As filed with the Securities and Exchange Commission on July 26, 2000
1933 Act Reg. No. 33-66242
1940 Act Reg. No. 811-7890
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No.
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Post-Effective Amendment No. 11 X
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and/or
(Check appropriate box or boxes.)
Copy to:
P. Michelle Grace, Esquire Martha J. Hays, Esquire
A I M Advisors, Inc. Ballard Spahr Andrews & Ingersoll, LLP
11 Greenway Plaza, Suite 100 1735 Market Street, 51st Floor
Houston, Texas 77046 Philadelphia, Pennsylvania 19103-7599
Approximate Date of Proposed As soon as practicable after the
Public Offering: effective date of this Amendment
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It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on July 28, 2000 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a previously filed post-effective amendment.
Title of Securities Being Registered: Shares of Beneficial Interest
AIM TAX-EXEMPT CASH FUND
AIM Tax-Exempt Cash Fund seeks to earn the highest level of current income
exempt from federal income taxes that is consistent with the preservation of
capital and liquidity.
AIM-- Registered Trademark --
PROSPECTUS
JULY 28, 2000
This prospectus contains important
information about Class A shares of
the fund. Please read it before
investing and keep it for future
reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
There can be no assurance that the
fund will be able to maintain a
stable net asset value of $1.00 per
share.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
-- Registered Trademark -- -- Registered Trademark --
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INVESTMENT OBJECTIVE AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - - PERFORMANCE INFORMATION 2 - - - - - - - - - - - - - - - - - - - - - - - - - Annual Total Returns 2 Performance Table 2 FEE TABLE AND EXPENSE EXAMPLE 3 - - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 3 Expense Example 3 FUND MANAGEMENT 4 - - - - - - - - - - - - - - - - - - - - - - - - - The Advisor 4 Advisor Compensation 4 OTHER INFORMATION 4 - - - - - - - - - - - - - - - - - - - - - - - - - Dividends and Distributions 4 Special Tax Information Regarding the Fund 4 FINANCIAL HIGHLIGHTS 5 - - - - - - - - - - - - - - - - - - - - - - - - - SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - - Choosing a Share Class A-1 Purchasing Shares A-3 Redeeming Shares A-4 Exchanging Shares A-6 Pricing of Shares A-8 Taxes A-8 OBTAINING ADDITIONAL INFORMATION Back Cover - - - - - - - - - - - - - - - - - - - - - - - - - |
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investor, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE are registered service marks and AIM Bank Connection and AIM Internet Connect are service marks of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.
The fund's investment objective is to earn the highest level of current income exempt from federal income taxes that is consistent with the preservation of capital and liquidity. The investment objective of the fund may be changed by the Board of Trustees without shareholder approval.
The fund attempts to meet its objective by investing at least 80% of its net assets in securities that (1) pay interest which is excluded from gross income for federal income tax purposes, and (2) do not produce income that will be considered to be an item of preference for purposes of the alternative minimum tax. The fund will invest only in high-quality short-term obligations, including
- municipal securities
- tax-exempt commercial paper
- cash equivalents
Municipal securities include debt obligations of varying maturities issued to obtain funds for various public purposes by or on behalf of states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies, authorities and instrumentalities. Municipal lease obligations, synthetic municipal securities and industrial development bonds are treated as municipal securities.
The fund may invest (1) up to 20% of its net assets in money market
instruments that may be subject to federal taxes, including treasury securities,
repurchase agreements, bankers' acceptances, commercial paper and master notes;
(2) less than 25% of its total assets in securities of issuers who are located
in the same state; (3) less than 25% of its total assets in industrial
development bonds; (4) less than 25% of its total assets in securities, the
interest on which is paid from revenues of similar type projects; and (5) up to
100% of its total assets in the securities in category four if the principal and
interest on the securities is guaranteed by a bank or financial service
provider. Any percentage limitations with respect to assets of the fund are
applied at the time of purchase.
The fund invests in compliance with Rule 2a-7 under the Investment Company Act of 1940, as amended.
The portfolio managers focus on securities that they believe have favorable prospects for current income, consistent with their concerns for preservation of capital and liquidity. The portfolio managers usually hold fixed-rate portfolio securities to maturity, but put or sell a particular security when they deem it advisable, such as when any of the factors above materially changes.
An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, the fund's yield will vary as the short-term securities in its portfolio mature or are sold, and the proceeds are reinvested in securities with different interest rates.
The following factors could reduce the fund's income and/or share price:
- sharply rising or falling interest rates;
- downgrades of credit ratings or defaults of any of the fund's holdings; or
- events adversely affecting the banking industry, such as interest rate risk, credit risk and regulatory developments relating to the banking and financial service industries.
The value of, payment of interest and repayment of principal by, and the ability of the fund to sell, a municipal security may also be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations and voter initiatives as well as the economics of the regions in which the fund invests.
The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance is not necessarily an indication of its future performance.
Annual
Year Ended Total
December 31 Returns
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1990 ............................................. 5.17%
1991 ............................................. 3.91%
1992 ............................................. 2.44%
1993 ............................................. 1.76%
1994 ............................................. 2.24%
1995 ............................................. 2.99%
1996 ............................................. 2.83%
1997 ............................................. 3.08%
1998 ............................................. 2.99%
1999 ............................................. 2.87%
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* The fund's Class A shares' year-to-date total return as of June 30, 2000 was 1.79%.
During the periods shown in the bar chart, the highest quarterly return was 1.29% (quarter ended June 30, 1990) and the lowest quarterly return was .42% (quarter ended March 31, 1993).
PERFORMANCE TABLE
The following performance table reflects the fund's performance over the periods indicated.
AVERAGE ANNUAL TOTAL RETURNS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (for the periods ended SINCE INCEPTION December 31, 1999) 1 YEAR 5 YEARS 10 YEARS INCEPTION DATE ------------------------------------------------------------------------------- Class A 2.87% 2.95% 3.02% 3.74% 09/22/82 ------------------------------------------------------------------------------- |
The seven-day yield on December 31, 1999 for the fund's Class A shares was 3.91%. For the current seven-day yield, call (800) 347-4246.
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold shares of the fund:
SHAREHOLDER FEES - - - - - - - - - - - - - - - - - - - - - - - - - (fees paid directly from your investment) CLASS A ------------------------------------------------- Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) None Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less) None ------------------------------------------------- |
ANNUAL FUND OPERATING EXPENSES - - - - - - - - - - - - - - - - - - - - - - - - - (expenses that are deducted from fund assets) CLASS A ------------------------------------------------- Management Fees 0.35% Distribution and/or Service (12b-1) Fees 0.25 Other Expenses 0.35 Total Annual Fund Operating Expenses 0.95 Fee Waiver(1) 0.15 Net Expenses 0.80 ------------------------------------------------- |
(1) The distributor has contractually agreed to waive 0.15% of the Rule 12b-1 distribution plan fee.
EXPENSE EXAMPLE
This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund's gross operating expenses remain the same. To the extent fees are waived, the expenses will be lower. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
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Class A $ 97 $ 303 $ 525 $ 1,166
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THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and is responsible for its day-to-day management. The advisor is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor supervises all aspects of the fund's operations and provides investment advisory services to the fund, including obtaining and evaluating economic, statistical and financial information to formulate and implement investment programs for the fund.
The advisor has acted as an investment advisor since its organization in 1976. Today, the advisor, together with its subsidiaries, advises or manages over 120 investment portfolios, including the fund, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended March 31, 2000, the advisor received compensation of 0.35% of average daily net assets.
DIVIDENDS AND DISTRIBUTIONS
The fund expects that its distributions, if any, will consist primarily of income.
DIVIDENDS
The fund generally declares dividends on each business day and pays any dividends monthly.
CAPITAL GAINS DISTRIBUTIONS
The fund generally distributes long-term and short-term capital gains, if any, annually.
SPECIAL TAX INFORMATION REGARDING THE FUND
In addition to the general tax information set forth under the heading "Shareholder Information--Taxes" in this prospectus, the following information describes the tax impact of certain dividends you may receive from the fund.
You will not be required to include the "exempt-interest" portion of dividends paid by the fund in your gross income for federal income tax purposes. You will be required to report the receipt of exempt-interest dividends and other tax-exempt interest on your federal income tax returns. Exempt-interest dividends from the fund may be subject to state and local 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, and may have other collateral federal income tax consequences for you. The fund may invest in municipal securities the interest on which constitutes an item of tax preference and could give rise to a federal alternative minimum tax liability for you, and may invest up to 20% of its net assets in such securities and other taxable securities. The fund will try to minimize investments that result in taxable dividends.
To the extent that dividends paid by the fund are derived from taxable investments or realized capital gains, they will be taxable as ordinary income or long-term capital gains. The percentage of dividends that constitutes exempt-interest dividends will be determined annually. This percentage may differ from the actual percentage of exempt interest received by the fund for the particular days in which you hold 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 fund to pay exempt-interest dividends might be adversely affected.
The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
CLASS A
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YEAR ENDED MARCH 31,
2000 1999 1998 1997 1996
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Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
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Income from investment operations:
Net investment income 0.03 0.03 0.03 0.03 0.03
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Less distributions from net investment income (0.03) (0.03) (0.03) (0.03) (0.03)
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Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
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Total return 3.05% 2.90% 3.12% 2.82% 2.92%
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Ratios/supplemental data:
Net assets, end of period (000s omitted) $60,440 $61,159 $51,934 $56,880 $30,014
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Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 0.80%(a) 0.79% 0.83% 1.04% 1.05%
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Without fee waivers and/or expense reimbursements 0.95%(a) 0.94% 0.98% 1.19% 1.20%
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Ratio of net investment income to average net assets 2.99%(a) 2.83% 3.07% 2.78% 2.97%
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(a) Ratios based on average net assets of $56,942,323.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
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- Initial sales charge - No initial sales charge - No initial sales charge
- Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within charge on redemptions within
six years one year
- Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
eight years after the end of shares
the month in which shares
were purchased along with a
pro rata portion of its
reinvested dividends and
distributions(1)
- Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
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DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund. You may be charged a contingent deferred sales charge if you redeem AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain exchanges. Sales charges on all other AIM Funds and classes of those Funds are detailed below. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales charges. The "Other Information" section of your prospectus will tell you in what category your particular AIM Fund is classified.
CATEGORY I INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
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AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
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A-1 MCF--06/00
CATEGORY II INITIAL SALES CHARGES
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INVESTOR'S
SALES CHARGE
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AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
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CATEGORY III INITIAL SALES CHARGES
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INVESTOR'S
SALES CHARGE
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AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
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CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
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First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
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COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current market value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, we will assume that you have redeemed shares on which there is no CDSC first and, then, shares in the order of purchase.
REDUCED SALES CHARGES
AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial consultant must provide sufficient information at the time of purchase to verify that your purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares currently owned for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the current value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of AIM Funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full face amount of the LOI is not invested by the end of the 13-month period, your account will be adjusted to the higher initial sales charge level for the amount actually invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- on shares purchased by reinvesting dividends and distributions;
- when exchanging shares among certain AIM Funds;
- when using the reinstatement privilege; and
- when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- if you redeem Class B shares you held for more than six years;
- if you redeem Class C shares you held for more than one year;
- if you redeem shares acquired through reinvestment of dividends and distributions; and
- on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares at reduced or without sales charges. Consult the fund's Statement of Additional Information for details.
MCF--06/00 A-2
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM Mid Cap Opportunities Fund and AIM Small Cap Opportunities Fund) are as follows:
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
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Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
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HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
PURCHASE OPTIONS
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OPENING AN ACCOUNT ADDING TO AN ACCOUNT
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Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed account application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed account application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank Connection
methods described above. form to the transfer agent. Once
the transfer agent has received the
form, call the transfer agent to
place your purchase order.
By AIM Internet Connect(SM) Open your account using one of the Select the AIM Internet Connect
methods described above. option on your completed account
application or complete an AIM
Internet Connect Authorization
Form. Mail the application or form
to the transfer agent. Once your
request for this option has been
processed (which may take up to 10
days), you may place your purchase
order at www.aimfunds.com. The
maximum purchase amount per
transaction is $100,000. You may
not purchase shares in AIM
prototype retirement accounts on
the internet.
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A-3 MCF--06/00
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing the AIM Fund to withdraw the amount of your investment from your bank account on a day or dates you specify and in an amount of at least $50. You may stop the Automatic Investment Plan at any time by giving the transfer agent notice ten days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund accounts with the identical registration. The account from which exchanges are to be made must have a minimum balance of $5,000 before you can use this option. Exchanges will occur on (or about) the 10th or 25th day of the month, whichever you specify, in the amount you specify. The minimum amount you can exchange to another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any AIM Fund at net asset value. Unless you specify otherwise, your dividends and distributions will automatically be reinvested in the same AIM Fund. You may invest your dividends and distributions (1) into another AIM Fund in the same class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at least $5,000; or (b) in the AIM Fund receiving the dividend must be at least $500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the Portfolio Rebalancing Program. Under this Program, you can designate how the total value of your AIM Fund holdings should be rebalanced, on a percentage basis, between two and ten of your AIM Funds on a quarterly, semiannual or annual basis. Your portfolio will be rebalanced through the exchange of shares in one or more of your AIM Funds for shares of the same class of one or more other AIM Funds in your portfolio. If you wish to participate in the Program, make changes or cancel the Program, the transfer agent must receive your request to participate, changes, or cancellation in good order at least five business days prior to the next rebalancing date, which is normally the 28th day of the last month of the period you choose. You may realize taxable gains from these exchanges. We may modify, suspend or terminate the Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through tax-sheltered retirement plans made available to corporations, individuals and employees of non-profit organizations and public schools. A plan document must be adopted to establish a retirement plan. You may use AIM Funds-sponsored retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans, 401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit Sharing plans, or another sponsor's retirement plan. The plan custodian of the AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10. Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
Generally, we will not charge you any fees to redeem your shares. However, if you acquired Class A shares of AIM Developing Markets Fund in connection with the reorganization of AIM Eastern Europe Fund, you will be charged a redemption fee of 2% of the net asset value of those shares, which will be paid to AIM Developing Markets Fund, if you redeem your shares within the first year after the reorganization. Your broker or financial consultant may charge service fees for handling redemption transactions. Your shares also may be subject to a contingent deferred sales charge (CDSC).
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares subject to a CDSC within 18 months of the purchase of the Class A shares, you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES OR CLASS C
SHARES ACQUIRED BY EXCHANGE FROM AIM CASH
RESERVE SHARES OF AIM MONEY MARKET FUND
We will begin the holding period for purposes of calculating the CDSC on Class B shares or Class C shares acquired by exchange from AIM Cash Reserve Shares of AIM Money Market Fund at the time of the exchange into Class B shares or Class C shares.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM Floating Rate Fund, the early withdrawal charge applicable to shares of AIM Floating Rate Fund will be applied instead of the CDSC normally applicable to Class B shares.
MCF--06/00 A-4
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record (if there has been no change communicated
to us within the last 30 days) or transferred electronically
to a pre-authorized checking account; (2) you do not hold
physical share certificates; (3) you can provide proper
identification information; (4) the proceeds of the
redemption do not exceed $50,000; and (5) you have not
previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not be redeemed by telephone. The transfer agent
must receive your call during the hours of the customary
trading session of the New York Stock Exchange (NYSE) in
order to effect the redemption at that day's closing price.
By AIM Internet
Connect Place your redemption request at www.aimfunds.com. You will
be allowed to redeem by internet if (1) you do not hold
physical share certificates; (2) you can provide proper
identification information; (3) the proceeds of the
redemption do not exceed $50,000; and (4) you have
established the internet trading option. AIM prototype
retirement accounts may not be redeemed on the internet.
The transfer agent must confirm your transaction during the
hours of the customary trading session of the NYSE in order
to effect the redemption at that day's closing price.
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TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no more than seven days, after we accept your request to redeem. If you redeem shares recently purchased by check, you will be required to wait up to ten business days before we will send your redemption proceeds. This delay is necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a check in the amount of the redemption proceeds to the address on record with us. If your request is not in good order, you may have to provide us with additional documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the redemption proceeds to your address of record (if there has been no change communicated to the transfer agent within the previous 30 days) or transmit them electronically to your pre-authorized bank account. We use reasonable procedures to confirm that instructions communicated by telephone are genuine and are not liable for telephone instructions that are reasonably believed to be genuine.
REDEMPTION BY INTERNET
If you redeem by internet, we will transmit your redemption proceeds electronically to your pre-authorized bank account. We use reasonable procedures to confirm that instructions communicated by internet are genuine and are not liable for internet instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account of at least $50. You also may make annual withdrawals if you own Class A shares. We will redeem enough shares from your account to cover the amount withdrawn. You must have an account balance of at least $5,000 to establish a Systematic Withdrawal Plan. You can stop this plan at any time by giving ten days prior notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try to transmit payment of redemption proceeds on that same day. If we receive your redemption order after 11:30 a.m. Eastern Time and before the close of the customary trading session of the NYSE, we generally will transmit payment on the next business day.
A-5 MCF--06/00
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or more if you have completed an authorization form. Redemption by check is not available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered on the account;
(3) you request that payment be sent somewhere other than the bank of record on the account; or
(4) you request that payment be sent to a new address or an address that changed in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of financial institutions. Call the transfer agent for additional information. Some institutions have transaction amount maximums for these guarantees. Please check with the guarantor institution.
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in Class A shares of any AIM Fund at net asset value in an identically registered account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting the difference between the initial sales charges on those Funds and the ones in which you will be investing. In addition, if you paid a contingent deferred sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC if you later redeem that amount. You must notify the transfer agent in writing at the time you reinstate that you are exercising your reinstatement privilege. You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have not provided a correct Social Security
or other tax ID number on your account application, the AIM Fund may, at its
discretion, redeem the account and distribute the proceeds to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those of another AIM Fund. Before requesting an exchange, review the prospectus of the AIM Fund you wish to acquire. Exchange privileges also apply to holders of the Connecticut General Guaranteed Account, established for tax-qualified group annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the same class of another AIM Fund. You may exchange AIM Cash Reserve Shares of AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You also may exchange AIM Cash Reserve Shares of AIM Money Market Fund for Class B shares or Class C shares of another AIM Fund, but only if the AIM Cash Reserve Shares were purchased directly and not acquired by exchange. You may be required to pay an initial sales charge when exchanging from a Fund with a lower initial sales charge than the one into which you are exchanging. If you exchange from Class A shares not subject to a CDSC into Class A shares subject to those charges, you will be charged a CDSC when you redeem the exchanged shares. The CDSC charged on redemption of those shares will be calculated starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except for Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund), but only if you acquired the original shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an initial sales charge;
MCF--06/00 A-6
(ii) on or after May 1, 1994 by exchange from Class A shares subject to an initial sales charge (except for Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund, but only if you acquired the original shares by exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class C shares.
(5) AIM Cash Reserve Shares of AIM Money Market Fund for Class B shares and Class C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- You must meet the minimum purchase requirements for the AIM Fund into which you are exchanging;
- Shares of the AIM Fund you wish to acquire must be available for sale in your state of residence;
- Exchanges must be made between accounts with identical registration information;
- The account you wish to exchange from must have a certified tax identification number (or the Fund has received an appropriate Form W-8 or W-9);
- Shares must have been held for at least one day prior to the exchange;
- If you have physical share certificates, you must return them to the transfer agent prior to the exchange; and
- You are limited to a maximum of 10 exchanges per calendar year, because excessive short-term trading or market-timing activity can hurt fund performance. If you exceed that limit, or if an AIM Fund or the distributor determines, in its sole discretion, that your short-term trading is excessive or that you are engaging in market-timing activity, it may reject any additional exchange orders. An exchange is the movement out of (redemption) one AIM Fund and into (purchase) another AIM Fund.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the purchase of shares being acquired in an exchange for up to five business days if it determines that it would be materially disadvantaged by the immediate transfer of exchange proceeds. There is no fee for exchanges. The exchange privilege is not an option or right to purchase shares. Any of the participating AIM Funds or the distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of each registered owner exactly as the shares are registered, the account registration and account number, the dollar amount or number of shares to be exchanged and the names of the AIM Funds from which and into which the exchange is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by telephone, including that the transfer agent must receive exchange requests during the hours of the customary trading session of the NYSE; however, you still will be allowed to exchange by telephone even if you have changed your address of record within the preceding 30 days.
BY INTERNET
You will be allowed to exchange by internet if (1) you do not hold physical
share certificates; (2) you can provide proper identification information; and
(3) you have established the internet trading option.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time you held the original shares will be added to the holding period of the Class B or Class C shares, respectively, into which you exchanged for the purpose of calculating contingent deferred sales charges (CDSC) if you later redeem the exchanged shares. If you redeem Class B shares acquired by exchange via a tender offer by AIM Floating Rate Fund, you will be credited with the time period you held the shares of AIM Floating Rate Fund for the purpose of computing the early withdrawal charge applicable to those shares.
- REJECT OR CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER;
- MODIFY ANY TERMS OR CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND;
- REJECT OR CANCEL ANY REQUEST TO ESTABLISH THE AUTOMATIC INVESTMENT PLAN AND SYSTEMATIC WITHDRAWAL PLAN OPTIONS ON THE SAME ACCOUNT; OR
A-7 MCF--06/00
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The AIM Funds value portfolio securities for which market quotations are readily available at market value. The AIM Funds value short-term investments maturing within 60 days at amortized cost, which approximates market value. AIM Money Market Fund and AIM Tax-Exempt Cash Fund value all of their securities at amortized cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund, AIM Tax-Exempt Bond Fund of Connecticut and AIM Tax-Free Intermediate Fund value variable rate securities that have an unconditional demand or put feature exercisable within seven days or less at par, which reflects the market value of such securities.
The AIM Funds value all other securities and assets at their fair value. Securities and other assets quoted in foreign currencies are valued in U.S. dollars based on the prevailing exchange rates on that day. In addition, if, between the time trading ends on a particular security and the close of the customary trading session of the NYSE, events occur that materially affect the value of the security, the AIM Funds may value the security at its fair value as determined in good faith by or under the supervision of the Board of Directors or Trustees of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's net asset value will be subject to the judgment of the Board of Directors or Trustees or its designee instead of being determined by the market. Because some of the AIM Funds may invest in securities that are primarily listed on foreign exchanges that trade on days when the AIM Funds do not price their shares, the value of those funds' assets may change on days when you will not be able to purchase or redeem fund shares.
Each AIM Fund determines the net asset value of its shares on each day the NYSE is open for business, as of the close of the customary trading session, or any earlier NYSE closing time that day. AIM Money Market Fund also determines its net asset value as of 12:00 noon Eastern Time on each day the NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours of the customary trading session of the NYSE. The AIM Funds price purchase, exchange and redemption orders at the net asset value calculated after the transfer agent receives an order in good form. An AIM Fund may postpone the right of redemption only under unusual circumstances, as allowed by the Securities and Exchange Commission, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary income or long-term capital gains for federal income tax purposes, whether you reinvest them in additional shares or take them in cash. Distributions are generally taxable to you at different rates depending on the length of time the fund holds its assets. Different tax rates may apply to ordinary income and long-term capital gain distributions, regardless of how long you have held your shares. Every year, you will be sent information showing the amount of dividends and distributions you received from each AIM Fund during the prior year.
Any long-term or short-term capital gains realized from redemptions of AIM Fund shares will be subject to federal income tax. Exchanges of shares for shares of another AIM Fund are treated as a sale, and any gain realized on the transaction will generally be subject to federal income tax.
INVESTORS IN TAX-EXEMPT FUNDS SHOULD READ THE INFORMATION UNDER THE HEADING "OTHER INFORMATION -- SPECIAL TAX INFORMATION REGARDING THE FUND" IN THEIR PROSPECTUS.
The foreign, state and local tax consequences of investing in AIM Fund shares may differ materially from the federal income tax consequences described above. You should consult your tax advisor before investing.
MCF--06/00 A-8
More information may be obtained free of charge upon request. The Statement of Additional Information (SAI), a current version of which is on file with the Securities and Exchange Commission (SEC), contains more details about the fund and is incorporated by reference into the prospectus (is legally a part of this prospectus). Annual and semiannual reports to shareholders contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of Funds--Registered Trademark-- or your account, or wish to obtain free copies of the fund's current SAI or annual or semiannual reports, please contact us
BY MAIL: A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
BY TELEPHONE: (800) 347-4246
BY E-MAIL: general@aimfunds.com
ON THE INTERNET: http://www.aimfunds.com
(prospectuses and annual
and semiannual reports
only)
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You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
[AIM LOGO APPEARS HERE] www.aimfunds.com TEC-PRO-1 INVEST WITH DISCIPLINE
-- Registered Trademark -- -- Registered Trademark --
AIM TAX-FREE
INTERMEDIATE FUND
AIM Tax-Free Intermediate Fund seeks to generate as high a level of tax-exempt income as is consistent with preservation of capital.
AIM --Registered Trademark--
PROSPECTUS
JULY 28, 2000
This prospectus contains important
information about Class A shares of
the fund. Please read it before
investing and keep it for future
reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE -- Registered Trademark -- -- Registered Trademark -- |
------------------------------
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INVESTMENT OBJECTIVE AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - - PERFORMANCE INFORMATION 2 - - - - - - - - - - - - - - - - - - - - - - - - - Annual Total Returns 2 Performance Table 2 FEE TABLE AND EXPENSE EXAMPLE 3 - - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 3 Expense Example 3 FUND MANAGEMENT 4 - - - - - - - - - - - - - - - - - - - - - - - - - The Advisor 4 Advisor Compensation 4 Portfolio Managers 4 OTHER INFORMATION 4 - - - - - - - - - - - - - - - - - - - - - - - - - Sales Charges 4 Dividends and Distributions 4 Special Tax Information Regarding the Fund 4 FINANCIAL HIGHLIGHTS 5 - - - - - - - - - - - - - - - - - - - - - - - - - SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - - Choosing a Share Class A-1 Purchasing Shares A-3 Redeeming Shares A-4 Exchanging Shares A-6 Pricing of Shares A-8 Taxes A-8 OBTAINING ADDITIONAL INFORMATION Back Cover - - - - - - - - - - - - - - - - - - - - - - - - - |
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investor, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE are registered service marks and AIM Bank Connection and AIM Internet Connect are service marks of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.
The fund's investment objective is to generate as high a level of tax-exempt income as is consistent with preservation of capital. The investment objective of the fund may be changed by the Board of Trustees without shareholder approval.
The fund seeks to meet its objective by investing in high-quality, intermediate-term municipal securities having a maturity of ten and one-half years or less.
The fund normally invests at least 80% of its assets in securities that (1) pay interest which is excluded from gross income for federal income tax purposes, and (2) do not produce income that will be considered to be an item of preference for purposes of the alternative minimum tax. Municipal securities include debt obligations of varying maturities issued to obtain funds for various public purposes by or on behalf of states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies, authorities and instrumentalities. Municipal lease obligations, synthetic municipal securities and industrial development bonds are treated as municipal securities.
The fund may purchase municipal securities that meet certain quality criteria at the time of purchase, including: (1) securities rated within the three highest ratings by Moody's Investors Service, Inc., Standard & Poor's Ratings Services or any other nationally recognized statistical rating organization (NRSRO); (2) securities rated within the two highest ratings for short-term municipal obligations by Moody's or S&P or any other NRSRO; (3) securities guaranteed as to payment of principal and interest by the U.S. Government; (4) securities fully collateralized by an escrow of U.S. Government or other high-quality securities; or (5) unrated securities, if (a) other municipal securities of the same issuer are rated A or better by a NRSRO, or (b) deemed by the portfolio managers to be of comparable quality. The fund will invest only in municipal securities that have maturities of ten and one-half years or less and will maintain a dollar-weighted average portfolio maturity of between three and seven and one-half years.
The fund may invest (1) less than 25% of its total assets in securities of issuers located in the same state; (2) less than 25% of its total assets in industrial development bonds; (3) less than 25% of its total assets in securities, the interest on which is paid from revenues of similar type projects; and (4) up to 100% of its assets in securities in category three, if the principal and interest on the securities is guaranteed. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
The portfolio managers focus on securities that they believe have favorable prospects for current income, consistent with their concern for preservation of capital. The portfolio managers consider whether to sell a particular security when any of those factors materially changes.
In anticipation of or in response to adverse market conditions, for cash management purposes, or for defensive purposes, the fund may temporarily hold all or a portion of its assets in cash, money market instruments, affiliated money market funds, bonds or other debt securities. As a result, the fund may not achieve its investment objective.
There is a risk that you could lose all or a portion of your investment in the fund and that the income you may receive from your investment may vary. The value of your investment in the fund will go up and down with the prices of the securities in which the fund invests. Interest rate increases will cause the price of a debt security to decrease. The longer a debt security's duration, the more sensitive it is to this risk. A municipality may default or otherwise be unable to honor a financial obligation. Revenue bonds are not backed by the taxing power of the issuing municipality.
The value of, payment of interest and repayment of principal by, and the ability of the fund to sell, a municipal security may also be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations and voter initiatives as well as the economies of the regions in which the fund invests.
An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance is not necessarily an indication of its future performance.
Annual
Year Ended Total
December 31 Returns
----------- -------
1990 ................................................ 6.60%
1991 ................................................ 9.85%
1992 ................................................ 7.98%
1993 ................................................ 9.03%
1994 ................................................ -1.43%
1995 ................................................ 10.21%
1996 ................................................ 3.82%
1997 ................................................ 7.27%
1998 ................................................ 5.47%
1999 ................................................ 0.09%
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* The fund's Class A shares' year-to-date total return as of June 30, 2000 was 3.25%.
During the periods shown in the bar chart, the highest quarterly return was 3.96% (quarter ended March 31, 1995) and the lowest quarterly return was -2.56% (quarter ended March 31, 1994).
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a broad-based securities market index. The fund's performance reflects payment of sales loads.
AVERAGE ANNUAL TOTAL RETURNS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (for the periods ended SINCE INCEPTION December 31, 1999) 1 YEAR 5 YEARS 10 YEARS INCEPTION DATE --------------------------------------------------------------------------------------- Class A -.88% 5.12% 5.72% 5.82% 05/11/87 Lehman Municipal Bond Fund Index(1) -2.06% 6.91% 6.89% 7.43%(2) 4/30/87(2) --------------------------------------------------------------------------------------- |
(1) The Lehman Municipal Bond Fund Index is a broad based, total return index comprised of 8000 actual bonds, all of which are investment grade, fixed rate, long term maturities (greater than two years) and are selected from issues larger than $50 million dated since January 1984.
(2) The average annual total return given is since the date closest to the inception date of Class A shares.
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold shares of the fund:
SHAREHOLDER FEES - - - - - - - - - - - - - - - - - - - - - - - - - (fees paid directly from your investment) CLASS A ------------------------------------------------- Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) 1.00% Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less) None ------------------------------------------------- |
ANNUAL FUND OPERATING EXPENSES - - - - - - - - - - - - - - - - - - - - - - - - - (expenses that are deducted from fund assets) CLASS A ------------------------------------------------- Management Fees 0.30% Distribution and/or Service (12b-1) Fees None Other Expenses 0.12 Total Annual Fund Operating Expenses 0.42 ------------------------------------------------- |
EXPENSE EXAMPLE
This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund's gross operating expenses remain the same. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $143 $234 $333 $625
----------------------------------------------
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THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and is responsible for its day-to-day management. The advisor is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor supervises all aspects of the fund's operations and provides investment advisory services to the fund, including obtaining and evaluating economic, statistical and financial information to formulate and implement investment programs for the fund.
The advisor has acted as an investment advisor since its organization in 1976. Today, the advisor, together with its subsidiaries, advises or manages over 120 investment portfolios, including the fund, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended March 31, 2000, the advisor received compensation of 0.30% of average daily net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual members of the team who are primarily responsible for the day-to-day management of the fund's portfolio are
- Richard A. Berry, Senior Portfolio Manager, who has been responsible for the fund since 1987 and has been associated with the advisor and/or its affiliates since 1987.
- Stephen D. Turman, Portfolio Manager, who has been responsible for the fund since 1988 and has been associated with the advisor and/or its affiliates since 1985.
SALES CHARGES
Purchases of Class A shares of AIM Tax-Free Intermediate Fund are subject to the maximum 1.00% initial sales charge as listed under the heading "CATEGORY III Initial Sales Charges" in the "Shareholder Information--Choosing a Share Class" section of this prospectus.
DIVIDENDS AND DISTRIBUTIONS
The fund expects that its distributions, if any, will consist primarily of income.
DIVIDENDS
The fund generally declares dividends on each business day and pays any dividends monthly.
CAPITAL GAINS DISTRIBUTIONS
The fund generally distributes long-term and short-term capital gains, if any, annually.
SPECIAL TAX INFORMATION REGARDING THE FUND
In addition to the general tax information set forth under the heading "Shareholder Information--Taxes" in this prospectus, the following information describes the tax impact of certain dividends you may receive from the fund.
You will not be required to include the "exempt-interest" portion of dividends paid by the fund in your gross income for federal income tax purposes. You will be required to report the receipt of exempt-interest dividends and other tax-exempt interest on your federal income tax returns. Exempt-interest dividends from the fund may be subject to state and local 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, and may have other collateral federal income tax consequences for you. The fund may invest in municipal securities the interest on which constitutes an item of tax preference and could give rise to a federal alternative minimum tax liability for you, and may invest up to 20% of its net assets in such securities and other taxable securities. The fund will try to avoid investments that result in taxable dividends.
To the extent that dividends paid by the fund are derived from taxable investments or realized capital gains, they will be taxable as ordinary income or long-term capital gains. The percentage of dividends that constitutes exempt-interest dividends will be determined annually. This percentage may differ from the actual percentage of exempt interest received by the fund for the particular days in which you hold 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 fund to pay exempt-interest dividends might be adversely affected.
The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
CLASS A
---------------------------------------------------------------
YEAR ENDED MARCH 31,
2000 1999 1998 1997 1996
---------------------------------------------------------------
Net asset value, beginning of period $ 11.13 $ 11.05 $ 10.73 $ 10.79 $ 10.67
-------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.48 0.49 0.50 0.50 0.52
-------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) (0.41) 0.08 0.32 (0.04) 0.12
-------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.07 0.57 0.82 0.46 0.64
-------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From net investment income (0.48) (0.49) (0.50) (0.52) (0.52)
-------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income (0.01) -- -- -- --
-------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.49) (0.49) (0.50) (0.52) (0.52)
-------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.71 $ 11.13 $ 11.05 $ 10.73 $ 10.79
-------------------------------------------------------------------------------------------------------------------------------
Total return(a) 0.70% 5.27% 7.79% 4.33% 6.06%
-------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $353,130 $244,499 $200,969 $173,342 $83,066
-------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets:
Including interest expense 0.42%(b) 0.46% 0.45% 0.56% 0.65%
-------------------------------------------------------------------------------------------------------------------------------
Excluding interest expense 0.42%(b) 0.45% 0.45% 0.56% 0.65%
-------------------------------------------------------------------------------------------------------------------------------
Ratio of interest expense to average net assets 0.00%(b) 0.01% -- -- --
-------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets 4.45%(b) 4.43% 4.56% 4.63% 4.81%
-------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 50% 32% 22% 26% 32%
-------------------------------------------------------------------------------------------------------------------------------
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(a) Does not deduct sales charges.
(b) Ratios are based on average net assets of $344,256,881.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
---------------------------------------------------------------------------------------------------------
- Initial sales charge - No initial sales charge - No initial sales charge
- Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within charge on redemptions within
six years one year
- Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
eight years after the end of shares
the month in which shares
were purchased along with a
pro rata portion of its
reinvested dividends and
distributions(1)
- Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
|
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund. You may be charged a contingent deferred sales charge if you redeem AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain exchanges. Sales charges on all other AIM Funds and classes of those Funds are detailed below. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales charges. The "Other Information" section of your prospectus will tell you in what category your particular AIM Fund is classified.
CATEGORY I INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
|
A-1 MCF--06/00
CATEGORY II INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
|
CATEGORY III INITIAL SALES CHARGES
-------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
-------------------------------------------------------------
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CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
----------------------------------------------------------
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
----------------------------------------------------------
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COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current market value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, we will assume that you have redeemed shares on which there is no CDSC first and, then, shares in the order of purchase.
REDUCED SALES CHARGES
AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial consultant must provide sufficient information at the time of purchase to verify that your purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares currently owned for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the current value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of AIM Funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full face amount of the LOI is not invested by the end of the 13-month period, your account will be adjusted to the higher initial sales charge level for the amount actually invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- on shares purchased by reinvesting dividends and distributions;
- when exchanging shares among certain AIM Funds;
- when using the reinstatement privilege; and
- when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- if you redeem Class B shares you held for more than six years;
- if you redeem Class C shares you held for more than one year;
- if you redeem shares acquired through reinvestment of dividends and distributions; and
- on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares at reduced or without sales charges. Consult the fund's Statement of Additional Information for details.
MCF--06/00 A-2
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM Mid Cap Opportunities Fund and AIM Small Cap Opportunities Fund) are as follows:
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
-----------------------------------------------------------------------------------------------------------
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
----------------------------------------------------------------------------------------------------------
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HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
PURCHASE OPTIONS
---------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
---------------------------------------------------------------------------------------------------------
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed account application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed account application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank Connection
methods described above. form to the transfer agent. Once
the transfer agent has received the
form, call the transfer agent to
place your purchase order.
By AIM Internet Connect(SM) Open your account using one of the Select the AIM Internet Connect
methods described above. option on your completed account
application or complete an AIM
Internet Connect Authorization
Form. Mail the application or form
to the transfer agent. Once your
request for this option has been
processed (which may take up to 10
days), you may place your purchase
order at www.aimfunds.com. The
maximum purchase amount per
transaction is $100,000. You may
not purchase shares in AIM
prototype retirement accounts on
the internet.
----------------------------------------------------------------------------------------------------------
|
A-3 MCF--06/00
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing the AIM Fund to withdraw the amount of your investment from your bank account on a day or dates you specify and in an amount of at least $50. You may stop the Automatic Investment Plan at any time by giving the transfer agent notice ten days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund accounts with the identical registration. The account from which exchanges are to be made must have a minimum balance of $5,000 before you can use this option. Exchanges will occur on (or about) the 10th or 25th day of the month, whichever you specify, in the amount you specify. The minimum amount you can exchange to another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any AIM Fund at net asset value. Unless you specify otherwise, your dividends and distributions will automatically be reinvested in the same AIM Fund. You may invest your dividends and distributions (1) into another AIM Fund in the same class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at least $5,000; or (b) in the AIM Fund receiving the dividend must be at least $500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the Portfolio Rebalancing Program. Under this Program, you can designate how the total value of your AIM Fund holdings should be rebalanced, on a percentage basis, between two and ten of your AIM Funds on a quarterly, semiannual or annual basis. Your portfolio will be rebalanced through the exchange of shares in one or more of your AIM Funds for shares of the same class of one or more other AIM Funds in your portfolio. If you wish to participate in the Program, make changes or cancel the Program, the transfer agent must receive your request to participate, changes, or cancellation in good order at least five business days prior to the next rebalancing date, which is normally the 28th day of the last month of the period you choose. You may realize taxable gains from these exchanges. We may modify, suspend or terminate the Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through tax-sheltered retirement plans made available to corporations, individuals and employees of non-profit organizations and public schools. A plan document must be adopted to establish a retirement plan. You may use AIM Funds-sponsored retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans, 401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit Sharing plans, or another sponsor's retirement plan. The plan custodian of the AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10. Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
Generally, we will not charge you any fees to redeem your shares. However, if you acquired Class A shares of AIM Developing Markets Fund in connection with the reorganization of AIM Eastern Europe Fund, you will be charged a redemption fee of 2% of the net asset value of those shares, which will be paid to AIM Developing Markets Fund, if you redeem your shares within the first year after the reorganization. Your broker or financial consultant may charge service fees for handling redemption transactions. Your shares also may be subject to a contingent deferred sales charge (CDSC).
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares subject to a CDSC within 18 months of the purchase of the Class A shares, you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES OR CLASS C
SHARES ACQUIRED BY EXCHANGE FROM AIM CASH
RESERVE SHARES OF AIM MONEY MARKET FUND
We will begin the holding period for purposes of calculating the CDSC on Class B shares or Class C shares acquired by exchange from AIM Cash Reserve Shares of AIM Money Market Fund at the time of the exchange into Class B shares or Class C shares.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM Floating Rate Fund, the early withdrawal charge applicable to shares of AIM Floating Rate Fund will be applied instead of the CDSC normally applicable to Class B shares.
MCF--06/00 A-4
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record (if there has been no change communicated
to us within the last 30 days) or transferred electronically
to a pre-authorized checking account; (2) you do not hold
physical share certificates; (3) you can provide proper
identification information; (4) the proceeds of the
redemption do not exceed $50,000; and (5) you have not
previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not be redeemed by telephone. The transfer agent
must receive your call during the hours of the customary
trading session of the New York Stock Exchange (NYSE) in
order to effect the redemption at that day's closing price.
By AIM Internet
Connect Place your redemption request at www.aimfunds.com. You will
be allowed to redeem by internet if (1) you do not hold
physical share certificates; (2) you can provide proper
identification information; (3) the proceeds of the
redemption do not exceed $50,000; and (4) you have
established the internet trading option. AIM prototype
retirement accounts may not be redeemed on the internet.
The transfer agent must confirm your transaction during the
hours of the customary trading session of the NYSE in order
to effect the redemption at that day's closing price.
|
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no more than seven days, after we accept your request to redeem. If you redeem shares recently purchased by check, you will be required to wait up to ten business days before we will send your redemption proceeds. This delay is necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a check in the amount of the redemption proceeds to the address on record with us. If your request is not in good order, you may have to provide us with additional documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the redemption proceeds to your address of record (if there has been no change communicated to the transfer agent within the previous 30 days) or transmit them electronically to your pre-authorized bank account. We use reasonable procedures to confirm that instructions communicated by telephone are genuine and are not liable for telephone instructions that are reasonably believed to be genuine.
REDEMPTION BY INTERNET
If you redeem by internet, we will transmit your redemption proceeds electronically to your pre-authorized bank account. We use reasonable procedures to confirm that instructions communicated by internet are genuine and are not liable for internet instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account of at least $50. You also may make annual withdrawals if you own Class A shares. We will redeem enough shares from your account to cover the amount withdrawn. You must have an account balance of at least $5,000 to establish a Systematic Withdrawal Plan. You can stop this plan at any time by giving ten days prior notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try to transmit payment of redemption proceeds on that same day. If we receive your redemption order after 11:30 a.m. Eastern Time and before the close of the customary trading session of the NYSE, we generally will transmit payment on the next business day.
A-5 MCF--06/00
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or more if you have completed an authorization form. Redemption by check is not available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered on the account;
(3) you request that payment be sent somewhere other than the bank of record on the account; or
(4) you request that payment be sent to a new address or an address that changed in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of financial institutions. Call the transfer agent for additional information. Some institutions have transaction amount maximums for these guarantees. Please check with the guarantor institution.
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in Class A shares of any AIM Fund at net asset value in an identically registered account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting the difference between the initial sales charges on those Funds and the ones in which you will be investing. In addition, if you paid a contingent deferred sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC if you later redeem that amount. You must notify the transfer agent in writing at the time you reinstate that you are exercising your reinstatement privilege. You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have not provided a correct Social Security
or other tax ID number on your account application, the AIM Fund may, at its
discretion, redeem the account and distribute the proceeds to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those of another AIM Fund. Before requesting an exchange, review the prospectus of the AIM Fund you wish to acquire. Exchange privileges also apply to holders of the Connecticut General Guaranteed Account, established for tax-qualified group annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the same class of another AIM Fund. You may exchange AIM Cash Reserve Shares of AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You also may exchange AIM Cash Reserve Shares of AIM Money Market Fund for Class B shares or Class C shares of another AIM Fund, but only if the AIM Cash Reserve Shares were purchased directly and not acquired by exchange. You may be required to pay an initial sales charge when exchanging from a Fund with a lower initial sales charge than the one into which you are exchanging. If you exchange from Class A shares not subject to a CDSC into Class A shares subject to those charges, you will be charged a CDSC when you redeem the exchanged shares. The CDSC charged on redemption of those shares will be calculated starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except for Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund), but only if you acquired the original shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an initial sales charge;
MCF--06/00 A-6
(ii) on or after May 1, 1994 by exchange from Class A shares subject to an initial sales charge (except for Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund, but only if you acquired the original shares by exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class C shares.
(5) AIM Cash Reserve Shares of AIM Money Market Fund for Class B shares and Class C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- You must meet the minimum purchase requirements for the AIM Fund into which you are exchanging;
- Shares of the AIM Fund you wish to acquire must be available for sale in your state of residence;
- Exchanges must be made between accounts with identical registration information;
- The account you wish to exchange from must have a certified tax identification number (or the Fund has received an appropriate Form W-8 or W-9);
- Shares must have been held for at least one day prior to the exchange;
- If you have physical share certificates, you must return them to the transfer agent prior to the exchange; and
- You are limited to a maximum of 10 exchanges per calendar year, because excessive short-term trading or market-timing activity can hurt fund performance. If you exceed that limit, or if an AIM Fund or the distributor determines, in its sole discretion, that your short-term trading is excessive or that you are engaging in market-timing activity, it may reject any additional exchange orders. An exchange is the movement out of (redemption) one AIM Fund and into (purchase) another AIM Fund.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the purchase of shares being acquired in an exchange for up to five business days if it determines that it would be materially disadvantaged by the immediate transfer of exchange proceeds. There is no fee for exchanges. The exchange privilege is not an option or right to purchase shares. Any of the participating AIM Funds or the distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of each registered owner exactly as the shares are registered, the account registration and account number, the dollar amount or number of shares to be exchanged and the names of the AIM Funds from which and into which the exchange is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by telephone, including that the transfer agent must receive exchange requests during the hours of the customary trading session of the NYSE; however, you still will be allowed to exchange by telephone even if you have changed your address of record within the preceding 30 days.
BY INTERNET
You will be allowed to exchange by internet if (1) you do not hold physical
share certificates; (2) you can provide proper identification information; and
(3) you have established the internet trading option.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time you held the original shares will be added to the holding period of the Class B or Class C shares, respectively, into which you exchanged for the purpose of calculating contingent deferred sales charges (CDSC) if you later redeem the exchanged shares. If you redeem Class B shares acquired by exchange via a tender offer by AIM Floating Rate Fund, you will be credited with the time period you held the shares of AIM Floating Rate Fund for the purpose of computing the early withdrawal charge applicable to those shares.
- REJECT OR CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER;
- MODIFY ANY TERMS OR CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND;
- REJECT OR CANCEL ANY REQUEST TO ESTABLISH THE AUTOMATIC INVESTMENT PLAN AND SYSTEMATIC WITHDRAWAL PLAN OPTIONS ON THE SAME ACCOUNT; OR
A-7 MCF--06/00
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The AIM Funds value portfolio securities for which market quotations are readily available at market value. The AIM Funds value short-term investments maturing within 60 days at amortized cost, which approximates market value. AIM Money Market Fund and AIM Tax-Exempt Cash Fund value all of their securities at amortized cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund, AIM Tax-Exempt Bond Fund of Connecticut and AIM Tax-Free Intermediate Fund value variable rate securities that have an unconditional demand or put feature exercisable within seven days or less at par, which reflects the market value of such securities.
The AIM Funds value all other securities and assets at their fair value. Securities and other assets quoted in foreign currencies are valued in U.S. dollars based on the prevailing exchange rates on that day. In addition, if, between the time trading ends on a particular security and the close of the customary trading session of the NYSE, events occur that materially affect the value of the security, the AIM Funds may value the security at its fair value as determined in good faith by or under the supervision of the Board of Directors or Trustees of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's net asset value will be subject to the judgment of the Board of Directors or Trustees or its designee instead of being determined by the market. Because some of the AIM Funds may invest in securities that are primarily listed on foreign exchanges that trade on days when the AIM Funds do not price their shares, the value of those funds' assets may change on days when you will not be able to purchase or redeem fund shares.
Each AIM Fund determines the net asset value of its shares on each day the NYSE is open for business, as of the close of the customary trading session, or any earlier NYSE closing time that day. AIM Money Market Fund also determines its net asset value as of 12:00 noon Eastern Time on each day the NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours of the customary trading session of the NYSE. The AIM Funds price purchase, exchange and redemption orders at the net asset value calculated after the transfer agent receives an order in good form. An AIM Fund may postpone the right of redemption only under unusual circumstances, as allowed by the Securities and Exchange Commission, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary income or long-term capital gains for federal income tax purposes, whether you reinvest them in additional shares or take them in cash. Distributions are generally taxable to you at different rates depending on the length of time the fund holds its assets. Different tax rates may apply to ordinary income and long-term capital gain distributions, regardless of how long you have held your shares. Every year, you will be sent information showing the amount of dividends and distributions you received from each AIM Fund during the prior year.
Any long-term or short-term capital gains realized from redemptions of AIM Fund shares will be subject to federal income tax. Exchanges of shares for shares of another AIM Fund are treated as a sale, and any gain realized on the transaction will generally be subject to federal income tax.
INVESTORS IN TAX-EXEMPT FUNDS SHOULD READ THE INFORMATION UNDER THE HEADING "OTHER INFORMATION -- SPECIAL TAX INFORMATION REGARDING THE FUND" IN THEIR PROSPECTUS.
The foreign, state and local tax consequences of investing in AIM Fund shares may differ materially from the federal income tax consequences described above. You should consult your tax advisor before investing.
MCF--06/00 A-8
More information may be obtained free of charge upon request. The Statement of Additional Information (SAI), a current version of which is on file with the Securities and Exchange Commission (SEC), contains more details about the fund and is incorporated by reference into the prospectus (is legally a part of this prospectus). Annual and semiannual reports to shareholders contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of Funds--Registered Trademark-- or your account, or wish to obtain free copies of the fund's current SAI or annual or semiannual reports, please contact us
BY MAIL: A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
BY TELEPHONE: (800) 347-4246
BY E-MAIL: general@aimfunds.com
ON THE INTERNET: http://www.aimfunds.com
(prospectuses and annual
and semiannual reports
only)
|
You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database, on the SEC's Internet website (http://www.sec.gov); or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
[AIM LOGO APPEARS HERE] www.aimfunds.com TFI-PRO-1 INVEST WITH DISCIPLINE
-- Registered Trademark -- -- Registered Trademark --
AIM TAX-EXEMPT BOND
FUND OF CONNECTICUT
AIM Tax-Exempt Bond Fund of Connecticut seeks to earn a high level of current income exempt from federal taxes and Connecticut taxes.
PROSPECTUS AIM--Registered Trademark--
JULY 28, 2000
This prospectus contains important
information about Class A shares of
the fund. Please read it before
investing and keep it for future
reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
|
---------------------------------------
|
INVESTMENT OBJECTIVE AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - - - PERFORMANCE INFORMATION 2 - - - - - - - - - - - - - - - - - - - - - - - - - - Annual Total Returns 2 Performance Table 2 FEE TABLE AND EXPENSE EXAMPLE 3 - - - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 3 Expense Example 3 FUND MANAGEMENT 4 - - - - - - - - - - - - - - - - - - - - - - - - - - The Advisor 4 Advisor Compensation 4 Portfolio Managers 4 OTHER INFORMATION 4 - - - - - - - - - - - - - - - - - - - - - - - - - - Sales Charges 4 Dividends and Distributions 4 Special Tax Information Regarding the Fund 4 FINANCIAL HIGHLIGHTS 5 - - - - - - - - - - - - - - - - - - - - - - - - - - SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - - - Choosing a Share Class A-1 Purchasing Shares A-3 Redeeming Shares A-4 Exchanging Shares A-6 Pricing of Shares A-8 Taxes A-8 OBTAINING ADDITIONAL INFORMATION Back Cover - - - - - - - - - - - - - - - - - - - - - - - - - - |
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investor, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE are registered service marks and AIM Bank Connection and AIM Internet Connect are service marks of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.
The fund's investment objective is to earn a high level of current income exempt from federal taxes and Connecticut taxes. The investment objective of the fund may be changed by the Board of Trustees without shareholder approval.
The fund attempts to meet its objective by investing at least 80% of its net assets in municipal securities issued by the State of Connecticut and authorities, agencies, instrumentalities and political subdivisions of the State of Connecticut, or other entities, that (1) pay interest which, in the opinion of bond counsel, is excluded from gross income for federal income tax purposes and from Connecticut income taxes on individuals, and (2) do not produce income that will be considered to be an item of preference for purposes of the alternative minimum tax. The fund will invest at least 65% of its assets in municipal bonds, which include debt obligations of varying maturities issued to obtain funds for various public purposes. Municipal lease obligations, synthetic municipal securities and industrial development bonds are treated as municipal securities.
At least 80% of the municipal bonds purchased by the fund will be rated investment grade, or will be obligations of issuers having an issue of outstanding municipal bonds rated investment grade, by Moody's Investors Service, Inc., Standard & Poor's Ratings Services or any other nationally recognized statistical rating organization. The fund may invest (1) up to 20% of its net assets in unrated bonds or municipal securities the portfolio managers deem to be of investment grade quality; (2) 25% or more of its total assets in securities, the interest on which is paid from revenues of similar type projects; (3) less than 25% of its total assets in industrial development bonds, and (4) up to 35% of its net assets in lower-quality bonds or municipal securities, i.e. "junk bonds."
The fund is non-diversified. This means that with respect to 50% of its total assets, it is permitted to invest more than 5% of its assets in the securities of any one issuer.
The portfolio managers focus on municipal securities they believe have favorable prospects for current income. The portfolio managers consider whether to sell a particular security when this factor materially changes.
For defensive purposes, the fund may temporarily invest up to 35% of its net assets in municipal securities that are exempt from federal taxes, but are subject to Connecticut income taxes, and up to 20% of its net assets in money market instruments that may not be exempt from federal income taxes. In anticipation of or in response to adverse market conditions, or for cash management purposes, the fund may temporarily hold all or a portion of its assets in cash, money market instruments, affiliated money market funds, bonds or other debt securities. As a result, the fund may not achieve its investment objective. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
There is a risk that you could lose all or a portion of your investment in the fund and that the income you may receive from your investment may vary. The value of your investment in the fund will go up and down with the prices of the securities in which the fund invests. Interest rate increases will cause the price of a debt security to decrease. The longer a debt security's duration, the more sensitive it is to this risk. Junk bonds are less sensitive to this risk than are higher-quality bonds. A municipality may default or otherwise be unable to honor a financial obligation. Revenue bonds are not backed by the taxing power of the issuing municipality.
The value of, payment of interest and repayment of principal by, and the ability of the fund to sell, a municipal security may also be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations and voter initiatives as well as the economics of the regions in which the fund invests.
Because it is non-diversified, the fund may invest in fewer issuers than if it were a diversified fund. The value of the fund's shares may vary more widely, and the fund may be subject to greater investment and credit risk, than if the fund invested more broadly.
Because the fund may invest a relatively high percentage of its total assets in municipal securities issued by entities having similar characteristics, such as where issuers' interest obligations are paid from revenues of similar projects, and focuses its investments in securities issued by issuers located in Connecticut, the value of your shares may rise and fall more than the shares of a fund that invests in a broader range of securities.
Compared to higher quality debt securities, junk bonds involve greater risk of default or price changes due to changes in the credit quality of the issuer and because they are generally unsecured and may be subordinated to other creditors' claims. The value of junk bonds often fluctuates in response to company, political or economic developments and can decline significantly over short periods of time or during periods of general or regional economic difficulty. During those times the bonds could be difficult to value or sell at a fair price. Credit ratings on junk bonds do not necessarily reflect their actual market risk.
An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance is not necessarily an indication of its future performance.
The following bar chart shows changes in the performance of the fund's Class A shares from year to year. The bar chart does not reflect sales loads. If it did, the annual total returns shown would be lower.
Annual
Year Ended Total
December 31 Returns
----------- -------
1990 ....................................... 5.89%
1991 ....................................... 12.23%
1992 ....................................... 8.21%
1993 ....................................... 11.99%
1994 ....................................... -3.34%
1995 ....................................... 12.18%
1996 ....................................... 3.97%
1997 ....................................... 7.20%
1998 ....................................... 4.91%
1999 ....................................... -1.17%
|
* The fund's Class A shares' year-to-date total return as of June 30, 2000 was 2.87%.
During the periods shown in the bar chart, the highest quarterly return was 4.99% (quarter ended March 31, 1995) and the lowest quarterly return was -5.68% (quarter ended March 31, 1994).
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a broad-based securities market index. The fund's performance reflects payment of sales loads.
(for the periods ended SINCE INCEPTION December 31, 1999) 1 YEAR 5 YEARS 10 YEARS INCEPTION DATE ------------------------------------------------------------------------------------------------------ Class A -5.85% 4.30% 5.56% 5.74% 10/03/89 Lehman Municipal Bond Fund Index(1) -2.06% 6.91% 6.89% 7.11(2) 9/30/89(2) ------------------------------------------------------------------------------------------------------ |
(1) The Lehman Municipal Bond Fund Index is a broad based, total return index comprised of 8000 actual bonds, all of which are investment grade, fixed rate, long term maturities (greater than two years) and are selected from issues larger than $50 million dated since January 1984.
(2) The average annual total return given is since the date closest to the inception date of Class A shares.
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold shares of the fund:
SHAREHOLDER FEES - - - - - - - - - - - - - - - - - - - - - - - - - - (fees paid directly from your investment) CLASS A --------------------------------------------------- Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) 4.75% Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less) None(1) --------------------------------------------------- |
ANNUAL FUND OPERATING EXPENSES - - - - - - - - - - - - - - - - - - - - - - - - - - (expenses that are deducted from fund assets) CLASS A --------------------------------------------------- Management Fees 0.50% Distribution and/or Service (12b-1) Fees 0.25 Other Expenses 0.35 Total Annual Fund Operating Expenses 1.10 --------------------------------------------------- |
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares within 18 months from the date of purchase, you may pay a 1% contingent deferred sales charge (CDSC) at the time of redemption.
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than the maximum permitted initial sales charge.
EXPENSE EXAMPLE
This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund's gross operating expenses remain the same. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $582 $808 $1,052 $1,752
----------------------------------------------
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THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and is responsible for its day-to-day management. The advisor is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor supervises all aspects of the fund's operations and provides investment advisory services to the fund, including obtaining and evaluating economic, statistical and financial information to formulate and implement investment programs for the fund.
The advisor has acted as an investment advisor since its organization in 1976. Today, the advisor, together with its subsidiaries, advises or manages over 120 investment portfolios, including the fund, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended March 31, 2000, the advisor received compensation of 0.50% of average daily net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual members of the team who are primarily responsible for the day-to-day management of the fund's portfolio are
- Richard A. Berry, Senior Portfolio Manager, who has been responsible for the fund since 1992 and has been associated with the advisor and/or its affiliates since 1987.
- Stephen D. Turman, Portfolio Manager, who has been responsible for the fund since 1992 and has been associated with the advisor and/or its affiliates since 1985.
SALES CHARGES
Purchases of Class A shares of AIM Tax-Exempt Bond Fund of Connecticut are subject to the maximum 4.75% initial sales charge as listed under the heading "CATEGORY II Initial Sales Charges" in the "Shareholder Information--Choosing a Share Class" section of this prospectus.
DIVIDENDS AND DISTRIBUTIONS
The fund expects that its distributions, if any, will consist primarily of income.
DIVIDENDS
The fund generally declares dividends on each business day and pays any dividends monthly.
CAPITAL GAINS DISTRIBUTIONS
The fund generally distributes long-term and short-term capital gains, if any, annually.
SPECIAL TAX INFORMATION REGARDING THE FUND
In addition to the general tax information set forth under the heading "Shareholder Information--Taxes" in this prospectus, the following information describes the tax impact of certain dividends you may receive from the fund.
You will not be required to include the "exempt-interest" portion of dividends paid by the fund in your gross income for federal income tax purposes. You will be required to report the receipt of exempt-interest dividends and other tax-exempt interest on your federal income tax returns. Exempt-interest dividends from the fund may be subject to state and local 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, and may have other collateral federal income tax consequences for you. The fund may invest in municipal securities the interest on which constitutes an item of tax preference and could give rise to a federal alternative minimum tax liability for you, and may invest up to 20% of its net assets in such securities and other taxable securities. The fund will try to avoid investments that result in taxable dividends.
To the extent that dividends paid by the fund are derived from taxable investments or realized capital gains, they will be taxable as ordinary income or long-term capital gains. The percentage of dividends that constitutes exempt-interest dividends will be determined annually. This percentage may differ from the actual percentage of exempt interest received by the fund for the particular days in which you hold 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 fund to pay exempt-interest dividends might be adversely affected.
The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
CLASS A
----------------------------------------------------
YEAR ENDED MARCH 31,
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
Net asset value, beginning of period $ 11.00 $ 11.04 $ 10.77 $ 10.81 $ 10.71
------------------------------------------------------------ ------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.51 0.53 0.55 0.56 0.56
------------------------------------------------------------ ------- ------- ------- ------- -------
Net gains (losses) on securities (both realized and
unrealized) (0.49) (0.03) 0.27 (0.05) 0.10
------------------------------------------------------------ ------- ------- ------- ------- -------
Total from investment operations 0.02 0.50 0.82 0.51 0.66
------------------------------------------------------------ ------- ------- ------- ------- -------
Less distributions from net investment income (0.51) (0.54) (0.55) (0.55) (0.56)
------------------------------------------------------------ ------- ------- ------- ------- -------
Net asset value, end of period $ 10.51 $ 11.00 $ 11.04 $ 10.77 $ 10.81
------------------------------------------------------------ ------- ------- ------- ------- -------
Total return(a) 0.28% 4.64% 7.78% 4.84% 6.24%
------------------------------------------------------------ ------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $37,302 $41,440 $40,567 $38,118 $39,355
------------------------------------------------------------ ------- ------- ------- ------- -------
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.09%(b) 0.99% 0.88% 0.72% 0.66%
------------------------------------------------------------ ------- ------- ------- ------- -------
Without fee waivers and/or expense reimbursements 1.10%(b) 1.11% 1.11% 1.09% 1.16%
------------------------------------------------------------ ------- ------- ------- ------- -------
Ratio of net investment income to average net assets 4.79%(b) 4.78% 5.02% 5.18% 5.16%
------------------------------------------------------------ ------- ------- ------- ------- -------
Portfolio turnover rate 28% 7% 5% 17% 17%
------------------------------------------------------------ ------- ------- ------- ------- -------
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(a) Does not deduct sales charges.
(b) Ratios are based on average net assets of $39,857,079.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
---------------------------------------------------------------------------------------------------------
- Initial sales charge - No initial sales charge - No initial sales charge
- Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within charge on redemptions within
six years one year
- Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
eight years after the end of shares
the month in which shares
were purchased along with a
pro rata portion of its
reinvested dividends and
distributions(1)
- Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
|
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund. You may be charged a contingent deferred sales charge if you redeem AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain exchanges. Sales charges on all other AIM Funds and classes of those Funds are detailed below. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales charges. The "Other Information" section of your prospectus will tell you in what category your particular AIM Fund is classified.
CATEGORY I INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
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A-1 MCF--06/00
CATEGORY II INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
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CATEGORY III INITIAL SALES CHARGES
-------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
-------------------------------------------------------------
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CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
----------------------------------------------------------
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
----------------------------------------------------------
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COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current market value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, we will assume that you have redeemed shares on which there is no CDSC first and, then, shares in the order of purchase.
REDUCED SALES CHARGES
AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial consultant must provide sufficient information at the time of purchase to verify that your purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares currently owned for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the current value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of AIM Funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full face amount of the LOI is not invested by the end of the 13-month period, your account will be adjusted to the higher initial sales charge level for the amount actually invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- on shares purchased by reinvesting dividends and distributions;
- when exchanging shares among certain AIM Funds;
- when using the reinstatement privilege; and
- when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- if you redeem Class B shares you held for more than six years;
- if you redeem Class C shares you held for more than one year;
- if you redeem shares acquired through reinvestment of dividends and distributions; and
- on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares at reduced or without sales charges. Consult the fund's Statement of Additional Information for details.
MCF--06/00 A-2
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM Mid Cap Opportunities Fund and AIM Small Cap Opportunities Fund) are as follows:
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
-----------------------------------------------------------------------------------------------------------
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
----------------------------------------------------------------------------------------------------------
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HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
PURCHASE OPTIONS
---------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
---------------------------------------------------------------------------------------------------------
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed account application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed account application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank Connection
methods described above. form to the transfer agent. Once
the transfer agent has received the
form, call the transfer agent to
place your purchase order.
By AIM Internet Connect(SM) Open your account using one of the Select the AIM Internet Connect
methods described above. option on your completed account
application or complete an AIM
Internet Connect Authorization
Form. Mail the application or form
to the transfer agent. Once your
request for this option has been
processed (which may take up to 10
days), you may place your purchase
order at www.aimfunds.com. The
maximum purchase amount per
transaction is $100,000. You may
not purchase shares in AIM
prototype retirement accounts on
the internet.
----------------------------------------------------------------------------------------------------------
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A-3 MCF--06/00
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing the AIM Fund to withdraw the amount of your investment from your bank account on a day or dates you specify and in an amount of at least $50. You may stop the Automatic Investment Plan at any time by giving the transfer agent notice ten days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund accounts with the identical registration. The account from which exchanges are to be made must have a minimum balance of $5,000 before you can use this option. Exchanges will occur on (or about) the 10th or 25th day of the month, whichever you specify, in the amount you specify. The minimum amount you can exchange to another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any AIM Fund at net asset value. Unless you specify otherwise, your dividends and distributions will automatically be reinvested in the same AIM Fund. You may invest your dividends and distributions (1) into another AIM Fund in the same class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at least $5,000; or (b) in the AIM Fund receiving the dividend must be at least $500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the Portfolio Rebalancing Program. Under this Program, you can designate how the total value of your AIM Fund holdings should be rebalanced, on a percentage basis, between two and ten of your AIM Funds on a quarterly, semiannual or annual basis. Your portfolio will be rebalanced through the exchange of shares in one or more of your AIM Funds for shares of the same class of one or more other AIM Funds in your portfolio. If you wish to participate in the Program, make changes or cancel the Program, the transfer agent must receive your request to participate, changes, or cancellation in good order at least five business days prior to the next rebalancing date, which is normally the 28th day of the last month of the period you choose. You may realize taxable gains from these exchanges. We may modify, suspend or terminate the Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through tax-sheltered retirement plans made available to corporations, individuals and employees of non-profit organizations and public schools. A plan document must be adopted to establish a retirement plan. You may use AIM Funds-sponsored retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans, 401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit Sharing plans, or another sponsor's retirement plan. The plan custodian of the AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10. Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
Generally, we will not charge you any fees to redeem your shares. However, if you acquired Class A shares of AIM Developing Markets Fund in connection with the reorganization of AIM Eastern Europe Fund, you will be charged a redemption fee of 2% of the net asset value of those shares, which will be paid to AIM Developing Markets Fund, if you redeem your shares within the first year after the reorganization. Your broker or financial consultant may charge service fees for handling redemption transactions. Your shares also may be subject to a contingent deferred sales charge (CDSC).
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares subject to a CDSC within 18 months of the purchase of the Class A shares, you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES OR CLASS C
SHARES ACQUIRED BY EXCHANGE FROM AIM CASH
RESERVE SHARES OF AIM MONEY MARKET FUND
We will begin the holding period for purposes of calculating the CDSC on Class B shares or Class C shares acquired by exchange from AIM Cash Reserve Shares of AIM Money Market Fund at the time of the exchange into Class B shares or Class C shares.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM Floating Rate Fund, the early withdrawal charge applicable to shares of AIM Floating Rate Fund will be applied instead of the CDSC normally applicable to Class B shares.
MCF--06/00 A-4
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record (if there has been no change communicated
to us within the last 30 days) or transferred electronically
to a pre-authorized checking account; (2) you do not hold
physical share certificates; (3) you can provide proper
identification information; (4) the proceeds of the
redemption do not exceed $50,000; and (5) you have not
previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not be redeemed by telephone. The transfer agent
must receive your call during the hours of the customary
trading session of the New York Stock Exchange (NYSE) in
order to effect the redemption at that day's closing price.
By AIM Internet
Connect Place your redemption request at www.aimfunds.com. You will
be allowed to redeem by internet if (1) you do not hold
physical share certificates; (2) you can provide proper
identification information; (3) the proceeds of the
redemption do not exceed $50,000; and (4) you have
established the internet trading option. AIM prototype
retirement accounts may not be redeemed on the internet.
The transfer agent must confirm your transaction during the
hours of the customary trading session of the NYSE in order
to effect the redemption at that day's closing price.
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TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no more than seven days, after we accept your request to redeem. If you redeem shares recently purchased by check, you will be required to wait up to ten business days before we will send your redemption proceeds. This delay is necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a check in the amount of the redemption proceeds to the address on record with us. If your request is not in good order, you may have to provide us with additional documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the redemption proceeds to your address of record (if there has been no change communicated to the transfer agent within the previous 30 days) or transmit them electronically to your pre-authorized bank account. We use reasonable procedures to confirm that instructions communicated by telephone are genuine and are not liable for telephone instructions that are reasonably believed to be genuine.
REDEMPTION BY INTERNET
If you redeem by internet, we will transmit your redemption proceeds electronically to your pre-authorized bank account. We use reasonable procedures to confirm that instructions communicated by internet are genuine and are not liable for internet instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account of at least $50. You also may make annual withdrawals if you own Class A shares. We will redeem enough shares from your account to cover the amount withdrawn. You must have an account balance of at least $5,000 to establish a Systematic Withdrawal Plan. You can stop this plan at any time by giving ten days prior notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try to transmit payment of redemption proceeds on that same day. If we receive your redemption order after 11:30 a.m. Eastern Time and before the close of the customary trading session of the NYSE, we generally will transmit payment on the next business day.
A-5 MCF--06/00
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or more if you have completed an authorization form. Redemption by check is not available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered on the account;
(3) you request that payment be sent somewhere other than the bank of record on the account; or
(4) you request that payment be sent to a new address or an address that changed in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of financial institutions. Call the transfer agent for additional information. Some institutions have transaction amount maximums for these guarantees. Please check with the guarantor institution.
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in Class A shares of any AIM Fund at net asset value in an identically registered account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting the difference between the initial sales charges on those Funds and the ones in which you will be investing. In addition, if you paid a contingent deferred sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC if you later redeem that amount. You must notify the transfer agent in writing at the time you reinstate that you are exercising your reinstatement privilege. You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have not provided a correct Social Security
or other tax ID number on your account application, the AIM Fund may, at its
discretion, redeem the account and distribute the proceeds to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those of another AIM Fund. Before requesting an exchange, review the prospectus of the AIM Fund you wish to acquire. Exchange privileges also apply to holders of the Connecticut General Guaranteed Account, established for tax-qualified group annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the same class of another AIM Fund. You may exchange AIM Cash Reserve Shares of AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You also may exchange AIM Cash Reserve Shares of AIM Money Market Fund for Class B shares or Class C shares of another AIM Fund, but only if the AIM Cash Reserve Shares were purchased directly and not acquired by exchange. You may be required to pay an initial sales charge when exchanging from a Fund with a lower initial sales charge than the one into which you are exchanging. If you exchange from Class A shares not subject to a CDSC into Class A shares subject to those charges, you will be charged a CDSC when you redeem the exchanged shares. The CDSC charged on redemption of those shares will be calculated starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except for Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund), but only if you acquired the original shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an initial sales charge;
MCF--06/00 A-6
(ii) on or after May 1, 1994 by exchange from Class A shares subject to an initial sales charge (except for Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund, but only if you acquired the original shares by exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class C shares.
(5) AIM Cash Reserve Shares of AIM Money Market Fund for Class B shares and Class C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- You must meet the minimum purchase requirements for the AIM Fund into which you are exchanging;
- Shares of the AIM Fund you wish to acquire must be available for sale in your state of residence;
- Exchanges must be made between accounts with identical registration information;
- The account you wish to exchange from must have a certified tax identification number (or the Fund has received an appropriate Form W-8 or W-9);
- Shares must have been held for at least one day prior to the exchange;
- If you have physical share certificates, you must return them to the transfer agent prior to the exchange; and
- You are limited to a maximum of 10 exchanges per calendar year, because excessive short-term trading or market-timing activity can hurt fund performance. If you exceed that limit, or if an AIM Fund or the distributor determines, in its sole discretion, that your short-term trading is excessive or that you are engaging in market-timing activity, it may reject any additional exchange orders. An exchange is the movement out of (redemption) one AIM Fund and into (purchase) another AIM Fund.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the purchase of shares being acquired in an exchange for up to five business days if it determines that it would be materially disadvantaged by the immediate transfer of exchange proceeds. There is no fee for exchanges. The exchange privilege is not an option or right to purchase shares. Any of the participating AIM Funds or the distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of each registered owner exactly as the shares are registered, the account registration and account number, the dollar amount or number of shares to be exchanged and the names of the AIM Funds from which and into which the exchange is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by telephone, including that the transfer agent must receive exchange requests during the hours of the customary trading session of the NYSE; however, you still will be allowed to exchange by telephone even if you have changed your address of record within the preceding 30 days.
BY INTERNET
You will be allowed to exchange by internet if (1) you do not hold physical
share certificates; (2) you can provide proper identification information; and
(3) you have established the internet trading option.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time you held the original shares will be added to the holding period of the Class B or Class C shares, respectively, into which you exchanged for the purpose of calculating contingent deferred sales charges (CDSC) if you later redeem the exchanged shares. If you redeem Class B shares acquired by exchange via a tender offer by AIM Floating Rate Fund, you will be credited with the time period you held the shares of AIM Floating Rate Fund for the purpose of computing the early withdrawal charge applicable to those shares.
- REJECT OR CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER;
- MODIFY ANY TERMS OR CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND;
- REJECT OR CANCEL ANY REQUEST TO ESTABLISH THE AUTOMATIC INVESTMENT PLAN AND SYSTEMATIC WITHDRAWAL PLAN OPTIONS ON THE SAME ACCOUNT; OR
A-7 MCF--06/00
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The AIM Funds value portfolio securities for which market quotations are readily available at market value. The AIM Funds value short-term investments maturing within 60 days at amortized cost, which approximates market value. AIM Money Market Fund and AIM Tax-Exempt Cash Fund value all of their securities at amortized cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund, AIM Tax-Exempt Bond Fund of Connecticut and AIM Tax-Free Intermediate Fund value variable rate securities that have an unconditional demand or put feature exercisable within seven days or less at par, which reflects the market value of such securities.
The AIM Funds value all other securities and assets at their fair value. Securities and other assets quoted in foreign currencies are valued in U.S. dollars based on the prevailing exchange rates on that day. In addition, if, between the time trading ends on a particular security and the close of the customary trading session of the NYSE, events occur that materially affect the value of the security, the AIM Funds may value the security at its fair value as determined in good faith by or under the supervision of the Board of Directors or Trustees of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's net asset value will be subject to the judgment of the Board of Directors or Trustees or its designee instead of being determined by the market. Because some of the AIM Funds may invest in securities that are primarily listed on foreign exchanges that trade on days when the AIM Funds do not price their shares, the value of those funds' assets may change on days when you will not be able to purchase or redeem fund shares.
Each AIM Fund determines the net asset value of its shares on each day the NYSE is open for business, as of the close of the customary trading session, or any earlier NYSE closing time that day. AIM Money Market Fund also determines its net asset value as of 12:00 noon Eastern Time on each day the NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours of the customary trading session of the NYSE. The AIM Funds price purchase, exchange and redemption orders at the net asset value calculated after the transfer agent receives an order in good form. An AIM Fund may postpone the right of redemption only under unusual circumstances, as allowed by the Securities and Exchange Commission, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary income or long-term capital gains for federal income tax purposes, whether you reinvest them in additional shares or take them in cash. Distributions are generally taxable to you at different rates depending on the length of time the fund holds its assets. Different tax rates may apply to ordinary income and long-term capital gain distributions, regardless of how long you have held your shares. Every year, you will be sent information showing the amount of dividends and distributions you received from each AIM Fund during the prior year.
Any long-term or short-term capital gains realized from redemptions of AIM Fund shares will be subject to federal income tax. Exchanges of shares for shares of another AIM Fund are treated as a sale, and any gain realized on the transaction will generally be subject to federal income tax.
INVESTORS IN TAX-EXEMPT FUNDS SHOULD READ THE INFORMATION UNDER THE HEADING "OTHER INFORMATION -- SPECIAL TAX INFORMATION REGARDING THE FUND" IN THEIR PROSPECTUS.
The foreign, state and local tax consequences of investing in AIM Fund shares may differ materially from the federal income tax consequences described above. You should consult your tax advisor before investing.
MCF--06/00 A-8
More information may be obtained free of charge upon request. The Statement of Additional Information (SAI), a current version of which is on file with the Securities and Exchange Commission (SEC), contains more details about the fund and is incorporated by reference into the prospectus (is legally a part of this prospectus). Annual and semiannual reports to shareholders contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of Funds--Registered Trademark-- or your account, or wish to obtain free copies of the fund's current SAI or annual or semiannual reports, please contact us
BY MAIL: A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
BY TELEPHONE: (800) 347-4246
BY E-MAIL: general@aimfunds.com
ON THE INTERNET: http://www.aimfunds.com
(prospectuses and annual
and semiannual reports
only)
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You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC, on the EDGAR database on the SEC's website (http://www.sec.gov) or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
[AIM LOGO APPEARS HERE] www.aimfunds.com TCT-PRO-1 INVEST WITH DISCIPLINE --Registered Trademark-- --Registered Trademark-- |
AIM HIGH INCOME
MUNICIPAL FUND
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AIM High Income Municipal Fund seeks to achieve a high level of current income that is exempt from federal income taxes.
PROSPECTUS AIM --Registered Trademark--
JULY 28, 2000
This prospectus contains important
information about Class A, B and C
shares of the fund. Please read it
before investing and keep it for
future reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
-- Registered Trademark -- -- Registered Trademark --
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INVESTMENT OBJECTIVE AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - - PERFORMANCE INFORMATION 2 - - - - - - - - - - - - - - - - - - - - - - - - - Annual Total Return 2 Performance Table 2 FEE TABLE AND EXPENSE EXAMPLE 3 - - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 3 Expense Example 3 FUND MANAGEMENT 4 - - - - - - - - - - - - - - - - - - - - - - - - - The Advisor 4 Advisor Compensation 4 Portfolio Managers 4 OTHER INFORMATION 4 - - - - - - - - - - - - - - - - - - - - - - - - - Sales Charges 4 Dividends and Distributions 4 Special Tax Information Regarding the Fund 4 FINANCIAL HIGHLIGHTS 5 - - - - - - - - - - - - - - - - - - - - - - - - - SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - - Choosing a Share Class A-1 Purchasing Shares A-3 Redeeming Shares A-4 Exchanging Shares A-6 Pricing of Shares A-8 Taxes A-8 OBTAINING ADDITIONAL INFORMATION Back Cover - - - - - - - - - - - - - - - - - - - - - - - - - |
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investor, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE are registered service marks and AIM Bank Connection and AIM Internet Connect are service marks of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.
The fund's investment objective is to achieve a high level of current income that is exempt from federal income taxes. The investment objective of the fund may be changed by the Board of Trustees without shareholder approval.
The fund seeks to meet its objective by investing, normally, at least 80% of
its net assets in a diversified portfolio of municipal securities that (1) pay
interest which is excluded from gross income for federal income tax purposes,
(2) do not produce income that will be considered to be an item of preference
for purposes of the alternative minimum tax, and (3) are rated BBB/Baa or lower
by Standard & Poor's Ratings Services, Moody's Investors Service, Inc., or any
other nationally recognized statistical rating organization, or are deemed by
the portfolio managers to be of comparable quality. Municipal securities include
debt obligations of varying maturities issued to obtain funds for various public
purposes by or on behalf of states, territories and possessions of the United
States and the District of Columbia and their political subdivisions, agencies,
authorities and instrumentalities. Municipal lease obligations, synthetic
municipal securities and industrial development bonds are treated as municipal
securities.
The fund may invest up to (1) 100% of its net assets in lower-quality debt securities, i.e., "junk bonds;" (2) 10% of its total assets in defaulted securities; and (3) 20% of its total assets in taxable securities. The fund may invest 25% or more of the value of its total assets in municipal securities issued by entities having similar characteristics, such as (a) securities the issuers of which are located in the same geographic area or where issuers' interest obligations are paid from revenues of similar projects, or (b) industrial development revenue bonds, including pollution control revenue bonds, housing finance agency bonds or hospital bonds. The fund may not, however, invest 25% or more of the value of its total assets in industrial development revenue bonds, including pollution control revenue bonds, issued for companies in the same industry. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
The portfolio managers focus on municipal securities they believe have favorable prospects for high current income. The portfolio managers consider whether to sell a particular security when this factor materially changes.
In anticipation of or in response to adverse market conditions, for cash management purposes, or for defensive purposes, the fund may temporarily hold all or a portion of its assets in cash, money market instruments, affiliated money market funds, bonds or other debt securities. Such instruments may be taxable or tax-exempt. As a result, the fund may not achieve its investment objective.
There is a risk that you could lose all or a portion of your investment in the fund and that the income you may receive from your investment may vary. The value of your investment in the fund will go up and down with the prices of the securities in which the fund invests. Debt securities are particularly vulnerable to credit risk and interest rate fluctuations. Interest rate increases can cause the price of a debt security to decrease; junk bonds are less sensitive to this risk than are higher-quality bonds. A municipality may default or otherwise be unable to honor a financial obligation. Private activity bonds are not backed by the taxing power of the issuing municipality.
The value of, payment of interest and repayment of principal by, a municipal issuer of and the ability of the fund to sell, a municipal security may also be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations and voter initiatives as well as the economics of the regions in which the fund invests.
Compared to higher-quality debt securities, junk bonds involve greater risk of default or price changes due to changes in the credit quality of the issuer and because they may be unsecured and may be subordinated to other creditors' claims. The value of junk bonds often fluctuates in response to company, political or economic developments and can decline significantly over short periods of time or during periods of general or regional economic difficulty. During those times, the bonds could be difficult to value or to sell at a fair price. Credit ratings on junk bonds do not necessarily reflect their actual market risk.
Because the fund may invest a relatively high percentage of its total assets in municipal securities issued by entities having similar characteristics, the value of your shares may rise and fall more than the shares of a fund that invests in a broader range of securities.
An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance is not necessarily an indication of its future performance.
[GRAPH]
Annual
Year Ended Total
December 31 Return
----------- ------
1999 ....................................... -7.62%
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* The fund's Class A shares' year-to-date total return as of June 30, 2000 was 0.70%.
During the period shown in the bar chart, the highest quarterly return was .78% (quarter ended March 31, 1999) and the lowest quarterly return was -4.91% (quarter ended December 31, 1999).
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a broad-based securities market index. The fund's performance reflects payment of sales loads.
AVERAGE ANNUAL TOTAL RETURNS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (for the periods ended SINCE INCEPTION December 31, 1999) 1 YEAR 5 YEARS INCEPTION DATE ------------------------------------------------------------------------------------- Class A -11.97% -- -3.31% 01/02/98 Class B -12.71% -- -3.55% 01/02/98 Class C -9.12% -- -1.69% 01/02/98 Lehman Municipal Bond Fund Index(1) -2.06% 6.91% 2.12%(2) 12/31/97(2) ------------------------------------------------------------------------------------- |
(1) The Lehman Municipal Bond Fund Index is a broad based, total return index comprised of 8000 actual bonds, all of which are investment grade, fixed rate, long term maturities (greater than two years) and are selected from issues larger than $50 million dated since January 1984.
(2) The average annual total return given is since the date closest to the inception date of Class A shares.
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold shares of the fund:
SHAREHOLDER FEES - - - - - - - - - - - - - - - - - - - - - - - - - - - - (fees paid directly from your investment) CLASS A CLASS B CLASS C ------------------------------------------------------- Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) 4.75% None None Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less) None(1) 5.00% 1.00% ------------------------------------------------------- |
ANNUAL FUND OPERATING EXPENSES - - - - - - - - - - - - - - - - - - - - - - - - - - - - (expenses that are deducted from fund assets) CLASS A CLASS B CLASS C ------------------------------------------------------- Management Fees 0.60% 0.60% 0.60% Distribution and/or Service (12b-1) Fees 0.25 1.00 1.00 Other Expenses 0.43 0.44 0.44 Total Annual Fund Operating Expenses(2) 1.28 2.04 2.04 ------------------------------------------------------- |
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares within 18 months from the date of purchase, you may pay a 1% contingent deferred sales charge (CDSC) at the time of redemption.
(2) The investment advisor has currently agreed to limit Total Annual Fund Operating Expenses (excluding interest, taxes, dividend expense on short sales, extraordinary items and increases in expenses due to expense offset arrangements, if any). Total Annual Fund Operating Expenses restated for the current waiver are 0.55%, 1.30% and 1.30% for Class A, Class B and Class C shares respectively. The expense limitation may be terminated at any time.
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than the maximum permitted initial sales charge.
EXPENSE EXAMPLE
This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund's gross operating expenses remain the same. To the extent fees are waived, the expenses will be lower. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $599 $862 $1,144 $1,947
Class B $707 $940 $1,298 $2,174
Class C $307 $640 $1,098 $2,369
----------------------------------------------
|
You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $ 599 $ 862 $1,144 $1,947
Class B $ 207 $ 640 $1,098 $2,174
Class C $ 207 $ 640 $1,098 $2,369
----------------------------------------------
|
THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and is responsible for its day-to-day management. The advisor is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor supervises all aspects of the fund's operations and provides investment advisory services to the fund, including obtaining and evaluating economic, statistical and financial information to formulate and implement investment programs for the fund.
The advisor has acted as an investment advisor since its organization in 1976. Today, the advisor, together with its subsidiaries, advises or manages over 120 investment portfolios, including the fund, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended March 31, 2000, the advisor received no compensation from the fund.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual members of the team who are primarily responsible for the day-to-day management of the fund's portfolio are
- Franklin Ruben, Portfolio Manager, who has been responsible for the fund since 1998 and has been associated with the advisor and/or its affiliates since 1997. Prior to joining AIM, he was Associate Portfolio Manager with Van Kampen American Capital Asset Management, Inc.
- Richard A. Berry, Senior Portfolio Manager, who has been responsible for the fund since 1998 and has been associated with the advisor and/or its affiliates since 1987.
- Sharon A. Copper, Portfolio Manager, who has been responsible for the fund since 1998 and has been associated with the advisor and/or its affiliates since 1992.
SALES CHARGES
Purchases of Class A shares of AIM High Income Municipal Fund are subject to the maximum 4.75% initial sales charge as listed under the heading "CATEGORY II Initial Sales Charges" in the "Shareholder Information--Choosing a Share Class" section of this prospectus. Purchases of Class B and Class C shares are subject to the contingent deferred sales charges listed in that section.
DIVIDENDS AND DISTRIBUTIONS
The fund expects that its distributions, if any, will consist primarily of income.
DIVIDENDS
The fund generally declares dividends on each business day and pays any dividends monthly.
CAPITAL GAINS DISTRIBUTIONS
The fund generally distributes long-term and short-term capital gains, if any, annually.
SPECIAL TAX INFORMATION REGARDING THE FUND
In addition to the general tax information set forth under the heading "Shareholder Information--Taxes" in this prospectus, the following information describes the tax impact of certain dividends you may receive from the fund.
You will not be required to include the "exempt-interest" portion of dividends paid by the fund in your gross income for federal income tax purposes. You will be required to report the receipt of exempt-interest dividends and other tax-exempt interest on your federal income tax returns. Exempt-interest dividends from the fund may be subject to state and local 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, and may have other collateral federal income tax consequences for you. The fund may invest up to 20% of its net assets in municipal securities the interest on which constitutes an item of tax preference and could give rise to a federal alternative minimum tax liability for you, and in other taxable securities. The fund will try to avoid investments that result in taxable dividends.
To the extent that dividends paid by the fund are derived from taxable investments or realized capital gains, they will be taxable as ordinary income or long-term capital gains. The percentage of dividends that constitutes exempt-interest dividends will be determined annually. This percentage may differ from the actual percentage of exempt interest received by the fund for the particular days in which you hold 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 fund to pay exempt-interest dividends might be adversely affected.
The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
CLASS A
-----------------------------------------------------------
FOR THE PERIOD
YEAR ENDED JANUARY 2, 1998
MARCH 31, THROUGH
--------------------------------- MARCH 31,
2000 1999 1998
-------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.04 $ 9.99 $ 10.00
Income from investment operations:
Net investment income 0.56 0.54 0.11
Net gains (losses) on securities (both
realized and unrealized) (1.32) 0.05 (0.01)
Total from investment operations (0.76) 0.59 0.10
Less distributions from net investment income (0.56) (0.54) (0.11)
Net asset value, end of period $ 8.72 $ 10.04 $ 9.99
Total return(a) (7.79)% 6.01% 1.04%
-------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
-------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $38,645 $49,570 $17,787
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 0.50%(b) 0.29% 0.25%(c)
Without fee waivers and/or expense
reimbursements 1.28%(b) 1.29% 1.65%(c)
Ratio of net investment income to average net
assets 5.95%(b) 5.41% 4.80%(c)
Portfolio turnover rate 51% 30% 21%
-------------------------------------------------------------------------------------------------------------
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(a) Does not deduct sales charges and is not annualized for periods less than one year.
(b) Ratios are based on average net assets of $44,793,328.
(c) Annualized.
CLASS B
-----------------------------------------------------------
FOR THE PERIOD
YEAR ENDED JANUARY 2, 1998
MARCH 31, THROUGH
--------------------------------- MARCH 31,
2000 1999 1998
-------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.04 $ 9.99 $10.00
Income from investment operations:
Net investment income 0.48 0.47 0.09
Net gains (losses) on securities (both
realized and unrealized) (1.32) 0.04 (0.01)
Total from investment operations (0.84) 0.51 0.08
Less distributions from net investment income (0.48) (0.46) (0.09)
Net asset value, end of period $ 8.72 $ 10.04 $ 9.99
Total return(a) (8.54)% 5.23% 0.81%
-------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
-------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $20,298 $13,850 $2,699
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.26%(b) 1.04% 1.00%(c)
Without fee waivers and/or expense
reimbursements 2.04%(b) 2.04% 2.44%(c)
Ratio of net investment income to average net
assets 5.19%(b) 4.66% 4.05%(c)
Portfolio turnover rate 51% 30% 21%
-------------------------------------------------------------------------------------------------------------
|
(a) Does not deduct sales charges and is not annualized for periods less than one year.
(b) Ratios are based on average net assets of $17,845,864.
(c) Annualized.
CLASS C
---------------------------------------------------------------------
FOR THE PERIOD
YEAR ENDED JANUARY 2, 1998
MARCH 31, THROUGH
--------------------------------------- MARCH 31,
2000 1999 1998
-----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.04 $ 9.99 $10.00
Income from investment operations:
Net investment income 0.48 0.47 0.09
Net gains (losses) on securities (both
realized and unrealized) (1.32) 0.04 (0.01)
Total from investment operations (0.84) 0.51 0.08
Less distributions from net investment income (0.48) (0.46) (0.09)
Net asset value, end of period $ 8.72 $10.04 $ 9.99
Total return(a) (8.54)% 5.23% 0.79%
-----------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
-----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $4,100 $3,017 $ 738
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.26%(b) 1.04% 1.00%(c)
Without fee waivers and/or expense
reimbursements 2.04%(b) 2.04% 2.44%(c)
Ratio of net investment income to average net
assets 5.19%(b) 4.66% 4.05%(c)
Portfolio turnover rate 51% 30% 21%
-----------------------------------------------------------------------------------------------------------------------
|
(a) Does not deduct sales charges and is not annualized for periods less than one year.
(b) Ratios are based on average net assets of $4,174,621.
(c) Annualized.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
---------------------------------------------------------------------------------------------------------
- Initial sales charge - No initial sales charge - No initial sales charge
- Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within charge on redemptions within
six years one year
- Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
eight years after the end of shares
the month in which shares
were purchased along with a
pro rata portion of its
reinvested dividends and
distributions(1)
- Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
|
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund. You may be charged a contingent deferred sales charge if you redeem AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain exchanges. Sales charges on all other AIM Funds and classes of those Funds are detailed below. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales charges. The "Other Information" section of your prospectus will tell you in what category your particular AIM Fund is classified.
CATEGORY I INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
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A-1 MCF--06/00
CATEGORY II INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
|
CATEGORY III INITIAL SALES CHARGES
-------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
-------------------------------------------------------------
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CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
----------------------------------------------------------
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
----------------------------------------------------------
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COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current market value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, we will assume that you have redeemed shares on which there is no CDSC first and, then, shares in the order of purchase.
REDUCED SALES CHARGES
AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial consultant must provide sufficient information at the time of purchase to verify that your purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares currently owned for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the current value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of AIM Funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full face amount of the LOI is not invested by the end of the 13-month period, your account will be adjusted to the higher initial sales charge level for the amount actually invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- on shares purchased by reinvesting dividends and distributions;
- when exchanging shares among certain AIM Funds;
- when using the reinstatement privilege; and
- when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- if you redeem Class B shares you held for more than six years;
- if you redeem Class C shares you held for more than one year;
- if you redeem shares acquired through reinvestment of dividends and distributions; and
- on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares at reduced or without sales charges. Consult the fund's Statement of Additional Information for details.
MCF--06/00 A-2
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM Mid Cap Opportunities Fund and AIM Small Cap Opportunities Fund) are as follows:
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
-----------------------------------------------------------------------------------------------------------
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
----------------------------------------------------------------------------------------------------------
|
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
PURCHASE OPTIONS
---------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
---------------------------------------------------------------------------------------------------------
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed account application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed account application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank Connection
methods described above. form to the transfer agent. Once
the transfer agent has received the
form, call the transfer agent to
place your purchase order.
By AIM Internet Connect(SM) Open your account using one of the Select the AIM Internet Connect
methods described above. option on your completed account
application or complete an AIM
Internet Connect Authorization
Form. Mail the application or form
to the transfer agent. Once your
request for this option has been
processed (which may take up to 10
days), you may place your purchase
order at www.aimfunds.com. The
maximum purchase amount per
transaction is $100,000. You may
not purchase shares in AIM
prototype retirement accounts on
the internet.
----------------------------------------------------------------------------------------------------------
|
A-3 MCF--06/00
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing the AIM Fund to withdraw the amount of your investment from your bank account on a day or dates you specify and in an amount of at least $50. You may stop the Automatic Investment Plan at any time by giving the transfer agent notice ten days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund accounts with the identical registration. The account from which exchanges are to be made must have a minimum balance of $5,000 before you can use this option. Exchanges will occur on (or about) the 10th or 25th day of the month, whichever you specify, in the amount you specify. The minimum amount you can exchange to another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any AIM Fund at net asset value. Unless you specify otherwise, your dividends and distributions will automatically be reinvested in the same AIM Fund. You may invest your dividends and distributions (1) into another AIM Fund in the same class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at least $5,000; or (b) in the AIM Fund receiving the dividend must be at least $500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the Portfolio Rebalancing Program. Under this Program, you can designate how the total value of your AIM Fund holdings should be rebalanced, on a percentage basis, between two and ten of your AIM Funds on a quarterly, semiannual or annual basis. Your portfolio will be rebalanced through the exchange of shares in one or more of your AIM Funds for shares of the same class of one or more other AIM Funds in your portfolio. If you wish to participate in the Program, make changes or cancel the Program, the transfer agent must receive your request to participate, changes, or cancellation in good order at least five business days prior to the next rebalancing date, which is normally the 28th day of the last month of the period you choose. You may realize taxable gains from these exchanges. We may modify, suspend or terminate the Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through tax-sheltered retirement plans made available to corporations, individuals and employees of non-profit organizations and public schools. A plan document must be adopted to establish a retirement plan. You may use AIM Funds-sponsored retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans, 401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit Sharing plans, or another sponsor's retirement plan. The plan custodian of the AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10. Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
Generally, we will not charge you any fees to redeem your shares. However, if you acquired Class A shares of AIM Developing Markets Fund in connection with the reorganization of AIM Eastern Europe Fund, you will be charged a redemption fee of 2% of the net asset value of those shares, which will be paid to AIM Developing Markets Fund, if you redeem your shares within the first year after the reorganization. Your broker or financial consultant may charge service fees for handling redemption transactions. Your shares also may be subject to a contingent deferred sales charge (CDSC).
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares subject to a CDSC within 18 months of the purchase of the Class A shares, you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES OR CLASS C
SHARES ACQUIRED BY EXCHANGE FROM AIM CASH
RESERVE SHARES OF AIM MONEY MARKET FUND
We will begin the holding period for purposes of calculating the CDSC on Class B shares or Class C shares acquired by exchange from AIM Cash Reserve Shares of AIM Money Market Fund at the time of the exchange into Class B shares or Class C shares.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM Floating Rate Fund, the early withdrawal charge applicable to shares of AIM Floating Rate Fund will be applied instead of the CDSC normally applicable to Class B shares.
MCF--06/00 A-4
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record (if there has been no change communicated
to us within the last 30 days) or transferred electronically
to a pre-authorized checking account; (2) you do not hold
physical share certificates; (3) you can provide proper
identification information; (4) the proceeds of the
redemption do not exceed $50,000; and (5) you have not
previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not be redeemed by telephone. The transfer agent
must receive your call during the hours of the customary
trading session of the New York Stock Exchange (NYSE) in
order to effect the redemption at that day's closing price.
By AIM Internet
Connect Place your redemption request at www.aimfunds.com. You will
be allowed to redeem by internet if (1) you do not hold
physical share certificates; (2) you can provide proper
identification information; (3) the proceeds of the
redemption do not exceed $50,000; and (4) you have
established the internet trading option. AIM prototype
retirement accounts may not be redeemed on the internet.
The transfer agent must confirm your transaction during the
hours of the customary trading session of the NYSE in order
to effect the redemption at that day's closing price.
|
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no more than seven days, after we accept your request to redeem. If you redeem shares recently purchased by check, you will be required to wait up to ten business days before we will send your redemption proceeds. This delay is necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a check in the amount of the redemption proceeds to the address on record with us. If your request is not in good order, you may have to provide us with additional documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the redemption proceeds to your address of record (if there has been no change communicated to the transfer agent within the previous 30 days) or transmit them electronically to your pre-authorized bank account. We use reasonable procedures to confirm that instructions communicated by telephone are genuine and are not liable for telephone instructions that are reasonably believed to be genuine.
REDEMPTION BY INTERNET
If you redeem by internet, we will transmit your redemption proceeds electronically to your pre-authorized bank account. We use reasonable procedures to confirm that instructions communicated by internet are genuine and are not liable for internet instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account of at least $50. You also may make annual withdrawals if you own Class A shares. We will redeem enough shares from your account to cover the amount withdrawn. You must have an account balance of at least $5,000 to establish a Systematic Withdrawal Plan. You can stop this plan at any time by giving ten days prior notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try to transmit payment of redemption proceeds on that same day. If we receive your redemption order after 11:30 a.m. Eastern Time and before the close of the customary trading session of the NYSE, we generally will transmit payment on the next business day.
A-5 MCF--06/00
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or more if you have completed an authorization form. Redemption by check is not available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered on the account;
(3) you request that payment be sent somewhere other than the bank of record on the account; or
(4) you request that payment be sent to a new address or an address that changed in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of financial institutions. Call the transfer agent for additional information. Some institutions have transaction amount maximums for these guarantees. Please check with the guarantor institution.
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in Class A shares of any AIM Fund at net asset value in an identically registered account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting the difference between the initial sales charges on those Funds and the ones in which you will be investing. In addition, if you paid a contingent deferred sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC if you later redeem that amount. You must notify the transfer agent in writing at the time you reinstate that you are exercising your reinstatement privilege. You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have not provided a correct Social Security
or other tax ID number on your account application, the AIM Fund may, at its
discretion, redeem the account and distribute the proceeds to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those of another AIM Fund. Before requesting an exchange, review the prospectus of the AIM Fund you wish to acquire. Exchange privileges also apply to holders of the Connecticut General Guaranteed Account, established for tax-qualified group annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the same class of another AIM Fund. You may exchange AIM Cash Reserve Shares of AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You also may exchange AIM Cash Reserve Shares of AIM Money Market Fund for Class B shares or Class C shares of another AIM Fund, but only if the AIM Cash Reserve Shares were purchased directly and not acquired by exchange. You may be required to pay an initial sales charge when exchanging from a Fund with a lower initial sales charge than the one into which you are exchanging. If you exchange from Class A shares not subject to a CDSC into Class A shares subject to those charges, you will be charged a CDSC when you redeem the exchanged shares. The CDSC charged on redemption of those shares will be calculated starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except for Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund), but only if you acquired the original shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an initial sales charge;
MCF--06/00 A-6
(ii) on or after May 1, 1994 by exchange from Class A shares subject to an initial sales charge (except for Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund, but only if you acquired the original shares by exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class C shares.
(5) AIM Cash Reserve Shares of AIM Money Market Fund for Class B shares and Class C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- You must meet the minimum purchase requirements for the AIM Fund into which you are exchanging;
- Shares of the AIM Fund you wish to acquire must be available for sale in your state of residence;
- Exchanges must be made between accounts with identical registration information;
- The account you wish to exchange from must have a certified tax identification number (or the Fund has received an appropriate Form W-8 or W-9);
- Shares must have been held for at least one day prior to the exchange;
- If you have physical share certificates, you must return them to the transfer agent prior to the exchange; and
- You are limited to a maximum of 10 exchanges per calendar year, because excessive short-term trading or market-timing activity can hurt fund performance. If you exceed that limit, or if an AIM Fund or the distributor determines, in its sole discretion, that your short-term trading is excessive or that you are engaging in market-timing activity, it may reject any additional exchange orders. An exchange is the movement out of (redemption) one AIM Fund and into (purchase) another AIM Fund.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the purchase of shares being acquired in an exchange for up to five business days if it determines that it would be materially disadvantaged by the immediate transfer of exchange proceeds. There is no fee for exchanges. The exchange privilege is not an option or right to purchase shares. Any of the participating AIM Funds or the distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of each registered owner exactly as the shares are registered, the account registration and account number, the dollar amount or number of shares to be exchanged and the names of the AIM Funds from which and into which the exchange is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by telephone, including that the transfer agent must receive exchange requests during the hours of the customary trading session of the NYSE; however, you still will be allowed to exchange by telephone even if you have changed your address of record within the preceding 30 days.
BY INTERNET
You will be allowed to exchange by internet if (1) you do not hold physical
share certificates; (2) you can provide proper identification information; and
(3) you have established the internet trading option.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time you held the original shares will be added to the holding period of the Class B or Class C shares, respectively, into which you exchanged for the purpose of calculating contingent deferred sales charges (CDSC) if you later redeem the exchanged shares. If you redeem Class B shares acquired by exchange via a tender offer by AIM Floating Rate Fund, you will be credited with the time period you held the shares of AIM Floating Rate Fund for the purpose of computing the early withdrawal charge applicable to those shares.
- REJECT OR CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER;
- MODIFY ANY TERMS OR CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND;
- REJECT OR CANCEL ANY REQUEST TO ESTABLISH THE AUTOMATIC INVESTMENT PLAN AND SYSTEMATIC WITHDRAWAL PLAN OPTIONS ON THE SAME ACCOUNT; OR
A-7 MCF--06/00
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The AIM Funds value portfolio securities for which market quotations are readily available at market value. The AIM Funds value short-term investments maturing within 60 days at amortized cost, which approximates market value. AIM Money Market Fund and AIM Tax-Exempt Cash Fund value all of their securities at amortized cost. AIM High Income Municipal Fund, AIM Municipal Bond Fund, AIM Tax-Exempt Bond Fund of Connecticut and AIM Tax-Free Intermediate Fund value variable rate securities that have an unconditional demand or put feature exercisable within seven days or less at par, which reflects the market value of such securities.
The AIM Funds value all other securities and assets at their fair value. Securities and other assets quoted in foreign currencies are valued in U.S. dollars based on the prevailing exchange rates on that day. In addition, if, between the time trading ends on a particular security and the close of the customary trading session of the NYSE, events occur that materially affect the value of the security, the AIM Funds may value the security at its fair value as determined in good faith by or under the supervision of the Board of Directors or Trustees of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's net asset value will be subject to the judgment of the Board of Directors or Trustees or its designee instead of being determined by the market. Because some of the AIM Funds may invest in securities that are primarily listed on foreign exchanges that trade on days when the AIM Funds do not price their shares, the value of those funds' assets may change on days when you will not be able to purchase or redeem fund shares.
Each AIM Fund determines the net asset value of its shares on each day the NYSE is open for business, as of the close of the customary trading session, or any earlier NYSE closing time that day. AIM Money Market Fund also determines its net asset value as of 12:00 noon Eastern Time on each day the NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours of the customary trading session of the NYSE. The AIM Funds price purchase, exchange and redemption orders at the net asset value calculated after the transfer agent receives an order in good form. An AIM Fund may postpone the right of redemption only under unusual circumstances, as allowed by the Securities and Exchange Commission, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary income or long-term capital gains for federal income tax purposes, whether you reinvest them in additional shares or take them in cash. Distributions are generally taxable to you at different rates depending on the length of time the fund holds its assets. Different tax rates may apply to ordinary income and long-term capital gain distributions, regardless of how long you have held your shares. Every year, you will be sent information showing the amount of dividends and distributions you received from each AIM Fund during the prior year.
Any long-term or short-term capital gains realized from redemptions of AIM Fund shares will be subject to federal income tax. Exchanges of shares for shares of another AIM Fund are treated as a sale, and any gain realized on the transaction will generally be subject to federal income tax.
INVESTORS IN TAX-EXEMPT FUNDS SHOULD READ THE INFORMATION UNDER THE HEADING "OTHER INFORMATION -- SPECIAL TAX INFORMATION REGARDING THE FUND" IN THEIR PROSPECTUS.
The foreign, state and local tax consequences of investing in AIM Fund shares may differ materially from the federal income tax consequences described above. You should consult your tax advisor before investing.
MCF--06/00 A-8
More information may be obtained free of charge upon request. The Statement of Additional Information (SAI), a current version of which is on file with the Securities and Exchange Commission (SEC), contains more details about the fund and is incorporated by reference into the prospectus (is legally a part of this prospectus). Annual and semiannual reports to shareholders contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of Funds--Registered Trademark-- or your account, or wish to obtain free copies of the fund's current SAI or annual or semiannual reports, please contact us
BY MAIL: A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
BY TELEPHONE: (800) 347-4246
BY E-MAIL: general@aimfunds.com
ON THE INTERNET: http://www.aimfunds.com
(prospectuses and annual
and semiannual reports
only)
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You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
[AIM LOGO APPEARS HERE] www.aimfunds.com HIM-PRO-1 INVEST WITH DISCIPLINE -- Registered Trademark -- -- Registered Trademark -- |
STATEMENT OF
ADDITIONAL INFORMATION
|
AIM TAX-EXEMPT FUNDS
AIM TAX-EXEMPT CASH FUND
AIM TAX-FREE INTERMEDIATE FUND
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
AIM HIGH INCOME MUNICIPAL FUND
11 Greenway Plaza
Suite 100
Houston, Texas 77046
(713) 626-1919
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS, AND IT
SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS FOR THE ABOVE-NAMED
FUNDS, A COPY OF WHICH MAY BE OBTAINED FREE OF CHARGE FROM AUTHORIZED
DEALERS OR BY WRITING A I M DISTRIBUTORS, INC., P.O. BOX 4739,
HOUSTON, TEXAS 77210-4739, OR BY CALLING (800) 347-4246
STATEMENT OF ADDITIONAL INFORMATION DATED: JULY 28, 2000
RELATING TO THE AIM TAX-EXEMPT CASH FUND PROSPECTUS DATED JULY 28, 2000,
THE AIM TAX-FREE INTERMEDIATE FUND PROSPECTUS DATED JULY 28, 2000,
THE AIM TAX-EXEMPT BOND FUND OF CONNECTICUT PROSPECTUS DATED JULY 28, 2000,
AND THE AIM HIGH INCOME MUNICIPAL FUND PROSPECTUS DATED JULY 28, 2000
TABLE OF CONTENTS
PAGE
INTRODUCTION................................................................................................... 1
GENERAL INFORMATION ABOUT THE TRUST............................................................................ 1
The Trust and its Shares.............................................................................. 1
PERFORMANCE INFORMATION........................................................................................ 3
Yield Calculations.................................................................................... 3
Total Return Calculations............................................................................. 5
Historical Portfolio Results.......................................................................... 6
PORTFOLIO TRANSACTIONS AND BROKERAGE........................................................................... 8
General Brokerage Policy.............................................................................. 8
Allocation of Portfolio Transactions.................................................................. 9
Section 28(e) Standards............................................................................... 9
Portfolio Turnover.................................................................................... 10
INVESTMENT STRATEGIES AND RISKS................................................................................ 11
Investment Program.................................................................................... 11
Municipal Securities.................................................................................. 11
Maturities............................................................................................ 13
Quality Standards..................................................................................... 13
Money Market Instruments: AIM Tax-Exempt Cash Fund Only.............................................. 15
Investment in Non-Investment Grade Securities: AIM Tax-Exempt Bond Fund of Connecticut and AIM High
Income Municipal Fund Only................................................................... 15
Defaulted Securities.................................................................................. 16
When-Issued or Delayed Delivery Securities............................................................ 17
Municipal Forward Contracts........................................................................... 18
Illiquid Securities................................................................................... 18
Variable or Floating Rate Instruments................................................................. 18
Concentration of Investments.......................................................................... 18
Risk Factors in Concentrating in Connecticut Municipal Obligations.................................... 19
Non-Diversified Portfolio............................................................................. 19
Margin Transactions................................................................................... 19
Short Sales........................................................................................... 20
Diversification Requirements - AIM Tax-Exempt Cash Fund............................................... 20
Synthetic Municipal Instruments....................................................................... 20
Standby Commitments................................................................................... 21
Indexed Securities.................................................................................... 21
Zero-Coupon and Pay-in-Kind Securities................................................................ 21
Insurance............................................................................................. 22
Lending of Portfolio Securities....................................................................... 22
Interfund Loans....................................................................................... 22
Other Considerations.................................................................................. 22
Investment in Other Investment Companies.............................................................. 22
Temporary Defensive Investments....................................................................... 23
Options and Futures................................................................................... 23
Covered Call Options: AIM High Income Municipal Fund, AIM Tax-Exempt Bond Fund of
Connecticut and AIM Tax-Free Intermediate Fund Only................................. 23
Put Options: AIM High Income Municipal Fund Only............................................ 24
Combined Option Positions: AIM High Income Municipal Fund Only............................... 24
Futures Contracts: All Funds................................................................ 24
Options on Futures Contracts: All Funds.............................................................. 25
AIM Tax-Exempt Cash Fund.............................................................................. 25
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Risks as to Futures Contracts and Related Options............................................ 25
INVESTMENT RESTRICTIONS........................................................................................ 26
Fundamental Restrictions.............................................................................. 26
Non-Fundamental Restrictions.......................................................................... 27
MANAGEMENT..................................................................................................... 28
Trustees and Officers................................................................................. 28
Remuneration of Trustees..................................................................... 31
AIM Funds Retirement Plan for Eligible Directors/Trustees.................................... 33
Deferred Compensation Agreements............................................................. 33
INVESTMENT ADVISORY AND OTHER SERVICES......................................................................... 34
Distribution Plans.................................................................................... 37
The Distributor....................................................................................... 41
SALES CHARGES AND DEALER CONCESSIONS........................................................................... 43
REDUCTIONS IN INITIAL SALES CHARGES............................................................................ 46
CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS.................................................................... 49
HOW TO PURCHASE AND REDEEM SHARES.............................................................................. 51
Backup Withholding.................................................................................... 52
DETERMINATION OF NET ASSET VALUE............................................................................... 54
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS....................................................................... 55
Dividends and Distributions........................................................................... 55
Tax Matters........................................................................................... 56
SHAREHOLDER INFORMATION........................................................................................ 60
MISCELLANEOUS INFORMATION...................................................................................... 63
Shareholder Inquiries................................................................................. 63
Audit Reports......................................................................................... 63
Legal Matters......................................................................................... 63
Custodian and Transfer Agent.......................................................................... 63
Control Persons and Principal Holders of Securities................................................... 63
RATINGS OF SECURITIES.......................................................................................... 66
FINANCIAL STATEMENTS........................................................................................... FS
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INTRODUCTION
AIM Tax-Exempt Funds (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 certain information concerning the activities of the fund being considered for investment. This information is included in four Prospectuses (the "Prospectuses"), one of which is dated July 28, 2000 and relates to the Class A shares of AIM TAX-EXEMPT CASH FUND, one of which is dated July 28, 2000 and relates to the Class A shares of AIM TAX-FREE INTERMEDIATE FUND, one of which is dated July 28, 2000 and relates to the Class A shares of AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, and one of which is dated July 28, 2000 and relates to the Class A, Class B and Class C shares of AIM HIGH INCOME MUNICIPAL FUND (collectively, the "Funds" and each separately a "Fund"). Copies of the Prospectuses and additional copies of this Statement of Additional Information may be obtained without charge by writing the distributor of the Funds' shares, A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739, Houston, Texas 77210-4739, or by calling (800) 347-4246. Investors must receive a Fund's Prospectus before they invest in that Fund.
This Statement of Additional Information is intended to furnish investors with additional information concerning the Funds. Some of the information required to be in this Statement of Additional Information is also included in the Funds' current Prospectuses. Additionally, the Prospectuses 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 Prospectuses 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 currently is organized under an Agreement and Declaration of Trust, dated December 6, 1999, as amended (the "Trust Agreement"). The Trust was previously organized as AIM Tax-Exempt Funds, Inc. ("ATEF"), a Maryland corporation. Pursuant to an Agreement and Plan of Reorganization, the Funds were reorganized on June 1, 2000 as portfolios of the Trust, which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end series management investment company. Pursuant to the Agreement and Plan of Reorganization, the Funds succeeded to the assets and assumed the liabilities of the series portfolios with corresponding names (the "Predecessor Funds") of ATEF. All historical financial and other information contained in this Statement of Additional Information for periods prior to June 1, 2000 relating to the Funds (or a class thereof) is that of the Predecessor Funds (or the corresponding class thereof).
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. Currently, the Trust has four separate series portfolios, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND (named the Intermediate Portfolio prior to September 25, 1997), AIM TAX-EXEMPT BOND FUND OF CONNECTICUT (all three of which currently offer only Class A shares) and AIM HIGH INCOME MUNICIPAL FUND (which currently offers Class A, Class B and Class C shares).
On October 15, 1993, pursuant to an Agreement and Plan of Reorganization between ATEF and AIM Funds Group ("AFG"), a Massachusetts business trust, AIM TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT succeeded to the assets and assumed the liabilities of AFG's AIM Tax-Exempt Cash Fund and AIM Tax-Exempt Bond Fund of Connecticut (the "AFG Funds"), respectively. Similarly, on October 15, 1993, pursuant to an Agreement and Plan of Reorganization between ATEF and Tax-Free Investments Co., a Maryland corporation ("TFIC"), ATEF's AIM TAX-FREE INTERMEDIATE FUND (named the Intermediate Portfolio prior to September 25, 1997) succeeded to the assets and assumed the liabilities of TFIC's Intermediate Portfolio (together with the AFG Funds, the "TFIC Predecessor Funds"). All historical financial and other information contained in this Statement of Additional Information for periods prior to October 15, 1993, relating to such Funds is that of the TFIC Predecessor Funds.
Shares of beneficial interest of the Trust are redeemable at their net asset value (subject, in certain circumstances, to a contingent deferred sales charge) at the option of the shareholder or at the option of the Trust in certain circumstances. Class A shares of AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM HIGH INCOME MUNICIPAL FUND purchased in amounts of $1 million or more may be subject to a contingent deferred sales charge under certain circumstances. For information concerning the methods of redemption and the rights of share ownership, investors should consult the Prospectuses under the caption "Redeeming Shares."
The assets received by the Trust from the issue or sale of shares of each of its series of shares, and all income, earnings, profits and proceeds thereof, subject only to the rights of creditors, are specifically allocated to the appropriate Fund. They constitute the underlying assets of each Fund, are required to be segregated on the Trust's books of account, and are to be charged with the expenses with respect to such 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.
Each share of each Fund represents an equal proportionate interest in that Fund with each other share and is entitled to such dividends and distributions out of the income belonging to such Fund as are declared by the Board of Trustees. Each class represents interests in the same portfolio of investments but, as further described in the Prospectuses, each such class is subject to differing sales charges 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 applicable Fund allocable to such class available for distribution after satisfaction of outstanding liabilities of the Fund allocable to such class.
The Trust is not required to hold annual or regular meetings of shareholders. Meetings of shareholders of a Fund 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.
Each class of shares of the same Fund represents interests in that Fund's assets and has identical voting, dividend, liquidation and other rights on the same terms and conditions, except that each class of shares bears differing class-specific expenses, is subject to differing sales loads, conversion features and exchange privileges, and has exclusive voting rights on matters pertaining to that class' distribution plan.
Class B shares automatically convert to Class A shares at the end of the month which is eight years after the date of purchase. A pro rata portion of shares from reinvested dividends and distributions convert at the same time. No other shares have conversion rights. Because Class B shares convert into Class A shares, the holders of Class B shares (as well as the holders of Class A shares) of each Fund must approve any material increase in fees payable with respect to that Fund under the Class A and C Plan or a new class of shares into which the Class B shares will convert must be created which will be identical in all material respects to the Class A shares prior to the material increase in fees.
Shareholders of each Fund are entitled to one vote per share (with proportionate voting for fractional shares), irrespective of the relative net asset value of the different classes of shares, where applicable, of a Fund. However, on matters affecting one portfolio of the Trust or one class of shares, a separate vote of shareholders of that portfolio or class is required. Shareholders of a portfolio or class are not entitled to vote on any matter which does not affect that portfolio or class but which requires a separate vote of another portfolio or class. An example of a matter which would be voted on separately by shareholders of a portfolio is the approval of an advisory agreement, and an example of a matter which would be voted on separately by shareholders of each class of shares is approval of a distribution plan. When issued, shares of each Fund are fully paid and nonassessable, have no preemptive or subscription rights, and are fully transferable. Shares do not have cumulative voting rights, which means that in situations in which shareholders elect trustees, holders of more than 50% of the shares voting for the election of trustees can elect all of the trustees of the
Trust, and the holders of less than 50% of the shares voting for the election of trustees will not be able to elect any trustees.
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 at least two-thirds 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 retired by a written instrument signed by a majority of the trustees and specifying the date of his or her retirement.
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 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 the trustees to all parties, and each party thereto must expressly waive all rights of action directly against shareholders of the Trust. The Trust Agreement provides for indemnification out of the property of a Fund for all losses and expenses of any shareholder of such Fund 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 a Fund would be unable to meet its obligations and wherein the complaining party was held not to be bound by the disclaimer.
The Trust Agreement further provides that the trustees and officers will not be liable for any act, omission or obligation of the Trust or any trustee or officer. However, nothing in the Trust Agreement protects a trustee or officer against any liability to the Trust or to the shareholders to which a trustee or officer would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office with the Trust. The Trust Agreement provides for indemnification by the Trust of the trustees, officers, employees and agents of the Trust, if it is determined that such person acted in good faith and reasonably believed: (1) in the case of conduct in his or her official capacity for the Trust, that his or her conduct was in the Trust's best interests, (2) in all other cases, that his or her conduct was at least not opposed to the Trust's best interests and (3) in a criminal proceeding, that he or she had no reason to believe that his or her conduct was unlawful. The Trust Agreement also authorizes the purchase of liability insurance on behalf of trustees and officers.
PERFORMANCE INFORMATION
The performance of each Fund 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 for each Fund will disclose the maximum sales charge, if any, imposed on purchases of that 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. Further information regarding each Fund's performance is contained in that Fund's annual report to shareholders, which is available upon request and without charge.
YIELD CALCULATIONS
AIM TAX-FREE INTERMEDIATE FUND, AIM HIGH INCOME MUNICIPAL FUND and AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT
Yield is computed in accordance with standardized formulas described in this Statement of Additional Information and can be expected to fluctuate from time to time and is not necessarily indicative of future results.
Accordingly, yield information may not provide a basis for comparison with investments which pay a fixed rate of interest for a stated period of time. Yield reflects investment income net of expenses over the relevant period attributable to a Fund share, expressed as an annualized percentage of the maximum offering price per share for AIM HIGH INCOME MUNICIPAL FUND, AIM TAX-FREE INTERMEDIATE FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, and net asset value per share for AIM TAX-EXEMPT CASH FUND.
Yield is a function of the type and quality of a Fund's investments, the maturity of the securities held in a Fund's portfolio and the operating expense ratio of the Fund. A shareholder's investment in a Fund is not insured or guaranteed. These factors should be carefully considered by the investor before making an investment in a Fund. A tax-equivalent yield is calculated in the same manner as the standard yield with an adjustment for a stated, assumed tax rate. The Funds may also demonstrate the effect of such tax-equivalent adjustments generally by comparing various yield levels with their corresponding tax-equivalent yields, given a stated tax rate.
Calculations of yield will take into account the total income earned by the AIM TAX-FREE INTERMEDIATE FUND, AIM HIGH INCOME MUNICIPAL FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, respectively, including taxable income, if any; however, all three Funds intend to invest their respective assets so that substantially all annual interest income will be tax-exempt.
Yields for each 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 offering price of the Fund's shares (including the maximum sales charge, if any) 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 such 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 this yield calculation.
A Fund's tax equivalent yield is the rate an investor would have to earn from a fully taxable investment in order to equal the Fund's yield after taxes. Tax equivalent yields are calculated by dividing the Fund's yield by one minus a stated tax rate (if only a portion of the Fund's yield was tax-exempt, only that portion would be adjusted in the calculation).
A Fund also may 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 Class A shares of AIM TAX-FREE INTERMEDIATE FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT for the thirty days ended March 31, 2000, were 4.59% and 4.85%, respectively. The distribution rates for the Class A shares, B shares and C shares of AIM HIGH INCOME MUNICIPAL FUND for the thirty days ended March 31, 2000 were 6.40%, 5.53% and 5.53%, respectively.
Income calculated for 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 from the Fund paid over the same period or the rate of income reported in the Fund's financial statements.
AIM TAX-EXEMPT CASH FUND
The standard formula for calculating annualized yield for AIM TAX-EXEMPT CASH FUND is as follows:
V V
Y = ( 1 - o) 365
---------- x ---
V 7
Where Y = annualized yield.
V
o = the value of a hypothetical pre-existing
account in the Fund having a balance of one share
V at the beginning of a stated seven-day period.
1 = the value of such an account at the end of the stated
period.
|
The standard formula for calculating effective annualized yield for the Fund is as follows:
365/7 EY = (Y + 1) - 1
Where EY = effective annualized yield.
Y = annualized yield, as determined above.
For purposes of the annualized yield and effective annualized yield, the net change in the value of the hypothetical AIM TAX-EXEMPT CASH FUND account reflects the value of additional shares purchased with dividends from the original shares and any such additional shares, and all fees charged, other than non-recurring account or sales charges, to all shareholder accounts in proportion to the length of the base period and the Fund's average account size, but does not include realized gains or losses or unrealized appreciation and depreciation and income other than investment income.
Tax-equivalent yield for the Fund will be calculated by dividing that portion of the yield of the Fund (as determined above) which is tax-exempt by one minus a stated income tax rate and adding the product to that portion of the yield that is not tax-exempt.
TOTAL RETURN CALCULATIONS (ALL FUNDS)
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 change in the Fund's net asset value per share over the period. Cumulative total return reflects the performance of a Fund over a stated period of time. Average annual total returns are calculated by determining the growth or decline in value of a hypothetical investment in a Fund over a stated period of time, 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 total 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 total return does not represent the actual year-to-year performance of a 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 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 tables, graphs or similar illustrations. Total returns may be quoted with or without taking any applicable maximum sales charge or contingent deferred sales charge into account. The total returns included for the Funds do not include applicable maximum sales charges and contingent deferred sales charges. Excluding a Fund's sales charge from a total return calculation produces a higher total return figure.
HISTORICAL PORTFOLIO RESULTS
From time to time, A I M Advisors, Inc. ("AIM") or its affiliates may waive all or a portion of their fees and/or assume certain expenses of any Fund. Voluntary fee waivers or reductions or commitments to assume expenses may be rescinded at any time without further notice to investors. During periods of voluntary fee waivers or reductions or commitments to assume expenses, AIM will retain its ability to be reimbursed for such fee prior to the end of each fiscal year. Contractual fee waivers or reductions or reimbursement of expenses set forth in the Fee Table in a Prospectus may not be terminated or amended to the Funds' detriment during the period stated in the agreement between AIM and the Fund. Fee waivers or reductions or commitments to reduce expenses will have the effect of increasing that Fund's yield and total return.
The performance of each Fund will vary from time to time and past results are not necessarily indicative 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 operating expenses of the Fund and market conditions. A shareholder's investment in a Fund is not insured or guaranteed. These factors should be carefully considered by the investor before making an investment in any Fund.
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 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 greater risk of loss of capital.
From time to time, sales literature and/or advertisements for any of the Funds may disclose (i) the largest holdings in the Fund's portfolio, (ii) certain selling group members and/or (iii) certain institutional shareholders.
Although performance data may be useful to prospective investors when comparing a Fund's performance with other mutual funds and other potential investments, investors should note that the methods of computing performance of other potential investments are not necessarily comparable to the methods employed by a Fund.
From time to time, the Funds' 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, asset allocation, tax-free investing, college planning and inflation.
AIM TAX-EXEMPT CASH FUND
The annualized and effective annualized yields for the Class A shares for the seven-day period ended March 31, 2000, were 3.42% and 3.48%, respectively. Assuming a tax rate of 39.6%, these yields for the Class A shares of the Fund on a tax-equivalent basis were 5.09% and 5.18%, respectively.
The following chart shows the total returns of the Class A shares of the Fund for the one, five and ten-year periods ended March 31, 2000:
Average
Period Annual Return Cumulative Return
------ ------------- -----------------
One year 3.05% 3.05%
Five years 2.96% 15.72%
Ten years 2.98% 34.10%
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AIM TAX-FREE INTERMEDIATE FUND
The following chart shows the total returns of the Class A shares of the Fund for the one, five and ten-year periods ended March 31, 2000:
Average
Period Annual Return Cumulative Return
------ ------------- -----------------
One year 0.70% 0.70%
Five years 4.80% 26.45%
Ten years 5.92% 77.75%
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The 30-day yield of the Fund's Class A shares as of March 31, 2000, was 4.58%, with a corresponding tax-equivalent yield of 7.58%, assuming a tax rate of 39.6%.
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
The following chart shows the total returns of the Class A shares of the Fund for the one, five and ten-year periods ended March 31, 2000:
Average
Period Annual Return Cumulative Return
------ ------------- -----------------
One year 0.28% 0.28%
Five years 4.72% 25.96%
Ten years 6.32% 84.58%
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The 30-day yield of the Fund's Class A shares as of March 31, 2000, was 4.15%, with a corresponding Connecticut individual's tax-equivalent yield of 7.19%, assuming a federal tax rate of 39.6%, and a state tax rate of 4.5%.
AIM HIGH INCOME MUNICIPAL FUND
The following chart shows total returns of the Class A shares of the Fund for the one-year period ended March 31, 2000, and the period from January 2, 1998 (date operations commenced) through March 31, 2000:
Average
Period Annual Return Cumulative Return
------ ------------- -----------------
One year -7.79% -7.79%
Since Inception -0.55% -1.24%
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The following chart shows total returns of the Class B shares of the Fund for the one-year period ended March 31, 2000, and the period from January 2, 1998 (date operations commenced) through March 31, 2000:
Average
Period Annual Return Cumulative Return
------ ------------- -----------------
One year -8.54% -8.54%
Since Inception -1.34% -2.98%
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The following chart shows total returns of the Class C shares of the Fund for the one-year period ended March 31, 2000, and the period from January 2, 1998 (date operations commenced) through March 31, 2000:
Average
Period Annual Return Cumulative Return
------ ------------- -----------------
One year -8.54% -8.54%
Since Inception -1.35% -3.00%
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The 30-day yields of the Fund's Class A, Class B and Class C shares as of March 31, 2000, were 6.14%, 5.70% and 5.70%, respectively, with the corresponding tax-equivalent yields of 10.17%, 9.44% and 9.44% respectively, assuming a tax rate of 39.6%.
PORTFOLIO TRANSACTIONS AND BROKERAGE
GENERAL BROKERAGE POLICY
AIM makes decisions to buy and sell securities for the Funds, selects broker-dealers, effects the Funds' investment transactions, allocates brokerage fees in such transactions, and where applicable, negotiates commissions and spreads on transactions. Since purchases and sales of portfolio securities by the Funds are usually principal transactions, the Funds incur little or no brokerage commission. AIM's primary consideration in effecting a security transaction is to obtain the most favorable execution of the order, which includes the best price on the security and a low commission rate (as applicable). While AIM seeks reasonably competitive commission rates, the Funds may not pay the lowest commission or spread available. See "Section 28(e) Standards" below.
In the event a Fund purchases securities traded over-the-counter, the Fund deals directly with dealers who make markets in the securities involved, except when better prices are available elsewhere. Fund transactions placed through dealers who are primary market makers are effected at net prices without commissions, but which include compensation in the form of a mark up or mark down.
AIM may determine target levels of commission business with various brokers on behalf of its clients (including the Funds) over a certain time period. The target levels will be based upon the following factors, among others: (1) the execution services provided by the broker; (2) the research services provided by the broker; and (3) the broker's interest in mutual funds in general and in the Funds and other mutual funds advised by AIM or A I M Capital Management, Inc. (collectively, the "AIM Funds") in particular, including sales of the Funds and of the other AIM Funds. In connection with (3) above, the Funds' trades may be executed directly by dealers which sell shares of the AIM Funds or by other broker-dealers with which such dealers have clearing arrangements. AIM will not use a specific formula in connection with any of these considerations to determine the target levels.
The Funds may engage in certain principal and agency transactions with banks and their affiliates that own 5% or more of the outstanding voting securities of an AIM Fund, provided the conditions of an exemptive
order received by the Funds from the SEC are met. In addition, the Funds may purchase or sell a security from or to another AIM Fund or account and may invest in affiliated money market funds, provided the Funds follow procedures adopted by the Board of Directors/Trustees of the various AIM Funds, including the Trust. These inter-fund transactions do not generate brokerage commissions but may result in custodial fees or taxes or other related expenses.
Under the 1940 Act, certain persons affiliated with the Trust are prohibited from dealing with the Trust as principal in any purchase or sale of securities unless an exemptive order allowing such transactions is obtained from the SEC. The 1940 Act also prohibits the Trust from purchasing a security being publicly underwritten by a syndicate of which certain persons affiliated with the Trust are members except in accordance with certain conditions. These conditions may restrict the ability of the Funds to purchase municipal securities being publicly underwritten by such syndicate, and the Funds may be required to wait until the syndicate has been terminated before buying such securities. At such time, the market price of the securities may be higher or lower than the original offering price. A person affiliated with the Trust may, from time to time, serve as placement agent or financial advisor to an issuer of Municipal Securities and be paid a fee by such issuer. The Funds may purchase such Municipal Securities directly from the issuer, provided that the purchase is reviewed by the Trust's Board of Trustees and a determination is made that the placement fee or other remuneration paid by the issuer to a person affiliated with the Trust is fair and reasonable in relation to the fees charged by others performing similar services. During the fiscal years ended March 31, 2000, 1999 and 1998, no securities or instruments were purchased by the Funds from issuers who paid placement fees or other compensation to a broker affiliated with the Funds.
ALLOCATION OF PORTFOLIO TRANSACTIONS
AIM and its affiliates manage numerous other investment accounts. Some of these accounts may have investment objectives similar to the Funds. Occasionally, identical securities will be appropriate for investment by a Fund and one or more of these investment accounts. However, the position of each account in the same securities and the length of time that each account may hold its investment in the same securities may vary. The timing and amount of purchase by each account will also be determined by its cash position. If the purchase or sale of securities is consistent with the investment policies of a Fund and one or more of these accounts, and is considered at or about the same time, AIM will fairly allocate transactions in such securities among such Fund and these accounts. AIM may combine such transactions, in accordance with applicable laws and regulations, to obtain the most favorable execution. Simultaneous transactions could, however, adversely affect the Funds' ability to obtain or dispose of the full amount of a security which it seeks to purchase or sell.
Sometimes the procedure for allocating portfolio transactions among the various investment accounts advised by AIM could have an adverse effect on the price or amount of securities available to the Funds. In making such allocations, AIM considers the investment objectives and policies of its advisory clients, the relative size of portfolio holdings of the same or comparable securities, the availability of cash for investment, the size of investment commitments generally held, and the judgments of the persons responsible for recommending the investment.
SECTION 28(e) STANDARDS
Section 28(e) of the Securities Exchange Act of 1934 provides that AIM, under certain circumstances, lawfully may cause an account to pay a higher commission than the lowest available. Under Section 28(e), AIM must make a good faith determination that the commissions paid are "reasonable in relation to the value of the brokerage and research services provided ... viewed in terms of either that particular transaction or [AIM's] overall responsibilities with respect to the accounts as to which it exercises investment discretion." The services provided by the broker also must lawfully and appropriately assist AIM in the performance of its investment decision-making responsibilities. Accordingly, in recognition of research services provided to them, Funds may pay a broker higher commissions than those available from another broker.
Research services received from broker-dealers supplement AIM's own research (and the research of its affiliates), and may include the following types of information: statistical and background information on the U.S. and foreign economies, industry groups and individual companies; forecasts and interpretations with respect to the U.S. and foreign economies, securities, markets, specific industry groups and individual companies; information on federal, state, local and foreign political developments; portfolio management strategies; performance information on securities, indexes and investment accounts; information concerning prices of securities; and information supplied by specialized services to AIM and to the Trust's trustees with respect to the performance, investment activities, and fees and expenses of other mutual funds. Broker-dealers may communicate such information electronically, orally, in written form or on computer software. Research services may also include the providing of custody services, as well as the providing of equipment used to communicate research information, the providing of specialized consultations with AIM personnel with respect to computerized systems and data furnished to AIM as a component of other research services, the arranging of meetings with management of companies, and the providing of access to consultants who supply research information.
The outside research assistance is useful to AIM since the broker-dealers used by AIM tend to follow a broader universe of securities and other matters than AIM's staff can follow. In addition, the research provides AIM with a diverse perspective on financial markets. Research services provided to AIM by broker-dealers are available for the benefit of all accounts managed or advised by AIM or by its affiliates. Some broker-dealers may indicate that the provision of research services is dependent upon the generation of certain specified levels of commissions and underwriting concessions by AIM's clients, including the Funds. However, the Funds are not under any obligation to deal with any broker-dealer in the execution of transactions in portfolio securities.
In some cases, the research services are available only from the broker-dealer providing them. In other cases, the research services may be obtainable from alternative sources in return for cash payments. AIM believes that the research services are beneficial in supplementing AIM's research and analysis and that they improve the quality of AIM's investment advice. The advisory fees paid by the Funds are not reduced because AIM receives such services. However, to the extent that AIM would have purchased research services had they not been provided by broker-dealers, the expenses to AIM could be considered to have been reduced accordingly.
The Funds paid no brokerage commissions to brokers affiliated with the Funds during the past three fiscal years ended March 31, 2000, 1999 and 1998 of each of AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM HIGH INCOME MUNICIPAL FUND.
PORTFOLIO TURNOVER
Ordinarily, AIM TAX-FREE INTERMEDIATE FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM HIGH INCOME MUNICIPAL FUND do not purchase securities with the intention of engaging in short-term trading. However, any particular security will be sold, and the proceeds reinvested, whenever such action is deemed prudent in light of the Funds' investment objectives, regardless of the holding period of that security. A higher rate of portfolio turnover may result in higher transaction costs. Also, the extent that higher portfolio turnover results in a higher rate of net realized capital gains to the Funds, the portion of the Funds' distributions constituting taxable capital gain may increase. It is expected that total portfolio turnover in any year will be less than 100%. The portfolio turnover rate of AIM TAX-FREE INTERMEDIATE FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM HIGH INCOME MUNICIPAL FUND is shown under "Financial Highlights" in the applicable Prospectus.
INVESTMENT STRATEGIES AND RISKS
INVESTMENT PROGRAM
Information concerning each Fund's non-fundamental investment objective is set forth in the Prospectuses under the heading "Investment Objective and Strategies." There can be no assurance that any Fund will achieve its objective. The principal features of each Fund's investment program and the principal risks associated with that investment program are discussed in the Prospectuses under the heading "Investment Objective and Strategies" and "Principal Risks of Investing in the Fund."
Set forth in this section is a description of each Fund's investment policies, strategies and practices. The investment objective(s) of each Fund are non-fundamental policies and may be changed by the Board of Trustees without shareholder approval. Each Fund's investment policies, strategies and practices are also non-fundamental. The Board of Trustees of the Trust reserves the right to change any of these non-fundamental investment policies, strategies or practices without shareholder approval. However, shareholders will be notified before any material change in the investment policies becomes effective. Each Fund has adopted certain investment restrictions, some of which are fundamental and cannot be changed without shareholder approval. See "Investment Restrictions" in this Statement of Additional Information. Individuals considering the purchase of shares of any Fund should recognize that there are risks in the ownership of any security.
Any percentage limitations with respect to assets of a Fund will be applied at the time of purchase. A later change in percentage resulting from changes in asset values will not be considered a violation of the percentage limitations. The percentage limitations applicable to borrowings will be applied in accordance with applicable provisions of the 1940 Act and the rules and regulations promulgated thereunder which specifically limit each Fund's borrowing abilities.
Subsequent to its purchase by a Fund, an issue of Municipal Securities may cease to be rated by Moody's Investors Service, Inc. ("Moody's") or Standard and Poor's Ratings Services ("S&P"), or another nationally recognized statistical rating organization ("NRSRO"), or the rating of such a security may be reduced below the minimum rating required for purchase by a Fund. Neither event would require a Fund to dispose of the security, but AIM will consider such events to be relevant in determining whether the Fund should continue to hold the security. To the extent that the ratings applied by Moody's, S&P or another NRSRO to Municipal Securities may change as a result of changes in these rating systems, a Fund will attempt to use comparable ratings as standards for its investments in Municipal Securities in accordance with the investment policies described herein.
The Funds may from time to time invest in taxable short-term investments ("Taxable Investments") consisting of obligations of the U.S. Government, its agencies or instrumentalities, banks and corporations, short-term fixed income securities, and repurchase agreements/reverse repurchase agreements (instruments under which the seller agrees to repurchase the security at a specified time and price) relating thereto; commercial paper rated within the highest rating category by a recognized rating agency; and certificates of deposit of domestic banks with assets of at least $1.5 billion or more as of the date of their most recently published financial statements. A Fund may invest in Taxable Investments, for example, due to market conditions or pending the investment of proceeds from the sale of its shares or proceeds from the sale of portfolio securities or in anticipation of redemptions. Although interest earned from Taxable Investments will be taxable to shareholders as ordinary income, the Funds generally intend to minimize taxable income through investment, when possible, in short-term tax-exempt securities, which may include shares of other investment companies whose dividends are tax-exempt.
MUNICIPAL SECURITIES
"Municipal Securities" include debt obligations of states, territories or possessions of the United States and District of Columbia and their political subdivisions, agencies and instrumentalities, issued to obtain funds
for various public purposes, including the construction of a wide range of public facilities such as airports, bridges, highways, housing, hospitals, mass transportation, schools, streets and water and sewer works.
Other public purposes for which Municipal Securities may be issued include the refunding of outstanding obligations, obtaining funds for general operating expenses and lending such funds to other public institutions and facilities. In addition, certain types of industrial development bonds are issued by or on behalf of public authorities to obtain funds to provide for the construction, equipment, repair or improvement of privately operated housing facilities, airport, mass transit, industrial, port or parking facilities, air or water pollution control facilities and certain local facilities for water supply, gas, electricity or sewage or solid waste disposal. The principal and interest payments for industrial development bonds or pollution control bonds are often the sole responsibility of the industrial user and therefore may not be backed by the taxing power of the issuing municipality. The interest paid on such bonds may be exempt from federal income tax, although current federal tax laws place substantial limitations on the purposes and size of such issues. Such obligations are considered to be Municipal Securities provided that the interest paid thereon, in the opinion of bond counsel, qualifies as exempt from federal income tax. However, interest on Municipal Securities may give rise to a federal alternative minimum tax liability and may have other collateral federal income tax consequences. See "Dividends, Distributions and Tax Matters - Tax Matters."
The two major classifications of Municipal Securities are bonds and notes. Bonds may be further classified as "general obligation" or "revenue" issues. General obligation bonds are secured by the issuer's pledge of its full faith, credit and taxing power for the payment of principal and interest. Revenue bonds are payable from the revenues derived from a particular facility or class of facilities, and in some cases, from the proceeds of a special excise or other specific revenue source, but not from the general taxing power. Tax-exempt industrial development bonds are in most cases revenue bonds and do not generally carry the pledge of the credit of the issuing municipality. Notes are short-term instruments which usually mature in less than two years. Most notes are general obligations of the issuing municipalities or agencies and are sold in anticipation of a bond sale, collection of taxes or receipt of other revenues. There are, of course, variations in the risks associated with Municipal Securities, both within a particular classification and between classifications. The Funds' assets may consist of any combination of general obligation bonds, revenue bonds, industrial revenue bonds and notes. The percentage of such Municipal Securities held by a Fund will vary from time to time.
Also included in "municipal securities" are municipal lease obligations, which may take the form of a lease, an installment purchase or a conditional sales contract. Municipal lease obligations are issued by state and local governments and authorities to acquire land, equipment and facilities such as state and municipal vehicles, telecommunications and computer equipment, and other capital assets. Interest payments on qualifying municipal leases are exempt from federal income taxes. The Funds may purchase these obligations directly, or they may purchase participation interests in such obligations. Municipal leases are generally subject to greater risks than general obligation or revenue bonds. State laws set forth requirements that states or municipalities must meet in order to issue municipal obligations, and such obligations may contain a covenant by the issuer to budget for, appropriate, and make payments due under the obligation. However, certain municipal lease obligations may contain "non-appropriation" clauses which provide that the issuer is not obligated to make payments on the obligation in future years unless funds have been appropriated for this purpose each year. Accordingly, such obligations are subject to "non-appropriation" risk. While municipal leases are secured by the underlying capital asset, it may be difficult to dispose of such assets in the event of non-appropriation or other default. The Trust's Board of Trustees has established guidelines and procedures for determining the liquidity and valuation of municipal lease obligations, and supervises AIM's determinations of the credit quality and cancellation risk of unrated municipal lease obligations.
Municipal Securities also include the following securities:
BOND ANTICIPATION NOTES usually are general obligations of state and local governmental issuers which are sold to obtain interim financing for projects that will eventually be funded through the sale of long-term debt obligations or bonds.
TAX ANTICIPATION NOTES are issued by state and local governments to finance the current operations of such governments. Repayment is generally to be derived from specific future tax revenues. Tax anticipation notes are usually general obligations of the issuer.
REVENUE ANTICIPATION NOTES are issued by governments or governmental bodies with the expectation that future revenues from a designated source will be used to repay the notes. In general, they also constitute general obligations of the issuer.
TAX-EXEMPT COMMERCIAL PAPER (MUNICIPAL PAPER) is identical to taxable commercial paper, except that tax-exempt commercial paper is issued by states, municipalities and their agencies.
The Funds also may purchase participation interests or custodial receipts from financial institutions. These participation interests give the purchaser an undivided interest in one or more underlying Municipal Securities.
The yields on Municipal Securities are dependent on a variety of factors, including general economic and monetary conditions, money market factors, conditions of the Municipal Securities market, size of a particular offering, and maturity and rating of the obligation. The yield realized by a Fund's shareholders will be the yield realized by the Fund on its investments, reduced by the general expenses of the Fund and the Trust. The market values of the Municipal Securities held by a Fund will be affected by changes in the yields available on similar securities. If yields increase following the purchase of a Municipal Security, the market value of such Municipal Security will generally decrease. Conversely, if yields decrease, the market value of a Municipal Security will generally increase.
MATURITIES
AIM TAX-EXEMPT CASH FUND will attempt to maintain a constant net asset value per share of $1.00 and, to this end, values its assets by the amortized cost method and rounds the per share net asset value of its shares in compliance with applicable rules and regulations. Accordingly, the Fund invests only in securities having remaining maturities of 397 days or less and maintains a dollar weighted average portfolio maturity of 90 days or less. The maturity of a security held by the Fund is determined in compliance with applicable rules and regulations. Certain securities bearing interest at rates that are adjusted prior to the stated maturity of the instrument or that are subject to redemption or repurchase agreements are deemed to have maturities shorter than their stated maturities.
AIM TAX-FREE INTERMEDIATE FUND may invest only in Municipal Securities which have maturities of ten and one-half years or less, and will maintain a dollar weighted average maturity of more than three years and not more than seven and one-half years. For purposes of this limitation, the maturity of an instrument will be considered to be the earlier of:
(a) the stated maturity of the instrument; or
(b) the date, if any, on which the issuer has agreed to redeem or purchase the instrument; or
(c) in the case of a variable rate instrument, the next date on which the coupon rate is to be adjusted.
AIM HIGH INCOME MUNICIPAL FUND may invest its assets without regard to the maturity of the various securities it purchases, and will not seek to maintain any particular average portfolio maturity.
QUALITY STANDARDS
AIM TAX-FREE INTERMEDIATE FUND. The following quality standards apply at the time a security is purchased. Information concerning the ratings criteria of Moody's, S&P, and Fitch Investors Service, Inc. ("Fitch") appears herein under the caption "Ratings of Securities."
The Fund may purchase Municipal Securities which meet any of the following quality criteria:
(a) They are rated within the three highest ratings for municipal obligations by Moody's (Aaa, Aa or A) or S&P (AAA, AA or A), or have received a comparable rating from another NRSRO; or
(b) They are rated within the two highest ratings for short-term municipal obligations by Moody's (MIG 1/VMIG 1/P-1 or MIG 2/VMIG 2/P-2), or S&P (SP-1/A-1 or SP-2/A-2), or have received a comparable rating from another NRSRO; or
(c) They are guaranteed as to payment of principal and interest by the U. S. Government; or
(d) They are fully collateralized by an escrow of U.S. Government or other high quality securities; or
(e) They are not rated, if other Municipal Securities of the same issuer are rated A or better by Moody's or S&P, or have received a comparable rating from another NRSRO; or
(f) They are not rated, but are determined by AIM to be of comparable quality to the rated obligations in which the Fund may invest.
Since the Fund invests in securities backed by insurance companies and other financial institutions, changes in the financial condition of these institutions could cause losses to the Fund and affect its share price.
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT. At least 80% of the municipal bonds purchased by the Fund will be rated within the four highest rating categories, or will be obligations of issuers having an issue of outstanding municipal bonds rated within the four highest rating categories, of any NRSRO. A description of municipal bond ratings is contained herein under the caption "Ratings of Securities."
The Fund will maintain less than 35% of its net assets in bonds and other Municipal Securities rated below Baa/BBB by Moody's or S&P, respectively, or a comparable rating of any other NRSRO. During the last fiscal year, the Fund did not invest in any such securities, and the Fund expects to invest less than 5% of its net assets in such securities during the current fiscal year. See "Ratings of Securities" for information regarding bond rating categories. Up to 20% of the Fund's net assets may be invested in unrated municipal bonds and other Municipal Securities if in the judgment of AIM, after considering available information as to the creditworthiness of the issuer and its ability to meet its future debt obligations, such investments are similar in quality to those bonds and other Municipal Securities rated within the four highest NRSRO rating categories mentioned above. For purposes of the foregoing percentage limitations, municipal bonds (i) which have been collateralized with U.S. Government securities held in escrow until the municipal securities refunding date or final maturity, but (ii) which have not been re-rated by a NRSRO, will be treated by the Fund as the equivalent of Aaa/AAA rated securities.
Securities held by the Fund that are rated below Baa/BBB by Moody's or S&P, respectively, may be subject to certain risk factors to which other securities are not subject to the same degree. An economic downturn tends to disrupt the market for high yield bonds and adversely affect their values. Such an economic downturn may be expected to result in increased price volatility of high yield bonds and an increase in issuers' defaults on such bonds.
AIM TAX-EXEMPT CASH FUND. The Fund will limit its investments to those securities which at the time of purchase are "Eligible Securities" as defined in Rule 2a-7 under the 1940 Act, as amended from time to time, and which the Trust's Board of Trustees has determined present minimal credit risk. Generally, "Eligible Securities" are securities that are rated in one of the two highest rating categories by two NRSROs, or if rated by only one NRSRO, are rated in one of the two highest rating categories by that NRSRO, or if unrated, are determined by AIM (under the supervision of and pursuant to guidelines established by the Board of Trustees) to be of comparable quality to a rated security that meets such quality standards. Eligible securities also include securities issued by a registered investment company that is a money market fund and U.S. government securities. Since AIM TAX-EXEMPT CASH FUND invests in securities backed by banks and other
financial institutions, changes in the credit quality of these institutions could cause losses to the Fund and affect its share price.
MONEY MARKET INSTRUMENTS: AIM TAX-EXEMPT CASH FUND ONLY
U.S. Government Obligations consist of marketable securities and instruments issued or guaranteed by the U.S. Government or by certain of its agencies or instrumentalities. Direct obligations are issued by the United States Treasury and include bills, certificates of indebtedness, notes and bonds. Obligations of U.S. Government agencies and instrumentalities ("Agencies") are issued by government-sponsored agencies and enterprises acting under authority of Congress. Certain Agencies are backed by the full faith and credit of the U.S. Government, and others are not.
Money market instruments in which the Fund will invest will be "Eligible Securities" as defined in Rule 2a-7 under the 1940 Act, as such Rule may be amended from time to time. An Eligible Security is generally a rated security with a remaining maturity of 397 calendar days or less that has been rated by the Requisite NRSROs in the two highest short-term rating categories, or a security issued by an issuer that has received a rating by the Requisite NRSROs in the two highest short-term rating categories with respect to a class of debt obligations (or any debt obligation within that class). Eligible Securities include unrated securities deemed by the Fund's investment adviser to be of comparable quality to such rated securities. A rated security includes a guarantee that has received a short-term rating from a NRSRO, or a guarantee issued by a guarantor that has received a short-term rating from a NRSRO with respect to a class of debt obligations (or any debt obligation within that class). To be an Eligible Security, if a security is subject to a guarantee, the guarantee generally must have received a rating from a NRSRO or be issued by a guarantor that has received a rating with respect to a class of debt obligations (or any debt obligation within that class) that is comparable in priority or security to the guarantee. Asset backed securities, other than those substantially all of whose qualifying assets consist of obligations of one or more municipal issuers, must have received a rating from a NRSRO to be Eligible Securities. The term "Requisite NRSRO" means (a) any two nationally recognized statistical rating organizations (NRSROs) that have issued a rating with respect to a security or class of debt obligations of an issuer, or (b) if only one NRSRO has issued a rating with respect to such security or issuer at the time the Fund acquires the security, that NRSRO.
INVESTMENT IN NON-INVESTMENT GRADE SECURITIES: AIM TAX-EXEMPT BOND FUND OF CONNECTICUT AND AIM HIGH INCOME MUNICIPAL FUND ONLY
In pursuit of its investment objective AIM TAX-EXEMPT BOND FUND OF CONNECTICUT will maintain less than 35% of its net assets in debt securities rated below Baa/BBB. In pursuit of its investment objective AIM HIGH INCOME MUNICIPAL FUND will usually maintain, under normal market conditions, at least 80% of its net assets in a diversified portfolio of Municipal Securities which are rated Baa/BBB or lower by Moody's or S&P or another NRSRO (or which are unrated but are determined by AIM to be of comparable quality to such securities), and the interest of which is exempt from federal income taxes (including the alternative minimum tax). Such non-investment grade debt securities are typically considered high risk securities and are commonly referred to as "junk bonds."
Although non-investment grade debt securities generally offer higher
yields than investment grade securities with similar maturities, non-investment
grade securities involve greater risks, including the possibility of default or
bankruptcy. In general, they are considered to be predominantly speculative with
respect to the issuer's capacity to pay interest and principal. Other potential
risks associated with investing in non-investment grade securities include: (i)
greater market price volatility resulting from changes in or uncertainty about
economic conditions, and changes in the actual or perceived ability of the
issuer to meet its obligations; (ii) greater sensitivity of highly leveraged
issuers to adverse economic changes and individual issuer developments; and
(iii) liquidity may be affected by adverse publicity and changing investor
perceptions about these securities in general and/or a particular issuer's
credit quality.
As with any other asset held by AIM TAX-EXEMPT BOND FUND OF CONNECTICUT or AIM HIGH INCOME MUNICIPAL Fund, any reduction in market value of such securities as a result of the above factors would be
reflected in each Funds' net asset value. In addition, because AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM HIGH INCOME MUNICIPAL FUND invest in non-investment grade securities they may incur additional expenses to the extent they are required to seek recovery upon a default in the payment of principal and interest on their holdings. Due to such risks, successful investments in non-investment grade securities will be more dependent on AIM's credit analysis than generally would be the case for investments in securities which are investment grade.
It is uncertain how the market for non-investment grade securities will perform during a prolonged period of rising interest rates. A prolonged economic downturn or a prolonged period of rising interest rates could adversely affect the market for these securities, increasing their volatility, and reduce their value and liquidity. Moreover, lower quality securities tend to be less liquid than higher rated securities because the market for them is not as broad or active. If market quotations are not available, these securities will be valued in accordance with procedures established by the Trust's Board of Trustees. Judgment may therefore play a greater role in valuing non-investment grade securities.
In the event AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM HIGH INCOME MUNICIPAL FUND experience an unexpected level of net redemptions, the Funds could be forced to sell their non-investment grade securities without regard to their investment merits, thereby decreasing the asset base upon which the Funds' expenses can be spread and possibly reducing the Funds' rate of return. Prices of junk bonds have been found to be less sensitive to fluctuations in interest rates, and more sensitive to adverse economic changes and individual corporate developments than those of higher-rated debt securities.
AIM HIGH INCOME MUNICIPAL FUND expects to invest a significant portion of its net assets in Municipal Securities which are non-investment grade or unrated and determined by AIM to be of comparable quality to securities rated below investment grade during the next fiscal year. See "Ratings of Securities" in this Statement of Additional Information.
Issuers of non-investment grade debt securities are substantially leveraged, which may impair their ability to meet their obligations. In some cases, such securities are subordinated to the prior payment of indebtedness senior to the securities purchased by the Funds, thus potentially limiting a Fund's ability to recover full principal or to receive payments when senior securities are in default. When the secondary market for non-investment grade debt securities becomes increasingly illiquid, including the absence of readily available market quotations, the relative lack of reliable, objective data makes the responsibility of the Board of Trustees to value a Fund's securities more difficult, and judgment plays a greater role in the valuation of portfolio securities, which may have a negative impact on the ability to accurately value the Fund's assets. Also, increased illiquidity in the non-investment grade debt market may affect a Fund's ability to dispose of portfolio securities at a desirable price.
The credit rating of a security does not necessarily address its market value risk. Also, ratings may from time to time be changed to reflect developments in the issuer's financial condition. Non-investment grade debt securities have speculative characteristics which generally increase in number and significance with each successive lower rating category. Also, prices of non-investment grade debt securities have been found to be less sensitive to interest rate changes and more sensitive to adverse economic changes and individual issuer developments than more highly rated debt securities. Such adverse economic changes may be expected to result in increased price volatility for junk bonds and of the value of shares of AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM HIGH INCOME MUNICIPAL FUND, and increased issuer defaults on junk bonds.
DEFAULTED SECURITIES
AIM HIGH INCOME MUNICIPAL FUND may invest up to 10% of its total assets in defaulted securities. In order to enforce its rights in defaulted securities, AIM HIGH INCOME MUNICIPAL FUND may be required to participate in various legal proceedings or take possession of and manage assets securing the issuer's obligations on the defaulted securities. This could increase AIM HIGH INCOME MUNICIPAL FUND'S operating expenses and adversely affect its net assets value. Any income derived from the ownership or operation of such assets would not be tax-exempt. The ability of a holder of a defaulted tax-exempt security to enforce the
terms of that security in a bankruptcy proceeding may be more limited than would be the case with respect to securities of private issuers. Any investments by AIM HIGH INCOME MUNICIPAL FUND in defaulted securities will also be considered illiquid securities subject to the limitations described herein, unless AIM determines that such defaulted securities are liquid under guidelines adopted by the Board of Trustees.
WHEN-ISSUED OR DELAYED DELIVERY SECURITIES
The Funds may purchase Municipal Securities on a "when-issued" basis, that is, the date for delivery of and payment for the securities is not fixed at the date of purchase, but is set after the securities are issued (normally within forty-five days after the date of the transaction). The Funds also may purchase or sell Municipal Securities on a delayed delivery basis. The payment obligation and the interest rate that will be received on the "delayed delivery" securities are fixed at the time the buyer enters into the commitment. The Funds will only make commitments to purchase when-issued or delayed delivery Municipal Securities with the intention of actually acquiring such securities, but the Funds may sell these securities before the settlement date if it is deemed advisable.
If a Fund purchases a when-issued or delayed delivery security, the Fund will direct its custodian bank to collateralize the when-issued or delayed delivery commitment by segregating liquid assets of a dollar value sufficient at all times to make payment for the when-issued or delayed-delivery securities. Such segregated liquid assets will be marked-to-market, and the amount segregated will be increased if necessary to maintain adequate coverage of the Fund's when-issued or delayed delivery commitments. If Fund assets are so segregated, the assets will be valued at market for the purpose of determining the adequacy of the segregated securities. If the market value of such securities declines below the value of the commitment, additional cash or securities will be segregated on a daily basis so that the market value of the segregated assets will equal the amount of the Fund's when-issued or delayed delivery commitments. To the extent assets are segregated, they will not be available for new investment or to meet redemptions.
Securities purchased on a when-issued or delayed delivery basis and the other securities held by a Fund are subject to changes in market value based on the public's perception of the creditworthiness of the issuer and changes in the level of interest rates (which will generally result in all of those securities changing in value in the same way (e.g., appreciating when interest rates fall)). Therefore, if in order to achieve higher interest income a Fund remains substantially fully invested at the same time that it has purchased securities on a when-issued or delayed delivery basis, there is a possibility that the Fund will experience greater fluctuation in the market value of its assets.
Furthermore, when the time comes for a Fund to meet its obligations under when-issued or delayed delivery commitments, the Fund will do so by use of its then available cash, by the sale of the segregated liquid assets, by the sale of other securities or, although it would not normally expect to do so, by directing the sale of the when-issued or delayed delivery securities themselves (which may have a market value greater or less than the Fund's payment obligation thereunder). The sale of securities to meet such obligations carries with it a greater potential for the realization of net short-term capital gains, which are not exempt from federal income taxes. The value of when-issued or delayed delivery securities on the settlement date may be more or less than the purchase price.
Investments in when-issued or delayed delivery securities may increase a Fund's exposure to market fluctuations and may increase the possibility that a Fund will incur short-term losses if the Fund engages in portfolio transactions in order to honor a when-issued or delayed delivery commitment. In a delayed delivery transaction, a Fund relies on the other party to complete the transaction. If the transaction is not completed, the Fund may miss a price or yield considered to be advantageous. The Funds will employ techniques designed to reduce such risks.
As a non-fundamental policy, AIM TAX-EXEMPT CASH FUND will not enter into when-issued commitments if more than 25% of its net assets would be subject to commitments for when-issued and delayed delivery securities.
MUNICIPAL FORWARD CONTRACTS
AIM HIGH INCOME MUNICIPAL FUND may purchase municipal forward contracts. A municipal forward contract is a Municipal Security which is purchased on a when-issued basis with delivery taking place up to five years from the date of purchase. AIM will monitor the liquidity, value, credit quality and delivery of the security under the supervision of the Board of Trustees. The Fund will not invest more than 5% of the value of its total assets in municipal forward contracts.
ILLIQUID SECURITIES
Each Fund may invest up to 15% of its net assets (10% of the net assets of AIM TAX-EXEMPT CASH FUND) in securities that are illiquid. Illiquid securities include securities that cannot be disposed of promptly (within seven days) in the normal course of business at a price at which they are valued. Illiquid securities may include securities that are subject to restrictions on resale because they have not been registered under the Securities Act of 1933. Restricted securities may, in certain circumstances, be resold pursuant to Rule 144A, and thus may or may not constitute illiquid securities. Limitations on the resale of restricted securities may have an adverse effect on their marketability, which may prevent the Fund from disposing of them promptly at reasonable prices. The Fund may have to bear the expense of registering such securities for resale, and the risk of substantial delays in effecting such registrations. The Board of Trustees is responsible for developing and establishing guidelines and procedures for determining the liquidity of Rule 144A restricted securities on behalf of the Funds and monitoring AIM's implementation of the guidelines and procedures.
VARIABLE OR FLOATING RATE INSTRUMENTS
The Funds may invest in Municipal Securities which have variable or floating interest rates which are readjusted on set dates (such as the last day of the month or calendar quarter) in the case of variable rates or whenever a specified interest rate change occurs in the case of a floating rate instrument. Variable or floating interest rates generally reduce changes in the market price of Municipal Securities from their original purchase price because, upon readjustment, such rates approximate market rates. Accordingly, as interest rates decrease or increase, the potential for capital appreciation or depreciation is less for variable or floating rate Municipal Securities than for fixed rate obligations. Many Municipal Securities with variable or floating interest rates purchased by a Fund are subject to payment of principal and accrued interest (usually within seven days) on the Fund's demand. The terms of such demand instruments require payment of principal and accrued interest by the issuer, a guarantor, and/or a liquidity provider. All variable or floating rate instruments will meet the applicable quality standards of a Fund. AIM will monitor the pricing, quality and liquidity of the variable or floating rate Municipal Securities held by the Funds.
AIM HIGH INCOME MUNICIPAL FUND may invest in inverse floating rate obligations or residual interest bonds, or other obligations or certificates related to such securities which have similar features. These types of obligations generally have floating or variable interest rates that move in the opposite direction of short-term interest rates, and generally increase or decrease in value in response to changes in short-term interest rates at a rate which is a multiple (typically two) of the rate at which long-term fixed rate tax-exempt securities increase or decrease in response to such changes. As a result, such obligations have the effect of providing investment leverage and may be more volatile than long-term fixed rate tax-exempt securities.
CONCENTRATION OF INVESTMENTS
As non-fundamental policies, each of AIM TAX-EXEMPT CASH FUND and AIM
TAX-FREE INTERMEDIATE FUND will each not: invest 25% or more of its assets in
(1) securities whose issuers are located in the same state; (2) securities the
interest upon which is paid from revenues of similar type projects; and (3)
industrial development bonds.
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT: (1) will invest 25% or more of
its assets in securities whose issuers are located in the State of Connecticut;
(2) may invest 25% or more of its assets in securities
the interest upon which is paid from revenues of similar type projects; and (3) will not invest 25% or more of its assets in industrial development bonds.
The policy described in (2) above for each of AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT does not apply if the securities are subject to a guarantee. For securities subject to a guarantee, these Funds do not intend to purchase any such security if, after giving effect to the purchase, 25% or more of the Fund's assets would be invested in securities issued or guaranteed by entities in a particular industry. Securities issued or guaranteed by a bank or subject to financial guaranty insurance are not subject to the limitations set forth in the preceding sentence.
AIM HIGH INCOME MUNICIPAL FUND may invest 25% or more of the value of its total assets in municipal securities issued by entities having similar characteristics, such as (a) securities the issuers of which are located in the same geographic area or where issuers' interest obligations are paid from revenues of similar projects, or (b) industrial development revenue bonds, including pollution control revenue bonds, housing finance agency bonds or hospital bonds. The Fund may not, however, invest 25% or more of the value of its total assets in industrial development revenue bonds, including pollution control revenue bonds, issued for companies in the same industry. Sizeable investments in such securities could involve an increased risk to AIM HIGH INCOME MUNICIPAL FUND if any of such issuers or any such related projects or facilities experience financial difficulties. The Fund may, but does not currently intend to, invest 25% or more of the value of its total assets in securities whose issuers are located in any of the following states: Arizona, California, Colorado, Connecticut, Florida, Illinois, Michigan, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania and Texas.
RISK FACTORS IN CONCENTRATING IN CONNECTICUT MUNICIPAL OBLIGATIONS
Since AIM TAX-EXEMPT BOND FUND OF CONNECTICUT invests primarily in obligations of the State of Connecticut, the marketability and market value of these obligations may be affected by the regional economy, certain Connecticut constitutional amendments, legislative measures, executive orders, administrative regulations and voter initiatives. The ability of the Fund to achieve its objective is affected by the ability of municipal issuers to meet their payment obligations. Problems which may arise in the foregoing areas and which are not resolved could adversely affect the various Connecticut issuers' abilities to meet their financial obligations.
NON-DIVERSIFIED PORTFOLIO
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT is a non-diversified portfolio, which means that it may invest a greater proportion of its assets in the securities of a smaller number of issuers and therefore may be subject to greater market and credit risk than a more broadly diversified portfolio. The Fund is subject to the issuer diversification requirements of the Internal Revenue Code of 1986, as amended, that are applicable to regulated investment companies. To qualify as a regulated investment company, the Fund must diversify its holdings so that, at the end of each fiscal quarter: (i) at least 50% of the market value of the Fund's assets is represented by cash and cash items, U.S. Government securities, securities of other regulated investment companies and other securities, with such other securities limited, with respect to any one issuer, to an amount not greater than 5% of the Fund's total assets and not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the Fund's total assets is invested in the securities (other than U.S. Government securities or securities of other regulated investment companies) of any one issuer, or of two or more issuers which the Fund controls and which are determined to be engaged in the same, similar or related trades or businesses.
MARGIN TRANSACTIONS
AIM HIGH INCOME MUNICIPAL FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE INTERMEDIATE FUND will not purchase any security on margin, except that each may obtain such short-term credits as may be necessary for the clearance of purchases and sales of portfolio securities. The payment by any of those Funds of initial or variation margin in connection with futures or related options transactions will
not be considered the purchase of a security on margin. AIM TAX-EXEMPT CASH FUND will not purchase any security on margin, except that it may obtain such short-term credits as may be necessary for the clearance of purchases and sales of portfolio securities.
SHORT SALES
AIM HIGH INCOME MUNICIPAL FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-FREE INTERMEDIATE FUND will not make short sales of securities or maintain a short position unless at all times when a short position is open, the fund owns an equal amount of such securities or securities convertible into or exchangeable for, without payment of any further consideration, securities of the same issue as, and equal in amount to, the securities sold short. In no event will any Fund deposit or pledge more than 10% of its total assets as collateral for such short sales at any one time. AIM TAX-EXEMPT CASH FUND will not make short sales of securities or maintain short positions.
DIVERSIFICATION REQUIREMENTS - AIM TAX-EXEMPT CASH FUND
As a money market fund, AIM TAX-EXEMPT CASH FUND is subject to the diversification requirements of Rule 2a-7 under the 1940 Act. This Rule sets forth two different diversification requirements: one applicable to the issuer of Municipal Securities (provided that such securities are not subject to a demand feature or a guarantee), and one applicable to Municipal Securities with demand features or guarantees.
The issuer diversification requirement provides that the Fund may not invest in the securities of any issuer if, as a result, more than 5% of its total assets would be invested in securities issued by such issuer. If the securities are subject to a demand feature or guarantee, however, they are not subject to this requirement. Moreover, for purposes of this requirement, the issuer of a security is not always the nominal issuer. Instead, in certain circumstances, the underlying obligor of a security is deemed to be the issuer of the security. Such circumstances arise for example when another political subdivision agrees to be ultimately responsible for payments of principal of an interest on a security or when the assets and revenues of a non-governmental user of the facility financed with the Municipal Securities secures repayment of such securities.
The diversification requirement applicable to Municipal Securities subject to a demand feature or guarantee provides that, with respect to 75% of its total assets, the Fund may not invest more than 10% of its total assets in securities issued by or subject to demand features or guarantees from the same entity. A demand feature permits the Fund to sell a Municipal Security at approximately its amortized cost value plus accrued interest at specified intervals upon no more than 30 days' notice. A guarantee includes a letter of credit, bond insurance and an unconditional demand feature (provided the demand feature is not provided by the issuer of the security.)
SYNTHETIC MUNICIPAL INSTRUMENTS
AIM believes that certain synthetic municipal instruments provide opportunities for mutual funds to invest in high credit quality securities providing attractive returns, even in market conditions where the supply of short-term tax-exempt instruments may be limited. AIM TAX-EXEMPT CASH FUND may invest in synthetic municipal instruments the value of and return on which are derived from underlying securities. Synthetic municipal instruments comprise a large percentage of tax-exempt securities eligible for purchase by tax-exempt money market funds. The types of synthetic municipal instruments in which the Fund may invest include tender option bonds and variable rate trust certificates. Both types of instruments involve the deposit into a trust or custodial account of one or more long-term tax-exempt bonds or notes ("Underlying Bonds"), and the sale of certificates evidencing interests in the trust or custodial account to investors such as the Fund. The trustee or custodian receives the long-term fixed rate interest payments on the Underlying Bonds, and pays certificate holders short-term floating or variable interest rates which are reset periodically. A "tender option bond" provides a certificate holder with the conditional right to sell its certificate to the Sponsor or some designated third party at specified intervals and receive the par value of the certificate plus accrued interest (a demand feature). A "variable rate trust certificate" evidences an interest in a trust entitling the certificate holder to receive variable rate interest based on prevailing short-term interest rates and also typically providing
the certificate holder with the conditional demand feature the right to tender its certificate at par value plus accrued interest.
All synthetic municipal instruments must meet the minimum quality standards for AIM TAX-EXEMPT CASH FUND'S investments and must present minimal credit risks. In selecting synthetic municipal instruments for the Fund, AIM considers the creditworthiness of the issuer of the Underlying Bond, the Sponsor and the party providing certificate holders with a conditional right to sell their certificates at stated times and prices (a demand feature). Typically, a certificate holder cannot exercise the demand feature upon the occurrence of certain conditions, such as where the issuer of the Underlying Bond defaults on interest payments. Moreover, because synthetic municipal instruments involve a trust or custodial account and a third party conditional demand feature, they involve complexities and potential risks that may not be present where a municipal security is owned directly.
The tax-exempt character of the interest paid to certificate holders is based on the assumption that the holders have an ownership interest in the Underlying Bonds; however, the Internal Revenue Service has not issued a ruling addressing this issue. In the event the Internal Revenue Service issues an adverse ruling or successfully litigates this issue, it is possible that the interest paid to AIM TAX-EXEMPT CASH FUND on certain synthetic municipal instruments would be deemed to be taxable. AIM TAX-EXEMPT CASH FUND relies on opinions of special tax counsel on this ownership question and opinions of bond counsel regarding the tax-exempt character of interest paid on the Underlying Bonds.
STANDBY COMMITMENTS
AIM HIGH INCOME MUNICIPAL FUND may acquire standby commitments from banks or other municipal securities dealers with respect to securities in its portfolio or that are being purchased by the Fund. Standby commitments generally increase the cost of the acquisition of the underlying security, thereby reducing the yield. Standby commitments depend upon the issuer's ability to fulfill its obligation upon demand. Although no definitive creditworthiness criteria are used for this purpose, AIM reviews the creditworthiness of the banks and other municipal securities dealers from which AIM HIGH INCOME MUNICIPAL FUND obtains standby commitments in order to evaluate those risks.
INDEXED SECURITIES
AIM HIGH INCOME MUNICIPAL FUND may invest in indexed securities the value of which is linked to interest rates, commodities, indices or other financial indicators. Most indexed securities are short to intermediate term fixed income securities whose values at maturity (principal value) or interest rates rise or fall according to changes in the value of one or more specified underlying instruments. Indexed securities may be positively or negatively indexed (i.e., their principal value or interest rates may increase or decrease if the underlying instrument appreciates), and may have return characteristics similar to direct investments in the underlying instrument or to one or more options on the underlying instrument. Indexed securities may be more volatile than the underlying instrument itself and could involve the loss of all or a portion of the principal amount of the indexed security.
ZERO-COUPON AND PAY-IN-KIND SECURITIES
AIM HIGH INCOME MUNICIPAL FUND may, but does not currently intend to, invest in zero-coupon or pay-in-kind securities. These securities are debt securities that do not make regular cash interest payments. Zero-coupon securities are sold at a deep discount to their face value. Pay-in-kind securities pay interest through the issuance of additional securities. Because zero-coupon and pay-in-kind securities do not pay current cash income, the price of these securities can be volatile when interest rates fluctuate. While these securities do not pay current cash income, federal tax law requires the holders of zero-coupon and pay-in-kind securities to include in income each year the portion of the original issue discount (or deemed discount) and other non-cash income on such securities accrued during that year. In order to qualify as a "regulated investment company" under the Internal Revenue Code of 1986, as amended (the "Code") and to avoid certain excise taxes, AIM HIGH INCOME MUNICIPAL FUND may be required to distribute a portion of such discount and
income, and may be required to dispose of other portfolio securities, which could occur during periods of adverse market prices, in order to generate sufficient cash to meet these distribution requirements.
INSURANCE
AIM HIGH INCOME MUNICIPAL FUND may purchase insurance for non-insured Municipal Securities in which it invests. The purchase of such insurance is expected to enhance the value of the security for which insurance is purchased. The cost of purchasing such insurance would be an expense of the Fund.
LENDING OF PORTFOLIO SECURITIES
Consistent with applicable regulatory requirements, the Funds may lend their portfolio securities (principally to broker-dealers) to the extent of one-third of their respective total assets. Such loans would be callable at any time and would be continuously secured by collateral equal to no less than the market value, determined daily, of the loaned securities. Such collateral will be cash, letters of credit, or debt securities issued or guaranteed by the U.S. Government or any of its agencies. The Funds would continue to receive the income on loaned securities and would, at the same time, earn interest on the loan collateral or on the investment of the loan collateral if it were cash. Any cash collateral pursuant to these loans would be invested in short-term money market instruments, or affiliated money market funds. Where voting or consent rights with respect to loaned securities pass to the borrower, the Funds will follow the policy of calling the loan, in whole or in part as may be appropriate, to permit the exercise of such voting or consent rights if the matters involved are expected to have a material effect on the Funds' investment in the loaned securities. Lending securities entails a risk of loss to the Funds if and to the extent that the market value of the securities loaned were to increase and the lender did not increase the collateral accordingly.
INTERFUND LOANS
Each Fund may lend up to 33 1/3% of its total assets to another AIM Fund, on such terms and conditions as the SEC may require in an exemptive order. An application for exemptive relief has been filed with the SEC on behalf of the Funds and others. Each Fund may also borrow from another AIM Fund to satisfy redemption requests or to cover unanticipated cash shortfalls due to a delay in the delivery of cash to the Fund's custodian or improper delivery instructions by a broker effectuating a transaction.
OTHER CONSIDERATIONS
The ability of AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND to achieve each of their investment objectives depends upon the continuing ability of the issuers or guarantors of Municipal Securities held by the Funds to meet their obligations for the payment of interest and principal when due. The securities in which such Funds invest may not yield as high a level of current income as longer term or lower grade securities, which generally have less liquidity and greater fluctuation in value.
AIM TAX-FREE INTERMEDIATE FUND will invest its assets so that 80% of the Fund's assets will be invested in securities that generate interest that is exempt from Federal income taxes. The Fund will seek to avoid the purchase of "private activity bonds" the interest on which could give rise to an alternative minimum tax liability for individuals and other noncorporate shareholders.
There is a risk that some or all of the interest received by a Fund from Municipal Securities might become taxable as a result of tax law changes or determinations of the Internal Revenue Service.
INVESTMENT IN OTHER INVESTMENT COMPANIES
Each of the Funds may invest in other investment companies to the extent permitted by the 1940 Act, and rules and regulations thereunder, and if applicable, exemptive orders granted by the SEC. The following restrictions apply to investments in other investment companies other than Affiliated Money Market Funds (defined below): (i) a Fund may not purchase more than 3% of the total outstanding voting stock of another
investment company; (ii) a Fund may not invest more than 5% of its total assets in securities issued by another investment company; and (iii) a Fund may not invest more than 10% of its total assets in securities issued by other investment companies other than Affiliated Money Market Funds. With respect to a Fund's purchase of shares of another investment company, including Affiliated Money Market Funds, the Fund will indirectly bear its proportionate share of the advisory fees and other operating expenses of such investment company. The Funds have obtained an exemptive order from the SEC allowing them to invest uninvested cash balances and cash collateral received in connection with securities lending in money market funds that have AIM or an affiliate of AIM as an investment advisor (the "Affiliated Money Market Funds"), provided that investments in Affiliated Money Market Funds do not exceed 25% of the total assets of the investing Fund.
TEMPORARY DEFENSIVE INVESTMENTS
In anticipation of or in response to adverse market conditions, for cash management purposes, or for defensive purposes, each of the Funds may temporarily hold all or a portion of its assets in cash, money market instruments, bonds, or other debt securities. Each of the Funds may also invest up to 25% of its total assets in Affiliated Money Market Funds for these purposes. For a description of the various rating categories of corporate bonds and commercial paper in which the Funds may invest, see "Ratings of Securities" in this Statement of Additional Information.
OPTIONS AND FUTURES
COVERED CALL OPTIONS: AIM HIGH INCOME MUNICIPAL FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT AND AIM TAX-FREE INTERMEDIATE FUND ONLY. The Fund may write call options on fixed income securities, but only on a covered basis; that is, the Fund will own the underlying security. Call options are "covered" by the Fund when it owns the underlying securities. The exercise price of a call option may be below, equal to, or above the current market value of the underlying security at the time the option is written. When the Fund writes a covered call option, an amount equal to the premium received by the Fund is recorded as an asset and an equivalent liability. The amount of the liability is subsequently "marked-to-market" to reflect the current market value of the option written. The current market value of a written option is the last sale price, or in the absence of a sale, the last offering price. If a written call option expires on the stipulated expiration date, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or a loss if the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written option is exercised, the Fund realizes a gain or a loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received.
A call option gives the purchaser of such option the right to buy, and the writer (the Fund) the obligation to sell, the underlying security at the stated exercise price up to a stated expiration date or, in the case of certain options, on such date. The purchaser of a call option owns or has the right to acquire the security which is the subject of the call option at any time during the option period. During the option period, in return for the premium paid by the purchaser of the option, the Fund has given up the opportunity for capital appreciation above the exercise price should the market price of the underlying security increase, but has retained the risk of loss should the price of the underlying security decline. During the option period, the Fund may be required at any time to deliver the underlying security against payment of the exercise price. This obligation is terminated upon the expiration of the option period or at such earlier time at which the Fund effects a closing purchase transaction by purchasing (at a price which may be higher than was received when the call option was written) a call option identical to the one originally written. The Fund as non-fundamental policies (a) will not write covered call options which exceed 25% of the value of its net assets and (b) will only write covered call options for hedging purposes and will not use leverage in doing so.
The Fund may purchase detachable call options on municipal securities, which are options issued by an issuer of the underlying municipal securities that give the holder the right to purchase the securities at a fixed price, either up to a stated time in the future, or in some cases, on a particular future date. The Fund may purchase warrants on fixed income securities. A warrant on a fixed income security is a long-dated call option
giving the holder the right, but not the obligation, to purchase a fixed income security of a specific description (from the issuer) on a certain date or dates at a fixed exercise price.
PUT OPTIONS: AIM HIGH INCOME MUNICIPAL FUND ONLY. The Fund may write (sell) put options on fixed income securities, but only on a covered basis; that is, the Fund will segregate liquid assets to satisfy any obligation of the Fund to purchase the underlying securities. Put options written by the Fund give the holder the right to sell the underlying securities to the Fund at a fixed price up to a stated expiration date or, in the case of certain options, on such date. Put options are "covered" by the Fund when it has segregated liquid assets which can be sold promptly to satisfy any obligation of the Fund to purchase the underlying securities. A put option may be sold at a profit or loss depending upon changes in the price of the underlying security. The Fund as non-fundamental policies (a) will not write covered put options which exceed 25% of the value of its net assets and (b) will only write covered put options for hedging purposes and will not use leverage in doing so.
COMBINED OPTION POSITIONS: AIM HIGH INCOME MUNICIPAL FUND ONLY. The Fund, for hedging purposes, may write straddles (combinations of put and call options on the same underlying security) to adjust the risk and return characteristics of the Fund's overall position. A possible combined position would involve writing a covered call option at one strike price and buying a call option at a lower price, in order to reduce the risk of the written covered call option in the event of a substantial price increase. Because combined options positions involve multiple trades, they result in higher transaction costs and may be more difficult to open and close out.
FUTURES CONTRACTS: ALL FUNDS. AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND do not currently intend to engage in transactions involving futures contracts. AIM HIGH INCOME MUNICIPAL FUND may purchase and sell futures contracts on fixed income securities or indices of such securities, or purchase and sell options thereon, in order to hedge the value of its portfolio against changes in market conditions. AIM TAX-EXEMPT BOND FUND OF CONNECTICUT may purchase and sell interest rate futures contracts or purchase options thereon to hedge its portfolio against changes in interest rates. In cases of purchases of futures contracts, an amount of liquid assets, equal to the cost of the futures contracts (less any related margin deposits), will be segregated with a Fund's custodian to collateralize the position and ensure that the use of such futures contracts is unleveraged. Unlike when a Fund purchases or sells a security, no price is paid or received by a Fund upon the purchase or sale of a futures contract. Initially, a Fund will be required to deposit liquid assets with its custodian for the account of the broker in a stated amount, as called for by the particular contract. This amount is known as "initial margin." The nature of initial margin in futures transactions is different from that of margin in securities transactions in that futures contract margin does not involve the borrowing of funds by the customer to finance the transactions.
Rather, the initial margin is in the nature of a performance bond or good faith deposit on the contract which is returned to the Fund upon termination of the futures contract assuming all contractual obligations have been satisfied. Subsequent payments, called "variation margin," to and from the broker will be made on a daily basis as the price of the futures contract fluctuates, making the long and short positions in the futures contract more or less valuable. This process is known as "marking-to-market." For example, when a Fund has purchased an indexed futures contract and the price of the underlying index has risen, that position will have increased in value and the Fund will receive from the broker a variation margin payment with respect to that increase in value. Conversely, where a Fund has purchased an indexed futures contract and the price of the underlying index has declined, that position would be less valuable and the Fund would be required to make a variation margin payment to the broker. Variation margin payments would be made in a similar fashion when a Fund has purchased an interest rate futures contract. At any time prior to expiration of the futures contract, a Fund may elect to close the position by taking an opposite position which will operate to terminate the Fund's position in the futures contract. A final determination of variation margin is then made, additional cash is required to be paid by or released to the Fund and the Fund realizes a loss or a gain.
An interest rate futures contract is an agreement between two parties to buy and sell a debt security for a set price on a future date. Currently, there are futures contracts based on long-term U.S. Treasury bonds, U.S. Treasury notes, U.S. Treasury bills, Eurodollars and the Bond Buyer Municipal Bond Index.
No Fund may purchase or sell futures contracts, purchase or sell related options, or purchase or sell options on securities indexes if, immediately thereafter, the sum of the amount of initial margin deposits and premiums on open positions with respect to futures contracts, related options and options on securities indexes would exceed 5% of the market value of a Fund's total assets. AIM TAX-EXEMPT BOND FUND OF CONNECTICUT will not hedge more than 20% of its assets at one time.
OPTIONS ON FUTURES CONTRACTS: ALL FUNDS
AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND do not currently intend to engage in transactions involving options on futures contracts. An option on a futures contract gives the purchaser the right, in return for the premium paid, to assume a position in a futures contract (a long position if the option is a call and a short position if the option is a put) at a specified exercise price at any time during the option exercise period. The writer of the option is required upon exercise to assume an offsetting futures position (a short position if the option is a call and a long position if the option is a put) at a specified exercise price at any time during the period of the option. Upon exercise of the option, the assumption of offsetting futures positions by the writer and holder of the option will be accompanied by delivery of the accumulated cash balance in the writer's futures margin account which represents the amount by which the market price of the futures contract, at exercise, exceeds, in the case of a call, or is less than, in the case of a put, the exercise price of the option on the futures contract. If an option on a futures contract is exercised on the last trading date prior to the expiration date of the option, the settlement will be made entirely in cash equal to the difference between the exercise price of the option and the closing price of the futures contract on the expiration date.
A Fund may purchase and sell put and call options on futures contracts in order to hedge the value of its portfolio against changes in market conditions. Depending on the pricing of the option compared to either the price of the futures contract upon which it is based or the price of the underlying securities or currency, it may or may not be less risky than ownership of the futures contract or underlying securities or currency.
AIM TAX-EXEMPT CASH FUND
AIM TAX-EXEMPT CASH FUND will not invest in puts, call, straddles, spreads or any combination thereof.
RISKS AS TO FUTURES CONTRACTS AND RELATED OPTIONS. The use of futures contracts and related options as hedging devices presents several risks. One risk arises because of the imperfect correlation between movements in the price of hedging instruments and movements in the price of the debt securities which are the subject of the hedge. Such imperfect correlation is exacerbated in the case of AIM TAX-EXEMPT BOND FUND OF CONNECTICUT by the fact that futures contracts are not based on a portfolio of bonds issued by the State of Connecticut and its political subdivisions. If the price of a hedging instrument moves less than the price of the Fund's investments which are the subject of the hedge, the hedge will not be fully effective. If the price of a hedging instrument moves more than the price of the Fund's investments, a Fund will experience either a loss or a gain on the hedging instrument which will not be completely offset by movements in the price of the investments which are the subject of the hedge. The use of options on futures contracts involves the additional risk that changes in the value of the underlying futures contract will not be fully reflected in the value of the option.
Successful use of hedging instruments by a Fund is also subject to AIM's ability to predict correctly movements in the direction of interest rates. Because of possible price distortions in the futures and options markets, and because of the imperfect correlation between movements in the prices of hedging instruments and the investments being hedged, even a correct forecast by AIM of general market trends may not result in a completely successful hedging transaction.
It is also possible that where a Fund has sold futures contracts to hedge its portfolio against a decline in the market, the market may advance and the value of debt securities held in a Fund's portfolio may decline. If this occurred, a Fund would lose money on the futures contracts and also experience a decline in the value of its portfolio securities.
Positions in futures contracts or options may be closed out only on an exchange on which such contracts are traded. Although the Funds intend to purchase or sell futures contracts or purchase options only on exchanges or boards of trade where there appears to be an active market, there is no assurance that a liquid market on an exchange or board of trade will exist for any particular contract or at any particular time. If there is not a liquid market at a particular time, it may not be possible to close a futures position or purchase an option at such time. In the event of adverse price movements under those circumstances, the Fund would continue to be required to make daily cash payments of maintenance margin on its futures positions. The extent to which the Fund may engage in futures contracts or related options will be limited by Internal Revenue Code requirements for qualification as a regulated investment company and the Funds' intent to continue to qualify as such. The result of a hedging program cannot be foreseen and may cause a Fund to suffer losses which it would not otherwise sustain. There is no assurance that a Fund will use hedging transactions. For example, if a Fund determines that the cost of hedging will exceed the potential benefit to the Fund, the Fund will not enter into such transaction.
INVESTMENT RESTRICTIONS
FUNDAMENTAL RESTRICTIONS
Each Fund is subject to the following investment restrictions, which
may be changed only by a vote of a majority of such Fund's outstanding shares,
except AIM TAX-EXEMPT BOND FUND OF CONNECTICUT is not subject to restriction
(1). Fundamental restrictions may be changed only by a vote of the lesser of (i)
67% or more of the Fund's shares present at a meeting if the holders of more
than 50% of the outstanding shares are present in person or represented by
proxy, or (ii) more than 50% of the Fund's outstanding shares.
(1) The Fund is a "diversified company" as defined in the 1940 Act. The Fund will not purchase the securities of any issuer if, as a result, the Fund would fail to be a diversified company within the meaning of the 1940 Act, and the rules and regulations promulgated thereunder, as such statute, rules and regulations are amended from time to time or are interpreted from time to time by the SEC staff (collectively, the "1940 Act Laws and Interpretations") or except to the extent that the Fund may be permitted to do so by exemptive order or similar relief (collectively, with the 1940 Act Laws and Interpretations, the "1940 Act Laws, Interpretations and Exemptions"). In complying with this restriction, however, the Fund may purchase securities of other investment companies to the extent permitted by the 1940 Act Laws, Interpretations and Exemptions. (This restriction is not applicable to AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.)
(2) The Fund may not borrow money or issue senior securities, except as permitted by the 1940 Act Laws, Interpretations and Exemptions.
(3) The Fund may not underwrite the securities of other issuers. This restriction does not prevent the Fund from engaging in transactions involving the acquisition, disposition or resale of its portfolio securities, regardless of whether the Fund may be considered to be an underwriter under the Securities Act of 1933.
(4) The Fund will not make investments that will result in the concentration (as that term may be defined or interpreted by the 1940 Act Laws, Interpretations and Exemptions) of its investments in the securities of issuers primarily engaged in the same industry. This restriction does not limit the Fund's investments in (i) obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities, (ii) tax-exempt obligations issued by governments or political subdivisions of governments, or (iii) with respect to AIM TAX-EXEMPT CASH FUND, bank instruments. In complying with this restriction, the Fund will not consider a bank-issued guaranty or financial guaranty insurance as a separate security.
(5) The Fund may not purchase real estate or sell real estate unless acquired as a result of ownership of securities or other instruments. This restriction does not prevent the Fund from investing in issuers that invest, deal, or otherwise engage in transactions in real estate or interests therein, or investing in securities that are secured by real estate or interests therein.
(6) The Fund may not purchase physical commodities or sell physical commodities unless acquired as a result of ownership of securities or other instruments. This restriction does not prevent the Fund from engaging in transactions involving futures contracts and options thereon or investing in securities that are secured by physical commodities.
(7) The Fund may not make personal loans or loans of its assets to persons who control or are under common control with the Fund, except to the extent permitted by 1940 Act Laws, Interpretations and Exemptions. This restriction does not prevent the Fund from, among other things, purchasing debt obligations, entering into repurchase agreements, loaning its assets to broker-dealers or institutional investors, or investing in loans, including assignments and participation interests.
(8) The Fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and restrictions as the Fund.
The investment restrictions set forth above provide each of the Funds with the ability to operate under new interpretations of the 1940 Act or pursuant to exemptive relief from the SEC without receiving prior shareholder approval of the change. Even though each of the Funds has this flexibility, the Board of Trustees has adopted non-fundamental restrictions for each of the Funds relating to certain of these restrictions which the advisor must follow in managing the Funds. Any changes to these non-fundamental restrictions, which are set forth below, require the approval of the Board of Trustees.
NON-FUNDAMENTAL RESTRICTIONS
The following restrictions apply to each of the Funds, except AIM TAX-EXEMPT BOND FUND OF CONNECTICUT is not subject to restriction (1). They may be changed for any Fund without approval of that Fund's voting securities. Any investment restriction that involves a maximum or minimum percentage of securities or assets shall not be considered to be violated unless an excess over or a deficiency under the percentage occurs immediately after, and is caused by, an acquisition or disposition of securities or utilization of assets by the Fund.
(1) In complying with the fundamental restriction regarding issuer diversification, the Fund will not, with respect to 75% of its total assets (and for AIM TAX-EXEMPT CASH FUND, with respect to 100% of its total assets), purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities), if, as a result, (i) more than 5% of the Fund's total assets would be invested in the securities of that issuer, except as permitted by Rule 2a-7 under the 1940 Act, or (ii) the Fund would hold more than 10% of the outstanding voting securities of that issuer. The Fund may (i) purchase securities of other investment companies as permitted by Section 12(d)(1) of the 1940 Act and (ii) invest its assets in securities of other money market funds and lend money to other investment companies or their series portfolios that have AIM or an affiliate of AIM as an investment advisor (an "AIM Advised Fund"), subject to the terms and conditions of any exemptive orders issued by the SEC. (This restriction is not applicable to AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.)
(2) In complying with the fundamental restriction regarding borrowing money and issuing senior securities, the Fund may borrow money in an amount not exceeding 33 1/3% of its total assets (including the amount borrowed) less liabilities (other than borrowings). The Fund may borrow from banks, broker-dealers or other investment companies or an AIM Advised Fund. The Fund may not borrow for leveraging, but may borrow for temporary or emergency purposes, in anticipation of or in response to adverse market conditions, or for cash management purposes. The Fund may not purchase additional securities when any borrowings from banks exceed 5% of the Fund's total assets.
(3) In complying with the fundamental restriction regarding industry concentration, the Fund may invest up to 25% of its total assets in the securities of issuers whose principal business activities are in the same industry.
(4) In complying with the fundamental restriction with regard to making loans, the Fund may lend up to 33 1/3% of its total assets and may lend money to another AIM Advised Fund, on such terms and conditions as the SEC may require in an exemptive order.
(5) Notwithstanding the fundamental restriction with regard to investing all assets in an open-end fund, the Fund may not invest all of its assets in the securities of a single open-end management investment company with the same fundamental investment objectives, policies and restrictions as the Fund.
For purposes of the fundamental investment restriction regarding issuer diversification for AIM TAX-FREE INTERMEDIATE FUND, AIM HIGH INCOME MUNICIPAL FUND and AIM TAX-EXEMPT CASH FUND, the Fund will regard each state and political subdivision, agency or instrumentality, and each multi-state agency of which such state is a member, as a separate issuer.
MANAGEMENT
The overall management of the business and affairs of the Funds are vested in the Trust's Board of Trustees. The Board of Trustees approves all significant agreements between the Trust, on behalf of the Funds, and persons or companies furnishing services to the Funds. The day-to-day operations of each Fund are delegated to the officers of the Trust and to AIM, subject always to the objective, restrictions and policies of the applicable Fund and to the general supervision of the 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.
TRUSTEES AND OFFICERS
The trustees and officers of the Trust and their principal occupations during at least the last five years are set forth below. Unless otherwise indicated, the address of each trustee and officer is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. All of the Trust's executive officers hold similar offices with some or all of the other AIM Funds.
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POSITION HELD PRINCIPAL OCCUPATION DURING AT LEAST
NAME, ADDRESS AND AGE WITH REGISTRANT THE PAST 5 YEARS
-------------------------------------------------- ---------------------- ------------------------------------------------
*CHARLES T. BAUER (81) Trustee and Director and Chairman A I M Management Group
Chairman Inc., A I M Advisors, Inc., A I M Capital
Management, Inc., A I M Distributors, Inc. A I M
Fund Services, Inc., and Fund Management
Company; and Executive Vice Chairman and
Director, AMVESCAP PLC.
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POSITION HELD PRINCIPAL OCCUPATION DURING AT LEAST
NAME, ADDRESS AND AGE WITH REGISTRANT THE PAST 5 YEARS
-------------------------------------------------- ---------------------- ------------------------------------------------
BRUCE L. CROCKETT (56) Trustee Director, ACE Limited (insurance company).
906 Frome Lane Formerly, Director, President and Chief
McLean, VA 22102 Executive Officer, COMSAT Corporation and
Chairman, Board of Governors of INTELSAT
(international communications company).
-------------------------------------------------- ---------------------- ------------------------------------------------
EDWARD K. DUNN, JR. (65) Trustee Chairman of the Board of Directors, Mercantile
2 Hopkins Plaza, 8th Floor, Suite 805 Mortgage Corp. Formerly, Vice Chairman of the
Baltimore, MD 21201 Board of Directors, President and Chief
Operating Officer, Mercantile - Safe Deposit &
Trust Co.; and President, Mercantile
Bankshares.
-------------------------------------------------- ---------------------- ------------------------------------------------
JACK FIELDS (48) Trustee Chief Executive Officer, Texana Global Inc.
34 New Jersey Avenue, S.E. (foreign trading company) and Twenty First
Washington, D.C. 20003 Century Group, Inc. (governmental affairs
company). Formerly, Member of the U.S. House
of Representatives.
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**CARL FRISCHLING (63) Trustee Partner, Kramer Levin Naftalis & Frankel LLP
919 Third Avenue (law firm).
New York, NY 10022
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*ROBERT H. GRAHAM (53) Trustee and President Director, President and Chief Executive
Officer, A I M Management Group Inc.; Director
and President, A I M Advisors, Inc.; Director
and Senior Vice President, A I M Capital
Management, Inc., A I M Distributors, Inc.,
A I M Fund Services, Inc. and Fund Management
Company; and Director and Chief Executive
Officer, Managed Products, AMVESCAP PLC.
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PREMA MATHAI-DAVIS (49) Trustee Formerly, Chief Executive Officer, YWCA of the
170 East 83rd Street USA.
New York, NY 10028
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LEWIS F. PENNOCK (57) Trustee Partner, Pennock & Cooper (law firm).
6363 Woodway, Suite 825
Houston, TX 77057
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LOUIS S. SKLAR (60) Trustee Executive Vice President, Development and
The Williams Tower, 50th Floor Operations, Hines Interests Limited
2800 Post Oak Blvd. Partnership (real estate development).
Houston, TX 77056
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* A trustee who is an "interested person" of AIM and the Trust as defined in the 1940 Act. Mr. Bauer has notified the Board that he intends to retire from his position as an officer and trustee of the Funds effective September 30, 2000. The Board does not presently intend to fill the vacancy that will result from Mr. Bauer's retirement. Effective September 30, 2000, Mr. Graham will succeed Mr. Bauer as Chairman of the Board.
** A trustee who is an "interested person" of the Trust as defined in the 1940 Act.
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POSITION HELD PRINCIPAL OCCUPATION DURING AT LEAST
NAME, ADDRESS AND AGE WITH REGISTRANT THE PAST 5 YEARS
-------------------------------------------------- ---------------------- ------------------------------------------------
GARY T. CRUM (52) Senior Vice President Director and President, A I M Capital
Management, Inc.; Director and Executive Vice
President, A I M Management Group Inc.;
Director and Senior Vice President, A I M
Advisors, Inc.; and Director, A I M
Distributors, Inc. and AMVESCAP PLC.
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CAROL F. RELIHAN (45) Senior Vice President Director, Senior Vice President, General
and Secretary Counsel and Secretary, A I M Advisors, Inc.;
Senior Vice President, General Counsel and
Secretary, A I M Management Group Inc.;
Director, Vice President and General Counsel,
Fund Management Company; Vice President, and
General Counsel, A I M Fund Services, Inc. and
Vice President, A I M Capital Management,
Inc. and A I M Distributors, Inc.
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DANA R. SUTTON (41) Vice President and Vice President and Fund Controller, A I M
Treasurer Advisors, Inc.; and Assistant Vice President
and Assistant Treasurer, Fund Management
Company.
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STUART W. COCO (45) Vice President Senior Vice President, A I M Capital
Management, Inc. and Vice President, A I M
Advisors, Inc.
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MELVILLE B. COX (56) Vice President Vice President and Chief Compliance Officer,
A I M Advisors, Inc., A I M Capital Management,
Inc., A I M Distributors, Inc., A I M Fund
Services, Inc. and Fund Management Company.
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KAREN DUNN KELLEY (40) Vice President Senior Vice President, A I M Capital
Management, Inc. and Vice President, A I M
Advisors, Inc.
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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. Crockett, Daly, Dunn (Chairman), Fields, Frischling, Pennock and Sklar and Dr. Mathai-Davis. The Audit Committee is responsible for: (i) considering management's recommendations of independent accountants for each Fund and evaluating such accountants' performance, costs and financial stability; (ii) with AIM, reviewing and coordinating audit plans prepared by the Funds' independent accountants and management's internal audit staff; and (iii) reviewing financial statements contained in periodic reports to shareholders with the Funds' independent accountants and management.
The members of the Investments Committee are Messrs. Bauer, Crockett,
Daly, Dunn, Fields, Frischling, Pennock and Sklar (Chairman) and Dr.
Mathai-Davis. The Investments Committee is responsible for: (i) overseeing AIM's
investment-related compliance systems and procedures to ensure their continued
adequacy; and (ii) considering and acting, on an interim basis between meetings
of the full Board, on
investment-related matters requiring Board consideration, including dividends and distributions, brokerage policies and pricing matters.
The members of the Nominating and Compensation Committee are Messrs. Crockett (Chairman), Daly, Dunn, Fields, Pennock and Sklar and Dr. Mathai-Davis. The Nominating and Compensation Committee is responsible for: (i) considering and nominating individuals to stand for election as independent trustees as long as the Trust maintains a distribution plan pursuant to Rule 12b-1 under the 1940 Act; (ii) reviewing from time to time the compensation payable to the independent trustees; and (iii) making recommendations to the Board regarding matters related to compensation, including deferred compensation plans and retirement plans for the independent trustees.
The Nominating and Compensation Committee will consider nominees recommended by a shareholder to serve as trustees, provided (i) that such person is a shareholder of record at the time he or she submits such names and is entitled to vote at the meeting of shareholders at which trustees will be elected, and (ii) that the Nominating and Compensation Committee or the Board, as applicable, shall make the final determination of persons to be nominated.
All of the Trust's trustees also serve as directors or trustees of some or all of the other investment companies managed or advised by AIM. All of the Trust's executive officers hold similar offices with some or all of the other investment companies managed or advised by AIM.
REMUNERATION OF TRUSTEES
Each trustee is reimbursed for expenses incurred in connection with each meeting of the Board of Trustees or any committee thereof. Each trustee who is not also an officer of the Trust is compensated for his or her services according to a fee schedule which recognizes the fact that such trustee also serves as a director or trustee of other AIM Funds. Each such trustee receives a fee, allocated among the AIM Funds for which he or she serves as a director or trustee, which consists of an annual retainer component and a meeting fee component.
Set forth below is information regarding compensation paid or accrued for each trustee of the Trust:
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RETIREMENT
BENEFITS
ACCRUED TOTAL
AGGREGATE COMPENSATION BY ALL AIM COMPENSATION
TRUSTEE FROM THE TRUST(1) FUNDS(2) FROM ALL AIM FUNDS(3)
------------------------- ------------------------- ----------------- -------------------------
Charles T. Bauer $ 0 $ 0 $ 0
------------------------- ------------------------- ----------------- -------------------------
Bruce L. Crockett 3,829 37,485 103,500
------------------------- ------------------------- ----------------- -------------------------
Owen Daly II 3,829 122,898 103,500
------------------------- ------------------------- ----------------- -------------------------
Edward K. Dunn, Jr 3,829 55,565 103,500
------------------------- ------------------------- ----------------- -------------------------
Jack Fields 3,754 15,826 101,500
------------------------- ------------------------- ----------------- -------------------------
Carl Frischling (4) 3,829 97,791 103,500
------------------------- ------------------------- ----------------- -------------------------
Robert H. Graham 0 0 0
------------------------- ------------------------- ----------------- -------------------------
John F. Kroeger (5) 0 40,461 0
------------------------- ------------------------- ----------------- -------------------------
Prema Mathai-Davis 3,756 11,870 101,500
------------------------- ------------------------- ----------------- -------------------------
Lewis F. Pennock 3,829 45,766 103,500
------------------------- ------------------------- ----------------- -------------------------
Ian Robinson (6) 0 94,442 25,000
------------------------- ------------------------- ----------------- -------------------------
Louis S. Sklar 3,756 90,232 101,500
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(1) The total amount of compensation deferred by all trustees of the Trust's predecessor during the fiscal year ended March 31, 2000, including earnings thereon, was $30,459.
(2) During the fiscal year ended March 31, 2000, the total amount of expenses allocated to the Trust's predecessor in respect of such retirement benefits was $2,726. Data reflects compensation for the calendar year ended December 31, 1999.
(3) Each trustee serves as director or trustee of at least 12 registered investment companies advised by AIM. Data reflects total compensation for the calendar year ended December 31, 1999.
(4) During the fiscal year ended March 31, 2000, the Trust's predecessor paid $16,477 in legal fees to Mr. Frischling's law firm, Kramer Levin Naftalis & Frankel LLP for services rendered to the independent trustees of the Trust. Mr. Frischling, a trustee of the Trust, is a partner in such firm.
(5) Mr. Kroeger was a director of the Trust's predecessor until June 11, 1998, when he resigned. On that date he became a consultant to the Trust's predecessor. Mr. Kroeger passed away on November 26, 1998. Mr. Kroeger's widow will receive his pension as described below under "AIM Funds Retirement Plan for Eligible Directors/Trustees."
(6) Mr. Robinson was a director of the Trust's predecessor until March 12, 1999, when he retired.
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, AIM Management or any of their affiliates) may be entitled to certain benefits upon retirement from the Board of Trustees. Pursuant to the Plan, a trustee becomes eligible to retire and receive full benefits under the Plan when he or she has attained age 65 and has completed at least five years of continuous service with one or more of the regulated investment companies managed, administered or distributed by AIM or its affiliates (the "Applicable AIM Funds"). Each eligible trustee is entitled to receive an annual benefit from the Applicable AIM Funds commencing on the first day of the calendar quarter coincident with or following his or her date of retirement equal to a maximum of 75% of the annual retainer paid or accrued by the Applicable AIM Funds for such trustee during the twelve-month period immediately preceding the trustee's retirement (including amounts deferred under a separate agreement between the Applicable AIM Funds and the trustee) and based on the number of such trustee's years of service (not in excess of 10 years of service) completed with respect to any of the Applicable AIM Funds. Such benefit is payable to each eligible trustee in quarterly installments. If an eligible trustee dies after attaining the normal retirement date but before receipt of all benefits under the Plan, 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 ten 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 Applicable AIM Fund.
Set forth below is a table that shows the estimated annual benefits payable to an eligible trustee upon retirement assuming the retainer amount reflected below and various years of service. The estimated credited years of service as of March 31, 2000, for Messrs. Crockett, Daly, Dunn, Fields, Frischling, Kroeger, Pennock, Robinson and Sklar and Dr. Mathai-Davis are 13, 13, 2, 3, 23, 20, 18, 11, 11 and 2 years, respectively.
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT
====================== ==============================================
Number of Annual Retirement Compensation
Years of Paid By All Applicable AIM Funds
Service With
Applicable
AIM Funds
---------------------- ----------------------------------------------
10 $67,500
---------------------- ----------------------------------------------
9 $60,750
---------------------- ----------------------------------------------
8 $54,000
---------------------- ----------------------------------------------
7 $47,250
---------------------- ----------------------------------------------
6 $40,500
---------------------- ----------------------------------------------
5 $33,750
====================== ==============================================
|
DEFERRED COMPENSATION AGREEMENTS
Messrs. Daly, Dunn, Fields, Frischling and Sklar and Dr. Mathai-Davis
(the "Deferring Trustees") have each executed a Deferred Compensation Agreement
(collectively, the "Agreements"). Pursuant to the Compensation Agreements, the
Deferring Trustees may elect to defer receipt of up to 100% of their
compensation payable by the Trust, and such amounts are placed into a deferral
account. Currently, the Deferring Trustees may select various AIM Funds in which
all or part of their deferral accounts shall be deemed to be invested.
Distributions from the Deferring Trustees' deferral accounts will be paid in
cash, generally in equal quarterly installments over a period of five (5) or ten
(10) years (depending on the Compensation
Agreement) beginning on the date the Deferring Trustee's retirement benefits commence under the Plan. The Trust's Board of Trustees, in its sole discretion, may accelerate or extend the distribution of such deferral accounts after the Deferring Trustee's termination of service as a trustee of the Trust. If a Deferring Trustee dies prior to the distribution of amounts in his or her deferral account, the balance of the deferral account will be distributed to his or her designated beneficiary in a single lump sum payment as soon as practicable after such Deferring Trustee's death. The Compensation 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 Trust and of each other AIM Fund from which they are deferring compensation.
INVESTMENT ADVISORY AND OTHER SERVICES
AIM serves as the investment advisor to each Fund pursuant to a Master Investment Advisory Agreement dated June 1, 2000 (the "Advisory Agreement"). AIM was organized in 1976, and together with its subsidiaries, advises or manages approximately 120 investment portfolios encompassing a broad range of investment objectives. AIM is a direct wholly owned subsidiary of AIM Management, a holding company that has been engaged in the financial services business since 1976. The address of AIM is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. AIM Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire Square, London EC2M 4YR, United Kingdom. AMVESCAP PLC and its subsidiaries are an independent investment management group engaged in institutional investment management and retail mutual fund businesses in the United States, Europe and the Pacific Region. Certain of the trustees and officers of AIM are also executive officers of the Trust 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 and the Trust have adopted a Code of Ethics which requires investment personnel and certain other employees to (a) pre-clear all personal securities transactions subject to the Code of Ethics; (b) file reports regarding such transaction; (c) 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 (subject to a de minimis exception), and (iii) transactions involving securities being considered for investment by an AIM Fund (subject to the de minimis exception); and (d) abide by certain other provisions of the Code of Ethics. The de minimis exception under the Code of Ethics covers situations where there is no material conflict of interest because of the large market capitalization of a security and the relatively small number of shares involved in a personal transaction. The Code of Ethics also generally prohibits AIM employees from purchasing securities in initial public offerings. Personal trading reports are periodically reviewed by AIM, and the Board of Trustees reviews quarterly and annual reports (which summarize any significant violations of the Code of Ethics). Sanctions for violating the Code of Ethics may include censure, monetary penalties, suspension or termination of employment.
The Trust, on behalf of each Fund, has entered into the Advisory Agreement and a Master Administrative Services Agreement (the "Administrative Agreement") with AIM.
Under the terms of the Advisory Agreement, AIM supervises all aspects of each Fund's operations and provides investment advisory services to each Fund.
The Advisory Agreement provides that each 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 trustee 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 each Fund in connection with membership in
investment company organizations and the cost of printing copies of prospectuses
and statements of additional information distributed to the Fund's shareholders.
The Advisory Agreement will continue in effect from year to year only if such continuance is specifically approved at least annually (i) (a) by the Trust's Board of Trustees or (b) by the vote of a majority of the outstanding voting securities of each Fund and (ii) by 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. Each Fund or AIM may terminate the Advisory Agreement with respect to that Fund 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 a fee from AIM TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT at the annual rates of 0.35% and 0.50% of those Funds' average daily net assets, respectively. The Advisory Agreement provides that AIM is entitled to receive a fee from AIM TAX-FREE INTERMEDIATE FUND at the following annual rates based on the Fund's average daily net assets:
AIM TAX-FREE INTERMEDIATE FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $500 million 0.30% Next $500 million 0.25% Amount over $1 billion 0.20% |
The Advisory Agreement provides that AIM is entitled to receive a fee from AIM HIGH INCOME MUNICIPAL FUND at the following annual rates based on the Fund's average daily net assets:
AIM HIGH INCOME MUNICIPAL FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $500 million 0.60% Over $500 million up to and including $1 billion 0.55% Over $1 billion to and including $1.5 billion 0.50% Over $1.5 billion 0.45% |
AIM may from time to time waive or reduce its fee. Voluntary fee waivers or reductions may be rescinded at any time without further notice to investors. During periods of voluntary fee waivers or reductions, AIM will retain its ability to be reimbursed for such fee prior to the end of each fiscal year. Contractual fee waivers or reductions set forth in the Fee Table in a Prospectus may not be terminated or amended to the Funds' detriment during the period stated in the agreement between AIM and the Fund. For the years ended March 31, 2000 and 1999, and the period January 2, 1998 (date operations commenced) through March 31, 1998, AIM waived the entire amount of advisory fees of $400,884, $272,006 and $20,756, respectively, from AIM HIGH INCOME MUNICIPAL FUND. AIM has contractually agreed to limit net expenses until June 30, 2000 of Class A, B and C shares of AIM HIGH INCOME MUNICIPAL FUND to the annual amount of 0.60%, 1.35% and 1.35%, respectively, of average daily net assets of the Fund. Effective July 1, 2000, AIM has agreed to limit total annual fund operating expenses excluding interest, taxes, dividend expense on short sales, extraordinary items and increases for indirect credits, if any, of Class A, Class B and Class C to 0.55%, 1.30% and 1.30%, respectively.
For the years ended March 31, 2000, 1999 and 1998, AIM received advisory fees from AIM TAX-EXEMPT CASH FUND of $199,298, $250,445 and $182,302, respectively.
For the years ended March 31, 2000, 1999 and 1998, AIM received advisory fees from AIM TAX-FREE INTERMEDIATE FUND of $1,032,771, $623,357 and $566,927, respectively.
For the years ended March 31, 2000, 1999 and 1998, AIM received advisory fees from AIM TAX-EXEMPT BOND FUND OF CONNECTICUT of $199,285, $205,983 and $106,187, respectively. For the years ended March 31, 2000, 1999 and 1998, AIM waived fees from the Fund in the amounts of $5,871, $47,933 and $86,950, respectively.
The payments set forth in the prior three paragraphs were made pursuant to a substantially similar advisory agreement between AIM and the Trust's predecessor.
In addition, if a Fund engages in securities lending, AIM will provide
the Fund investment advisory services and related administrative services. The
Master Investment Advisory Agreement describes the administrative services to be
rendered by AIM if a Fund engages in securities lending activities, as well as
the compensation AIM may receive for such administrative services. Services to
be provided include: (a) overseeing participation in the securities lending
program to ensure compliance with all applicable regulatory and investment
guidelines; (b) assisting the securities lending agent or principal (the agent)
in determining which specific securities are available for loan; (c) monitoring
the agent to ensure that securities loans are effected in accordance with AIM's
instructions and with procedures adopted by the Board; (d) preparing appropriate
periodic reports for, and seeking appropriate approvals from, the Board with
respect to securities lending activities; (e) responding to agent inquiries; and
(f) performing such other duties as may be necessary.
AIM's compensation for advisory services rendered in connection with securities lending is included in the advisory fee schedule. As compensation for the related administrative services AIM will provide, a lending Fund will pay AIM a fee equal to 25% of the net monthly interest or fee income retained or paid to the Fund from such activities. AIM currently intends to waive such fee, and has agreed to seek Board approval prior to its receipt of all or a portion of such fee.
Under the terms of the Administrative Agreement, AIM is entitled to receive from each 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 Funds' principal financial officer and her staff, and any expenses related to fund accounting services.
The Administrative Agreement for the Funds provides that AIM may perform, or arrange for the performance of, certain accounting and other administrative services to the Funds. For such services, AIM is entitled to receive from each Fund reimbursement of AIM's costs or such reasonable compensation as may be approved by the Trust's Board of Trustees. The Administrative Agreement will continue in effect from year to year only if such continuance is specifically approved at least annually (i) (a) by the Trust's Board of Trustees or (b) by the vote of a majority of the outstanding voting securities of each Fund and (ii) by the affirmative vote of the Non-Interested Trustees, by votes cast in person at a meeting called for such purpose.
For the years ended March 31, 2000 and 1999 and the period January 2, 1998 (date operations commenced) through March 31, 1998, AIM HIGH INCOME MUNICIPAL FUND did not reimburse AIM for administrative services. Had expenses not been absorbed by AIM during this period, the Fund would have reimbursed AIM $56,591, $69,125 and $18,594, respectively, for administrative services.
For the years ended March 31, 2000, 1999 and 1998, AIM TAX-EXEMPT CASH FUND reimbursed AIM in the amounts of $49,808, $49,285 and $38,545, respectively, for administrative services.
For the years ended March 31, 2000, 1999 and 1998, the AIM TAX-FREE INTERMEDIATE FUND reimbursed AIM in the amounts of $68,350, $50,951 and $46,097, respectively, for administrative services.
For the years ended March 31, 2000, 1999 and 1998, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT reimbursed AIM in the amounts of $49,944, $48,824 and $46,188, respectively, for administrative services.
The payments set forth in the prior four paragraphs were made pursuant to a substantially similar administrative services agreement between AIM and the Trust's predecessor.
In addition, the Amended and Restated Transfer Agency and Service Agreement (the "Transfer Agency and Service Agreement") between the Trust and AIM Fund Services, Inc. ("AFS"), a registered transfer agent and wholly owned subsidiary of AIM, will perform certain shareholder services for the Funds 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 Funds, maintain shareholder accounts and provide shareholders with information regarding the Funds and their accounts.
DISTRIBUTION PLANS
THE CLASS A AND C PLAN. The Trust has adopted a Master Distribution Plan, as amended, pursuant to Rule 12b-1 under the 1940 Act relating to the Class A shares of AIM TAX-EXEMPT CASH FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM HIGH INCOME MUNICIPAL FUND, and the Class C shares of AIM HIGH INCOME MUNICIPAL FUND (the "Class A and C Plan"). The Class A and C Plan provides that Class A shares pay 0.25% per annum of their average daily net assets as compensation to AIM Distributors for the purpose of financing any activity which is primarily intended to result in the sale of Class A shares. The Class A and C Plan also provides that Class C shares pay 1.00% per annum of their average daily net assets as compensation to AIM Distributors. Of such amount, the Class C shares pay a service fee of 0.25% of their average daily net assets to selected dealers and other institutions which furnish continuing personal shareholder services to their customers who purchase and own Class C shares. Activities appropriate for financing under the Class A and C Plan include, but are not limited to, the following: printing of prospectuses and statements of additional information and reports for other than existing shareholders; overhead; preparation and distribution of advertising material and sales literature; expenses of organizing and conducting sales seminars; supplemental payments to dealers and other institutions such as asset-based sales charges or as payments of service fees under shareholder service arrangements; and costs of administering the Class A and C Plan.
The Class A and C Plan is designed to compensate AIM Distributors, on a quarterly basis, for certain promotional and other sales-related costs, and to implement a dealer incentive program which provides for periodic payments to selected dealers who furnish continuing personal shareholder services to their customers who purchase and own Class A or Class C shares. Payments can also be directed by AIM Distributors to selected institutions who have entered into service agreements with respect to Class A and Class C shares and who provide continuing personal shareholder services to their customers who own Class A and Class C shares.
Of the aggregate amount payable under the Class A and C Plan, payments to dealers and other financial institutions that provide continuing personal shareholder services to their customers who purchase and own shares of a Fund, in amounts of up to 0.25% of the average daily net assets of the Fund attributable to the customers of such dealers or financial institutions are characterized as a service fee, and payments to dealers and other financial institutions in excess of such amount would be characterized as an asset-based sales charge pursuant to the Class A and C Plan.
THE CLASS B PLAN. The Trust has also adopted a Master Distribution Plan pursuant to Rule 12b-1 under the 1940 Act relating to the Class B shares of AIM HIGH INCOME MUNICIPAL FUND (the "Class B Plan", and collectively with the Class A and C Plan, the "Plans"). Under the Class B Plan, the Class B shares pay compensation to AIM Distributors at an annual rate of 1.00% of their average daily net assets. Of such amount, the Class B shares pay a service fee of 0.25% of their average daily net assets to selected dealers and other institutions which furnish continuing personal shareholder services to their customers who purchase and own Class B shares. Any amounts not paid as a service fee would constitute an asset based sales charge. Amounts paid in accordance with the Class B Plan may be used to finance any activity primarily intended to result in the sale of Class B shares, including, but not limited to, printing of prospectuses and statements of additional information and reports for other than existing shareholders; overhead; preparation and distribution of advertising material and sales literature; expenses of organizing and conducting sales seminars;
supplemental payments to dealers and other institutions such as asset-based sales charges or as payments of service fees under shareholder service arrangements; and costs of administering the Class B Plan.
BOTH PLANS. Pursuant to an incentive program, AIM Distributors may enter into agreements ("Shareholder Service Agreements") with investment dealers selected from time to time by AIM Distributors for the provision of distribution assistance in connection with the sale of the Funds' shares to such dealers' customers, and for the provision of continuing personal shareholder services to customers who may from time to time directly or beneficially own shares of the Funds. The distribution assistance and continuing personal shareholder services to be rendered by dealers under the Shareholder Service Agreements may include, but shall not be limited to, the following: distributing sales literature; answering routine customer inquiries concerning the Funds; assisting customers in changing dividend options, account designations and addresses, and in enrolling in any of several special investment plans offered in connection with the purchase of the 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 any capital gains distributions automatically in the Funds' shares; and providing such other information and services as the Funds or the customer may reasonably request.
Under the Plans, in addition to the Shareholder Service Agreements authorizing payments to selected dealers, banks may enter into Shareholder Service Agreements authorizing payments under the Plans to be made to banks which provide services to their customers who have purchased shares. Services provided pursuant to Shareholder Service Agreements with banks may include some or all of the following: answering shareholder inquiries regarding the Funds and the Trust; 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 shares of the Funds; and such other administrative services as the Funds reasonably may request, to the extent permitted by applicable statute, rule or regulation. Similar agreements may be permitted under the Plans for institutions which provide recordkeeping for and administrative services to 401(k) plans.
Financial intermediaries and any other person entitled to receive compensation for selling shares of the Funds may receive different compensation for selling shares of one particular class over another.
Payments pursuant to the Plans are subject to any applicable limitations imposed by rules of the National Association of Securities Dealers, Inc. ("NASD"). The Plans conform 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 Funds to no more than 0.25% per annum of the average daily net assets of the Funds attributable to the customers of such dealers or financial institutions, and by imposing a cap on the total sales charges, including asset based sales charges, that may be paid by the Funds and their respective classes.
AIM Distributors may from time to time waive or reduce any portion of its 12b-1 fee for Class A shares of the Funds and for Class C shares of AIM HIGH INCOME MUNICIPAL FUND. Voluntary fee waivers or reductions may be rescinded at any time without further notice to investors. During periods of voluntary fee waivers or reductions, AIM Distributors will retain its ability to be reimbursed for such fee prior to the end of each fiscal year. Contractual fee waivers or reductions set forth in the Fee Table in a Prospectus may not be terminated or amended to the Funds' detriment during the period stated in the agreement between AIM Distributors and the Fund.
Under a Shareholder Service Agreement, the Funds agree to pay periodically fees to selected dealers and other institutions who render the foregoing services to their customers. The fees payable under a Shareholder Service Agreement generally will be calculated at the end of each payment period for each business day of the Funds during such period at the annual rate of 0.25% of the average daily net asset value of the Funds' shares purchased or acquired through exchange. Fees calculated in this manner shall be paid only to those selected dealers or other institutions who are dealers or institutions of record at the close of business on the last business day of the applicable payment period for the account in which the Funds' shares
are held. Due to AIM Distributors' waiver of fees payable by AIM TAX-EXEMPT CASH FUND under the Plan, fees payable under Shareholder Service Agreements currently are limited to 0.10% of the average daily net asset value of that Fund's shares purchased or acquired through exchange.
Under the Plans, certain financial institutions which have entered into service agreements and which sell shares of the Funds on an agency basis, may receive payments from the Funds pursuant to the respective Plans. AIM Distributors does not act as principal, but rather as agent for the Funds, in making dealer incentive and shareholder servicing payments under the Plans. These payments are an obligation of the Funds and not of AIM Distributors. The Funds will obtain a representation from such financial institutions that they will either be licensed as a dealer 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.
For the years ended March 31, 2000, 1999 and 1998, the Class A shares of AIM TAX-EXEMPT CASH FUND paid a total of $56,943, $71,556 and $52,086, respectively, under the Class A and C Plan, which constituted 0.10%, 0.10% and 0.10%, respectively, of such Class A shares' average daily net assets. For the years ended March 31, 2000, 1999 and 1998, the Class A shares of AIM TAX-EXEMPT BOND FUND OF CONNECTICUT paid a total of $99,643, $102,992 and $96,569, respectively, under the Class A and C Plan, which constituted 0.25%, 0.25% and 0.25%, respectively, of such Class A shares' average daily net assets. For the year ended March 31, 2000, the Class A, Class B and Class C shares of AIM HIGH INCOME MUNICIPAL FUND paid a total of $111,983, $178,459 and $41,746, respectively, under the Class A and C Plan and the Class B Plan, which constitutes 0.25%, 1.00% and 1.00% of such Class A, Class B and Class C shares' average net assets. For the year ended March 31, 1999, the Class A, Class B and Class C shares of AIM HIGH INCOME MUNICIPAL FUND paid a total of $90,468, $74,401 and $17,071, respectively, under the Class A and C Plan and the Class B Plan, which constitutes 0.25%, 1.00% and 1.00%, of such Class A, Class B and Class C shares' average net assets. For the period January 2, 1998 (date operations commenced) through March 31, 1998, the Class A, Class B and Class C shares of AIM HIGH INCOME MUNICIPAL FUND paid a total of $7,728, $2,778 and $904, respectively, under the Class A and C Plan, and the Class B Plan, which constituted 0.25%, 1.00% and 1.00%, of such Class A, Class B and Class C shares' average net assets.
The payments set forth in the prior paragraph were made pursuant to substantially similar distribution plans adopted by the Trust's predecessor.
An estimate by category of the allocation of actual fees paid by the Class A shares of the Funds under the Class A and C Plan during the year ended March 31, 2000 were allocated as follows:
AIM TAX-EXEMPT
AIM HIGH INCOME AIM TAX-EXEMPT BOND FUND OF
MUNICIPAL FUND CASH FUND CONNECTICUT
-------------- -------------- --------------
CLASS A
Advertising $ 16,000 $ 5,000 $ 2,000
Printing and mailing prospectuses, 1,000 0 0
semi-annual reports and annual reports
(other than to current shareholders)
Seminars 5,000 1,000 0
Compensation to Underwriters to 0 0 0
partially offset other marketing
expenses
Compensation to Dealers 90,000 51,000 98,000
(including finder's fees)
Compensation to Sales Personnel 0 0 0
Annual Report Total 112,000 57,000 100,000
|
An estimate by category of the allocation of the actual fees paid by AIM HIGH INCOME MUNICIPAL FUND under the Class B Plan (for Class B shares) and the Class A and C Plan (for Class C shares) during the year ended March 31, 2000, was as follows:
AIM HIGH INCOME MUNICIPAL FUND
------------------------------
CLASS B CLASS C
----------- ---------
Advertising $ 14,000 $ 4,000
Printing and mailing prospectuses, 1,000 0
semi-annual reports and annual reports
(other than to current shareholders)
Seminars 2,000 0
Compensation to Underwriters to 134,000 22,000
partially offset other marketing
expenses
Compensation to Dealers 28,000 16,000
(including finder's fees)
Compensation to Sales Personnel 0 0
Annual Report Total 179,000 42,000
|
The Plans require AIM Distributors to provide the Board of Trustees at least quarterly with a written report of the amounts expended pursuant to the Plans and the purposes for which such expenditures were made. The Board of Trustees reviews these reports in connection with their decisions with respect to the Plans.
As required by Rule 12b-1, the Plans and related forms of Shareholder Service Agreements were 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 Plans or in any agreements related to the Plans ("Qualified Trustees"). In approving the Plans in accordance with the requirements of Rule 12b-1, the trustees considered various factors and determined that there is a reasonable likelihood that the Plans would benefit each class of each applicable Fund, and its respective shareholders.
The Plans do not obligate the Funds to reimburse AIM Distributors for the actual expenses AIM Distributors may incur in fulfilling its obligations under the Plans. Thus, even if AIM Distributors' actual expenses exceed the fee payable to AIM Distributors thereunder at any given time, the Funds will not be obligated to pay more than that fee. If AIM Distributors' expenses are less than the fee it receives, AIM Distributors will retain the full amount of the fee.
Unless the Plans are terminated earlier in accordance with their terms, the Plans continue as long as such continuance is specifically approved at least annually by the Board of Trustees, including a majority of the Qualified Trustees.
The Plans may be terminated by the vote of a majority of the Qualified Trustees, or, with respect to a particular class, by the vote of a majority of the outstanding voting securities of that class.
Any change in the Plans that would increase materially the distribution expenses paid by the applicable class requires shareholder approval; otherwise, it may be amended by the 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 Plans are in effect, the selection or nomination of the Qualified Trustees is committed to the discretion of the Qualified Trustees. In the event the Class A and C Plan is amended in a manner which the Board of Trustees determines would materially increase the charges paid under the Class A and C Plan, the Class B shares of the Funds (if any) will no longer convert into Class A shares of the same Funds unless the Class B shares, voting separately, approve such amendment. If the Class B shareholders do not approve such amendment, the Board of Trustees will (i) create a new class of shares of the Funds which is identical in all material respects to the Class A shares as they existed prior to the implementation of the amendment, and (ii) ensure that the existing Class B shares of the Funds (if any) will be exchanged or converted into such new class of shares no later than the date the Class B shares were scheduled to convert into Class A shares.
The principal differences between the Class A and C Plan and the Class B Plan are: (i) the Class A and C Plan allows payment to AIM Distributors or to dealers or financial institutions of up to 0.25% of average daily net assets of the Class A shares of AIM TAX-EXEMPT CASH FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM HIGH INCOME MUNICIPAL FUND, as compared to 1.00% of such assets of the Class B and Class C shares of AIM HIGH INCOME MUNICIPAL FUND; (ii) the Class B Plan obligates the Class B shares to continue to make payments to AIM Distributors following termination of the Class B shares Distribution Agreement with respect to Class B shares sold by or attributable to the distribution efforts of AIM Distributors unless there has been a complete termination of the Class B Plan (as defined in such Plan); and (iii) the Class B Plan expressly authorizes AIM Distributors to assign, transfer or pledge its rights to payments pursuant to the Class B Plan.
THE DISTRIBUTOR
The Trust has entered into distribution arrangements with AIM Distributors, a registered broker-dealer and a wholly owned subsidiary of AIM, pursuant to which AIM Distributors acts as the distributor of Class A shares of the Funds and Class B and Class C shares of AIM HIGH INCOME MUNICIPAL FUND. The address of AIM Distributors is P.O. Box 4739, Houston, Texas 77210-4739. Certain trustees and officers of the Trust are affiliated with AIM Distributors.
A Master Distribution Agreement with AIM Distributors relating to the Class A shares of the Funds and Class C shares of AIM HIGH INCOME MUNICIPAL FUND has been approved by the Board of Trustees of the Trust. A Master Distribution Agreement with AIM Distributors relating to the Class B shares of AIM HIGH INCOME MUNICIPAL FUND also has been approved by the Board of Trustees of the Trust. Both such Master Distribution Agreements are hereinafter collectively referred to as the "Distribution Agreements".
The Distribution Agreements provide AIM Distributors with the exclusive right to distribute shares of the Funds directly and through institutions with whom AIM Distributors has entered into selected dealer agreements. Under the Distribution Agreement for the Class B shares of AIM HIGH INCOME MUNICIPAL FUND, AIM Distributors sells Class B shares at net asset value subject to a contingent deferred sales charge established by AIM Distributors. AIM Distributors is authorized to advance to institutions through whom Class B shares are sold a sales commission under schedules established by AIM Distributors. The Distribution Agreement for the Class B shares provides that AIM Distributors (or its assignee or transferee) will receive 0.75% (of the total 1.00% payable under the distribution plan applicable to Class B shares) of the average daily net assets attributable to Class B shares of AIM HIGH INCOME MUNICIPAL FUND attributable to the sales efforts of AIM Distributors.
The Distribution Agreements provide that AIM Distributors will bear the expenses of printing from the final proof and distributing the Funds' prospectuses and statements of additional information relating to public offerings made by AIM Distributors pursuant to the Distribution Agreements (other than those prospectuses and statements of additional information distributed to existing shareholders of the Funds), and any promotional or sales literature used by AIM Distributors or furnished by AIM Distributors to dealers in connection with the public offering of the Funds' shares, including expenses of advertising in connection with such public offerings. AIM Distributors has not undertaken to sell any specified number of shares of any classes of the Funds.
AIM Distributors expects to pay sales commissions from its own resources to dealers and institutions who sell Class B shares and Class C shares at the time of such sales. Payments with respect to Class B shares will equal 4.0% of the purchase price of the Class B shares sold by the dealer or institution, and will consist of a sales commission equal to 3.75% of the purchase price of the Class B shares sold plus an advance of the first year service fee of 0.25% with respect to such shares. The portion of the payments to AIM Distributors under the Class B Plan which constitutes an asset-based sales charge (0.75%) is intended in part to permit AIM Distributors to recoup a portion of such sales commissions plus financing costs. AIM Distributors anticipates that it will require a number of years to recoup from Class B Plan payments the sales commissions paid to dealers and institutions in connection with sales of Class B shares. In the future, if multiple distributors serve AIM HIGH INCOME MUNICIPAL FUND, each such distributor (or its assignee or transferee) would receive a share of the payments under the Class B Plan based on the portion of such Fund's Class B shares sold by or attributable to the distribution efforts of that distributor.
AIM Distributors may pay sales commissions to dealers and institutions who sell Class C shares at the time of such sales. Payments with respect to Class C shares will equal 1.00% of the purchase price of the Class C shares sold by the dealer or institution, and will consist of a sales commission of 0.75% of the purchase price of the Class C shares sold plus an advance of the first year service fee of 0.25% with respect to such shares. AIM Distributors will retain all payments received by it relating to Class C shares for the first year after they are purchased. The portion of the payments to AIM Distributors under the Class A and C Plan attributable to Class C shares which constitutes an asset-based sales charge (0.75%) is intended in part to permit AIM Distributors to recoup a portion of on-going sales commissions to dealers plus financing costs, if any. After the first full year, AIM Distributors will make such payments quarterly to dealers and institutions based on the average net asset value of Class C shares which are attributable to shareholders for whom the dealers and institutions are designated as dealers of record.
The Trust (on behalf of any class of the Funds) or AIM Distributors may terminate the Distribution Agreements on sixty (60) days' written notice without penalty. The Distribution Agreements will terminate in the event of their assignment. In the event the Class B shares Distribution Agreement is terminated, AIM Distributors would continue to receive payments of asset-based distribution fees in respect of the outstanding Class B shares attributable to the distribution efforts of AIM Distributors; provided, however, that a complete
termination of the Class B Plan (as defined in such Plan) would terminate all payments to AIM Distributors. Termination of the Class B Plan or Distribution Agreement does not affect the obligations of Class B shareholders to pay contingent deferred sales charges.
From time to time, AIM Distributors may transfer and sell its right to payments under the Distribution Agreements relating to Class B shares in order to finance distribution expenditures in respect of Class B shares.
The following chart reflects the total sales charges paid in connection with the sale of Class A shares of each Fund and the amount retained by AIM Distributors:
2000 1999 1998
--------------------- --------------------- --------------------
Sales Amount Sales Amount Sales Amount
Charges Retained Charges Retained Charges Retained
------- -------- ------- -------- ------- --------
AIM HIGH INCOME MUNICIPAL FUND $360,935 $73,191 $213,013 $49,929 $ 43,626 $ 8,743
AIM TAX-FREE INTERMEDIATE FUND 235,340 54,505 90,481 28,272 85,903 21,156
AIM TAX-EXEMPT BOND FUND OF 140,020 25,420 113,890 25,026 167,903 29,650
CONNECTICUT
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The following chart reflects the contingent deferred sales charges paid by shareholders. AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND are not subject to contingent deferred sales charges. Class A shares of AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, and Class A, B and C shares of AIM HIGH INCOME MUNICIPAL FUND for the fiscal years or periods ended March 31, 2000, 1999 and 1998 are as follows:
2000 1999 1998
------- ------- -------
AIM Tax-Exempt Bond Fund of Connecticut.............. $ -0- $ -0- $ -0-
AIM High Income Municipal Fund* ..................... 77,143 13,087 3,627
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SALES CHARGES AND DEALER CONCESSIONS
CATEGORY I. Certain AIM Funds are currently sold with a sales charge ranging from 5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These AIM Funds include Class A shares of each of AIM Advisor Flex Fund, AIM Advisor International Value Fund, AIM Aggressive Growth Fund, AIM Asian Growth Fund, AIM Basic Value Fund, AIM Blue Chip Fund, AIM Capital Development Fund, AIM Charter Fund, AIM Constellation Fund, AIM Dent Demographic Trends Fund, AIM Emerging Growth Fund, AIM European Development Fund, AIM Euroland Growth Fund, AIM Global Utilities Fund, AIM International Equity Fund, AIM Japan Growth Fund, AIM Large Cap Basic Value Fund, AIM Large Cap Growth Fund, AIM Large Cap Opportunities Fund, AIM Mid Cap Equity Fund, AIM Mid Cap Growth Fund, AIM Mid Cap Opportunities Fund, AIM Select Growth Fund, AIM Small Cap Growth Fund, AIM Small Cap Opportunities Fund, AIM Value Fund and AIM Weingarten Fund.
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(1) Price Invested Price
--------------------------------- ------------- ---------- ----------
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
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CATEGORY II. Certain AIM Funds are currently sold with a sales charge
ranging from 4.75% to 2.00% of the offering price on purchases of less than
$1,000,000. These AIM Funds are: the Class A shares of each of AIM Advisor Real
Estate Fund, AIM Balanced Fund, AIM Developing Markets Fund, AIM Global
Aggressive Growth Fund, AIM Global Consumer Products and Services Fund, AIM
Global Financial Services Fund, AIM Global Growth Fund, AIM Global Health Care
Fund, AIM Global Income Fund, AIM Global Infrastructure Fund, AIM Global
Resources Fund, AIM Global Telecommunications and Technology Fund, AIM Global
Trends Fund, AIM HIGH INCOME MUNICIPAL FUND, AIM High Yield Fund, AIM High Yield
Fund II, AIM Income Fund, AIM Intermediate Government Fund, AIM Latin American
Growth Fund, AIM Municipal Bond Fund, AIM Strategic Income Fund and AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT.
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
--------------------------------- ------------- ---------- ----------
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
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CATEGORY III. Certain AIM Funds are currently sold with a sales charge ranging from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000. These AIM Funds are the Class A shares of each of AIM Limited Maturity Treasury Fund and AIM TAX-FREE INTERMEDIATE FUND.
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
--------------------------------- ------------- ---------- ----------
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
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There is no sales charge on purchases of $1,000,000 or more of Category I, II or III funds; however, AIM Distributors may pay a dealer concession and/or advance a service fee on such transactions as set forth below.
ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire initial sales charge to dealers for all sales with respect to which orders are placed with AIM Distributors during a particular period. Dealers to whom substantially the entire sales charge is re-allowed may be deemed to be "underwriters" as that term is defined under the Securities Act of 1933.
In addition to amounts paid to dealers as a dealer concession out of the initial sales charge paid by investors, AIM Distributors may, from time to time, at its expense or as an expense for which it may be compensated under a distribution plan, if applicable, pay a bonus or other consideration or incentive to dealers who sell a minimum dollar amount of the shares of the AIM Funds during a specified period of time. At the option of the dealer, such incentives may take the form of payment for travel expenses, including lodging, incurred in connection with trips taken by qualifying registered representatives and their families to places within or outside the United States. The total amount of such additional bonus payments or other consideration shall not exceed 0.25% of the public offering price of the shares sold. Any such bonus or incentive programs will not change the price paid by investors for the purchase of the applicable AIM Fund's shares or the amount that any particular AIM Fund will receive as proceeds from such sales. Dealers may not use sales of the AIM Funds' shares to qualify for any incentives to the extent that such incentives may be prohibited by the laws of any state.
AIM Distributors may make payments to dealers and institutions who are dealers of record for purchases of $1 million or more of Class A shares (or shares which normally involve payment of initial sales charges), which are sold at net asset value and are subject to a contingent deferred sales charge, for all AIM Funds other than Class A shares of each of AIM Limited Maturity Treasury Fund and AIM TAX-FREE INTERMEDIATE FUND as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next $1 million of such purchases, plus 0.50% of the next $17 million of such purchases, plus 0.25% of amounts in excess of $20 million of such purchases. AIM Distributors may make payments to dealers and institutions who are dealers of record for purchases of $1 million or more of Class A shares (or shares which normally involve payment of initial sales charges), and which are sold at net asset value and are not subject to a contingent deferred sales charge, in an amount up to 0.10% of such purchases of Class A shares of AIM Limited Maturity Treasury Fund, and in an amount up to 0.25% of such purchases of Class A shares of AIM Tax-Free Intermediate Fund.
AIM Distributors may pay sales commissions to dealers and institutions who sell Class B shares of the AIM Funds at the time of such sales. Payments with respect to Class B shares will equal 4.00% of the purchase price of the Class B shares sold by the dealer or institution, and will consist of a sales commission equal to 3.75% of the purchase price of the Class B shares sold plus an advance of the first year service fee of 0.25% with respect to such shares. The portion of the payments to AIM Distributors under the Class B Plan which constitutes an asset-based sales charge (0.75%) is intended in part to permit AIM Distributors to recoup a portion of such sales commissions plus financing costs.
AIM Distributors may pay sales commissions to dealers and institutions who sell Class C shares of the AIM Funds at the time of such sales. Payments with respect to Class C shares will equal 1.00% of the purchase price of the Class C shares sold by the dealer or institution, and will consist of a sales commission of 0.75% of the purchase price of the Class C shares sold plus an advance of the first year service fee of 0.25% with respect to such shares. AIM Distributors will retain all payments received by it relating to Class C shares for the first year after they are purchased. The portion of the payments to AIM Distributors under the Class A and C Plan attributable to Class C shares which constitutes an asset-based sales charge (0.75%) is intended in part to permit AIM Distributors to recoup a portion of on-going sales commissions to dealers plus financing costs, if any. After the first full year, AIM Distributors will make such payments quarterly to dealers and institutions based on the average net asset value of Class C shares which are attributable to shareholders for whom the dealers and institutions are designated as dealers of record. These commissions are not paid on sales to investors exempt from the CDSC, including shareholders of record of AIM Advisor Funds, Inc. on April 30, 1995, who purchase additional shares in any of the Funds on or after May 1, 1995, and in circumstances where AIM Distributors grants an exemption on particular transactions.
Exchanges of AIM Cash Reserve Shares of AIM Money Market Fund for Class B shares or Class C shares are considered sales of such Class B shares or Class C shares for purposes of the sales charges and dealer concessions discussed above.
AIM Distributors may pay investment dealers or other financial service firms for share purchases (measured on an annual basis) of Class A Shares of all AIM Funds except AIM Limited Maturity Treasury Fund, AIM TAX-FREE INTERMEDIATE FUND and AIM TAX-EXEMPT CASH FUND sold at net asset value to an employee benefit plan as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next $1 million of such purchases, plus 0.50% of the next $17 million of such purchases, plus 0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of the net asset value of any Class A shares of AIM Limited Maturity Treasury Fund sold at net asset value to an employee benefit plan in accordance with this paragraph.
REDUCTIONS IN INITIAL SALES CHARGES
Reductions in the initial sales charges shown in the sales charge tables (quantity discounts) apply to purchases of shares of the AIM Funds that are otherwise subject to an initial sales charge, provided that such purchases are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM Money Market Fund and Class B and Class C shares of the AIM Funds will not be taken into account in determining whether a purchase qualifies for a reduction in initial sales charges.
The term "purchaser" means:
o an individual and his or her spouse and children, including any trust established exclusively for the benefit of any such person; or a pension, profit-sharing, or other benefit plan established exclusively for the benefit of any such person, such as an IRA, Roth IRA, a single-participant money-purchase/profit-sharing plan or an individual participant in a 403(b) Plan (unless such 403(b) plan qualifies as the purchaser as defined below);
o a 403(b) plan, the employer/sponsor of which is an organization described under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), if:
a. the employer/sponsor must submit contributions for all participating employees in a single contribution transmittal (i.e., the Funds will not accept contributions submitted with respect to individual participants);
b. each transmittal must be accompanied by a single check or wire transfer; and
c. all new participants must be added to the 403(b) plan by submitting an application on behalf of each new participant with the contribution transmittal;
o a trustee or fiduciary purchasing for a single trust, estate or single fiduciary account (including a pension, profit-sharing or other employee benefit trust created pursuant to a plan qualified under Section 401 of the Code) and 457 plans, although more than one beneficiary or participant is involved;
o a Simplified Employee Pension (SEP), Salary Reduction and other Elective Simplified Employee Pension account (SAR-SEP) or a Savings Incentive Match Plans for Employees IRA (SIMPLE IRA), where the employer has notified the distributor in writing that all of its related employee SEP, SAR-SEP or SIMPLE IRA accounts should be linked; or
o any other organized group of persons, whether incorporated or not, provided the organization has been in existence for at least six months and has some purpose other than the purchase at a discount of redeemable securities of a registered investment company.
Investors or dealers seeking to qualify orders for a reduced initial sales charge must identify such orders and, if necessary, support their qualification for the reduced charge. AIM Distributors reserves the right to determine whether any purchaser is entitled, by virtue of the foregoing definition, to the reduced sales charge. No person or entity may distribute shares of the AIM Funds without payment of the applicable sales charge other than to persons or entities who qualify for a reduction in the sales charge as provided herein.
1. LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced initial sales charges by completing the appropriate section of the account application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is also available to holders of the Connecticut General Guaranteed Account, established for tax qualified group annuities, for contracts purchased on or before June 30, 1992. The LOI confirms such purchaser's intention as to the total investment to be made in shares of the AIM Funds (except for (i) Class A shares of AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares of AIM Money Market Fund, (ii) Class B and Class C shares of the AIM Funds and (iii) shares of AIM Floating Rate Fund) 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 shares, to make up such difference within 60 days of the expiration date.
If at any time before completing the LOI Program, the purchaser wishes to cancel the agreement, he must give written notice to AIM Distributors. If at any time before completing the LOI Program the purchaser requests the Transfer Agent to liquidate or transfer beneficial ownership of his total shares, a cancellation of the LOI will automatically be effected. If the total amount purchased is less than the amount specified in the LOI, the Transfer Agent will redeem an appropriate number of escrowed shares equal to the difference between the sales charge actually paid and the sales charge that would have been paid if the total purchases had been made at a single time.
2. RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may
also qualify for reduced initial sales charges based upon such purchaser's
existing investment in shares of any of the AIM Funds (except for (i) Class A
shares of AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM Money
Market Fund and (ii) Class B and Class C shares of the AIM Funds and (iii)
shares of AIM Floating Rate Fund) at the time of the proposed purchase. Rights
of Accumulation are also available to holders of the Connecticut General
Guaranteed Account, established for tax-qualified group annuities, for contracts
purchased on or before June 30, 1992. To determine whether or not a reduced
initial sales charge applies to a proposed purchase, AIM Distributors takes into
account not only the money which is invested upon such proposed purchase, but
also the value of all shares of the AIM Funds (except for (i) Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM Money Market Fund,
(ii) Class B and Class C shares of the AIM Funds and (iii) shares of AIM
Floating Rate Fund) owned by such purchaser, calculated at their then current
public offering price. If a purchaser so qualifies for a reduced sales charge,
the reduced sales charge applies to the total amount of money then being
invested by such purchaser and not just to the portion that exceeds the
breakpoint above which a reduced sales charge applies. For example, if a
purchaser already owns qualifying shares of any AIM Fund with a value of $20,000
and wishes to invest an additional $20,000 in a fund, with a maximum initial
sales charge of 5.50%, the reduced initial sales charge of 5.25% will apply to
the full $20,000 purchase and not just to the $15,000 in excess of the $25,000
breakpoint. To qualify for obtaining the discount applicable to a particular
purchase, the purchaser or his dealer must furnish AFS with a list of the
account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at net asset value (without payment of an initial sales charge) may be made in connection with: (a) the reinvestment of dividends and distributions from a fund; (b) exchanges of shares of certain funds; (c) use of the reinstatement privilege; or (d) a merger, consolidation or acquisition of assets of a fund.
The following purchasers will not pay initial sales charges on purchases of Class A shares because there is a reduced sales effort involved in sales to these purchasers:
o AIM Management and its affiliates, or their clients;
o Any current or retired officer, director or employee (and members of their immediate family) of AIM Management, its affiliates or The AIM Family of Funds--Registered Trademark--, and any foundation, trust or employee benefit plan established exclusively for the benefit of, or by, such persons;
o Any current or retired officer, director, or employee (and members of their immediate family), of CIGNA Corporation or its affiliates, or of First Data Investor Services Group; and any deferred compensation plan for directors of investment companies sponsored by CIGNA Investments, Inc. or its affiliates;
o Sales representatives and employees (and members of their immediate family) of selling group members or financial institutions that have arrangements with such selling group members;
o Purchases through approved fee-based programs;
o Employee benefit plans designated as purchasers as defined above, and non-qualified plans offered in conjunction therewith, provided the initial investment in the plan(s) is at least $1 million; the sponsor signs a $1 million LOI; the employer-sponsored plan(s) has at least 100 eligible employees; or all plan transactions are executed through a single omnibus account per Fund and the financial institution or service organization has entered into the appropriate agreement with the distributor. Section 403(b) plans sponsored by public educational institutions are not eligible for a sales charge exception based on the aggregate investment made by the plan or the number of eligible employees. Purchases of AIM Small Cap Opportunities Fund by such plans are subject to initial sales charges;
o Shareholders of record or discretionary advised clients of any investment advisor holding shares of AIM Weingarten Fund or AIM Constellation Fund on September 8, 1986, or of AIM Charter Fund on November 17, 1986, who have continuously owned shares having a market value of at least $500 and who purchase additional shares of the same Fund;
o Shareholders of record of Advisor Class shares of AIM International Growth Fund or AIM Worldwide Growth Fund on February 12, 1999 who have continuously owned shares of the AIM Funds;
o Unitholders of G/SET series unit investment trusts investing proceeds from such trusts in shares of AIM Weingarten Fund or AIM Constellation Fund; provided, however, prior to the termination date of the trusts, a unitholder may invest proceeds from the redemption or repurchase of his units only when the investment in shares of AIM Weingarten Fund and AIM Constellation Fund is effected within 30 days of the redemption or repurchase;
o A shareholder of a fund that merges or consolidates with an AIM Fund or that sells its assets to an AIM Fund in exchange for shares of an AIM Fund;
o Shareholders of the GT Global funds as of April 30, 1987 who since that date continually have owned shares of one or more of these funds;
o Certain former AMA Investment Advisers' shareholders who became shareholders of the AIM Global Health Care Fund in October 1989, and who have continuously held shares in the GT Global funds since that time; and
o Shareholders of record of Advisor Class shares of an AIM Fund on February 11, 2000 who have continuously owned shares of that AIM Fund, and who purchase additional shares of that AIM Fund.
As used above, immediate family includes an individual and his or her spouse, children, parents and parents of spouse.
CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS
Former GT Global funds Class A shares that are subject to a contingent deferred sales charge and that were purchased before June 1, 1998 are entitled to the following waivers from the contingent deferred sales charge otherwise due upon redemption: (1) minimum required distributions made in connection with an IRA, Keogh Plan or custodial account under Section 403(b) of the Code or other retirement plan following
attainment of age 70 1/2; (2) total or partial redemptions resulting from a
distribution following retirement in the case of a tax-qualified
employer-sponsored retirement plan; (3) when a redemption results from a
tax-free return of an excess contribution pursuant to Section 408(d)(4) or (5)
of the Code or from the death or disability of the employee; (4) redemptions
pursuant to a Fund's right to liquidate a shareholder's account involuntarily;
(5) redemptions pursuant to distributions from a tax-qualified
employer-sponsored retirement plan, which is invested in the former GT Global
funds, which are permitted to be made without penalty pursuant to the Code,
other than tax-free rollovers or transfers of assets, and the proceeds of which
are reinvested in the former GT Global funds; (6) redemptions made in connection
with participant-directed exchanges between options in an employer-sponsored
benefit plan; (7) redemptions made for the purpose of providing cash to fund a
loan to a participant in a tax-qualified retirement plan; (8) redemptions made
in connection with a distribution from any retirement plan or account that is
permitted in accordance with the provisions of Section 72(t)(2) of the Code, and
the regulations promulgated thereunder; (9) redemptions made in connection with
a distribution from any retirement plan or account that involves the return of
an excess deferral amount pursuant to Section 401(k)(8) or Section 402(g)(2) of
the Code; (10) redemptions made in connection with a distribution from a
qualified profit-sharing or stock bonus plan described in Section 401(k) of the
Code to a participant or beneficiary under Section 401(k)(2)(B)(IV) of the Code
upon hardship of the covered employee (determined pursuant to Treasury
Regulation Section 1.401(k)-1(d)(2)); and (11) redemptions made by or for the
benefit of certain states, counties or cities, or any instrumentalities,
departments or authorities thereof where such entities are prohibited or limited
by applicable law from paying a sales charge or commission.
Former GT Global funds Class B shares purchased before June 1, 1998 are
subject to the following waivers from the contingent deferred sales charge
otherwise due upon redemption in addition to the waivers provided for
redemptions of currently issued Class B shares as described in a Prospectus: (1)
total or partial redemptions resulting from a distribution following retirement
in the case of a tax-qualified employer-sponsored retirement; (2) minimum
required distributions made in connection with an IRA, Keogh Plan or custodial
account under Section 403(b) of the Code or other retirement plan following
attainment of age 70 1/2; (3) redemptions pursuant to distributions from a
tax-qualified employer-sponsored retirement plan, which is invested in the
former GT Global funds, which are permitted to be made without penalty pursuant
to the Code, other than tax-free rollovers or transfers of assets, and the
proceeds of which are reinvested in the former GT Global funds; (4) redemptions
made in connection with participant-directed exchanges between options in an
employer-sponsored benefit plan; (5) redemptions made for the purpose of
providing cash to fund a loan to a participant in a tax-qualified retirement
plan; (6) redemptions made in connection with a distribution from any retirement
plan or account that is permitted in accordance with the provisions of Section
72(t)(2) of the Code, and the regulations promulgated thereunder; (7)
redemptions made in connection with a distribution from a qualified
profit-sharing or stock bonus plan described in Section 401(k) of the Code to a
participant or beneficiary under Section 401(k)(2)(B)(IV) of the Code upon
hardship of the covered employee (determined pursuant to Treasury Regulation
Section 1.401(k)-1(d)(2)); and (8) redemptions made by or for the benefit of
certain states, counties or cities, or any instrumentalities, departments or
authorities thereof where such entities are prohibited or limited by applicable
law from paying a sales charge or commission.
CDSCs will not apply to the following:
o Additional purchases of Class C shares of AIM Advisor Flex Fund, AIM Advisor International Value Fund and AIM Advisor Real Estate Fund by shareholders of record on April 30, 1995, of these Funds, except that shareholders whose broker-dealers maintain a single omnibus account with AFS on behalf of those shareholders, perform sub-accounting functions with respect to those shareholders, and are unable to segregate shareholders of record prior to April 30, 1995, from shareholders whose accounts were opened after that date will be subject to a CDSC on all purchases made after March 1, 1996;
o Redemptions following the death or post-purchase disability of
(1) any registered shareholders on an account or (2) a settlor
of a living trust, of shares held in the account at the time of
death or initial determination of post-purchase disability;
o Certain distributions from individual retirement accounts,
Section 403(b) retirement plans, Section 457 deferred
compensation plans and Section 401 qualified plans, where
redemptions result from (i) required minimum distributions to
plan participants or beneficiaries who are age 70-1/2 or
older, and only with respect to that portion of such
distributions that does not exceed 12% annually of the
participant's or beneficiary's account value in a particular
AIM Fund; (ii) in kind transfers of assets where the
participant or beneficiary notifies the distributor of the
transfer no later than the time the transfer occurs; (iii)
tax-free rollovers or transfers of assets to another plan of
the type described above invested in Class B or Class C shares
of one or more of the AIM Funds; (iv) tax-free returns of
excess contributions or returns of excess deferral amounts;
and (v) distributions on the death or disability (as defined
in the Internal Revenue Code of 1986, as amended) of the
participant or beneficiary;
o Amounts from a Systematic Withdrawal Plan of up to an annual amount of 12% of the account value on a per fund basis, at the time the withdrawal plan is established, provided the investor reinvests his dividends;
o Liquidation by the Fund when the account value falls below the minimum required account size of $500;
o Investment account(s) of AIM; and
o Class C shares where the investor's dealer of record notifies the distributor prior to the time of investment that the dealer waives the payment otherwise payable to him.
Upon the redemption of shares of funds in sales charge Categories I and II (see "Sales Charges and Dealer Concessions") purchased in amounts of $1 million or more, no CDSC will be applied in the following situations:
o Shares held more than 18 months;
o Redemptions from employee benefit plans designated as qualified purchasers, as defined above, where the redemptions are in connection with employee terminations or withdrawals, provided the total amount invested in the plan is at least $1,000,000; the sponsor signs a $1 million LOI; or the employer-sponsored plan has at least 100 eligible employees; provided, however, that 403(b) plans sponsored by public educational institutions shall qualify for the CDSC waiver on the basis of the value of each plan participant's aggregate investment in the AIM Funds, and not on the aggregate investment made by the plan or on the number of eligible employees;
o Private foundations or endowment funds;
o Redemption of shares by the investor where the investor's dealer waives the amounts otherwise payable to it by the distributor and notifies the distributor prior to the time of investment; and
o Shares acquired by exchange from Class A shares of funds in sales charge Categories I and II unless the shares acquired by exchange are redeemed within 18 months of the original purchase of the Class A shares.
HOW TO PURCHASE AND REDEEM SHARES
A complete description of the manner in which the shares of the Funds may be purchased appears in the Prospectuses under the heading "Purchasing Shares-How to Purchase Shares."
The sales charge normally deducted on purchases of Class A shares of AIM TAX-FREE INTERMEDIATE FUND, AIM HIGH INCOME MUNICIPAL FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT is used to compensate AIM Distributors and participating dealers for their expenses incurred in connection with the distribution of such Funds' shares. Since there is little expense associated with unsolicited orders placed directly with AIM Distributors by persons who, because of their relationship with the Funds or with AIM and its affiliates, are familiar with the Funds (e.g., due to the size of the transaction and shareholder records required), AIM Distributors believes that it is appropriate and in a Fund's best interest that such persons, and certain other persons whose purchases result in relatively low expenses of distribution, be permitted to purchase Class A shares of AIM TAX-FREE INTERMEDIATE FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT through AIM Distributors without payment of a sales charge. The persons who may purchase Class A shares of those Funds without a sales charge are set forth in the Prospectuses. Class A shares of AIM TAX-EXEMPT CASH FUND are offered at net asset value.
Complete information concerning the method of exchanging shares of the Funds for shares of the other AIM Funds is set forth in the Prospectuses under the heading "Exchanging Shares."
Information concerning redemption of the Funds' shares is set forth in the Prospectuses under the heading "Redeeming Shares." In addition to the Funds' obligation to redeem shares, AIM Distributors may also repurchase shares as an accommodation to shareholders. To effect a repurchase, those dealers who have executed Selected Dealer Agreements with AIM Distributors must phone orders to the order desk of the Funds (telephone: (800) 959-4246) and guarantee delivery of all required documents in good order. A repurchase is effected at the net asset value per share of the applicable Fund next determined after the repurchase order is received. Such arrangement is subject to timely receipt by the 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. While there is no charge imposed by the Funds or by AIM Distributors (other than any applicable contingent deferred sales charge) when shares are redeemed or repurchased, dealers may charge a fair service fee for handling the transaction.
The right of redemption may be suspended or the date of payment postponed when (a) trading on the New York Stock Exchange (the "NYSE") is restricted, as determined by applicable rules and regulations of the SEC, (b) the NYSE is closed for other than customary weekend and holiday closings, (c) the SEC has by order permitted such suspension, or (d) an emergency as determined by the SEC exists making disposition of portfolio securities or the valuation of the net assets of the Funds not reasonably practicable.
BACKUP WITHHOLDING
Accounts submitted without a correct, certified taxpayer identification number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for non-resident aliens) or Form W-9 (certifying exempt status) accompanying the registration information will generally be subject to backup withholding.
Each AIM Fund, and other payers, must, according to IRS regulations, withhold 31% of redemption payments and reportable dividends (whether paid or accrued) in the case of any shareholder who fails to provide the Fund with a taxpayer identification number ("TIN") and a certification that he is not subject to backup withholding.
An investor is subject to backup withholding if:
1. the investor fails to furnish a correct TIN to the Fund, or
2. the IRS notifies the Fund that the investor furnished an
incorrect TIN, or
3. the investor or the Fund 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 non-exempt mutual fund accounts opened after 1983, or broker accounts considered inactive during 1983.
Interest and dividend payments are subject to withholding in all five situations discussed above. Redemption proceeds and long-term gain distributions are subject to backup withholding only if (1), (2) or (5) above.
Certain payees and payments are exempt from backup withholding and information reporting. A complete listing of such exempt entities appears in the Instructions for the Requester of Form W-9 (which can be obtained from the IRS) and includes, among others, the following:
o a corporation
o an organization exempt from tax under Section 501(a), an
individual retirement plan (IRA), or a custodial account under
Section 403(b)(7)
o the United States or any of its agencies or instrumentalities
o a state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities
o a foreign government or any of its political subdivisions, agencies or instrumentalities
o an international organization or any of its agencies or instrumentalities
o a foreign central bank of issue
o a dealer in securities or commodities required to register in the U.S. or a possession of the U.S.
o a futures commission merchant registered with the Commodity Futures Trading Commission
o a real estate investment trust
o an entity registered at all times during the tax year under the 1940 Act
o a common trust fund operated by a bank under Section 584(a)
o a financial institution
o a middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List
o a trust exempt from tax under Section 664 or described in Section 4947
Investors should contact the IRS if they have any questions concerning entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
IRS PENALTIES - Investors who do not supply the AIM Funds with a correct TIN will be subject to a $50 penalty imposed by the IRS unless such failure is due to reasonable cause and not willful neglect. If an investor falsifies information on this form or makes any other false statement resulting in no backup withholding on an account which should be subject to backup withholding, such investor may be subject to a $500 penalty imposed by the IRS and to certain criminal penalties including fines and/or imprisonment.
NONRESIDENT ALIENS - Nonresident alien individuals and foreign entities are not subject to the backup withholding previously discussed, but must certify their foreign status by attaching IRS Form W-8 to their application. Form W-8 remains in effect for three calendar years beginning with the calendar year in which it is received by the Fund. Such shareholders may, however, be subject to federal income tax withholding at a 30% rate on ordinary income dividends and distributions and return of capital distributions. Under applicable treaty law, residents of treaty countries may qualify for a reduced rate of withholding or a withholding exemption.
DETERMINATION OF NET ASSET VALUE
A Fund's net asset value is calculated by dividing the number of outstanding shares into the net assets of the Fund. Net assets are the excess of a Fund's assets over its liabilities.
For AIM TAX-EXEMPT CASH FUND: The Fund may use the amortized cost method to determine its net asset value so long as the Fund does not (a) purchase any instrument with a remaining maturity greater than 397 days (for these purposes, repurchase agreements shall not be deemed to involve the purchase by the Fund of the securities pledged as collateral in connection with such agreements) or (b) maintain a dollar-weighted average portfolio maturity in excess of 90 days, and otherwise complies with the terms of rules adopted by the SEC.
Under the amortized cost method, each investment is valued at its cost and thereafter any discount or premium is amortized on a constant basis to maturity. While this method provides certainty of valuation, it may result in periods in which the amortized cost value of the Fund's investments is higher or lower than the price that would be received if the investments were sold. During periods of declining interest rates, use by the Fund of the amortized cost method of valuing its portfolio may result in a lower value than the market value of the portfolio, which could be an advantage to new investors relative to existing shareholders. The converse would apply in a period of rising interest rates.
The Board of Trustees has established procedures designed to stabilize at $1.00, to the extent reasonably possible, the Fund's net asset value per share. Such procedures include review of portfolio holdings by the trustees at such intervals as they may deem appropriate to determine whether net asset value, calculated by using available market quotations, deviates from $1.00 per share and, if so, whether such deviation may result in material dilution or is otherwise unfair to investors or existing shareholders. In the event the trustees determine that a deviation having such a result exists, they intend to take such corrective action as they deem necessary and appropriate, including the sale of portfolio securities prior to maturity in order to realize capital gains or losses or to shorten average portfolio maturity; withholding dividends; redemption of shares in kind; or establishing a net asset value per share by using available market quotations, in which case, the net asset value could possibly be more or less than $1.00 per share.
For AIM TAX-FREE INTERMEDIATE FUND, AIM HIGH INCOME MUNICIPAL FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT: Securities held by AIM TAX-FREE INTERMEDIATE FUND, AIM HIGH INCOME MUNICIPAL FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT are valued using market quotations or at fair value determined by a pricing service approved by the Board of Trustees. Debt securities with remaining maturities of sixty (60) days or less are valued on the basis of amortized cost. All variable rate securities held by such Funds, with an unconditional demand or put feature exercisable within seven (7) days or less are valued at par, which reflects the market value of such securities. Securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of the Board of Trustees.
The following formula may be used to determine the public offering price per share of an investment in AIM TAX-FREE INTERMEDIATE FUND, AIM HIGH INCOME MUNICIPAL FUND or AIM TAX-EXEMPT BOND FUND OF CONNECTICUT:
Net Asset Value / (1 - Sales Charge as % of Offering Price) = Offering Price.
The net asset value per share of each Fund is normally determined daily
as of the close of trading of the customary trading session of the NYSE
(generally 4:00 p.m. Eastern time) on each business day of the Fund. In the
event the NYSE closes early (i.e., before 4:00 p.m. Eastern time) on a
particular day, the net asset value of a Fund share is determined as of the
close of the NYSE on such day. For purposes of determining net asset value per
share, futures and options contract closing prices which are available fifteen
(15) minutes after the close of the customary trading session on the NYSE will
generally be used. The net asset values per share of the various classes of a
Fund will differ because different expenses are attributable to each class. The
income or loss and the expenses common to all classes of a Fund are allocated to
each class on the basis of the net assets of the Fund allocable to each such
class, calculated as of the close of business on the previous business day, as
adjusted for the current day's shareholder activity of each class. In addition
to certain common expenses which are allocated to all classes of a Fund, certain
expenses, such as those related to the distribution of shares of a class, are
allocated only to the class to which such expenses relate. The net asset value
per share of a class is determined by subtracting the liabilities (e.g., the
expenses) of the Fund allocated to the class from the assets of the Fund
allocated to the class and dividing the result by the total number of shares
outstanding of such class. Determination of each Fund's net asset value per
share is made in accordance with generally accepted accounting principles.
Option contracts are valued at the mean between the closing bid and asked prices on the exchange where the contracts are principally traded. Securities for which market quotations are not readily available or are questionable are valued at fair value as determined in good faith by or under the supervision of the Trust's officers in a manner 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.
Generally, trading in foreign securities, corporate bonds, municipal 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 each Fund's shares are determined at 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 such values are determined and the close of the customary trading session of the NYSE which will not be reflected in the computation of a Fund's net asset value. If events materially affecting the value of such securities occur during such period, then these securities will be valued at their fair value as determined in good faith by or under the supervision of the Board of Trustees.
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Net investment income for each Fund is declared as a dividend to the shareholders of record of such Fund on each business day of the Fund. Dividends will be paid monthly. Net realized capital gains, if any, are generally distributed annually, although AIM TAX-EXEMPT CASH FUND may distribute short-term capital gains more frequently. Dividends and distributions are reinvested in additional full and fractional shares of the same class of each Fund at the net asset value thereof, unless the shareholder has elected to have dividends and distributions paid in cash. Dividends and distributions may also be reinvested in shares of another AIM Fund.
Dividends with respect to the shares of AIM TAX-FREE INTERMEDIATE FUND, AIM HIGH INCOME MUNICIPAL FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT begin accruing on the day on which payment is received for the purchase of shares, and accrue through the day preceding the date of payment of redemption proceeds. Dividends with respect to the shares of AIM TAX-EXEMPT CASH FUND begin accruing on the day after which payment is received, and accrue through the date of payment of redemption proceeds.
TAX MATTERS
The following is only a summary of certain additional tax considerations generally affecting the Funds and their shareholders. No attempt is made to present a detailed explanation of the tax treatment of the Funds or their shareholders, and the discussion here and in the Funds' Prospectuses 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. Each 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, a Fund is not subject to federal income tax on the portion of its net investment income (i.e., taxable interest, dividends and other taxable ordinary income, net of expenses) and capital gain net income (i.e., the excess of capital gains over capital losses) that it distributes to shareholders, provided that it distributes an amount at least equal to the sum of (a) 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) and (b) 90% of its tax-exempt income (net of allocable expenses and amortized bond premium) for the taxable year (the "Distribution Requirement"), and satisfies certain other requirements of the Code that are described below. Distributions by each Fund made during the taxable year or, under specified circumstances, within twelve months after the close of the taxable year, will be considered distributions of income and gains of the taxable year and can therefore satisfy the Distribution Requirement.
In addition to satisfying the Distribution Requirement, a regulated
investment company must derive at least 90% of its gross income from dividends,
interest, certain payments with respect to securities loans, gains from the sale
or other disposition of stock or securities or foreign currencies (to the extent
such currency gains are directly related to the regulated investment company's
principal business of investing in stock or securities) and other income
(including but not limited to gains from options, futures or forward contracts)
derived with respect to its business of investing in such securities or
currencies (the "Income Requirement").
At the close of each quarter of a 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 will be subject to tax at regular corporate rates without any deduction for distributions to shareholders, and such distributions will be taxable as ordinary dividends to the extent of the Fund's current and accumulated earnings and profits. Such distributions 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 a regulated investment company that fails to distribute in each calendar year an amount equal to 98% of its ordinary taxable income for the calendar year plus 98% of its capital gain net income (excess of capital gains over capital losses) for the one-year period ended on October 31 of such calendar year. The balance of such income must be distributed during the next calendar year. Undistributed tax-exempt interest on Municipal Securities (as defined under "Investment Program and Restrictions -- Municipal Securities") is not subject to the excise tax. 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.
Each Fund intends to make sufficient distributions or deemed distributions of its ordinary taxable income and capital gain net income prior to the end of each calendar year to avoid liability for the excise tax.
However, investors should note that a Fund may in certain circumstances be required to liquidate portfolio investments if it intends to make sufficient distributions to avoid excise tax liability.
Tax Treatment of Interest Rate Futures Contracts and Related Options.
Section 1092 of the Code affects the taxation of certain transactions involving
futures or options contracts. If a futures or options contract is part of a
"straddle" (which could include another futures contract or underlying stock or
securities), as defined in Section 1092 of the Code, then, generally, losses are
deferred first to the extent that the modified "wash sale" rules of the Section
1092 regulations apply, and second to the extent of unrecognized gains on
offsetting positions. Further, a Fund may be required to capitalize, rather than
deduct currently, any interest expense on indebtedness incurred or continued to
purchase or carry any positions that are part of a straddle. Sections 1092 of
the Code and the Treasury Regulations thereunder also suspend the holding
periods for straddle positions with possible adverse effects regarding long-term
capital gain treatment.
Section 1256 of the Code generally requires that futures contracts and
options on futures contracts be "marked-to-market" at the end of each year for
federal income tax purposes. Code Section 1256 further characterizes 60% of any
capital gain or loss with respect to such futures and options contracts as
long-term capital gain or loss and 40% as short-term capital gain or loss. If
such a future or option is held as an offsetting position and can be considered
a straddle under Section 1092 of the Code, such a straddle will constitute a
mixed straddle. A mixed straddle will be subject to both Section 1256 and
Section 1092 unless certain elections are made by a Fund.
Fund Distributions. Each Fund intends to qualify to pay exempt-interest dividends by satisfying the requirement that at the close of each quarter of a Fund's taxable year at least 50% of the Fund's total assets consist of tax-exempt Municipal Securities. Distributions from a Fund will constitute exempt-interest dividends to the extent of the Fund's tax-exempt interest income (net of allocable expenses and amortized bond premium). Exempt-interest dividends distributed to shareholders of a Fund are excluded from gross income for federal income tax purposes. However, shareholders who file federal income tax returns will be required to report the receipt of exempt-interest dividends on such returns. Moreover, while exempt-interest dividends are excluded from gross income for federal income tax purposes, they may be subject to alternative minimum tax ("AMT") in certain circumstances and may have other collateral tax consequences as discussed below. Distributions by a Fund of any investment company taxable income or of any net capital gain will be taxable to shareholders as discussed below.
AMT is imposed in addition to, but only to the extent it exceeds, the regular tax and is computed at a maximum rate of 28% for non-corporate taxpayers and 20% for corporate taxpayers on the excess of the taxpayer's alternative minimum taxable income ("AMTI") over an exemption amount. Exempt-interest dividends derived from certain "private activity" Municipal Securities issued after August 7, 1986, will generally constitute an item of tax preference includable in AMTI for both corporate and non-corporate taxpayers. In addition, exempt-interest dividends derived from all Municipal Securities, regardless of the date of issue, must be included in adjusted current earnings, which are used in computing an additional corporate preference item (i.e., 75% of the excess of a corporate taxpayer's adjusted current earnings over its AMTI (determined without regard to this item and the AMT net operating loss deduction)) includable in AMTI. Pursuant to the Taxpayer Relief Act of 1997, certain small corporations are wholly exempt from AMT.
Exempt-interest dividends must be taken into account in computing the portion, if any, of social security or railroad retirement benefits that must be included in an individual shareholder's gross income subject to federal income tax. Further, a shareholder of a Fund is denied a deduction for interest on indebtedness incurred or continued to purchase or carry such shares. Moreover, a shareholder who is (or is related to) a "substantial user" of a facility financed by industrial development bonds held by a Fund will likely be subject to tax on dividends paid by the Fund which are derived from interest on such bonds. Receipt of exempt-interest dividends may result in other collateral federal income tax consequences to certain taxpayers, including financial institutions, property and casualty insurance companies and foreign corporations engaged in a trade or business in the United States. Prospective investors should consult their own tax advisors as to such consequences.
Each Fund anticipates distributing substantially all of its investment company taxable income, if any, 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.
Each Fund may either retain or distribute to shareholders its net capital gain (excess of net long-term capital gain over net short-term capital loss), if any, for each taxable year. Each Fund currently intends to distribute any such amounts. If net capital gain is distributed and designated as a capital gain distribution, 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 a Fund prior to the date on which the shareholder acquired his shares. If a Fund does not distribute its net capital gain in any taxable year, such Fund will be subject to taxes on such net capital gain at the highest corporate rate. If a Fund elects to retain its net capital gain, it is expected that the Fund also will elect to have shareholders treated as if each received a distribution of its pro rata share of such gain, with the result that each shareholder will be required to report its pro rata share of such gain on its tax return as long-term capital gain, will receive a refundable tax credit for its 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. Realized market discount on Municipal Securities purchased after April 30, 1993, will be treated as ordinary income and not as capital gain.
Distributions by a Fund that do not constitute ordinary income dividends, exempt-interest dividends or capital gain distributions 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 of another AIM Fund). Shareholders electing to reinvest a distribution in additional shares will be treated as receiving a distribution in an amount equal to the net asset value of the shares acquired, determined as 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 would 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 shareholders (and made by the Fund) on December 31 of such calendar year if such dividends are actually paid in January of the following year. Shareholders will be advised annually as to the U.S. federal income tax consequences of distributions made (or deemed made) during the year to the extent that guidance has been provided by the IRS.
Each Fund will be required in certain cases to withhold and remit to the U.S. Treasury 31% of ordinary income dividends and capital gain distributions, and the proceeds of redemptions of shares, paid to any shareholder who (1) has provided either an incorrect tax identification number or no number at all, (2) is subject to backup withholding by the IRS for failure to properly report the receipt of interest or dividend income, or (3) 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 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. All or a portion of any loss so recognized may be disallowed if the shareholder purchases other shares of the same Fund within 30 days before or after the sale or redemption. Investors should note that this rule applies to shares purchased through the reinvestment of dividends within 30 days before or after a sale or redemption of 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 (taxable to a noncorporate shareholder at a maximum rate of 20%) 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 disallowed to the extent of the amount of exempt-interest dividends received on such shares and (to the extent not disallowed) 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 for regular and alternative minimum tax purposes that in some cases may be at least 19.6% lower than the maximum rate applicable to ordinary income. Capital losses in any year are deductible only to the extent of capital gains plus, in the case of non-corporate taxpayers, $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 such shares or shares of 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 (unless such shares also are
disposed of less than 91 days after they are 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 the Fund is not effectively connected with a U.S. trade or business carried on by a foreign shareholder, dividends and distributions (other than long-term capital gain distributions and exempt-interest dividends) will be subject to U.S. withholding tax at the rate of 30% (or lower applicable treaty rate) upon the gross amount of the dividend or distribution. Such a foreign shareholder would generally be exempt from U.S. federal income tax on gains realized on the sale of shares of a Fund, capital gain distributions and exempt-interest dividends.
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 distributions and any gains realized upon the sale of shares of the Fund will be subject to U.S. federal income tax at the rates applicable to U.S. citizens or domestic corporations.
In the case of foreign non-corporate shareholders, a Fund may be required to withhold U.S. federal income tax at a rate of 31% on distributions (other than exempt-interest dividends) 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. In addition, foreign shareholders entitled to a refund tax credit for their pro rata share of tax paid by a Fund electing to retain net capital gain may need to apply for an Individual Taxpayer Identification Number ("ITIN") in order to file the necessary refund claim. Such shareholders may apply for an ITIN using IRS Form W-7.
The tax consequences to a foreign shareholder entitled to claim the benefits of an applicable tax treaty may be different from those described herein. Recently proposed regulations may change the information provided here. Foreign shareholders are urged to consult their own tax advisors with respect to the particular tax consequences to them of an investment in a Fund.
Effect of Future Legislation; Local Tax Considerations. The foregoing general discussion of federal income tax consequences is based on the Code and the regulations issued thereunder as in effect on July 26, 2000. 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 discussed herein.
Connecticut Tax Considerations. The Connecticut income tax ("CIT") is imposed on individuals resident in Connecticut and certain non-residents and partial-year residents with income derived from or connected with sources located within Connecticut. The CIT is imposed on the federal adjusted gross income of taxpayers (including married couples who file a joint federal income tax return) with certain adjustments. The applicable CIT law provides that distributions by a regulated investment company that qualify as exempt-interest dividends for federal income tax purposes are not added to federal adjusted gross income and thus are not subject to CIT to the extent such distributions are derived from obligations issued by or on behalf of the State of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws thereof, and certain other U.S. Government obligations and obligations of certain U.S. Territories. Distributions of the net income of AIM TAX-EXEMPT BOND FUND OF CONNECTICUT from other sources, including distributions from Municipal Securities issued by other states or authorities and short-term capital gains that are treated as ordinary income dividends for federal income tax purposes are taxable as dividends for CIT purposes.
In addition, the Connecticut corporation business tax ("CCBT") is imposed on any corporation or association carrying on, or having the right to carry on, business in Connecticut. Distributions from any source that are treated as exempt-interest dividends for federal income tax purposes are includable in gross income for purposes of the CCBT. Moreover, while the CCBT generally allows a 70% deduction for amounts includable in taxable income for CCBT purposes that are treated as "dividends" for federal income tax purposes, such as distributions of taxable net investment income and net short-term capital gains, the Connecticut Department of Revenue Services has ruled that the CCBT does not allow this deduction for exempt-interest dividends and capital gain distributions whose character as "dividends" has been altered for federal income tax purposes.
Rules of state and local taxation of ordinary income dividends, exempt-interest dividends and capital gain distributions from regulated investment companies often differ from the rules for U.S. federal income taxation described above. Shareholders are urged to consult their tax advisors as to the consequences of these and other federal, state and local tax rules affecting investments in the Funds.
SHAREHOLDER INFORMATION
This information supplements the discussion in each Fund's Prospectus under the title "Shareholder Information."
TIMING OF PURCHASE ORDERS. It is the responsibility of the dealer to ensure that all orders are transmitted on a timely basis to the Transfer Agent. Any loss resulting from the dealer's failure to submit an order within the prescribed time frame will be borne by that dealer. If a check used to purchase shares does not clear, or if any investment order must be canceled due to nonpayment, the investor will be responsible for any resulting loss to an AIM Fund or to AIM Distributors.
SHARE CERTIFICATES. Shareholders of the Funds do not have the right to demand or require the Trust to issue share certificates, although the Trust in its sole discretion may issue them.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer Agent and all dividends and distributions are reinvested in shares of the applicable AIM Fund by the Transfer Agent. To provide funds for payments made under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full and fractional shares at their net asset value in effect at the time of each such redemption.
Payments under a Systematic Withdrawal Plan constitute taxable events. Since such payments are funded by the redemption of shares, they may result in a return of capital and in capital gains or losses, rather than in ordinary income. Because sales charges are imposed on additional purchases of shares (other than Class B or Class C Shares of the AIM Funds and AIM Cash Reserve Shares of AIM Money Market Fund), it is disadvantageous to effect such purchases while a Systematic Withdrawal Plan is in effect.
Each AIM Fund bears its share of the cost of operating the Systematic Withdrawal Plan.
TERMS AND CONDITIONS OF EXCHANGES. 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, 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, and the release of the exchange proceeds is delayed for the foregoing five-day period, such shareholder will not begin to accrue dividends until the sixth business day after the exchange.
EXCHANGES BY TELEPHONE. AIM Distributors has made arrangements with certain dealers and investment advisory firms to accept telephone instructions to exchange shares between any of the AIM Funds. AIM Distributors reserves the right to impose conditions on dealers or investment advisors who make telephone exchanges of shares of the funds, including the condition that any such dealer or investment advisor enter into an agreement (which contains additional conditions with respect to exchanges of shares) with AIM Distributors. To exchange shares by telephone, a shareholder, dealer or investment advisor who has satisfied the foregoing conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach AFS by telephone, he may also request exchanges by telegraph or use overnight courier services to expedite exchanges by mail, which will be effective on the business day received by the Transfer Agent as long as such request is received prior to the close of the customary trading session of the NYSE. The Transfer Agent and AIM Distributors may in certain cases be liable for losses due to unauthorized or fraudulent transactions if they do not follow reasonable procedures for verification of telephone transactions. Such reasonable procedures may include recordings of telephone transactions (maintained for six months), requests for confirmation of the shareholder's Social Security Number and current address, and mailings of confirmations promptly after the transaction.
By signing an account application form, an investor appoints the Transfer Agent as his true and lawful attorney-in-fact to surrender for redemption any and all unissued shares held by the Transfer Agent in the designated account(s), or in any other account with any of the AIM Funds, present or future, which has the identical registration as the designated account(s), with full power of substitution in the premises. The Transfer Agent and AIM Distributors are thereby authorized and directed to accept and act upon any telephone redemptions of shares held in any of the account(s) listed, from any person who requests the redemption proceeds to be applied to purchase shares in any one or more of the AIM Funds, provided that such fund is available for sale and provided that the registration and mailing address of the shares to be purchased are identical to the registration of the shares being redeemed. An investor acknowledges by signing the form that he understands and agrees that the Transfer Agent and AIM Distributors may not be liable for any loss, expense or cost arising out of any telephone exchange requests effected in accordance with the authorization set forth in these instructions if they reasonably believe such request to be genuine, but may in certain cases be liable for losses due to unauthorized or fraudulent transactions. 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 modify or terminate the telephone exchange privilege at any time without notice. An investor may elect not to have this privilege by marking the appropriate box on the application. Then any exchanges must be effected in writing by the investor.
REDEMPTIONS BY TELEPHONE. By signing an account application form, an investor appoints the Transfer Agent as his true and lawful attorney-in-fact to surrender for redemption any and all unissued shares held by the Transfer Agent in the designated account(s), present or future, with full power of substitution in the premises. The Transfer Agent and AIM Distributors are thereby authorized and directed to accept and act upon any telephone redemptions of shares held in any of the account(s) listed, from any person who requests the redemption. An investor acknowledges by signing the form that he understands and agrees that the Transfer Agent and AIM Distributors may not be liable for any loss, expense or cost arising out of any telephone redemption requests effected in accordance with the authorization set forth in these instructions if they reasonably believe such request to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions. Procedures for verification of telephone transactions may include recordings of telephone transactions (maintained for six months), requests for confirmation of the shareholder's Social Security Number and current address, and mailings of confirmations promptly after the transactions. 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 Transfer Agent reserves the right to cease to act as attorney-in-fact subject to this appointment, and AIM Distributors reserves the right to modify or terminate the telephone redemption privilege at any time without notice. An investor may elect not to have this privilege by marking the appropriate box on the application. Then any redemptions must be effected in writing by the investor.
SIGNATURE GUARANTEES. In addition to those circumstances listed in the "Shareholder Information" section of each Fund's prospectus, signature guarantees are required in the following situations: (1) requests to transfer the registration of shares to another owner; (2) telephone exchange and telephone redemption authorization forms; (3) changes in previously designated wiring or electronic funds transfer instructions; and (4) written redemptions or exchanges of shares previously reported as lost, whether or not the redemption amount is under $50,000 or the proceeds are to be sent to the address of record. AIM Funds may waive or modify any signature guarantee requirements at any time.
Acceptable guarantors include banks, broker-dealers, credit unions, national securities exchanges, savings associations and any other organization, provided that such institution or organization qualifies as an "eligible guarantor institution" as that term is defined in rules adopted by the SEC, and further provided that such guarantor institution is listed in one of the reference guides contained in the Transfer Agent's current Signature Guarantee Standards and Procedures, such as certain domestic banks, credit unions, securities dealers, or securities exchanges. The Transfer Agent will also accept signatures with either: (1) a signature guaranteed with a medallion stamp of the STAMP Program, or (2) a signature guaranteed with a medallion stamp of the NYSE Medallion Signature Program, provided that in either event, the amount of the transaction involved does not exceed the surety coverage amount indicated on the medallion. For information regarding whether a particular institution or organization qualifies as an "eligible guarantor institution," an investor should contact the Client Services Department of AFS.
TRANSACTIONS BY INTERNET. An investor may effect transactions in his account through the Internet by selecting the AIM Internet Connect option on his completed account application form or completing an AIM Internet Connect Authorization Form. By signing either form the Investor acknowledges and agrees that the Transfer Agent and AIM Distributors will not be liable for any loss, expense or cost arising out of any Internet transaction effected in accordance with the instructions set forth in the forms if they reasonably believe such request to be genuine. Procedures for verification of Internet transactions include requests for confirmation of the shareholder's personal identification number and mailing of confirmations promptly after the transactions. The investor also acknowledges that (1) if he no longer wants the AIM Internet Contract option, he will notify the Transfer Agent in writing, and (2) the AIM Internet Connect option may be terminated at any time by the AIM Funds.
DIVIDENDS AND DISTRIBUTIONS. In determining the amount of capital gains, if any, available for distribution, net capital gains are offset against available net capital losses, if any, carried forward from previous fiscal periods.
For funds that do not declare a dividend daily, such dividends and distributions will be reinvested at the net asset value per share determined on the ex-dividend date. For funds that declare a dividend daily, such dividends and distributions will be reinvested at the net asset value per share determined on the payable date.
Dividends on Class B and Class C shares are expected to be lower than those for Class A shares or AIM Cash Reserve Shares because of higher distribution fees paid by Class B and Class C shares. Dividends on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the shareholder at any time by notice to the Transfer Agent and are effective as to any subsequent payment if such notice is received by the Transfer Agent prior to the record date of such payment. Any dividend and distribution election remains in effect until the Transfer Agent receives a revised written election by the shareholder.
Any dividend or distribution paid by a fund which does not declare dividends daily has the effect of reducing the net asset value per share on the ex-dividend date by the amount of the dividend or distribution. Therefore, a dividend or distribution declared shortly after a purchase of shares by an investor would represent, in substance, a return of capital to the shareholder with respect to such shares even though it would be subject to income taxes.
MISCELLANEOUS INFORMATION
SHAREHOLDER INQUIRIES
The Transfer Agent may impose certain copying charges for requests for copies of shareholder account statements and other historical account information older than the current year and the immediately preceding year.
AUDIT REPORTS
The Board of Trustees will issue to shareholders at least semi-annually the Funds' financial statements. Financial statements, audited by independent auditors, will be issued annually. The firm of KPMG LLP, 700 Louisiana, Bank of America Building, Houston, Texas 77002, currently serves as the auditors of the Funds.
LEGAL MATTERS
Legal matters for the Trust have been passed upon by Ballard Spahr Andrews & Ingersoll, LLP, 1735 Market Street, Philadelphia, Pennsylvania 19103.
CUSTODIAN AND TRANSFER AGENT
The Bank of New York (the "Custodian"), 90 Washington Street, 11th Floor, New York, New York 10286 is custodian of all securities and cash of the Funds. Under its contract with the Trust, the Custodian maintains the portfolio securities of the Funds, administers the purchases and sales of portfolio securities, collects interest and dividends and other distributions made on the securities held in the portfolios of the Funds and performs other ministerial duties. A I M Fund Services, Inc., a wholly owned subsidiary of AIM (the "Transfer Agent"), P.O. Box 4739, Houston, Texas 77210-4739, acts as transfer agent, dividend disbursing agent and shareholder services agent for the Funds. These services do not include any supervisory function over management or provide any protection against any possible depreciation of assets. The Funds pay the Custodian and the Transfer Agent such compensation as may be agreed upon from time to time.
Chase Bank of Texas, N.A., 712 Main, Houston, Texas 77002, serves as Sub-Custodian for retail purchases of the AIM Funds.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of July 10, 2000, the trustees and officers of the Trust as a group owned less than 1% of the outstanding Class A shares of AIM TAX-EXEMPT BOND FUND OF CONNECTICUT and AIM TAX-EXEMPT CASH FUND. As of July 10, 2000, the trustees and officers of the Trust as a group owned 1.44% of the outstanding Class A Shares of AIM HIGH INCOME MUNICIPAL FUND. Also as of July 10, 2000, the trustees and officers of the Trust as a group owned 18.54% of the outstanding Class A shares of AIM TAX-FREE INTERMEDIATE FUND.
To the best knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding shares of each class of each Fund as of July 10, 2000, and the percentage of the outstanding shares held by such holders, are set forth below:
Percent Owned
Name and Address of Percent Owned of Record
Fund Record or Beneficial Owner of Record* and Beneficially
------------------- ---------------------------------- --------------- ----------------
AIM Tax-Free
Intermediate Fund -
Class A Shares Charles T. Bauer -- 18.23%
c/o AIM Management Group Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046
Fiserv Securities Inc. 16.94% --
FBO CB Clients
Trade House Account
2005 Market Street
Philadelphia, PA 19103-0000
Gary T. Crum -- 7.86%
11 Greenway Plaza, Suite 100
Houston, TX 77046
AIM Tax-Exempt
Cash Fund -
Class A Shares Gary T. Crum -- 16.82%
11 Greenway Plaza, Suite 100
Houston, TX 77046-1100
CFP Holdings Ltd. (Partnership) -- 9.01%
Attn: Gary Crum
11 Greenway Plaza, Suite 100
Houston, TX 77046-1100
AIM High Income
Municipal Fund -
Class A Shares Obie & Co. -- 16.42%
FBO Charles T. Bauer
P.O. Box 200547
Mutual Fund Unit 16-HCB-09
Houston, TX 77216-0547
|
Percent Owned
Name and Address of Percent Owned of Record
Fund Record or Beneficial Owner of Record* and Beneficially
------------------- ---------------------------------- --------------- ----------------
AIM High Income
Municipal Fund -
Class B Shares Merrill Lynch Pierce Fenner & Smith 15.24% --
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
AIM High Income
Municipal Fund -
Class C Shares Merrill Lynch Pierce Fenner & Smith 15.40% --
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Prudential Securities Inc. FBO -- 8.47%
Robert C. Byrne
28 Brookside Drive
Littleton, CO 80121-1244
AIM Tax-Exempt
Bond Fund of
Connecticut
Class A Shares Merrill Lynch Pierce Fenner & Smith 5.20% --
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
|
RATINGS OF SECURITIES
The following is a description of the factors underlying the commercial paper and debt ratings of Moody's, S&P and Fitch:
Moody's describes its ratings for corporate bonds as follows:
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risk appear somewhat larger than the Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are to be considered as upper-medium-grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate, and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing.
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating classification from Aa through Caa in its corporate bond rating system. The modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks in the lower end of its generic rating category.
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are to be considered as upper-medium-grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing.
Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from Aa to B. The modifier 1 indicates that the company ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the company ranks in the lower end of its generic rating category.
Moody's ratings for state and municipal short-term obligations will be designated Moody's Investment Grade or (MIG). Such ratings recognize the differences between short-term credit risk and long-term risk. Factors affecting the liquidity of the borrower and short-term cyclical elements are critical in short-term ratings, while other factors of major importance in bond risk, long-term secular trends for example, may be less important over the short run.
A short-term rating may also be assigned on an issue having a demand feature variable rate demand obligation (VRDO). Such ratings will be designated as VMIG or, if the demand feature is not rated, as NR. Short-term ratings on issues with demand features are differentiated by the use of the VMIG symbol to reflect such characteristics as payment upon periodic demand rather than fixed maturity dates and payment relying on external liquidity. Additionally, investors should be alert to the fact that the source of payment may be limited to the external liquidity with no or limited legal recourse to the issuer in the event the demand is not met.
A VMIG rating may also be assigned to commercial paper programs. Such programs are characterized as having variable short-term maturities but having neither a variable rate nor demand feature.
Moody's short-term ratings are designated Moody's Investment Grade as MIG 1 or VMIG 1 through MIG 4 or VMIG 4.
Gradations of investment quality are indicated by rating symbols, with each symbol representing a group in which the quality characteristics are broadly the same.
MIG 1/VMIG 1: This designation denotes best quality. There is present strong protection by established cash flows, superior liquidity support or demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2: This designation denotes high quality. Margins of protection are ample although not so large as in the preceding group.
MIG 3/VMIG 3: This designation denotes favorable quality. All security elements are accounted for but there is lacking the undeniable strength of the preceding grades. Liquidity and cash flow protection may be narrow and market access for refinancing is likely to be less well established.
MIG 4/VMIG 4: This designation denotes adequate quality. Protection commonly regarded as required of an investment security is present and although not distinctly or predominantly speculative, there is specific risk.
Moody's commercial paper ratings are opinions of the ability of issues to repay punctually promissory obligations not having an original maturity in excess of nine months.
PRIME-1: Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following characteristics:
leading market positions in well-established industries; high rates of return on
funds employed; conservative capitalization structures with moderate reliance on
debt and ample asset protection; broad margins in earning coverage of fixed
financial charges and high internal cash generation; and well established access
to a range of financial markets and assured sources of alternate liquidity.
PRIME-2: Issuers rated Prime-2 (or related supporting institutions) have a strong capacity for repayment of short-term promissory obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained.
PRIME-3: Issuers rated Prime-3 (or related supported institutions) have an acceptable capacity for repayment of short-term promissory obligations. The effects of industry characteristics and market composition may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt protection measurements and the requirement for relatively high financial leverage. Adequate alternate liquidity is maintained.
NOT PRIME: Issuers rated Not Prime do not fall within any of the Prime rating categories.
S&P describes its ratings for corporate bonds as follows:
AAA: Debt rated AAA has the highest rating assigned by S&P. Capacity to pay interest and repay principal is extremely strong.
AA: Debt rated AA has a very strong capacity to pay interest and repay principal and differs from the highest rated issues only in small degree.
A: Debt rated A has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories.
BBB: Debt rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher rated categories.
BB-B-CCC-CC-C: Debt rated BB, B, CCC, CC and C is regarded as having predominantly speculative characteristics with respect to capacity to pay interest and repay principal. BB indicates the least degree of speculation and C the highest. While such debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or large exposure to adverse conditions.
S&P assigns "dual" ratings to all debt issues that have a put option or demand feature as part of their structure.
The first rating addresses the likelihood of repayment of principal and interest as due, and the second rating addresses only the demand feature. The long-term debt rating symbols are used for bonds to denote the long-term maturity and the commercial paper rating symbols for the put option (for example, AAA/A-1+). With short-term demand debt, the note rating symbols are used with the commercial paper rating symbols (for example, SP-1+/A-1+).
A S&P note rating reflects the liquidity factors and market-access risks unique to notes. Notes maturing in three years or less will likely receive a note rating. Notes maturing beyond three years will most likely receive a long-term debt rating. The following criteria will be used in making that assessment: amortization schedule (the larger the final maturity relative to other maturities, the more likely the issue will be treated as a note); and source of payment (the more the issue depends on the market for its refinancing, the more likely it is to be treated as a note).
Note rating symbols and definitions are as follows.
SP-1: Strong capacity to pay principal and interest. Issues determined to possess very strong characteristics are given a plus (+) designation.
SP-2: Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.
SP-3: Speculative capacity to pay principal and interest.
A S&P commercial paper rating is a current assessment of the likelihood of timely payment of debt having an original maturity of no more than 365 days.
Rating categories are as follows:
A-1: This highest category indicates that the degree of safety regarding timely payment is strong. Those issues determined to possess extremely strong safety characteristics are denoted with a plus sign (+) designation.
A-2: Capacity for timely payment on issues with this designation is satisfactory. However, the relative degree of safety is not as high as for issues designated A-1.
A-3: Issues carrying this designation have adequate capacity for timely payment. They are, however, more vulnerable to the adverse effects of changes in circumstances than obligations carrying the higher designations.
B: Issues with this rating are regarded as having only speculative capacity for timely payment.
C: This rating is assigned to short-term debt obligations with a doubtful capacity for payment.
D: Debt with this rating is in payment default. The D rating category is used when interest payments or principal payments are not made on the date due, even if the applicable grace period has not expired, unless it is believed that such payments will be made during such grace period.
Fitch IBCA, Inc. ("Fitch") investment grade bond ratings provide a guide to investors in determining the credit risk associated with a particular security. The ratings represent Fitch's assessment of the issuer's ability to meet the obligations of a specific debt issue in a timely manner.
The rating takes into consideration special features of the issue, its relationship to other obligations of the issuer, the current and prospective financial condition and operating performance of the issuer and any guarantor, as well as the economic and political environment that might affect the issuer's future financial strength and credit quality.
Fitch ratings do not reflect any credit enhancement that may be provided by insurance policies or financial guaranties unless otherwise indicated.
Bonds carrying the same rating are of similar but not necessarily identical credit quality since the rating categories do not fully reflect small differences in the degrees of credit risk.
Fitch ratings are not recommendations to buy, sell or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect of any security.
Fitch ratings are based on information obtained from issuers, other obligors, underwriters, their experts, and other sources Fitch believes to be reliable. Fitch does not audit or verify the truth or accuracy of such information. Ratings may be changed, suspended, or withdrawn as a result of changes in, or the unavailability of, information or for other reasons.
AAA: Bonds considered to be investment grade and of the highest credit quality. The obligor has an exceptionally strong ability to pay interest and repay principal, which is unlikely to be affected by reasonably foreseeable events.
AA: Bonds considered to be investment grade and of very high credit quality. The obligor's ability to pay interest and repay principal is very strong, although not quite as strong as bonds rated "AAA." Because bonds rated in the "AAA" and "AA" categories are not significantly vulnerable to foreseeable future developments, short-term debt of these issuers is generally rated "F-1+".
A: Bonds considered to be investment grade and of high credit quality. The obligor's ability to pay interest and repay principal is considered to be strong, but may be more vulnerable to adverse changes in economic conditions and circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of satisfactory credit quality. The obligor's ability to pay interest and repay principal is considered to be adequate. Adverse changes in economic conditions and circumstances, however, are more likely to have adverse impact on these bonds and, therefore, impair timely payment. The likelihood that the ratings of these bonds will fall below investment grade is higher than for bonds with higher ratings.
PLUS (+) MINUS (-): Plus and minus signs are used with a rating symbol to indicate the relative position of a credit within the rating category. Plus and minus signs, however, are not used in the "AAA" category.
NR: Indicates that Fitch does not rate the specific issue.
CONDITIONAL: A conditional rating is premised on the successful completion of a project or the occurrence of a specific event.
SUSPENDED: A rating is suspended when Fitch deems the amount of information available from the issuer to be inadequate for rating purposes.
WITHDRAWN: A rating will be withdrawn when an issue matures or is called or refinanced, and, at Fitch's discretion, when an issuer fails to furnish proper and timely information.
FITCHALERT: Ratings are placed on FitchAlert to notify investors of an occurrence that is likely to result in a rating change and the likely direction of such change. These are designated as "Positive," indicating a potential upgrade, "Negative," for potential downgrade, or "Evolving," where ratings may be raised or lowered. FitchAlert is relatively short-term and should be resolved within 12 months.
RATINGS OUTLOOK
An outlook is used to describe the most likely direction of any rating change over the intermediate term. It is described as "Positive" or "Negative." The absence of a designation indicates a stable outlook.
Fitch speculative grade bond ratings provide a guide to investors in determining the credit risk associated with a particular security. The ratings ("BB" to "C") represent Fitch's assessment of the likelihood of timely payment of principal and interest in accordance with the terms of obligation for bond issues not in default. For defaulted bonds, the rating ("DDD" to "D") is an assessment of the ultimate recovery value through reorganization or liquidation.
The rating takes into consideration special features of the issue, its relationship to other obligations of the issuer or possible recovery value in bankruptcy, the current and prospective financial condition and operating performance of the issuer and any guarantor, as well as the economic and political environment that might affect the issuer's future financial strength.
Bonds that have the same rating are of similar but not necessarily identical credit quality since rating categories cannot fully reflect the differences in degrees of credit risk.
BB: Bonds are considered speculative. The obligor's ability to pay interest and repay principal may be affected over time by adverse economic changes. However, business and financial alternatives can be identified, which could assist the obligor in satisfying its debt service requirements.
B: Bonds are considered highly speculative. While bonds in this class are currently meeting debt service requirements, the probability of continued timely payment of principal and interest reflects the obligor's limited margin of safety and the need for reasonable business and economic activity throughout the life of the issue.
CCC: Bonds have certain identifiable characteristics that, if not remedied, may lead to default. The ability to meet obligations requires an advantageous business and economic environment.
CC: Bonds are minimally protected. Default in payment of interest and/or principal seems probable over time.
C: Bonds are in imminent default in payment of interest or principal.
DDD, DD, AND D: Bonds are in default on interest and/or principal payments. Such bonds are extremely speculative and should be valued on the basis of their ultimate recovery value in liquidation or reorganization of the obligor. "DDD" represents the highest potential for recovery on these bonds, and "D" represents the lowest potential for recovery.
PLUS (+) MINUS (-): Plus and minus signs are used with a rating symbol to indicate the relative position of a credit within the rating category. Plus and minus signs, however, are not used in the "DDD", "DD", or "D" categories.
Fitch's short-term ratings apply to debt obligations that are payable on demand or have original maturities of generally up to three years, including commercial paper, certificates of deposit, medium-term notes, and municipal and investment notes.
The short-term rating places greater emphasis than a long-term rating on the existence of liquidity necessary to meet the issuer's obligations in a timely manner.
Fitch short-term ratings are as follows:
F-1+: Exceptionally Strong Credit Quality. Issues assigned this rating are regarded as having the strongest degree of assurance for timely payment.
F-1: Very Strong Credit Quality. Issues assigned this rating reflect an assurance of timely payment only slightly less in degree than issues rated "F-1+."
F-2: Good Credit Quality. Issues assigned this rating have a satisfactory degree of assurance for timely payment, but the margin of safety is not as great as for issues assigned "F-1+" and "F-1" ratings.
F-3: Fair Credit Quality. Issues assigned this rating have characteristics suggesting that the degree of assurance for timely payment is adequate, however, near-term adverse changes could cause these securities to be rated below investment grade.
F-S: Weak Credit Quality. Issues assigned this rating have characteristics suggesting a minimal degree of assurance for timely payment and are vulnerable to near-term adverse changes in financial and economic conditions.
D: Default. Issues assigned this rating are in actual or imminent payment default.
LOC: The symbol LOC indicates that the rating is based on a letter of credit issued by a commercial bank.
FINANCIAL STATEMENTS
FS
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
AIM Tax-Exempt Cash Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Tax-Exempt Cash Fund (a portfolio of
AIM Tax-Exempt Funds, Inc.), including the schedule of
investments, as of March 31, 2000, the related statement
of operations for the year then ended, the statement of
changes in net assets for each of the years in the
two-year period then ended and the financial highlights
for each of the years in the five-year period then ended.
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 auditing
standards generally accepted in the United States of
America. 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 March 31, 2000, by correspondence with the custodian
and brokers. An audit also includes assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall
financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM
Tax-Exempt Cash Fund as of March 31, 2000, the results of
its operations for the year then ended, the changes in
its net assets for each of the years in the two-year
period then ended and the financial highlights for each
of the years in the five-year period then ended, in
conformity with accounting principles generally accepted
in the United States of America.
/s/ KPMG LLP KPMG LLP May 1, 2000 Houston, Texas |
FS-1
SCHEDULE OF INVESTMENTS
March 31, 2000
RATING(a) PAR
S&P MOODY'S (000) VALUE
SHORT-TERM MUNICIPAL
OBLIGATIONS-86.12%
ALABAMA-2.32%
Alabama Industrial
Development Board
(Industrial Partners
Project); Refunding VRD
Series 1989 RB
(LOC-Suntrust Bank)
4.10%, 01/01/07(b) -- Aa3 $1,405 $ 1,405,000
-----------------------------------------------------------------
ARKANSAS-2.15%
Arkansas (University of)
(University of Arkansas
for Medical Sciences
Campus); Refunding VRD
Series 1998 RB
3.95%, 12/01/19(b)(c) -- VMIG-1 1,300 1,300,000
-----------------------------------------------------------------
CALIFORNIA-3.47%
Huntington Beach (City of)
(Seabridge Villas
Project); Multifamily
Housing VRD Series 1985
A RB
4.00%, 02/01/10(b) -- VMIG-1 2,100 2,100,000
-----------------------------------------------------------------
CONNECTICUT-1.03%
Connecticut (State of)
Special Tax Obligation
(JP Morgan PUTTERS); VRD
Series 114 1999 A RB
3.81%, 10/01/09(b)(d) -- VMIG-1 618 618,002
-----------------------------------------------------------------
Connecticut (State of)
Special Tax Obligation
(Infrastructure Purpose
S-1); Transportation VRD
Series RB
3.85%, 12/01/10(b) A-1+ VMIG-1 5 5,000
-----------------------------------------------------------------
623,002
-----------------------------------------------------------------
DELAWARE-3.48%
Delaware (State of);
Unlimited Series 1997 B
GO
5.00%, 05/01/00 AAA Aaa 2,000 2,001,456
-----------------------------------------------------------------
Delaware (University of)
VRD Series 1998 RB
3.90%, 11/01/23(b) A-1+ -- 100 100,000
-----------------------------------------------------------------
2,101,456
-----------------------------------------------------------------
FLORIDA-5.30%
Capital Trust Agency;
Multifamily Housing VRD
Series 1999 B RB
4.00%, 12/01/32(b)(c) A-1+ -- 3,200 3,200,467
-----------------------------------------------------------------
|
RATING(a) PAR
S&P MOODY'S (000) VALUE
GEORGIA-0.28%
Dekalb Private Hospital
Authority (Egleston
Children's Hospital at
Emory University);
Revenue Anticipation
Certificates VRD Series
1994 A (LOC-SunTrust
Bank)
3.85%, 03/01/24(b) A-1+ VMIG-1 $ 170 $ 170,000
-----------------------------------------------------------------
ILLINOIS-12.08%
Illinois Development
Finance Authority
(American College of
Surgeons Project); Tax
Exempt VRD Series 1996
RB (LOC-Northern Trust
Co.)
3.95%, 08/01/26(b) A-1+ -- 2,083 2,083,000
-----------------------------------------------------------------
Illinois Health Facilities
Authority (Blessing
Hospital); VRD Series
1999 B RB
4.00%, 11/15/29(b)(c) A-1 VMIG-1 2,000 2,000,000
-----------------------------------------------------------------
Illinois Health Facilities
Authority (Franciscan
Eldercare Project);
Adjustable Rate
Refunding VRD Series
1996 C RB
(LOC-Lasalle National
Bank)
3.90%, 05/15/26(b) A-1+ -- 1,420 1,420,000
-----------------------------------------------------------------
Illinois Health Facilities
Authority (Resurrection
Health Care); VRD Series
1999 B RB
3.95%, 05/15/29(b) A-1+ VMIG-1 300 300,000
-----------------------------------------------------------------
Illinois Health Facilities
Authority; Revolving
Fund Pooled VRD Series D
RB (LOC-Bank One
Illinois NA)
3.90%, 08/01/15(b) A-1 VMIG-1 1,500 1,500,000
-----------------------------------------------------------------
7,303,000
-----------------------------------------------------------------
IOWA-2.66%
Iowa School Corporations
(Iowa School Cash
Anticipation Program);
Warrant Certificates
Series 2000
4.75%, 02/01/01(c) SP-1+ MIG-1 1,600 1,608,931
-----------------------------------------------------------------
KENTUCKY-1.93%
Kentucky Interlocal School
Transportation
Association; Series 1999
TRAN
4.00%, 06/30/00 SP-1+ MIG-1 1,163 1,164,207
-----------------------------------------------------------------
LOUISIANA-3.31%
Calcasieu Parish Inc.
Industrial Development
Board (Olin Corp.
Project); Refunding VRD
Series 1993 B IDR
(LOC-Wachovia Bank
Corp.)
4.10%, 02/01/16(b) A-1+ -- 2,000 2,000,000
-----------------------------------------------------------------
|
FS-2
RATING(a) PAR
S&P MOODY'S (000) VALUE
MASSACHUSETTS-1.00%
Massachusetts Bay
Transportation
Authority; Series 1967
RB
5.00%, 03/01/01 AA- Aa2 $ 600 $ 604,225
-----------------------------------------------------------------
MICHIGAN-7.12%
Michigan State Hospital
Finance Authority
(Hospital Equipment Loan
Program); VRD Series
1995 A RB (LOC-First of
America Bank)
3.85%, 12/01/23(b) -- VMIG-1 400 400,000
-----------------------------------------------------------------
Monroe (County of)
Economic Development
Corp. (Detroit Edison
Co.);
Refunding Limited
Obligation VRD Series
1992 CC RB (LOC-Barclays
Bank PLC)
4.00%, 10/01/24(b) -- P-1 2,000 2,000,000
-----------------------------------------------------------------
Morgan Stanley Float
Program, Michigan State
Hospital Finance
Authority (Ascension
Health); Floating Rate
Trust Certificate VRD
Series 98 180 RB
4.01%, 05/15/05(b)(d) A-1c -- 1,300 1,300,000
-----------------------------------------------------------------
Plymouth (Township of)
Economic Development
Corp. (Key International
Project); VRD Series
1984 RB (LOC-Comerica
Bank)
4.05%, 07/01/04(b)(e) -- -- 100 100,000
-----------------------------------------------------------------
Walled Lake Michigan
Consolidated School
District; Unlimited Tax
Series II GO
7.00%, 05/01/00(c) AA+ Aa 500 501,361
-----------------------------------------------------------------
4,301,361
-----------------------------------------------------------------
MONTANA-0.99%
Missoula (County of)
(Washington Corp.
Project); VRD Series
1984 IDR (LOC-Bank of
Montreal)
3.51%, 11/01/04(b) -- VMIG-1 600 600,000
-----------------------------------------------------------------
NEW HAMPSHIRE-2.32%
New Hampshire Higher
Education and Health
Facilities Authority;
VRD Hospital Series 1985
C RB
3.95%, 12/01/25(b)(c) A-1+ -- 1,400 1,400,000
-----------------------------------------------------------------
NEW YORK-2.14%
Eagle Tax Exempt Trust;
Class A VRD Series
943802 COP
3.96%, 05/01/07(b)(c)(d) A-1+C -- 1,295 1,295,000
-----------------------------------------------------------------
NORTH CAROLINA-4.76%
North Carolina Municipal
Power Agency Number One
(Catawba Electric);
MERLOTS VRD Series 1999
Q RB
4.05%, 01/01/10(b)(c)(d) -- VMIG-1 2,875 2,875,000
-----------------------------------------------------------------
|
RATING(a) PAR
S&P MOODY'S (000) VALUE
NORTH DAKOTA-0.76%
North Dakota Rural Water
Finance Corp. (Public
Projects-Construction);
Series 1999 Notes
4.25%, 09/01/00 -- MIG-1 $ 460 $ 460,000
-----------------------------------------------------------------
OHIO-0.50%
Delaware (County of)
(Radiation Sterilizers,
Inc.); VRD Series 1984
IDR (LOC-Comerica Bank)
3.95%, 12/01/04(b) A-1 -- 300 300,000
-----------------------------------------------------------------
PENNSYLVANIA-2.32%
York (City of) General
Authority; Adjustable
Rate Pooled Financing
VRD Series 1996 RB
3.95%, 09/01/26(b) A-1 -- 1,400 1,400,000
-----------------------------------------------------------------
SOUTH DAKOTA-1.66%
South Dakota Housing
Development Authority
(Homeownership
Mortgage); Series C RB
4.90%, 05/01/00 AAA Aa1 1,005 1,006,007
-----------------------------------------------------------------
TENNESSEE-1.92%
Nashville and Davidson
(Counties of) (Amberwood
Ltd. Project); Metro
Government Multifamily
Housing Refunding VRD
Series 1993 A IDR
(LOC-Commerzbank AG)
4.16%, 07/01/13(b) A-1+ VMIG-1 1,160 1,160,000
-----------------------------------------------------------------
TEXAS-13.11%
Bexar (County of) Housing
Finance Authority
(Fountainhead
Apartments); Multifamily
Refunding VRD Series RB
3.90%, 09/15/26(b) A-1+ -- 2,074 2,074,000
-----------------------------------------------------------------
Dallas (City of); Water &
Sewer Commercial Paper
Notes
3.85%, 04/04/00 A-1+ P-1 2,441 2,441,000
-----------------------------------------------------------------
Texas (State of); Series
1999 A TRAN
4.50%, 08/31/00 A-1 MIG-1 2,000 2,006,181
-----------------------------------------------------------------
Trinity River Industrial
Development Authority
(Radiation Sterilizers,
Inc.); VRD Series 1985 A
IDR (LOC-Comerica Bank)
3.95%, 11/01/05(b) A-1 -- 1,400 1,400,000
-----------------------------------------------------------------
7,921,181
-----------------------------------------------------------------
|
FS-3
RATING(a) PAR
S&P MOODY'S (000) VALUE
UTAH-3.14%
Salt Lake (County of)
Housing Authority (Santa
Fe Apartments Project);
Multifamily Housing
Refunding VRD Series
1992 RB (LOC-Dresdner
Bank AG)
3.95%, 07/01/22(b) -- VMIG-1 $1,900 $ 1,900,000
-----------------------------------------------------------------
VIRGINIA-2.48%
Norfolk (City of)
Industrial Development
Authority (Sentara
Health System);
Commercial Paper Notes
3.90%, 05/17/00 A-1+ P-1 1,500 1,500,000
-----------------------------------------------------------------
WASHINGTON-3.89%
Industrial Development
Corp. of Port Townsend
(Port Townsend Paper
Corp. Project); VRD
Series 1988 A RB
(LOC-Deutsche Bank AG)
4.00%, 03/01/09(b) -- VMIG-1 500 500,000
-----------------------------------------------------------------
Tacoma (City of)
Metropolitan Park
District; Series 1994 GO
4.50%, 12/01/00(e) -- -- 1,850 1,852,867
-----------------------------------------------------------------
2,352,867
-----------------------------------------------------------------
Total Short-Term Municipal Obligations
(Cost $52,051,704) 52,051,704
-----------------------------------------------------------------
|
PAR
(000) VALUE
MEDIUM TERM NOTE(f)-4.63%
Bear Stearns & Co., Inc.,
6.57%, 11/14/00 (Cost $2,800,000) 2,800 2,800,000
--------------------------------------------------------------
MASTER NOTE AGREEMENT(f)-4.80%
BROKER/DEALER-4.80%
Merrill Lynch Mortgage Capital, Inc.,
6.64%, 08/17/00 (Cost $2,900,000)(g) 2,900 2,900,000
--------------------------------------------------------------
REPURCHASE AGREEMENT(f)(h)-3.25%
Westdeutsche Landesbank Girozentrale,
6.20%, 04/03/00 (Cost $1,961,164)(i) 1,961 1,961,164
--------------------------------------------------------------
TOTAL INVESTMENTS-98.80% (Cost
$59,712,868)(j) 59,712,868
--------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-1.20% 727,371
--------------------------------------------------------------
NET ASSETS-100.00% $60,440,239
==============================================================
|
Investment Abbreviations:
COP - Certificates of Participation GO - General Obligation Bonds IDR - Industrial Development Revenue Bonds LOC - Letter of Credit MERLOTS - Municipal Exempt Receipts Liquidity Optional Tender PUTTERS - Putable Tax Exempt Receipts RB - Revenue Bonds TRAN - Tax and Revenue Anticipation Notes VRD - Variable Rate Demand |
Notes to Schedule of Investments:
(a) Ratings assigned by Moody's Investors Service, Inc. ("Moody's") and Standard
& Poor's Corporation ("S&P"). Ratings are not covered by Independent
Auditors' Report.
(b) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined periodically.
Rate shown is the rate in effect on 03/31/00.
(c) Secured by bond insurance provided by one of the following companies: AMBAC,
FGIC, FSA or MBIA.
(d) The Fund may invest in synthetic municipal instruments the value of and
return on which are derived from underlying securities. The types of
synthetic municipal instruments in which the Fund may invest include
variable rate instruments. These instruments involve the deposit into a
trust of one or more long-term tax-exempt bonds or notes ("Underlying
Bonds"), and the sale of certificates evidencing interests in the trust to
investors such as the Fund. The trustee receives the long-term fixed rate
interest payments on the Underlying Bonds, and pays certificate holders
short-term floating or variable interest rates which are reset periodically.
A "variable rate trust certificate" evidences an interest in a trust
entitling the certificate holder to receive variable rate interest based on
prevailing short-term interest rates and also typically providing the
certificate holder with the conditional right to put its certificate at par
value plus accrued interest. Because synthetic municipal instruments involve
a trust and a third party conditional put feature, they involve complexities
and potential risks that may not be present where a municipal security is
owned directly.
(e) Unrated; determined by the investment advisor to be of comparable quality to
the rated securities in which the Fund may invest, pursuant to guidelines
for the determination of quality adopted by the Board of Directors and
followed by the investment advisor.
(f) Interest does not qualify as exempt interest for federal tax purposes.
(g) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon one business days' notice. Interest rates on master
notes are redetermined periodically. Rate shown is the rate in effect on
03/31/00.
(h) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts, and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(i) Joint repurchase agreement entered into 03/31/00 with a maturing value of
$100,051,667. Collateralized by $107,546,033 U.S. Government obligations,
7.00% due 07/15/29 with an aggregate market value at 03/31/00 of
$102,000,000.
(j) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
FS-4
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
ASSETS:
Investments, at value (amortized cost) $ 59,712,868
------------------------------------------------------------
Receivables for:
Capital stock sold 116,329
------------------------------------------------------------
Interest 467,651
------------------------------------------------------------
Investments sold 2,400,000
------------------------------------------------------------
Investment for deferred compensation plan 32,868
------------------------------------------------------------
Other assets 13,408
------------------------------------------------------------
Total assets 62,743,124
------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 1,915,999
------------------------------------------------------------
Dividends 17,613
------------------------------------------------------------
Deferred compensation 32,868
------------------------------------------------------------
Capital stock reacquired 246,376
------------------------------------------------------------
Accrued administrative services fees 4,000
------------------------------------------------------------
Accrued advisory fees 17,235
------------------------------------------------------------
Accrued distribution fees 14,680
------------------------------------------------------------
Accrued transfer agent fees 7,619
------------------------------------------------------------
Accrued operating expenses 46,495
------------------------------------------------------------
Total liabilities 2,302,885
------------------------------------------------------------
Net assets applicable to shares outstanding $ 60,440,239
============================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Authorized 1,000,000,000
------------------------------------------------------------
Outstanding 60,439,977
============================================================
Net asset value, offering and redemption
price per share $ 1.00
============================================================
|
STATEMENT OF OPERATIONS
For the year ended March 31, 2000
INVESTMENT INCOME:
Interest income $2,155,558
-----------------------------------------------------------
EXPENSES:
Advisory fees 199,298
-----------------------------------------------------------
Administrative services fees 49,808
-----------------------------------------------------------
Directors' fees 2,480
-----------------------------------------------------------
Transfer agent fees 49,431
-----------------------------------------------------------
Distribution fees 142,356
-----------------------------------------------------------
Filing fees 41,665
-----------------------------------------------------------
Printing fees 27,764
-----------------------------------------------------------
Other 26,077
-----------------------------------------------------------
Total expenses 538,879
-----------------------------------------------------------
Less: Fees waived (85,413)
-----------------------------------------------------------
Expenses paid indirectly (615)
-----------------------------------------------------------
Net expenses 452,851
-----------------------------------------------------------
Net investment income 1,702,707
-----------------------------------------------------------
Net increase in net assets resulting from
operations $1,702,707
===========================================================
|
See Notes to Financial Statements.
FS-5
STATEMENT OF CHANGES IN NET ASSETS
For the years ended March 31, 2000 and 1999
2000 1999
------------ -----------
OPERATIONS:
Net investment income $ 1,702,707 $ 2,023,407
----------------------------------------------------------------------------------------
Net realized gain on sales of investment securities -- 11,634
----------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities -- (160)
----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 1,702,707 2,034,881
----------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (1,730,612) (2,029,841)
----------------------------------------------------------------------------------------
Net increase (decrease) from capital stock transactions (690,854) 9,220,052
----------------------------------------------------------------------------------------
Net increase (decrease) in net assets (718,759) 9,225,092
----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 61,158,998 51,933,906
----------------------------------------------------------------------------------------
End of period $ 60,440,239 $61,158,998
========================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $ 60,421,491 $61,130,831
----------------------------------------------------------------------------------------
Undistributed net investment income 23,318 29,998
----------------------------------------------------------------------------------------
Undistributed realized gain (loss) on sales of investment
securities (4,570) (1,831)
----------------------------------------------------------------------------------------
$ 60,440,239 $61,158,998
========================================================================================
|
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Tax-Exempt Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company. The Company is organized as a Maryland corporation
consisting of four separate portfolios. Matters affecting each portfolio are
voted on exclusively by the shareholders of such portfolio. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to AIM
Tax-Exempt Cash Fund (the "Fund"). The investment objective of the Fund is to
earn the highest level of current income free from federal income taxes that is
consistent with the preservation of capital and liquidity.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of the significant accounting policies followed by the
Fund in the preparation of its financial statements.
A. Security Valuations--The Fund's securities are valued on the basis of
amortized cost which approximates market value. This method values a
security at its cost on the date of purchase and thereafter assumes a
constant amortization to maturity of premiums or original issue discounts.
B. Securities Transactions and Investment Income--Securities transactions are
accounted for on a trade date basis. Realized gains or losses on sales are
computed on the basis of specific identification of the securities sold.
Interest income is recorded as earned from settlement date, adjusted for
amortization of premiums and discounts on investments, and is recorded on
the accrual basis. Discounts, other than original issue, are amortized to
unrealized appreciation for financial reporting purposes. On March 31,
2000, undistributed net investment income was increased by $21,225,
undistributed net realized gains (losses) was decreased by $2,739 and
paid-in capital was decreased by $18,486 as a result of differing book/tax
adjustments. Net assets of the Fund were unaffected by the
reclassifications.
C. Distributions--It is the policy of the Fund to declare daily dividends from
net investment income. Such distributions are paid monthly. Distributions
from net realized capital gains, if any, are generally paid annually and
recorded on ex-dividend date. The Fund may elect to use a portion of the
proceeds of fund share redemptions as distributions for federal income tax
purposes.
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 of $4,570 (which may be carried forward to
FS-6
offset future taxable capital gains, if any) which expires, if not previously utilized, through the year 2004. The Fund cannot distribute capital gains to shareholders until the tax loss carryforwards have been utilized.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.35% of the Fund's
average daily net assets.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the year ended March 31, 2000, AIM was paid
$49,808 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency
services to the Fund. For the year ended March 31, 2000, AFS was paid $36,897
for such services.
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") pursuant to which AIM Distributors
serves as the distributor for the Fund. The Company has also adopted a plan
pursuant to Rule 12b-1 under the 1940 Act (the "Plan") with respect to the Fund
whereby the Fund will pay AIM Distributors up to a maximum annual rate of 0.25%
of the Fund's average daily net assets as compensation for services related to
the sale and distribution of the Fund's shares. The Plan provides that of the
aggregate amount payable under the Plan, payments to dealers and other financial
institutions that provide continuing personal shareholder services to their
customers who purchase and own shares of the Fund in amounts of up to 0.25% of
the average daily net assets of the Fund attributable to the customers of such
dealers or financial institutions may be characterized as a service fee, and
that payments to dealers and other financial institutions in excess of such
amount and payments to AIM Distributors would be characterized as 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 Company with
respect to the Fund. Currently, AIM Distributors has elected to waive a portion
of its compensation payable by the Fund such that the compensation paid pursuant
to the Plan equals 0.10% of the Fund's average daily net assets.
For the year ended March 31, 2000, AIM Distributors received $56,943 as
compensation pursuant to the Plan and waived fees of $85,413.
Certain officers and directors of the Company are officers and directors of
AIM, AFS and AIM Distributors.
During the year ended March 31, 2000, the Fund paid legal fees of $3,767 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Fund's Board of Directors. A member of that firm is a director of the Company.
NOTE 3-DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to directors who are not an "interested person" of AIM. The Company invests directors' fees, if so elected by a director, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 4-INDIRECT EXPENSES
During the year ended March 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $615 under an expense offset arrangement. The effect of the above arrangement resulted in a reduction of the Fund's total expenses of $615 during the year ended March 31, 2000.
NOTE 5-CAPITAL STOCK
Changes in capital stock outstanding during the years ended March 31, 2000 and 1999 were as follows:
2000 1999
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------------- ------------- ------------ --------------
Sold 99,988,658 $ 99,988,658 365,487,367 $ 365,487,367
-----------------------------------------------------------------------------------
Issued as
reinvestment of
dividends 1,656,515 1,656,515 1,903,872 1,903,872
-----------------------------------------------------------------------------------
Reacquired (102,336,027) (102,336,027) (358,171,187) (358,171,187)
-----------------------------------------------------------------------------------
(690,854) $ (690,854) 9,220,052 $ 9,220,052
===================================================================================
|
FS-7
NOTE 6-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of capital stock outstanding during each of the years in the five-year period ended March 31, 2000.
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------------------------------------------------------ ------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.03 0.03 0.03 0.03 0.03
------------------------------------------------------------ ------- ------- ------- ------- -------
Less distributions from net investment income (0.03) (0.03) (0.03) (0.03) (0.03)
------------------------------------------------------------ ------- ------- ------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============================================================ ======= ======= ======= ======= =======
Total return 3.05% 2.90% 3.12% 2.82% 2.92%
============================================================ ======= ======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $60,440 $61,159 $51,934 $56,880 $30,014
============================================================ ======= ======= ======= ======= =======
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 0.80%(a) 0.79% 0.83% 1.04% 1.05%
============================================================ ======= ======= ======= ======= =======
Without fee waivers and/or expense reimbursements 0.95%(a) 0.94% 0.98% 1.19% 1.20%
============================================================ ======= ======= ======= ======= =======
Ratio of net investment income to average net assets 2.99%(a) 2.83% 3.07% 2.78% 2.97%
============================================================ ======= ======= ======= ======= =======
|
(a) Ratios based on average net assets of $56,942,323.
FS-8
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
AIM Tax-Free Intermediate Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Tax-Free Intermediate Fund (a
portfolio of AIM Tax-Exempt Funds, Inc.), including the
schedule of investments, as of March 31, 2000, the
related statement of operations for the year then ended,
the statement of changes in net assets for each of the
years in the two-year period then ended and the financial
highlights for each of the years in the five-year period
then ended. 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 auditing
standards generally accepted in the United States of
America. 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 March 31, 2000, by correspondence with the custodian
and brokers. An audit also includes assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall
financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM Tax-Free
Intermediate Fund as of March 31, 2000, the results of
its operations for the year then ended, the changes in
its net assets for each of the years in the two-year
period then ended and the financial highlights for each
of the years in the five-year period then ended, in
conformity with accounting principles generally accepted
in the United States of America.
/s/ KMPG LLP KPMG LLP May 1, 2000 Houston, Texas |
FS-9
SCHEDULE OF INVESTMENTS
MARCH 31, 2000
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
ALABAMA-1.60%
Alabama State Municipal
Electric Authority;
Power Supply Series 1991
A RB
6.30%, 09/01/01(b) AAA Aaa $ 400 $ 409,680
-----------------------------------------------------------------
Birmingham (City of)
Special Care Facilities
Financing Authority
(Charity Obligation
Group);
Hospital Series 1997
D RB
4.95%, 11/01/07(c)(d) NRR Aa2 945 935,569
-----------------------------------------------------------------
Lauderdale & Florence
(County of) Health Care
Authority (Coffee Health
Group Project);
Unlimited Tax Series
1999 A GO
5.00%, 07/01/07(b) AAA Aaa 2,450 2,436,598
-----------------------------------------------------------------
McIntosh Alabama
Industrial Development
Board;
Environmental
Improvement Series 1998
B RB
4.65%, 06/01/08 AA- A2 2,000 1,861,520
-----------------------------------------------------------------
5,643,367
-----------------------------------------------------------------
ALASKA-1.12%
Alaska State Housing
Financing Corp.;
Series 1991 A-1 RB
4.90%, 12/01/07(b) AAA Aaa 800 788,912
-----------------------------------------------------------------
Anchorage (City of);
Unlimited Tax Series
1994 GO
5.50%, 07/01/06(b) AAA Aaa 1,950 2,006,803
-----------------------------------------------------------------
Fairbanks North Star
Borough;
Unlimited Tax School
Series 1999 B GO
5.13%, 04/01/09(b) AAA Aaa 1,160 1,160,406
-----------------------------------------------------------------
3,956,121
-----------------------------------------------------------------
ARIZONA-4.41%
Arizona (State of)
Transportation Board
(Highway Project);
Refunding Series 1993 RB
4.70%, 07/01/01 AAA Aa1 2,800 2,803,136
-----------------------------------------------------------------
Maricopa County Unified
School District #4 (Mesa
Project of 1995);
Unlimited Tax Series
1998 E GO
5.00%, 07/01/09(b) AAA Aaa 1,900 1,885,997
-----------------------------------------------------------------
Maricopa County Unified
School District #11
(Peoria Project of
1991);
Unlimited Tax Series
1995 GO
5.50%, 07/01/10(b) AAA Aaa 1,365 1,390,102
-----------------------------------------------------------------
|
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
ARIZONA-(CONTINUED)
Maricopa County Unified
School District #41
(Gilbert Project of
1988);
Unlimited Tax Series
1992 E GO
6.20%, 07/01/02(d) AAA Aaa $1,250 $ 1,291,987
-----------------------------------------------------------------
Mohave County Unified
School District #1 (Lake
Havasu);
Unlimited Tax Series
1996 A GO
5.40%, 07/01/06(b) AAA Aaa 200 205,304
-----------------------------------------------------------------
Navajo County Unified
School District
(Herber-Overgaard);
Unlimited Tax Series
1997 A GO
5.00%, 07/01/07(b) AAA Aaa 450 450,778
-----------------------------------------------------------------
Nogales Municipal
Development Authority;
Series 1999 RB
4.20%, 06/01/08(b) -- Aaa 710 661,699
-----------------------------------------------------------------
4.30%, 06/01/09(b) -- Aaa 230 214,268
-----------------------------------------------------------------
Phoenix (City of) Civic
Improvement Corp.
(Wastewater System);
Lease Series 1993 RB
6.13%, 07/01/03(c)(d) AAA NRR 3,255 3,443,530
-----------------------------------------------------------------
Phoenix (City of) Senior
Lien Street and Highway
User;
Refunding Series 1992 RB
6.20%, 07/01/02 AA A1 1,000 1,030,790
-----------------------------------------------------------------
Scottsdale (City of);
Unlimited Tax Series
1999 GO
7.50%, 07/01/02 AA+ Aa1 1,100 1,164,614
-----------------------------------------------------------------
Yuma Industrial
Development Authority
(Yuma Regional Medical
Center Project);
Refunding Hospital
Series 1997 RB
5.70%, 08/01/06(b) AAA Aaa 1,000 1,032,000
-----------------------------------------------------------------
15,574,205
-----------------------------------------------------------------
ARKANSAS-2.15%
Arkansas State Development
Financial Authority;
Correction Facility
Series 1996 RB
6.25%, 10/01/06(b) AAA Aaa 1,800 1,934,712
-----------------------------------------------------------------
Arkansas State Development
Financial Authority,
State Agencies
Facilities (Department
Corporate Project);
Series 1999 RB
5.00%, 11/01/05(b) AAA Aaa 1,125 1,134,754
-----------------------------------------------------------------
Fort Smith Water and
Sewer;
Series 1999 RB
5.00%, 10/01/08(b) AAA Aaa 1,000 994,530
-----------------------------------------------------------------
|
FS-10
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
ARKANSAS-(CONTINUED)
Little Rock (City of)
Health Facility Board
(Baptist Medical
Center);
Refunding Hospital
Series 1991 RB
6.70%, 11/01/04(b) AAA Aaa $1,400 $ 1,488,508
-----------------------------------------------------------------
North Little Rock (City
of);
Refunding Electric
Series 1992 A RB
6.00%, 07/01/01(b) AAA Aaa 500 509,140
-----------------------------------------------------------------
Sebastian (County of)
(Arkansas Community Jr.
College District);
Refunding and
Improvement Limited Tax
Series 1997 GO
5.10%, 04/01/06(b) -- Aaa 500 503,845
-----------------------------------------------------------------
5.20%, 04/01/07(b) -- Aaa 1,000 1,011,670
-----------------------------------------------------------------
7,577,159
-----------------------------------------------------------------
CALIFORNIA-0.70%
California Intercommunity
Hospital Financing
Authority (NorthBay
Healthcare System);
Series 1998 COP
4.60%, 11/01/08(b) A -- 660 630,439
-----------------------------------------------------------------
California State Public
Works Board Department
of Corrections (Madera
County State Prison);
Lease Series 1990 A RB
7.00%, 09/01/00 A+ A1 100 101,288
-----------------------------------------------------------------
Folsom (City of) (School
Facilities Project);
Unlimited Tax Series
1994 B GO
6.00%, 08/01/02(b) AAA Aaa 500 518,225
-----------------------------------------------------------------
Inglewood (City of)
(Daniel Freeman Hospital
Inc.);
Insured Hospital Series
1991 RB
6.50%, 05/01/01(d) NRR NRR 400 410,080
-----------------------------------------------------------------
San Francisco (City and
County of) Parking
Authority;
Parking Meter Series
1994 RB
6.75%, 06/01/05(b) AAA Aaa 500 549,045
-----------------------------------------------------------------
West End Water Treatment
and Conservation Joint
Powers Authority;
Water Facilities Series
1990 COP
7.00%, 10/01/00(d) NRR NRR 250 253,715
-----------------------------------------------------------------
2,462,792
-----------------------------------------------------------------
COLORADO-0.61%
Boulder (County of); Open
Space Capital
Improvement
Trust Fund Series 1998
RB
5.25%, 12/15/09 AA- -- 1,000 1,009,760
-----------------------------------------------------------------
|
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
COLORADO-(CONTINUED)
Highlands Ranch
Metropolitan District
#3;
Refunding Unlimited Tax
Series 1998 B GO
4.50%, 12/01/04(b) A -- $1,175 $ 1,128,341
-----------------------------------------------------------------
2,138,101
-----------------------------------------------------------------
CONNECTICUT-3.05%
Connecticut (State of)
Residential Recovery
Authority (Bridgeport
Resco Co. LP Project);
Refunding Series 1999 RB
5.00%, 01/01/07(b) AAA Aaa 1,000 997,100
-----------------------------------------------------------------
5.13%, 01/01/09(b) AAA Aaa 1,000 994,010
-----------------------------------------------------------------
Connecticut (State of)
Residential Recovery
Authority;
Connecticut System
Series 1999 A RB
5.50%, 11/15/03(b) AAA Aaa 750 766,425
-----------------------------------------------------------------
Connecticut (State of)
Special Tax Obligation
(2nd Lien Transportation
Infrastructure-1);
VRDn Series 1990 RB
3.85%, 12/01/10(c)(e) A-1+ VMIG1 2,000 2,000,000
-----------------------------------------------------------------
Connecticut (State of)
Special Tax Obligation
(JP Morgan PUTTERS);
VRD Series 114 1999 A RB
3.81%, 10/01/09(e)(f) -- VMIG1 3,830 3,830,000
-----------------------------------------------------------------
New Haven (City of);
Unlimited Tax Series
1997 GO
6.00%, 02/15/06(b) AAA Aaa 2,050 2,173,164
-----------------------------------------------------------------
10,760,699
-----------------------------------------------------------------
DELAWARE-0.22%
Delaware Transportation
Authority;
Senior Lien
Transportation System
Series 1991 RB
6.00%, 07/01/01(c)(d) AAA Aaa 750 763,800
-----------------------------------------------------------------
DISTRICT OF COLUMBIA-4.02%
District of Columbia;
Refunding Unlimited Tax
GO: Series 1992 B
6.13%, 06/01/02(c)(d) AAA Aaa 60 62,777
-----------------------------------------------------------------
Series 1993 B-1,
5.50%, 06/01/09(b) AAA Aaa 1,250 1,272,387
-----------------------------------------------------------------
Series 1993 B-2,
5.50%, 06/01/07(b) AAA Aaa 3,000 3,060,150
-----------------------------------------------------------------
Series 1999 B,
5.50%, 06/01/09(b) AAA Aaa 5,000 5,089,550
-----------------------------------------------------------------
District of Columbia
(American Association of
Advancement Science);
Series 1997 RB
5.00%, 01/01/05(b) AAA Aaa 800 802,616
-----------------------------------------------------------------
|
FS-11
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
DISTRICT OF COLUMBIA-(CONTINUED)
District of Columbia
(Gonzaga College High
School);
Series 1999 RB
5.25%, 07/01/08(b) AAA Aaa $ 500 $ 505,290
-----------------------------------------------------------------
5.25%, 07/01/09(b) AAA Aaa 510 512,183
-----------------------------------------------------------------
District of Columbia (The
Howard University
Issue);
Series 1990 A RB
6.90%, 10/01/00(d) AAA NRR 200 202,632
-----------------------------------------------------------------
District of Columbia
(Medlantic Healthcare
Group);
Hospital Refunding
Series A RB
Series 1993, 5.50%,
08/15/06(d) AAA Aaa 500 513,720
-----------------------------------------------------------------
Series 1996, 6.00%,
08/15/06(d) AAA Aaa 1,550 1,634,320
-----------------------------------------------------------------
Series 1997, 6.00%,
08/15/07(d) AAA Aaa 500 529,495
-----------------------------------------------------------------
14,185,120
-----------------------------------------------------------------
FLORIDA-2.19%
Broward (County of)
Expressway Authority;
Refunding Unlimited Tax
Series 1986 A GO
6.50%, 07/01/04 AA+ Aa2 1,000 1,001,750
-----------------------------------------------------------------
Capital Trust Agency;
MultiFamily Housing VRD
Series 1999 B RB
4.00%, 12/01/32(b)(e) A-1+ -- 2,681 2,681,000
-----------------------------------------------------------------
Miami Beach (City of)
Health Facilities
Authority (South Shore
Hospital);
Series 1998 A RB
4.80%, 08/01/08 A -- 1,000 947,410
-----------------------------------------------------------------
Palm Beach (County of)
Solid Waste Authority;
Refunding Series 1997
A RB
5.50%, 10/01/06(b) AAA Aaa 3,000 3,092,280
-----------------------------------------------------------------
7,722,440
-----------------------------------------------------------------
GEORGIA-2.76%
Albany (City of) Sewer
System;
Series 1992 RB
6.30%, 07/01/02(d) AAA Aaa 500 516,985
-----------------------------------------------------------------
Cobb-Marietta Coliseum and
Exhibit Hall Authority;
Series 1999 RB
5.00%, 10/01/09(b) AAA Aaa 250 249,437
-----------------------------------------------------------------
Floyd (County of) School
District;
Unlimited Tax Series
2000 GO
5.25%, 08/01/03 -- Aa2 2,000 2,030,880
-----------------------------------------------------------------
Fulton (County of) Water
and Sewer;
Refunding Series 1992 RB
5.75%, 01/01/02(b) AAA Aaa 715 728,771
-----------------------------------------------------------------
Georgia State;
Refunding Unlimited Tax
Series 1992 B GO
6.30%, 03/01/09 AAA Aaa 1,425 1,556,755
-----------------------------------------------------------------
Series 1993 E GO
5.50%, 07/01/03 AAA Aaa 910 931,567
-----------------------------------------------------------------
|
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
GEORGIA-(CONTINUED)
Georgia State Municipal
Electric Authority;
Series 1991 V RB,
6.00%, 01/01/01(b) AAA Aaa $1,000 $ 1,012,520
-----------------------------------------------------------------
Georgia State Municipal
Electric Authority
(Project One);
Sub Series 1998 A RB
4.75%, 01/01/08(b) AAA Aaa 2,250 2,216,947
-----------------------------------------------------------------
Metropolitan Atlanta Rapid
Transportation
Authority;
Sales Tax Refunding
Series 1991 M RB
6.15%, 07/01/02 AA- A1 500 513,800
-----------------------------------------------------------------
9,757,662
-----------------------------------------------------------------
HAWAII-2.51%
Hawaii (State of);
Refunding Unlimited Tax
Series CO 1997 GO
6.00%, 03/01/07(b) AAA Aaa 5,000 5,276,750
-----------------------------------------------------------------
Hawaii (State of);
Unlimited Tax Series CA
1993 GO
5.75%, 01/01/10(b) AAA Aaa 1,000 1,039,970
-----------------------------------------------------------------
Hawaii (State of) (Kapolei
State Office Building);
Series 1998 A COP
4.50%, 05/01/09(b) AAA Aaa 2,725 2,557,194
-----------------------------------------------------------------
8,873,914
-----------------------------------------------------------------
IDAHO-0.17%
Idaho Housing Agency;
Single Family Mortgage
Sub. Series 1994 D-1 RB
5.90%, 07/01/06 -- Aa2 570 595,291
-----------------------------------------------------------------
ILLINOIS-4.48%
Chicago (City of);
Limited Tax Series 1997
GO
6.00%, 01/01/06(b) AAA Aaa 500 525,140
-----------------------------------------------------------------
Chicago (City of)
Distribution Package
Facility;
Series 1999 RB
5.25%, 01/01/05 A Baa1 2,500 2,513,325
-----------------------------------------------------------------
Chicago (City of) Midway
Airport;
Series 1996 A RB
5.30%, 01/01/08(b) AAA Aaa 1,000 1,015,770
-----------------------------------------------------------------
Chicago (City of) Public
Building Commission;
Unlimited Tax Series
1999 C GO
5.50%, 02/01/06(b) AAA Aaa 1,500 1,545,000
-----------------------------------------------------------------
Hoffman Estates Illinois
Multifamily Housing
(Park Place Apartments
Project);
Refunding Series 1996 RB
5.75%, 06/01/06(c) AAA -- 1,400 1,432,550
-----------------------------------------------------------------
|
FS-12
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
ILLINOIS-(CONTINUED)
Illinois Development
Financial Authority
(Citizens Utility
Company Project);
Series 1997 RB
4.80%, 08/01/25 A-1 -- $1,000 $ 954,030
-----------------------------------------------------------------
Illinois Educational
Facilities Authority
(MJH Educational
Assistance);
Series 1999 B RB
4.63%, 09/01/04(b)(c) AAA Aaa 350 344,732
-----------------------------------------------------------------
Illinois Health Facilities
Authority (Alexian
Brothers Health System);
Series 1997 A RB
5.00%, 01/01/06(b) AAA Aaa 1,000 999,920
-----------------------------------------------------------------
Illinois Health Facilities
Authority (Children's
Memorial Hospital);
Series 1999 A RB
5.50%, 08/15/07(b) AAA Aaa 1,580 1,611,474
-----------------------------------------------------------------
Illinois Health Facilities
Authority (Edward
Obligated Group);
Series 1997 A RB
4.90%, 02/15/08(b) AAA Aaa 835 821,590
-----------------------------------------------------------------
Illinois Health Facilities
Authority (Highland Park
Hospital);
Series 1991 B RB
5.55%, 10/01/06(b) AAA Aaa 500 513,685
-----------------------------------------------------------------
Illinois Regional
Transportation
Authority;
Series 1994 B RB
6.30%, 06/01/04(c)(d) AAA Aaa 1,000 1,070,290
-----------------------------------------------------------------
Illinois (State of)
Partners; (Departmental
Central Management
Services)
Series 1999 COP
4.90%, 07/01/08(b) AAA Aaa 1,000 989,920
-----------------------------------------------------------------
Joliet (City of)
Waterworks and Sewer;
Series 1989 RB
6.95%, 01/01/01(b) AAA Aaa 250 254,837
-----------------------------------------------------------------
McHenry (County of) School
District #47 (Crystal
Lake);
Unlimited Tax Series
1999 GO
5.13%, 02/01/10(b) -- Aaa 1,250 1,245,612
-----------------------------------------------------------------
15,837,875
-----------------------------------------------------------------
INDIANA-3.04%
Hamilton (County of);
Optional Income Tax
Revenue Series 1998 RB
5.00%, 07/10/08(b) AAA Aaa 1,095 1,089,065
-----------------------------------------------------------------
Indiana Health Facilities
Financing Authority
(Charity Obligated
Group);
VRD Series 1997 D RB
5.00%, 11/01/07(c)(d)(e) NRR NRR 3,260 3,246,667
-----------------------------------------------------------------
Indiana Municipal Power
Agency (Power Supply
System);
Refunding Special
Obligation 1st-Crossover
Series 1998 B RB
4.80%, 01/01/09(b) AAA Aaa 2,000 1,936,280
-----------------------------------------------------------------
|
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
INDIANA-(CONTINUED)
Indiana Transportation
Finance Authority;
Airport
Facilities Lease Series
1992 A RB
6.00%, 11/01/01 A+ A1 $ 500 $ 509,190
-----------------------------------------------------------------
Indiana Transportation
Finance Authority;
Highway Series 1993 A RB
5.50%, 06/01/07(b) AAA Aaa 1,000 1,028,480
-----------------------------------------------------------------
Indianapolis (City of);
Local Public Improvement
Series 1999 D RB
5.10%, 01/01/09 AAA Aaa 425 425,561
-----------------------------------------------------------------
Indianapolis (City of);
Refunding Local Public
Improvement Series 1998
A RB
5.50%, 02/01/08 AAA Aaa 1,000 1,029,360
-----------------------------------------------------------------
Warren (City of)
Independent School
Building Corp;
Refunding First Mortgage
Series 1998 RB
4.50%, 01/05/03(b) AAA Aaa 1,500 1,484,625
-----------------------------------------------------------------
10,749,228
-----------------------------------------------------------------
IOWA-1.01%
Des Moines (City of);
Unlimited Tax Series
1999 A GO
4.80%, 06/01/08 AA+ Aa2 775 761,623
-----------------------------------------------------------------
Muscatine (City of);
Refunding Electric
Series 1986 RB
5.00%, 01/01/08 A A3 2,855 2,813,403
-----------------------------------------------------------------
3,575,026
-----------------------------------------------------------------
KANSAS-0.91%
Burlington (City of)
Environmental
Improvement (Kansas City
Power and Light Co.
Project);
Refunding Series 1998
D RB
4.35%, 09/01/01(c) A1 A2 1,250 1,240,063
-----------------------------------------------------------------
4.50%, 09/01/03(c) A1 A2 2,000 1,956,140
-----------------------------------------------------------------
3,196,203
-----------------------------------------------------------------
KENTUCKY-1.20%
Carrollton and Henderson
Public Energy Authority;
Gas Series 1998 B RB
4.20%, 01/01/06(b) AAA Aaa 1,000 925,870
-----------------------------------------------------------------
Kentucky State Property
and Buildings Commission
(Project #64);
Series 1999 RB
5.13%, 05/01/09(b) AAA Aaa 1,000 1,000,320
-----------------------------------------------------------------
|
FS-13
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
KENTUCKY-(CONTINUED)
Kentucky State Turnpike
Authority (Economic
Development Road
Revitalization
Projects);
7.13%, Series 1990 RB
05/15/00(c)(d) AAA Aaa $ 260 $ 264,766
-----------------------------------------------------------------
5.50%, Refunding Series
1993 RB 07/01/07(b) AAA Aaa 1,000 1,028,750
-----------------------------------------------------------------
Louisville and Jefferson
(County of) Metro Sewer
District (Sewer and
Drain System);
Series 1999 A RB
5.13%, 05/15/10(b) AAA Aaa 1,000 997,990
-----------------------------------------------------------------
4,217,696
-----------------------------------------------------------------
LOUISIANA-2.58%
Jefferson Parish School
Board;
Sales and Use Tax Series
1995 RB
6.00%, 02/01/04(b) AAA Aaa 1,720 1,788,731
-----------------------------------------------------------------
Louisiana (State of);
Unlimited Tax Series
1993 A GO
6.00%, 04/15/07(b) AAA Aaa 5,000 5,275,000
-----------------------------------------------------------------
Louisiana (State of)
Offshore Terminal
Authority (Loop, Inc.);
Refunding Deepwater Port
1st Stage Series 1992 RB
6.00%, 09/01/01 A A3 1,000 1,011,600
-----------------------------------------------------------------
6.20%, 09/01/03 A A3 1,000 1,027,020
-----------------------------------------------------------------
9,102,351
-----------------------------------------------------------------
MAINE-0.49%
Maine Financial Authority;
Electric
Refunding Rate
Stabilization Series
1998 A RB
4.50%, 07/01/08(b) AAA Aaa 1,830 1,733,651
-----------------------------------------------------------------
MARYLAND-0.31%
Maryland (State of)
Department of
Transportation
Conservation;
Series 1999 RB
5.00%, 12/15/09 AA Aa2 1,095 1,092,427
-----------------------------------------------------------------
MASSACHUSETTS-1.88%
Massachusetts (State of);
Refunding Limited Tax
Series 1997 A GO
5.75, 08/01/08(b) AAA Aaa 5,000 5,241,950
-----------------------------------------------------------------
Massachusetts (State of)
Health and Educational
Facilities Authority
(Eye and Ear Infirmary);
Series 1998 B RB
5.00%, 07/01/05 A -- 1,000 979,210
-----------------------------------------------------------------
New England Education Loan
Marketing Corp;
Refunding Student Loan
Senior Issue 1992 D RB
6.20%, 09/01/00 -- Aaa 400 402,908
-----------------------------------------------------------------
6,624,068
-----------------------------------------------------------------
|
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
MICHIGAN-2.52%
Dearborn (City of)
Economic Development
Corp. (Oakwood Obligated
Group);
Hospital Series 1991 ARB
6.95%, 08/15/01(c)(d) AAA Aaa $1,000 $ 1,050,750
-----------------------------------------------------------------
Detroit (City of) School
District;
Unlimited Tax Series
1992 GO
5.60%, 05/01/01 AA+ Aa2 765 775,687
-----------------------------------------------------------------
Michigan State Building
Authority;
Refunding Series 1991 IRB
6.40%, 10/01/04 AA Aa2 2,000 2,085,060
-----------------------------------------------------------------
Michigan State Hospital
Financial Authority
(Ascension Health
Credit);
Series 1999 B RB
5.20%, 11/15/05(c)(d) AA Aa2 4,000 3,988,240
-----------------------------------------------------------------
Michigan State Hospital
Financial Authority (Bay
Medical Center);
Refunding Series 1997 ARB
5.00%, 07/01/02(b) AAA Aaa 1,000 1,004,120
-----------------------------------------------------------------
8,903,857
-----------------------------------------------------------------
MINNESOTA-0.50%
Minneapolis (City of)
Special School District
#1;
Unlimited Tax Series
1997 GO
5.00%, 02/01/10 AA+ Aa1 1,000 996,860
-----------------------------------------------------------------
Southern Minnesota
Municipal Power Agency;
Unrefunded Power Supply
System Series 1992 A RB
5.60%, 01/01/04 A+ A2 745 764,094
-----------------------------------------------------------------
1,760,954
-----------------------------------------------------------------
MISSISSIPPI-0.29%
Gulfport (City of);
Refunding Unlimited Tax
Series 1998 GO
4.50%, 05/01/07(b) -- Aaa 515 495,703
-----------------------------------------------------------------
4.55%, 05/01/08(b) -- Aaa 550 526,460
-----------------------------------------------------------------
1,022,163
-----------------------------------------------------------------
MISSOURI-0.41%
Missouri (State of) Health
and Educational
Facilities Authority
(Freeman Health Systems
Project);
Hospital Series 1998 RB
4.85%, 02/15/07(b) A -- 1,000 950,490
-----------------------------------------------------------------
5.00%, 02/15/08(b) A -- 515 490,919
-----------------------------------------------------------------
1,441,409
-----------------------------------------------------------------
MONTANA-0.12%
Montana (State of) Higher
Education Assistance
Corp.;
Student Loan Series 1992
A RB
6.60%, 12/01/00 -- A 420 425,057
-----------------------------------------------------------------
|
FS-14
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
NEVADA-1.67%
Clark (County of)
Improvement District #65
(Lamb Boulevard III);
Series 1992 Special
Assessment
6.20%, 12/01/02 AA A1 $ 120 $ 123,842
-----------------------------------------------------------------
Las Vegas (City of);
Limited Tax Park Series
1999 GO
5.00%, 08/01/09(b) AAA Aaa 3,000 2,973,360
-----------------------------------------------------------------
Nevada (State of) Capital
Improvement and Cultural
Affairs;
Limited Tax Series 1999
A GO
5.00%, 02/01/10 AA Aa2 2,500 2,456,075
-----------------------------------------------------------------
Nevada (State of)
Municipal Bond Bank
Project #38-39;
Limited Tax Series 1992
A GO
6.00%, 07/01/01(d) NRR NRR 350 356,016
-----------------------------------------------------------------
5,909,293
-----------------------------------------------------------------
NEW JERSEY-0.42%
Passaic (County of)
Utilities Authority;
Solid Waste System
Series 1999 A RB
4.80%, 03/01/08(b) AAA Aaa 1,000 980,000
-----------------------------------------------------------------
Trenton (City of);
Unlimited Tax Series
1992 GO
6.10%, 08/15/02(b) AAA Aaa 500 516,905
-----------------------------------------------------------------
1,496,905
-----------------------------------------------------------------
NEW MEXICO-2.16%
Albuquerque (City of)
Joint Water and Sewer
System;
Series 1990 A RB
6.00%, 07/01/00(c)(d) AAA NRR 1,000 1,004,460
-----------------------------------------------------------------
Farmington (City of ) (San
Juan Regional Medical
Center);
Hospital Series A RB
5.00%, 06/01/01(b) -- Aaa 1,015 1,019,456
-----------------------------------------------------------------
New Mexico (State of);
Severance Tax Series
1999 B RB
5.00%, 07/01/06 AA Aa2 5,100 5,105,406
-----------------------------------------------------------------
Santa Fe (City of);
Series 1994 RB
5.50%, 06/01/03(d) AAA Aaa 500 510,395
-----------------------------------------------------------------
7,639,717
-----------------------------------------------------------------
NEW YORK-8.51%
Nassau (County of);
Unlimited Tax General
Improvement Series 1997
V GO
5.15%, 03/01/07(b) AAA Aaa 5,000 5,022,800
-----------------------------------------------------------------
New York (City of);
Refunding Series 1996 D
GO
5.60%, 11/01/05 A- A3 5,000 5,131,900
-----------------------------------------------------------------
|
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
NEW YORK-(CONTINUED)
New York (City of);
Unlimited Tax Series
1996 G GO
5.90%, 02/01/05 A- A3 $1,150 $ 1,191,285
-----------------------------------------------------------------
New York (City of) Transit
Authority (Metropolitan
Transportation
Authority);
Triborough Series 1999 A
COP
5.00%, 01/01/08(b) AAA Aaa 1,000 998,650
-----------------------------------------------------------------
New York (State of)
Dormitory Authority;
Mental Health Facilities
Series 1997 A RB
6.00%, 02/15/05 A A3 1,000 1,038,680
-----------------------------------------------------------------
6.00%, 08/15/07 A A3 1,775 1,865,223
-----------------------------------------------------------------
New York (State of)
Dormitory Authority
(Pace University Issue);
Series 1997 RB
6.00%, 07/01/07(b) AAA Aaa 1,275 1,349,945
-----------------------------------------------------------------
New York (State of)
Dormitory Authority
(Upstate Community
Colleges);
Series 1999 A RB
4.38%, 07/01/09(b) AAA Aaa 1,000 934,340
-----------------------------------------------------------------
New York (State of) Local
Government Assistance
Corp;
Refunding Series 1996 A
RB
5.13%, 04/01/10(b) AAA Aaa 5,000 4,986,450
-----------------------------------------------------------------
New York (State of)
Medical Care Facilities
(Hospital and Nursing
Home);
Financial Agency Series
1995 A RB
5.60%, 02/15/05(b) AAA -- 475 474,762
-----------------------------------------------------------------
New York (State of)
Tollway Authority;
General Series 1997 D RB
5.40%, 01/01/10 AA- Aa3 5,000 5,100,750
-----------------------------------------------------------------
Triborough Bridge and
Tunnel Authority;
General Purpose Series
1994 A RB
4.80%, 01/01/08 A+ Aa3 2,000 1,973,180
-----------------------------------------------------------------
30,067,965
-----------------------------------------------------------------
NORTH CAROLINA-4.39%
Coastal Regional Solid
Waste Management
Authority (Solid Waste
Disposal System);
Refunding Series 1999 RB
4.00%, 06/01/04(b) AAA Aaa 1,775 1,688,078
-----------------------------------------------------------------
Charlotte (City of);
Refunding Unlimited Tax
Series 1998 GO
5.25%, 02/01/10 AAA Aaa 5,000 5,080,200
-----------------------------------------------------------------
North Carolina (State of);
Unlimited Tax Series
1997 A GO
5.10%, 03/01/04 AAA Aaa 2,500 2,530,750
-----------------------------------------------------------------
|
FS-15
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
NORTH CAROLINA-(CONTINUED)
North Carolina (State of)
Eastern Municipal Power
Agency (Power System);
Refunding Series 1993
B RB
7.00%, 01/01/08(b) AAA Aaa $1,000 $ 1,114,720
-----------------------------------------------------------------
North Carolina (State of)
(Public Improvement);
Unlimited Tax Series
1999 A GO
5.25%, 03/01/10 AAA Aaa 5,000 5,080,850
-----------------------------------------------------------------
15,494,598
-----------------------------------------------------------------
NORTH DAKOTA-0.48%
Burleigh (County of)
Health Care (Medcenter
One Inc.);
Refunding Series 1999 RB
5.25%, 05/01/09(b) AAA Aaa 1,695 1,699,780
-----------------------------------------------------------------
OHIO-2.47%
Franklin (County of);
Limited Tax Series 1991
GO
6.30%, 12/01/01(c)(d) NRR NRR 1,500 1,567,890
-----------------------------------------------------------------
Greene (County of) Water
System;
Series 1996 A RB
5.45%, 12/01/06(b) AAA Aaa 585 603,714
-----------------------------------------------------------------
Hilliard (City of) School
District;
Refunding Unlimited Tax
Series 1992 GO
6.05%, 12/01/00(b) AAA Aaa 500 506,050
-----------------------------------------------------------------
6.15%, 12/01/01(b) AAA Aaa 250 256,733
-----------------------------------------------------------------
Lucas (County of) (St.
Vincent's Medical
Center);
Hospital Improvement
Series 1990 A RB
6.75%, 08/15/20(b) AAA Aaa 2,000 2,055,060
-----------------------------------------------------------------
Montgomery (County of)
(Catholic Health
Initiatives);
Series 2000 RB
5.25%, 12/01/03 AA- Aa3 1,745 1,757,547
-----------------------------------------------------------------
Ohio (State of)
(Elementary & Secondary
Education Facilities);
Special Obligation
Series 1997 A RB
5.10%, 12/01/05 AA- Aa2 1,500 1,518,255
-----------------------------------------------------------------
Portage (County of)
(Robinson Memorial
Hospital);
Hospital Series 1999 RB
5.15%, 11/15/08(b) AAA Aaa 465 467,223
-----------------------------------------------------------------
8,732,472
-----------------------------------------------------------------
OKLAHOMA-1.41%
Grady (County of)
Industrial Authority
(Correctional
Facilities);
Series 1999 RB
5.38%, 11/01/09(b) AAA Aaa 360 369,054
-----------------------------------------------------------------
Mustang (City of)
Improvement Authority;
Utility Series 1999 RB
5.25%, 10/01/09(b) -- Aaa 1,130 1,147,718
-----------------------------------------------------------------
|
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
OKLAHOMA-(CONTINUED)
Norman (City of) Regional
Hospital Authority;
Refunding Series 1996
A RB
5.20%, 09/01/06(b) AAA Aaa $ 310 $ 313,856
-----------------------------------------------------------------
5.30%, 09/01/07(b) AAA Aaa 1,090 1,106,612
-----------------------------------------------------------------
Oklahoma (State of)
Capitol Improvement
Authority;
State Facilities Series
1999 A RB
5.00%, 09/01/09(b) AAA Aaa 1,000 996,990
-----------------------------------------------------------------
Okmulgee (County of)
Governmental Building
(Authority Sales Tax);
1st Mortgage Series 2000
RB
5.60%, 03/01/10(b) -- Aaa 1,000 1,040,820
-----------------------------------------------------------------
4,975,050
-----------------------------------------------------------------
OREGON-1.17%
Cow Creek Band (Umpqua
Tribe of Indians);
Series 1998 B RB
4.25%, 07/01/03(b) AAA Aaa 480 470,021
-----------------------------------------------------------------
Grande Ronde (City of)
Community Confederated
Tribes (Governmental
Facilities and
Infrastructure);
Unlimited Tax Series
1997 GO
5.00%, 12/01/07(b) AAA Aaa 1,145 1,148,538
-----------------------------------------------------------------
Portland (City of);
Sewer System Series 1994
A RB
5.45%, 06/01/03 A+ A1 1,065 1,088,728
-----------------------------------------------------------------
5.55%, 06/01/04 A+ A1 500 512,995
-----------------------------------------------------------------
Salem (City of) Hospital
Facilities Authority
(Salem Hospital);
Series 1998 RB
4.20%, 08/15/08 AA- -- 1,000 904,740
-----------------------------------------------------------------
4,125,022
-----------------------------------------------------------------
PENNSYLVANIA-4.81%
Delaware (State of) River
Port Authority;
Series 1999 RB
5.50%, 01/01/10(b) AAA Aaa 2,340 2,409,124
-----------------------------------------------------------------
Lackawanna (County of);
Unlimited Tax Series
1999 A GO
4.40%, 01/01/09(b) AAA Aaa 510 477,299
-----------------------------------------------------------------
Lehigh (County of) General
Purpose Authority
(Kidspeace Obligation
Group);
Series 1998 RB
5.70%, 11/01/09(b) A -- 1,000 1,002,880
-----------------------------------------------------------------
Pennsylvania (State of);
Series 2000 RB
5.50%, 01/15/08(b) AAA Aaa 1,000 1,031,160
-----------------------------------------------------------------
|
FS-16
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
PENNSYLVANIA-(CONTINUED)
Pennsylvania (State of)
Higher Educational
Facilities Authority;
Series 1999 RB
4.40%, 07/01/07(b) AAA Aaa $1,595 $ 1,515,904
-----------------------------------------------------------------
4.50%, 07/01/08(b) AAA Aaa 1,525 1,450,839
-----------------------------------------------------------------
4.55%, 07/01/09(b) AAA Aaa 750 711,030
-----------------------------------------------------------------
Pennsylvania (State of)
Higher Educational
Facilities Authority
(UPMC Health System);
Series A RB
5.00%, 08/01/09(b) AAA Aaa 4,000 3,923,840
-----------------------------------------------------------------
Philadelphia (City of)
Hospitals and Higher
Educational Facilities
Authority (St. Agnes
Medical Center);
Refunding Hospital
Series 1996 A RB
5.00%, 07/01/05(b) AAA Aaa 865 863,357
-----------------------------------------------------------------
Philadelphia (City of)
School District;
Refunding Unlimited Tax
Series 1999 D GO
5.50%, 03/01/08(b) AAA Aaa 3,500 3,601,430
-----------------------------------------------------------------
16,986,863
-----------------------------------------------------------------
PUERTO RICO-0.29%
Puerto Rico Municipal
Financial Agency;
Unlimited Tax Series
1999 A GO
5.50%, 08/01/09(b) AAA Aaa 1,000 1,037,570
-----------------------------------------------------------------
RHODE ISLAND-0.29%
Rhode Island (State of);
Refunding Unlimited Tax
Series 1992 GO
6.10%, 06/15/03(b) AAA Aaa 1,000 1,038,290
-----------------------------------------------------------------
SOUTH CAROLINA-2.84%
Charleston (County of)
(Care Alliance Health
Services);
Series 1999 A RB
4.40%, 08/15/08(b) AAA Aaa 3,000 2,787,930
-----------------------------------------------------------------
Medical University of
South Carolina;
Hospital Facilities
Series 1999 RB
5.50%, 07/01/09 A A3 1,000 965,180
-----------------------------------------------------------------
Piedmont (City of)
Municipal Power Agency;
Refunding Series 1996
B RB
5.25%, 01/01/08(b) AAA Aaa 4,000 4,042,720
-----------------------------------------------------------------
South Carolina (State of)
Public Service
Authority;
Series 1999 A RB
5.50%, 01/01/10(b) AAA Aaa 1,000 1,028,000
-----------------------------------------------------------------
|
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
SOUTH CAROLINA-(CONTINUED)
South Carolina (State of)
Transportation
Infrastructure;
Series 1999 A RB
5.50%, 01/01/09(b) -- Aaa $1,180 $ 1,215,152
-----------------------------------------------------------------
10,038,982
-----------------------------------------------------------------
SOUTH DAKOTA-0.56%
Rapid City (City of);
Sales Tax Series 1995
A RB
5.60%, 06/01/05(b) AAA Aaa 255 263,262
-----------------------------------------------------------------
South Dakota Health and
Educational Facility
(McKennan Hospital);
Refunding Series 1996 RB
5.40%, 07/01/06(b) AAA Aaa 1,680 1,706,510
-----------------------------------------------------------------
1,969,772
-----------------------------------------------------------------
TENNESSEE-1.71%
Johnson (City of) Health
and Educational
Facilities Board;
Refunding Hospital
Series 2000 A RB
5.50%, 07/01/05(b) -- Aaa 1,975 2,017,127
-----------------------------------------------------------------
Nashville and Davidson
(County of) Health and
Educational Facilities
Board (Welch Bend
Apartments);
Multifamily Housing
Series 1996 A RB
5.50%, 01/01/07(c)(d) AAA -- 1,000 1,010,610
-----------------------------------------------------------------
Nashville and Davidson
(County of) Metropolitan
Government Health and
Educational Facilities
Board (Meharry Medical
College);
Series 1979 RB
7.88%, 12/01/04(d) NRR Aaa 785 832,500
-----------------------------------------------------------------
Tennergy Corp.;
Gas Series 1999 RB
4.13%, 06/01/09(b) AAA Aaa 1,000 849,160
-----------------------------------------------------------------
Tennessee Housing
Development Agency;
Mortgage Financing
Refunding Series 1993
A RB
5.65%, 01/01/07 A+ A1 1,325 1,341,629
-----------------------------------------------------------------
6,051,026
-----------------------------------------------------------------
TEXAS-14.49%
Arlington (City of)
Independent School
District;
Unlimited Tax Series
2000 GO
5.25%, 02/15/08(b) -- Aaa 1,000 1,014,070
-----------------------------------------------------------------
Bexar (County of) Housing
Finance Authority
(Fountainhead Apts.);
Refunding VRD
Multifamily Series 1996
RB
3.90%, 09/15/26(e) A-1+ -- 918 918,000
-----------------------------------------------------------------
|
FS-17
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
TEXAS-(CONTINUED)
Brownsville (City of)
Utility System;
Refunding Series 1995 RB
5.00%, 09/01/02(b) AAA Aaa $2,810 $ 2,833,913
-----------------------------------------------------------------
Canadian River Municipal
Water Authority (Bureau
of Reclamation Project);
Refunding Texas Contract
Series 1999 RB
4.35%, 10/01/09(b) NRR Aaa 615 568,242
-----------------------------------------------------------------
Canadian River Municipal
Water Authority
(Conjunctive Use
Groundwater);
Refunding Texas Contract
Series 1999 RB
5.00%, 02/15/10(b) AAA Aaa 2,655 2,626,353
-----------------------------------------------------------------
Central Texas College
District;
Building Series 1999 RB
4.63%, 05/15/09(b) AAA Aaa 1,135 1,086,195
-----------------------------------------------------------------
Cleburne (City of)
Waterworks and Sewer;
Series 1999 RB
5.50%, 02/15/10(b) AAA Aaa 1,395 1,419,594
-----------------------------------------------------------------
Comal County Industrial
Development Authority
(Coleman Company, Inc.
Project);
Series 1980 IDR
9.25%, 08/01/00(d) NRR NRR 170 172,686
-----------------------------------------------------------------
Conroe (City of)
Independent School
District;
Unlimited School Tax
Series 1991 GO
7.38%, 02/01/01(b) -- Aaa 115 117,863
-----------------------------------------------------------------
Dallas (City of)
Waterworks and Sewer
System;
Series 2000 RB
5.50%, 10/01/09 AA Aa2 1,500 1,543,545
-----------------------------------------------------------------
Garland (City of)
Certificates Obligation;
Limited Tax Series 2000
GO
5.25%, 02/15/09 AA Aa2 1,940 1,959,031
-----------------------------------------------------------------
Gatesville Independent
School District;
Unlimited Tax School
Refunding and Building
Series 1995 GO
5.80%, 02/01/03(b) -- Aaa 485 498,265
-----------------------------------------------------------------
Harris (County of) (Port
of Houston Authority);
Series 1977 RB
5.75%, 05/01/02 A A2 805 809,387
-----------------------------------------------------------------
5.75%, 05/01/02(b) AAA Aaa 810 814,909
-----------------------------------------------------------------
Harris County Health
Facilities Development
Corp. (Christus Health);
Series 1999 A RB
5.38%, 07/01/08(b) AAA Aaa 1,000 1,012,190
-----------------------------------------------------------------
|
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
TEXAS-(CONTINUED)
Harris County Health
Facilities Development
Corp. (Memorial Hermann
Hospital System
Project);
Hospital Series 1998 RB
5.50%, 06/01/09(b) AAA Aaa $2,500 $ 2,555,725
-----------------------------------------------------------------
Harris County Health
Facilities Development
Corp. (Memorial Hospital
System Project);
Hospital Series 1992 RB
6.70%, 06/01/00(d) NRR NRR 1,000 1,003,870
-----------------------------------------------------------------
Harris County Health
Facilities Development
Corp. (School Health
Care System Project);
Series 1997 B RB
5.10%, 07/01/06(d) NRR NRR 1,000 1,006,820
-----------------------------------------------------------------
Harris County Health
Facilities Development
Corp. (Texas Children's
Hospital Project);
Series 1999 A RB
5.00%, 10/01/09 AA Aa2 1,920 1,844,045
-----------------------------------------------------------------
Houston (City of) (Public
Improvement);
Refunding Limited Tax
Series 1998 A GO
5.00%, 03/01/07 AA- Aa3 1,250 1,251,388
-----------------------------------------------------------------
Katy (City of) Independent
School District;
Unlimited Tax Series
1999 A GO
5.20%, 02/15/10(b) AAA Aaa 1,285 1,291,258
-----------------------------------------------------------------
Keller (City of)
Independent School
District;
Series 1994 COP
5.75%, 08/15/01(b) AAA Aaa 700 711,291
-----------------------------------------------------------------
Kerrville (City of);
Refunding Electric
Series 1991 RB
6.38%, 11/01/01(b) AAA Aaa 185 190,200
-----------------------------------------------------------------
Killeen (City of);
Refunding Limited Tax
Series 1999 GO
4.30%, 08/01/09(b) AAA Aaa 1,170 1,076,061
-----------------------------------------------------------------
La Joya Independent School
District;
Unlimited Tax Series
1998 GO
5.38%, 02/15/10(b) AAA Aaa 1,535 1,558,977
-----------------------------------------------------------------
La Marque Independent
School District;
Unlimited Tax Series
1992 GO
7.50%, 08/15/02(b) AAA Aaa 750 796,867
-----------------------------------------------------------------
Lubbock (City of);
Series 1999 COP
5.00%, 02/15/10 AA Aa2 680 673,180
-----------------------------------------------------------------
Lubbock Health Facility
Development Corp.
(Methodist Hospital);
Series 1993 B RB
5.40%, 12/01/05(d) AAA Aaa 500 512,430
-----------------------------------------------------------------
|
FS-18
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
TEXAS-(CONTINUED)
Plano (City of);
Unlimited Tax Series
2000 GO
5.25%, 09/01/06 AAA Aaa $ 600 $ 610,410
-----------------------------------------------------------------
5.13%, 09/01/07 AAA Aaa 535 539,729
-----------------------------------------------------------------
Plano (City of)
Independent School
District;
Unlimited Tax Series
1994 GO
5.80%, 02/15/05(b) AAA Aaa 2,025 2,091,866
-----------------------------------------------------------------
San Antonio (City of)
Electric and Gas;
Refunding Series 1998
A RB
5.25%, 02/01/10 AA Aa1 8,500 8,525,245
-----------------------------------------------------------------
Southlake (City of)
(Waterworks and
Sewer-Certificates
Obligation);
Limited Tax Series 2000
A GO
5.40%, 02/15/09(b) AAA Aaa 250 253,142
-----------------------------------------------------------------
5.45%, 02/15/10(b) AAA Aaa 235 238,281
-----------------------------------------------------------------
Tarrant (County of)
Housing Finance Corp.
(Arbors On the Park II);
Multifamily Housing
Series 1990 RB
5.05%, 12/01/07 AAA -- 1,440 1,420,128
-----------------------------------------------------------------
Temple (City of);
Refunding Limited Tax
Series 1992 GO
5.80%, 02/01/01(b) AAA Aaa 250 253,182
-----------------------------------------------------------------
Texas Municipal Power
Agency;
Series 1992 RB
5.75%, 09/01/02(c)(d) AAA Aaa 1,000 1,022,890
-----------------------------------------------------------------
Texas (State of) Turnpike
Authority (Addison
Airport Toll Tunnel
Project);
Dallas North Tollway
Series 1994 RB
6.30%, 01/01/05(b) AAA Aaa 500 529,670
-----------------------------------------------------------------
University of Texas
(Financing System);
Series 1996 B RB,
4.80%, 08/15/09 AAA Aa1 1,650 1,606,242
-----------------------------------------------------------------
Series 1999 B RB,
5.50%, 08/15/09 AAA Aa1 1,000 1,027,910
-----------------------------------------------------------------
Weatherford (City of)
Utility System;
Refunding and
Improvement Series 1999
RB
4.35%, 09/01/09(b) AAA Aaa 1,275 1,179,490
-----------------------------------------------------------------
51,164,540
-----------------------------------------------------------------
UTAH-1.55%
Intermountain Power Agency
(Utah Power Supply);
Refunding Series 1997
B RB
6.00%, 07/01/07(b) AAA Aaa 1,000 1,054,440
-----------------------------------------------------------------
Salt Lake City (City of);
Unlimited Tax Series
1999 GO
5.25%, 06/15/09 AAA Aaa 900 912,375
-----------------------------------------------------------------
|
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
UTAH-(CONTINUED)
Utah (State of) Associated
Municipal Power System
(Hunter Project);
Refunding Series 1994 RB
5.00%, 07/01/09(b) AAA Aaa $1,500 $ 1,477,005
-----------------------------------------------------------------
Utah (State of) Board of
Regents (Utah
University);
Refunding Hospital
Series 1997 RB
5.00%, 08/01/02(b) AAA Aaa 1,000 1,005,810
-----------------------------------------------------------------
Utah (State of) Housing
Finance Agency;
Single Family Mortgage
Series 1999 E-II RB
4.95%, 07/01/06 AAA Aaa 250 248,525
-----------------------------------------------------------------
5.05%, 07/01/07 AAA Aaa 250 249,980
-----------------------------------------------------------------
Utah (State of) (Board of
Water Resource Program);
Revolving Fund
Recapitalization Series
1992 B RB
6.10%, 04/01/02 AA -- 500 514,290
-----------------------------------------------------------------
5,462,425
-----------------------------------------------------------------
VIRGINIA-0.81%
Norfolk (City of)
Redevelopment and
Housing Authority
(Tidewater Community
College Campus);
Educational Facility
Series 1995 RB
5.30%, 11/01/04 AA A2 535 546,503
-----------------------------------------------------------------
5.40%, 11/01/05 AA A2 500 513,515
-----------------------------------------------------------------
Portsmouth (City of);
Refunding Unlimited Tax
Port Improvement Series
1992 GO
6.40%, 11/01/03 AA- A3 300 312,927
-----------------------------------------------------------------
Portsmouth (City of);
Refunding Unlimited Tax
Public Utility Series
1992 GO
5.90%, 11/01/01 AA- A3 450 459,306
-----------------------------------------------------------------
Virginia (State of) Public
School Authority;
Refunding School Funding
Series 1997 I RB
5.25%, 08/01/07 AA+ Aa1 1,000 1,019,400
-----------------------------------------------------------------
2,851,651
-----------------------------------------------------------------
WASHINGTON-3.36%
King (County of);
Sewer Series 1994 A RB
5.80%, 01/01/04(c)(d) NRR Aaa 1,000 1,048,760
-----------------------------------------------------------------
Lewis (County of) Public
Utility District #1
(Cowlitz Falls
Hydroelectronics);
Refunding Series 1993 RB
5.38%, 10/01/08 AA- Aa1 1,000 1,013,490
-----------------------------------------------------------------
Seattle (City of);
Refunding Limited Tax
Series GO
6.40%, 10/01/01(d) NRR NRR 250 256,403
-----------------------------------------------------------------
|
FS-19
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
WASHINGTON-(CONTINUED)
Seattle (Port of);
Series 1992 A RB
6.00%, 11/01/01 AA- Aa3 $ 500 $ 510,480
-----------------------------------------------------------------
Snohomish (County of)
Public Utilities
District #1;
Electric Generation
System Series 1993 RB
5.70%, 01/01/06(b) AAA Aaa 4,000 4,152,360
-----------------------------------------------------------------
Spokane (City of);
Unlimited Tax Series
1999 B GO
5.40%, 01/01/10 AAA Aaa 2,075 2,103,635
-----------------------------------------------------------------
Washington (State of);
Refunding Unlimited Tax
Series 1999 R 2000A GO
5.50%, 01/01/08 AA+ Aa1 1,135 1,166,553
-----------------------------------------------------------------
Washington (State of)
Public Power Supply
System (Nuclear Project
#1);
Refunding Series 1993
B RB
5.15%, 07/01/02 AA- Aa1 610 612,379
-----------------------------------------------------------------
Washington (State of)
Public Power Supply
System (Nuclear Project
#2);
Refunding Series 1997
B RB
5.50%, 07/01/06 AA- Aa1 1,000 1,017,320
-----------------------------------------------------------------
11,881,380
-----------------------------------------------------------------
|
RATING(a) PAR
S&P MOODY'S (000) MARKET VALUE
WISCONSIN-1.85%
Oak Creek (City of);
Waterworks Systems
Series 1998 BAN
3.90%, 09/01/00 -- MIG1 $1,000 $ 998,340
-----------------------------------------------------------------
Wisconsin (State of)
Health & Educational
Facilities Authority;
(Benedictine Health);
Health Care Series 1999
B RB
5.00%, 02/15/09(b) AAA Aaa 1,185 1,167,438
-----------------------------------------------------------------
Wisconsin (State of)
Health & Educational
Facilities Authority
(Charity Obligation
Group);
Hospital Series 1997
D RB
4.90%, 11/01/05(c)(d) NRR NRR 2,145 2,137,686
-----------------------------------------------------------------
Wisconsin (State of)
Health & Educational
Facilities Authority
(Marshfield Clinic);
Series 1997 RB
5.20%, 02/15/07(b) AAA Aaa 2,210 2,228,873
-----------------------------------------------------------------
6,532,337
-----------------------------------------------------------------
TOTAL INVESTMENTS-100.49%
(Cost $355,628,444) 354,848,274
-----------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(0.49)% (1,718,339)
-----------------------------------------------------------------
NET ASSETS-100.00% $353,129,935
=================================================================
|
Investment Abbreviations:
BAN - Bond Anticipation Notes COP - Certificates of Participation GO - General Obligation Bonds IDR - Industrial Development Revenue Bonds NRR - Not re-rated |
PUTTERS - Putable Tax Exempt Receipts
RB - Revenue Bonds
VRD - Variable Rate Demand
Notes to Schedule of Investments:
(a) Ratings assigned by Moody's Investors Service, Inc. ("MOODY'S") and Standard & Poor's Corporation ("S&P"). NRR indicates a security that is not re-rated subsequent to funding of an escrow fund (consisting of U.S. Treasury obligations); this funding is pursuant to an advance refunding of the security. Ratings are not covered by Independent Auditors' Report.
(b) Secured by bond insurance provided by one of the following companies:
AMBAC, FGIC, FSA or MBIA.
(c) Subject to an irrevocable call or mandatory put by the issuer. Market value and maturity date reflect such call or put.
(d) Secured by an escrow fund of U.S. Treasury obligations.
(e) Demand security; payable on demand by the Fund at specified time intervals no greater than thirteen months. Interest rate is redetermined periodically. Rate shown is the rate in effect on 03/31/00.
(f) The fund may invest in synthetic municipal instruments the value of and return on which are derived from underlying securities. The types of synthetic municipal instruments in which the Fund may invest include variable rate instruments. These instruments involve the deposit into a trust of one or more long-term tax-exempt bonds or notes ("Underlying Bonds"), and the sale of certificates evidencing interests in the trust to investors such as the Fund. The trustee receives the long-term fixed rate interest payments on the Underlying Bonds, and pays certificate holders short-term floating or variable interest rates which are reset periodically. A "variable rate trust certificate" evidences an interest in a trust entitling the certificate holder to receive variable rate interest based on prevailing short-term interest rates and also typically providing the certificate holder with the conditional right to put its certificate at par value plus accrued interest. Because synthetic municipal instruments involve a trust and a third party conditional put feature, they involve complexities and potential risks that may not be present where a municipal security is owned directly.
See Notes to Financial Statements.
FS-20
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2000
ASSETS:
Investments, at market value (cost
$355,628,444) $ 354,848,274
---------------------------------------------------------
Receivables for:
Capital stock sold 3,853,280
---------------------------------------------------------
Interest 4,854,702
---------------------------------------------------------
Investment for deferred compensation plan 30,690
---------------------------------------------------------
Other assets 57,258
---------------------------------------------------------
Total assets 363,644,204
---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 5,797,993
---------------------------------------------------------
Capital stock reacquired 4,076,984
---------------------------------------------------------
Dividends 439,277
---------------------------------------------------------
Deferred compensation plan 30,690
---------------------------------------------------------
Accrued administrative services fees 6,186
---------------------------------------------------------
Accrued advisory fees 87,538
---------------------------------------------------------
Accrued transfer agent fees 7,793
---------------------------------------------------------
Accrued operating expenses 67,808
---------------------------------------------------------
Total liabilities 10,514,269
---------------------------------------------------------
Net assets applicable to shares
outstanding $ 353,129,935
=========================================================
CAPITAL STOCK, $0.001 PAR VALUE PER
SHARE:
Authorized 1,000,000,000
---------------------------------------------------------
Outstanding 32,987,141
=========================================================
Net asset value and redemption price per
share $ 10.71
=========================================================
Offering price per share:
(Net asset value of $10.71 divided
by 99.00%) $ 10.82
=========================================================
|
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2000
INVESTMENT INCOME:
Interest income $ 16,773,430
---------------------------------------------------------
EXPENSES:
Advisory fees 1,032,771
---------------------------------------------------------
Administrative services fees 68,350
---------------------------------------------------------
Custodian fees 17,939
---------------------------------------------------------
Transfer agent fees 76,610
---------------------------------------------------------
Registration and filing fees 105,761
---------------------------------------------------------
Directors' fees 8,541
---------------------------------------------------------
Interest 4,794
---------------------------------------------------------
Other 134,074
---------------------------------------------------------
Total expenses 1,448,840
---------------------------------------------------------
Less: Expenses paid indirectly (3,721)
---------------------------------------------------------
Net expenses 1,445,119
---------------------------------------------------------
Net investment income 15,328,311
---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES:
Net realized gain (loss) on sales of
investment securities (3,662,707)
---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of investment securities (8,785,558)
---------------------------------------------------------
Net gain (loss) on investment securities (12,448,265)
---------------------------------------------------------
Net increase in net assets resulting from
operations $ 2,880,046
=========================================================
|
See Notes to Financial Statements.
FS-21
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED MARCH 31, 2000 AND 1999
2000 1999
--------------- ------------
OPERATIONS:
Net investment income $ 15,328,311 $ 9,178,235
---------------------------------------------------------------------------------------------
Net realized gain (loss) on sales of investment securities (3,662,707) 409,752
---------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities (8,785,558) 966,924
---------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 2,880,046 10,554,911
---------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (15,337,130) (9,191,201)
---------------------------------------------------------------------------------------------
Distributions in excess of net investment income (293,541) (47,638)
---------------------------------------------------------------------------------------------
Net increase from capital stock transactions 121,381,091 42,214,423
---------------------------------------------------------------------------------------------
Net increase in net assets 108,630,466 43,530,495
---------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 244,499,469 200,968,974
---------------------------------------------------------------------------------------------
End of period $353,129,935 $244,499,469
=============================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $358,332,424 $237,244,429
---------------------------------------------------------------------------------------------
Undistributed net investment income (36,050) (24,189)
---------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) on sales of
investment securities (4,386,269) (726,159)
---------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities (780,170) 8,005,388
---------------------------------------------------------------------------------------------
$353,129,935 $244,499,469
=============================================================================================
|
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Tax-Exempt Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Company is organized as a Maryland corporation consisting of four separate
portfolios. Matters affecting each portfolio are voted on exclusively by the
shareholders of such portfolio. The assets, liabilities and operations of each
portfolio are accounted for separately. Information presented in these financial
statements pertains only to AIM Tax-Free Intermediate Fund (the "Fund"). The
investment objective of the Fund is to generate as high a level of tax-exempt
income as is consistent with preservation of capital by investing in high
quality, intermediate-term municipal securities having a maturity of ten and
one-half years or less.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations -- Portfolio securities are valued based on market
quotations or at fair value determined by a pricing service approved by the
Company's Board of Directors, provided that securities with a demand feature
exercisable within one to seven days will be valued at par. Prices provided
by the pricing service may be determined without exclusive reliance on
quoted prices and may reflect appropriate factors such as institution-size
trading in similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, individual trading characteristics and other market
data. Portfolio securities for which prices are not provided by the pricing
service are valued at the mean between the last available bid and asked
prices, unless the Board of Directors, or persons designated by the Board of
Directors, determines that the mean between the last available bid and asked
prices does not accurately reflect the current market value of the security.
Securities for which market quotations either are not readily available or
are questionable are valued at fair value as determined in good faith by or
under the supervision of the Company's officers in a manner specifically
authorized by the Board of Directors. Notwithstanding the above, short-term
obligations with maturities of 60 days or less are valued at amortized cost.
B. Securities Transactions and Investment Income -- Securities transactions are
recorded on a trade date basis. Realized gains and losses are computed on
the basis of specific identification of the securities sold. Interest
income, adjusted for amortization of premiums and original issue discounts,
is earned from settlement date and is recorded on the accrual basis. On
March 31, 2000, undistributed net investment income was increased by
$290,499, undistributed net realized gain (loss) was increased by $2,597 and
paid-in capital was decreased by
FS-22
$293,096 as a result of differing book/tax reclassifications. Net assets of
the Fund were unaffected by the reclassifications.
C. Distributions -- It is the policy of the Fund to declare daily dividends
from net investment income. Such distributions are paid monthly.
Distributions from net realized capital gains, if any, are generally paid
annually and recorded on ex-dividend date. The Fund may elect to use a
portion of the proceeds of fund share redemptions as distributions for
federal income tax purposes.
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 $1,822,426, which expires, if not previously utilized, in
the year 2008. The Fund cannot distribute capital gains to shareholders
until the tax loss carryforwards have been utilized. In addition, the Fund
intends to invest in such municipal securities to allow it to qualify to pay
"exempt interest dividends," as defined in the Internal Revenue Code.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.30% of
the first $500 million of the Fund's average daily net assets, plus 0.25% of the
Fund's average daily net assets in excess of $500 million, but not in excess of
$1 billion, plus 0.20% of the Fund's average daily net assets in excess of $1
billion.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the year ended March 31, 2000, AIM was paid
$68,350 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agent and
shareholder services to the Fund. For the year ended March 31, 2000, AFS was
paid $45,974 for such services.
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") pursuant to which AIM Distributors
serves as the distributor for the Fund. AIM Distributors received commissions of
$54,505 from sales of capital stock during the year ended March 31, 2000. Such
commissions are not an expense of the Company. They are deducted from, and are
not included in, the proceeds from sales of capital stock.
Certain officers and directors of the Company are officers of AIM, AFS and AIM
Distributors.
During the year ended March 31, 2000, the Fund paid legal fees of $3,903 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Directors. A member of that firm is a director of the Company.
NOTE 3-INDIRECT EXPENSES
During the year ended March 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $3,721 under an expense offset arrangement. The effect of the above arrangement resulted in a reduction of the Fund's total expenses of $3,721 during the year ended March 31, 2000.
NOTE 4-DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to directors who are not an "interested person" of AIM. The Company may invest directors' fees, if so elected by a director, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to the lesser of (i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the line of credit may borrow on a first come, first served basis. During the year ended March 31, 2000, the Fund borrowed minimal amounts under the line of credit agreement. Interest expense for the Fund for the year ended March 31, 2000 was $4,794. The funds which are parties to the line of credit are charged a commitment fee of 0.09% on the unused balance of the committed line. The commitment fee is allocated among such funds based on their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold during the year ended March 31, 2000 was $288,681,681 and
$160,430,807, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
as of March 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $ 2,441,517 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (3,221,687) --------------------------------------------------------- Net unrealized appreciation (depreciation) of investment securities $ (780,170) ========================================================= Investments have the same cost for tax and financial statement purposes. |
FS-23
NOTE 7-CAPITAL STOCK
Changes in capital stock outstanding during the years ended March 31, 2000 and 1999 were as follows:
2000 1999
--------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ---------- ------------
Sold 36,588,213 $ 396,750,803 11,532,083 $128,215,321
---------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends 1,010,690 10,900,646 488,076 5,429,472
---------------------------------------------------------------------------------------------------------------------
Reacquired (26,587,941) (286,270,358) (8,238,608) (91,430,370)
---------------------------------------------------------------------------------------------------------------------
11,010,962 $ 121,381,091 3,781,551 $ 42,214,423
=====================================================================================================================
|
NOTE 8-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of capital stock outstanding during each of the years in the five-year period ended March 31, 2000.
2000 1999 1998 1997 1996
-------- -------- -------- -------- -------
Net asset value, beginning of period $ 11.13 $ 11.05 $ 10.73 $10.79 $10.67
------------------------------------------------------------ -------- -------- -------- -------- -------
Income from investment operations:
Net investment income 0.48 0.49 0.50 0.50 0.52
------------------------------------------------------------ -------- -------- -------- -------- -------
Net gains (losses) on securities (both realized and
unrealized) (0.41) 0.08 0.32 (0.04) 0.12
------------------------------------------------------------ -------- -------- -------- -------- -------
Total from investment operations 0.07 0.57 0.82 0.46 0.64
------------------------------------------------------------ -------- -------- -------- -------- -------
Distributions to shareholders:
From net investment income (0.48) (0.49) (0.50) (0.52) (0.52)
------------------------------------------------------------ -------- -------- -------- -------- -------
In excess of net investment income (0.01) -- -- -- --
------------------------------------------------------------ -------- -------- -------- -------- -------
Total distributions (0.49) (0.49) (0.50) (0.52) (0.52)
------------------------------------------------------------ -------- -------- -------- -------- -------
Net asset value, end of period $ 10.71 $ 11.13 $ 11.05 $10.73 $10.79
============================================================ ======== ======== ======= ======== =======
Total return(a) 0.70% 5.27% 7.79% 4.33% 6.06%
============================================================ ======== ======== ======= ======== =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $353,130 $244,499 $200,969 $173,342 $83,066
============================================================ ======== ======== ======= ======== =======
Ratio of expenses to average net assets:
Including interest expense 0.42%(b) 0.46% 0.45% 0.56% 0.65%
============================================================ ======== ======== ======= ======== =======
Excluding interest expense 0.42%(b) 0.45% 0.45% 0.56% 0.65%
============================================================ ======== ======== ======= ======== =======
Ratio of interest expense to average net assets 0.00%(b) 0.01% -- -- --
============================================================ ======== ======== ======= ======== =======
Ratio of net investment income to average net assets 4.45%(b) 4.43% 4.56% 4.63% 4.81%
============================================================ ======== ======== ======= ======== =======
Portfolio turnover rate 50% 32% 22% 26% 32%
============================================================ ======== ======== ======= ======== =======
|
(a) Does not deduct sales charges.
(b) Ratios are based on average net assets of $344,256,881.
FS-24
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
AIM Tax-Exempt Bond Fund of Connecticut:
We have audited the accompanying statement of assets and
liabilities of AIM Tax-Exempt Bond Fund of Connecticut (a
portfolio of AIM Tax-Exempt Funds, Inc.), including the
schedule of investments, as of March 31, 2000, the
related statement of operations for the year then ended,
the statement of changes in net assets for each of the
years in the two-year period then ended and the financial
highlights for each of the years in the five-year period
then ended. 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 auditing
standards generally accepted in the United States of
America. 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 March 31, 2000, by correspondence with the custodian
and brokers. An audit also includes assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall
financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM
Tax-Exempt Bond Fund of Connecticut as of March 31, 2000,
the results of its operations for the year then ended,
the changes in its net assets for each of the years in
the two-year period then ended and the financial
highlights for each of the years in the five-year period
then ended, in conformity with accounting principles
generally accepted in the United States of America.
/s/ KPMG LLP KPMG LLP May 1, 2000 Houston, Texas |
FS-25
SCHEDULE OF INVESTMENTS
March 31, 2000
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
MUNICIPAL
OBLIGATIONS-100.66%
EDUCATION-6.60%
Connecticut Area
Cooperative Educational
Services (Staff
Development/Administration
Facilities); Unlimited
Tax Series GO
5.625%, 07/15/19(b) A -- $1,060 $ 1,037,337
----------------------------------------------------------------
Connecticut Regional
School District No. 5;
Unlimited Tax Series
1992 GO
6.00%, 03/01/02(c)(d) AAA Aaa 335 349,717
----------------------------------------------------------------
Connecticut State Higher
Education Supplemental
Loan Authority (Family
Education Loan Program);
Series 1990 A RB
7.50%, 11/15/10(e) -- A1 1,060 1,072,794
----------------------------------------------------------------
2,459,848
----------------------------------------------------------------
GENERAL OBLIGATION-14.34%
Bridgeport (Town of),
Connecticut; Unlimited
Tax Series A GO
6.00%, 09/01/06(b) AAA Aaa 875 926,826
----------------------------------------------------------------
Brooklyn (City of),
Connecticut; Unlimited
Tax Series GO
5.50%, 05/01/06(b) AAA Aaa 250 258,980
----------------------------------------------------------------
5.70%, 05/01/08(b) AAA Aaa 250 261,367
----------------------------------------------------------------
Chester (Town of),
Connecticut; Unlimited
Tax Series 1989 GO
7.00%, 10/01/05 -- A 190 194,239
----------------------------------------------------------------
Connecticut (State of)
(General Purpose Public
Improvement); Unlimited
Tax Series 1991 A GO
6.75%, 03/01/01(c)(d) NRR NRR 680 708,621
----------------------------------------------------------------
Unlimited Tax Series
1992 A GO
6.50%, 03/15/02(c)(d) NRR NRR 300 315,795
----------------------------------------------------------------
Guam (Government of);
Unlimited Tax Series
1995 A GO
5.375%, 09/01/00 BBB- -- 250 250,798
----------------------------------------------------------------
Mansfield (City of),
Connecticut; Unlimited
Tax Series 1990 GO
6.00%, 06/15/07 -- A1 100 106,282
----------------------------------------------------------------
6.00%, 06/15/08 -- A1 100 106,786
----------------------------------------------------------------
6.00%, 06/15/09 -- A1 100 107,367
----------------------------------------------------------------
New Britain (City of),
Connecticut; Unlimited
Tax Series 1992 Various
Purpose GO
6.00%, 02/01/11(b) AAA Aaa 400 429,968
----------------------------------------------------------------
|
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
GENERAL OBLIGATION-(CONTINUED)
North Canaan (City of),
Connecticut; Unlimited
Tax Series 1991 GO
6.50%, 01/15/08 -- A3 $ 125 $ 136,780
----------------------------------------------------------------
6.50%, 01/15/09 -- A3 125 137,619
----------------------------------------------------------------
6.50%, 01/15/10 -- A3 125 138,534
----------------------------------------------------------------
6.50%, 01/15/11 -- A3 125 139,141
----------------------------------------------------------------
Puerto Rico Commonwealth
(Public Improvement
Project); Unlimited Tax
Series 2000 GO
6.00%, 07/01/29 A Baa1 500 503,560
----------------------------------------------------------------
Somers (City of),
Connecticut; Unlimited
Tax Series 1990 Various
Purpose GO
6.00%, 12/01/10 -- A1 190 205,044
----------------------------------------------------------------
Westbrook (City of),
Connecticut; Unlimited
Tax Series 1992 GO
6.40%, 03/15/10(b) AAA Aaa 380 420,333
----------------------------------------------------------------
5,348,040
----------------------------------------------------------------
HEALTH CARE-17.89%
Connecticut Development
Authority (Elim Park
Baptist Home); Refunding
Series A RB
5.375%, 12/01/18 BBB+ -- 500 414,425
----------------------------------------------------------------
Connecticut Development
Authority (Life Care
Facility-Seabury);
Refunding Series RB
5.00%, 09/01/15(b) AA -- 500 463,470
----------------------------------------------------------------
Connecticut (State of),
Development Authority
(Pfizer Inc. Project);
Series 1992 PCR
6.55%, 02/15/13 AAA Aaa 250 264,132
----------------------------------------------------------------
Connecticut (State of),
Development Authority
(Weekly- Corporate
Independent Living
Project); Hospital VRD
Series RB (LOC-Chase
Manhattan Bank)
3.75%, 07/01/15(f) -- VMIG-1 2 2,000
----------------------------------------------------------------
Connecticut Health and
Education Facilities
Authority (Bridgeport
Hospital); Series 1992 A
RB
6.625%, 07/01/18(b) AAA Aaa 500 519,810
----------------------------------------------------------------
Connecticut Health and
Education Facilities
Authority (Danbury
Hospital);
Series 1991 E RB
6.50%, 07/01/14(b) AAA Aaa 750 774,540
----------------------------------------------------------------
Series G RB
5.625%, 07/01/25(b) AAA Aaa 250 243,890
----------------------------------------------------------------
|
FS-26
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
HEALTH CARE-(CONTINUED)
Connecticut Health and
Education Facilities
Authority (Middlesex
Hospital); Series 1992 G
RB
6.25%, 07/01/02(c)(d) NRR NRR $1,100 $ 1,158,454
----------------------------------------------------------------
Connecticut Health and
Education Facilities
Authority (New Britain
Memorial Hospital);
Series 1991 A RB
7.75%, 07/01/02(c)(d) NRR -- 500 542,345
----------------------------------------------------------------
Connecticut Health and
Education Facilities
Authority (Stamford
Hospital); Series F RB
5.40%, 07/01/09(b) AAA Aaa 1,000 1,017,200
----------------------------------------------------------------
Connecticut Health and
Education Facilities
Authority (Veteran
Memorial Medical
Center); Series 1996 A
RB
5.50%, 07/01/26(b) AAA Aaa 500 477,915
----------------------------------------------------------------
Connecticut Health and
Education Facilities
Authority (Yale-New
Haven Hospital); Series
1990 F RB
7.10%, 07/01/00(c)(d) NRR NRR 775 795,995
----------------------------------------------------------------
6,674,176
----------------------------------------------------------------
HOUSING-30.06%
Connecticut Housing
Development Authority
(Housing Mortgage
Finance Program); RB
Series 1991 C,
Sub-Series C-3,
6.55%, 11/15/13 AA Aa2 290 301,754
----------------------------------------------------------------
Series D-2,
5.45%, 11/15/24(e) AA Aa2 1,250 1,156,413
----------------------------------------------------------------
Connecticut (State of)
(Housing Mortgage
Finance Program); RB
Series A-1, 5.70%,
05/15/08 AA Aa 100 102,457
----------------------------------------------------------------
Sub-Series A-3, 5.95%,
05/15/17 AA Aa3 1,500 1,523,970
----------------------------------------------------------------
Series E-1, 5.95%,
05/15/17 AA Aa2 500 508,380
----------------------------------------------------------------
Series 1993 E-1, 6.00%,
05/15/17 AA Aa 675 682,303
----------------------------------------------------------------
Series C-1, 6.30%,
11/15/17 AA Aa 1,270 1,315,504
----------------------------------------------------------------
Series C-2, 6.25%,
11/15/18 AA Aa2 750 774,472
----------------------------------------------------------------
Series C-2, 6.70%,
11/15/22(e) AA Aa2 90 92,389
----------------------------------------------------------------
Series C-2, 5.85%,
11/15/28(e) AA Aa2 2,065 2,006,355
----------------------------------------------------------------
Series A-2, 5.20%,
11/15/29(e) AA Aa2 1,250 1,090,775
----------------------------------------------------------------
Series C, 5.50%,
11/15/35(e) AA Aa2 1,775 1,657,264
----------------------------------------------------------------
11,212,036
----------------------------------------------------------------
|
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
LEASE RENTAL-1.12%
Connecticut (State of)
(Middletown Courthouse
Facilities Project);
Series 1991 Lease-Rental
Revenue COP
6.25%, 12/15/01(c)(d) NRR NRR $ 400 $ 419,020
----------------------------------------------------------------
TRANSPORTATION-14.50%
Connecticut (State of),
Special Parking
Obligation (Bradley
International Airport);
Series 2000 A RB
6.60%, 07/01/24(b)(e) A -- 250 250,800
----------------------------------------------------------------
Connecticut State Special
Tax Obligation
(Transportation
Infrastructure);
Series 1991 B RB
6.25%, 10/01/01(c)(d) NRR NRR 1,000 1,044,380
----------------------------------------------------------------
Series A
6.80%, 06/01/03(c)(d) NRR NRR 1,250 1,324,925
----------------------------------------------------------------
Series 1991 B
6.50%, 10/01/10 AA- A1 530 590,611
----------------------------------------------------------------
Connecticut State Special
Tax Obligation
(Transportation
Infrastructure Sales and
Excise Tax); Series 1991
B RB
6.50%, 10/01/12 AA- A1 1,500 1,692,225
----------------------------------------------------------------
Puerto Rico Commonwealth
(Highway and
Transportation
Authority); Series X RB
5.20%, 07/01/03 A Baa1 500 505,895
----------------------------------------------------------------
5,408,836
----------------------------------------------------------------
UTILITIES-2.33%
Guam (Government of) Power
Authority (Electrical,
Light & Power
Improvements); Series A
RB
5.25%, 10/01/34 BBB Baa3 1,000 870,150
----------------------------------------------------------------
WATER & SEWER-6.48%
Connecticut Development
Authority Water Facility
(Bridgeport Hydraulic
Co. Project); Refunding
Series RB
7.25%, 06/01/20 AA- -- 800 818,384
----------------------------------------------------------------
Connecticut State Clean
Water Fund; Series 1991
RB
7.00%, 01/01/11 AAA Aaa 1,100 1,143,417
----------------------------------------------------------------
Manchester (City of)
Connecticut Eighth
Utilities Fire District;
Unlimited Tax Series
1991 GO
6.75%, 08/15/06 -- Aa3 180 197,996
----------------------------------------------------------------
|
FS-27
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
WATER & SEWER-(CONTINUED)
South Central Connecticut
Regional Water
Authority; Eighth Series
1990 A Water System RB
6.60%, 08/01/00(c)(d) NRR NRR $ 250 $ 256,968
----------------------------------------------------------------
2,416,765
----------------------------------------------------------------
MISCELLANEOUS-7.34%
Connecticut Development
Authority (Economic
Development Projects);
Refunding Series 1992 A
RB
6.00%, 11/15/08 AA- Aa 500 510,660
----------------------------------------------------------------
Connecticut (State of),
Special Tax Obligation
(JP Morgan PUTTERS
Receipt); VRD Series 114
1999 A RB
3.81%, 10/01/09(f)(g) -- VMIG-1 1,725 1,725,000
----------------------------------------------------------------
|
RATING(a) PAR MARKET
S&P MOODY'S (000) VALUE
MISCELLANEOUS-(CONTINUED)
Virgin Islands Public
Financial Authority
(Gross Receipts Taxes);
Series 1999 A RB
6.125%, 10/01/29(b) A -- $ 500 $ 503,890
----------------------------------------------------------------
2,739,550
----------------------------------------------------------------
TOTAL INVESTMENTS-100.66% (Cost $36,750,721) 37,548,421
----------------------------------------------------------------
LIABILITIES LESS OTHER ASSETS-(0.66)% (245,961)
----------------------------------------------------------------
NET ASSETS-100.00% $37,302,460
================================================================
|
Investment Abbreviations:
COP -- Certificates of Participation GO -- General Obligation Bonds LOC -- Letter of Credit PCR -- Pollution Control Revenue Bonds |
PUTTERS -- Putable Tax Exempt Receipts
RB -- Revenue Bonds
VRD -- Variable Rate Demand
Notes to Schedule of Investments:
(a) Ratings assigned by Moody's Investors Service, Inc. ("Moody's") and Standard
& Poor's Corporation ("S&P"). NRR indicates a security that is not re-rated
subsequent to funding of an escrow fund (consisting of U.S. Treasury
obligations); this funding is pursuant to an advance refunding of the
security. Ratings are not covered by Independent Auditors' Report.
(b) Secured by bond insurance provided by one of the following companies: AMBAC,
FGIC, FSA or MBIA.
(c) Security has an irrevocable call or mandatory put by the issuer. Market
value and maturity date reflect such call or put.
(d) Secured by an escrow fund of U.S. Treasury obligations.
(e) Security subject to the alternative minimum tax.
(f) Demand security; payable upon demand by the Fund at specified time intervals
no greater than thirteen months. Interest rate is redetermined periodically.
Rate shown is the rate in effect on 03/31/00.
(g) The Fund may invest in synthetic municipal instruments the value of and
return on which are derived from underlying securities. The types of
synthetic municipal instruments in which the Fund may invest include
variable rate instruments. These instruments involve the deposit into a
trust of one or more long-term tax-exempt bonds or notes ("Underlying
Bonds"), and the sale of certificates evidencing interests in the trust to
investors such as the Fund. The trustee receives the long-term fixed rate
interest payments on the Underlying Bonds, and pays certificate holders
short-term floating or variable interest rates which are reset periodically.
A "variable rate trust certificate" evidences an interest in a trust
entitling the certificate holder to receive variable rate interest based on
prevailing short-term interest rates and also typically providing the
certificate holder with the conditional right to put its certificate at par
value plus accrued interest. Because synthetic municipal instruments involve
a trust and a third party conditional put feature, they involve complexities
and potential risks that may not be present where a municipal security is
owned directly.
See Notes to Financial Statements.
FS-28
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2000
ASSETS:
Investments, at value (cost $36,750,721) $ 37,548,421
---------------------------------------------------------
Receivables for:
Capital stock sold 46,415
---------------------------------------------------------
Interest 688,609
---------------------------------------------------------
Investment for deferred compensation plan 28,833
---------------------------------------------------------
Other assets 2,107
---------------------------------------------------------
Total assets 38,314,385
---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 748,484
---------------------------------------------------------
Capital stock reacquired 106,877
---------------------------------------------------------
Dividends 61,409
---------------------------------------------------------
Deferred compensation 28,833
---------------------------------------------------------
Accrued advisory fees 16,983
---------------------------------------------------------
Accrued administrative services fees 4,235
---------------------------------------------------------
Accrued transfer agent fees 2,203
---------------------------------------------------------
Accrued distribution fees 23,053
---------------------------------------------------------
Accrued operating expenses 19,848
---------------------------------------------------------
Total liabilities 1,011,925
---------------------------------------------------------
Net assets applicable to shares
outstanding $ 37,302,460
=========================================================
CAPITAL STOCK, $0.001 PAR VALUE PER
SHARE:
Authorized 1,000,000,000
---------------------------------------------------------
Outstanding 3,550,418
=========================================================
Net asset value and redemption price per
share $ 10.51
=========================================================
Offering price per share:
(Net asset value of $10.51 / 95.25%) $ 11.03
=========================================================
|
STATEMENT OF OPERATIONS
For the year ended March 31, 2000
INVESTMENT INCOME:
Interest income $ 2,342,851
---------------------------------------------------------
EXPENSES:
Advisory fees 199,285
---------------------------------------------------------
Administrative services fees 49,944
---------------------------------------------------------
Custodian fees 2,101
---------------------------------------------------------
Transfer agent fees 22,866
---------------------------------------------------------
Professional fees 26,546
---------------------------------------------------------
Distribution fees 99,643
---------------------------------------------------------
Other 38,026
---------------------------------------------------------
Total expenses 438,411
---------------------------------------------------------
Less: Fees waived by advisor (5,871)
---------------------------------------------------------
Expenses paid indirectly (433)
---------------------------------------------------------
Net expenses 432,107
---------------------------------------------------------
Net investment income 1,910,744
---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES:
Net realized gain (loss) on sales of
investment securities (308,420)
---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of investment securities (1,602,460)
---------------------------------------------------------
Net gain (loss) on investment securities (1,910,880)
---------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $ (136)
=========================================================
|
See Notes to Financial Statements.
FS-29
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED MARCH 31, 2000 AND 1999
2000 1999
----------- -----------
OPERATIONS:
Net investment income $ 1,910,744 $ 1,969,711
-----------------------------------------------------------------------------------------
Net realized gain (loss) on sales of investment securities (308,420) 8,698
-----------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities (1,602,460) (113,211)
-----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (136) 1,865,198
-----------------------------------------------------------------------------------------
Distributions to shareholders from net investment income (1,927,885) (2,022,076)
-----------------------------------------------------------------------------------------
Net increase (decrease) from capital stock transactions (2,209,321) 1,030,126
-----------------------------------------------------------------------------------------
Net increase (decrease) in net assets (4,137,342) 873,248
-----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 41,439,802 40,566,554
-----------------------------------------------------------------------------------------
End of period $37,302,460 $41,439,802
-----------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $37,046,987 $39,259,242
-----------------------------------------------------------------------------------------
Undistributed net investment income (30,043) (17,677)
-----------------------------------------------------------------------------------------
Undistributed net realized gain (loss) on sales of
investment securities (512,184) (201,923)
-----------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 797,700 2,400,160
-----------------------------------------------------------------------------------------
$37,302,460 $41,439,802
=========================================================================================
|
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Tax-Exempt Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company. The Company is organized as a Maryland corporation
consisting of four separate portfolios. Matters affecting each portfolio are
voted on exclusively by the shareholders of such portfolio. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to AIM
Tax-Exempt Bond Fund of Connecticut (the "Fund"). The investment objective of
the Fund is to earn a high level of current income exempt from federal taxes and
Connecticut taxes by investing at least 80% of its net assets in municipal
securities.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of the significant accounting policies followed by the
Fund in the preparation of its financial statements.
A. Security Valuations--Portfolio securities are valued based on market
quotations or at fair value determined by a pricing service approved by the
Company's Board of Directors, provided that securities with a demand feature
exercisable within one to seven days will be valued at par. Prices provided
by the pricing service may be determined without exclusive reliance on
quoted prices and may reflect appropriate factors such as institution-size
trading in similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, individual trading characteristics and other market
data. Portfolio securities for which prices are not provided by the pricing
service are valued at the mean between the last available bid and asked
prices, unless the Board of Directors, or persons designated by the Board of
Directors, determines that the mean between the last available bid and asked
prices does not accurately reflect the current market value of the security.
Securities for which market quotations either are not readily available or
are questionable are valued at fair value as determined in good faith by or
under the supervision of the Company's officers in a manner specifically
authorized by the Board of Directors. Notwithstanding the above, short-term
obligations with maturities of 60 days or less are valued at amortized cost.
B. Securities Transactions and Investment Income--Securities transactions are
recorded on a trade date basis. Realized gains and losses on sales are
computed on the basis of specific identification of the securities sold.
Interest income, adjusted for amortization of premiums and original issue
discounts, is recorded as earned from settlement date and is recorded on the
accrual basis. On March 31, 2000, undistributed net investment income was
increased by $4,775, undistributed net realized gain (loss) was decreased by
$1,841 and paid-in capital decreased by $2,934 as a result of differing
book/tax reclassifications. Net assets of the Fund were unaffected by the
reclassifications.
C. Distributions--It is the policy of the Fund to declare daily dividends from
net investment income. Such distributions are paid monthly. Distributions
from net realized capital gains, if any, are generally paid annually and
recorded on ex-dividend date. The Fund may elect to use a portion of the
proceeds of fund share redemptions as distributions for federal income tax
purposes.
FS-30
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 gains, if any) of $209,019, which expires, if not previously utilized, through the year 2008. The Fund cannot distribute capital gains to shareholders until the tax loss carryforwards have been utilized. In addition, the Fund intends to invest in such municipal securities to allow it to qualify to pay to shareholders "exempt interest dividends," as defined in the Internal Revenue Code.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.50% of
the Fund's average daily net assets. During the year ended March 31, 2000, AIM
waived advisory fees of $5,871.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the year ended March 31, 2000, AIM was paid
$49,944 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agent and
shareholder services to the Fund. For the year ended March 31, 2000, AFS was
paid $16,463 for such services.
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") pursuant to which AIM Distributors
serves as the distributor for the Fund. The Company has also adopted a plan
pursuant to Rule 12b-1 under the 1940 Act (the "Plan") with respect to the Fund,
whereby the Fund pays to AIM Distributors compensation at an annual rate of
0.25% of the Fund's average daily net assets. The Plan is designed to compensate
AIM Distributors for certain promotional and other sales related costs and
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 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 sales charges, including asset-based sales charges, that may be
paid by the Fund. For the year ended March 31, 2000, the Fund paid AIM
Distributors $99,643 as compensation under the Plan.
AIM Distributors received commissions of $25,420 from sales of shares of the
Fund's capital stock during the year ended March 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of capital stock.
Certain officers and directors of the Company are officers of AIM, AFS and AIM
Distributors.
During the year ended March 31, 2000, the Fund paid legal fees of $5,036 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Directors. A member of that firm is a director of the Company.
NOTE 3-INDIRECT EXPENSES
During the year ended March 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $433 under an expense offset arrangement. The effect of the above arrangement resulted in a reduction of the Fund's total expenses of $433 during the year ended March 31, 2000.
NOTE 4-DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to directors who are not an "interested person" of AIM. The Company may invest directors' fees, if so elected by a director, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to the lesser of (i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the line of credit may borrow on a first come, first served basis. During the year ended March 31, 2000, the Fund did not borrow under the line of credit agreement. The funds which are parties to the line of credit are charged a commitment fee of 0.09% on the unused balance of the committed line. The commitment fee is allocated among such funds based on their respective average net assets for the period.
FS-31
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities) purchased and sold during the year ended March 31, 2000 were $10,747,463 and $12,752,238, respectively. The amount of unrealized appreciation (depreciation) of investment securities as of March 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $1,244,839 ------------------------------------------------------------------------ Aggregate unrealized (depreciation) of investment securities (447,139) ------------------------------------------------------------------------ Net unrealized appreciation of investment securities $ 797,700 ======================================================================== Investments have the same cost for tax and financial statement purposes. |
NOTE 7-CAPITAL STOCK
Changes in capital stock outstanding during the years ended March 31, 2000 and 1999 were as follows:
2000 1999
----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
-------- ------------ --------- -----------
Sold 615,888 $ 6,621,410 634,272 $ 7,019,083
---------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends 111,105 1,180,598 118,804 1,314,072
---------------------------------------------------------------------------------------------------------------
Reacquired (942,707) (10,011,329) (660,290) (7,303,029)
---------------------------------------------------------------------------------------------------------------
(215,714) $ (2,209,321) 92,786 $ 1,030,126
===============================================================================================================
|
NOTE 8-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of capital stock outstanding during each of the years in the five-year period ended March 31, 2000.
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
Net asset value, beginning of period $ 11.00 $ 11.04 $ 10.77 $ 10.81 $ 10.71
------------------------------------------------------------ ------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.51 0.53 0.55 0.56 0.56
------------------------------------------------------------ ------- ------- ------- ------- -------
Net gains (losses) on securities (both realized and
unrealized) (0.49) (0.03) 0.27 (0.05) 0.10
------------------------------------------------------------ ------- ------- ------- ------- -------
Total from investment operations 0.02 0.50 0.82 0.51 0.66
------------------------------------------------------------ ------- ------- ------- ------- -------
Less distributions from net investment income (0.51) (0.54) (0.55) (0.55) (0.56)
------------------------------------------------------------ ------- ------- ------- ------- -------
Net asset value, end of period $ 10.51 $ 11.00 $ 11.04 $ 10.77 $ 10.81
============================================================ ======= ======= ======= ======= =======
Total return(a) 0.28% 4.64% 7.78% 4.84% 6.24%
============================================================ ======= ======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $37,302 $41,440 $40,567 $38,118 $39,355
============================================================ ======= ======= ======= ======= =======
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.09%(b) 0.99% 0.88% 0.72% 0.66%
============================================================ ======= ======= ======= ======= =======
Without fee waivers and/or expense reimbursements 1.10%(b) 1.11% 1.11% 1.09% 1.16%
============================================================ ======= ======= ======= ======= =======
Ratio of net investment income to average net assets 4.79%(b) 4.78% 5.02% 5.18% 5.16%
============================================================ ======= ======= ======= ======= =======
Portfolio turnover rate 28% 7% 5% 17% 17%
============================================================ ======= ======= ======= ======= =======
|
(a) Does not deduct sales charges.
(b) Ratios are based on average net assets of $39,857,079.
FS-32
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
AIM High Income Municipal Bond Fund:
We have audited the accompanying statement of assets and
liabilities of AIM High Income Municipal Bond Fund (a
portfolio of AIM Tax-Exempt Funds, Inc.), including the
schedule of investments, as of March 31, 2000, the
related statement of operations for the year then ended,
the statement of changes in net assets for each of the
years in the two-year period then ended and the financial
highlights for each of the years or periods in the three-
year period then ended. 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 auditing
standards generally accepted in the United States of
America. 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 March 31, 2000, by correspondence with the custodian
and brokers. An audit also includes assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall
financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM High
Income Municipal Bond Fund as of March 31, 2000, the
results of its operations for the year then ended, the
changes in its net assets for each of the years in the
two-year period then ended and the financial highlights
for each of the years or periods in the three-year period
then ended, in conformity with accounting principles
generally accepted in the United States of America.
/s/ KPMG LLP KPMG LLP May 1, 2000 Houston, Texas |
FS-33
SCHEDULE OF INVESTMENTS
MARCH 31, 2000
PAR MARKET
(000) VALUE
LONG-TERM MUNICIPAL OBLIGATIONS-92.95%
CALIFORNIA-3.10%
California (State of) Educational
Facilities Authority (Fresno Pacific
University); Series A RB
6.75%, 03/01/19 $1,000 $ 1,033,830
-------------------------------------------------------------
Sacramento (City of) Financing
Authority (Convention Center Hotel);
Series A Senior RB
6.25%, 01/01/30 1,000 920,540
-------------------------------------------------------------
1,954,370
-------------------------------------------------------------
COLORADO-3.36%
Colorado Health Facilities Authority
(Volunteers of America); Health and
Residential Care Facilities Series A
RB
6.00%, 07/01/29 850 706,095
-------------------------------------------------------------
Saddle Rock (City of) South
Metropolitan District No. 2 (Mill
Levy Obligation); Limited Tax Series
GO
7.20%, 12/01/19 650 650,429
-------------------------------------------------------------
St. Vincent General Hospital District
of Colorado; Series RB
6.00%, 12/01/19 885 758,790
-------------------------------------------------------------
2,115,314
-------------------------------------------------------------
CONNECTICUT-0.78%
Connecticut (State of) Development
Authority (Watson Foods Co., Inc.);
Series IDR
5.90%, 06/01/28(a) 555 494,805
-------------------------------------------------------------
FLORIDA-6.35%
Lexington Oaks (District of); Community
Development Special Assessment Series
B RB
6.70%, 05/01/07 500 502,755
-------------------------------------------------------------
Orange (County of) Housing Finance
Authority (Brentwood Park
Apartments); Multifamily Housing
Series G RB
6.40%, 07/01/32 1,500 1,394,205
-------------------------------------------------------------
Orange (County of) Housing Finance
Authority (Palm West Apartments);
Multifamily Housing Series B RB
6.50%, 03/01/34 1,000 903,400
-------------------------------------------------------------
Sumter (County of) Industrial
Development Authority (Wecare Nursing
Center Project); Health Care
Facilities Series A RB
6.75%, 04/01/29 1,405 1,202,497
-------------------------------------------------------------
4,002,857
-------------------------------------------------------------
GEORGIA-4.27%
Fulton (County of) Housing Authority
(Azalea Manor Project); Multifamily
Housing RB
6.50%, 02/01/28 780 731,492
-------------------------------------------------------------
Fulton (County of) Housing Authority
(Washington Court Project);
Multifamily Housing RB
6.40%, 02/01/19 775 728,965
-------------------------------------------------------------
6.50%, 02/01/28 225 209,455
-------------------------------------------------------------
|
PAR MARKET
(000) VALUE
GEORGIA-(CONTINUED)
Rockdale (County of) Development
Authority (Visy Paper, Inc.); Solid
Waste Disposal RB
7.50%, 01/01/26(a) $1,000 $ 1,023,180
-------------------------------------------------------------
2,693,092
-------------------------------------------------------------
ILLINOIS-4.64%
Crestwood (City of); Tax Increment
Revenue Refunding Non-Qualified Bonds
7.25%, 12/01/08 100 103,131
-------------------------------------------------------------
Hoopeston (City of) Hospital Capital
Improvement (Hoopeston Community
Memorial Hospital); Refunding RB
6.55%, 11/15/29 700 626,185
-------------------------------------------------------------
Illinois Health Facilities Authority
(Bethesda Home & Retirement); Series
A RB
6.25%, 09/01/14 500 473,455
-------------------------------------------------------------
Illinois Health Facilities Authority
(Bohemian-Tabor Hills); Refunding
Series A RB
5.90%, 11/15/24 775 642,948
-------------------------------------------------------------
Illinois Health Facilities Authority
(Lifelink Corp. Obligation Group);
Refunding RB
5.85%, 02/15/20 350 293,475
-------------------------------------------------------------
5.70%, 02/15/24 850 683,884
-------------------------------------------------------------
Saint Charles (City of) (Tri-city
Center Associates Limited Project);
IDR
7.50%, 11/01/13 100 100,963
-------------------------------------------------------------
2,924,041
-------------------------------------------------------------
INDIANA-0.97%
Indiana Health Facilities Financing
Authority (Franciscan Eldercare
Community Services); RB
5.88%, 05/15/29 750 613,612
-------------------------------------------------------------
IOWA-0.16%
Iowa Finance Authority (Park West
Housing Project); Multifamily
Refunding RB
8.00%, 10/01/23 100 100,754
-------------------------------------------------------------
KANSAS-1.96%
Hutchinson (City of) Health Care
Facilities (Wesley Towers Inc.);
Refunding & Improvement Series A RB
6.25%, 11/15/19 750 662,220
-------------------------------------------------------------
Lawrence (City of) (Holiday Inn
Project); Commercial Development
Senior Refunding Series A RB
8.00%, 07/01/16 40 41,324
-------------------------------------------------------------
Olathe (City of) Senior Living
Facilities (Aberdeen Village Inc.);
Series A RB
7.00%, 05/15/20 200 197,854
-------------------------------------------------------------
7.50%, 05/15/24 330 332,666
-------------------------------------------------------------
1,234,064
-------------------------------------------------------------
|
FS-34
PAR MARKET
(000) VALUE
KENTUCKY-1.82%
Jefferson (County of) Health Facilities
(Beverly Enterprises Inc. Project);
Refunding RB
5.88%, 08/01/07 $ 675 $ 638,334
-------------------------------------------------------------
Newport (City of) Public Properties
Corporation (Public Parking & Plaza);
First Mortgage Series A-1 RB
8.50%, 01/01/27 500 508,000
-------------------------------------------------------------
1,146,334
-------------------------------------------------------------
MASSACHUSETTS-1.10%
Massachusetts (State of) Health &
Educational Facilities Authority
(Christopher House); Refunding Series
A RB
6.88%, 01/01/29 750 690,787
-------------------------------------------------------------
MICHIGAN-3.87%
Garden City Hospital Finance Authority
(Garden City Hospital Osteo Group);
Hospital Refunding Series A RB
5.75%, 09/01/17 1,500 1,221,915
-------------------------------------------------------------
Gogebic (County of) Hospital Finance
Authority (Grand View Health System
Inc.); Refunding RB
5.88%, 10/01/16 920 785,625
-------------------------------------------------------------
Mecosta (County of) General Hospital;
Refunding Unlimited GO
6.00%, 05/15/18 500 431,375
-------------------------------------------------------------
2,438,915
-------------------------------------------------------------
MINNESOTA-6.42%
Columbia Heights (City of) Multifamily
and Health Care Facility (Crest View
Corp. Project); RB
6.00%, 03/01/33 500 412,710
-------------------------------------------------------------
Minneapolis (City of) Health Care
Facility (Ebenezer Society Project);
Series A RB
7.00%, 07/01/12 100 97,740
-------------------------------------------------------------
Minneapolis (City of) Health Care
Facility (Shelter Care Foundation);
Series A RB
6.00%, 04/01/10 1,060 979,652
-------------------------------------------------------------
Moorhead (City of) Economic Development
Authority (Eventide Housing
Development Project); Multifamily
Refunding Series A RB
6.00%, 06/01/18 500 429,945
-------------------------------------------------------------
Northfield (City of) Health Care
Facilities (Retirement Center);
Refunding and Improvement Series A RB
5.75%, 05/01/16 335 283,075
-------------------------------------------------------------
6.00%, 05/01/28 500 416,895
-------------------------------------------------------------
Richfield (City of) Senior Housing;
Series A RB
6.75%, 02/01/14 300 298,101
-------------------------------------------------------------
7.38%, 02/01/19 400 401,660
-------------------------------------------------------------
St. Paul (City of) Port Authority and
Hotel Facilities (Radisson Kellogg
Project); Series 2 RB
7.38%, 08/01/29 750 730,088
-------------------------------------------------------------
4,049,866
-------------------------------------------------------------
MISSISSIPPI-0.40%
Ridgeland Urban Renewal (The Orchard
Limited Project); Refunding Series A
RB
7.75%, 12/01/15 250 255,950
-------------------------------------------------------------
|
PAR MARKET
(000) VALUE
MISSOURI-2.02%
Good Shepherd Nursing Home District;
Nursing Home Facilities Refunding RB
5.90%, 08/15/23 $ 500 $ 417,145
-------------------------------------------------------------
Madison (County of); Hospital Refunding
RB
5.88%, 10/01/26 500 411,240
-------------------------------------------------------------
Valley Park Industrial Development
Authority (Cape Albeon Project);
Senior Housing RB
6.15%, 12/01/33 500 447,565
-------------------------------------------------------------
1,275,950
-------------------------------------------------------------
NEVADA-2.64%
Boulder (City of) (Boulder City
Hospital Inc.); Refunding Hospital
Series RB
5.85%, 01/01/22 2,000 1,667,060
-------------------------------------------------------------
NEW HAMPSHIRE-1.34%
New Hampshire Business Financial
Authority (Alice Peck Day Health
System); Series A RB
6.88%, 10/01/19 750 705,285
-------------------------------------------------------------
New Hampshire Higher Educational and
Health Facilities Authority: RB
Daniel Webster College;
7.63%, 07/01/04(b)(c) 100 112,139
-------------------------------------------------------------
Franklin Pierce College;
6.00%, 10/01/18 30 28,108
-------------------------------------------------------------
845,532
-------------------------------------------------------------
NEW JERSEY-5.05%
New Jersey Economic Development
Authority (Continental Airlines,
Inc.); Special Facilities Series RB
6.40%, 09/15/23(a) 1,160 1,100,736
-------------------------------------------------------------
6.25%, 09/15/29(a) 750 685,395
-------------------------------------------------------------
New Jersey Health Care Facilities
Financing Authority (Raritan Bay
Medical Center); RB
7.25%, 07/01/14 750 708,008
-------------------------------------------------------------
7.25%, 07/01/27 750 687,075
-------------------------------------------------------------
3,181,214
-------------------------------------------------------------
NEW MEXICO-0.63%
Sante Fe (County of) (El Castillo
Retirement Project); Series A RB
5.63%, 05/15/25 500 396,260
-------------------------------------------------------------
NEW YORK-5.28%
New York Industrial Development Agency
(Field Hotel Associates LP);
Refunding IDR
5.80%, 11/01/13 475 432,692
-------------------------------------------------------------
6.00%, 11/01/28 500 432,230
-------------------------------------------------------------
New York Industrial Development Agency
(Marymount Manhattan College
Project); Civic Facility RB
7.00%, 07/01/23(b) 150 159,029
-------------------------------------------------------------
Onondaga (County of) Industrial
Development Agency (Solvay Paperboard
LLC Project); Solid Waste Disposal
Facility Refunding Series RB
7.00%, 11/01/30(a) 2,000 1,979,920
-------------------------------------------------------------
|
FS-35
PAR MARKET
(000) VALUE
NEW YORK-(CONTINUED)
Suffolk (County of) Industrial
Development Agency (Spellman High
Voltage Facility); Series A IDR
6.38%, 12/01/17(a) $ 350 $ 325,003
-------------------------------------------------------------
3,328,874
-------------------------------------------------------------
NORTH DAKOTA-0.69%
Grand Forks Senior Housing (4000 Valley
Square Project); Special Term Series
RB
6.38%, 12/01/34 500 435,425
-------------------------------------------------------------
OHIO-6.78%
Belmont (County of) Health Systems
(East Ohio Regional Hospital);
Refunding and Improvement RB
5.80%, 01/01/18 800 645,536
-------------------------------------------------------------
Fairfield (City of) Economic
Development (Beverly Enterprises
Inc.); Refunding Series RB
8.50%, 01/01/03 110 112,971
-------------------------------------------------------------
Madison (County of) (Madison County
Hospital Project); Hospital
Improvement Refunding Series RB
6.25%, 08/01/18 1,000 880,930
-------------------------------------------------------------
6.40%, 08/01/28 1,000 868,280
-------------------------------------------------------------
Ohio (State of) (CSC Limited Project);
Solid Waste RB
8.50%, 08/01/22(a) 1,860 1,763,931
-------------------------------------------------------------
4,271,648
-------------------------------------------------------------
PENNSYLVANIA-13.86%
Allegheny (County of) Hospital
Development Authority (Villa St.
Joseph of Baden); Health Care
Facilities RB
6.00%, 08/15/28 1,000 833,250
-------------------------------------------------------------
Berks (County of) Municipal Authority
(Phoebe-Devitt Homes Project);
Refunding Series A1 RB
5.50%, 05/15/11 250 222,092
-------------------------------------------------------------
Chartiers Valley Industrial &
Commercial Development Authority
(Asbury Health Center); First
Mortgage Refunding Series RB
6.38%, 12/01/19 1,000 894,540
-------------------------------------------------------------
Columbia (County of) Hospital Authority
(Bloomsburg Hospital Project); Health
Care RB
5.85%, 06/01/24 1,000 807,610
-------------------------------------------------------------
5.90%, 06/01/29 350 278,866
-------------------------------------------------------------
Crawford (County of) Hospital Authority
(Wesbury United Methodist Community);
Senior Living Facilities RB
6.25%, 08/15/29 750 658,837
-------------------------------------------------------------
Cumberland (County of) Industrial
Development Authority (Woods Cedar
Run); First Mortgage Refunding Series
A RB
6.50%, 11/01/18 1,000 885,040
-------------------------------------------------------------
Lancaster (County of) Hospital
Authority (Saint Anne's Home Health
Center); RB
6.63%, 04/01/28 1,000 898,180
-------------------------------------------------------------
Montgomery (County of) Higher Education
& Health Authority (Philadelphia
Geriatric Center); Series A RB
7.38%, 12/01/30 1,340 1,274,809
-------------------------------------------------------------
|
PAR MARKET
(000) VALUE
PENNSYLVANIA-(CONTINUED)
Montgomery (County of) Higher Education
& Health Authority (Temple Continuing
Care Center); RB
6.63%, 07/01/19 $1,250 $ 1,125,275
-------------------------------------------------------------
6.75%, 07/01/29 460 409,400
-------------------------------------------------------------
Philadelphia (City of) Hospital &
Higher Education Facilities Authority
(Chestnut Hill College); RB
6.00%, 10/01/29 500 450,815
-------------------------------------------------------------
8,738,714
-------------------------------------------------------------
SOUTH CAROLINA-0.79%
South Carolina (State of) Jobs and
Economic Development Authority
(Palmetto Health Alliance); Hospital
Facilities Improvement Series A RB
7.38%, 12/15/21 500 496,445
-------------------------------------------------------------
TEXAS-8.92%
Abilene (City of) Health Facilities
Development (Sears Methodist
Retirement); Corporate Retirement
Facilities:
Series 1998 A RB
5.88%, 11/15/18 1,000 848,410
-------------------------------------------------------------
Series 1999 RB
5.88%, 11/15/18 450 381,384
-------------------------------------------------------------
6.00%, 11/15/29 550 457,132
-------------------------------------------------------------
Atlanta (City of) Hospital Authority
(Hospital Facility); RB
6.70%, 08/01/19 500 460,875
-------------------------------------------------------------
Austin (City of) (Bergstrom Landhost
Enterprises Inc.); Airport Hotel
Series A Senior RB
6.75%, 04/01/27 1,000 918,650
-------------------------------------------------------------
Bexar (County of) Housing Finance Corp.
(Villa Madrid/Cumberland Apartments);
Multifamily Housing Series A RB
7.25%, 05/01/16 200 199,794
-------------------------------------------------------------
Matagorda (County of) NAV District #1
(Reliant Energy Project); Refunding
Series B RB
5.95%, 05/01/30(a) 500 446,460
-------------------------------------------------------------
Meadow Parc Development Inc. (Meadow
Parc Apartments Project); Multifamily
Housing RB
6.50%, 12/01/30 1,000 919,510
-------------------------------------------------------------
Woodhill Public Facilities Corp.
(Woodhill Apartments Project);
Housing Series RB
7.50%, 12/01/29 1,000 992,790
-------------------------------------------------------------
5,625,005
-------------------------------------------------------------
VERMONT-1.37%
Vermont Education & Health Buildings
Financing Agency (Copley Manor
Project); Health Care Facilities
Series RB
6.25%, 04/01/29 1,000 861,910
-------------------------------------------------------------
VIRGINIA-0.74%
Hampton (City of) Redevelopment and
Housing Authority (Olde Hampton Hotel
Association); First Mortgage
Refunding Series A RB
6.50%, 07/01/16 500 465,770
-------------------------------------------------------------
|
FS-36
PAR MARKET
(000) VALUE
WISCONSIN-3.64%
Wisconsin (State of) Health and
Educational Facilities Authority RB:
Attic Angel Community Inc.;
5.75%, 11/15/27 $1,000 $ 806,400
-------------------------------------------------------------
FH Healthcare Development Inc.;
6.25%, 11/15/20 750 669,923
-------------------------------------------------------------
St. Camillus Health Center;
5.75%, 07/01/28 500 402,015
-------------------------------------------------------------
United Lutheran Home;
5.70%, 03/01/28 525 418,929
-------------------------------------------------------------
2,297,267
-------------------------------------------------------------
Total Long-Term Municipal
Obligations (Cost $64,508,301) 58,601,835
-------------------------------------------------------------
SHORT-TERM MUNICIPAL
OBLIGATIONS-5.86%(d)
CONNECTICUT-2.51%
Connecticut (State of) Development
Authority (Weekly-Corporate
Independent Living Project); Health
Care VRD Series RB (LOC-Chase
Manhattan)
3.75%, 07/01/15 714 714,000
-------------------------------------------------------------
Connecticut (State of) Special Tax
Obligation (JP Morgan PUTTERS); VRD
Series 114 1999 A RB
3.81%, 10/01/09(e) 870 870,000
-------------------------------------------------------------
1,584,000
-------------------------------------------------------------
DELAWARE-0.63%
University of Delaware, VRD Series RB
3.90%, 11/01/23 400 400,000
-------------------------------------------------------------
|
PAR MARKET
(000) VALUE
FLORIDA-0.54%
Capital Trust Agency (Community Loan
Program); Multifamily Housing VRD
Series 1999 B RB
4.00%, 12/01/32(f) $ 337 $ 337,000
-------------------------------------------------------------
GEORGIA-0.86%
Dekalb Private Hospital Authority
(Egleston Children's Hospital at
Emory University); VRD Series 1994 A
RAN (LOC-Suntrust Bank)
3.85%, 03/01/24 540 540,000
-------------------------------------------------------------
ILLINOIS-0.77%
Illinois Health Facilities Authority
(Resurrection Health Care); VRD
Series 1999 B RB
3.95%, 05/15/29 485 485,000
-------------------------------------------------------------
PENNSYLVANIA-0.13%
York (City of) General Authority;
Pooled Financing Sub. VRD Series 96 B
RB
3.95%, 09/01/26(f) 84 84,000
-------------------------------------------------------------
TEXAS-0.42%
Bexar (County of) Housing Finance
Authority (Fountainhead Apartments);
Multifamily Refunding VRD Series RB
3.90%, 09/15/26(f) 262 262,000
-------------------------------------------------------------
Total Short-Term Municipal
Obligations (Cost $3,692,000) 3,692,000
-------------------------------------------------------------
TOTAL INVESTMENTS-98.81% (Cost
$68,200,301) 62,293,835
-------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-1.19% 749,494
-------------------------------------------------------------
NET ASSETS-100.00% $63,043,329
=============================================================
|
Investment Abbreviations:
IDR - Industrial Development Revenue Bonds GO - General Obligation Bonds LOC - Letter of Credit PUTTERS - Putable Tax Exempt Receipts RAN - Revenue Anticipation Notes RB - Revenue Bonds Sub. - Subordinated VRD - Variable Rate Demand |
Notes to Schedule of Investments:
(a) Security subject to the alternative minimum tax.
(b) Secured by an escrow fund of U.S. Treasury obligations.
(c) Security has an irrevocable call or mandatory put by the issuer. Market
value and maturity date reflect such call or put.
(d) Demand security; payable upon demand by the Fund at specified time intervals
no greater than seven calendar days' notice. Interest rate is redetermined
periodically. Rate shown is the rate in effect on 03/31/00.
(e) The fund may invest in synthetic municipal instruments the value of and
return on which are derived from underlying securities. The types of
synthetic municipal instruments in which the Fund may invest include
variable rate instruments. These instruments involve the deposit into a
trust of one or more long-term tax-exempt bonds or notes ("Underlying
Bonds"), and the sale of certificates evidencing interests in the trust to
investors such as the Fund. The trustee receives the long-term fixed rate
interest payments on the Underlying Bonds, and pays certificate holders
short-term floating or variable interest rates which are reset periodically.
A "variable rate trust certificate" evidences an interest in a trust
entitling the certificate holder to receive variable rate interest based on
prevailing short-term interest rates and also typically providing the
certificate holder with the conditional right to put its certificate at par
value plus accrued interest. Because synthetic municipal instruments involve
a trust and a third party conditional put feature, they involve complexities
and potential risks that may not be present where a municipal security is
owned directly.
(f) Secured by bond insurance provided by one of the following companies: AMBAC,
FGIC, FSA or MBIA.
See Notes to Financial Statements.
FS-37
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
ASSETS:
Investments, at market value (cost
$68,200,301) $ 62,293,835
---------------------------------------------------------
Cash 1,626
---------------------------------------------------------
Receivables for:
Investments sold 111,185
---------------------------------------------------------
Capital stock sold 503,957
---------------------------------------------------------
Interest 1,215,594
---------------------------------------------------------
Amount due from advisor 19,456
---------------------------------------------------------
Investment for deferred compensation plan 9,783
---------------------------------------------------------
Other assets 30,937
---------------------------------------------------------
Total assets 64,186,373
---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 853,586
---------------------------------------------------------
Capital stock reacquired 57,097
---------------------------------------------------------
Dividends 147,217
---------------------------------------------------------
Deferred compensation plan 9,783
---------------------------------------------------------
Accrued administrative services fees 4,235
---------------------------------------------------------
Accrued transfer agent fees 3,455
---------------------------------------------------------
Accrued distribution fees 48,943
---------------------------------------------------------
Accrued operating expenses 18,728
---------------------------------------------------------
Total liabilities 1,143,044
---------------------------------------------------------
Net assets applicable to shares
outstanding $ 63,043,329
=========================================================
NET ASSETS:
Class A $ 38,645,407
=========================================================
Class B $ 20,298,218
=========================================================
Class C $ 4,099,704
=========================================================
CAPITAL STOCK, $0.001 PAR VALUE PER
SHARE:
Class A:
Authorized 1,000,000,000
---------------------------------------------------------
Outstanding 4,430,151
=========================================================
Class B:
Authorized 1,000,000,000
---------------------------------------------------------
Outstanding 2,327,269
=========================================================
Class C:
Authorized 1,000,000,000
---------------------------------------------------------
Outstanding 469,964
=========================================================
Class A:
Net asset value and redemption price
per share $ 8.72
---------------------------------------------------------
Offering price per share:
(Net asset value of $8.72 divided
by 95.25%) $ 9.15
=========================================================
Class B:
Net asset value and offering price per
share $ 8.72
=========================================================
Class C:
Net asset value and offering price per
share $ 8.72
=========================================================
|
STATEMENT OF OPERATIONS
For the year ended March 31, 2000
INVESTMENT INCOME:
Interest income $ 4,312,230
--------------------------------------------------------
EXPENSES:
Advisory fees 400,884
--------------------------------------------------------
Administrative services fees 56,591
--------------------------------------------------------
Custodian fees 4,405
--------------------------------------------------------
Directors fees 6,460
--------------------------------------------------------
Distribution fees -- Class A 111,983
--------------------------------------------------------
Distribution fees -- Class B 178,459
--------------------------------------------------------
Distribution fees -- Class C 41,746
--------------------------------------------------------
Transfer agent fees 35,049
--------------------------------------------------------
Registration and filing fees 112,221
--------------------------------------------------------
Other 76,605
--------------------------------------------------------
Total expenses 1,024,403
--------------------------------------------------------
Less: Fee waivers and expense
reimbursements (519,765)
--------------------------------------------------------
Expenses paid indirectly (727)
--------------------------------------------------------
Net expenses 503,911
--------------------------------------------------------
Net investment income 3,808,319
--------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES:
Net realized gain (loss) on sales of
investment securities (3,732,037)
--------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of investment securities (5,956,529)
--------------------------------------------------------
Net gain (loss) on investment securities (9,688,566)
--------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $(5,880,247)
========================================================
|
See Notes to Financial Statements.
FS-38
STATEMENT OF CHANGES IN NET ASSETS
For the years ended March 31, 2000 and 1999
2000 1999
----------- -----------
OPERATIONS:
Net investment income $ 3,808,319 $ 2,386,340
---------------------------------------------------------------------------------------
Net realized gain (loss) on sales of investment securities (3,732,037) 634
---------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities (5,956,529) 27,086
---------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (5,880,247) 2,414,060
---------------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A (2,644,268) (1,942,603)
---------------------------------------------------------------------------------------
Class B (924,064) (343,532)
---------------------------------------------------------------------------------------
Class C (215,599) (78,427)
---------------------------------------------------------------------------------------
NET CAPITAL STOCK TRANSACTIONS:
Class A (4,438,767) 31,696,998
---------------------------------------------------------------------------------------
Class B 8,998,851 11,184,663
---------------------------------------------------------------------------------------
Class C 1,710,760 2,281,041
---------------------------------------------------------------------------------------
Net increase (decrease) in net assets (3,393,334) 45,212,200
---------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 66,436,663 21,224,463
---------------------------------------------------------------------------------------
End of period $63,043,329 $66,436,663
=======================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $72,624,428 $66,355,245
---------------------------------------------------------------------------------------
Undistributed net investment income 68,799 42,750
---------------------------------------------------------------------------------------
Undistributed realized gain (loss) on sales of investment
securities (3,743,432) (11,395)
---------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities (5,906,466) 50,063
---------------------------------------------------------------------------------------
$63,043,329 $66,436,663
=======================================================================================
|
See Notes to Financial Statements.
FS-39
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Tax-Exempt Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company. The Company is organized as a Maryland corporation
consisting of four separate portfolios. Matters affecting each portfolio or
class are voted on exclusively by the shareholders of such portfolio or class.
The assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
AIM High Income Municipal Fund (the "Fund"). The Fund currently offers three
different classes of shares: the Class A shares, the Class B shares and the
Class C shares. Class A shares are sold with a front-end sales charge. Class B
and Class C shares are sold with a contingent deferred sales charge. The
investment objective of the Fund is to achieve a high level of current income
that is exempt from federal income taxes.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations -- Portfolio securities are valued based on market
quotations or at fair value determined by a pricing service approved by the
Company's Board of Directors, provided that securities with a demand
feature exercisable within one to seven days will be valued at par. Prices
provided by the pricing service may be determined without exclusive
reliance on quoted prices and may reflect appropriate factors such as
institution-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, individual trading characteristics
and other market data. Portfolio securities for which prices are not
provided by the pricing service are valued at the mean between the last
available bid and asked prices, unless the Board of Directors, or persons
designated by the Board of Directors, determines that the mean between the
last available bid and asked prices does not accurately reflect the current
market value of the security. Securities for which market quotations either
are not readily available or are questionable are valued at fair value as
determined in good faith by or under the supervision of the Company's
officers in a manner specifically authorized by the Board of Directors.
Notwithstanding the above, short-term obligations with maturities of 60
days or less are valued at amortized cost.
The Fund's investments include lower-rated and unrated debt securities
which may be more susceptible to adverse economic conditions than
investment grade holdings. These securities are often subordinated to the
prior claims of other senior lenders and uncertainties exist as to an
issuer's ability to meet principal and interest payments. Securities rated
below investment grade and comparable unrated securities represented
approximately 89% of the Fund's investment portfolio at the end of the
period.
B. Securities Transactions and Investment Income -- Securities transactions
are recorded on a trade date basis. Realized gains and losses are computed
on the basis of specific identification of the securities sold. Interest
income, adjusted for amortization of premiums and original issue discounts,
is earned from settlement date and is recorded on the accrual basis. On
March 31, 2000, undistributed net investment income was increased by $1,661
and paid-in capital was decreased by $1,661 as a result of differing
book/tax adjustments and a reclassification of nondeductible organizational
expenses. Net assets of the Fund were unaffected by the reclassifications.
C. Distributions -- It is the policy of the Fund to declare daily dividends
from net investment income. Such distributions are paid monthly.
Distributions from net realized capital gains, if any, are generally paid
annually and recorded on ex-dividend date. The Fund may elect to use a
portion of the proceeds of fund share redemptions as distributions for
federal income tax purposes.
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. In addition, the Fund
intends to invest in such municipal securities to allow it to qualify to
pay "exempt interest dividends," as defined in the Internal Revenue Code.
The Fund has a capital loss carryforward of $1,007,290 (which may be
carried forward to offset future taxable capital gains, if any) which
expires, if not previously utilized, through the year 2008.
E. Expenses -- Distribution and transfer agency expenses directly attributable
to a class of shares are charged to that class' operations. All other
expenses which are attributable to more than one class are allocated among
the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M Advisors, Inc. ("AIM"). Under the terms of the master investment advisory agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.60% of the first $500 million of the Fund's average daily net assets, plus 0.55% of the Fund's average daily net assets of the next $500 million, plus 0.50% of the next $500 million of the Fund's average daily net assets, plus 0.45% of the Fund's average daily net assets in excess of $1.5 billion. AIM has agreed to limit the Fund's expenses
FS-40
(exclusive of brokerage commissions, taxes, interest, extraordinary items and
increases for indirect credits (if any)) to the annual rate of 0.55%, 1.30% and
1.30% of the average daily net assets of the Fund's Class A, Class B and Class
C, shares, respectively. During the year ended March 31, 2000, AIM waived
advisory fees and reimbursed expenses of $519,765.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the year ended March 31, 2000, AIM was paid
$56,591 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agent and
shareholder services to the Fund. For the year ended March 31, 2000, AFS was
paid $19,405 for such services.
The Company has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Company has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at an annual rate of
0.25% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the year ended March 31, 2000,
the Class A shares, Class B shares and Class C shares paid AIM Distributors
$111,983, $178,459 and $41,746, respectively, as compensation under the Plans.
AIM Distributors received commissions of $73,191 from the sales of Class A
shares of the Fund during the year ended March 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended March 31, 2000, AIM
Distributors received $77,143 in contingent deferred sales charges imposed on
redemptions of Fund shares.
Certain officers and directors of the Company are officers of AIM, AFS and AIM
Distributors.
During the year ended March 31, 2000, the Fund paid legal fees of $3,771 for
services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Directors. A member of that firm is a director of the Company.
NOTE 3-DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to directors who are not an "interested person" of AIM. The Company may invest directors' fees, if so elected by a director, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 4-INDIRECT EXPENSES
During the year ended March 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $727 under an expense offset arrangement. The effect of the above arrangement resulted in a reduction of the Fund's total expenses of $727 during the year ended March 31, 2000.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to the lesser of (i) $1,000,000,000 or (ii) the limits set by its prospectus for borrowings. The Fund and other funds advised by AIM which are parties to the line of credit may borrow on a first come, first served basis. During the year ended March 31, 2000, the fund did not borrow under the line of credit agreement. The funds which are parties to the line of credit are charged a commitment fee of 0.09% on the unused balance of the committed line. The commitment fee is allocated among such funds based on their respective average net assets for the period.
FS-41
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities) purchased and sold during the year ended March 31, 2000 was $36,846,568 and $32,445,378, respectively.
The amount of unrealized appreciation (depreciation) of investment securities as of March 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $ 116,757 ------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (6,023,223) ------------------------------------------------------------------------- Net unrealized appreciation (depreciation) of investment securities $(5,906,466) ========================================================================= |
Investments have the same cost for tax and financial statement purposes.
NOTE 7-CAPITAL STOCK
Changes in capital stock outstanding during the years ended March 31, 2000 and 1999 were as follows:
2000 1999
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
Sold:
Class A 2,912,871 $ 27,305,711 4,375,932 $ 44,035,445
------------------------------------------------------------------------------------------------------------------------
Class B 1,583,616 14,795,377 1,198,092 12,077,378
------------------------------------------------------------------------------------------------------------------------
Class C 349,542 3,330,532 299,455 3,014,253
------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 161,117 1,500,788 111,621 1,125,789
------------------------------------------------------------------------------------------------------------------------
Class B 53,062 488,068 18,956 191,064
------------------------------------------------------------------------------------------------------------------------
Class C 14,157 130,348 4,580 46,173
------------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (3,579,016) (33,245,266) (1,332,330) (13,464,236)
------------------------------------------------------------------------------------------------------------------------
Class B (689,244) (6,284,594) (107,492) (1,083,779)
------------------------------------------------------------------------------------------------------------------------
Class C (194,287) (1,750,120) (77,415) (779,385)
------------------------------------------------------------------------------------------------------------------------
611,818 $ 6,270,844 4,491,399 $ 45,162,702
========================================================================================================================
|
FS-42
NOTE 8-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A, Class B and Class C capital stock outstanding during each of the years in the two-year period ended March 31, 2000 and the period January 2, 1998 (date operations commenced) through March 31, 1998.
CLASS A
-----------------------------
2000 1999 1998
------- ------- -------
Net asset value, beginning of period $ 10.04 $ 9.99 $ 10.00
------------------------------------------------------------ ------- ------- -------
Income from investment operations:
Net investment income 0.56 0.54 0.11
------------------------------------------------------------ ------- ------- -------
Net gains (losses) on securities (both realized and
unrealized) (1.32) 0.05 (0.01)
------------------------------------------------------------ ------- ------- -------
Total from investment operations (0.76) 0.59 0.10
------------------------------------------------------------ ------- ------- -------
Less distributions from net investment income (0.56) (0.54) (0.11)
============================================================ ======= ======= =======
Net asset value, end of period $ 8.72 $ 10.04 $ 9.99
============================================================ ======= ======= =======
Total return(a) (7.79)% 6.01% 1.04%
============================================================ ======= ======= =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $38,645 $49,570 $17,787
============================================================ ======= ======= =======
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 0.50%(b) 0.29% 0.25%(c)
------------------------------------------------------------ ------- ------- -------
Without fee waivers and/or expense reimbursements 1.28%(b) 1.29% 1.65%(c)
============================================================ ======= ======= =======
Ratio of net investment income to average net assets 5.95%(b) 5.41% 4.80%(c)
============================================================ ======= ======= =======
Portfolio turnover rate 51% 30% 21%
============================================================ ======= ======= =======
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(a) Does not deduct sales charges and is not annualized for periods less than
one year.
(b) Ratios are based on average net assets of $44,793,328.
(c) Annualized.
FS-43
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B CLASS C
----------------------------- --------------------------
2000 1999 1998 2000 1999 1998
------- ------- ------- ------ ------ ------
Net asset value, beginning of period $ 10.04 $ 9.99 $ 10.00 $10.04 $ 9.99 $10.00
------------------------------------------------------------ ------- ------- ------- ------ ------ ------
Income from investment operations:
Net investment income 0.48 0.47 0.09 0.48 0.47 0.09
------------------------------------------------------------ ------- ------- ------- ------ ------ ------
Net gains (losses) on securities (both realized and
unrealized) (1.32) 0.04 (0.01) (1.32) 0.04 (0.01)
------------------------------------------------------------ ------- ------- ------- ------ ------ ------
Total from investment operations (0.84) 0.51 0.08 (0.84) 0.51 0.08
------------------------------------------------------------ ------- ------- ------- ------ ------ ------
Less distributions from net investment income (0.48) (0.46) (0.09) (0.48) (0.46) (0.09)
============================================================ ======= ======= ======= ====== ====== ======
Net asset value, end of period $ 8.72 $ 10.04 $ 9.99 $ 8.72 $10.04 $ 9.99
============================================================ ======= ======= ======= ====== ====== ======
Total return(a) (8.54)% 5.23% 0.81% (8.54)% 5.23% 0.79%
============================================================ ======= ======= ======= ====== ====== ======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $20,298 $13,850 $ 2,699 $4,100 $3,017 $ 738
============================================================ ======= ======= ======= ====== ====== ======
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements 1.26%(b) 1.04% 1.00%(c) 1.26%(b) 1.04% 1.00%(c)
------------------------------------------------------------ ------- ------- ------- ------ ------ ------
Without fee waivers and/or expense reimbursements 2.04%(b) 2.04% 2.44%(c) 2.04%(b) 2.04% 2.44%(c)
============================================================ ======= ======= ======= ====== ====== ======
Ratio of net investment income to average net assets 5.19%(b) 4.66% 4.05%(c) 5.19%(b) 4.66% 4.05%(c)
============================================================ ======= ======= ======= ====== ====== ======
Portfolio turnover rate 51% 30% 21% 51% 30% 21%
============================================================ ======= ======= ======= ====== ====== ======
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(a) Does not deduct sales charges and is not annualized for periods less than
one year.
(b) Ratios are based on average net assets of $17,845,864 and $4,174,621 for
Classes B and C, respectively.
(c) Annualized.
FS-44
PART C
OTHER INFORMATION
Item 23. Exhibits
Exhibit
Number
------
a (1) - (a) Articles of Incorporation of Registrant, dated April 30, 1993, were filed as an Exhibit
to Registrant's Registration Statement on July 19, 1993, and were filed electronically as an
Exhibit to Post-Effective Amendment No. 4 on July 26, 1996.
- (b) Articles of Amendment, dated July 27, 1993, were filed as an Exhibit to Registrant's
Pre-Effective Amendment No. 1 on October 12, 1993, and were filed electronically as an Exhibit
to Post-Effective Amendment No. 4 on July 26, 1996.
- (c) Articles of Amendment, dated September 10, 1993, were filed as an Exhibit to Registrant's
Pre-Effective Amendment No. 1 on October 12, 1993, and were filed electronically as an
Exhibit to Post-Effective Amendment No. 4 on July 26, 1996.
- (d) Articles of Amendment, dated June 18, 1997, were filed as an Exhibit to Registrant's
Post-Effective Amendment No. 5 on July 29, 1997.
- (e) Articles of Amendment, dated September 23, 1997, were filed as an Exhibit to Registrant's
Post-Effective Amendment No. 6 on October 7, 1997.
- (f) Articles Supplementary, dated September 29, 1997, were filed as an Exhibit to Registrant's
Post-Effective Amendment No. 6 on October 7, 1997.
(2) - (a) Agreement and Declaration of Trust of AIM Tax-Exempt Funds, dated December 6, 1999, was
electronically filed as an Exhibit to Post-Effective Amendment No. 9 on March 24, 2000, and
is hereby incorporated by reference.
(b) Amendment No. 1 to Agreement and Declaration of Trust of AIM Tax-Exempt Funds dated May
10, 2000, was electronically filed as an Exhibit to Post-Effective Amendment No. 10 on May
22, 2000, and is hereby incorporated by reference.
b (1) - (a) By-Laws of Registrant were filed as an Exhibit to Registrant's Registration Statement on
July 19, 1993, and were electronically filed as an Exhibit to Post-Effective Amendment No. 3
on July 27, 1995.
- (b) First Amendment, dated March 14, 1995, to the By-Laws of Registrant was electronically
filed as an Exhibit to Post-Effective Amendment No. 3 on July 27, 1995.
(2) - Amended and Restated By-Laws of Registrant, dated December 11, 1996, were filed as an Exhibit
to Registrant's Post-Effective Amendment No. 5 on July 29, 1997.
(3) - (a) By-Laws of Registrant, dated effective December 6, 1999, were electronically filed as an
Exhibit to Post-Effective Amendment No. 9 on March 24, 2000, and are hereby incorporated by
reference.
- (b) Amendment No. 1 to By-Laws of Registrant, dated effective June 14, 2000, is filed
herewith electronically.
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c (1) - Specimen share certificate for AIM Tax-Exempt Cash Fund of Registrant (transfer agent change) was
electronically filed as an Exhibit to Post-Effective Amendment No. 3 on July 27, 1995.
(2) - Specimen share certificate for Intermediate Portfolio - AIM Tax-Free Intermediate Shares of
Registrant (transfer agent change) was electronically filed as an Exhibit to Post-Effective
Amendment No. 3 on July 27, 1995.
(3) - Specimen share certificate for AIM Tax-Free Intermediate Fund of Registrant (name change) was
filed as an Exhibit to Post-Effective Amendment No. 7 on July 29, 1998.
(4) - Specimen share certificate for AIM Tax-Exempt Bond Fund of Connecticut of Registrant
(transfer agent change) was electronically filed as an Exhibit to Post-Effective Amendment
No. 3 on July 27, 1995.
(5) - Specimen share certificates for AIM High Income Municipal Fund of Registrant (new portfolio)
was filed as an Exhibit to Post-Effective Amendment No. 7 on July 29, 1998.
d (1) - 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 Pre-Effective Amendment No. 1 on
October 12, 1993.
(2) - 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. 1 on
April 28, 1994 and was filed electronically as an Exhibit to Post-Effective Amendment No. 4
on July 26, 1996.
(3) - (a) Master Investment Advisory Agreement, dated February 28, 1997, between Registrant and A I M
Advisors, Inc. was filed as an Exhibit to Post-Effective Amendment No. 5 on July 29, 1997.
- (b) Amendment No. 1, dated September 20, 1997, to the Master Investment Advisory Agreement, dated
February 28, 1997, between Registrant and A I M Advisors, Inc., was filed as an Exhibit to
Post-Effective Amendment No. 7 on July 29, 1998.
(4) - Master Investment Advisory Agreement, dated June 1, 2000, between Registrant and A I M
Advisors, Inc. is filed herewith electronically.
e (1) - Master Distribution Agreement, dated as of August 6, 1993, between Registrant and A I M
Distributors, Inc. was filed as an Exhibit to Registrant's Pre-Effective Amendment No. 1 on
October 12, 1993.
(2) - Master Distribution Agreement, dated October 18, 1993, between Registrant and A I M
Distributors, Inc. was filed as an Exhibit to Registrant's Post-Effective Amendment No. 1 on
April 28, 1994, and was filed electronically as an Exhibit to Post-Effective Amendment No. 4
on July 26, 1996.
(3) - (a) Master Distribution Agreement, dated February 28, 1997, between Registrant and A I M
Distributors, Inc. was filed as an Exhibit to Post-Effective Amendment No. 5 on July 29, 1997.
|
- (b) Amendment No. 1, dated August 4, 1997, to Master Distribution Agreement, dated February
28, 1997, between Registrant and A I M Distributors, Inc., was filed as an Exhibit to
Post-Effective Amendment No. 6 on October 7, 1997.
(4) - Amended and Restated Master Distribution Agreement, dated September 20, 1997, between
Registrant (on behalf of its Class A and Class C Shares) and A I M Distributors, Inc., was
filed as an Exhibit to Post-Effective Amendment No. 7 on July 29, 1998.
(5) - (a) Master Distribution Agreement, dated June 1, 2000, between Registrant (on behalf of its
Class A and Class C Shares) and A I M Distributors, Inc., is filed herewith electronically.
- (b) First Amended and Restated Master Distribution Agreement, dated July 1, 2000, between
Registrant (on behalf of its Class A and Class C Shares) and A I M Distributors, Inc.,
is filed herewith electronically.
(6) - Master Distribution Agreement, dated September 20, 1997 between Registrant (on behalf of its
Class B Shares) and A I M Distributors, Inc., was filed as an Exhibit to Post-Effective
Amendment No. 7 on July 29, 1998.
(7) - Master Distribution Agreement, dated June 1, 2000, between Registrant (on behalf of its Class
B Shares) and A I M Distributors, Inc., is filed herewith electronically.
(8) - Form of Selected Dealer Agreement between A I M Distributors, Inc. and selected dealers was
filed as an Exhibit to Post-Effective Amendment No. 7 on July 29, 1998, and is hereby
incorporated by reference.
(9) - Form of Bank Agreement between A I M Distributors, Inc. and selected banks was filed as an
Exhibit to Post-Effective Amendment No. 7 on July 29, 1998, and is hereby incorporated by
reference.
f (1) - AIM Funds Retirement Plan for Registrant's Non-Affiliated Directors was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 2 on July 26, 1994.
(2) - AIM Funds Retirement Plan for Eligible Directors/Trustees dated effective March 8, 1994, as
restated September 18, 1995, was filed electronically as an Exhibit to Post-Effective
Amendment No. 4 on July 26, 1996.
(3) - AIM Funds Retirement Plan for Eligible Directors/Trustees, as restated March 7, 2000, is
filed herewith electronically.
(4) - Form of Deferred Compensation Agreement for Registrant's Non-Affiliated Directors as approved
March 12, 1997, was filed as an Exhibit to Post-Effective Amendment No. 7 on July 29, 1998.
(5) - Form of Deferred Compensation Plan for Eligible Directors/Trustees was filed electronically as
an Exhibit to Post-Effective Amendment No.4 on July 26, 1996.
(6) - Form of AIM Funds Director Deferred Compensation Agreement, as amended March 7, 2000, is
filed herewith electronically.
g (1) - Custodian Agreement, dated October 15, 1993, between Registrant and State Street Bank and
Trust Company was filed as an Exhibit to Registrant's Post-Effective Amendment No. 1 on April
28, 1994.
|
(2) - Custody Agreement, dated October 19, 1995, between Registrant and The Bank of New York was
filed electronically as an Exhibit to Post-Effective Amendment No. 4 on July 26, 1996, and is
hereby incorporated by reference.
(3) - (a) Subcustodian Agreement, dated September 9, 1994, between Registrant and Texas Commerce
Bank National Association was electronically filed as an Exhibit to Post-Effective Amendment
No. 3 on July 27, 1995, and is hereby incorporated by reference.
- (b) Amendment No. 1, dated October 2, 1998, to the Subcustodian Agreement between Registrant
and Texas Commerce Bank National Association was filed as an Exhibit to Post-Effective
Amendment No. 8 on June 18, 1999, and is hereby incorporated by reference.
h (1) - (a) Assignment and Acceptance of Assignment of Transfer Agency and Registrar Agreement, dated
as of October 15, 1993, among Registrant (on behalf of its Intermediate Portfolio - AIM
Tax-Free Intermediate Shares), Tax-Free Investments Co. (on behalf of its Intermediate
Portfolio - AIM Tax-Free Intermediate Shares) and First Data Investor Services Group
(formerly The Shareholder Services Group, Inc.) was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 2 on July 26, 1994.
- (b) Amendment No. 1, dated October 15, 1993, to the Transfer Agency and Registrar Agreement between
Registrant and First Data Investor Services Group (formerly The Shareholder Services Group,
Inc.) was filed as an Exhibit to Registrant's Post-Effective Amendment No. 2 on July 26, 1994.
(2) - Transfer Agency and Service Agreement, dated November 1, 1994, between Registrant and A I M
Fund Services, Inc. was electronically filed as an Exhibit to Post-Effective Amendment No. 3
on July 27, 1995.
(3) - (a) Amended and Restated Transfer Agency and Service Agreement, dated September 20, 1997,
between Registrant and A I M Fund Services, Inc. was filed as an Exhibit to Post-Effective
Amendment No. 7 on July 29, 1998.
- (b) Amendment No. 1, dated January 1, 1999, to the Amended and Restated Transfer Agency and Service
Agreement between Registrant and A I M Fund Services, Inc. was filed as an Exhibit to
Post-Effective Amendment No. 8 on June 18, 1999.
(4) - (a) Transfer Agency and Service Agreement, dated June 1, 2000, between Registrant and A I M
Fund Services, Inc., is filed herewith electronically.
- (b) Amendment No. 1, dated July 1, 2000, to the Transfer Agency and Service Agreement, dated
June 1, 2000, between Registrant and A I M Fund Services, Inc., is filed herewith
electronically.
(5) - (a) Remote Access and Related Services Agreement, dated December 23, 1994, between Registrant
and First Data Investor Services Group, Inc. (formerly The Shareholder Services Group, Inc.)
was electronically filed as an Exhibit to Post-Effective Amendment No. 3 on July 27, 1995,
and is hereby incorporated by reference.
- (b) Amendment No. 1, dated October 4, 1995, to the Remote Access and Related Services
Agreement, dated December 23, 1994, between Registrant and First Data Investor Services
Group, Inc. (formerly, The Shareholder Services Group, Inc.) was filed electronically as an
Exhibit to Post-Effective Amendment No. 4 on July 26, 1996, and is hereby incorporated by
reference.
|
- (c) Addendum No. 2, dated October 12, 1995, to the Remote Access and Related Services
Agreement, dated December 23, 1994, between Registrant and First Data Investor Services
Group, Inc. (formerly The Shareholder Services Group, Inc.) was filed electronically as an
Exhibit to Post-Effective Amendment No. 4 on July 26, 1996, and is hereby incorporated by
reference.
- (d) Amendment No. 3, dated February 1, 1997, to the Remote Access and Related Services
Agreement, dated December 23, 1994, between Registrant and First Data Investor Services
Group, Inc. (formerly The Shareholder Services Group, Inc.) was filed electronically as an
Exhibit to Post-Effective Amendment No. 5 on July 29, 1997, and is hereby incorporated by
reference.
- (e) Amendment No. 4, dated June 30, 1998, to the Remote Access and Related Services
Agreement, dated December 23, 1994, between Registrant and First Data Investor Services
Group, Inc. was filed as an Exhibit to Post-Effective Amendment No. 8 on June 18, 1999, and
is hereby incorporated by reference.
- (f) Amendment No. 5, dated July 1, 1998, to the Remote Access and Related Services Agreement, dated
December 23, 1994, between Registrant and First Data Investor Services Group, Inc. was filed
as an Exhibit to Post-Effective Amendment No. 8 on June 18, 1999, and is hereby incorporated
by reference.
- (g) Exhibit 1, effective August 4, 1997 to the Remote Access and Related Services Agreement, dated
December 23, 1994, between the Registrant and First Data Investor Services Group, Inc. was filed as
an Exhibit to Post-Effective Amendment No. 7 on July 29, 1998, and is hereby incorporated by reference.
- (h) Amendment No. 6, dated August 30, 1999, to the Remote Access and Related Services Agreement, dated
December 23, 1994, between Registrant and First Data Investor Services Group, Inc., is filed
herewith electronically.
- (i) Amendment No. 7, dated February 29, 2000, to the Remote Access and Related Services Agreement,
dated December 23, 1994, between Registrant and First Data Investor Services Group, Inc., is filed
herewith electronically.
(6) - Preferred Registration Technology Escrow Agreement, dated September 10, 1997, between
Registrant and First Data Investor Services Group, Inc., was filed as an Exhibit to
Post-Effective Amendment No. 7 on July 29, 1998, and is hereby incorporated by reference.
(7) - 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 Pre-Effective Amendment No. 1 on
October 12, 1993.
(8) - 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. 1 on
April 28, 1994, and was filed electronically as an Exhibit to Post-Effective Amendment No. 4
on July 26, 1996.
(9) - (a) Administrative Services Agreement, dated October 18, 1993, between A I M Advisors, Inc.,
on behalf of Registrant's portfolios, and A I M Fund Services, Inc. was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 1 on April 28, 1994.
|
- (b) Amendment No. 1 to the 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. 2 on July
26, 1994.
- (c) Amendment No. 2, dated July 1, 1994, to the 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 Post-Effective Amendment
No. 5 on July 29, 1997.
- (d) Amendment No. 3, dated September 16, 1994, to the 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 Post-Effective Amendment
No. 5 on July 29, 1997.
- (e) Amendment No. 4, dated November 1, 1994, to the 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 Post-Effective Amendment
No. 5 on July 29, 1997.
(10) - (a) Master Administrative Services Agreement, dated February 28, 1997, between Registrant and
A I M Advisors, Inc. was filed as an Exhibit to Post-Effective Amendment No. 5 on July 29,
1997.
- (b) Amendment No. 1, dated September 20, 1997, to the Master Administrative Services Agreement, dated
February 28, 1997, between Registrant and A I M Advisors, Inc. was filed as an Exhibit to
Post-Effective Amendment No. 7 on July 29, 1998.
(11) - Master Administrative Services Agreement, dated June 1, 2000, between Registrant and A I M
Advisors, Inc., is filed herewith electronically.
(12) - Memorandum of Agreement, dated July 29, 1999, between Registrant, on behalf of AIM Tax-Exempt
Cash Fund, and A I M Distributors, Inc. was filed as an Exhibit to Post-Effective Amendment
No. 8 on June 18, 1999.
(13) Memorandum of Agreement, dated July 29, 1999, between Registrant, on behalf of AIM High
Income Municipal Fund, and A I M Advisors, Inc., was electronically filed as an Exhibit to
Post-Effective Amendment No. 10 on May 22, 2000.
(14) - Form of Memorandum of Agreement, dated July 1, 2000, between Registrant, on behalf of
AIM Tax-Exempt Cash Fund, and A I M Distributors, Inc. is filed herewith electronically.
(15) - Agreement and Plan of Reorganization, dated December 7, 1999, between AIM Tax-Exempt Funds,
Inc., a Maryland Corporation, and AIM Tax-Exempt Funds, a Delaware business trust was
electronically filed as an Exhibit to Post-Effective Amendment No. 9 on March 24, 2000, and
is hereby incorporated by reference.
i (1) - Opinion of Ballard Spahr Andrews & Ingersoll, LLP was filed as an Exhibit to Post-Effective
Amendment No. 6 on October 7, 1997, and is hereby incorporated by reference.
(2) - Opinion and Consent of Ballard Spahr Andrews & Ingersoll, LLP was electronically filed as an
Exhibit to Post-Effective Amendment No. 9 on March 24, 2000, and is hereby incorporated by
reference.
(3) - Consent of Ballard Spahr Andrews & Ingersoll, LLP is filed herewith electronically.
j - Consent of KPMG LLP is filed herewith electronically.
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k - Financial Statements - None.
l - Initial Capitalization Agreement, dated January 2, 1998, for Registrant's AIM High Income
Municipal Fund was filed as an Exhibit to Post-Effective Amendment No. 7 on July 29, 1998,
and is hereby incorporated by reference.
m (1) - Distribution Plan for Registrant's AIM Tax-Exempt Cash Fund and AIM Tax-Exempt Bond Fund of
Connecticut, and related forms of agreements were filed as an Exhibit to Registrant's
Post-Effective Amendment No. 1 on April 28, 1994.
(2) - Amended Distribution Plan, dated as of September 10, 1994, for Registrant's AIM Tax-Exempt
Cash Fund and AIM Tax-Exempt Bond Fund of Connecticut, and related forms of agreement were
electronically filed as an Exhibit to Post-Effective Amendment No. 3 on July 27, 1995.
(3) - Amended and Restated Master Distribution Plan, dated as of June 30, 1997, for Registrant's
AIM Tax-Exempt Cash Fund and AIM Tax-Exempt Bond Fund of Connecticut was filed as an Exhibit
to Post-Effective Amendment No. 5 on July 29, 1997.
(4) - Second Amended and Restated Master Distribution Plan, dated as of August 4, 1997, for
Registrant's AIM Tax-Exempt Cash Fund and AIM Tax-Exempt Bond Fund of Connecticut was filed
as an Exhibit to Post-Effective Amendment No. 6 on October 7, 1997.
(5) - Third Amended and Restated Master Distribution Plan, dated as of September 20, 1997, for
Registrant's Class A and Class C Shares was filed as an Exhibit to Post-Effective Amendment
No. 7 on July 29, 1998.
(6) - (a) Master Distribution Plan, dated as of June 1, 2000, for Registrant's Class A and Class C
Shares is filed herewith electronically.
- (b) First Amended and Restated Master Distribution Plan, dated as of July 1, 2000, for
Registrant's Class A and Class C Shares is filed herewith electronically.
(7) - Master Distribution Plan, dated as of September 20, 1997, for Registrant's Class B Shares
was filed as an Exhibit to Post-Effective Amendment No. 7 on July 29, 1998.
(8) - Master Distribution Plan, dated as of June 1, 2000, for Registrant's Class B Shares, is filed
herewith electronically.
(9) - Form of Shareholder Service Agreement to be used in connection with Registrant's Master
Distribution Plans was filed as an Exhibit to Post-Effective Amendment No. 8 on June 18,
1999, and is hereby incorporated by reference.
(10) - Form of Bank Shareholder Service Agreement to be used in connection with Registrant's Master
Distribution Plans was filed as an Exhibit to Post-Effective Amendment No. 8 on June 18,
1999, and is hereby incorporated by reference.
(11) - Forms of Service Agreement for Bank Trust Department and for Brokers for Bank Trust
Departments to be used in connection with Registrant's Master Distribution Plans were filed
as an Exhibit to Post-Effective Amendment No. 8 on June 18, 1999, and is hereby incorporated
by reference.
|
(12) - Form of Shareholder Service Agreement for Shares of the AIM Mutual Funds to be used in connection with
Registrant's Master Distribution Plans, is filed herewith electronically.
n (1) - Rule 18f-3 Amended and Restated Multiple Class Plan was filed as an Exhibit to Post-Effective
Amendment No. 5 on July 29, 1997.
(2) - Rule 18f-3 Second Amended and Restated Multiple Class Plan was filed as an Exhibit to
Post-Effective Amendment No. 6 on October 7, 1997.
(3) - Rule 18f-3 Third Amended and Restated Multiple Class Plan was filed as an Exhibit to Post-Effective Amendment
No. 9 on March 24, 2000, and is hereby incorporated by reference.
o - Reserved.
p (1) - The AIM Management Group Code of Ethics, as amended August 17, 1999, relating to A I M
Management Group Inc. and A I M Advisors, Inc. was filed as an Exhibit to Post-Effective
Amendment No. 9 on March 24, 2000.
(2) - AIM Funds Code of Ethics of Registrant, effective June 14, 2000, is filed herewith
electronically.
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Item 24. Persons Controlled by or Under Common Control with Registrant
Provide a list or diagram of all persons directly or indirectly controlled by or under common control with the Registrant. For any person controlled by another person, disclose the percentage of voting securities owned by the immediately controlling person or other basis of that person's control. For each company, also provide the state or other sovereign power under the laws of which the company is organized.
None.
Item 25. Indemnification
State the general effect of any contract, arrangements or statute under which any director, officer, underwriter or affiliated person of the Registrant is insured or indemnified against any liability incurred in their official capacity, other than insurance provided by any director, officer, affiliated person or underwriter for their own protection.
The Registrant's Agreement and Declaration of Trust, dated December 6, 1999, provides, among other things (i) that trustees and officers of the Registrant, when acting as such, shall not be personally liable for any act, omission or obligation of the Registrant or any trustee or officer (except for liabilities to the Registrant or its shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard to duty); (ii) for the indemnification by the Registrant of the trustees, officers, employees and agents of the Registrant to the fullest extent permitted by the Delaware Business Trust Act and Bylaws and other applicable law; (iii) that shareholders of the Registrant shall not be personally liable for the debts, liabilities, obligations or expenses of the Registrant or any portfolio or class; and (iv) for the indemnification by the Registrant, out of the assets belonging to the applicable portfolio, of shareholders and former shareholders of the Registrant in case they are held personally liable solely by reason of being or having been shareholders of the Registrant or any portfolio or class and not because of their acts or omissions or for some other reason.
Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in such Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a 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. Insurance coverage is provided under a joint Mutual Fund and Investment Advisory Professional Directors & Officers Liability Policy, issued by ICI Mutual Insurance Company, with a $35,000,000 limit of liability.
Item 26. Business and Other Connections of Investment Advisor
Describe any other business, profession, vocation or employment of a substantial nature that each investment advisor and each director, officer or partner of the advisor, is or has been, engaged within the last two fiscal years, for his or her own account or in the capacity of director, officer, employee, partner, or trustee.
The only employment of a substantial nature of the Advisor's directors and officers is with the Advisor and its affiliated companies. Reference is also made to the discussion under the captions "Management" of the Prospectus which comprises Part A of this Registration Statement, and to the discussion under the caption "Investment Advisory and Other Services" of the Statement of Additional Information which comprises Part B of this Registration Statement, and to Item 29(b) of Part C of this Registration Statement.
Item 27. Principal Underwriters
(a) State the name of each investment company (other than Registrant) for which each principal underwriter currently distributing the Registrant's securities also acts as a principal underwriter, depositor, or investment advisor.
A I M Distributors, Inc., the Registrant's principal underwriter, also acts as principal underwriter to the following investment companies:
AIM Advisor Funds, Inc.
AIM Equity Funds (Retail Classes)
AIM Floating Rate Fund
AIM Funds Group
AIM Growth Series
AIM International Funds, Inc.
AIM Investment Funds
AIM Investment Securities Funds (Retail Classes)
AIM Series Trust
AIM Special Opportunities Funds
AIM Summit Fund
AIM Variable Insurance Funds
(b) Provide the information required by the following tables for each director, officer or partner of each principal underwriter named in response to Item 20.
The following table sets forth information with respect to each director, officer or partner of A I M Distributors, Inc.
Name and Principal Position and Offices Position and Offices
Business Address* with Principal Underwriter with Registrant
---------------- -------------------------- ---------------
Charles T. Bauer Chairman & Director Chairman and Trustee
Michael J. Cemo President & Director None
Gary T. Crum Director Senior Vice President
Robert H. Graham Senior Vice President & Director President & Trustee
William G. Littlepage Senior Vice President & Director None
James L. Salners Executive Vice President None
Marilyn M. Miller Senior Vice President None
Gene L. Needles Senior Vice President None
Gordon J. Sprague Senior Vice President None
Michael C. Vessels Senior Vice President None
B.J. Thompson First Vice President None
James R. Anderson Vice President None
Mary Kay Coleman Vice President None
Mary A. Corcoran Vice President None
Melville B. Cox Vice President & Chief Compliance Vice President
Officer
Glenda A. Dayton Vice President None
Sidney M. Dilgren Vice President None
Tony D. Green Vice President None
Dawn M. Hawley Vice President & Treasurer None
Ofelia M. Mayo Vice President, General Counsel Assistant Secretary
& Assistant Secretary
|
Name and Principal Position and Offices Position and Offices
Business Address* with Principal Underwriter with Registrant
---------------- -------------------------- ---------------
Charles H. McLaughlin Vice President None
Ivy B. McLemore Vice President None
Terri L. Ransdell Vice President None
Carol F. Relihan Vice President Senior Vice President
& Secretary
Kamala C. Sachidanandan Vice President None
Christopher T. Simutis Vice President None
Gary K. Wendler Vice President None
Norman W. Woodson Vice President None
Kathleen J. Pflueger Secretary Assistant Secretary
Luke P. Beausoleil Assistant Vice President None
Sheila R. Brown Assistant Vice President None
Scott E. Burman Assistant Vice President None
Mary E. Gentempo Assistant Vice President None
David E. Hessel Assistant Vice President, None
Assistant Treasurer &
Controller
Simon R. Hoyle Assistant Vice President None
Kathryn A. Jordon Assistant Vice President None
Kim T. McAuliffe Assistant Vice President None
David B. O'Neil Assistant Vice President None
Rebecca Starling-Klatt Assistant Vice President None
Nicholas D. White Assistant Vice President None
Nancy L. Martin Assistant General Counsel & Assistant Secretary
Assistant Secretary
|
Name and Principal Position and Offices Position and Offices
Business Address* with Principal Underwriter with Registrant
---------------- -------------------------- ---------------
Samuel D. Sirko Assistant General Counsel & Assistant Secretary
Assistant Secretary
P. Michelle Grace Assistant Secretary Assistant Secretary
Lisa A. Moss Assistant Secretary Assistant Secretary
|
*11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
(c) Provide the information required by the following table for all commissions and other compensation received, directly or indirectly, from the Registrant during the last fiscal year by each principal underwriter who is not an affiliated person of the Registrant or any affiliated person of an affiliated person.
Not Applicable.
Item 28. Location of Accounts and Records
State the name and address of each person maintaining physical possession
of each account, book or other document required to be maintained by section
31(a) [15 U.S.C. 80a-30(a)] and the rules under that section.
A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, maintains physical possession of each such account, book or other document of the Registrant at its principal executive offices, except for those maintained by the Registrant's Custodian, The Bank of New York, 90 Washington Street, 11th Floor, New York, New York 10286, and the Registrant's Transfer Agent and Dividend Paying Agent, A I M Fund Services, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.
Item 29. Management Services
Provide a summary of the substantive provisions of any management-related service contract not discussed in Part A or B, disclosing the parties to the contract, the total amount paid and by whom, for the Registrant's last three fiscal years.
Not Applicable.
Item 30. Undertakings
(c) In initial registration statements filed under the Securities Act, provide an undertaking to file an amendment to the registration statement with certified financial statements showing the initial capital received before accepting subscriptions from more than 25 persons if the Registrant intends to raise its initial capital under section 14(a)(3) [15 U.S.C. 80a-14(a)(3)].
Not Applicable.
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, thereto duly authorized, in the city of Houston, Texas on the 26th day of July, 2000.
Registrant: AIM TAX-EXEMPT 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:
SIGNATURES TITLE DATE
---------- ----- ----
/s/ CHARLES T. BAUER Chairman & Trustee July 26, 2000
-------------------------------------
(Charles T. Bauer)
/s/ ROBERT H. GRAHAM Trustee & President July 26, 2000
------------------------------------- (Principal Executive Officer)
(Robert H. Graham)
/s/ BRUCE L. CROCKETT Trustee July 26, 2000
-------------------------------------
(Bruce L. Crockett)
/s/ OWEN DALY II Trustee July 26, 2000
-------------------------------------
(Owen Daly II)
/s/ EDWARD K. DUNN, JR. Trustee July 26, 2000
--------------------------------------
(Edward K. Dunn, Jr.)
/s/ JACK FIELDS Trustee July 26, 2000
-------------------------------------
(Jack Fields)
/s/ CARL FRISCHLING Trustee July 26, 2000
-------------------------------------
(Carl Frischling)
/s/ PREMA MATHAI-DAVIS Trustee July 26, 2000
-------------------------------------
(Prema Mathai-Davis)
/s/ LOUIS F. PENNOCK Trustee July 26, 2000
-------------------------------------
(Lewis F. Pennock)
/s/ LOUIS S. SKLAR Trustee July 26, 2000
-------------------------------------
(Louis S. Sklar)
/s/ DANA R. SUTTON Vice President &
------------------------------------- Treasurer (Principal Financial July 26, 2000
(Dana R. Sutton) and Accounting Officer)
|
INDEX TO EXHIBITS
Exhibit
Number
------
b(3)(b) Amendment No. 1 to By-Laws of Registrant, dated effective June 14, 2000
d(4) Master Investment Advisory Agreement, dated June 1, 2000, between Registrant and
A I M Advisors, Inc.
e(5)(a) Master Distribution Agreement, dated June 1, 2000, between Registrant
(on behalf of its Class A and Class C Shares) and A I M Distributors, Inc.
e(5)(b) First Amended and Restated Master Distribution Agreement, dated July 1, 2000,
between Registrant (on behalf of its Class A and Class C Shares) and
A I M Distributors, Inc.
e(7) Master Distribution Agreement, dated June 1, 2000, between Registrant (on
behalf of its Class B Shares) and A I M Distributors, Inc.
f(3) AIM Funds Retirement Plan for Eligible Directors/Trustees, as restated March 7, 2000
f(6) Form of AIM Funds Director Deferred Compensation Agreement, as amended March 7, 2000
h(4)(a) Transfer Agency and Service Agreement, dated June 1, 2000, between Registrant
and A I M Fund Services, Inc.
h(4)(b) Amendment No. 1, dated July 1, 2000, to the Transfer Agency and Service Agreement, dated
June 1, 2000, between Registrant and A I M Fund Services, Inc.
h(5)(h) Amendment No. 6, dated August 30, 1999, to the Remote Access and Related Services Agreement,
dated December 23, 1994, between Registrant and First Data Investor Services Group, Inc.
h(5)(i) Amendment No. 7, dated February 29, 2000, to the Remote Access and Related Services Agreement,
dated December 23, 1994, between Registrant and First Data Investor Services Group, Inc.
h(11) Master Administrative Services Agreement, dated June 1, 2000,
between Registrant and A I M Advisors, Inc.
h(14) Form of Memorandum of Agreement, dated July 1, 2000, between Registrant, on behalf of
AIM Tax-Exempt Cash Fund, and A I M Distributors, Inc.
i(3) Consent of Ballard Spahr Andrews & Ingersoll, LLP
j Consent of KPMG LLP
m(6)(a) Master Distribution Plan, dated as of June 1, 2000, for Registrant's Class A and Class C
Shares
m(6)(b) First Amended and Restated Master Distribution Plan, dated as of July 1, 2000, for
Registrant's Class A and Class C Shares
m(8) Master Distribution Plan, dated as of June 1, 2000, for Registrant's Class B Shares
|
m(12) Form of Shareholder Service Agreement for Shares of the AIM Mutual Funds to be used in
connection with Registrant's Master Distribution Plans
p(2) AIM Funds Code of Ethics of Registrant, effective June 14, 2000
|
EXHIBIT b(3)(b)
AMENDMENT NO. 1
TO
BYLAWS OF AIM TAX-EXEMPT FUNDS
(A DELAWARE BUSINESS TRUST)
ADOPTED EFFECTIVE JUNE 14, 2000
This Amendment No. 1 to the Bylaws of AIM Tax-Exempt Funds amends the Bylaws initially adopted effective December 6, 1999 (the "Bylaws").
1. Article IV, Section 8 is hereby restated in its entirety to read as follows:
"Section 8. Quorum. The holders of one-third of the Outstanding Shares entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the Shareholders for the transaction of business except as otherwise provided by applicable law or by the Agreement. Notwithstanding the preceding sentence, with respect to any matter which by applicable law or by the Agreement requires the separate approval of one or more Classes or Portfolios, the holders of one-third of the Outstanding Shares of each such Class or Portfolio (or of such Classes or Portfolios voting together as a single class) entitled to vote on the matter shall constitute a quorum. If, however, such quorum shall not be present or represented at any meeting of the Shareholders, the vote of the holders of a majority of Shares cast shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting, at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified."
2. A new Article IV, Section 14 is hereby added to the Bylaws to read in full as follows:
"Section 14. Record Date. The Board of Trustees may set a record date for the purpose of making any proper determination with respect to Shareholders, including, but not limited to, which Shareholders are entitled to notice of a meeting or to vote at a meeting. The record date may not be prior to the close of business on the day the record date is fixed and shall be not more than 90 days before the date on which the action requiring the determination will be taken."
3. A new Article IV, Section 15 is hereby added to the Bylaws to read in full as follows:
"Section 15. Adjournments. A meeting of Shareholders convened on the date for which it was called may be adjourned from time to time without further notice to Shareholders to a date not more than 120 days after the original record date. A meeting of Shareholders may not be adjourned for more than 120 days after the original record date for such meeting without giving the Shareholders notice of the adjournment and the new meeting
date."
EXHIBIT d(4)
AIM TAX-EXEMPT FUNDS
MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 1st day of June, 2000, by and between AIM Tax-Exempt Funds, a Delaware business trust (the "Trust") with respect to its series of shares shown on the Appendix A attached hereto, as the same may be amended from time to time, and A I M Advisors, Inc., a Delaware corporation (the "Advisor").
RECITALS
WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end, diversified management investment company;
WHEREAS, the Advisor is registered under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), as an investment advisor and engages in the business of acting as an investment advisor;
WHEREAS, the Trust's Agreement and Declaration of Trust (the "Declaration of Trust") authorizes the Board of Trustees of the Trust (the "Board of Trustees") to create separate series of shares of beneficial interest in the Trust, and as of the date of this Agreement, the Board of Trustees has created four separate series portfolios (such portfolios and any other portfolios hereafter added to the Trust being referred to collectively herein as the "Funds"); and
WHEREAS, the Trust and the Advisor desire to enter into an agreement to provide for investment advisory services to the Funds upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1. Advisory Services. The Advisor shall act as investment advisor for the Funds and shall, in such capacity, supervise all aspects of the Funds' operations, including the investment and reinvestment of cash, securities or other properties comprising the Funds' assets, subject at all times to the policies and control of the Board of Trustees. The Advisor shall give the Trust and the Funds the benefit of its best judgment, efforts and facilities in rendering its services as investment advisor.
2. Investment Analysis and Implementation. In carrying out its obligations under Section 1 hereof, the Advisor shall:
(a) supervise all aspects of the operations of the Funds;
(b) obtain and evaluate pertinent information about significant developments and economic, statistical and financial data, domestic, foreign or otherwise, whether affecting the economy generally or the Funds, and whether concerning the individual issuers whose securities are included in the assets of the Funds or the activities in which such issuers engage, or with respect to securities which the Advisor considers desirable for inclusion in the Funds' assets;
(c) determine which issuers and securities shall be represented in the Funds' investment portfolios and regularly report thereon to the Board of Trustees;
(d) formulate and implement continuing programs for the purchases and sales of the securities of such issuers and regularly report thereon to the Board of Trustees; and
(e) take, on behalf of the Trust and the Funds, all actions which appear to the Trust and the Funds necessary to carry into effect such purchase and sale programs and supervisory functions as aforesaid, including but not limited to the placing of orders for the purchase and sale of securities for the Funds.
3. Securities Lending Duties and Fees. The Advisor agrees to provide the following services in connection with the securities lending activities of each Fund: (a) oversee participation in the securities lending program to ensure compliance with all applicable regulatory and investment guidelines; (b) assist the securities lending agent or principal (the "Agent") in determining which specific securities are available for loan; (c) monitor the Agent to ensure that securities loans are effected in accordance with the Advisor's instructions and with procedures adopted by the Board of Trustees; (d) prepare appropriate periodic reports for, and seek appropriate approvals from, the Board of Trustees with respect to securities lending activities; (e) respond to Agent inquiries; and (f) perform such other duties as necessary.
As compensation for such services provided by the Advisor in connection with securities lending activities of each Fund, a lending Fund shall pay the Advisor a fee equal to 25% of the net monthly interest or fee income retained or paid to the Fund from such activities.
4. Delegation of Responsibilities. The Advisor is authorized to delegate any or all of its rights, duties and obligations under this Agreement to one or more sub-advisors, and may enter into agreements with sub-advisors, and may replace any such sub-advisors from time to time in its discretion, in accordance with the 1940 Act, the Advisers Act, and rules and regulations thereunder, as such statutes, rules and regulations are amended from time to time or are interpreted from time to time by the staff of the Securities and Exchange Commission ("SEC"), and if applicable, exemptive orders or similar relief granted by the SEC and upon receipt of approval of such sub-advisors by the Board of Trustees and by shareholders (unless any such approval is not required by such statutes, rules, regulations, interpretations, orders or similar relief).
5. Independent Contractors. The Advisor and any sub-advisors shall for all purposes herein be deemed to be independent contractors and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Trust in any way or otherwise be deemed to be an agent of the Trust.
6. 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 Funds, shall at all times be subject to any directives of the Board of Trustees.
7. 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 Trust, 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 Declaration of Trust, as the same may be amended from time to time;
(d) the provisions of the by-laws of the Trust, as the same may be amended from time to time; and
(e) any other applicable provisions of state, federal or foreign law.
8. Broker-Dealer Relationships. The Advisor is responsible for decisions to buy and sell securities for the Funds, broker-dealer selection, and negotiation of brokerage commission rates.
(a) The Advisor's primary consideration in effecting a security transaction will be to obtain the best execution.
(b) In selecting a broker-dealer to execute each particular
transaction, the Advisor will take the following into consideration:
the best net price available; the reliability, integrity and financial
condition of the broker-dealer; the size of and the difficulty in
executing the order; and the value of the expected contribution of the
broker-dealer to the investment performance of the Funds on a
continuing basis. Accordingly, the price to the Funds in any
transaction may be less favorable than that available from another
broker-dealer if the difference is reasonably justified by other
aspects of the fund execution services offered.
(c) 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 Funds to pay a broker or dealer that provides brokerage and research services to the Advisor an amount of commission for effecting a fund 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 a particular Fund, other Funds of the Trust, and to other clients of the Advisor as to which the Advisor exercises investment discretion. The Advisor is further authorized to allocate the orders placed by it on behalf of the Funds to such brokers and dealers who also provide research or statistical material, or other services to the Funds, to the Advisor, or to any sub-advisor. Such allocation shall be in such amounts and proportions as the Advisor shall determine and the Advisor will report on said allocations regularly to the Board of Trustees indicating the brokers to whom such allocations have been made and the basis therefor.
(d) With respect to one or more Funds, to the extent the Advisor does not delegate trading responsibility to one or more sub-advisors, in making decisions regarding broker-dealer relationships, the Advisor may take into consideration the recommendations of any sub-advisor appointed to provide investment research or advisory services in connection with the Funds, and may take into consideration any research services provided to such sub-advisor by broker-dealers.
(e) Subject to the other provisions of this Section 8, the 1940 Act, the Securities Exchange Act of 1934, and rules and regulations thereunder, as such statutes, rules and regulations are amended from time to time or are interpreted from time to time by the staff of the SEC, any exemptive orders issued by the SEC, and any other applicable provisions of law, the Advisor may select brokers or dealers with which it or the Funds are affiliated.
9. Compensation. The compensation that each Fund shall pay the Advisor is set forth in Appendix B attached hereto.
10. Expenses of the Funds. All of the ordinary business expenses incurred in the operations of the Funds and the offering of their shares shall be borne by the Funds unless specifically provided otherwise in this Agreement. These expenses borne by the Funds include but are not limited to brokerage commissions, taxes, legal, accounting, auditing, or governmental fees, the cost of preparing share certificates, custodian, transfer and shareholder service agent costs, expenses of issue, sale, redemption and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to trustee 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 Funds in connection with membership in investment company organizations and the cost of printing copies of prospectuses and statements of additional information distributed to the Funds' shareholders.
11. Services to Other Companies or Accounts. The Trust understands that the Advisor now acts, will continue to act and may act in the future as investment manager or advisor to fiduciary and other managed accounts, and as investment manager or advisor to other investment companies, including any offshore entities, or accounts, and the Trust has no objection to the Advisor so acting, provided that whenever the Trust and one or more other investment companies or accounts managed or advised by the Advisor have available funds for investment, investments suitable and appropriate for each will be allocated in accordance with a formula believed to be equitable to each company and account. The Trust recognizes that in some cases this procedure may adversely affect the size of the positions obtainable and the prices realized for the Funds.
12. Non-Exclusivity. The Trust understands that the persons employed by the Advisor to assist in the performance of the Advisor's duties under this Agreement will not devote their full time to such service and nothing contained in this Agreement shall be deemed to limit or restrict the right of the Advisor or any affiliate of the Advisor to engage in and devote time and attention to other businesses or to render services of whatever kind or nature. The Trust further understands and agrees that officers or directors of the Advisor may serve as officers or trustees of the Trust, and that officers or trustees of the Trust 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.
13. Effective Date, Term and Approval. This Agreement shall become effective with respect to a Fund, if approved by the shareholders of such Fund, on the Effective Date for such Fund, as set forth in Appendix A attached hereto. If so approved, this Agreement shall thereafter continue in force and effect until June 30, 2001, 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 Board of Trustees or (ii) by the vote of "a majority of the outstanding voting securities" of such Fund (as defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the trustees 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 Trust trustees), by votes cast in person at a meeting specifically called for such purpose.
14. Termination. This Agreement may be terminated as to the Trust or as to any one or more of the Funds at any time, without the payment of any penalty, by vote of the Board of Trustees or by vote of a majority of the outstanding voting securities of the applicable Fund, or by the Advisor, on sixty (60) days' written notice to the other party. The notice provided for herein may be waived by the party entitled to receipt thereof. This Agreement shall automatically terminate in the event of its assignment, the term "assignment" for purposes of this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act.
15. Amendment. No amendment of this Agreement shall be effective unless it is in writing and signed by the party against which enforcement of the amendment is sought.
16. Liability of Advisor and Fund. 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 Trust or to the Funds or to any shareholder of the Funds for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security. Any liability of the Advisor to one Fund shall not automatically impart liability on the part of the Advisor to any other Fund. No Fund shall be liable for the obligations of any other Fund.
17. Liability of Shareholders. Notice is hereby given that, as provided by applicable law, the obligations of or arising out of this Agreement are not binding upon any of the shareholders of the Trust individually but are binding only upon the assets and property of the Trust and that the shareholders shall be entitled, to the fullest extent permitted by applicable law, to the same limitation on personal liability as shareholders of private corporations for profit.
18. Notices. Any notices under this Agreement shall be in writing, addressed and delivered, telecopied or mailed postage paid, to the other party entitled to receipt thereof at such address as such party may designate for the receipt of such notice. Until further notice to the other party, it is agreed that the address of the Trust and that of the Advisor shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.
19. 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 SEC 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 SEC, such provision shall be deemed to incorporate the effect of such rule, regulation or order. Subject to the foregoing, this Agreement shall be governed by and construed in accordance with the laws (without reference to conflicts of law provisions) of the State of Texas.
20. License Agreement. The Trust shall have the non-exclusive right to use the name "AIM" to designate any current or future series of shares only so long as A I M Advisors, Inc. serves as investment manager or advisor to the Trust with respect to such series of shares.
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 Tax-Exempt Funds
(a Delaware business trust)
Attest:
/s/ P. MICHELLE GRACE By: /s/ ROBERT H. GRAHAM
-------------------------------- -------------------------------
Assistant Secretary President
(SEAL)
Attest: A I M Advisors, Inc.
/s/ P. MICHELLE GRACE By: /s/ ROBERT H. GRAHAM
-------------------------------- -------------------------------
Assistant Secretary President
|
(SEAL)
APPENDIX A
FUNDS AND EFFECTIVE DATES
NAME OF FUND EFFECTIVE DATE OF ADVISORY AGREEMENT ------------ ------------------------------------ AIM High Income Municipal Fund June 1, 2000 AIM Tax-Exempt Bond Fund of Connecticut June 1, 2000 AIM Tax-Exempt Cash Fund June 1, 2000 AIM Tax-Free Intermediate Fund June 1, 2000 |
APPENDIX B
COMPENSATION TO THE ADVISOR
The Trust shall pay the Advisor, out of the assets of a Fund, as full compensation for all services rendered, an advisory fee for such Fund set forth below. Such fee shall be calculated by applying the following annual rates to the average daily net assets of such Fund for the calendar year computed in the manner used for the determination of the net asset value of shares of such Fund.
AIM TAX-FREE INTERMEDIATE FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $500 million.................................................... 0.30% Over $500 million to and including $1 billion......................... 0.25% Over $1 billion....................................................... 0.20% |
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
NET ASSETS ANNUAL RATE ---------- ----------- All Assets............................................................ 0.50% |
AIM TAX-EXEMPT CASH FUND
NET ASSETS ANNUAL RATE ---------- ----------- All Assets............................................................ 0.35% |
AIM HIGH INCOME MUNICIPAL FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $500 million.................................................... 0.60% Over $500 million to and including $1 billion......................... 0.55% Over $1 billion to and including $1.5 billion......................... 0.50% Over $1.5 billion..................................................... 0.45% |
EXHIBIT e(5)(a)
MASTER DISTRIBUTION AGREEMENT
BETWEEN
AIM TAX-EXEMPT FUNDS
(CLASS A AND C SHARES)
AND
A I M DISTRIBUTORS, INC.
THIS AGREEMENT made as of the 1st day of June, 2000, by and between AIM TAX-EXEMPT FUNDS, a Delaware business trust (the "Trust"), with respect to the series of shares of beneficial interest set forth on Appendix A to this agreement (the "Portfolios") and the shares, other than the Class B shares, representing the Portfolios (hereinafter referred to as the "Class A and Class C Shares") and A I M DISTRIBUTORS, INC., a Delaware corporation (the "Distributor").
WITNESSETH:
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 Trust on behalf of the Class A and Class C Shares hereby appoints the Distributor as its exclusive agent for the sale of the Class A and Class C Shares to the public directly and through investment dealers and financial institutions in the United States and throughout the world.
SECOND: The Trust shall not sell any Class A and Class C Shares except through the Distributor and under the terms and conditions set forth in paragraph FOURTH below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Trust may issue Class A and Class C Shares to any other investment company or personal holding company, or to the shareholders thereof, in exchange for all or a majority of the shares or assets of any such company; and
(B) the Trust may issue Class A and Class C Shares 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 applicable Class A and Class C Shares.
THIRD: The Distributor hereby accepts appointment as exclusive agent for the sale of the Class A and Class C Shares and agrees that it will use its best efforts to sell such shares; provided, however, that:
(A) the Distributor may, and when requested by the Trust on behalf of the Class A and Class C Shares shall, suspend its efforts to effectuate such sales at any time when, in the opinion of the Distributor or of the Trust, no sales should be made because of market or other economic considerations or abnormal circumstances of any kind; and
(B) the Trust may withdraw the offering of the Class A and Class C Shares (i) at any time with the consent of the Distributor, or (ii) without such consent when so required by the provisions of any statute or of any order, rule or regulation of any governmental body having jurisdiction. It is mutually understood and agreed that the Distributor does not undertake to sell any specific amount of the Class A and Class C Shares. The Trust shall have the right to specify minimum amounts for initial and subsequent orders for the purchase of Class A and Class C Shares.
FOURTH:
(A) The public offering price of Class A Shares (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
Portfolios. The sales charge shall be established by the Distributor, may
reflect scheduled variations in, or the elimination of, sales charges on sales
of Class A 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 Portfolios. The Distributor shall
apply any scheduled variation in, or elimination of, the selling commission
uniformly to all offerees in the class specified.
The public offering price of the Class C shares shall be the net asset value per share of the applicable Class C shares. Net asset value per share shall be determined in accordance with the provisions of the then current prospectus and statement of additional information of the applicable Portfolio. The Distributor may establish a schedule of contingent deferred sales charges to be imposed at the time of redemption of the Shares, and such schedule shall be disclosed in the current prospectus of each Portfolio. Such schedule of contingent deferred sales charges may reflect variations in or waivers of such charges on redemptions of Class C shares, either generally to the public or to any specified class of shareholders and/or in connection with any specified class of transactions, in accordance with applicable rules and regulations and exemptive relief granted by the Securities and Exchange Commission, and as set forth in the Portfolios" current prospectus(es). The Distributor and the Trust shall apply any then applicable scheduled variation in or waiver of contingent deferred sales charges uniformly to all shareholders and/or all transactions belonging to a specified class.
(B) The Portfolios shall allow directly to investment dealers and other financial institutions through whom Class A Shares 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 and the total sales charges included in the offering price shall be paid to the Distributor.
The Distributor may pay to investment dealers and other financial institutions through whom Class C shares are sold, such sales commission as the Distributor may specify from time to time. Payment of any such sales commissions shall be the sole obligation of the Distributor.
(C) No provision of this Agreement shall be deemed to prohibit any payments by a Portfolio to the Distributor or by a Portfolio or the Distributor to investment dealers, financial institutions and 401(k) plan service providers where such payments are made under a distribution plan adopted by the Trust on behalf of each Portfolio pursuant to Rule 12b-1 under the 1940 Act.
FIFTH: The Distributor shall act as agent of the Trust on behalf of each Portfolio in connection with the sale and repurchase of Class A and Class C Shares. 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 Class A and Class C Shares and shall enter into all of its own engagements, agreements and contracts as principal on its own account. The Distributor shall enter into agreements with investment dealers and financial institutions selected by the Distributor, authorizing such investment dealers and financial institutions to offer and sell Class A and Class C Shares to the public upon the terms and conditions set forth therein, which shall not be inconsistent with the provisions of this Agreement. Each agreement shall provide that the investment dealer and financial institution shall act as a principal, and not as an agent, of the Trust on behalf of the Portfolios.
SIXTH: The Portfolios shall bear:
(A) the expenses of qualification of Class A and Class C Shares for sale in connection with such public offerings in such states as shall be selected by the Distributor, and of continuing the qualification therein until the Distributor notifies the Trust that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the final proof and distributing the Portfolios' 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 Portfolio), 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 Trust on behalf of the Portfolios pursuant to Rule 12b-1 under the 1940 Act.
EIGHTH: The Distributor will accept orders for the purchase of Class A and Class C Shares only to the extent of purchase orders actually received and not in excess of such orders, and it will not avail itself of any opportunity of making a profit by expediting or withholding orders. It is mutually understood and agreed that the Trust may reject purchase orders where, in the judgment of the Trust, such rejection is in the best interest of the Trust.
NINTH: The Trust, on behalf of the Portfolios, 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 Class A and Class C Shares.
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 Trust on behalf of the Portfolios 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 Portfolios, 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 Trust or Portfolio in connection therewith by or on behalf of the Distributor. The Distributor agrees to indemnify the Trust and the Portfolios against any and all claims, demands, liabilities and expenses which the Trust or the Portfolios 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 Trust or the Portfolios in its prospectus or in this Agreement.
(B) The Distributor agrees to indemnify the Trust and the Portfolios against any and all claims, demands, liabilities and expenses which the Trust or the Portfolios 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 Portfolios, 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 Trust or the Portfolios 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 Portfolios' transfer agent(s), or for any failure of any such transfer agent to perform its duties.
ELEVENTH: Nothing herein contained shall require the Trust to take any action contrary to any provision of its Agreement and Declaration of Trust, or to any applicable statute or regulation.
TWELFTH: This Agreement shall become effective as of the date hereof, shall continue in force and effect until June 30, 2001, 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 Trustees of the Trust or (ii) by the vote of a majority of the Portfolios' outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act), and (b) by vote of a majority of the trustees of the Trust 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 Trustees of the Trust or by vote of a majority of the outstanding voting securities of each Portfolio, 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 Trust and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate on the day and year first above written.
AIM TAX-EXEMPT FUNDS
By: /s/ ROBERT H. GRAHAM
------------------------------
Name: Robert H. Graham
Title: President
Attest:
/s/ P. MICHELLE GRACE
-----------------------------
Name:
Title:
|
A I M DISTRIBUTORS, INC.
By: /s/ MARILYN M. MILLER
------------------------------
Name: Marilyn M. Miller
Senior Vice President
Attest:
/s/ P. MICHELLE GRACE
-----------------------------
Name:
Title:
|
APPENDIX A
TO
MASTER DISTRIBUTION AGREEMENT
OF
AIM TAX-EXEMPT FUNDS
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Fund
AIM High Income Municipal Fund
AIM High Income Municipal Fund
EXHIBIT e(5)(b)
FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
BETWEEN
AIM TAX-EXEMPT FUNDS
(CLASS A SHARES AND CLASS C SHARES)
AND
A I M DISTRIBUTORS, INC.
THIS AGREEMENT made as of the 1st day of July, 2000, by and between AIM TAX-EXEMPT FUNDS, a Delaware business trust (the "Trust"), with respect to the series of shares of beneficial interest set forth on Appendix A to this agreement (the "Portfolios") and the shares, other than the Class B shares, representing the Portfolios (hereinafter referred to as the "Class A and Class C Shares") and A I M DISTRIBUTORS, INC., a Delaware corporation (the "Distributor").
WITNESSETH:
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 Trust on behalf of the Class A and Class C Shares hereby appoints the Distributor as its exclusive agent for the sale of the Class A and Class C Shares to the public directly and through investment dealers and financial institutions in the United States and throughout the world.
SECOND: The Trust shall not sell any Class A and Class C Shares except through the Distributor and under the terms and conditions set forth in paragraph FOURTH below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Trust may issue Class A and Class C Shares to any other investment company or personal holding company, or to the shareholders thereof, in exchange for all or a majority of the shares or assets of any such company; and
(B) the Trust may issue Class A and Class C Shares 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 applicable Class A and Class C Shares.
THIRD: The Distributor hereby accepts appointment as exclusive agent for the sale of the Class A and Class C Shares and agrees that it will use its best efforts to sell such shares; provided, however, that:
(A) the Distributor may, and when requested by the Trust on behalf of the Class A and Class C Shares shall, suspend its efforts to effectuate such sales at any time when, in the opinion of the
Distributor or of the Trust, no sales should be made because of market or other economic considerations or abnormal circumstances of any kind; and
(B) the Trust may withdraw the offering of the Class A and Class C Shares (i) at any time with the consent of the Distributor, or (ii) without such consent when so required by the provisions of any statute or of any order, rule or regulation of any governmental body having jurisdiction. It is mutually understood and agreed that the Distributor does not undertake to sell any specific amount of the Class A and Class C Shares. The Trust shall have the right to specify minimum amounts for initial and subsequent orders for the purchase of Class A and Class C Shares.
FOURTH:
(A) The public offering price of Class A Shares (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
Portfolios. The sales charge shall be established by the Distributor, may
reflect scheduled variations in, or the elimination of, sales charges on sales
of Class A 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 Portfolios. The Distributor shall
apply any scheduled variation in, or elimination of, the selling commission
uniformly to all offerees in the class specified.
The public offering price of the Class C shares shall be the net asset value per share of the applicable Class C shares. Net asset value per share shall be determined in accordance with the provisions of the then current prospectus and statement of additional information of the applicable Portfolio. The Distributor may establish a schedule of contingent deferred sales charges to be imposed at the time of redemption of the Shares, and such schedule shall be disclosed in the current prospectus of each Portfolio. Such schedule of contingent deferred sales charges may reflect variations in or waivers of such charges on redemptions of Class C shares, either generally to the public or to any specified class of shareholders and/or in connection with any specified class of transactions, in accordance with applicable rules and regulations and exemptive relief granted by the Securities and Exchange Commission, and as set forth in the Portfolios' current prospectus(es). The Distributor and the Trust shall apply any then applicable scheduled variation in or waiver of contingent deferred sales charges uniformly to all shareholders and/or all transactions belonging to a specified class.
(B) The Portfolios shall allow directly to investment dealers and other financial institutions through whom Class A Shares 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 and the total sales charges included in the offering price shall be paid to the Distributor.
The Distributor may pay to investment dealers and other financial institutions through whom Class C shares are sold, such sales commission as the Distributor may specify from time to time. Payment of any such sales commissions shall be the sole obligation of the Distributor.
(C) No provision of this Agreement shall be deemed to prohibit any payments by a Portfolio to the Distributor or by a Portfolio or the Distributor to investment dealers, financial institutions and
401(k) plan service providers where such payments are made under a distribution plan adopted by the Trust on behalf of each Portfolio pursuant to Rule 12b-1 under the 1940 Act.
FIFTH: The Distributor shall act as agent of the Trust on behalf of each Portfolio in connection with the sale and repurchase of Class A and Class C Shares. 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 Class A and Class C Shares and shall enter into all of its own engagements, agreements and contracts as principal on its own account. The Distributor shall enter into agreements with investment dealers and financial institutions selected by the Distributor, authorizing such investment dealers and financial institutions to offer and sell Class A and Class C Shares to the public upon the terms and conditions set forth therein, which shall not be inconsistent with the provisions of this Agreement. Each agreement shall provide that the investment dealer and financial institution shall act as a principal, and not as an agent, of the Trust on behalf of the Portfolios.
SIXTH: The Portfolios shall bear:
(A) the expenses of qualification of Class A and Class C Shares for sale in connection with such public offerings in such states as shall be selected by the Distributor, and of continuing the qualification therein until the Distributor notifies the Trust that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the final proof and distributing the Portfolios' 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 Portfolio), 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 shall be reimbursed for all or a portion of such expenses, and shall receive reasonable compensation for distribution related services, to the extent permitted by a distribution plan adopted by the Trust on behalf of the Portfolios pursuant to Rule 12b-1 under the 1940 Act, which plan may be amended from time to time as provided therein without the consent of the Distributor.
EIGHTH: The Distributor will accept orders for the purchase of Class A and Class C Shares only to the extent of purchase orders actually received and not in excess of such orders, and it will not avail itself of any opportunity of making a profit by expediting or withholding orders. It is mutually understood and agreed that the Trust may reject purchase orders where, in the judgment of the Trust, such rejection is in the best interest of the Trust.
NINTH: The Trust, on behalf of the Portfolios, 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 Class A and Class C Shares.
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 Trust on behalf of the Portfolios 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 Portfolios, 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 Trust or Portfolio in connection therewith by or on behalf of the Distributor. The Distributor agrees to indemnify the Trust and the Portfolios against any and all claims, demands, liabilities and expenses which the Trust or the Portfolios 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 Trust or the Portfolios in its prospectus or in this Agreement.
(B) The Distributor agrees to indemnify the Trust and the Portfolios against any and all claims, demands, liabilities and expenses which the Trust or the Portfolios 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 Portfolios, 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 Trust or the Portfolios 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 Portfolios' transfer agent(s), or for any failure of any such transfer agent to perform its duties.
ELEVENTH: Nothing herein contained shall require the Trust to take any action contrary to any provision of its Agreement and Declaration of Trust, or to any applicable statute or regulation.
TWELFTH: This Agreement shall become effective as of the date hereof, shall continue in force and effect until June 30, 2001, 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 Trustees of the Trust or (ii) by the vote of a majority of the Portfolios' outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act), and (b) by vote of a majority of the trustees of the Trust 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 Trustees of the Trust or by vote of a majority of the outstanding voting securities of each Portfolio, 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 Trust and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate on the day and year first above written.
AIM TAX-EXEMPT FUNDS
By: /s/ CAROL F. RELIHAN
----------------------------
Name: Carol F. Relihan
Title: Senior Vice President
Attest:
/s/ P. MICHELLE GRACE
--------------------------
Name: P. Michelle Grace
Title: Assistant Secretary
|
A I M DISTRIBUTORS, INC.
By: /s/ MICHAEL J. CEMO
----------------------
Name: Michael J. Cemo
Title: President
Attest:
/s/ P. MICHELLE GRACE
--------------------------
Name: P. Michelle Grace
Title: Assistant Secretary
|
APPENDIX A
TO
FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
OF
AIM TAX-EXEMPT FUNDS
EXHIBIT e(7)
MASTER DISTRIBUTION AGREEMENT
BETWEEN
AIM TAX-EXEMPT FUNDS
(CLASS B SHARES)
AND
A I M DISTRIBUTORS, INC.
THIS AGREEMENT made as of the 1st day of June, 2000, by and between AIM TAX-EXEMPT FUNDS, a Delaware business trust (the "Trust"), with respect to each of the Class B shares (the "Shares") of each series of shares of beneficial interest set forth on Schedule A to this agreement (the "Portfolios"), and A I M DISTRIBUTORS, INC., a Delaware corporation (the "Distributor").
WITNESSETH:
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 Trust hereby appoints the Distributor as its exclusive agent for the sale of the Shares to the public directly and through investment dealers in the United States and throughout the world. If subsequent to the termination of the Distributor's services to the Trust pursuant to this Agreement, the Trust retains the services of another distributor, the distribution agreement with such distributor shall contain provisions comparable to Clauses FOURTH and SEVENTH hereof and Exhibit A hereto, and without limiting the generality of the foregoing, will require such distributor to maintain and make available to the Distributor records regarding sales, redemptions and reinvestments of Shares necessary to implement the terms of Clauses FOURTH, SEVENTH and EIGHTH hereof.
SECOND: The Trust shall not sell any Shares except through the Distributor and under the terms and conditions set forth in paragraph FOURTH below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Trust may issue Shares to any other investment company or personal holding company, or to the shareholders thereof, in exchange for all or a majority of the shares or assets of any such company;
(B) the Trust may issue Shares at their net asset value in connection with certain classes of transactions or to certain classes of persons, in accordance with Rule 22d-1 under the Investment Company Act of 1940, as amended (the "1940 Act"), provided that any such class is specified in the then current prospectus of the applicable Shares; and
(C) the Trust shall have the right to specify minimum amounts for initial and subsequent orders for the purchase of Shares.
THIRD: The Distributor hereby accepts appointment as exclusive agent for the sale of the Shares and agrees that it will use its best efforts to sell such Shares; provided, however, that:
(A) the Distributor may, and when requested by the Trust on behalf of the Shares shall, suspend its efforts to effectuate such sales at any time when, in the opinion of the Distributor or of the Trust, no sales should be made because of market or other economic considerations or abnormal circumstances of any kind;
(B) the Trust may withdraw the offering of the Shares (i) at any time with the consent of the Distributor, or (ii) without such consent when so required by the provisions of any statute or of any order, rule or regulation of any governmental body having jurisdiction; and
(C) the Distributor, as agent, does not undertake to sell any specific amount of the Shares.
FOURTH:
(A) The public offering price of the Shares shall be the net asset value per share of the applicable Shares. Net asset value per share shall be determined in accordance with the provisions of the then current prospectus and statement of additional information of the applicable Portfolio. The Distributor may establish a schedule of contingent deferred sales charges to be imposed at the time of redemption of the Shares, and such schedule shall be disclosed in the current prospectus of each Portfolio. Such schedule of contingent deferred sales charges may reflect variations in or waivers of such charges on redemptions of Shares, either generally to the public or to any specified class of shareholders and/or in connection with any specified class of transactions, in accordance with applicable rules and regulations and exemptive relief granted by the Securities and Exchange Commission, and as set forth in the Portfolios' current prospectus(es). The Distributor and the Trust shall apply any then applicable scheduled variation in or waiver of contingent deferred sales charges uniformly to all shareholders and/or all transactions belonging to a specified class.
(B) The Distributor may pay to investment dealers and other financial institutions through whom Shares are sold, such sales commission as the Distributor may specify from time to time. Payment of any such sales commissions shall be the sole obligation of the Distributor.
(C) No provision of this Agreement shall be deemed to prohibit any payments by the Trust to the Distributor or by the Trust or the Distributor to investment dealers, financial institutions and 401(k) plan service providers where such payments are made under a distribution plan adopted by the Trust pursuant to Rule 12b-1 under the 1940 Act.
(D) The Trust shall redeem the Shares from shareholders in accordance with the terms set forth from time to time in the current prospectus and statement of additional information of each Portfolio. The price to be paid to a shareholder to redeem the Shares shall be equal to the net asset value of the Shares being redeemed ("gross redemption proceeds"), less any applicable contingent deferred sales charge, calculated pursuant to the then applicable schedule of contingent deferred sales charges ("net redemption proceeds"). The Distributor shall be entitled to receive the amount of the contingent deferred sales charge that has been subtracted from gross redemption proceeds (the "CDSC"), provided that the Shares being redeemed were (i) issued by a Portfolio during the term of this Agreement and any predecessor Agreement between the Trust and the Distributor or (ii) issued by a Portfolio during or after the term of this Agreement or any predecessor Agreement between the Trust and the Distributor in one or a series of free exchanges of Shares for Class B shares of another portfolio, which can be traced to Shares or Class B shares of another portfolio initially issued by a Portfolio or such other portfolio during the term of this Agreement, any predecessor Agreement or any other distribution agreement with the Distributor with respect to such
other portfolio (the "Distributor's Earned CDSC"). The Trust shall pay or cause the Trust's transfer agent to pay the Distributor's Earned CDSC to the Distributor on the date net redemption proceeds are payable to the redeeming shareholder.
(E) The Distributor shall maintain adequate books and records to identify Shares (i) issued by a Portfolio during the term of this Agreement and any predecessor Agreement between the Trust and the Distributor or (ii) issued by a Portfolio during or after the term of this Agreement or any predecessor Agreement between the Trust and the Distributor in one or a series of free exchanges of Shares for Class B shares of another portfolio, which can be traced to Shares or Class B shares of another portfolio initially issued by a Portfolio or such other portfolio during the term of this Agreement, any predecessor Agreement or any other distribution agreement with the Distributor with respect to such other portfolio and shall calculate the Distributor's Earned CDSC, if any, with respect to such Shares, upon their redemption. The Trust shall be entitled to rely on Distributor's books, records and calculations with respect to Distributor's Earned CDSC.
FIFTH: The Distributor shall act as an agent of the Trust in connection with the sale and redemption of Shares. Except with respect to such sales and redemptions, the Distributor shall act as principal in all matters relating to the promotion of the sale of Shares and shall enter into all of its own engagements, agreements and contracts as principal on its own account. The Distributor shall enter into agreements with investment dealers and financial institutions selected by the Distributor, authorizing such investment dealers and financial institutions to offer and sell the Shares to the public upon the terms and conditions set forth therein, which shall not be inconsistent with the provisions of this Agreement. Each agreement shall provide that the investment dealer or financial institution shall act as a principal, and not as an agent, of the Trust.
SIXTH: The Shares shall bear:
(A) the expenses of qualification of Shares for sale in connection with such public offerings in such states as shall be selected by the Distributor, and of continuing the qualification therein until the Distributor notifies the Trust that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the final proof and distributing the prospectuses and statements of additional information for the Shares (including supplements thereto) relating to public offerings made by the Trust pursuant to such prospectuses (which shall not include those prospectuses and statements of additional information, and supplements thereto, to be distributed to existing shareholders of the Shares), and any other promotional or sales literature used by the Distributor or furnished by the Distributor to dealers in connection with such public offerings, and expenses of advertising in connection with such public offerings.
(B) Subject to the limitations, if any, of applicable law including the NASD Conduct Rules (formerly, the NASD Rules of Fair Practice) regarding asset-based sales charges, the Trust shall pay to the Distributor as a reimbursement for all or a portion of such expenses, or as reasonable compensation for distribution of the Shares, an asset-based sales charge in an amount equal to 0.75% per annum of the average daily net asset value of the Shares of each Portfolio from time to time (the "Distributor's 12b-1 Share"), such sales charge to be payable pursuant to the distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The Distributor's 12b-1 Share shall be a percentage, which shall be recomputed periodically (but not less than monthly) in
accordance with Exhibit A to this Agreement. The Distributor's 12b-1 Share shall
accrue daily and be paid to the Distributor as soon as practicable after the end
of each calendar month within which it accrues but in any event within 10
business days after the end of each such calendar month (unless the Distributor
shall specify a later date in written instructions to the Trust) provided,
however, that any notices and calculation required by Section EIGHTH: (B) and
(C) have been received by the Trust.
(C) The Distributor shall maintain adequate books and records to permit calculations periodically (but not less than monthly) of, and shall calculate on a monthly basis, the Distributor's 12b-1 Share to be paid to the Distributor. The Trust shall be entitled to rely on Distributor's books, records and calculations relating to Distributor's 12b-1 Share.
EIGHTH:
(A) The Distributor may, from time to time, assign, transfer or pledge ("Transfer") to one or more designees (each an "Assignee"), its rights to all or a designated portion of (i) the Distributor's 12b-1 Share (but not the Distributor's duties and obligations pursuant hereto or pursuant to the Plan), and (ii) the Distributor's Earned CDSC, free and clear of any offsets or claims the Trust may have against the Distributor. Each such Assignee's ownership interest in a Transfer of a designated portion of a Distributor's 12b-1 Share and a Distributor's Earned CDSC is hereinafter referred to as an "Assignee's 12b-1 Portion" and an "Assignee's CDSC Portion," respectively. A Transfer pursuant to this Section EIGHTH: (A) shall not reduce or extinguish any claim of the Trust against the Distributor.
(B) The Distributor shall promptly notify the Trust in writing of each Transfer pursuant to Section EIGHTH: (A) by providing the Trust with the name and address of each such Assignee.
(C) The Distributor may direct the Trust to pay directly to an Assignee
such Assignee's 12b-1 Portion and Assignee's CDSC Portion. In such event,
Distributor shall provide the Trust with a monthly calculation of (i) the
Distributor's Earned CDSC and Distributor's 12b-1 Share and (ii) each Assignee's
12b-1 Portion and Assignee's CDSC Portion, if any, for such month (the "Monthly
Calculation"). The Monthly Calculation shall be provided to the Trust by the
Distributor promptly after the close of each month or such other time as agreed
to by the Trust and the Distributor which allows timely payment of the
Distributor's 12b-1 Share and Distributor's Earned CDSC and/or the Assignee's
12b-1 Portion and Assignee's CDSC Portion. The Trust shall not be liable for any
interest on such payments occasioned by delayed delivery of the Monthly
Calculation by the Distributor. In such event following receipt from the
Distributor of (i) notice of Transfer referred to in Section EIGHTH: (B) and
(ii) each Monthly Calculation, the Trust shall make all payments directly to the
Assignee or Assignees in accordance with the information provided in such notice
and Monthly Calculation, on the same terms and conditions as if such payments
were to be paid directly to the Distributor. The Trust shall be entitled to rely
on Distributor's notices, and Monthly Calculations in respect of amounts to be
paid pursuant to this Section EIGHTH: (B).
(D) Alternatively, in connection with a Transfer the Distributor may direct the Trust to pay all of such Distributor's 12b-1 Share and Distributor's Earned CDSC from time to time to a depository or collection agent designated by any Assignee, which depository or collection agent may be delegated the duty of dividing such Distributor's 12b-1 Share and Distributor's Earned CDSC between the Assignee's 12b-1 Portion and Assignee's CDSC Portion and the balance of the Distributor's 12b-1 Share (such balance, when distributed to the Distributor by the depository or collection agent, the "Distributor's 12b-1 Portion") and of the Distributor's Earned CDSC (such balance, when distributed to the Distributor by the depository or collection agent, the "Distributor's
Earned CDSC Portion"), in which case only the Distributor's 12b-1 Portion and Distributor's Earned CDSC Portion may be subject to offsets or claims the Trust may have against the Distributor.
(E) The Trust shall not amend the Plan to reduce the amount payable to the Distributor or any Assignee under Section SEVENTH: (B) hereof with respect to the Shares for any Shares which have been issued prior to the date of such amendment.
NINTH: The Distributor will accept orders for the purchase of Shares only to the extent of purchase orders actually received and not in excess of such orders, and it will not avail itself of any opportunity of making a profit by expediting or withholding orders.
TENTH:
(A) Pursuant to the Plan and this Agreement, the Distributor shall enter into Shareholder Service Agreements with investment dealers, financial institutions and certain 401(K) plan service providers (collectively "Service Providers") selected by the Distributor for the provision of certain continuing personal services to customers of such Service Providers who have purchased Shares. Such agreements shall authorize Service Providers to provide continuing personal shareholder services to their customers upon the terms and conditions set forth therein, which shall not be inconsistent with the provisions of this Agreement. Each Shareholder Service Agreement shall provide that the Service Provider shall act as principal, and not as an agent of the Trust.
(B) Shareholder Service Agreements may provide that the Service Providers may receive a service fee in the amount of .25% of the average daily net assets of the Shares held by customers of such Service Providers provided that such Service Providers furnish continuing personal shareholder services to their customers in respect of such Shares. The continuing personal services to be rendered by Service Providers under the Shareholder Service Agreements may include, but shall not be limited to, some or all of the following: distributing sales literature; answering routine customer inquiries concerning the Trust; assisting customers in changing dividend elections, options, account designations and addresses, and in enrolling in any of several special investment plans offered in connection with the purchase of Shares; assisting in the establishment and maintenance of or establishing and maintaining customer accounts and records and the processing of purchase and redemption transactions; performing subaccounting; investing dividends and any capital gains distributions automatically in the Trust's shares; providing periodic statements showing a customer's account balance and the integration of such statements with those of other transactions and balances in the customer's account serviced by the Service Provider; forwarding applicable prospectus, proxy statements, reports and notices to customers who hold Shares and providing such other information and services as the Trust or the customers may reasonably request.
(C) The Distributor may advance service fees payable to Service Providers pursuant to the Plan or any other distribution plan adopted by the Trust with respect to Shares of one or more of the Portfolios pursuant to Rule 12b-1 under the 1940 Act; and thereafter the Distributor may be reimbursed for such advances through retention of service fee payments during the period for which the service fees were advanced.
ELEVENTH: The Trust and the Distributor shall each comply with all applicable provisions of the 1940 Act, the Securities Act of 1933, as amended, and of all other federal and state laws, rules and regulations governing the issuance and sale of the Shares.
TWELFTH:
(A) In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Trust shall indemnify the Distributor against any and all
claims, demands, liabilities and expenses which the Distributor may incur under
the Securities Act of 1933, or common law or otherwise, arising out of or based
upon any alleged untrue statement of a material fact contained in any
registration statement or prospectus of the Shares, or any omission to state a
material fact therein, the omission of which makes any statement contained
therein misleading, unless such statement or omission was made in reliance upon,
and in conformity with, information furnished to the Trust in connection
therewith by or on behalf of the Distributor. The Distributor shall indemnify
the Trust and the Shares against any and all claims, demands, liabilities and
expenses which the Trust or the Shares may incur arising out of or based upon
(i) any act or deed of the Distributor or its sales representatives which has
not been authorized by the Trust in its prospectus or in this Agreement and (ii)
the Trust's reliance on the Distributor's books, records, calculations and
notices in Sections FOURTH: (E), SEVENTH: (C), EIGHTH: (B), EIGHTH: (C) and
EIGHTH: (D).
(B) The Distributor shall indemnify the Trust and the Shares against any and all claims, demands, liabilities and expenses which the Trust or the Shares may incur under the Securities Act of 1933, as amended, or common law or otherwise, arising out of or based upon any alleged untrue statement of a material fact contained in any registration statement or prospectus of the Shares, or any omission to state a material fact therein if such statement or omission was made in reliance upon, and in conformity with, information furnished to the Trust in connection therewith by or on behalf of the Distributor.
(C) Notwithstanding any other provision of this Agreement, the Distributor shall not be liable for any errors of the transfer agent(s) of the Shares, or for any failure of any such transfer agent to perform its duties.
THIRTEENTH: Nothing herein contained shall require the Trust to take any action contrary to any provision of its Agreement and Declaration of Trust or to any applicable statute or regulation.
FOURTEENTH: This Agreement shall become effective with respect to the Shares of each Portfolio upon its approval by the Board of Trustees of the Trust and by vote of a majority of the trustees of the Trust who are not interested parties to this Agreement or "interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of any party to this Agreement cast in person at a meeting called for such purpose, shall continue in force and effect until June 30, 2001, and from year to year thereafter, provided, that such continuance is specifically approved with respect to the Shares of each Portfolio at least annually (a)(i) by the Board of Trustees of the Trust or (ii) by the vote of a majority of the outstanding Shares of such class of such Portfolio, and (b) by vote of a majority of the trustees of the Trust who are not parties to this Agreement or "interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of any party to this Agreement cast in person at a meeting called for such purpose.
FIFTEENTH:
(A) This Agreement may be terminated with respect to the Shares of any Portfolio, at any time, without the payment of any penalty, by vote of the Board of Trustees of the Trust or by vote of a majority of the outstanding Shares of such Portfolio, or by the Distributor, on sixty (60) days' written notice to the other party; and
(B) This Agreement shall also automatically terminate in the event of
its assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act; provided, that, subject to the provisions of the
following sentence, if this Agreement is terminated for any reason, the
obligations of the Trust and the Distributor pursuant to Sections FOURTH: (D),
FOURTH: (E), SEVENTH: (B), SEVENTH: (C), EIGHTH: (A) through (E) and TWELFTH:
(A) of this Agreement will continue and survive any such termination.
Notwithstanding the foregoing, upon Complete Termination of the Plan (as such
term is defined in Section 8 of the Plan in effect at the date of this
Agreement), the obligations of the Trust pursuant to the terms of Sections
SEVENTH: (B), EIGHTH: (A), EIGHTH: (C), EIGHTH: (D) and EIGHTH: (E) (with
respect to payments of Distributor's 12b-1 Share and Assignee's 12b-1 Portion)
of this Agreement shall terminate. A termination of the Plan with respect to any
or all Shares of any or all Portfolios shall not affect the obligations of the
Trust pursuant to Sections FOURTH: (D), EIGHTH: (A), EIGHTH: (C), EIGHTH: (D)
and EIGHTH: (E) (with respect to payments of Distributor's Earned CDSC or
Assignee's CDSC Portion) hereof or of the obligations of the Distributor
pursuant to Section FOURTH: (E) or EIGHTH: (B) hereof.
(C) The Transfer of the Distributor's rights to Distributor's 12b-1
Share or Distributor's Earned CDSC shall not cause a termination of this
Agreement or be deemed to be an assignment for purposes of Section FIFTEENTH:
(B) above.
SIXTEENTH: Any notice under this Agreement shall be in writing, addressed and delivered, or mailed postage prepaid, to the other party at such address as the other party may designate for the receipt of notices. Until further notice to the other party, the addresses of both the Trust and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate on the day and year first above written.
AIM TAX-EXEMPT FUNDS
By: /s/ ROBERT H. GRAHAM
---------------------------
Name: Robert H. Graham
Title: President
Attest:
/s/ P. MICHELLE GRACE
--------------------------------
Name:
Title:
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A I M DISTRIBUTORS, INC.
By: /s/ MARILYN M. MILLER
---------------------------
Marilyn M. Miller
Senior Vice President
Attest:
/s/ P. MICHELLE GRACE
--------------------------------
Name:
Title:
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SCHEDULE A
TO
MASTER DISTRIBUTION AGREEMENT
OF
AIM TAX-EXEMPT FUNDS
AIM High Income Municipal Fund
As of June 1, 2000
EXHIBIT A
The Distributor's 12b-1 Share in respect of each Portfolio shall be 100 percent until such time as the Distributor shall cease to serve as exclusive distributor of the Shares of such Portfolio and thereafter shall be a percentage, recomputed first on the date of any termination of the Distributor's services as exclusive distributor of Shares of any Portfolio and thereafter periodically (but not less than monthly), representing the percentage of Shares of such Portfolio outstanding on each such computation date allocated to the Distributor in accordance with the following rules:
1. DEFINITIONS. For purposes of this Exhibit A defined terms used herein shall have the meaning assigned to such terms in the Distribution Agreement and the following terms shall have the following meanings:
"Commission Shares" shall mean shares of the Portfolio or another portfolio the redemption of which would, in the absence of the application of some standard waiver provision, give rise to the payment of a CDSC and shall include Commission Shares which due to the expiration of the CDSC period no longer bear a CDSC.
"Distributor" shall mean the Distributor.
"Other Distributor" shall mean each person appointed as the exclusive distributor for the Shares of the Portfolio after the Distributor ceases to serve in that capacity.
2. ALLOCATION RULES. In determining the Distributor's 12b-1 Share in respect of a particular Portfolio:
(a) There shall be allocated to the Distributor and each Other Distributor all Commission Shares of such Portfolio which were sold while such Distributor or such Other Distributor, as the case may be, was the exclusive distributor for the Shares of the Portfolio, determined in accordance with the transfer records maintained for such Portfolio.
(b) Reinvested Shares: On the date that any Shares are issued by a Portfolio as a result of the reinvestment of dividends or other distributions, whether ordinary income, capital gains or exempt-interest dividends or distributions ("Reinvested Shares"), Reinvested Shares shall be allocated to the Distributor and each Other Distributor in a number obtained by multiplying the total number of Reinvested Shares issued on such date by a fraction, the numerator of which is the total number of all Shares outstanding in such Portfolio as of the opening of business on such date and allocated to the Distributor or Other Distributor as of such date of determination pursuant
to these allocation procedures and the denominator is the total number of Shares outstanding as of the opening of business on such date.
(c) Exchange Shares: There shall be allocated to the Distributor and each Other Distributor, as the case may be, all Commission Shares of such Portfolio which were issued during or after the period referred to in (a) as a consequence of one or more free exchanges of Commission Shares of the Portfolio or of another portfolio (other than Free Appreciation Shares) (the "Exchange Shares"), which in accordance with the transfer records maintained for such Portfolio can be traced to Commission Shares of the Portfolio or another portfolio initially issued by the Trust or such other portfolio during the time the Distributor or such Other Distributor, as the case may be, was the exclusive distributor for the Shares of the Portfolio or such other portfolio.
(d) Free Appreciation Shares: Shares (other than Exchange Shares) that were acquired by the holders of such Shares in a free exchange of Shares of any other Portfolio, which represent the appreciated value of the Shares of the exiting portfolio over the initial purchase price paid for the Shares being redeemed and exchanged and for which the original purchase date and the original purchase price are not identified on an on-going basis, shall be allocated to the Distributor and each Other Distributor ("Free Appreciation Shares") daily in a number obtained by multiplying the total number of Free Appreciation Shares issued by the exiting portfolio on such date by a fraction, the numerator of which is the total number of all Shares outstanding as of the opening of business on such date allocated to the Distributor or such Other Distributor as of such date of determination pursuant to these allocation procedures and the denominator is the total number of Shares outstanding as of the opening of business on such date.
(e) Redeemed Shares: Shares (other than Reinvested Shares and Free Appreciation Shares) that are redeemed will be allocated to the Distributor and each Other Distributor to the extent such Share was previously allocated to the Distributor or such Other Distributor in accordance with the rules set forth in 2(a) or (c) above. Reinvested Shares and Free Appreciation Shares that are redeemed will be allocated to the Distributor and each Other Distributor daily in a number obtained by multiplying the total number of Free Appreciation Shares and Reinvested Shares being redeemed by such Portfolio on such date by a fraction, the numerator of which is the total number of all Free Appreciation Shares and Reinvested Shares of such Portfolio outstanding as of the opening of business on such date allocated to the Distributor or such Other Distributor as of such date of determination pursuant to these allocation procedures and the denominator is the total number of Free Appreciation Shares and Reinvested Shares of such Portfolio outstanding as of the opening of business on such date.
The Trust shall use its best efforts to assure that the transfer agents and sub-transfer agents for each Portfolio maintain the data necessary to implement the foregoing rules. If, notwithstanding the foregoing, the transfer agents or sub-transfer agents for such Portfolio are unable to maintain the data necessary to implement the foregoing rules as written, or if the Distributor shall cease to serve as exclusive distributor of the Shares of the Portfolio, the Distributor and the Portfolio agree
to negotiate in good faith with each other, with the transfer agents and sub-transfer agents for such Portfolio and with any third party that has obtained an interest in the Distributor's 12b-1 Share in respect of such Portfolio with a view to arriving at mutually satisfactory modifications to the foregoing rules designed to accomplish substantially identical results on the basis of data which can be made available.
EXHIBIT f(3)
AIM FUNDS
RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES
Effective as of March 8, 1994
As Restated September 18, 1995
As Restated March 7, 2000
AIM FUNDS
RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES
TABLE OF CONTENTS
Page
----
ARTICLE I................................................................. 1
1.1 Definitions...................................................... 1
1.2 Plurals and Gender............................................... 3
1.3 Directors/Trustees............................................... 3
1.4 Headings......................................................... 3
1.5 Severability..................................................... 3
ARTICLE II................................................................ 3
2.1 Commencement of Participation.................................... 3
2.2 Termination of Participation..................................... 3
2.3 Resumption of Participation...................................... 4
2.4 Determination of Eligibility..................................... 4
ARTICLE III............................................................... 4
3.1 Retirement....................................................... 4
3.2 Retirement Benefit............................................... 4
3.3 Termination of Service Before Retirement......................... 4
3.4 Termination of Service by Reason of Death........................ 5
3.5 Benefits Calculated in the Aggregate for all of the AIM Funds.... 5
ARTICLE IV................................................................ 5
4.1 Death Prior to Commencement of Benefits.......................... 5
4.2 Death Subsequent to Commencement of Benefits..................... 5
4.3 Death of Spouse.................................................. 5
ARTICLE V................................................................. 6
5.1 Suspension of Benefits Upon Resumption of Service................ 6
5.2 Payments Due Missing Persons..................................... 6
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ARTICLE VI................................................................ 6
6.1 Appointment of Administrator..................................... 6
6.2 Powers and Duties of Administrator............................... 6
6.3 Action by Administrator.......................................... 7
6.4 Participation by Administrators.................................. 7
6.5 Agents and Expenses.............................................. 8
6.6 Allocation of Duties............................................. 8
6.7 Delegation of Duties............................................. 8
6.8 Administrator's Action Conclusive................................ 8
6.9 Records and Reports.............................................. 8
6.10 Information from the AIM Funds.................................. 8
6.11 Reservation of Rights by Boards of Directors.................... 9
6.12 Liability and Indemnification................................... 9
ARTICLE VII............................................................... 9
7.1 Amendments....................................................... 9
7.2 Termination...................................................... 10
ARTICLE VIII.............................................................. 10
8.1 Rights of Creditors.............................................. 10
8.2 Liability Limited................................................ 10
8.3 Incapacity....................................................... 10
8.4 Cooperation of Parties........................................... 10
8.5 Governing Law.................................................... 11
8.6 Nonguarantee of Directorship..................................... 11
8.7 Counsel.......................................................... 11
8.8 Spendthrift Provision............................................ 11
8.9 Forfeiture for Cause............................................. 11
ARTICLE IX................................................................ 12
9.1 Notice of Denial................................................. 12
9.2 Right to Reconsideration......................................... 12
9.3 Review of Documents.............................................. 12
9.4 Decision by Administrator........................................ 12
9.5 Notice by Administrator.......................................... 12
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RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES
PREAMBLE
Effective as of March 8, 1994, the regulated investment companies managed, administered and/or distributed by A I M Advisors, Inc. or its affiliates (the "AIM Funds") have adopted THE AIM FUNDS RETIREMENT PLAN FOR ELIGIBLE DIRECTORS/TRUSTEES (the "Plan") for the benefit of each of the directors and trustees of each of the AIM Funds who is not an employee of any of the AIM Funds, A I M Management Group Inc. or any of their affiliates. As the Plan does not benefit any employees of the AIM Funds, it is not intended to be classified as an employee benefit plan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
ARTICLE I
DEFINITION OF TERMS AND CONSTRUCTION
Unless a different meaning is plainly implied by the context, the following terms as used in this Plan shall have the following meanings:
(a) "Accrued Benefit" shall mean, as of any date prior to a Participant's Retirement date, his Retirement Benefit commencing on such Retirement date, but based upon his Compensation and Years of Service computed as of such date of determination.
(b) "Actuary" shall mean the independent actuary selected by the Administrator.
(c) "Administrator" shall mean the administrative committee provided for in Article VI.
(d) "AIM Funds" shall mean those regulated investment companies managed, administered or distributed by A I M Advisors, Inc. or its affiliates, set forth on Appendix A hereto, as such Appendix may be amended from time to time.
(e) "Board of Directors" shall mean the Board of Directors or Board of Trustees of each of the AIM Funds.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, or any successor statute.
(g) "Compensation" shall mean, for any Director, the amount of the retainer paid or accrued by the AIM Funds for such Director during the twelve month period immediately
preceding the Director's Retirement, including amounts deferred under a separate agreement between the AIM Funds and the Director. The amount of such retainer Compensation shall be as determined by the Administrator.
(h) "Deferred Retirement Date" shall mean the last day of the Plan Year in which a Participant terminated Service after his Normal Retirement Date.
(i) "Director" shall mean an individual who is a director or trustee of one or more of the AIM Funds which have adopted the Plan but who is not an employee of any of the AIM Funds, A I M Management Group Inc. or any of their affiliates.
(j) "Disability" shall mean the inability of the Participant to participate in meetings of the Board of Directors, either in person or by telephone, for a period of at least nine (9) months.
(k) "Effective Date" shall mean March 8, 1994.
(l) "Fund" shall mean an AIM Fund which has adopted this Plan.
(m) "Mandatory Retirement Date" shall mean the last day of the Plan Year in which a participant has reached the age of 72. Such Mandatory Retirement Date may be extended upon the majority vote of the Boards of Directors of the AIM Funds.
(n) "Normal Retirement Date" shall mean the last day of the Plan Year in which a Participant has both attained age 65 (or at least age 55 in the event of the Director's termination of Service by reason of death or Disability) and has completed at least five continuous and non-forfeited Years of Service (and thirty months of Service with one or more of the AIM Funds).
(o) "Participant" shall mean a Director who has met all of the eligibility requirements of the Plan and who is currently included in the Plan as provided in Article II hereof.
(p) "Plan" shall mean the "AIM Funds Retirement Plan for Eligible Directors/Trustees" as described herein or as hereafter amended from time to time.
(q) "Plan Year" shall mean the calendar year.
(r) "Retirement" shall mean a Director's termination of his active Service with the AIM Funds on or after his Normal Retirement Date, due to his death, Disability, or voluntary or involuntary termination of his Service.
(s) "Retirement Benefit" shall mean the benefit described under
Section 3.2 hereof.
(t) "Service" shall mean an individual's serving as a Director of one or more of the AIM Funds. Furthermore, any unbroken service provided by a Participant (i) to an AIM Fund immediately prior to its being managed or administered by AIM Advisors, Inc. (or any of
its affiliates) or (ii) to a predecessor of an AIM Fund immediately prior to its being merged into such AIM Fund, will be taken into account in determining such Participant's Years of Service, subject to all restrictions and other forfeiture provisions contained herein.
(u) "Year of Service" shall mean a twelve consecutive month period of
Service. For all purposes in this Plan, if a Participant's Service terminates
prior to his Retirement, he shall forfeit credit for all Years of Service
completed prior to such termination unless (a) he again becomes a Director and
(b) the number of Years of Service he accumulated prior to such termination
exceeded the number of years in which he did not serve as a Director.
Where appearing in the Plan, the masculine gender shall include the feminine and neuter genders, and the singular shall include the plural, and vice versa, unless the context clearly indicates a different meaning.
Where appropriate, the term "director" shall refer to "trustee", "directorship" shall refer to "trusteeship" and "Board of Directors" shall refer to "Board of Trustees."
The headings and sub-headings in this Plan are inserted for the convenience of reference only and are to be ignored in any construction of the provisions hereof.
In case any provision of this Plan shall be held illegal or void, such illegality or invalidity shall not affect the remaining provisions of this Plan, but shall be fully severable, and the Plan shall be construed and enforced as if said illegal or invalid provisions had never been inserted herein.
ARTICLE II
PARTICIPATION
Each Director shall become a Participant hereunder on the date his directorship of one or more of the AIM Funds commences.
After commencement or resumption of his participation, a Director shall remain a Participant until the earliest of the following dates:
(a) His actual Retirement date;
(b) His date of death;
(c) The date on which he otherwise incurs a termination of Service; or
(d) The effective date of the termination of the Plan.
Any Participant whose Service terminates and who thereafter again becomes a Director shall resume participation immediately upon again becoming a Director except that, as provided in Section 1.1(u) hereof, if his Service is terminated prior to his Normal Retirement Date, for all purposes of this Plan he shall forfeit credit for all Years of Service completed prior to such termination of his Service.
The Administrator shall determine the eligibility of Directors in accordance with the provisions of this Article.
ARTICLE III
BENEFITS UPON
RETIREMENT AND OTHER TERMINATION OF SERVICE
In order to receive Retirement Benefits under this Plan a Director must reach
the age of 65 (55 in the event of death or disability), the Normal Retirement
Date, as defined in Section 1.1(n) before retiring. Each Director must retire
on reaching the age of 72, the Mandatory Retirement Date, as defined in Section
1.1(m). Such Mandatory Retirement Date may be extended upon the majority vote
of the Board of Directors of the AIM Funds.
Upon Retirement a Participant shall be entitled to receive an annual benefit from the AIM Funds commencing on the first day of the calendar quarter coincident with or next following his date of Retirement, payable in quarterly installments for a period of no more than ten (10) years (or, if less, the number of his Years of Service) equal to seventy-five percent (75%) of his Compensation.
In the event that a Participant's Service terminates by reason of death, Disability or removal by the Board for cause (as defined in Section 8.9) prior to his Normal Retirement Date, he shall not be entitled to receive any benefits hereunder. If a Participant's Service terminates for any other reason and he has accumulated at least five (5) continuous and non-forfeited Years of Service, he shall be entitled to receive his Accrued Benefit determined as of such date of termination.
No benefits will be paid under this Plan with respect to a Participant after his death other than as provided in Article IV.
With respect to each Participant, the benefits payable hereunder shall be based on the aggregate Compensation paid by the AIM Funds and on the Participant's non-forfeited Years of Service. Each Fund's share of the obligation to provide such benefits shall be determined by use of accounting methods adopted by the Administrator.
ARTICLE IV
DEATH BENEFITS
In the event of a Participant's death subsequent to his Normal Retirement Date, but prior to the commencement of his Retirement Benefits under Article III hereof, the surviving spouse (if any) of such Participant shall be entitled to receive a quarterly survivor's benefit for a period of no more than ten (10) years (or, if less, the number of the Participant's Years of Service) beginning on the first day of the calendar quarter next following the date of the Participant's death equal to fifty percent (50%) of the amount of the quarterly installments of Retirement Benefits that would have been paid to the Participant under Sections 3.2 or 3.3 hereof had his Retirement occurred on his date of death.
In the event a Participant dies after the commencement of his Retirement Benefit under Article III, but prior to the cessation of the payment of such Retirement Benefits, the surviving spouse (if any) of such Participant shall be entitled to receive survivor's benefits equal to fifty percent (50%) of the amount of the annual Retirement Benefit payable to the Participant under Article III hereunder, paid at such times, and for such period, as such Retirement Benefit would have continued to have been paid to the Participant had he not died.
(a) In the event a Participant is not survived by a spouse, no benefits will be paid hereunder upon the Participant's death.
(b) If a deceased Participant's surviving spouse dies while receiving survivor's benefits hereunder, any installments not paid at the time of the surviving spouse's death shall be forfeited.
ARTICLE V
SUSPENSION OF BENEFITS, ETC.
In the case of a Participant who, at a time when he is receiving Retirement Benefits under Article III of this Plan, resumes Service with any AIM Fund, such Retirement Benefits shall be suspended until his subsequent Retirement, termination of Service or death. Subject to the Years of Service limitations of Section 3.2 hereof, in the event of his Retirement or termination of Service following such a suspension, the quarterly amount of his remaining Retirement Benefits shall thereafter be adjusted, if appropriate, to reflect any additional Years of Service completed by, or a higher rate of Compensation received by, such Participant.
The Administrator shall make a reasonable effort to locate all persons entitled to benefits (including Retirement Benefits and survivor's benefits for spouses) under the Plan; however, notwithstanding any provisions of this Plan to the contrary, if, after a period of 5 years from the date any of such benefits first become due, any such persons entitled to benefits have not been located, their rights under the Plan shall stand suspended. Before this provision becomes operative, the Administrator shall send a certified letter to all such persons (if any) at their last known address advising them that their benefits under the Plan shall be suspended. Any such suspended amounts shall be held by the AIM Funds for a period of 3 additional years (or a total of 8 years from the time the benefits first became payable) and thereafter such amounts shall be forfeited.
ARTICLE VI
ADMINISTRATOR
This Plan shall be administered by the Nominating and Compensation Committees of the Boards of Directors of the AIM Funds. The members of such committees are not "interested persons" (within the meaning of Section 2(a)(19) of the Investment Company Act of 1940) of any of the AIM Funds. The term "Administrator" as used in this Plan shall refer to the members of such committees, either individually or collectively, as appropriate.
Except as provided below, the Administrator shall have the following duties and responsibilities in connection with the administration of this Plan:
(a) To promulgate and enforce such rules, regulations and procedures as shall be proper for the efficient administration of the Plan;
(b) To determine all questions arising in the administration, interpretation and application of the Plan, including questions of eligibility and of the status and rights of Participants and any other persons hereunder;
(c) To decide any dispute arising hereunder; provided, however, that no Administrator shall participate in any matter involving any questions relating solely to his own participation or benefits under this Plan;
(d) To advise the Boards of Directors of the AIM Funds regarding the known future need for funds to be available for distribution;
(e) To correct defects, supply omissions and reconcile inconsistencies to the extent necessary to effectuate the Plan;
(f) To compute the amount of benefits and other payments which shall be payable to any Participant or surviving spouse in accordance with the provisions of the Plan and to determine the person or persons to whom such benefits shall be paid;
(g) To make recommendations to the Boards of Directors of the AIM Funds with respect to proposed amendments to the Plan;
(h) To file all reports with government agencies, Participants and other parties as may be required by law, whether such reports are initially the obligation of the AIM Funds, or the Plan;
(i) To engage the Actuary of the Plan and to cause the liabilities of the Plan to be evaluated by the Actuary; and
(j) To have all such other powers as may be necessary to discharge its duties hereunder.
The Administrator may elect a Chairman and Secretary from among its members and may adopt rules for the conduct of its business. A majority of the members then serving shall constitute a quorum for the transacting of business. All resolutions or other action taken by the Administrator shall be by vote of a majority of those present at such meeting and entitled to vote. Resolutions may be adopted or other action taken without a meeting upon written consent signed by at least a majority of the members. All documents, instruments, orders, requests, directions, instructions and other papers shall be executed on behalf of the Administrator by either the Chairman or the Secretary of the Administrator, if any, or by any member or agent of the Administrator duly authorized to act on the Administrator's behalf.
No Administrator shall be precluded from becoming a Participant in the Plan if he would be otherwise eligible, but he shall not be entitled to vote or act upon matters or to sign any documents relating specifically to his own participation under the Plan, except when such
matters or documents relate to benefits generally. If this disqualification results in the lack of a quorum, then the Boards of Directors, by majority vote of the members of a majority of such Boards of Directors (a "Majority Vote"), shall appoint a sufficient number of temporary Administrators, who shall serve for the sole purpose of determining such a question.
The Administrator may employ agents and provide for such clerical, legal, actuarial, accounting, medical, advisory or other services as it deems necessary to perform its duties under this Plan. The cost of such services and all other expenses incurred by the Administrator in connection with the administration of the Plan shall be allocated to each Fund pursuant to the method utilized under Section 3.5 hereof with respect to costs related to benefit accruals. For purposes of the preceding sentence, if an individual serves as a Director for more than one Fund, he shall be deemed to be a separate Director for each such Fund in determining the aggregate number of Directors of the AIM Funds.
The duties, powers and responsibilities reserved to the Administrator may be allocated among its members so long as such allocation is pursuant to written procedures adopted by the Administrator, in which case no Administrator shall have any liability, with respect to any duties, powers or responsibilities not allocated to him, for the acts or omissions of any other Administrator.
The Administrator may delegate any of its duties to employees of A I M Advisors, Inc. or any of its affiliates or to any other person or firm, provided that the Administrator shall prudently choose such agents and rely in good faith on their actions.
Any action on matters within the discretion of the Administrator shall be final and conclusive.
The Administrator shall maintain adequate records of its actions and proceedings in administering this Plan and shall file all reports and take all other actions as it deems appropriate in order to comply with any federal or state law.
The AIM Funds shall promptly furnish all necessary information to the Administrator to permit it to perform its duties under this Plan. The Administrator shall be entitled to rely upon the accuracy and completeness of all information furnished to it by the AIM Funds, unless it knows or should have known that such information is erroneous.
When rights are reserved in this plan to the Boards of Directors, such rights shall be exercised only by Majority Vote of the Boards of Directors, except where the Boards of Directors, by unanimous written resolution, delegate any such rights to one or more persons or to the Administrator. Subject to the rights reserved to the Boards of Directors as set forth in this Plan, no member of the Boards of Directors shall have any duties or responsibilities under this Plan, except to the extent he shall be acting in the capacity of an Administrator.
(a) The Administrator shall perform all duties required of it under this Plan in a prudent manner. The Administrator shall not be responsible in any way for any action or omission of the AIM Funds or their employees in the performance of their duties and obligations as set forth in this Plan. The Administrator also shall not be responsible for any act or omission of any of its agents provided that such agents were prudently chosen by the Administrator and that the Administrator relied in good faith upon the action of such agents.
(b) Except for its own gross negligence, willful misconduct or willful breach of the terms of this Plan, the Administrator shall be indemnified and held harmless by the AIM Funds against any and all liability, loss, damages, cost and expense which may arise, occur by reason of, or be based upon, any matter connected with or related to this Plan or its administration (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending any litigation, commenced or threatened, or in settlement of any such claim).
ARTICLE VII
AMENDMENTS AND TERMINATION
The Boards of Directors reserve the right at any time and from time to time, and retroactively if deemed necessary or appropriate by them, to amend in whole or in part by Majority Vote any or all of the provisions of this Plan, provided that:
(a) No amendment shall make it possible for any part of a Participant's or former Participant's Retirement Benefit to be used for, or diverted to, purposes other than for the exclusive benefit of such Participant or surviving spouse, except to the extent otherwise provided in this Plan;
(b) No amendment may reduce any Participant's or former Participant's Retirement Benefit as of the effective date of the amendment;
Amendments may be made in the form of Board of Directors' resolutions or separate written document.
Except as provided below, the Boards of Directors reserve the right to terminate this Plan at any time by Majority Vote by giving to the Administrator notice in writing of such desire to terminate. The Plan shall terminate upon the date of receipt of such notice and the rights of all Participants to their Retirement Benefits (determined as of the date the Plan is terminated) shall become payable upon the effective date of the termination of the Plan in quarterly installments or in an actuarially equivalent lump sum as determined by the Administrator.
ARTICLE VIII
MISCELLANEOUS
(a) The Plan is unfunded. Neither the Participants nor any other persons shall have any interest in any fund or in any specific asset or assets of any of the AIM Funds by reason of any Accrued or Retirement Benefit hereunder, nor any rights to receive distribution of any Retirement Benefit except and as to the extent expressly provided hereunder.
(b) The Accrued and Retirement Benefits of each Participant are unsecured and shall be subject to the claims of the general creditors of the AIM Funds.
Neither the AIM Funds, the Administrator, nor any agents, employees, officers, directors or shareholders of any of them, nor any other person shall have any liability or responsibility with respect to this Plan, except as expressly provided herein.
If the Administrator shall receive evidence satisfactory to it that a Participant or surviving spouse entitled to receive any benefit under the Plan is, at the time when such benefit becomes payable, physically or mentally incompetent to receive such benefit and to give a valid release therefor, and that another person or an institution is then maintaining or has custody of such Participant or surviving spouse and that no guardian, committee or other representative of the estate of such Participant or surviving spouse shall have been duly appointed, the Administrator may make payment of such benefit otherwise payable to such Participant or surviving spouse to such other person or institution, and the release of such other person or institution shall be a valid and complete discharge for the payment of such benefit.
All parties to this Plan and any person claiming any interest hereunder agree to perform any and all acts and execute any and all documents and papers which are necessary or desirable for carrying out this Plan or any of its provisions.
All rights under the Plan shall be governed by and construed in accordance with rules of Federal law applicable to such plans and, to the extent not preempted, by the laws of the State of Texas without regard to principles of conflicts of law. No action shall be brought by or on behalf of any Participant for or with respect to benefits due under this Plan unless the person bringing such action has timely exhausted the Plan's claim review procedure. Any such action must be commenced within three years. This three-year period shall be computed from the earlier of (a) the date a final determination denying such benefit, in whole or in part, is issued under the Plan's claim review procedure or (b) the date such individual's cause of action first accrued. Any dispute, controversy or claim arising out of or in connection with this Plan (including the applicability of this arbitration provision) and not resolved pursuant to the Plan's claim review procedure shall be determined and settled by arbitration conducted by the American Arbitration Association ("AAA") in the County and State of the Funds' principal place of business and in accordance with the then existing rules, regulations, practices and procedures of the AAA. Any award in such arbitration shall be final, conclusive and binding upon the parties to the arbitration and may be enforced by either party in any court of competent jurisdiction. Each party to the arbitration will bear its own costs and fees (including attorney's fees).
Nothing contained in this Plan shall be construed as a guaranty or right of any Participant to be continued as a Director of one or more of the AIM Funds (or of a right of a Director to any specific level of Compensation) or as a limitation of the right of the AIM Funds to remove any of its directors.
The Administrator may consult with legal counsel, who may be counsel for one or more of the Boards of Directors of the AIM Funds and for the Administrator, with respect to the meaning or construction of this Plan, its obligations or duties hereunder or with respect to any action or proceeding or any question of law, and they shall be fully protected with respect to any action taken or omitted by them in good faith pursuant to the advice of legal counsel.
A Participant's interest in his Accrued Benefit or Retirement Benefit may not be transferred, alienated, assigned nor become subject to execution, garnishment or attachment, and any attempt to do so will render benefits hereunder immediately forfeitable.
Notwithstanding any other provision of this Plan to the contrary, any benefits to which a Participant (or his surviving spouse) may otherwise be entitled hereunder will be forfeited in the event the Administrator, in its sole discretion, determines that a Participant's termination of Service is due to such Participant's willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Director.
ARTICLE IX
CLS PROCEDURE
If a Participant is denied any Retirement Benefit (or a surviving spouse is denied a survivor's benefit) under this Plan, either in total or in an amount less than the full Retirement Benefit to which he would normally be entitled, the Administrator shall advise the Participant (or surviving spouse) in writing of the amount of his Retirement Benefit (or survivor's benefit), if any, and the specific reasons for the denial. The Administrator shall also furnish the Participant (or surviving spouse) at that time with a written notice containing:
(a) A specific reference to pertinent Plan provisions.
(b) A description of any additional material or information necessary for the Participant (or surviving spouse) to perfect his claim, if possible, and an explanation of why such material or information is needed.
(c) An explanation of the Plan's claim review procedure.
Within 60 days of receipt of the information stated in Section 9.1 above, the Participant (or surviving spouse) shall, if he desires further review, file a written request for reconsideration with the Administrator.
So long as the Participant's (or surviving spouse's) request for review is pending (including the 60 day period in 9.2 above), the Participant (or surviving spouse) or his duly authorized representative may review pertinent Plan documents and may submit issues and comments in writing to the Administrator.
A final and binding decision shall be made by the Administrator within 60 days of the filing by the Participant (or surviving spouse) of his request for reconsideration, provided, however, that if the Administrator, in its discretion, feels that a hearing with the Participant (or surviving spouse) or his representative present is necessary or desirable, this period shall be extended an additional 60 days.
The Administrator's decision shall be conveyed to the Participant (or surviving spouse) in writing and shall include specific reasons for the provisions on which the decision is based.
APPENDIX A
March 7, 2000
For the purposes of the Retirement Plan for Eligible Directors/Trustees "AIM Funds" shall mean each of the regulated investment companies constituting classes or series of shares of the following entities:
AIM ADVISOR FUNDS, INC.
AIM EQUITY FUNDS, INC.
AIM FUNDS GROUP
AIM INTERNATIONAL FUNDS, INC.
AIM INVESTMENT SECURITIES FUNDS
AIM SPECIAL OPPORTUNITIES FUNDS
AIM SUMMIT FUND, INC.
AIM TAX-EXEMPT FUNDS, INC.
AIM VARIABLE INSURANCE FUNDS, INC.
SHORT-TERM INVESTMENTS CO.
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS CO.
EXHIBIT f(6)
AIM FUNDS
DIRECTOR DEFERRED COMPENSATION AGREEMENT
As Amended March 7, 200O
AIM FUNDS
AGREEMENT, made on this ____ day of _______, 20___, by and between the registered open-end investment companies listed on Appendix A hereto (the "Funds"), and _______________________________________________ (the "Director") residing at ____________________________________________.
WHEREAS, the Funds and the Director have entered into agreements pursuant to which the Director will serve as a director/trustee of the Funds; and
WHEREAS, if the Funds and the Director have previously entered into an additional agreement whereby the Funds will provide to the Director a vehicle under which the Director can defer receipt of directors' fees payable by the Funds, they now desire to amend and restate such agreement.
NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth in this Agreement, the Funds and the Director hereby agree as follows:
1.1 Definitions. Unless a different meaning is plainly implied by the context, the following terms as used in this Agreement shall have the following meanings:
(a) "Beneficiary" shall mean such person or persons designated pursuant to Section 4.3 hereof to receive benefits after the death of the Director.
(b) "Boards of Directors" shall mean the respective Boards of Directors of the Funds.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, or any successor statute.
(d) "Compensation" shall mean the amount of directors' fees paid by each of the Funds to the Director during a Deferral Year prior to reduction for Compensation Deferrals made under this Agreement.
(e) "Compensation Deferral" shall mean the amount or amounts of the Director's Compensation deferred under the provisions of Section 3 of this Agreement.
(f) "Deferral Accounts" shall mean the accounts maintained to reflect the Director's Compensation Deferrals made pursuant to Section 3 hereof (or pursuant to any prior agreement) and any other credits or debits thereto.
(g) "Deferral Year" shall mean each calendar year during which the Director makes, or is entitled to make, Compensation Deferrals under Section 3 hereof.
(h) "Retirement" shall have the same meaning as set forth under the Retirement Plan.
(i) "Retirement Plan" shall mean the "AIM Funds Retirement Plan for Eligible Directors/Trustees."
(j) "Valuation Date" shall mean the last business day of each calendar year and any other day upon which the Funds makes valuations of the Deferral Accounts.
1.2 Plurals and Gender. Where appearing in this Agreement the singular shall include the plural and the masculine shall include the feminine, and vice versa, unless the context clearly indicates a different meaning.
1.3 Directors and Trustees. Where appearing in this Agreement, "Director" shall also refer to "Trustee" and "Board of Directors" shall also refer to "Board of Trustees."
1.4 Headings. The headings and sub-headings in this Agreement are inserted for the convenience of reference only and are to be ignored in any construction of the provisions hereof.
1.5 Separate Agreement for Each Fund. This Agreement is drafted, and shall be construed, as a separate agreement between the Director and each of the Funds.
2.1 Commencement of Compensation Deferrals. The Director may elect, on a form provided by, and submitted to, the Presidents of the respective Funds, to commence Compensation Deferrals under Section 3 hereof for the period beginning on the later of (i) the date this Agreement is executed or (ii) the date such form is submitted to the Presidents of the Funds.
2.2 Termination of Deferrals. The Director shall not be eligible to make Compensation Deferrals after the earliest of the following dates:
(a) The date on which he ceases to serve as a Director of all of the Funds; or
(b) The effective date of the termination of this Agreement.
(a) On or prior to the first day of any Deferral Year, the Director may elect, on the form described in Section 2.1 hereof, to defer the receipt of all or a portion of his Compensation for such Deferral Year. Such writing shall set forth the amount of such Compensation Deferral (in whole percentage amounts). Such election shall continue in effect for all subsequent Deferral Years unless it is canceled or modified as provided below.
(b) Compensation Deferrals shall be withheld from each payment of Compensation by the Funds to the Director based upon the percentage amount elected by the Director under Section 3.1 (a) hereof.
(c) The Director may cancel or modify the amount of his Compensation Deferrals on a prospective basis by submitting to the Presidents of the Funds a revised Compensation Deferral election form. Such change will be effective as of the first day of the Deferral Year following the date such revision is submitted to the Presidents of the Funds.
(a) Each Fund shall establish a bookkeeping Deferral Account to which will be credited an amount equal to the Director's Compensation Deferrals under this Agreement made with respect to Compensation earned from each such Fund. Compensation Deferrals shall be allocated to the Deferral Accounts on the first business day following the date such Compensation Deferrals are withheld from the Director's Compensation. As of the date of this Agreement, the Deferral Accounts also shall be credited with the amounts credited to the Director under each other outstanding elective deferred compensation agreement entered into by and between the Funds and the Director which is superseded by this Agreement pursuant to Section 6.11 hereof. The Deferral Accounts shall be debited to reflect any distributions from such Accounts. Such debits shall be allocated to the Deferral Accounts as of the date such distributions are made.
(b) As of each Valuation Date, income, gain and loss equivalents (determined as if the Deferral Accounts are invested in the manner set forth under Section 3.3, below) attributable to the period following the next preceding Valuation Date shall be credited to and/or deducted from the Director's Deferral Accounts.
(a) (1) The Director may select, from various options made available by the Funds, the investment media in which all or part of his Deferral Accounts shall be deemed to be invested.
(2) The Director shall make an investment designation on a form provided by the Presidents of the Funds which shall remain effective until another valid direction has been made by the Director as herein provided. The Director may amend his investment designation by giving written direction to the Presidents of the Funds in such manner and at such time as the Funds may permit, but no less frequently than quarterly on thirty (30) days' notice prior to the end of a calendar quarter. A timely change to a Director's investment designation shall become effective as soon as practicable following receipt by the Presidents of the Funds.
(3) The investment media deemed to be made available to the Director, and any limitation on the maximum or minimum percentages of the Director's Deferral Accounts that may be invested any particular medium, shall be the same as from time-to-time communicated to the Director by the Presidents of the Funds.
(b) Except as provided below, the Director's Deferral Accounts shall be deemed to be invested in accordance with his investment designations, provided such designations conform to the provisions of this Section. If-
(1) the Director does not furnish the Presidents of the Funds with complete, written investment instructions, or
(2) the written investment instructions from the Director are unclear, then the Director's election to make Compensation Deferrals hereunder shall be held in abeyance and have no force or effect until such time as the Director shall provide the Presidents of the Funds with complete investment instructions. Notwithstanding the above, the Boards of Directors, in their sole discretion, may disregard the Director's election and determine that all Compensation Deferrals shall be deemed to be invested in a fund determined by the Boards of Directors. In the event that any fund under which any portion of the Director's Deferral Accounts is deemed to be invested ceases to exist, such portion of the Deferral Accounts thereafter shall be held in the successor to such fund, subject to subsequent deemed investment elections.
The Funds shall provide an annual statement to the Director showing such information as is appropriate, including the aggregate amount in the Deferral Accounts, as of a reasonably current date.
(a) Designation of Date. Each deferral direction given pursuant to
Section 3.1 shall include designation of the Payment Date for the value of the
amount deferred. Such Payment Date shall be the first day of any calendar
quarter, subject to the limitation set forth in paragraph 4.1(c).
(b) Extension Date. At least one year before the Payment Date initially designated pursuant to paragraph 4.1(a) above, the Participant may irrevocably elect to extend such Payment Date to the first day of any calendar quarter, subject to the limitation set forth in paragraph 4.1(c).
(c) Limitation. The Director shall select a Payment Date (or extended Payment Date) that is no sooner than the earlier of (i) the January 1 that follows the second anniversary of the Participant's deferral election made pursuant to paragraph 4.1(a) or (b) or (ii) the January 1 of the year after the Participant's Retirement.
(d) Methods of Payment. Distributions from the Director's Deferral Accounts shall be paid in cash in a single sum unless the Participant elects, at the time a Payment Date is selected pursuant to paragraph 4.1(a) or 4.1(b), to receive the amount payable in generally equal quarterly installments over a period not to exceed ten (10) years. In addition, at least one year before the Payment Date, a Director may change the method of payment previously selected.
(e) Irrevocability. Except as provided in paragraphs 4.1(b) and 4.1(d), a designation of a Payment Date and an election of installment payments shall be irrevocable; provided, however, that payment shall be made or begin on a different date as follows:
(1) Upon the Director's death, payment shall be made in accordance with Section 4.2,
(2) Upon the Director's ceasing to serve as a director of all of the Funds for reasons other than death or Retirement, payment shall be made or begin within three months after the end of the calendar year in which such termination occurs in accordance with the method elected by the Director pursuant to paragraph 4.1(d) provided the designation of such method had been made at least one year before such termination occurred, except that the Boards of Directors, in their sole discretion, may accelerate the distribution of such Deferral Accounts,
(3) Upon termination of this Agreement, payment shall be made in accordance with Section 5.2, and
(4) In the event of the liquidation, dissolution or winding up of a Fund or the distribution of all or substantially all of a Fund's assets and property relating to one or more series of its shares to the shareholders of such series (for this purpose a sale, conveyance or transfer of a Fund's assets to a trust, partnership, association or corporation in exchange for cash, shares or other securities with the transfer being made subject to, or with the assumption by the transferee of, the liabilities of the Fund shall not be deemed a termination of the Fund or such a distribution), all unpaid balances of the Deferral Accounts related to such Fund as of the effective date thereof shall be paid in a lump sum on such effective date.
4.2 Death Prior to Complete Distribution of Deferral Accounts. Upon the death of the Director prior to the commencement of the distribution of the amounts credited to his Deferral Accounts, the balance of such Accounts shall be distributed to his Beneficiary in accordance with the method of payment selected pursuant to paragraph 4.1(d), commencing as soon as practicable after the Director's death. In the event of the death of the Director after the commencement of such distribution, but prior to the complete distribution of his Deferral Accounts, the balance of the amounts credited to his Deferral Accounts shall be distributed to his Beneficiary over the remaining period during which such amounts were distributable to the Director under Section 4.1 hereof. Notwithstanding the above, the Boards of Directors, in their sole discretion, may accelerate the distribution of the Deferral Accounts.
4.3 Designation of Beneficiary. For purposes of Section 4.2 hereof, the
Director's Beneficiary shall be the person or persons so designated by the
Director in a written instrument submitted to the Presidents of the Funds. In
the event the Director fails to properly designate a Beneficiary, his
Beneficiary shall be the person or persons in the first of the following classes
of successive preference Beneficiaries surviving at the death of the Director:
the Director's (1) surviving spouse or (2) estate.
4.4 Payments Due Missing Persons. The Funds shall make a reasonable effort to locate all persons entitled to benefits under this Agreement. However, notwithstanding any provisions of this Agreement to the contrary, if, after a period of five (5) years from the date such
benefit shall be due, any such persons entitled to benefits have not been located, their rights under this Agreement shall stand suspended. Before this provision becomes operative, the Funds shall send a certified letter to all such persons to their last known address advising them that their benefits under this Agreement shall be suspended. Any such suspended amounts shall be held by the Funds for a period of three (3) additional years (or a total of eight (8) years from the time the benefits first become payable) and thereafter, if unclaimed, such amounts shall be forfeited.
(a) The Funds and the Director may, by a written instrument signed by, or on behalf of, such parties, amend this Agreement at any time and in any manner.
(b) The Funds reserve the right to amend, in whole or in part, and in any manner, any or all of the provisions of this Agreement by action of their Boards of Directors for the purposes of complying with any provision of the Code or any other technical or legal requirements, provided that:
(1) No such amendment shall make it possible for any part of the Director's Deferral Accounts to be used for, or diverted to, purposes other than for the exclusive benefit of the Director or his Beneficiaries, except to the extent otherwise provided in this Agreement; and
(2) No such amendment may reduce the amount of the Director's Deferral Accounts as of the effective date of such amendment.
5.2 Termination. The Director and the Funds may, by written instrument signed by, or on behalf of, such parties, terminate this Agreement at any time. In the event of the termination of this Agreement, the Boards of Directors, in their sole discretion, may choose to pay out the Director's Deferral Accounts prior to the designated Payment Dates. Otherwise, following a termination of this Agreement, such Accounts shall continue to be maintained in accordance with the provisions of this Agreement until the time they are paid out.
(a) This Agreement is unfunded. Neither the Director nor any other persons shall have any interest in any specific asset or assets of the Funds by reason of any Deferral Accounts hereunder, nor any rights to receive distribution of his Deferral Accounts except and as to the extent expressly provided hereunder. The Funds shall not be required to purchase, hold or dispose of any investments pursuant to this Agreement; however, if in order to cover their obligations hereunder the Funds elect to purchase any investments the same shall continue for all purposes to be a part of the general assets and property of the Funds, subject to the claims of their general creditors and no person other than the Funds shall by virtue of the provisions of this Agreement have any interest in such assets other than an interest as a general creditor.
(b) The rights of the Director and the Beneficiaries to the amounts held in the Deferral Accounts are unsecured and shall be subject to the creditors of the Funds. With respect to the payment of amounts held under the Deferral Accounts, the Director and his Beneficiaries have the status of unsecured creditors of the Funds. This Agreement is executed on behalf of the Funds by an officer, or other representative, of the Funds as such and not individually. Any obligation of the Funds hereunder shall be an unsecured obligation of the Funds and not of any other person.
6.2 Agents. The Funds may employ agents and provide for such clerical, legal, actuarial, accounting, advisory or other services as it deems necessary to perform their duties under this Agreement. The Funds shall bear the cost of such services and all other expenses they incur in connection with the administration of this Agreement.
6.3 Liability and Indemnification. Except for their own gross negligence, willful misconduct or willful breach of the terms of this Agreement, the Funds shall be indemnified and held harmless by the Director against liability or losses occurring by reason of any act or omission of the Funds or any other person.
6.4 Incapacity. If the Funds shall receive evidence satisfactory to them that the Director or any Beneficiary entitled to receive any benefit under the Agreement is, at the time when such benefit becomes payable, a minor, or is physically or mentally incompetent to receive such benefit and to give a valid release therefor, and that another person or an institution is then maintaining or has custody of the Director or Beneficiary and that no guardian, committee or other representative of the estate of the Director or Beneficiary shall have been duly appointed, the Funds may make payment of such benefit otherwise payable to the Director or Beneficiary to such other person or institution, including a custodian under a Uniform Gifts to Minors Act, or corresponding legislation (who shall be an adult, a guardian of the minor or a trust company), and the release of such other person or institution shall be a valid and complete discharge for the payment of such benefit.
6.5 Cooperation of Parties. All parties to this Agreement and any person claiming any interest hereunder agree to perform any and all acts and execute any and all documents and papers which are necessary or desirable for carrying out this Agreement or any of its provisions.
6.6 Governing Law. This Agreement is made and entered into in the State of Texas and all matters concerning its validity, construction and administration shall be governed by the laws of the State of Texas.
6.7 Nonguarantee of Directorship. Nothing contained in this Agreement shall be construed as a contract or guarantee of the right of the Director to be, or remain as, a director of any of the Funds or to receive any, or any particular rate of, Compensation from any of the Funds.
6.8 Counsel. The Funds may consult with legal counsel with respect to the meaning or construction of this Agreement, their obligations or duties hereunder or with respect to any action or proceeding or any question of law, and they shall be fully protected with respect to any action taken or omitted by them in good faith pursuant to the advice of legal counsel.
6.9 Spendthrift Provision. The Director's and Beneficiaries' interests in the Deferral Accounts may not be anticipated, sold, encumbered, pledged, mortgaged, charged, transferred, alienated, assigned nor become subject to execution, garnishment or attachment and any attempt to do so by any person shall render the Deferral Accounts immediately forfeitable.
6.10 Notices. For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally or mailed by United States registered or certified mail, return receipt requested, postage prepaid, or by nationally recognized overnight delivery service providing for a signed return receipt, addressed to the Director at the home address set forth in the Funds' records and to the Funds at the address set forth on the first page of this Agreement, provided that all notices to the Funds shall be directed to the attention of the Presidents of the Funds or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.
6.11 Entire Agreement. This Agreement contains the entire understanding between the Funds and the Director with respect to the payment of non-qualified elective deferred compensation by the Fund to the Director. Effective as of the date hereof, this Agreement replaces, and supersedes, all other non-qualified elective deferred compensation agreements by and between the Director and the Funds.
6.12 Interpretation of Agreement. Interpretations of, and determinations (including factual determinations) related to, this Agreement made by the Funds in good faith, including any determinations of the amounts of the Deferral Accounts, shall be conclusive and binding upon all parties; and the Funds shall not incur any liability to the Director for any such interpretation or determination so made or for any other action taken by it in connection with this Agreement in good faith.
6.13 Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of, the Funds and their successors and assigns and to the Director and his heirs, executors, administrators and personal representatives.
6.14 Severability. In the event any one or more provisions of this Agreement are held to be invalid or unenforceable, such illegality or unenforceability shall not affect the validity or enforceability of the other provisions hereof and such other provisions shall remain in full force and effect unaffected by such invalidity or unenforceability.
6.15 Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.
The Funds
By:
---------------------------- --------------------------------------
Witness Name:
Title:
----------------------------
Witness
-----------------------------------------
Director
|
For the purposes of the Deferred Compensation Agreement "AIM Funds" shall mean each of the regulated investment companies constituting classes or series of shares of the following entities:
AIM EQUITY FUNDS, INC.
AIM FUNDS GROUP
AIM INTERNATIONAL FUNDS, INC.
AIM INVESTMENT SECURITIES FUNDS
AIM STRATEGIC INCOME FUND, INC.
AIM SUMMIT FUND, INC.
AIM TAX-EXEMPT FUNDS, INC.
AIM VARIABLE INSURANCE FUNDS, INC.
SHORT-TERM INVESTMENTS CO.
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS CO.
TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation agreement (the "Agreement") dated as of______________________________ by and between the undersigned and the AIM Funds, I hereby make the following elections:
Starting with Compensation to be paid to me with respect to services provided by me to the AIM Funds after the date this election Form is received by the AIM Funds, I hereby elect that ______ percent (__%) of my Compensation (as defined under the Agreement) be reduced and that the Fund establish a bookkeeping account credited with amounts equal to the amount so reduced (the "Deferral Account"). The Deferral Account shall be further credited with income equivalents as provided under the Agreement. I understand that this election will remain in effect with respect to Compensation I earn in subsequent years unless I modify or revoke it. I further understand that such modification or revocation will be effective only prospectively and will apply commencing with the Compensation I earn in the calendar year that begins after the change is received by you.
I hereby designate _____________1 (select the first month in any calendar quarter) in the year ____________ (select a year that is at least two years after the year this election is made) as the Payment Date for the amounts credited to my Deferral Account pursuant to the election made above. If my Retirement (as defined in the Agreement) occurs sooner, I [_] do [_] do not (check the appropriate box) want payment of such amounts to commence effective the January 1 following my Retirement. I understand that amounts credited to my Deferral Account may be paid to me prior to the Payment Date as provided in the Agreement.
I hereby elect to receive the amounts credited to my Deferral Account in (check one)
[_] a single payment in cash
[_] annual installments for a period of _________ (select no more than 10 years)
beginning within 30 days following the payment date selected above.
I understand that the amounts credited to my Deferral Account shall remain the general assets of the AIM Funds and that, with respect to the payment of such amounts, I am merely a general creditor of the AIM Funds. I may not sell, encumber, pledge, assign or otherwise alienate the amounts credited to my Deferral Account.
I hereby agree that the terms of the Agreement are incorporated herein and are made a part hereof Dated as of the day and year first above written.
WITNESS: DIRECTOR:
----------------------------- ---------------------------------
WITNESS: RECEIVED:
AIM Funds
-----------------------------
By:
-----------------------
Date:
-----------------------
|
TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation Agreement (the "Agreement") by and between the undersigned and the AIM Funds, I hereby elect that my Deferral Account under the Agreement be considered to be invested as follows (in multiples of 10%):
NAME OF FUND %
------------ ---
____________________________________ __ %
____________________________________ __ %
____________________________________ __ %
____________________________________ __ %
____________________________________ __ %
____________________________________ __ %
|
I acknowledge that I may amend this Investment Agreement in the manner, and at such time, as permitted under the Agreement. Furthermore, I acknowledge that, pursuant to Section 3.3(b) of the Agreement, the Fund has reserved the right to disregard the elections made above to consider my Deferral Account to be deemed to be invested in a fund of its choosing.
WITNESS: DIRECTOR:
------------------------- -----------------------------
WITNESS: RECEIVED:
AIM Funds
By:
------------------------- ----------------------------
Date:
--------------------------
|
TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation Agreement (the "Agreement") by and between the undersigned and the AIM Funds, I hereby make the following beneficiary designations:
I hereby appoint the following as my Primary Beneficiary(ies) to receive at my death the amounts credited to my Deferral Account under the Agreement. In the event I am survived by more than one Primary Beneficiary, such Primary Beneficiaries shall share equally in such amounts unless I indicate otherwise on an attachment to this form:
--------------------------------------------------------------------- Name Relationship --------------------------------------------------------------------- Address --------------------------------------------------------------------- City State Zip |
In the event I am not survived by any Primary Beneficiary, I hereby appoint the following as Secondary Beneficiary(ies) to receive death benefits under the Agreement. In the event I am survived by more than one Secondary Beneficiary, such Secondary Beneficiaries shall share equally unless I indicate otherwise on an attachment to this form:
--------------------------------------------------------------------- Name Relationship --------------------------------------------------------------------- Address --------------------------------------------------------------------- City State Zip |
I understand that I may revoke or amend the above designations at any time. I further understand that if I am not survived by a Primary or Secondary Beneficiary, my Beneficiary shall be as set forth under the Agreement.
WITNESS: DIRECTOR:
------------------------- -----------------------------
WITNESS: RECEIVED:
AIM Funds
By:
------------------------- ----------------------------
Date:
--------------------------
|
TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation agreement (the "Agreement") by and between the undersigned and the AIM Funds, pursuant to which I have previously elected to defer Compensation,
I hereby designate _________1 (select the first month in any calendar quarter) in the year _________ (select a year that is at least two years after the year this election is made) as the Payment Date for the amounts previously credited to my Deferral Account and amounts subsequently credited thereto. If my Retirement (as defined in the Agreement) occurs sooner, I [_] do [_] do not (check the appropriate box) want payment of such amounts to commence effective the January 1 following my Retirement. I understand that amounts credited to my Deferral Account may be paid to me prior to the Payment Date as provided in the Agreement.
I hereby elect to receive the amounts credited to my Deferral Account in (check one)
[_] a single payment in cash
[_] annual installments for a period of ________ (select no more than 10 years)
I understand that this change in payment method will not be given effect unless my Payment Date is at least one year from the date hereof and I do not cease to be a Director within such year.
I understand that I may amend this designation in the manner, and at such time, as permitted under the Agreement.
WITNESS: DIRECTOR:
------------------------- -----------------------------
WITNESS: RECEIVED:
AIM Funds
By:
------------------------- ----------------------------
Date:
--------------------------
|
EXHIBIT h(4)(a)
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
AIM TAX-EXEMPT FUNDS
AND
A I M FUND SERVICES, INC.
TABLE OF CONTENTS
PAGE
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 LIMITATION OF SHAREHOLDER LIABILITY............................6
ARTICLE 10 ASSIGNMENT.....................................................6
ARTICLE 11 AMENDMENT......................................................7
ARTICLE 12 TEXAS LAW TO APPLY.............................................7
ARTICLE 13 MERGER OF AGREEMENT............................................7
ARTICLE 14 COUNTERPARTS...................................................7
|
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 1st day of June, 2000, by and between AIM TAX-EXEMPT FUNDS, a Delaware business trust, having its principal office and place of business at 11 Greenway Plaza, Suite 100, 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 100, 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 each 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 each 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 Charter 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;
(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 for each class of each of the Portfolios. 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.
2.02 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 corporate 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, 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 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 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
LIMITATION OF SHAREHOLDER LIABILITY
9.01 Notice is hereby given that this Agreement is being executed by the Fund 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, shareholders or the investment advisor of the Fund individually but are binding only upon the assets and property belonging to the Fund, on its own behalf or on behalf of a Portfolio, for the benefit of which the trustees or directors have caused this Agreement to be executed.
ARTICLE 10
ASSIGNMENT
10.01 Except as provided in Section 10.03 below, neither this Agreement nor any rights or obligations hereunder may be assigned by either party without the written consent of the other party.
10.02 This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and assigns.
10.03 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 11
AMENDMENT
11.01 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 12
TEXAS LAW TO APPLY
12.01 This Agreement shall be construed and the provisions thereof interpreted under and in accordance with the laws of the State of Texas.
ARTICLE 13
MERGER OF AGREEMENT
13.01 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 14
COUNTERPARTS
14.01 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.
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.
AIM TAX-EXEMPT FUNDS
By: /s/ ROBERT H. GRAHAM
-----------------------
President
ATTEST:
/s/ P. MICHELLE GRACE
-----------------------
Assistant Secretary
|
A I M FUND SERVICES, INC.
By: /s/ JOHN CALDWELL
-----------------------
President
ATTEST:
/s/ P. MICHELLE GRACE
-----------------------
Assistant Secretary
|
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.
Per Account Fee
Fund Type Annualized
--------- ----------
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
Class C 19.65
|
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.
|
The Fund shall reimburse the Transfer Agent monthly for applicable out-of-pocket expenses, including, but not limited to the following items:
- Microfiche/microfilm production & equipment
- Magnetic media tapes and freight
- Printing costs, including, without limitation, certificates,
envelopes, checks, stationery, confirmations and statements
- Postage (bulk, pre-sort, ZIP+4, bar coding, first class) direct
pass through to the Fund
- Due diligence mailings
- Telephone and telecommunication costs, including all lease,
maintenance and line costs
- Ad hoc reports
- Proxy solicitations, mailings and tabulations
- Daily & Distribution advice mailings
- Shipping, Certified and Overnight mail and insurance
- Year-end form production and mailings
- Terminals, communication lines, printers and other equipment and
any expenses incurred in connection with such terminals and lines
- Duplicating services
- Courier services
- Banking charges, including without limitation incoming and
outgoing wire charges @ $8.00 per wire
- Rendering fees as billed
- Federal Reserve charges for check clearance
- Record retention, retrieval and destruction costs, including,
but not limited to exit fees charged by third party record
keeping vendors
- Third party audit reviews
- All client specific Systems enhancements will be at the Funds'
cost.
- Certificate Insurance
- Such other miscellaneous expenses reasonably incurred by the
Transfer Agent in performing its duties and responsibilities
under this Agreement
- Check writing 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.
EXHIBIT h(4)(b)
AMENDMENT NUMBER 1 TO THE TRANSFER AGENCY
AND SERVICE AGREEMENT
This Amendment, dated as of July 1, 2000 is made to the Transfer Agency and Service Agreement dated June 1, 2000, as amended (the "Agreement") between AIM Tax-Exempt Funds (the "Fund") and A I M Fund Services, Inc. ("AFS") pursuant to Article 11 of the Agreement.
Paragraph 1 of the Fee Schedule is hereby deleted in its entirety and replaced with the following:
"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.
Per Account Fee
Fund Type Annualized
--------- ----------
Class A, B and C
Non-Daily Accrual Funds $15.20
Class A, B and C
Monthly Dividend and Daily Accrual Funds 16.20"
|
Paragraph 4 of the Fee Schedule is hereby deleted in its entirety and replaced with the following:
"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 the 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."
|
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
AIM TAX-EXEMPT FUNDS
By: /s/ ROBERT H. GRAHAM
--------------------
President
ATTEST:
/s/ P. MICHELLE GRACE
---------------------
Secretary
|
A I M FUND SERVICES, INC.
By: /s/ TONY D. GREEN
-----------------
President
ATTEST:
/s/ P. MICHELLE GRACE
---------------------
Assistant Secretary
|
EXHIBIT (h)(5)(h)
AMENDMENT NO. 6 TO THE REMOTE ACCESS
AND RELATED SERVICES AGREEMENT
FOR IMPRESSNET(TM) SERVICES
THIS AMENDMENT, dated as of the 30th day of August, 1999 is made to the Remote Access and Related Services Agreement dated as of December 23, 1994, as amended (the "Agreement") between each registered investment company listed on Exhibit 1 of the Agreement (the "Fund") and FIRST DATA INVESTOR SERVICES GROUP, INC. ("Investor Services Group").
WITNESSETH
WHEREAS, the Fund desires to enable Shareholders and Financial Planners to conduct certain account transactions through the use of the Internet and Investor Services Group desires to allow such access and provide certain services as more fully described below in connection therewith;
NOW THEREFORE, the Fund and Investor Services Group agree that as of the date first referenced above, Investor Services Group Agreement shall be amended as follows:
1. Definitions. Terms not otherwise defined herein shall have the same meanings as ascribed them in the Agreement. In addition, the following definitions are hereby incorporated into Agreement:
(a) "End-User" shall mean any Shareholder or Financial Planner that accesses the Investor Services Group recordkeeping system via IMPRESSNet--Registered Trademark--.
(b) "Financial Planner" shall mean any investment advisor, broker-dealer, financial planner or any other person authorized to act on behalf of a Shareholder.
(c) "Financial Transaction" shall mean purchase, redemption, exchange or any other transaction involving the movement of Shares initiated by an End-User.
(d) "Fund Home Page" shall mean the Fund's proprietary web site on the Internet used by the Fund to provide information to its shareholders and potential shareholders.
(e) "IMPRESSNet--Registered Trademark--" shall mean the Investor Services Group proprietary system consisting of the Investor Services Group Secure Net Gateway and the Investor Services Group Web Transaction Engine and shall also be deemed to be part of, and included within the definition of "FDISG System" and "FDISG Facilities", as those terms are defined in the Agreement.
(f) "Investor Services Group Secure Net Gateway" shall mean the system of computer hardware and software and network established by Investor Services Group to provide access between Investor Services Group recordkeeping system and the Internet.
(g) "Investor Services Group Web Transaction Engine" shall mean the system of computer hardware and software created and established by Investor Services Group in order to enable Shareholders of the Fund to perform the transactions contemplated hereunder.
(h) "Internet" shall mean the communications network comprised of multiple communications networks linking education, government, industrial and private computer networks.
(i) "Shares" refers collectively to such shares of capital stock or beneficial interest, as the case may be, or class thereof, of a Fund as may be issued from time to time.
(j) "Shareholder" shall mean a record owner of Shares of the Fund.
2. Responsibilities of Investor Services Group. In addition to the services rendered by Investor Services Group as set forth in the Agreement, Investor Services Group agrees to provide the following services for the fees set forth in the Schedule of IMPRESSNet--Registered Trademark-- Fees attached hereto as Schedule A of this Amendment:
(a) In accordance with the written IMPRESSNet--Registered Trademark--
procedures and product functionality documentation provided to the
Fund by Investor Services Group, Investor Services Group shall,
through the use of the Investor Services Group Web Transaction Engine
and Secure Net Gateway enable End-Users to utilize the Internet to
access the Investor Services Group System in order to perform
transactions in Shareholder accounts. IMPRESSNet--Registered
Trademark-- shall be accessible by End-Users in order to perform
transactions in Shareholder accounts via the Internet at least 95% of
the time during any 24 hour period, excluding a) the standard Initial
Program Loads (IPL) which shall be scheduled from 9:00 p.m. Saturday
through 7:00 a.m. Sunday Central Time, and b) the software change
windows which shall be scheduled from 12:00 a.m. Friday through 4:00
a.m. Friday Central Time and 12:00 a.m. Monday through 4:00 a.m.
Monday Central Time.
(b) (i) With respect to Shareholders, process the set up of personal identification numbers ("PIN") which shall include verification of initial identification numbers issued, reset and activate personalized PIN's and reissue new PIN's in connection with lost PIN's; and (ii) with respect to Financial Planners process the set up of digital certificates which shall include verification of initial digital certificates issued, reset and activate digital certificates and reissue digital certificates in connection with expired or terminated certificates.
(c) Installation services which shall include, review and sign off on the Fund's network requirements, recommending method of linking to the FDISG Web Transaction Engine, installing network hardware and software, implementing the network connectivity, and testing the network connectivity and performance;
(d) Maintenance and support of the Investor Services Group Secure Net
Gateway and the Investor Services Group Web Transaction Engine, which
includes the following:
(i) error corrections, minor enhancements and interim upgrades to
IMPRESSNet--Registered Trademark-- which are made generally
available by FDISG to IMPRESSNet--Registered Trademark--
customers;
(ii) help desk support to provide assistance to Fund employees
with the Fund's use of IMPRESSNet--Registered Trademark--.
Maintenance and support shall not include (i) access to or use of any
substantial added functionality, new interfaces, new architecture, new
platforms, new versions or major development efforts, unless made
generally available by FDISG to IMPRESSNet--Registered Trademark--
clients, as determined solely by FDISG; or (ii) development of
customized features.
(e) Maintenance and upkeep of the security infrastructure and
capabilities described in the procedures and product functionality
documentation.
(f) Prepare and forward monthly usage reports to the Fund which shall
provide the Fund with a summary of activity and functionality used by
End-Users. In addition, the Fund will be provided web-site access for
determination of daily usage activity.
3. Responsibility of the Fund. In connection with the services provided
by Investor Services Group hereunder, the Fund shall be responsible
for the following:
(a) establishment and maintenance of the Fund Home Page on the
Internet;
(b) services and relationships between the Fund and any third party
on-line service providers to enable End-Users to access the Fund Home
Page and/or the Investor Services System via the Internet;
(c) provide Investor Services Group with access to and information
regarding the Fund Home Page in order to enable Investor Services
Group to provide the services contemplated hereunder.
4 Software Exclusivity. The Fund may choose to have exclusive use of
enhancement software paid for by the Fund. 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, Investor Services Group or other
Investor Services Group clients agree to share in the expense of
the enhancements.
b). At any time during the 9 months following implementation, Investor
Services Group or other Investor Services Group clients agree to
share the expense for the enhancements.
|
The Agreement, as previously amended and as amended by this Amendment, ("Modified Agreement") constitutes the entire agreement between the parties with respect to the subject matter hereof. The Modified Agreement supersedes all prior and contemporaneous agreements between the parties in connection with the subject matter hereof. No officer, employee, servant or other agent of either party is authorized to make any representation, warranty, or other promises not expressly contained herein with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized officers, as of the day and year first above written.
On behalf of the Funds and respective FIRST DATA INVESTOR SERVICES Portfolios and Classes set forth in GROUP, INC. Exhibit 1 of the Agreement which may be amended from time to time. |
By: /s/ROBERT H. GRAHAM By: /s/DEBRLEE G. GOLDBERG
-------------------------------- -------------------------------
Name: Robert H. Graham Name: Debrlee G. Goldberg
------------------------------- ----------------------------
Title: President Title: SVP
------------------------------ ---------------------------
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SCHEDULE A
IMPRESSNET(TM) Fees
WEB TRANSACTION ENGINE
SET UP FEE: $150.00 PER HOUR
o Reviewing client network requirements and signing off on the requirements
o Recommending method of linking to the Web Transaction Engine
o Installing the network hardware and software
o Implementing the network connectivity
o Testing the network connectivity and performance
FINANCIAL TRANSACTION COST:
NUMBER OF TRANSACTIONS PER MONTH FEE PER TRANSACTION
-------------------------------- -------------------
0-10,000 $.50
10,001-20,000 $.40
20,001+ $.25
|
SOFTWARE MAINTENANCE FEE: $25,000 PER ANNUM
o Releases of new versions of Web Transaction Engine (does not include customization)
o Maintain security infrastructure with auditing function for the purpose of Fund and Shareholder protection
o Monthly Usage Reports and web access as described in Paragraph 2(f) of this Amendment No. 6
o Help Desk Support (contact and escalation procedures set forth in Exhibit 1)
HARDWARE MAINTENANCE FEE: $25,000 PER ANNUM
o Does not include client hardware and software requirements.
o Installation of hardware is billed as time and materials
o Does not include third party hardware and software maintenance agreements
The Software Maintenance Fee and Hardware Maintenance Fee shall remain unchanged until December 31, 2002. During each one year term of the agreement after December 31, 2002, the Software Maintenance Fee and Hardware Maintenance Fee may be changed no more than 5% than the then-current Software Maintenance Fee and Hardware Maintenance Fee upon 90 days' prior written notice to the Funds. Such change to the Software Maintenance Fee and Hardware Maintenance Fee shall be effective at the beginning of the next one year term of the Agreement.
CUSTOMIZED DEVELOPMENT: $150 PER HOUR
The above referenced fees do not include fees associated with third party software products which may be required to utilize future releases of IMPRESSNet(TM) .
EXHIBIT 1 OF SCHEDULE A
IMPRESSNET HELP DESK AND ESCALATION PROCEDURES
This is directed to the IMPRESSNet staff as well as the customer base to ensure a common understanding of the expectations surrounding help desk support.
It is assumed that each site has a front line of technical support which filters out calls and determines that the issue is IMPRESSNet related and is severe enough to justify immediate attention. It is requested that off-hour calls be reserved for major production or data integrity issues.
Once an issue is determined to be IMPRESSNet related, the client representative
(either the user or a point of contact) should call the First Data Help Desk at
(508) 871-8550.
The Help Desk has a list of primary and secondary developers on call by product. It is advantageous to provide a clear and concise problem statement to the Help Desk personnel along with a telephone number and point of contact. The caller should be sure to obtain a ticket number to facilitate progress tracking if necessary.
o The Help Desk will call and/or page the primary on-call developer and allow 15 minutes for a return call.
o If no response is received, the Help Desk will call and/or page the secondary on call and wait 10 minutes for a return call.
o If no response is received, the manager on call will be called and/or paged.
o If no response is received, the Help Desk personnel will contact the Vice President of Corporate Systems and then the Manager of the Environmental Support Group.
o Finally, if no response is received the Help Desk personnel has access to SCONCALL (special procedures utilized by help desk personnel)
Once the developer or manager is assigned the call, they are responsible for seeing that the issue is satisfactorily addressed. They are not necessarily responsible for physically addressing the issue.
The assigned person will contact the designated client personnel to inform them the issue is being addressed and to collect any relevant information.
If an issue will take more than an hour to resolve, the assigned person will periodically update the Help Desk with a progress status.
Once the issue has been addressed it is the responsibility of the assigned person to notify the Help Desk that the issue can be marked as "resolved".
The Help Desk will contact the client to obtain confirmation of resolution prior to closing the ticket.
If there has been a lack of response on a particular issue after the specified time period, please contact your Client Service or IMPRESSNet Manager.
EXHIBIT h(5)(i)
AMENDMENT NO. 7 TO THE REMOTE ACCESS
AND RELATED SERVICES AGREEMENT
FOR IMPRESSPlus FORMS PROCESSING SOFTWARE
THIS AMENDMENT, dated as of the 29th day of February, 2000 is made to
the Remote Access and Related Services Agreement dated as of December 23, 1994,
as amended (the "Agreement") between each registered investment company listed
on Exhibit 1 of the Agreement (the "Fund") and FIRST DATA INVESTOR SERVICES
GROUP, INC. (k/n/a PFPC Inc.) ("PFPC").
WITNESSETH
WHEREAS, the Fund and PFPC desire to amend certain provisions of the Agreement;
NOW THEREFORE, the Fund and PFPC agree that as of the date first referenced above, the Agreement shall be amended as follows:
1. All references to "First Data Investor Services Group, Inc." and "Investor Services Group" are hereby deleted and replaced with "PFPC Inc." and "PFPC" respectively.
2. Exhibit 1 of the Agreement is hereby deleted and replaced with the attached revised Exhibit 1.
3. Schedule C -- "Fee Schedule" is hereby amended by adding the following new subsection i to Section III -- "Additional Fees":
"i. IMPRESSPlus Forms Processing Fees. The following fees shall cover costs associated with the Fund's use of the Forms Processing Software, maintenance and support and the costs associated with the integration of the associated software with IMPRESSPlus.
Number of user licenses purchased: 300 (125 max. concurrent users) Total License Fee: $842,400* Monthly Maintenance Fee: $15,600**
*Calculated at $2,808 per user license ($78 per month per user license). Additional concurrent user licenses may be purchased by the Fund during the term of this Agreement and PFPC will apply appropriate volume discounts at the time of purchase.
**Calculated at $52 per user license per month.
The License Fee includes:
(a) All ICR/OCR software, including AEG recognition engine, Form ID, PerfectPost Address Validation, Image pre-processing Module, FormWare JobFlow, FormWare Completion, and Edit/Export Module;
(b) One copy of System and User documentation;
(c) A completed ICR/OCR application to handle and process AIM's New Account form;
(d) Quarterly PerfectPost updates each year;
(e) Attendance at the IMPRESS Plus User Group meetings; and
(f) Installation and implementation of the application and integrated solution.
Delivery
PFPC shall deliver to the Fund and install IMPRESSPlus Forms Processing 1.0, as customized as described herein, no later than six (6) months following the Fund's acceptance of the Forms Processing Functional Specifications (the "Delivery Date"). The Fund and PFPC agree to use good faith efforts to finalize the Forms Processing Functional Specifications document as soon as reasonably practicable.
Payment Terms:
1/3 of Total License Fee ($280,800) is due and payable thirty (30) days after effective date of this Amendment No. 7: Monthly License Fee payments in the amount of $20,800 (Totaling $561,600) will begin to accrue upon delivery of the software and the obligation of the Fund to begin paying the Monthly License Fee shall commence upon Acceptance (described below), provided, however,
(a) If Acceptance occurs between one (1) day following the Delivery Date and sixty (60) days following the Delivery Date, then the initial Monthly License Fee payable by the Fund shall include (i) the Monthly License Fee for the month in which Acceptance occurs; and (ii) any accrued Monthly License Fees. However, if Acceptance does not occur at or prior to sixty (60) days following the Delivery Date, then (x) any accrued Monthly License Fees shall be forfeited by PFPC, (y) the initial Monthly License Fee shall equal $20,800, and (z) the initial Monthly License Fee shall apply to the month in which Acceptance occurs. The forgoing described forfeiture of fees shall in no event apply if the cause of the delay results from any action or inaction of the Fund, or its affiliates.
(b) PFPC shall be entitled to an additional payment in an amount equal to $10,000 for each fifteen (15) day period prior to the Delivery Date in which actual delivery occurs. Such additional payment shall be made within thirty (30) days of Acceptance.
(c) Notwithstanding the above, in all instances, (i) the Fund's obligation to pay the Monthly Maintenance Fee shall commence during the calendar month of Acceptance; and (ii) the Fund's obligation to pay Monthly License Fees shall terminate on December 31, 2002.
Other Costs.
All AIM-specific optional customizations and enhancements not otherwise identified as "included" in the License and Maintenance Fees identified herein will be billed at a rate of $150/hour with mutually agreed upon project definition and functional requirements.
Training will be billed at $2,500 per student per class. The Fund agrees to send at least one individual to at least two (2) training classes.
The Fund may purchase additional copies of user and technical documentation at a cost of $100 per copy.
Acceptance. The Fund shall be deemed to have accepted the IMPRESSPlus Forms Processing Software on the earlier of (i) the Fund's first use of any software component to process live production data; or (ii) twenty-one (21) days after delivery of the software, provided, however, acceptance shall be deemed not to have occurred during the aforementioned twenty-one day period if during such period the Fund notifies PFPC in writing and can demonstrate that the software is unable to perform any of the following acceptance criteria:
(a) scan documents into the "Recognition" or a comparable alternate activity in the Impress Imaging Application using existing Ricoh and Kodak scanners;
(b) recognize the document based on form geography and/or bar codes;
(c) recognize and appropriately reject missing pages, blank fields and client annotations in the document margins;
(d) perform recognition process and deliver the documents to specified associates for verification and/or correction;
(e) automated workflow based on form ID and pre-determined recognition conditions
(f) allow the user to discontinue verification/correction in favor of data entry from image on applications that could not be read;
(g) automatically update all IMPRESSPlus Imaging system indexes. These consist of Transaction Type, Fund#, Account#, document workflow history, and the information contained in the four transaction free form indexes;
(h) automatically update to the FSR system, on a near time basis, all new account information recognized on the new account form;
(i) update the FSR system utilizing existing application edits found on the online system; and
(j) include standard reporting functionality provided by FormWare. Predetermined reports include, Operator Batch Detail, Operator Job Summary, Operator Keystroke, Operator Summary & Operator Time. AIM may customize reports utilizing FormWare data elements.
In the event that the Fund so notifies PFPC and demonstrates that one or more or the acceptance criteria stated above has not been met, PFPC and the Fund agree to use best efforts to resolve any such failures and upon resolution. Acceptance shall be deemed to have occurred.
4. Section 1.1 of Exhibit 1 of Schedule G of the Agreement is hereby amended by adding the following to the list of PFPC software products:
"IMPRESSPlus Forms Processing 1.0"
5. Section 2.1.3 of Exhibit 1 of Schedule G of the Agreement is hereby amended by adding the following:
"2.1.3 Captiva Software. The following Third Party Software is licensed directly to the Fund by PFPC subject to the mandatory Captiva Software Corporation ("Captiva") software license terms and conditions ("Captiva Terms") to be provided to the Fund upon delivery of the Captiva Software. To the extent that the Captiva Terms conflict with or differ from the other terms and conditions in the Agreement, the Captiva Terms shall prevail with respect to the Captiva Software.
Captiva Formware -- 300 seat availability maximum 125 concurrent users
Notwithstanding any provision of the Agreement to the contrary, upon termination of this Agreement, the Fund shall retain a perpetual license with respect to the Captiva Software, provided however, the Fund's use of the Captive Software shall be governed by the Captiva Terms and provided that PFPC shall have no further responsibility to the Fund with respect to the use by the Fund thereof.."
6. Exhibit 1.1 of Schedule G -- "Specifications" is amended by adding the following new section:
"IMPRESSPlus Forms Processing
The IMPRESSPlus Forms Processing system is an integrated ICR/OCR solution for mutual fund transaction processing. The IMPRESSPlus Forms Processing system utilizes PFPC existing workflow technology and Captiva Software Corporation's FormWare product. This integrated solution provides the user with the capability to process shareholder transactions, maintenance and new account set up through Intelligent Character Recognition. This technology will allow for population of specified information, from established form types to the PFPC FSR shareholder recordkeeping system with reduced keystrokes by a data entry operator."
7. The Agreement, as previously amended and as amended by this Amendment, ("Modified Agreement") constitutes the entire agreement between the parties with respect to the subject matter hereof. The Modified Agreement supersedes all prior and contemporaneous agreements between the parties in connection with the subject matter hereof. No officer,
employee, servant or other agent of either party is authorized to make any representation, warranty, or other promises not expressly contained herein with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized officers, as of the day and year first above written.
On behalf of the Funds and respective PFPC INC.
Portfolios And Classes Set Forth In (f/k/a First Data Investor Services
Exhibit 1 of the Agreement which may Group, Inc.)
be amended from time to time.
By: /s/ CAROL F. RELIHAN By: /s/ DEBRLEE GOLDBERG
----------------------------------- --------------------------------
Name: Carol F. Relihan Name: Debrlee Goldberg
--------------------------------- ------------------------------
Title: Senior Vice President Title: Senior Vice President
-------------------------------- -----------------------------
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EXHIBIT 1
List of Funds
Fund # Fund Name ------ --------- 0001 AIM WEINGARTEN FUND - CLASS A 0002 AIM CONSTELLATION FUND - CLASS A 0006 AIM BALANCED FUND - CLASS A 0007 AIM LIMITED MATURITY TREASURY FUND - CLASS A 0008 AIM TAX-FREE INTERMEDIATE FUND 0010 AIM CHARTER FUND - CLASS A 0016 AIM INTERNATIONAL EQUITY FUND - CLASS A 0017 AIM HIGH INCOME MUNICIPAL FUND - CLASS A 0018 AIM MID CAP GROWTH FUND - CLASS A 0019 AIM LARGE CAP OPPORTUNITIES FUND - CLASS A 0030 AIM EUROPEAN DEVELOPMENT FUND - CLASS A 0031 AIM ASIAN GROWTH FUND - CLASS A 0034 AIM SMALL CAP OPPORTUNITIES FUND - CLASS A 0035 AIM HIGH YIELD FUND II - CLASS A 0036 AIM MID CAP OPPORTUNITIES FUND - CLASS A 0037 AIM LARGE CAP GROWTH FUND - CLASS A 0038 AIM DENT DEMOGRAPHIC TRENDS FUND - CLASS A 0039 AIM LARGE CAP BASIC VALUE FUND - CLASS A 0081 AIM GLOBAL AGGRESSIVE GROWTH FUND - CLASS A 0082 AIM GLOBAL GROWTH FUND - CLASS A 0083 AIM GLOBAL INCOME FUND - CLASS A 0301 AIM WEINGARTEN FUND - CLASS C 0302 AIM CONSTELLATION FUND - CLASS C 0303 AIM MUNICIPAL BOND FUND - CLASS C 0305 AIM VALUE FUND - CLASS C 0306 AIM BALANCED FUND - CLASS C 0307 AIM AGGRESSIVE GROWTH FUND - CLASS C 0308 AIM GLOBAL UTILITIES FUND - CLASS C 0310 AIM CHARTER FUND - CLASS C 0314 AIM CAPITAL DEVELOPMENT FUND - CLASS C 0315 AIM BLUE CHIP FUND - CLASS C 0316 AIM INTERNATIONAL EQUITY FUND - CLASS C 0317 AIM HIGH INCOME MUNICIPAL FUND - CLASS |
EXHIBIT 1
List of Funds
Fund # Fund Name ------ --------- 0318 AIM MID CAP GROWTH FUND - CLASS C 0319 AIM LARGE CAP OPPORTUNITIES FUND - CLASS C 0320 AIM ADVISOR LARGE CAP VALUE FUND - CLASS C 0322 AIM ADVISOR FLEX FUND - CLASS C 0325 AIM ADVISOR REAL ESTATE FUND - CLASS C 0326 AIM ADVISOR INTERNATIONAL VALUE FUND - CLASS C 0330 AIM EUROPEAN DEVELOPMENT FUND - CLASS C 0331 AIM ASIAN GROWTH FUND - CLASS C 0334 AIM SMALL CAP OPPORTUNITIES FUND - CLASS C 0335 AIM HIGH YIELD FUND II - CLASS C 0336 AIM MID CAP OPPORTUNITIES FUND - CLASS C 0337 AIM LARGE CAP GROWTH FUND - CLASS C 0338 AIM DENT DEMOGRAPHIC TRENDS FUND - CLASS C 0339 AIM LARGE CAP BASIC VALUE FUND - CLASS C 0342 AIM NEW PACIFIC GROWTH FUND - CLASS C 0343 AIM EUROLAND GROWTH FUND - CLASS C 0344 AIM JAPAN GROWTH FUND - CLASS C 0346 AIM MID CAP EQUITY FUND - CLASS C 0348 AIM STRATEGIC INCOME FUND - CLASS C 0349 AIM GLOBAL GOVERNMENT INCOME FUND - CLASS C 0350 AIM SELECT GROWTH FUND - CLASS C 0351 AIM GLOBAL HEALTH CARE FUND - CLASS C 0353 AIM LATIN AMERICAN GROWTH FUND - CLASS C 0357 AIM GLOBAL FINANCIAL SERVICES FUND - CLASS C 0358 AIM EMERGING MARKETS DEBT FUND - CLASS C 0359 AIM GLOBAL INFRASTRUCTURE FUND - CLASS C 0360 AIM INTERMEDIATE GOVERNMENT FUND - CLASS C 0361 AIM GLOBAL RESOURCES FUND - CLASS C 0362 AIM GLOBAL CONSUMER PRODS & SERVICES - CLASS C 0363 AIM BASIC VALUE FUND - CLASS C 0364 AIM SMALL CAP GROWTH FUND - CLASS C 0365 AIM INCOME FUND - CLASS C 0375 AIM HIGH YIELD FUND - CLASS C |
EXHIBIT 1
List of Funds
Fund # Fund Name ------ --------- 0376 AIM DEVELOPING MARKETS FUND - CLASS C 0378 AIM GLOBAL GROWTH AND INCOME FUND - CLASS C 0379 AIM GLOBAL TELECOM. & TECH. FUND - CLASS C 0380 AIM MONEY MARKET FUND - CLASS C 0381 AIM GLOBAL AGGRESSIVE GROWTH FUND - CLASS C 0382 AIM GLOBAL GROWTH FUND - CLASS C 0383 AIM GLOBAL INCOME FUND - CLASS C 0384 AIM GLOBAL TRENDS FUND - CLASS C 0402 AIM INCOME FUND - CLASS A 0403 AIM MUNICIPAL BOND FUND - CLASS A 0404 AIM INTERMEDIATE GOVERNMENT FUND - CLASS A 0405 AIM VALUE FUND - CLASS A 0406 AIM SELECT GROWTH FUND - CLASS A 0407 AIM AGGRESSIVE GROWTH FUND - CLASS A 0408 AIM GLOBAL UTILITIES FUND - CLASS A 0421 AIM CASH RESERVE SHARES 0422 AIM TAX-EXEMPT CASH FUND 0425 AIM HIGH YIELD FUND - CLASS A 0430 CG GUARANTEED ACCT 71-73 0431 CG GUARANTEED ACCT 74-77 0432 CG GUARANTEED ACCT 1978 0433 CG GUARANTEED ACCT 1979 0434 CG GUARANTEED ACCT 1980 0435 CG GUARANTEED ACCT 1981 0436 CG GUARANTEED ACCT 1982 0437 CG GUARANTEED ACCT 1983 0438 CG GUARANTEED ACCT 1984 0439 CG GUARANTEED ACCT 1985 0440 CG GUARANTEED ACCT 1985A 0441 CG GUARANTEED ACCT 1985B 0442 CG GUARANTEED ACCT 1986 0443 CG GUARANTEED ACCT 1986A 0444 CG GUARANTEED ACCT 1987 |
EXHIBIT 1
List of Funds
Fund # Fund Name ------ --------- 0445 CG GUARANTEED ACCT 1988 0446 CG GUARANTEED ACCT 1989 0447 CG GUARANTEED ACCT 1990 0448 CG GUARANTEED ACCT 1991 0449 CG GUARANTEED ACCT 1992 0460 AIM TAX-EXEMPT BOND FUND OF CONNECTICUT 0514 AIM CAPITAL DEVELOPMENT FUND - CLASS A 0515 AIM BLUE CHIP FUND - CLASS A 0520 AIM ADVISOR LARGE CAP VALUE FUND - CLASS A 0522 AIM ADVISOR FLEX FUND - CLASS A 0525 AIM ADVISOR REAL ESTATE FUND - CLASS A 0526 AIM ADVISOR INTERNATIONAL VALUE FUND - CLASS A 0542 AIM NEW PACIFIC GROWTH FUND - CLASS A 0543 AIM EUROLAND GROWTH FUND - CLASS A 0544 AIM JAPAN GROWTH FUND - CLASS A 0546 AIM MID CAP EQUITY FUND - CLASS A 0548 AIM STRATEGIC INCOME FUND - CLASS A 0549 AIM GLOBAL GOVERNMENT INCOME FUND - CLASS A 0551 AIM GLOBAL HEALTH CARE FUND - CLASS A 0553 AIM LATIN AMERICAN GROWTH FUND - CLASS A 0557 AIM GLOBAL FINANCIAL SERVICES FUND - CLASS A 0558 AIM EMERGING MARKETS DEBT FUND - CLASS A 0559 AIM GLOBAL INFRASTRUCTURE FUND - CLASS A 0561 AIM GLOBAL RESOURCES FUND - CLASS A 0562 AIM GLOBAL CONSUMER PRODS & SERVICES - CLASS A 0563 AIM BASIC VALUE FUND - CLASS A 0564 AIM SMALL CAP GROWTH FUND - CLASS A 0576 AIM DEVELOPING MARKETS FUND - CLASS A 0578 AIM GLOBAL GROWTH AND INCOME FUND - CLASS A 0579 AIM GLOBAL TELECOM. & TECH. FUND - CLASS A 0584 AIM GLOBAL TRENDS FUND - CLASS A 0602 AIM CONSTELLATION FUND - CLASS B 0607 AIM AGGRESSIVE GROWTH FUND - CLASS B |
EXHIBIT 1
List of Funds
Fund # Fund Name ------ --------- 0614 AIM CAPITAL DEVELOPMENT FUND - CLASS B 0615 AIM BLUE CHIP FUND - CLASS B 0617 AIM HIGH INCOME MUNICIPAL FUND - CLASS B 0618 AIM MID CAP GROWTH FUND - CLASS B 0619 AIM LARGE CAP OPPORTUNITIES FUND - CLASS B 0620 AIM ADVISOR LARGE CAP VALUE FUND - CLASS B 0622 AIM ADVISOR FLEX FUND - CLASS B 0625 AIM ADVISOR REAL ESTATE FUND - CLASS B 0626 AIM ADVISOR INTERNATIONAL VALUE FUND - CLASS B 0630 AIM EUROPEAN DEVELOPMENT FUND - CLASS B 0631 AIM ASIAN GROWTH FUND - CLASS B 0634 AIM SMALL CAP OPPORTUNITIES FUND - CLASS B 0635 AIM HIGH YIELD FUND II - CLASS B 0636 AIM MID CAP OPPORTUNITIES FUND - CLASS B 0637 AIM LARGE CAP GROWTH FUND - CLASS B 0638 AIM DENT DEMOGRAPHIC TRENDS FUND - CLASS B 0639 AIM LARGE CAP BASIC VALUE FUND - CLASS B 0640 AIM WEINGARTEN FUND - CLASS B 0642 AIM NEW PACIFIC GROWTH FUND - CLASS B 0643 AIM EUROLAND GROWTH FUND - CLASS B 0644 AIM JAPAN GROWTH FUND - CLASS B 0645 AIM CHARTER FUND - CLASS B 0646 AIM MID CAP EQUITY FUND - CLASS B 0648 AIM STRATEGIC INCOME FUND - CLASS B 0649 AIM GLOBAL GOVERNMENT INCOME FUND - CLASS B 0650 AIM SELECT GROWTH FUND - CLASS B 0651 AIM GLOBAL HEALTH CARE FUND - CLASS B 0653 AIM LATIN AMERICAN GROWTH FUND - CLASS B 0655 AIM GLOBAL UTILITIES FUND - CLASS B 0657 AIM GLOBAL FINANCIAL SERVICES FUND - CLASS B 0658 AIM EMERGING MARKETS DEBT FUND - CLASS B 0659 AIM GLOBAL INFRASTRUCTURE FUND - CLASS B 0660 AIM INTERMEDIATE GOVERNMENT FUND - CLASS B |
EXHIBIT 1
List of Funds
Fund # Fund Name ------ --------- 0661 AIM GLOBAL RESOURCES FUND - CLASS B 0662 AIM GLOBAL CONSUMER PRODS & SERVICES - CLASS B 0663 AIM BASIC VALUE FUND - CLASS B 0664 AIM SMALL CAP GROWTH FUND - CLASS B 0665 AIM INCOME FUND - CLASS B 0670 AIM MUNICIPAL BOND FUND - CLASS B 0675 AIM HIGH YIELD FUND - CLASS B 0676 AIM DEVELOPING MARKETS FUND - CLASS B 0678 AIM GLOBAL GROWTH AND INCOME FUND - CLASS B 0679 AIM GLOBAL TELECOM. & TECH. FUND - CLASS B 0680 AIM MONEY MARKET FUND - CLASS B 0684 AIM GLOBAL TRENDS FUND - CLASS B 0685 AIM BALANCED FUND - CLASS B 0690 AIM VALUE FUND - CLASS B 0691 AIM GLOBAL AGGRESSIVE GROWTH FUND - CLASS B 0692 AIM GLOBAL GROWTH FUND - CLASS B 0693 AIM GLOBAL INCOME FUND - CLASS B 0694 AIM INTERNATIONAL EQUITY FUND - CLASS B 0695 AIM FLOATING RATE FUND 0790 AIM SUMMIT FUND, INC. CLASS II SHARES 0842 AIM NEW PACIFIC GROWTH FUND - ADVISOR 0843 AIM EUROLAND GROWTH FUND - ADVISOR 0844 AIM JAPAN GROWTH FUND - ADVISOR 0846 AIM MID CAP EQUITY FUND - ADVISOR 0848 AIM STRATEGIC INCOME FUND - ADVISOR 0849 AIM GLOBAL GOVERNMENT INCOME FUND - ADVISOR 0851 AIM GLOBAL HEALTH CARE FUND - ADVISOR 0853 AIM LATIN AMERICAN GROWTH FUND - ADVISOR 0857 AIM GLOBAL FINANCIAL SERVICES FUND - ADVISOR 0858 AIM EMERGING MARKETS DEBT FUND - ADVISOR 0859 AIM GLOBAL INFRASTRUCTURE FUND - ADVISOR 0861 AIM GLOBAL RESOURCES FUND - ADVISOR 0862 AIM GLOBAL CONSUMER PRODS & SERVICES - ADVISOR |
EXHIBIT 1
List of Funds
Fund # Fund Name ------ --------- 0863 AIM BASIC VALUE FUND - ADVISOR 0864 AIM SMALL CAP GROWTH FUND - ADVISOR 0876 AIM DEVELOPING MARKETS FUND - ADVISOR 0878 AIM GLOBAL GROWTH & INCOME FUND - ADVISOR 0879 AIM GLOBAL TELECOM. & TECH. FUND - ADVISOR 0884 AIM GLOBAL TRENDS FUND - ADVISOR |
EXHIBIT h(11)
MASTER ADMINISTRATIVE SERVICES AGREEMENT
This MASTER ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement") is made this 1st day of June, 2000 by and between A I M ADVISORS, INC., a Delaware corporation (the "Administrator") and AIM TAX-EXEMPT FUNDS, a Delaware business trust (the "Trust") with respect to the separate series set forth in Appendix A to this Agreement, as the same may be amended from time to time (the "Portfolios").
WITNESSETH:
WHEREAS, the Trust is an open-end investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust, on behalf of the Portfolios, has retained the Administrator to 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 Trust (including related office space, facilities and equipment) whose normal duties consist of maintaining the financial accounts and books and records of the Trust 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) 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; and
(c) such other administrative services as may be furnished from time to time by the Administrator to the Trust or the Portfolios at the request of the Trust's Board of Trustees.
2. The services provided hereunder shall at all times be subject to the direction and supervision of the Trust'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 Trust'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 Trust 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 Trust 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 Trust 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 become effective with respect to a Portfolio on the Effective Date for such Portfolio, as set forth in Appendix A attached hereto. This Agreement shall continue in effect until June 30, 2001, 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 Trust's Board of Trustees or (ii) by the vote of "a majority of the outstanding voting securities" of such Portfolio (as defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the trustees 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 trustees of the Trust), 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).
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 Trust and the Administrator.
9. Notice is hereby given that, as provided by applicable law, the obligations of or arising out of this Agreement are not binding upon any of the shareholders of the Trust individually but are binding only upon the assets and property of the Trust 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.
11. 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 100, Houston, Texas 77046, Attention: President, with a copy to the General Counsel, or (b) to the Trust at Eleven Greenway Plaza, Suite 100, Houston, Texas 77046, Attention: President, with a copy to the General Counsel.
12. 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.
13. This Agreement shall be governed by and construed in accordance with the laws (without reference to conflicts of law provisions) of the State of Texas.
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/ P. MICHELLE GRACE By: /s/ ROBERT H. GRAHAM
------------------------------- -----------------------------
Assistant Secretary President
|
(SEAL)
AIM TAX-EXEMPT FUNDS
Attest: /s/ P. MICHELLE GRACE By: /s/ ROBERT H. GRAHAM
------------------------------- -----------------------------
Assistant Secretary President
|
(SEAL)
APPENDIX A
TO
MASTER ADMINISTRATIVE SERVICES AGREEMENT
OF
AIM TAX-EXEMPT FUNDS
PORTFOLIOS EFFECTIVE DATE OF AGREEMENT ---------- --------------------------- AIM High Income Municipal Fund June 1, 2000 AIM Tax-Exempt Bond Fund of Connecticut June 1, 2000 AIM Tax-Exempt Cash Fund June 1, 2000 AIM Tax-Free Intermediate Fund June 1, 2000 |
Dated: June 1, 2000
EXHIBIT h(14)
MEMORANDUM OF AGREEMENT
This Memorandum of Agreement is entered into as of this 1st day of July, 2000 between AIM Tax-Exempt Funds (the "Trust"), on behalf of the funds listed on Exhibit "A" to this Memorandum of Agreement (the "Funds"), and A I M Distributors, Inc. ("AIM").
For and in consideration of the mutual terms and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Trust and AIM agree as follows:
The Trust and AIM agree until the date set forth on the attached Exhibit "A" that AIM will waive Rule 12b-1 distribution plan payments at the rates set forth on Exhibit "A" of the average daily net assets allocable to such class. Neither the Trust nor AIM may remove or amend the waivers to the Trust's detriment prior to the date set forth on Exhibit "A." AIM will not have any right to reimbursement of any amount so waived.
The Trust and AIM agree to review the then-current waivers for each class of each Fund listed on Exhibit "A" on a date prior to the date listed on that Exhibit to determine whether such waivers should be amended, continued or terminated. Unless the Trust, by vote of its Board of Trustees, or AIM terminates the waivers, or the Trust and AIM are unable to reach an agreement on the amount of the waivers to which the Trust and AIM desire to be bound, the waivers will continue for additional one-year terms at the rate to which the Trust and AIM mutually agree. Exhibit "A" will be amended to reflect that rate and the new date through which the Trust and AIM agree to be bound.
IN WITNESS WHEREOF, the Trust and AIM have entered into this Memorandum of Agreement as of the date first above written.
AIM Tax-Exempt Funds, on behalf of each Fund listed in Exhibit "A" to this Memorandum of Agreement
A I M Distributors, Inc.
EXHIBIT "A"
AIM TAX-EXEMPT FUNDS
FUND WAIVER COMMITTED UNTIL
---- ------ ---------------
AIM Tax-Exempt Cash Fund 0.15% of Rule 12b-1 distribution June 30, 2001
plan payments on average net assets
|
EXHIBIT i(3)
CONSENT OF COUNSEL
We hereby consent to the use of our name and to the reference to our firm under the caption "Miscellaneous Information - Legal Matters" in the Statement of Additional Information for AIM Tax-Exempt Cash Fund, AIM Tax-Free Intermediate Fund, AIM Tax-Exempt Bond Fund of Connecticut and AIM High Income Municipal Fund, which is included in Post-Effective Amendment No. 11 to the Registration Statement under the Securities Act of 1933, as amended (No. 33-66242), and Amendment No. 12 to the Registration Statement under the Investment Company Act of 1940, as amended (No. 811-7890), on Form N-1A of AIM Tax-Exempt Funds.
/S/ BALLARD SPAHR ANDREWS & INGERSOLL, LLP
------------------------------------------
Ballard Spahr Andrews & Ingersoll, LLP
Philadelphia, Pennsylvania
July 17, 2000
|
EXHIBIT j
INDEPENDENT AUDITORS' CONSENT
The Board of Trustees and Shareholders
AIM Tax-Exempt Funds:
We consent to the use of our reports on AIM Tax-Exempt Cash Fund, AIM Tax-Free Intermediate Fund, AIM Tax-Exempt Bond Fund of Connecticut, and AIM High Income Municipal Bond Fund (series portfolios of AIM Tax-Exempt Funds) dated May 1, 2000 included herein and the references to our firm under the headings "Financial Highlights" in the Prospectuses and "Audit Reports" in the Statement of Additional Information.
/s/ KPMG LLP KPMG LLP Houston, Texas July 26, 2000 |
EXHIBIT m(6)(a)
MASTER DISTRIBUTION PLAN
OF
AIM TAX-EXEMPT FUNDS
(CLASS A AND CLASS C SHARES)
SECTION 1. AIM Tax-Exempt Funds (the "Fund") on behalf of the series of shares set forth in Schedule A to this plan (the "Portfolios"), may act as a distributor of the shares, other than the Class B shares, of such Portfolios (hereinafter referred to as "Class A and Class C 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. The Fund may incur as a distributor of the Class A and Class C Shares, expenses at the annual rates set forth on Schedule A hereto of the average daily net assets of the Fund attributable to the Class A and Class C Shares, subject to any limitations imposed from time to time by applicable rules of the National Association of Securities Dealers, Inc.
SECTION 3. Amounts set forth in Section 2 may be used to finance any activity which is primarily intended to result in the sale of the Class A and Class C 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. Amounts set forth in Section 2 may also be used to finance 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 4, 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 service as a service fee pursuant to Section 4 shall be deemed an asset-based sales charge. No provision of this Plan shall be interpreted to prohibit any payments by the Fund during periods when the Fund has suspended or otherwise limited sales.
SECTION 4.
(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 Class A and Class C Shares. The maximum service fee paid to any service provider shall be twenty-five one-hundredths of one percent (0.25%) per annum of the average daily net assets of the Fund attributable to the Class A and Class C 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 Class A and Class C Shares to the Dealers' clients and customers ("Customers") who may from time to time directly or beneficially own Class A and
Class C 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: (i) distributing sales literature; (ii)
answering routine Customer inquiries concerning the Fund and
the Class A and Class C Shares; (iii) assisting Customers in
changing dividend options, account designations and addresses,
and in enrolling into any of several retirement plans offered
in connection with the purchase of Class A and Class C Shares;
(iv) assisting in the establishment and maintenance of
customer accounts and records, and in the processing of
purchase and redemption transactions; (v) investing dividends
and capital gains distributions automatically in Class A and
Class C Shares; and (vi) 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 some or all of the 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 ("Bank Trust Department Agreements and Brokers for Bank Trust Department Agreements") with selected bank trust departments and brokers for bank trust departments. Such bank trust departments and brokers for bank trust departments will provide some or all of the shareholder services to their customers as set forth in the Bank Trust Department Agreements and Brokers for Bank Trust Department Agreements from time to time.
SECTION 5. Any amendment to this Plan that requires the approval of the shareholders of a Class pursuant to Rule 12b-1 under the 1940 Act shall become effective as to such Class upon the approval of such amendment by a "majority of the outstanding voting securities" (as defined in the 1940 Act) of such Class, provided that the Board of Trustees of the Fund has approved such amendment in accordance with the provisions of Section 6 of this Plan.
SECTION 6. This Plan, any amendment to this Plan and any agreements related to this Plan shall become effective immediately upon the receipt by the Fund of both (a) the affirmative vote of a majority of the Board of Trustees of the Fund, and (b) the affirmative vote of a majority of 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. Notwithstanding the foregoing, no such amendment that requires the approval of the shareholders of a Class of a Fund shall become effective as to such Class until such amendment has been approved by the shareholders of such Class in accordance with the provisions of Section 5 of this Plan.
SECTION 7. Unless sooner terminated pursuant to Section 9, this Plan shall continue in effect until June 30, 2001 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 6.
SECTION 8. 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.
SECTION 9. This Plan may be terminated, with respect to the Class A and Class C Shares of each 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 Class A and Class C Shares of such Portfolios. 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 10. Any agreement related to this Plan shall be made in writing, and shall provide:
(a) that such agreement may be terminated 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 Class A and Class C Shares of each Portfolio, on not more than sixty (60) days' written notice to any other party to the agreement; and
(b) that such agreement shall terminate automatically in the event of its assignment.
SECTION 11. This Plan may not be amended to increase materially the amount of distribution expenses provided for in Section 2 hereof unless such amendment is approved in the manner provided in Section 5 hereof, and no material amendment to the Plan shall be made unless approved in the manner provided for in Section 6 hereof.
AIM TAX-EXEMPT FUNDS
(on behalf of its Class A and Class C Shares)
Attest: /s/ P. MICHELLE GRACE By: /s/ ROBERT H. GRAHAM
------------------------- -------------------------
Assistant Secretary President
|
Effective as of June 1, 2000.
SCHEDULE A
TO
MASTER DISTRIBUTION PLAN
OF
AIM TAX-EXEMPT FUNDS
(CLASS A AND CLASS C SHARES)
(DISTRIBUTION FEE)
MINIMUM MAXIMUM MAXIMUM
ASSET-BASED SERVICE AGGREGATE
FUND SALES CHARGE FEE ANNUAL FEE
---- ------------ ------- ----------
Class A Shares
AIM Tax-Exempt Cash Fund 0.00% 0.25% 0.25%
AIM Tax-Exempt Bond Fund of Connecticut 0.00% 0.25% 0.25%
AIM Tax-Free Intermediate Fund 0.00% 0.00% 0.00%
AIM High Income Municipal Fund 0.00% 0.25% 0.25%
Class C Shares
AIM High Income Municipal Fund 0.75% 0.25% 1.00%
|
EXHIBIT m(6)(b)
FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
OF
AIM TAX-EXEMPT FUNDS
(CLASS A SHARES AND CLASS C SHARES)
SECTION 1. AIM Tax-Exempt Funds (the "Fund") on behalf of the series of shares set forth in Schedule A to this plan (the "Portfolios"), may act as a distributor of the shares, other than the Class B shares, of such Portfolios (hereinafter referred to as "Class A and Class C 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. The Fund may incur as a distributor of the Class A and Class C Shares, expenses at the annual rates set forth on Schedule A hereto of the average daily net assets of the Fund attributable to the Class A and Class C Shares, subject to any applicable limitations imposed from time to time by applicable rules of the National Association of Securities Dealers, Inc.
SECTION 3. Amounts set forth in Section 2 may be used to finance any activity which is primarily intended to result in the sale of the Class A and Class C 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. Amounts set forth in Section 2 may also be used to finance 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 4, 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 to, or paid or advanced by Distributors to dealers or other institutions, for providing personal continuing shareholder service as a service fee pursuant to Section 4 shall be deemed an asset-based sales charge. No provision of this Plan shall be interpreted to prohibit any payments by the Fund during periods when the Fund has suspended or otherwise limited sales.
SECTION 4.
(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 Class A and Class C Shares. The maximum service fee paid to any service provider shall be twenty-five one-hundredths of one percent (0.25%) per annum of the average daily net assets of the Fund attributable to the Class A and Class C 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 Class A and Class C Shares to the Dealers' clients and customers
("Customers") who may from time to time directly or beneficially own Class A and Class C 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: (i) distributing sales literature; (ii) answering routine Customer inquiries concerning the Fund and the Class A and Class C Shares; (iii) assisting Customers in changing dividend options, account designations and addresses, and in enrolling into any of several retirement plans offered in connection with the purchase of Class A and Class C Shares; (iv) assisting in the establishment and maintenance of customer accounts and records, and in the processing of purchase and redemption transactions; (v) investing dividends and capital gains distributions automatically in Class A and Class C Shares; and (vi) 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 some or all of the 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 ("Bank Trust Department Agreements and Brokers for Bank Trust Department Agreements") with selected bank trust departments and brokers for bank trust departments. Such bank trust departments and brokers for bank trust departments will provide some or all of the shareholder services to their customers as set forth in the Bank Trust Department Agreements and Brokers for Bank Trust Department Agreements from time to time.
(e) Distributors, as agent of the Portfolios, may also enter into a Shareholder Service Agreement substantially in the form attached hereto as Exhibit D ("Agreement") with Distributors, acting as principal. Distributors, acting as principal will provide some or all of the shareholder services to Portfolio shareholders for which Distributors is the broker of record, as set forth in such Agreement.
SECTION 5. Any amendment to this Plan that requires the approval of the shareholders of a Class pursuant to Rule 12b-1 under the 1940 Act shall become effective as to such Class upon the approval of such amendment by a "majority of the outstanding voting securities" (as defined in the 1940 Act) of such Class, provided that the Board of Trustees of the Fund has approved such amendment in accordance with the provisions of Section 6 of this Plan.
SECTION 6. This Plan, any amendment to this Plan and any agreements related to this Plan shall become effective immediately upon the receipt by the Fund of both (a) the affirmative vote of a majority of the Board of Trustees of the Fund, and (b) the affirmative vote of a majority of 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. Notwithstanding the foregoing, no such amendment that requires the approval of the shareholders of a Class of a Fund shall become effective as to such Class until such amendment has been approved by the shareholders of such Class in accordance with the provisions of Section 5 of this Plan.
SECTION 7. Unless sooner terminated pursuant to Section 9, this Plan shall continue in effect until June 30, 2001 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 6.
SECTION 8. 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.
SECTION 9. This Plan may be terminated, with respect to the Class A and Class C Shares of each 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 Class A and Class C Shares of such Portfolios. 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 10. Any agreement related to this Plan shall be made in writing, and shall provide:
(a) that such agreement may be terminated 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 Class A and Class C Shares of each Portfolio, on not more than sixty (60) days' written notice to any other party to the agreement; and
(b) that such agreement shall terminate automatically in the event of its assignment.
SECTION 11. This Plan may not be amended to increase materially the amount of distribution expenses provided for in Section 2 hereof unless such amendment is approved in the manner provided in Section 5 hereof, and no material amendment to the Plan shall be made unless approved in the manner provided for in Section 6 hereof.
AIM TAX-EXEMPT FUNDS
(on behalf of its Class A Shares
and Class C Shares)
Attest: /s/ P. MICHELLE GRACE By: /s/ CAROL F. RELIHAN
----------------------------- -------------------------------
Assistant Secretary Senior Vice President
|
Effective as of June 1, 2000.
Amended and restated for all Portfolios as of July 1, 2000.
SCHEDULE A
TO
FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
OF
AIM TAX-EXEMPT FUNDS
(CLASS A SHARES AND CLASS C SHARES)
(DISTRIBUTION FEE)
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
PORTFOLIO CHARGE FEE FEE
------------ ------- ----------
CLASS A SHARES
--------------
AIM Tax-Exempt Cash Fund 0.00% 0.25% 0.25%
AIM Tax-Exempt Bond Fund of Connecticut 0.00% 0.25% 0.25%
AIM Tax-Free Intermediate Fund 0.00% 0.00% 0.00%
AIM High Income Municipal Fund 0.00% 0.25% 0.25%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
CHARGE FEE FEE
------------ ------- ----------
CLASS C SHARES
--------------
AIM High Income Municipal Fund 0.75% 0.25% 1.00%
|
EXHIBIT m(8)
MASTER DISTRIBUTION PLAN
OF
AIM TAX-EXEMPT FUNDS
(CLASS B SHARES)
(SECURITIZATION FEATURE)
SECTION 1. AIM Tax-Exempt Funds (the "Fund"), on behalf of the series of shares set forth in Schedule A to this plan (the "Portfolios"), may pay for distribution of the Class B Shares of such Portfolios (the "Shares") which the Fund issues from time to time, pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act"), according to the terms of this Distribution Plan (the "Plan").
SECTION 2. The Fund may incur expenses for and pay any institution selected to act as the Fund's agent for distribution of the Shares of any Portfolio from time to time (each, a "Distributor") at the rates set forth on Schedule A hereto based on the average daily net assets of each class of Shares subject to any applicable limitations imposed by the Conduct Rules of the National Association of Securities Dealers, Inc. in effect from time to time (the "Conduct Rules"). All such payments are the legal obligation of the Fund and not of any Distributor or its designee.
SECTION 3.
(a) Amounts set forth in Section 2 may be used to finance any activity which is primarily intended to result in the sale of the Shares, including, but not limited to, expenses of organizing and conducting sales seminars and running advertising programs, payment of finders fees, printing of prospectuses and statements of additional information (and supplements thereto) and reports for other than existing shareholders, preparation and distribution of advertising material and sales literature, payment of overhead and supplemental payments to dealers and other institutions as asset-based sales charges. Amounts set forth in Section 2 may also be used to finance payments of service fees under a shareholder service arrangement, which may be established by each Distributor in accordance with Section 4, and the costs of administering the Plan. To the extent that amounts paid hereunder are not used specifically to reimburse the Distributor for any such expense, such amounts may be treated as compensation for the Distributor's distribution-related services. No provision of this Plan shall be interpreted to prohibit any payments by the Fund during periods when the Fund has suspended or otherwise limited sales.
(b) Subject to the provisions of Sections 8 and 9 hereof, amounts payable pursuant to Section 2 in respect of Shares of each Portfolio shall be paid by the Fund to the Distributor in respect of such Shares or, if more than one institution has acted or is acting as Distributor in respect of such Shares, then amounts payable pursuant to Section 2 in respect of such Shares shall be paid to each such Distributor in proportion to the number of such Shares sold by or attributable to such Distributor's distribution efforts in respect of such Shares in accordance with allocation provisions of each Distributor's distribution agreement (the "Distributor's 12b-1 Share") notwithstanding that such Distributor's distribution agreement with the Fund may have been terminated. That portion of the amounts paid under the Plan that is not paid or advanced by the Distributor to dealers or other institutions that
provide personal continuing shareholder service as a service fee pursuant to Section 4 shall be deemed an asset-based sales charge.
(c) Any Distributor may assign, transfer or pledge ("Transfer") to one or more designees (each an "Assignee"), its rights to all or a designated portion of its Distributor's 12b-1 Share from time to time (but not such Distributor's duties and obligations pursuant hereto or pursuant to any distribution agreement in effect from time to time, if any, between such Distributor and the Fund), free and clear of any offsets or claims the Fund may have against such Distributor. Each such Assignee's ownership interest in a Transfer of a specific designated portion of a Distributor's 12b-1 Share is hereafter referred to as an "Assignee's 12b-1 Portion." A Transfer pursuant to this Section 3(c) shall not reduce or extinguish any claims of the Fund against the Distributor.
(d) Each Distributor shall promptly notify the Fund in writing of each such Transfer by providing the Fund with the name and address of each such Assignee.
(e) A Distributor may direct the Fund to pay an Assignee's 12b-1 Portion directly to such Assignee. In such event, the Distributor shall provide the Fund with a monthly calculation of the amount of (i) the Distributor's 12b-1 Share, and (ii) each Assignee's 12b-1 Portion, if any, for such month (the "Monthly Calculation"). In such event, the Fund shall, upon receipt of such notice and Monthly Calculation from the Distributor, make all payments required under such distribution agreement directly to the Assignee in accordance with the information provided in such notice and Monthly Calculation upon the same terms and conditions as if such payments were to be paid to the Distributor.
(f) Alternatively, in connection with a Transfer, a Distributor may direct the Fund to pay all of such Distributor's 12b-1 Share from time to time to a depository or collection agent designated by any Assignee, which depository or collection agent may be delegated the duty of dividing such Distributor's 12b-1 Share between the Assignee's 12b-1 Portion and the balance of the Distributor's 12b-1 Share (such balance, when distributed to the Distributor by the depository or collection agent, the "Distributor's 12b-1 Portion"), in which case only the Distributor's 12b-1 Portion may be subject to offsets or claims the Fund may have against such Distributor.
SECTION 4.
(a) Amounts expended by the Fund under the Plan shall be used in part for the implementation by the Distributor of shareholder service arrangements with respect to the Shares. The maximum service fee payable to any provider of such shareholder service shall be twenty-five one-hundredths of one percent (0.25%) per annum of the average daily net assets of the Shares attributable to the customers of such service provider. All such payments are the legal obligation of the Fund and not of any Distributor or its designee.
(b) Pursuant to this Plan, the Distributor may enter into agreements substantially in the form attached hereto as Exhibit A ("Service Agreements") with such broker-dealers ("Dealers") as may be selected from time to time by the Distributor for the provision of continuing shareholder services in connection with Shares held by such Dealers' clients and customers ("Customers") who may from time to time directly or beneficially own Shares. The personal continuing shareholder
services to be rendered by Dealers under the Service Agreements may include, but shall not be limited to, some or all of the following: (i) distributing sales literature; (ii) answering routine Customer inquiries concerning the Fund and the Shares; (iii) assisting Customers in changing dividend options, account designations and addresses, and enrolling in any of several retirement plans offered in connection with the purchase of Shares; (iv) assisting in the establishment and maintenance of Customer accounts and records, and in the processing of purchase and redemption transactions; (v) investing dividends and capital gains distributions automatically in Shares; (vi) performing sub-accounting; (vii) providing periodic statements showing a Customer's shareholder account balance and the integration of such statements with those of other transactions and balances in the Customer's account serviced by such institution; (viii) forwarding applicable prospectuses, proxy statements, and reports and notices to Customers who hold Shares; and (ix) providing such other information and administrative services as the Fund or the Customer may reasonably request.
(c) The Distributor may also enter into Bank Shareholder Service Agreements substantially in the form attached hereto as Exhibit B ("Bank Agreements") with selected banks and financial institutions acting in an agency capacity for their customers ("Banks"). Banks acting in such capacity will provide some or all of the shareholder services to their customers as set forth in the Bank Agreements from time to time.
(d) The Distributor may also enter into Shareholder Service Agreements substantially in the form attached hereto as Exhibit C ("Bank Trust Department Agreements and Brokers for Bank Trust Department Agreements") with selected bank trust departments and brokers for bank trust departments. Such bank trust departments and brokers for bank trust departments will provide some or all of the shareholder services to customers as set forth in the Bank Trust Department Agreements and Brokers for Bank Trust Department Agreements from time to time.
SECTION 5. This Plan shall not take effect until (i) it has been
approved, together with any related agreements, by votes of the majority of both
(a) the Board of 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, and
(ii) the execution by the Fund and A I M Distributors, Inc. of a Master
Distribution Agreement in respect of the Shares.
SECTION 6. Unless sooner terminated pursuant to Section 8, this Plan shall continue in effect until June 30, 2001, 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. Each Distributor 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 expended for distribution of the Shares and the purposes for which such expenditures were made.
SECTION 8. This Plan may be terminated with respect to the Shares of any Portfolio at any time by vote of a majority of the Dis-interested Trustees, or by vote of a majority of outstanding Shares of such Portfolio. Upon termination of this Plan with respect to any or all such Classes, the obligation of the Fund to make payments pursuant to this Plan with respect to such Classes shall terminate, and the Fund shall not be required to make payments hereunder beyond such termination
date with respect to expenses incurred in connection with Shares sold prior to such termination date, provided, in each case that each of the requirements of a Complete Termination of this Plan in respect of such class, as defined below, are met. A termination of this Plan with respect to any or all Shares of any or all Portfolios shall not affect the obligation of the Fund to withhold and pay to any Distributor contingent deferred sales charges to which such distributor is entitled pursuant to any distribution agreement. For purposes of this Section 8 a "Complete Termination" of this Plan in respect of any Portfolio shall mean a termination of this Plan in respect of such Portfolio, provided that: (i) the Dis-interested Trustees of the Fund shall have acted in good faith and shall have determined that such termination is in the best interest of the Fund and the shareholders of such Portfolio; (ii) and the Fund does not alter the terms of the contingent deferred sales charges applicable to Shares outstanding at the time of such termination; and (iii) unless the applicable Distributor at the time of such termination was in material breach under the distribution agreement in respect of such Portfolio, the Fund shall not, in respect of such Portfolio, pay to any person or entity, other than such Distributor or its designee, either the asset-based sales charge or the service fee (or any similar fee) in respect of the Shares sold by such Distributor prior to such termination.
SECTION 9. Any agreement related to this Plan shall be made in writing, and shall provide:
(a) that such agreement may be terminated with
respect to the Shares of any or all Portfolios at any time,
without payment of any penalty, by vote of a majority of the
Dis-interested Trustees or by a vote of the majority of the
outstanding Shares of such Portfolio, on not more than sixty
(60) days' written notice to any other party to the agreement;
and
(b) that such agreement shall terminate automatically
in the event of its assignment; provided, however, that,
subject to the provisions of Section 8 hereof, if such
agreement is terminated for any reason, the obligation of the
Fund to make payments of (i) the Distributor's Share in
accordance with the directions of the Distributor pursuant to
Section 3(e) or (f) hereof if there exist Assignees for all or
any portion of such Distributor's 12b-1 Share, and (ii) the
remainder of such Distributor's 12b-1 Share to such
Distributor if there are no Assignees for such Distributor's
Share, pursuant to such agreement and this Plan will continue
with respect to the Shares until such Shares are redeemed or
automatically converted into another class of shares of the
Fund.
SECTION 10. This Plan may not be amended to increase materially the amount of distribution expenses provided for in Section 2 hereof unless such amendment is approved by a vote of at least a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the Shares, and no material amendment to the Plan shall be made unless approved in the manner provided for in Section 5 hereof.
AIM TAX-EXEMPT FUNDS
(on behalf of its Class B Shares)
Attest: /s/ P. MICHELLE GRACE By: /s/ ROBERT H. GRAHAM
----------------------------- -----------------------------
Assistant Secretary President
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Effective as of June 1, 2000
SCHEDULE A
TO
MASTER DISTRIBUTION PLAN
OF
AIM TAX-EXEMPT FUNDS
(CLASS B SHARES)
(DISTRIBUTION FEE)
MAXIMUM
ASSET-BASED SERVICE AGGREGATE
FUND SALES CHARGE FEE ANNUAL FEE
---- ------------ ------- ----------
AIM High Income Municipal Fund 0.75% 0.25% 1.00%
(Class B Shares)
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[A I M DISTRIBUTORS LOGO APPEARS HERE]
EXHIBIT m(12)
SHAREHOLDER SERVICE AGREEMENT FOR SHARES
OF THE AIM MUTUAL FUNDS
(A I M Distributors, Inc. as Principal)
This Shareholder Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, by each of the AIM-managed mutual funds (or designated classes of such funds) listed in Schedule A to this Agreement (the "Funds"), which may be amended from time to time by the Funds acting through A I M Distributors, Inc. ("Distributors") as the Funds' agent under a Distribution Plan (the "Plan") adopted pursuant to said Rule. This Agreement, being made between Distributors as agent for such Funds on the one hand and Distributors acting as principal on the other hand, defines the services to be provided by Distributors acting as principal for which it is to receive shareholder service payments pursuant to the Plan adopted by each of the Funds. The Plan and the Agreement have been approved by a majority of the directors of each of the Funds, including a majority of the directors who are not interested persons of such Funds, and who have no direct or indirect financial interest in the operation of the Plan or related agreements (the "Dis-interested Directors"), by votes cast in person at a meeting called for the purpose of voting on the Plan. Such approval included a determination that in the exercise of their reasonable business judgement and in light of their fiduciary duties, there is a reasonable likelihood that the Plan will benefit such Fund and its shareholders.
1. To the extent that Distributors, acting as principal, provides continuing personal shareholder services to Fund shareholders for whom Distributors is the broker of record, including but not limited to, answering routine customer inquiries regarding the Funds, assisting customers in changing dividend options, account designations and addresses, and in enrolling into any of several special investment plans offered in connection with the purchase of the Funds' shares, assisting in the establishment and maintenance of customer accounts and records and in the processing of purchase and redemption transactions, investing dividends and capital gains distributions automatically in shares and providing such other services as the Funds or the customer may reasonably request, Distributors as agent for the Funds, shall pay Distributors as principal a service fee (as that term is defined in NASD Conduct Rule 28-30(b)(9)), periodically or arrange for such fee to be paid to you.
2. The service 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 for which Distributors is broker of record and which shares were 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 Distributors as principal only if Distributors 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").
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 within 45 days after the close of such period.
4. This Agreement and Schedule A does not require Distributors, as principal to provide transfer agency and recordkeeping related services.
5. Distributors, shall furnish the Funds with such information as shall reasonably be requested by the directors of the Funds with respect to the fees paid pursuant to this Agreement.
6. 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 Master Distribution Agreement between the Fund and Distributors 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.
7. This Agreement shall become effective upon execution and delivery hereof and shall continue in full force and effect as long as the continuance of the Plan and this related Agreement are approved at least annually by a vote of the directors, including a majority of the Dis-interested Directors, cast in person at a meeting called for the purpose of voting thereon. All communications should be sent to the address of Distributors as shown at the bottom of this Agreement.
8. Distributors, acting as principal represents that it provides to shareholders for which it is broker of record personal services as such term is used from time to time in applicable regulations of the National Association of Securities Dealers, Inc., and that it will continue to accept payments under this Agreement only so long as it provides such services.
9. This Agreement shall be construed in accordance with the laws of the State of Texas.
A I M DISTRIBUTORS, INC.
(Acting as Agent for the Funds)
Date: By:
-------------------------- --------------------------------
07/00
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3
|
Shareholder Service Agreement
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By:
-------------------------- -----------------------------------
Signature
-----------------------------------
|
Print Name Title
Dealer's Name A I M DISTRIBUTORS, INC. ----------------------------------- Address ----------------------------------- City State Zip ----------------------------------- |
Telephone
Please sign both copies and return one copy of each to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
07/00
Shareholder Service Agreement 4
SCHEDULE "A" TO
SHAREHOLDER SERVICE AGREEMENT
Fund Fee Rate* Plan Calculation Date
----------------------------------------------------------------------------------------
AIM Advisor Flex Fund A Shares 0.25 August 4, 1997
AIM Advisor Flex Fund B Shares 0.25 March 3, 1998
AIM Advisor Flex Fund C Shares 1.00** August 4, 1997
AIM Advisor International Value Fund A Shares 0.25 August 4, 1997
AIM Advisor International Value Fund B Shares 0.25 March 3, 1998
AIM Advisor International Value Fund C Shares 1.00** August 4, 1997
AIM Advisor Real Estate Fund A Shares 0.25 August 4, 1997
AIM Advisor Real Estate Fund B Shares 0.25 March 3, 1998
AIM Advisor Real Estate Fund C Shares 1.00** August 4, 1997
AIM Aggressive Growth Fund A Shares 0.25 July 1, 1992
AIM Aggressive Growth Fund B Shares 0.25 March 1, 1999
AIM Aggressive Growth Fund C Shares 1.00** March 1, 1999
AIM Asian Growth Fund A Shares 0.25 November 1, 1997
AIM Asian Growth Fund B Shares 0.25 November 1, 1997
AIM Asian Growth Fund C Shares 1.00** November 1, 1997
AIM Balanced Fund A Shares 0.25 October 18, 1993
AIM Balanced Fund B Shares 0.25 October 18, 1993
AIM Balanced Fund C Shares 1.00** August 4, 1997
AIM Blue Chip Fund A Shares 0.25 June 3, 1996
AIM Blue Chip Fund B Shares 0.25 October 1, 1996
AIM Blue Chip Fund C Shares 1.00** August 4, 1997
AIM Capital Development Fund A Shares 0.25 June 17, 1996
AIM Capital Development Fund B Shares 0.25 October 1, 1996
AIM Capital Development Fund C Shares 1.00** August 4, 1997
AIM Charter Fund A Shares 0.25 November 18, 1986
AIM Charter Fund B Shares 0.25 June 15, 1995
AIM Charter Fund C Shares 1.00** August 4, 1997
AIM Constellation Fund A Shares 0.25 September 9, 1986
AIM Constellation Fund B Shares 0.25 November 3, 1997
AIM Constellation Fund C Shares 1.00** August 4, 1997
AIM Dent Demographic Trends Fund A Shares 0.25 June 7, 1999
AIM Dent Demographic Trends Fund B Shares 0.25 June 7, 1999
AIM Dent Demographic Trends Fund C Shares 1.00** June 7, 1999
AIM Emerging Growth Fund A Shares 0.25 March 31, 2000
AIM Emerging Growth Fund B Shares 0.25 March 31, 2000
AIM Emerging Growth Fund C Shares 1.00** March 31, 2000
AIM European Development Fund A Shares 0.25 November 1, 1997
AIM European Development Fund B Shares 0.25 November 1, 1997
AIM European Development Fund C Shares 1.00** November 1, 1997
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07/00
Shareholder Service Agreement 5
Fund Fee Rate* Plan Calculation Date
------------------------------------------------------------------------------------------
AIM Global Aggressive Growth Fund A Shares 0.50** September 15, 1994
AIM Global Aggressive Growth Fund B Shares 0.25 September 15, 1994
AIM Global Aggressive Growth Fund C Shares 1.00** August 4, 1997
AIM Global Growth Fund A Shares 0.50** September 15, 1994
AIM Global Growth Fund B Shares 0.25 September 15, 1994
AIM Global Growth Fund C Shares 1.00** August 4, 1997
AIM Global Income Fund A Shares 0.50** September 15, 1994
AIM Global Income Fund B Shares 0.25 September 15, 1994
AIM Global Income Fund C Shares 1.00** August 4, 1997
AIM Global Utilities Fund A Shares 0.25 July 1, 1992
AIM Global Utilities Fund B Shares 0.25 September 1, 1993
AIM Global Utilities Fund C Shares 1.00** August 4, 1997
AIM High Income Municipal Fund A Shares 0.25 December 22, 1997
AIM High Income Municipal Fund B Shares 0.25 December 22, 1997
AIM High Income Municipal Fund C Shares 1.00** December 22, 1997
AIM High Yield Fund A Shares 0.25 July 1, 1992
AIM High Yield Fund B Shares 0.25 September 1, 1993
AIM High Yield Fund C Shares 1.00** August 4, 1997
AIM High Yield Fund II A Shares 0.25 October 1, 1998
AIM High Yield Fund II B Shares 0.25 November 20, 1998
AIM High Yield Fund II C Shares 1.00** November 20, 1998
AIM Income Fund A Shares 0.25 July 1, 1992
AIM Income Fund B Shares 0.25 September 1, 1993
AIM Income Fund C Shares 1.00** August 4, 1997
AIM Intermediate Government Fund A Shares 0.25 July 1, 1992
AIM Intermediate Government Fund B Shares 0.25 September 1, 1993
AIM Intermediate Government Fund C Shares 1.00** August 4, 1997
AIM International Equity Fund A Shares 0.25 May 21, 1992
AIM International Equity Fund B Shares 0.25 September 15, 1994
AIM International Equity Fund C Shares 1.00** August 4, 1997
AIM Large Cap Basic Value Fund A Shares 0.25 July 15, 1999
AIM Large Cap Growth Fund A Shares 0.25 March 1, 1999
AIM Large Cap Growth Fund B Shares 0.25 April 5, 1999
AIM Large Cap Growth Fund C Shares 1.00** April 5, 1999
AIM Large Cap Opportunities Fund A Shares 0.25 December 30, 1999
AIM Large Cap Opportunities Fund B Shares 0.25 March 31, 2000
AIM Large Cap Opportunities Fund C Shares 1.00** March 31, 2000
AIM Limited Maturity Treasury Fund A Shares 0.15 December 2, 1987
AIM Mid Cap Growth Fund A Shares 0.25 November 1, 1999
AIM Mid Cap Growth Fund B Shares 0.25 November 1, 1999
AIM Mid Cap Growth Fund C Shares 1.00** November 1, 1999
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Shareholder Service Agreement 6
Fund Fee Rate* Plan Calculation Date
-----------------------------------------------------------------------------------------
AIM Mid Cap Opportunities Fund A Shares 0.25 December 30, 1998
AIM Mid Cap Opportunities Fund B Shares 0.25 November 12, 1999
AIM Mid Cap Opportunities Fund C Shares 1.00** November 12, 1999
AIM Money Market Fund B Shares 0.25 October 18, 1993
AIM Money Market Fund C Shares 1.00** August 4, 1997
AIM Money Market Fund Cash Reserve Shares 0.25 October 18, 1993
AIM Municipal Bond Fund A Shares 0.25 July 1, 1992
AIM Municipal Bond Fund B Shares 0.25 September 1, 1993
AIM Municipal Bond Fund C Shares 1.00** August 4, 1997
AIM Select Growth Fund A Shares 0.25 July 1, 1992
AIM Select Growth Fund B Shares 0.25 September 1,1993
AIM Select Growth Fund C Shares 1.00** August 4, 1997
AIM Small Cap Opportunities Fund A Shares(1) 0.25 June 29, 1998
AIM Small Cap Opportunities Fund B Shares 0.25 July 13, 1998
AIM Small Cap Opportunities Fund C Shares 1.00** December 30, 1998
AIM Tax-Exempt Bond Fund of Connecticut A Shares 0.25 July 1, 1992
AIM Tax-Exempt Cash Fund A Shares 0.10 July 1, 1992
AIM Value Fund A Shares 0.25 July 1, 1992
AIM Value Fund B Shares 0.25 October 18, 1993
AIM Value Fund C Shares 1.00** August 4, 1997
AIM Weingarten Fund A Shares 0.25 September 9, 1986
AIM Weingarten Fund B Shares 0.25 June 15, 1995
AIM Weingarten Fund C Shares 1.00** August 4, 1997
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*Frequency of Payments: Quarterly, B and C share payments begin after an initial 12 month holding period. Where the broker dealer or financial institution waives, pursuant to the terms of the prospectus, the 1% up-front commission on Class C shares, payments commence immediately.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder is paid as an asset-based sales charge, as those terms are defined under the rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other service provider for the first year with respect to sales of $1 million or more, at no load, in cases where A I M Distributors, Inc. has advanced the service fee to the dealer, bank or other service provider.
(1) AIM Mid Cap Opportunities and AIM Small Cap Opportunities Fund are closed to new investors.
07/00
Shareholder Service Agreement Page 7
Fund Fee Rate* Plan Calculation Date
----------------------------------------------------------------------------------------
AIM Basic Value Fund A Shares 0.25 May 29, 1998
AIM Basic Value Fund B Shares 0.25 May 29, 1998
AIM Basic Value Fund C Shares 1.00** May 3, 1999
AIM Developing Markets Fund A Shares 0.25 May 29, 1998
AIM Developing Markets Fund B Shares 0.25 May 29, 1998
AIM Developing Markets Fund C Shares 1.00** March 1, 1999
AIM Euroland Growth Fund A Shares 0.25 May 29, 1998
AIM Euroland Growth Fund B Shares 0.25 May 29, 1998
AIM Euroland Growth Fund C Shares 1.00** May 3, 1999
AIM Floating Rate Fund B Shares 0.25** March 31, 2000
AIM Floating Rate Fund C Shares 0.50* March 31, 2000
AIM Global Consumer Products and
Services Fund A Shares 0.40** May 29, 1998
AIM Global Consumer Products and
Services Fund B Shares 0.25 May 29, 1998
AIM Global Consumer Products and
Services Fund C Shares 1.00** March 1, 1999
AIM Global Financial Services Fund A Shares 0.40** May 29, 1998
AIM Global Financial Services Fund B Shares 0.25 May 29, 1998
AIM Global Financial Services Fund C Shares 1.00** March 1, 1999
AIM Global Health Care Fund A Shares 0.40** May 29, 1998
AIM Global Health Care Fund B Shares 0.25 May 29, 1998
AIM Global Health Care Fund C Shares 1.00** March 1, 1999
AIM Global Infrastructure Fund A Shares 0.40** May 29, 1998
AIM Global Infrastructure Fund B Shares 0.25 May 29, 1998
AIM Global Infrastructure Fund C Shares 1.00** March 1, 1999
AIM Global Resources Fund A Shares 0.40** May 29, 1998
AIM Global Resources Fund B Shares 0.25 May 29, 1998
AIM Global Resources Fund C Shares 1.00** March 1, 1999
AIM Global Telecommunications and
Technology Fund A Shares 0.40** May 29, 1998
AIM Global Telecommunications and
Technology Fund B Shares 0.25 May 29, 1998
AIM Global Telecommunications and
Technology Fund C Shares 1.00** March 1, 1999
AIM Japan Growth Fund A Shares 0.25 May 29, 1998
AIM Japan Growth Fund B Shares 0.25 May 29, 1998
AIM Japan Growth Fund C Shares 1.00** May 3, 1999
AIM Latin American Growth Fund A Shares 0.40** May 29, 1998
AIM Latin American Growth Fund B Shares 0.25 May 29, 1998
AIM Latin American Growth Fund C Shares 1.00** March 1, 1999
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07/00
Shareholder Service Agreement 8
Fund Fee Rate* Plan Calculation Date
----------------------------------------------------------------------------------------
AIM Mid Cap Equity Fund A Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund B Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund C Shares 1.00** May 3, 1999
AIM Global Trends Fund A Shares 0.40** May 29, 1998
AIM Global Trends Fund B Shares 0.25 May 29, 1998
AIM Global Trends Fund C Shares 1.00** May 29, 1998
AIM Small Cap Growth Fund A Shares(2) 0.25 May 29, 1998
AIM Small Cap Growth Fund B Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund C Shares 1.00** May 3, 1999
AIM Strategic Income Fund A Shares 0.25 May 29, 1998
AIM Strategic Income Fund B Shares 0.25 May 29, 1998
AIM Strategic Income Fund C Shares 1.00** March 1, 1999
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*Frequency of Payments:
EFFECTIVE JULY 1, 1998: B share payments, like C share payments, will begin after an initial 12 month holding period and are paid quarterly. Where the broker dealer or financial institution, waives pursuant to the terms of the prospectus, the 1% up-front commission on Class C shares, payments commence immediately.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder is paid as an asset-based sales charge, as those terms are defined under the rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other service provider for the first year with respect to sales of $1 million or more, at no load, in cases where A I M Distributors, Inc. has advanced the service fee to the dealer, bank or other service provider.
07/00
EXHIBIT p(2)
AIM FUNDS
CODE OF ETHICS
OF
AIM TAX-EXEMPT FUNDS
WHEREAS, AIM Tax-Exempt Funds (the "Company") is a registered investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, Rule 17j-1 under the 1940 Act requires the Company to adopt a Code of Ethics ("the Code"); and
NOW, THEREFORE, the Company hereby adopts the following Code, effective as of June 14, 2000.
I. DEFINITIONS
For the purpose of the Code the following terms shall have the meanings set forth below:
A. "ACCESS PERSON" means any director, trustee, or officer of the Company notwithstanding that only access persons who are independent directors/trustees, as defined in Section I.H. below, are covered under the Code.
B. "AFFILIATED PERSONS" or "AFFILIATES" means
1. any employee or access person of the Company, and any member of the immediate family (defined as spouse, child, mother, father, brother, sister, in-law or any other relative) of any such person who lives in the same household as such person or who is financially dependent upon such person;
2. any account for which any of the persons described in
Section I.B.1. hereof is a custodian, trustee or otherwise
acting in a fiduciary capacity, or with respect to which any
such person either has the authority to make investment
decisions or from time to time give investment advice; and
3. any partnership, corporation, joint venture, trust or other entity in which any employee of the Company or access person of the Company directly or indirectly, in the aggregate, has a 10% or more beneficial interest or for which any such person is a general partner or an executive officer.
C. "CONTROL" means the power to exercise a controlling influence over the management or policies of a corporation. Any person who owns beneficially, either directly or through one or more controlled corporations, more than 25% of the voting securities of a corporation shall be presumed to control such corporation.
D. "SECURITY" is defined in the same manner as set forth in Section 2(a)(36) of the 1940 Act.
E. "PURCHASE OR SALE OF A SECURITY" includes the writing of an option to purchase or sell a security.
F. "SECURITY HELD OR TO BE ACQUIRED" by the Company means any security that, within the most recent fifteen (15) days:
1. is or has been held by the Company, or
2. is being or has been considered by the Company for purchase by the Company.
G. "BENEFICIAL OWNERSHIP OF A SECURITY" is defined in the same manner as set forth in Rule 16a-1(a)(2) promulgated under the Securities Exchange Act of 1934.
H. "INDEPENDENT DIRECTOR/TRUSTEE" means directors and/or trustees who are not "interested persons" as defined in Section 2(a)(19) of the 1940 Act.
II. COMPLIANCE WITH GOVERNING LAWS, REGULATIONS AND PROCEDURES
A. Each access person shall comply strictly with all applicable federal and state laws and all rules and regulations of any governmental agency or self-regulatory organization governing his or her activities.
B. Each access person shall comply strictly with procedures established by the Company to ensure compliance with applicable federal and state laws and regulations of governmental agencies and self-regulatory organizations.
C. Access persons shall not knowingly participate in, assist, or condone any acts in violation of any statute or regulation governing securities matters, nor any act that would violate any provision of this Code or any rules adopted thereunder.
III. CONFIDENTIALITY OF TRANSACTIONS
A. Information relating to the Company's portfolio and research and studies activities is confidential until publicly available. Whenever statistical information or research is supplied to or requested by the Company, such information must not be disclosed to any persons other than as duly authorized by the President or the Board of Directors/Trustees of the Company. If the Company is considering a particular purchase or sale of a security, this must not be disclosed except to such duly authorized persons.
IV. ETHICAL STANDARDS
A. Access persons shall conduct themselves in a manner consistent with the highest ethical standards. They shall avoid any action, whether for personal profit or otherwise, that results in an actual or potential conflict of interest, or the appearance of a conflict of interest, with the Company or which may be otherwise detrimental to the interests of the Company.
B. Conflicts of interest generally result from a situation in which an individual has personal interests in a matter that is or may be competitive with his responsibilities to another person or entity (such as the Company) or where an individual has or may have competing obligations or responsibilities to two or more persons or entities. In the case of the relationship between the Company on the one hand, and its employees and access persons and their respective affiliates on the other hand, such conflicts may result from the purchase or sale of securities for the account of the Company and for the personal account of the individual involved or the account of any affiliate of such person. Such conflict may also arise from the purchase or sale for the account of the Company of securities in which an access person or employee of the Company (or an affiliate of such person) has an interest. In any such case, potential or actual conflicts must be disclosed to the Company, and the first preference and priority must be to avoid such conflicts of interest wherever possible and, where they unavoidably occur, to resolve them in a manner not disadvantageous to the Company.
V. ACTIVITIES AND TRANSACTIONS OF ACCESS PERSONS
A. No access person shall recommend to, or cause or attempt to cause, the Company to acquire, dispose of, or hold any security (including, any option, warrant or other right or interest relating to such security) which such access person or an affiliate of such access person has direct or indirect beneficial ownership, unless the access person shall first disclose to the Board of Directors/Trustees all facts reasonably necessary to identify the nature of the ownership of such access person or his or her affiliate in such security.
B. No access person or affiliate of such access person shall engage in a purchase or sale of a security (including, any option, warrant or other right or interest relating to such security), other than on behalf of the Company, with respect to any security, which, to the actual knowledge of such access person at the time of such purchase or sale, is (i) being considered for purchase or sale by the Company; or (ii) being purchased or sold by the Company.
C. The prohibitions of Section V.B. above shall not apply to:
purchases or sales effected in any account over which the access
person has no direct or indirect influence or control; purchases
or sales which are
non-volitional on the part of either the access person or the Company; purchases that are part of an automatic dividend reinvestment plan; purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired; and, purchases or sales which receive the prior approval of the President of the Company because they are only remotely potentially harmful to the Company because they would be very unlikely to affect trading in or the market value of the security, or because they clearly are not related economically to the securities to be purchased, sold or held by the Company.
D. If, in compliance with the limitations and procedures set forth in this Section V, any access person or an affiliate of such person shall engage in a purchase or sale of a security held or to be acquired by the Company, first preference and priority must be given to any transactions that involve the Company, and the Company must have the benefit of the best price obtainable on acquisition and the best price obtainable on disposition of such securities.
E. If, as a result of fiduciary obligations to other persons or
entities, an access person believes that such person or an
affiliate of such person is unable to comply with certain
provisions of the Code, such access person shall so advise the
Board of Directors/Trustees in writing, setting forth with
reasonable specificity the nature of such fiduciary obligations
and the reasons why such access person believes such person is
unable to comply with any such provisions. The Board of
Directors/Trustees may, in its discretion, exempt such access
person or an affiliate of such person from any such provisions, if
the Board of Directors/Trustees shall determine that the services
of such access person are valuable to the Company and the failure
to grant such exemption is likely to cause such access person to
be unable to render services to the Company. Any access person
granted an exemption (including, an exception for an affiliate of
such person) pursuant to this Section V.E. shall, within three
business days after engaging in a purchase or sale of a security
held or to be acquired by a client, furnish the Board of
Directors/Trustees with a written report concerning such
transaction, setting forth the information specified in Section
VI.B. hereof.
VI. REPORTING PROCEDURES
A. Except as provided by Sections VI.C., VI.D., VI.F. hereof, every access person shall report to the Board of Directors/Trustees and to the Code of Ethics Officer of A I M Advisors, Inc. ("AIM") the information described in Section VI.B. hereof with respect to transactions in any security in which such access person has, or by reason of such transaction acquires, any direct or indirect beneficial ownership in the security (whether or not such security is a security held or to be acquired by a client); provided, however, that any such report may contain a statement that the report shall not be construed as an admission by the person making such report that he has any direct or indirect beneficial ownership in the security to which the report relates.
B. Every report required to be made pursuant to Section VI.A. hereof shall be made not later than ten days after the end of the calendar quarter in which the transaction to which the report relates was effected and shall contain the following information:
1. The date of the transaction, the title, and the number of shares or the principal amount of each security involved;
2. The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition);
3. The price at which the transaction was effected; and
4. The name of the broker, dealer or bank with or through whom the transaction was effected.
C. Notwithstanding the provisions of Section VI.A. and VI.B. hereof, no person shall be required to make a report with respect to transactions effected for any account over which such person does not have any direct or indirect influence or control.
D. Notwithstanding the provisions of Section VI.A., VI.B., and VI.F. hereof, an access person who is not an "interested person" of the Company within the meaning of Section 2(a)(19) of the 1940 Act, and who would be required to make a report solely by reason of being a director/trustee of the Company, need
only report a transaction in a security if such director/trustee, at the time of the transaction, knew or, in the ordinary course of fulfilling his official duties as a director/trustee of the Company, should have known, that, during the 15-day period immediately preceding or after the date of the transaction by the director/trustee, such security is or was purchased or sold, or considered by the Company or its investment advisor for purchase or sale by the Company.
E. Every access person who beneficially owns, directly or indirectly, 1/2% or more of the stock of any company the securities of which are eligible for purchase by the Company shall report such holdings to the Company.
F. Every transaction by an access person, including independent directors/trustees, in securities of AMVESCAP PLC shall be reported no later than ten days after the transaction was effected in the manner described in Sections VI.B. 1 through 4 above.
G. Transactions in the following types of securities are exempt from the reporting provisions herein: open-end management companies or unit investment trusts, as defined in Sections 5(a)(1) and 4(2) of the 1940 Act; variable annuities, variable life products and other similar unit-based insurance products issued by insurance companies and insurance company separate accounts; securities issued by the United States government, its agencies or instrumentalities; and money market instruments, as defined by AIM's Code of Ethics Officer.
VII. REVIEW PROCEDURES
A. The reports submitted by access persons pursuant to Section VI.B. hereof shall be reviewed at least quarterly by the Board of Directors/Trustees or such other persons or committees as shall be designated by the Board of Directors/Trustees, in order to monitor compliance with this Code.
B. If it is determined by the Board of Directors/Trustees or AIM's Code of Ethics Officer that a matter has arisen contrary to the provisions of this Code, such matter shall be reported immediately to the independent counsel for the independent directors/trustees of the Company and, if not previously reported by or to AIM, to AIM's Code of Ethics Officer within 30 days of submission of reports to the outside counsel.
VIII. AMENDMENTS TO THE CODE
A. The Board of Directors/Trustees of the Company, including a majority of the independent directors/trustees, must approve any material changes or amendments to the Code no less than six months following the date such changes or amendments are made.
IX. RECORDS RETENTION
A. The following records must be retained for the Company: copies of the Code and any amendment thereto; records of any violation of the Code and any action taken as of result of the violation; any report made pursuant to the Code by any access person; records of all persons who are or were subject to the Code and of persons responsible for reviewing reports made by persons subject to the Code; and a copy of each report made to the Board of Directors/Trustees pursuant to Rule 17j-1(c)(2)(ii) of the 1940 Act. These records must be maintained in an easily accessible place in a manner consistent with Rule 17j-1(f), but generally for not less than five years after the end of the fiscal year after amendments were approved; reports were made; information provided; or violations occurred pursuant to the provisions of the Code.