As filed with the Securities and Exchange Commission on September 29, 2000
1933 Registration No. 2-27334
1940 Act Registration No. 811-1540
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. 81 X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. 81 X
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(Check appropriate box or boxes.)
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Copy to:
Renee A. Friedli, Esquire Martha J. Hays, Esquire A I M Advisors, Inc. Ballard Spahr Andrews & Ingersoll, LLP 11 Greenway Plaza, Suite 100 1735 Market Street, 51st Floor Houston, Texas 77046 Philadelphia, Pennsylvania 19103-7599 |
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Amendment
It is proposed that this filing will become effective (check appropriate box)
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--Registered Trademark--
PROSPECTUS
DECEMBER 29, 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.
Investments in the fund:
- are not FDIC insured;
- may lose value; and
- are 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 - - - - - - - - - - - - - - - - - - - - - - - - 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 - - - - - - - - - - - - - - - - - - - - - - - - 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 long-term growth 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 generally by investing in marketable equity securities of domestic issuers and foreign issuers; however, the fund may invest up to 80% of its total assets in marketable equity securities of foreign issuers. The fund invests without regard to market capitalization and may invest in the securities of companies located in at least four countries, including the United States. The fund will usually maintain at least 20% of its total assets in U.S. dollar denominated securities.
The fund emphasizes investment in companies in developed countries such as the United States, the countries of Western Europe and certain countries in the Pacific Basin. The fund may also invest in companies located in developing countries, i.e., those that are in the initial stages of their industrial cycles. The fund may invest in securities exchangeable for or convertible into marketable equity securities of foreign and domestic issuers.
The fund also may invest in preferred stocks and debt instruments that have prospects for growth of capital. The fund may invest up to 30% of its total assets in high-grade short-term securities and in debt securities, including U.S. Government obligations, investment-grade corporate bonds and taxable municipal securities. Under normal conditions, the top ten holdings may comprise up to 50% of the fund's total assets. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
The portfolio managers focus on companies that are likely to benefit from new or innovative products, services or processes as well as those that have experienced above-average long-term growth in earnings and have excellent prospects for future growth. The portfolio managers also focus on companies judged by the fund's investment advisor to be undervalued relative to the investment advisor's appraisal of the current or projected earnings of the companies issuing the securities, or relative to current market values of assets owned by the companies issuing the securities or relative to the equity markets generally.
The portfolio managers consider undervalued equity securities of (1) out-of-favor cyclical growth companies, (2) established growth companies that are undervalued compared to historical relative valuation parameters, (3) companies where there is early but tangible evidence of improving prospects that are not yet reflected in the price of the company's equity securities and (4) companies whose equity securities are selling at prices that do not reflect the current market value of their assets and where there is reason to expect realization of this market value in the form of increased equity values. The portfolio managers consider whether to sell a particular security when they believe the company no longer fits into any of the above categories.
In selecting countries in which the fund will invest, the fund's portfolio managers also consider such factors as the prospect for relative economic growth of countries or regions, economic or political conditions, currency exchange fluctuations, tax considerations and the liquidity of a particular security. The fund's portfolio managers consider whether to sell a particular security when any of these 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, shares of 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. The value of your investment in the fund will go up and down with the prices of the securities in which the fund invests. The prices of equity securities change in response to many factors including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity. This is especially true with respect to equity securities of small- and medium-sized companies, whose prices may go up and down more than the prices of equity securities of larger, more established companies. Also, since equity securities of small- and medium-sized companies may not be traded as often as equity securities of larger, more established companies, it may be difficult or impossible for the fund to sell securities at a desired price.
The prices of foreign securities may be further affected by other factors, including:
- Currency exchange rates--The dollar value of the fund's foreign investments will be affected by changes in the exchange rates between the dollar and the currencies in which those investments are traded.
- Political and economic conditions--The value of the fund's foreign investments may be adversely affected by political and social instability in their home countries and by changes in economic or taxation policies in those countries.
- Regulations--Foreign companies generally are subject to less stringent regulations, including financial and accounting controls, than are U.S. companies. As a result, there generally is less publicly available information about foreign companies than about U.S. companies.
- Markets--The securities markets of other countries are smaller than U.S. securities markets. As a result, many foreign securities may be less liquid and more volatile than U.S. securities.
[These factors may affect the prices of securities issued by foreign companies located in developing countries more than those in countries with mature economies. For example, many developing countries have, in the past, experienced high rates of inflation or sharply devalued their currencies against the U.S. dollar, thereby causing the value of investments in companies located in those countries to decline. Transaction costs are often higher in developing countries and there may be delays in settlement procedures.]
The values of the convertible securities in which the fund may invest also will be affected by market interest rates, the risk that the issuer may default on interest or principal payments and the value of the underlying common stock into which these securities may be converted. Specifically, since these types of convertible securities pay fixed interest and dividends, their values may fall if market interest rates rise and rise if market interest rates fall. Additionally, an issuer may have the right to buy back certain of the convertible securities at a time and at a price that is unfavorable to the fund.
Because a large percentage of the fund's assets may be invested in a limited number of securities, a change in the value of these securities could significantly affect the value of your investment in the fund.
The fund may participate in the initial public offering (IPO) market, and a significant portion of the fund's return may be attributable to its investment in IPOs, which may have a magnified impact due to the fund's small asset base. As the fund's assets grow, it is probable that the effect of the fund's investment in IPOs on its total returns will decline, which may reduce the fund's total returns.
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.
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) 5.50% None None Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less) None(1) 5.00% 1.00% -------------------------------------------------------------- |
ANNUAL FUND OPERATING EXPENSES -------------------------------------------------------------- (expenses that are deducted from fund assets) CLASS A CLASS B CLASS C -------------------------------------------------------------- Management Fees 0.85% 0.85% 0.85% Distribution and/or Service (12b-1) Fees 0.35 1.00 1.00 Other Expenses(2) 0.60 0.62 0.62 Total Annual Fund Operating Expenses 1.80 2.47 2.47 -------------------------------------------------------------- |
(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) Other expenses are based on estimated amounts for the current fiscal year.
You may also be charged a transaction or other fee by the financial institution managing your account.
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than the maximum permitted initial sales charge.
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in different classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund's operating expenses remain the same. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS
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Class A $723 $1,085
Class B 750 1,070
Class C 350 770
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You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS
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Class A $723 $1,085
Class B 250 770
Class C 250 770
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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
[125] investment portfolios, including the fund, encompassing a broad range of
investment objectives.
ADVISOR COMPENSATION
The advisor is to receive a fee from the fund calculated at the annual rate of 0.85% of the first $1 billion of average daily net assets and 0.80% of average daily net assets over $1 billion.
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
- Joel E. Dobberpuhl, Senior Portfolio Manager, who has been responsible for the fund since its inception in 2000 and has been associated with the advisor and/or its affiliates since 1990.
- Clas G. Olsson, Senior Portfolio Manager, who has been responsible for the fund since its inception in 2000 and has been associated with the advisor and/or its affiliates since 1994.
SALES CHARGES
Purchases of Class A shares of AIM Explorer Fund are subject to the maximum 5.50% initial sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in the "Shareholder Information--Choosing a Share Class" section of this prospectus. 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 capital gains.
DIVIDENDS
The fund generally declares and pays dividends, if any, annually.
CAPITAL GAINS DISTRIBUTIONS
The fund generally distributes long-term and short-term capital gains, if any, annually.
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
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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
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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--09/00
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
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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
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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--09/00 A-2
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM Large Cap Opportunities Fund, 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--09/00
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--09/00 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--09/00
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--09/00 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--09/00
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--09/00 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.
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AIM Explorer Fund
SEC 1940 Act file number: 811-1540
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[AIM LOGO APPEARS HERE] www.aimfunds.com EXP-PRO-1 INVEST WITH DISCIPLINE
--Registered Trademark--
--Registered Trademark--
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STATEMENT OF
ADDITIONAL INFORMATION
AIM BALANCED FUND
AIM EUROPEAN SMALL COMPANY FUND
AIM EXPLORER FUND
AIM GLOBAL UTILITIES FUND
AIM INTERNATIONAL EMERGING GROWTH FUND
AIM NEW TECHNOLOGY FUND
AIM SELECT GROWTH FUND
AIM SMALL CAP EQUITY FUND
AIM VALUE FUND
AIM VALUE II FUND
(SERIES PORTFOLIOS OF
AIM FUNDS GROUP)
11 GREENWAY PLAZA
SUITE 100
HOUSTON, TEXAS 77046-1173
(713) 626-1919
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS, AND IT SHOULD BE
READ IN CONJUNCTION WITH A PROSPECTUS FOR THE ABOVE-NAMED FUNDS, A COPY OF
WHICH MAY BE OBTAINED FROM AUTHORIZED DEALERS OR BY WRITING
A I M FUND SERVICES, INC.
P.O. BOX 4739
HOUSTON, TEXAS 77210-4739.
STATEMENT OF ADDITIONAL INFORMATION DATED: DECEMBER 29, 2000,
RELATING TO THE AIM BALANCED FUND PROSPECTUS DATED JUNE 1, 2000,
THE AIM EUROPEAN SMALL COMPANY FUND PROSPECTUS DATED AUGUST 31, 2000,
THE AIM EXPLORER FUND PROSPECTUS DATED DECEMBER 29, 2000,
THE AIM GLOBAL UTILITIES FUND PROSPECTUS DATED JUNE 1, 2000,
THE AIM INTERNATIONAL EMERGING GROWTH FUND PROSPECTUS DATED AUGUST 31, 2000,
THE AIM NEW TECHNOLOGY FUND PROSPECTUS DATED AUGUST 31, 2000,
THE AIM SELECT GROWTH FUND PROSPECTUS DATED JUNE 1, 2000,
THE AIM SMALL CAP EQUITY FUND PROSPECTUS DATED AUGUST 31, 2000,
THE AIM VALUE FUND PROSPECTUS DATED JUNE 1, 2000, AS REVISED JUNE 30, 2000,
AND THE AIM VALUE II FUND PROSPECTUS DATED AUGUST 31, 2000.
TABLE OF CONTENTS
PAGE
INTRODUCTION.......................................................................................................1
GENERAL INFORMATION ABOUT THE TRUST................................................................................1
The Trust and Its Shares..........................................................................................1
PERFORMANCE INFORMATION............................................................................................3
Total Return Quotations...........................................................................................5
Yield Quotations..................................................................................................7
PORTFOLIO TRANSACTIONS AND BROKERAGE...............................................................................7
General Brokerage Policy..........................................................................................7
Allocation of Portfolio Transactions..............................................................................8
Allocation of IPO Securities Transactions.........................................................................9
Section 28(e) Standards...........................................................................................9
Transactions with Regular Brokers................................................................................10
Brokerage Commissions Paid.......................................................................................10
Portfolio Turnover...............................................................................................11
INVESTMENT STRATEGIES AND RISKS...................................................................................11
All Funds........................................................................................................11
AIM Balanced Fund................................................................................................12
AIM European Small Company Fund..................................................................................12
AIM Explorer Fund................................................................................................13
AIM Global Utilities Fund........................................................................................14
AIM International Emerging Growth Fund...........................................................................16
Non-Diversified Portfolios.......................................................................................16
Risk Factors Regarding Non-Investment Grade Debt Securities......................................................16
Real Estate Investment Trusts ("REITs")..........................................................................17
Interfund Loans: All Funds......................................................................................18
Lending Portfolio Securities: All Funds.........................................................................18
Short Sales: All Funds..........................................................................................18
Margin Transactions..............................................................................................19
Delayed Delivery Agreements: All Funds..........................................................................19
When-Issued Securities: All Funds...............................................................................19
Investments in Foreign Securities: All Funds....................................................................20
Risk Factors Regarding Foreign Securities........................................................................20
Foreign Exchange Transactions: All Funds........................................................................21
Illiquid Securities: All Funds..................................................................................21
Rule 144A Securities: All Funds.................................................................................22
Repurchase Agreements: All Funds................................................................................22
Reverse Repurchase Agreements: All Funds........................................................................22
Equity-Linked Derivatives: All Funds............................................................................23
Investment in Other Investment Companies: All Funds.............................................................23
Investment in Unseasoned Issuers: All Funds.....................................................................23
Temporary Defensive Investments: All Funds......................................................................23
OPTIONS, FUTURES AND CURRENCY STRATEGIES..........................................................................23
Introduction.....................................................................................................23
General Risk of Options, Futures and Currency Strategies.........................................................24
Cover............................................................................................................24
Writing Call Options.............................................................................................25
Writing Put Options..............................................................................................25
Purchasing Put Options...........................................................................................26
Purchasing Call Options..........................................................................................26
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Over-The-Counter Options.........................................................................................26 Index Options....................................................................................................27 Limitations on Options...........................................................................................27 Interest Rate, Currency and Stock Index Futures Contracts........................................................27 Options on Futures Contracts.....................................................................................28 Forward Contracts................................................................................................29 Limitations on Use of Futures, Options on Futures and Certain Options on Currencies..............................29 INVESTMENT RESTRICTIONS...........................................................................................29 Fundamental Restrictions.........................................................................................29 Non-Fundamental Restrictions.....................................................................................31 CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES...............................................................31 AIM Explorer Fund................................................................................................39 MANAGEMENT........................................................................................................39 Trustees and Officers............................................................................................40 INVESTMENT ADVISORY AND OTHER SERVICES............................................................................46 THE DISTRIBUTION PLANS............................................................................................50 THE DISTRIBUTOR...................................................................................................54 SALES CHARGES AND DEALER CONCESSIONS..............................................................................56 REDUCTIONS IN INITIAL SALES CHARGES...............................................................................59 CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS.......................................................................62 HOW TO PURCHASE AND REDEEM SHARES.................................................................................64 Backup Withholding...............................................................................................65 NET ASSET VALUE DETERMINATION.....................................................................................67 TAX MATTERS.......................................................................................................68 SHAREHOLDER INFORMATION...........................................................................................70 MISCELLANEOUS INFORMATION.........................................................................................72 Charges for Certain Account Information..........................................................................72 Audit Reports....................................................................................................72 Legal Matters....................................................................................................73 Custodians and Transfer Agent....................................................................................73 Other Information................................................................................................73 RATINGS OF SECURITIES.............................................................................................73 FINANCIAL STATEMENTS..............................................................................................FS |
INTRODUCTION
AIM Funds Group (the "Trust") is a series mutual fund. The rules and regulations of the Securities and Exchange Commission (the "SEC") require all mutual funds to furnish prospective investors certain information concerning the activities of a fund being considered for investment. The information for AIM BALANCED FUND is included in a Prospectus dated June 1, 2000. The information for AIM EUROPEAN SMALL COMPANY FUND is included in a Prospectus dated August 31, 2000. The information for AIM EXPLORER FUND is included in a Prospectus dated December 29, 2000. The information for AIM GLOBAL UTILITIES FUND is included in a Prospectus dated June 1, 2000. The information for AIM INTERNATIONAL EMERGING GROWTH FUND is included in a Prospectus dated August 31, 2000. The information for AIM NEW TECHNOLOGY FUND is included in a Prospectus dated August 31, 2000. The information for AIM SELECT GROWTH FUND is included in a Prospectus dated June 1, 2000. The information for AIM SMALL CAP EQUITY FUND is included in a Prospectus dated August 31, 2000. The information for AIM VALUE FUND is included in a Prospectus dated June 1, 2000, as revised June 30, 2000. The information for AIM VALUE II FUND is included in a Prospectus dated August 31, 2000. Copies of each Prospectus and additional copies of this Statement of Additional Information may be obtained without charge by writing the principal 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 Prospectus before they invest in any Fund.
This Statement of Additional Information is intended to furnish prospective investors with additional information concerning the Funds. Some of the information required to be in this Statement of Additional Information is also included in the Prospectuses, and in order to avoid repetition, reference will be made herein to sections of the 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 was previously organized as a Massachusetts business trust pursuant to a Master Trust Agreement, dated October 30, 1984, as amended. Pursuant to agreements and plans of reorganization, the Funds were reorganized on October 15, 1993 as portfolios of AIM Funds Group, a Delaware business trust which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company. The Trust currently is organized under an Amended and Restated Agreement and Declaration of Trust, dated November 5, 1998, as amended (the "Trust Agreement"). The Trust currently consists of ten separate portfolios: AIM BALANCED FUND, AIM EUROPEAN SMALL COMPANY FUND, AIM EXPLORER FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL EMERGING GROWTH FUND, AIM NEW TECHNOLOGY FUND, AIM SMALL CAP EQUITY FUND, AIM SELECT GROWTH FUND, AIM VALUE FUND and AIM VALUE II FUND (each a "Fund" and collectively, the "Funds"). Each Fund is a series of shares of the Trust. Under the Trust Agreement, the Board of Trustees is authorized to create new series of shares without the necessity of a vote of shareholders of the Trust.
On October 15, 1993, AIM GLOBAL UTILITIES FUND, AIM SELECT GROWTH FUND and AIM VALUE FUND succeeded to the assets and assumed the liabilities of the funds with corresponding names (the "Predecessor Funds") of AIM Funds Group, a Massachusetts business trust ("AFG"), pursuant to an Agreement and Plan of Reorganization between the Trust and AFG. Also on October 15, 1993, AIM BALANCED FUND succeeded to the assets and assumed the liabilities of AIM Convertible Securities, Inc., a Maryland corporation ("ACS"), pursuant to an Agreement and Plan of Reorganization between the Trust and ACS. All historical financial and other information contained in this Statement of Additional Information for periods prior to October 15, 1993 relating to the Funds (or a class thereof) is that of the
Predecessor Funds (or the corresponding class thereof) or ACS. Pursuant to an Amendment to the Trust Agreement, dated May 1, 1995, AIM Utilities Fund changed its name to AIM GLOBAL UTILITIES FUND. The Trust Agreement was amended on May 1, 1998, to change the name of AIM Growth Fund to AIM SELECT GROWTH FUND. 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. For information concerning the methods of redemption, 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. Each Fund offers three separate classes of shares: Class A shares, Class B shares and Class C shares. Each such 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.
Class A shares, Class B shares and Class C shares of the same Fund represent interests in that Fund's assets and have 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 (although Class A shareholders and Class B shareholders of a given Fund must approve any material increase in fees payable with respect to the Class A shares of such Fund under the Class A and C Plan).
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.
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 shares of a Fund. However, on matters affecting an individual Fund or class of shares, a separate vote of shareholders of that Fund or class is required. Shareholders of a Fund or class are not entitled to vote on any matter which does not affect that Fund or class but which requires a separate vote of another Fund or class. An example of a matter which would be voted on separately by shareholders of each Fund is the approval of the Advisory Agreement, and an example of a matter which would be voted on separately by shareholders of each class of shares is approval of the distribution plans. When issued, shares of each Fund are fully paid and nonassessable, have no preemptive or subscription rights, and are fully transferable. Other than the automatic conversion of Class B shares to Class A shares, there are no conversion rights. 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 removed by a written instrument signed by a majority of the trustees.
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 office with the Trust. The Trust Agreement provides for indemnification by the Trust of the trustees, the officers and employees or 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. Such person may not be indemnified against any liability to the Trust or to the Trust's shareholders to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office. The Trust Agreement also authorizes the purchase of liability insurance on behalf of trustees and officers.
PERFORMANCE INFORMATION
All advertisements of the Funds will disclose the maximum sales charge (including deferred sales charges) imposed on purchases of a Fund's shares. If any advertised performance data does not reflect the maximum sales charge (if any), 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.
Each Fund's total return is calculated in accordance with a standardized formula for computation of annualized total return. Standardized total return for Class A shares reflects the deduction of a Fund's maximum front-end sales charge at the time of purchase. Standardized total return for Class B and Class C shares reflects the deduction of the maximum applicable contingent deferred sales charge on a redemption of shares held for the period.
A Fund's total return shows its overall change in value, including changes in share price and assuming all the Fund's dividends and capital gain distributions are reinvested. A cumulative total return reflects the Fund's performance over a stated period of time. An average annual total return reflects the hypothetical compounded annual rate of return that would have produced the same cumulative total return if the Fund's performance had been constant over the entire period. Because average annual returns tend to even out variations in the Fund's return, investors should recognize that such returns are
not the same as actual year-by-year results. To illustrate the components of overall performance, a Fund may separate its cumulative and average annual returns into income results and capital gains or losses.
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. Yield is computed in accordance with standardized formulas described below 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 Class A shares and net asset value per share for Class B shares and Class C shares.
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.
Each of the Funds may participate in the initial public offering ("IPO") market, and a significant portion of the Funds' total returns may be attributable to their investments in IPOs. Investments in IPOs could have a magnified impact on a Fund with a small asset base, such as AIM EUROPEAN SMALL COMPANY FUND, AIM EXPLORER FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL EMERGING GROWTH FUND, AIM NEW TECHNOLOGY FUND, AIM SMALL CAP EQUITY FUND and AIM VALUE II FUND. There is no guarantee that as a Fund's assets grow, it will continue to experience substantially similar performance by investing in IPOs.
Total return and yield figures for the Funds are neither fixed nor guaranteed. The Funds may provide performance information in reports, sales literature and advertisements. The Funds may also, from time to time, quote information about the Funds published or aired by publications or other media entities which contain articles or segments relating to investment results or other data about one or more of the Funds. The following is a list of such publications or media entities:
Advertising Age Forbes Nation's Business Barron's Fortune New York Times Best's Review Hartford Courant Pension World Broker World Inc. Pensions & Investments Business Week Institutional Investor Personal Investor Changing Times Insurance Forum Philadelphia Inquirer Christian Science Monitor Insurance Week USA Today Consumer Reports Investor's Daily U.S. News & World Report Economist Journal of the American Wall Street Journal FACS of the Week Society of CLU & ChFC Washington Post Financial Planning Kiplinger Letter CNN Financial Product News Money CNBC Financial Services Week Mutual Fund Forecaster PBS Financial World |
Each Fund may also compare its performance to performance data of similar mutual funds as published by the following services:
Bank Rate Monitor Stanger Donoghue's Weisenberger Mutual Fund Values (Morningstar) Lipper, Inc. |
Each Fund's performance may also be compared in advertising to the performance of comparative benchmarks such as the following:
Standard & Poor's 400 Index Lipper Small Cap Core Index Standard & Poor's 500 Stock Index Lipper Multi-Cap Core Index Dow Jones Industrial Average Wilshire 5000 EAFE Index Lehman Bond Indices Consumer Price Index Bond Buyer Index Russell 2000--Registered Trademark-- Index NASDAQ MSCI Europe Index COFI MSCI All Country World Index First Boston High Yield Index Lipper Global Fund Index |
Each Fund may also compare its performance to rates on Certificates of Deposit and other fixed rate investments such as the following:
10 year Treasury Notes
30 year Treasury Bonds
90 day Treasury Bills
Advertising for AIM EUROPEAN SMALL COMPANY FUND, AIM EXPLORER FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL EMERGING GROWTH FUND, AIM NEW TECHNOLOGY FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP EQUITY FUND, AIM VALUE FUND AND AIM VALUE II FUND may from time to time include discussions of general economic conditions and interest rates. Advertising for such Funds and for AIM BALANCED FUND may also include references to the use of those Funds as part of an individual's overall retirement investment program. 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.
From time to time, the Funds' sales literature and/or advertisements may discuss generic topics pertaining to the mutual fund industry. This includes, but is not limited to, literature addressing general information about mutual funds, variable annuities, dollar-cost averaging, stocks, bonds, money markets, certificates of deposit, retirement, retirement plans, asset allocation, tax-free investing, college planning and inflation.
Although performance data may be useful to prospective investors when comparing a Fund's performance with other funds and other potential investments, investors should note that the methods of computing performance of other potential investments are not necessarily comparable to the methods employed by a Fund.
TOTAL RETURN QUOTATIONS
The standard formula for calculating total return is as follows:
n P(1+T) =ERV
Where P = a hypothetical initial payment of $1,000.
T = average annual total return (assuming the
applicable maximum sales load is deducted at the
beginning of the 1, 5, or 10 year periods).
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
payment at the end of the 1, 5, or 10 year periods
(or fractional portion of such period).
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The average annual total returns for each Fund, with respect to its Class A shares, for the one, five and ten year periods ended December 31, 1999 and June 30, 2000, are as follows:
PERIODS ENDED PERIODS ENDED
JUNE 30, 2000 DECEMBER 31, 1999
CLASS A SHARES: 1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
-------------- ------ ------- -------- ------ ------- --------
AIM Balanced Fund 10.02% 17.17% 14.78% 13.38% 20.62% 15.42%
AIM Global Utilities Fund 24.62% 19.93% 14.07% 26.79% 21.55% 13.06%
AIM Select Growth Fund 36.49% 24.98% 16.07% 33.67% 26.47% 15.30%
AIM Value Fund 6.80% 20.39% 18.95% 22.80% 25.56% 20.60%
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The average annual total returns for each Fund, with respect to its Class B shares, for the periods ended December 31, 1999 and June 30, 2000, are as follows:
PERIODS ENDED PERIODS ENDED
JUNE 30, 2000 DECEMBER 31, 1999
SINCE SINCE
CLASS B SHARES: 1 YEAR 5 YEARS INCEPTION 1 YEAR 5 YEARS INCEPTION
--------------- ------ ------- --------- ------ ------- ---------
AIM Balanced Fund 9.58% 17.16% 13.76% 13.08% 20.63% 14.66%
AIM Global Utilities Fund 25.82% 20.20% 13.33% 28.16% 21.83% 13.61%
AIM Select Growth Fund 38.26% 25.19% 20.34% 35.29% 26.66% 19.31%
AIM Value Fund 7.12% 20.60% 18.96% 23.94% 25.80% 20.78%
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*The inception date of the Class B shares of AIM GLOBAL UTILITIES FUND and AIM SELECT GROWTH FUND, was September 1, 1993; and the inception date of the Class B shares of AIM BALANCED FUND and AIM VALUE FUND was October 18, 1993.
The average annual total returns for each Fund, with respect to its Class C shares, for the periods ended December 31, 1999 and June 30, 2000, are as follows:
PERIODS ENDED PERIODS ENDED
JUNE 30, 2000 DECEMBER 31, 1999
CLASS C SHARES: 1 YEAR SINCE INCEPTION 1 YEAR SINCE INCEPTION
-------------- ------ --------------- ------ ---------------
AIM Balanced Fund 13.56% 12.28% 17.09% 14.29%
AIM Global Utilities Fund 29.84% 21.53% 32.18% 24.10%
AIM Select Growth Fund 42.19% 26.22% 39.26% 24.65%
AIM Value Fund 11.14% 19.65% 27.92% 24.55%
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*The inception date of the Class C shares of the Funds was August 4, 1997.
Average annual returns are not available for Class A, B and C shares of AIM EUROPEAN SMALL COMPANY FUND, AIM EXPLORER FUND, AIM INTERNATIONAL EMERGING GROWTH FUND, AIM NEW TECHNOLOGY FUND, AIM SMALL CAP EQUITY FUND AND AIM VALUE II FUND because these classes had no operations prior to December 31, 1999 or June 30, 2000.
Standard total return quotes may be accompanied by total return figures calculated by alternative methods. For example, average annual total return may be calculated without assuming payment of the full sales load according to the following formula:
n P(1+U) =ERV
Where P = a hypothetical initial payment of $1,000.
U = average annual total return assuming payment of
only a stated portion of, or none of, the applicable
maximum sales load at the beginning of the stated
period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
payment at the end of the stated period.
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Cumulative total return across a stated period may be calculated as
follows:
n
P(1+V) =ERV
Where P = a hypothetical initial payment of $1,000.
V = cumulative total return assuming payment of all of,
a stated portion of, or none of, the applicable
maximum sales load at the beginning of the stated
period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
payment at the end of the stated period.
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YIELD QUOTATIONS
The standard formula for calculating yield for each Fund is as follows:
Where a = dividends and interest earned during a stated 30-day
period. For purposes of this calculation, dividends are
accrued rather than recorded on the ex-dividend date.
Interest earned under this formula must generally be
calculated based on the yield to maturity of each
obligation (or, if more appropriate, based on yield to
call date).
b = expenses accrued during period (net of reimbursement).
c = the average daily number of shares outstanding during
the period.
d = the maximum offering price per share on the last day of
the period.
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The yields for each of the named Funds are as follows:
30 DAYS ENDED 30 DAYS ENDED
JUNE 30, 2000 DECEMBER 31, 1999
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
------- ------- ------- ------- ------- -------
AIM Balanced Fund 2.72% 2.07% 2.07% 2.40% 1.74% 1.74%
AIM Global Utilities Fund 1.27% 0.44% 0.44% 1.02% 0.44% 0.44%
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PORTFOLIO TRANSACTIONS AND BROKERAGE
GENERAL BROKERAGE POLICY
AIM makes decisions to buy and sell securities for each Fund, selects broker-dealers, effects the Funds' investment portfolio transactions, allocates brokerage fees in such transactions, and where applicable, negotiates commissions and spreads on transactions. AIM's primary consideration in effecting a security transaction is to obtain the most favorable execution of the order, which includes the best price on the security and a low commission rate. While AIM seeks reasonably competitive commission rates, the Funds may not pay the lowest commission or spread available. See "Section 28(e) Standards" below.
Some of the securities in which the Funds invest are traded in over-the-counter markets. In such transactions, a Fund deals directly with dealers who make markets in the securities involved, except when better prices are available elsewhere. Portfolio transactions placed through dealers who are primary market makers are effected at net prices without commissions, but which include compensation in the form of a mark up or mark down.
Traditionally, commission rates have not been negotiated on stock markets outside the United States. Although in recent years many overseas stock markets have adopted a system of negotiated rates, a number of markets maintain an established schedule of minimum commission rates.
AIM may determine target levels of commission business with various brokers on behalf of its clients (including the Funds) over a certain time period. The target levels will be based upon the following factors, among others: (1) the execution services provided by the broker; (2) the research services provided by the broker; and (3) the broker's interest in mutual funds in general and in the Funds and 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 that sell shares of the AIM Funds or by other broker-dealers with which such dealers have clearing arrangements. AIM will not use a specific formula in connection with any of these considerations to determine the target levels.
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 AIM Funds from the SEC are met. In addition, a Fund 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 Boards 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 Funds as principal in any purchase or sale of securities unless an exemptive order allowing such transactions is obtained from the SEC. The 1940 Act also prohibits the Funds from purchasing a security being publicly underwritten by a syndicate of which certain persons affiliated with the Trust are members except in accordance with certain conditions. These conditions may restrict the ability of a Fund to purchase municipal securities being publicly underwritten by such syndicate, and the Fund 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. Each Fund may purchase such municipal securities directly from the issuer, provided that the purchase is reviewed by the 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.
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 one of the Funds and by another Fund or one or more of these investment accounts. However, the position of each account in the same securities and the length of time that each account may hold its investment in the same securities may vary. The timing and amount of purchase by each account will also be determined by its cash position. If the purchase or sale of securities is consistent with the investment policies of the Fund(s) and one or more of these accounts, and is considered at or about the same time, AIM will fairly allocate transactions in such securities among the Fund(s) and these accounts. AIM may combine such transactions, in accordance with applicable laws and regulations, to obtain the most favorable execution. Simultaneous transactions could, however, adversely affect a Fund's ability to obtain or dispose of the full amount of a security which it seeks to purchase or sell.
Sometimes the procedure for allocating portfolio transactions among the various investment accounts advised by AIM could have an adverse effect on the price or amount of securities available to a Fund. In making such allocations, AIM considers the investment objectives and policies of its advisory clients, the relative size of portfolio holdings of the same or comparable securities, the availability of cash for investment, the size of investment commitments generally held, and the judgments of the persons responsible for recommending the investment.
ALLOCATION OF IPO SECURITIES TRANSACTIONS
From time to time, certain of the AIM Funds or other accounts managed by AIM may become interested in participating in security distributions that are available in an IPO, and occasions may arise when purchases of such securities by one AIM Fund or account may also be considered for purchase by one or more other AIM Funds or accounts. In such cases, it shall be AIM's practice to specifically combine or otherwise bunch indications of interest for IPO securities for all AIM Funds and accounts participating in purchase transactions for that security, and to allocate such transactions in accordance with the following procedures:
AIM will determine the eligibility of each AIM Fund and account that seeks to participate in a particular IPO by reviewing a number of factors, including suitability of the investment with the AIM Fund's or account's investment objective, policies and strategies, the liquidity of the AIM Fund or account if such investment is purchased, and whether the portfolio manager intends to hold the security as a long-term investment. The allocation of limited supply securities issued in IPOs will be made to eligible AIM Funds and accounts in a manner designed to be fair and equitable for the eligible AIM Funds and accounts, and so that there is equal allocation of IPOs over the longer term. Where multiple funds or accounts are eligible, rotational participation may occur, based on the extent to which an AIM Fund or account has participated in previous IPOs as well as the size of the AIM Fund or account. Each eligible AIM Fund and account with an asset level of less than $500 million will be placed in one of three tiers, depending upon its asset level. The AIM Funds and accounts in the tier containing funds and accounts with the smallest asset levels will participate first, each receiving a 40 basis point allocation (rounded to the nearest share round lot that approximates 40 basis points) (the "Allocation"), based on that AIM Fund's or account's net assets. This process continues until all of the AIM Funds and accounts in the three tiers receive their Allocations, or until the shares are all allocated. Should securities remain after this process, eligible AIM Funds and accounts will receive their Allocations on a straight pro rata basis. For the tier of AIM Funds and accounts not receiving a full Allocation, the Allocation may be made only to certain AIM Funds or accounts so that each may receive close to or exactly 40 basis points.
When any AIM Fund and/or account with substantially identical investment objectives and policies participate in syndicates, they will do so in amounts that are substantially proportionate to each other. In these cases, the net assets of the largest AIM Fund will be used to determine in which tier, as described in the paragraph above, such group of AIM Funds or accounts will be placed. If no AIM Fund is participating, then the net assets of the largest account will be used to determine tier placement. The price per share of securities purchased in such syndicate transactions will be the same for each AIM Fund and account.
SECTION 28(e) STANDARDS
Section 28(e) of the Securities Exchange Act of 1934 provides that AIM, under certain circumstances, lawfully may cause an account to pay a higher commission than the lowest available. Under Section 28(e), AIM must make a good faith determination that the commissions paid are "reasonable in relation to the value of the brokerage and research services provided ... viewed in terms of either that particular transaction or [AIM's] overall responsibilities with respect to the accounts as to which it exercises investment discretion." The services provided by the broker also must lawfully and appropriately assist AIM in the performance of its investment decision-making responsibilities. Accordingly, in recognition of research services provided to it, a Fund may pay a broker higher commissions than those available from another broker.
Research services received from broker-dealers supplement AIM's own research (and the research of its affiliates), and may include the following types of information: statistical and background information on the U.S. and foreign economies, industry groups and individual companies; forecasts and interpretations with respect to the U.S. and foreign economies, securities, markets, specific industry groups and individual companies; information on federal, state, local and foreign political developments; portfolio management strategies; performance information on securities, indexes and investment accounts; information concerning prices of securities; and information supplied by specialized services to AIM and to the 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 fee paid by the Funds is not reduced because AIM receives such services. However, to the extent that AIM would have purchased research services had they not been provided by broker-dealers, the expenses to AIM could be considered to have been reduced accordingly.
TRANSACTIONS WITH REGULAR BROKERS
As of December 31, 1999, no Funds entered into repurchase agreements with their regular brokers, as that term is defined in Rule 10b-1 under the 1940 Act.
As of December 31, 1999, AIM BALANCED FUND held an amount of common stock issued by Merrill Lynch & Co., Inc., Morgan Stanley Dean Witter & Co. and Goldman Sachs Group, Inc. (The) having a market value of $14,696,000, $21,412,500 and $4,926,006, respectively. As of December 31, 1999, AIM VALUE FUND held an amount of common stock issued by Morgan Stanley having a market value of $685,414,125.
BROKERAGE COMMISSIONS PAID
For the year ended December 31, 1999, AIM BALANCED FUND, AIM GLOBAL
UTILITIES FUND, AIM SELECT GROWTH FUND and AIM VALUE FUND directed certain
brokerage transactions to broker-dealers that provided AIM with research,
statistical and other information: $156,721,721, $10,896,995, $74,955,560 and
$3,288,505,195, respectively. For the same period, AIM BALANCED FUND, AIM GLOBAL
UTILITIES FUND, AIM SELECT GROWTH FUND and AIM VALUE FUND paid the following in
related brokerage commissions: $252,312, $19,863, $92,999 and $3,014,005,
respectively.
Except as noted, the Trust does not utilize an affiliated broker or dealer in effecting portfolio transactions and does not recapture commissions paid in such transactions. Brokerage commissions or
underwriting concessions (or both) paid by each of the Funds listed below were as follows for the years ended December 31, 1999, 1998 and 1997.
FUND 1999 1998 1997
---- ---------- ---------- ----------
(000) (000) (000)
AIM Balanced Fund ..................................... $ 1,595 $ 1,328 $ 726
AIM Global Utilities Fund.............................. 199 209 150
AIM Select Growth Fund................................. 592 906 1,101
AIM Value Fund......................................... 23,804 34,489 35,473
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PORTFOLIO TURNOVER
Any particular security will be sold, and the proceeds reinvested, whenever such action is deemed prudent from the viewpoint of a Fund's investment objective(s), regardless of the holding period of that security. Each Fund's historical portfolio turnover rates are included in the Financial Highlights tables of the Fund's Prospectus. A higher rate of portfolio turnover may result in higher transaction costs, including brokerage commissions. Also, to the extent that higher portfolio turnover results in a higher rate of net realized capital gains to a Fund, the portion of the Fund's distributions constituting taxable capital gains may increase. See "Tax Matters."
INVESTMENT STRATEGIES AND RISKS
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 headings "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 and reverse repurchase agreements 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.
ALL FUNDS
Each of the Funds invests in securities traded in the over-the-counter market or listed on a national securities exchange. AIM BALANCED FUND, investing in both equity and debt securities, acquires securities in the over-the-counter market and on national securities exchanges, and acquires bonds in new offerings or in principal trades with broker-dealers. Ordinarily, the Funds 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 from the viewpoint of a Fund's investment objectives, regardless of the holding period of that security.
A portion of each Fund's assets may be held in cash and high quality, short-term money market instruments such as certificates of deposit, commercial paper, bankers' acceptances, short-term U.S. Government obligations, taxable municipal securities, master notes, and repurchase agreements, pending investment in portfolio securities, to meet anticipated short-term cash needs such as dividend payments or redemptions of shares, or for temporary defensive purposes. Such investments generally will have maturities of 60 days or less and normally are held to maturity. The underlying securities that are subject to a repurchase agreement will be "marked-to-market" on a daily basis so that AIM can determine the value of the securities in relation to the amount of the repurchase agreement.
U.S. Government securities may take the form of participation interests in, and may be evidenced by, deposit or safekeeping receipts. Participation interests are pro rata interests in U.S. Government securities. A Fund may acquire participation interests in pools of mortgages sold by the Government National Mortgage Association ("GNMA"), the Federal National Mortgage Association "FNMA") and the Federal Home Loan Banks. Instruments evidencing deposit or safekeeping are documentary receipts for such original securities held in custody by others.
U.S. Government securities, including those that are guaranteed by federal agencies or instrumentalities, may or may not be backed by the "full faith and credit" of the United States. Some securities issued by federal agencies or instrumentalities are only supported by the credit of the agency or instrumentality (such as the Federal Home Loan Banks) while others have an additional line of credit with the U.S. Treasury (such as FNMA). In the case of securities not backed by the full faith and credit of the United States, the Funds must look principally to the agency issuing or guaranteeing the obligation for ultimate repayment and may not be able to assert a claim against the United States itself in the event the agency or instrumentality does not meet its commitments.
AIM BALANCED FUND
Most debt securities purchased by the Fund will be rated Baa or better by Moody's or BBB or better by S&P or, if unrated, deemed to be of comparable quality by AIM, although the Fund may invest to a limited extent in lower-rated securities. The fixed income securities in which the Fund invests may include U.S. Government obligations, mortgage-backed securities, asset-backed securities, bank obligations, corporate debt obligations and unrated obligations, including those of foreign issuers. The Fund may, in pursuit of its objective, invest up to 10% of its total assets in debt securities rated lower than Baa by Moody's or BBB by S&P (or a comparable rating of any other nationally recognized statistical rating organizations "NRSROs") or unrated securities determined by AIM to be of comparable quality.
AIM EUROPEAN SMALL COMPANY FUND
The investment objective of the Fund is to provide long-term growth of capital.
The Fund seeks to achieve its investment objective by investing, normally at least 65% of its total assets, in marketable equity securities of European small companies, the issuers of which are considered by AIM to be experiencing strong growth and have prospects for future long-term growth.
Under normal market conditions the Fund will invest at least 65% of its total assets in securities, including common stocks, preferred stock, warrants, depositary receipts for stock and other securities having the characteristics of stock (such as an equity or ownership interest in a company) of European small companies. The Fund may satisfy the foregoing requirement in part by investing in the securities of European issuers which are in the form of ADRs, EDRs, or other securities representing underlying securities of European issuers. The Fund may invest up to 20% of its total assets in securities exchangeable for or convertible into equity securities of European issuers. Investments in foreign securities may include securities issued by enterprises that have undergone or are currently undergoing privatization. From time to time, the Fund may own U.S. securities not to exceed 35% of the Fund's total assets.
The Fund considers an issuer of securities to be a European company if;
(i) it is organized under the laws of a European country and has a principal
office in a European country; (ii) it derives a significant portion (i.e., 50%
or more) of its total revenues from business in Europe; or (iii) its equity
securities are traded principally on a stock exchange in Europe or in an
over-the-counter market in Europe.
There are no prescribed limits on geographic asset distribution within the European community. Under normal market conditions, at least three European countries will be represented in the Fund's portfolio of investments. The Fund intends to invest in securities of issuers in Western Europe (such as the United Kingdom, Germany and the Netherlands) as well as companies of issuers in Eastern Europe (such as Croatia, the Czech Republic, Russia and Turkey). Many of the countries in Eastern Europe are "developing countries." The Fund may invest up to 35% of its total assets in securities of European issuers located in "developing countries."
The Fund considers issuers of securities located in the following countries to be European issuers:
Austria Germany Netherlands Slovenia Belgium Greece Norway Spain Croatia Hungary Poland Sweden Czech Republic Ireland Portugal Switzerland Denmark Italy Romania Turkey Finland Liechtenstein Russia Ukraine France Luxembourg Slovakia United Kingdom |
In addition to European issuers, the Fund may invest up to 35% of its total assets in securities of non-European issuers. The following is a list of some of the non-European countries in which The Fund may invest from time to time:
Bermuda Israel South Africa United States Egypt |
The above lists may include foreign countries that have not yet been approved by the Trust's advisor. The Fund will only invest in foreign countries that have been approved by the advisor.
AIM EXPLORER FUND
The investment objective of the Fund is to provide long-term growth of capital.
The Fund seeks to achieve its objective by investing in equity securities of small, medium or large companies located throughout the world that are considered by AIM to have experienced above-average long-term growth in earnings and to have excellent prospects for future growth. The Fund also seeks to achieve its objective by investing in companies judged by AIM to be undervalued relative to AIM's appraisal of the current or projected earnings of the companies issuing the securities, or relative to current market values of assets owned by the companies issuing the securities or relative to the equity markets generally. Current income will not be an important criterion of investment selection, and any such income should be considered incidental.
Under normal market conditions, the Fund will invest in marketable equity securities (including common and preferred stock and other securities having the characteristics of stock (such as an equity or ownership interest in a company)) of companies which are listed on a recognized securities exchange or traded in an over-the-counter market. The Fund may satisfy the foregoing requirement in part by investing in the securities of issuers which are in the form of ADRs, EDRs, or other securities representing underlying securities of foreign issuers. The Fund may invest in securities convertible into or exchangeable for equity securities of foreign and domestic issuers which (except in the case of ADRs, EDRs and other securities representing underlying securities of foreign issuers) are listed on a recognized securities exchange or traded in an over-the-counter market.
Under normal market conditions, the assets of the Fund will be invested in the securities of companies located in at least four different countries, including the United States. [The Fund will emphasize investment in companies in developed countries such as the United States, the countries of Western Europe and certain countries in the Pacific Basin (such as Japan, Hong Kong and Australia). The Fund may also invest in the securities of companies located in developing countries (such as Turkey, Poland and Mexico) in various regions of the world. A "developing country" is a country in the initial stages of this industrial cycle.]
[Investment in the equity markets of developing countries involves exposure to securities exchanges that may have substantially less trading volume and greater price volatility, economic structures that are less diverse and mature, and political systems that may be less stable than the equity markets of developed countries.]
The Fund will invest in equity securities without regard to market capitalization. Investors should realize that equity securities of small to medium-sized companies may involve greater risk than is associated with investing in more established companies. Small to medium-sized companies often have limited product and market diversification, fewer financial and managerial resources and may be dependent on a few key managers. Also, because smaller companies normally have fewer shares outstanding than larger companies and trade less frequently, it may be more difficult for the Fund to buy and sell shares without an unfavorable impact on prevailing market prices. Some of the companies in which the Fund may invest may distribute, sell or produce products which have recently been brought to market. Any of the foregoing may change suddenly and have an immediate impact on the value of the Fund's investments. Furthermore, whenever the securities markets have experienced rapid price changes due to national economic trends, secondary growth securities have historically been subject to exaggerated price changes.
AIM GLOBAL UTILITIES FUND
DESCRIPTION OF THE UTILITIES INDUSTRY
Electric Utility Industry. Electric utilities are heavily regulated. Local rates are subject to the review of state commissions, and sales either between companies or that cross state lines are subject to review by the Federal Energy Regulatory Commission. The industry is also subject to regulation by the SEC under the Public Utility Holding Company Act of 1935. In addition, companies constructing or operating nuclear powered generating stations are subject to extensive regulation by the Nuclear Regulatory Commission.
Electric utility companies are also subject to extensive local regulation in environmental and site location matters. Future legislation with regard to the issues of acid rain and toxic and radioactive wastes could have a significant impact on the manner in which utility companies conduct their business, and the costs that they incur. Since the late 1970s, investor-owned utilities have experienced a number of unfavorable regulatory trends, including increased regulatory resistance to price increases and new legislation encouraging deregulation and competition.
Electric utilities and their predominant business, electric energy generation, transmission and distribution, are undergoing fundamental changes that may materially affect their financial condition. These changes are attributable to advancements in technology, as well as deregulation of the retail sale of electric generation and other aspects of utilities' core businesses. For example, Federal law and regulations have been amended to provide for open transmission system access and competitive wholesale sales of electric generation, and various states are considering, or have adopted (including California, Illinois, Massachusetts, New Hampshire, New York, and Pennsylvania), new regulatory structures to allow access by some or all customers to energy suppliers in addition to the local utility.
Competition in electric generation is expected to create new uncertainties in the electric utility industry. These uncertainties include future prices of electricity in both the wholesale and retail markets, potential changes in the composition of utilities' customer base and supply and demand volatility.
Specifically, it is expected that state deregulation of electric generating operations will result in price pressures that will reduce the future revenues of utilities in such states. In addition, to the extent a utility loses retail customers, it may have to sell generation previously used to serve retail customers in the wholesale market. Since margins in the wholesale market are currently lower than in the retail market, this change could further reduce revenues and adversely affect the profit margins of affected utilities.
Furthermore, the ability of utilities to compete in the retail electric generation market may be compromised by the costs of earlier investments in generation facilities such as nuclear power plants. While the trend in this area has been to allow utilities to recover such costs through the imposition of surcharges on customers' bills, not every state that deregulates its retail electric generation market may do so. It is also unknown at this time whether the existing state statutory schemes designed to address the loss of investments suffered by deregulated utilities will adequately compensate such utilities or place them in a position to effectively compete with new market entrants who are not encumbered by these investments.
Natural Gas Industry. The natural gas industry is comprised primarily of many small distribution companies and a few large interstate pipeline companies. The Public Utility Holding Company Act of 1935 has generally acted as a bar to the consolidation of pipeline and distribution companies. Regulation of these companies is similar to that of electric companies. The performance of natural gas utilities may also be substantially affected by fluctuations in energy prices.
In addition, the gas industry is continuing to undergo structural changes in response to federal policies designed to increase competition. These policies have required interstate gas pipelines to unbundle their gas sales service from other regulated tariff services, such as transportation and storage. There are also initiatives in several states, such as Pennsylvania, to deregulate the gas industry.
Communications Industry. Most of the communications industry capacity is concentrated in the hands of a few very large publicly-held companies, unlike the situation in the electric and gas industries. Significant risks for the investor to overcome still exist, however, including risk related to pricing at marginal versus embedded cost. New entrants may have lower costs of material due to new technologies or lower standards of reliability than those imposed in the past by American Telephone & Telegraph ("AT&T") on the industry. Accordingly, the marginal cost of incremental service is much lower than the costs embedded in an existing network. Communications companies are not subject to the Public Utility Holding Company Act of 1935.
Interstate communications service may be subject to Federal Communications Commission regulation. Local service may be regulated by the states. In addition, AT&T and its former subsidiaries are still subject to judicial review pursuant to the settlement of the antitrust case brought against them by the Department of Justice.
Water Utility Industry. The water utility industry is composed of regulated public utilities that are involved in the distribution of drinking water to densely populated areas. The industry is geographically diverse and subject to the same rate base and rate of return regulations as are other public utilities. Demand for water is most heavily influenced by the local weather, population growth in the service area and new construction. Supplies of clean, drinkable water are limited and are primarily a function of the amount of past rainfall.
Other. In addition to the particular types of utilities industries
described above, the Fund may invest in developing utility technology companies
(such as cellular telephone, fiber optics and satellite communications firms)
and in holding companies which derive a substantial portion of their revenues
from utility-related activities.
AIM INTERNATIONAL EMERGING GROWTH FUND
The investment objective of the Fund is to provide long-term growth of capital.
Under normal market conditions the Fund will invest at least 65% of its total assets in securities, including common stocks, preferred stock, warrants, depositary receipts for stock and other securities having the characteristics of stock (such as an equity or ownership interest in a company) of international companies the portfolio managers believe are likely to benefit from new or innovative products, services or processes. The Fund may also invest up to 20% of its total assets in securities exchangeable for or convertible into equity securities of foreign companies. The Fund may satisfy the foregoing requirements in part by investing in the securities of foreign issuers which are in the form of ADRs, EDRs, or other securities representing underlying securities of foreign issuers. From time to time, the Fund may own U.S. securities not to exceed 35% of the Fund's total assets.
Under normal market conditions, the Fund intends to invest in the securities of foreign companies located in at least four countries outside the United States. The Fund will emphasize investment in foreign companies in the developed countries of Western Europe (such as Germany, France, Switzerland, the Netherlands and the United Kingdom) and the Pacific Basin (such as Japan, Hong Kong and Australia), and the Fund may also invest up to 35% of its total assets in the securities of companies located in developing countries (such as Turkey, Malaysia and Mexico) in various regions of the world. A "developing country" is a country in the initial stages of its industrial cycle.
Investment in the equity markets of developing countries involves exposure to securities exchanges that may have substantially less trading volume and greater price volatility, economic structures that are less diverse and mature, and political systems that may be less stable than the equity markets of developed countries. At the present time, AIM does not intend to invest more than 35% of the Fund's total assets in foreign companies in developing countries.
NON-DIVERSIFIED PORTFOLIOS
AIM EUROPEAN SMALL COMPANY FUND, AIM GLOBAL UTILITIES FUND AND AIM INTERNATIONAL EMERGING GROWTH FUND are non-diversified portfolios, which means that they may invest a greater proportion of their 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. Each 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, each Fund must diversify its holdings so that, at the end of each fiscal quarter: (i) at least 50% of the market value of each 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 each Fund's total assets and not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of each 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 each Fund controls and which are determined to be engaged in the same, similar or related trades or businesses.
RISK FACTORS REGARDING NON-INVESTMENT GRADE DEBT SECURITIES
AIM BALANCED FUND and AIM GLOBAL UTILITIES FUND may seek to meet their respective investment objectives by investing in non-investment grade debt securities, commonly known as "junk bonds." While generally providing greater income and opportunity for gain, non-investment grade debt securities may be subject to greater risks than higher-rated securities. Economic downturns tend to disrupt the market for junk bonds and adversely affect their values. Such economic downturns may be expected to result in increased price volatility for junk bonds and of the value of shares of the above-named Funds, and increased issuer defaults on junk bonds.
In addition, many issuers of junk bonds are substantially leveraged, which may impair their ability to meet their obligations. In some cases, junk bonds are subordinated to the prior payment of senior indebtedness, which potentially limits a Fund's ability to fully recover principal or to receive payments when senior securities are subject to a default.
The credit rating of a junk bond does not necessarily address its market value risk, and ratings may from time to time change to reflect developments regarding the issuer's financial condition. Junk bonds have speculative characteristics which are likely to increase in number and significance with each successive lower rating category.
When the secondary market for junk bonds becomes more illiquid, or in the absence of readily available market quotations for such securities, the relative lack of reliable objective data makes it more difficult for the trustees to value a Fund's securities, and judgment plays a more important role in determining such valuations. Increased illiquidity in the junk bond market also may affect a Fund's ability to dispose of such securities at desirable prices.
In the event a Fund experiences an unexpected level of net redemptions, the Fund could be forced to sell its junk bonds without regard to their investment merits, thereby decreasing the asset base upon which the Fund's expenses can be spread and possibly reducing the Fund's 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.
REAL ESTATE INVESTMENT TRUSTS ("REITS")
To the extent consistent with their respective investment objectives and policies, AIM BALANCED FUND, AIM EUROPEAN SMALL COMPANY FUND, AIM EXPLORER FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL EMERGING GROWTH FUND, AIM NEW TECHNOLOGY FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP EQUITY FUND, AIM VALUE FUND and AIM VALUE II FUND may each invest up to 25%, 5%, 25%, 25%, 5%, 25%, 25%, 15%, 25% and 25%, respectively, of its total assets in equity and/or debt securities issued by REITs.
REITs are trusts which sell equity or debt securities to investors and use the proceeds to invest in real estate or interests therein. A REIT may focus on particular projects, such as apartment complexes, or geographic regions, such as the southeastern United States, or both.
To the extent that a Fund has the ability to invest in REITs, such Fund could conceivably own real estate directly as a result of a default on the securities it owns. A Fund, therefore, may be subject to certain risks associated with the direct ownership of real estate including difficulties in valuing and trading real estate, declines in the value of real estate, risks related to general and local economic conditions, adverse changes in the climate for real estate, environmental liability risks, increases in property taxes and operating expenses, changes in zoning laws, casualty or condemnation losses, limitations on rents, changes in neighborhood values, the appeal of properties to tenants, and increases in interest rates.
In addition to the risks described above, equity in REITs may be affected by any changes in the value of the underlying property owned by the trusts, while mortgage REITs may be affected by the quality of any credit extended. Equity and mortgage REITs are dependent upon management skill, are not diversified, and are therefore subject to the risk of financing single or a limited number of projects. Such trusts are also subject to heavy cash flow dependency, defaults by borrowers, self-liquidation, and the possibility of failing to maintain exemption from the 1940 Act. Changes in interest rates may also affect the value of debt securities held by a Fund. By investing in REITs indirectly through a Fund, a shareholder will bear not only his/her proportionate share of the expenses of the Fund, but also, indirectly, similar expenses of the REITs.
INTERFUND LOANS: ALL FUNDS
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.
LENDING PORTFOLIO SECURITIES: ALL FUNDS
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.
SHORT SALES: ALL FUNDS
Each of the Funds may from time to time make short sales of securities which it owns or which it has the right to acquire through the conversion or exchange of other securities it owns. In a short sale, a Fund does not immediately deliver the securities sold and does not receive the proceeds from the sale. A Fund is said to have a short position in the securities sold until it delivers the securities sold, at which time it receives the proceeds of the sale. A Fund will neither make short sales of securities nor 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, without payment of any further consideration, for securities of the same issue as, and equal in amount to, the securities sold short. This is a technique known as selling short "against the box." To secure its obligation to deliver the securities sold short, a Fund will deposit in escrow in a separate account with its custodian, State Street Bank and Trust Company ("State Street"), an equal amount of the securities sold short or securities convertible into or exchangeable for such securities. In no event may more than 10% of a Fund's total assets be deposited or pledged as collateral for short sales at any one time.
Since a Fund ordinarily will want to continue to receive interest and dividend payments on securities in its portfolio which are convertible into the securities sold short, the Fund will normally close out a short position by purchasing and delivering an equal amount of the securities sold short, rather than by delivering securities which it already holds.
A Fund will make a short sale, as a hedge, when it believes that the price of a security may decline, causing a decline in the value of a security owned by the Fund or a security convertible into or exchangeable for such security, or when the Fund does not want to sell the security it owns, because, among other reasons, it wishes to defer recognition of gain or loss for federal income tax purposes. In such case, any future losses in a Fund's long position should be reduced by a gain in the short position. Conversely, any gain in the long position should be reduced by a loss in the short position. The extent to which such gains or losses are reduced will depend upon the amount of the security sold short relative to the amount a Fund owns, either directly or indirectly, and, in the case where the Fund owns convertible securities, changes in the conversion premium. In determining the number of shares to be sold short
against a Fund's position in a convertible security, the anticipated fluctuation in the conversion premium is considered. A Fund may also make short sales to generate additional income from the investment of the cash proceeds of short sales.
MARGIN TRANSACTIONS
None of the Funds will purchase any security on margin, except that each Fund may obtain such short-term credits as may be necessary for the clearance of purchases and sales of portfolio securities. The payment by a Fund of initial or variation margin in connection with futures or related options transactions will not be considered the purchase of a security on margin.
DELAYED DELIVERY AGREEMENTS: ALL FUNDS
Each Fund may purchase or sell securities on a delayed delivery basis. Delayed delivery agreements involve commitments by a Fund to dealers or issuers to acquire securities or instruments at a specified future date beyond the customary same-day settlement for such securities or instruments. These commitments may fix the payment price and interest rate to be received on the investment. Delayed delivery agreements will not be used as a speculative or leverage technique. Rather, from time to time, AIM can anticipate that cash for investment purposes will result from, among other things, scheduled maturities of existing portfolio instruments or from net sales of shares of a Fund. To assure that a Fund will be as fully invested as possible in instruments meeting the Fund's investment objective, the Fund may enter into delayed delivery agreements, but only to the extent of anticipated funds available for investment during a period of not more than five business days. Until the settlement date, a Fund will segregate liquid assets of a dollar value sufficient at all times to make payment for the delayed delivery securities. No more than 25% of a Fund's total assets will be committed to delayed delivery agreements and when-issued securities, as described below. The delayed delivery securities, which will not begin to accrue interest or dividends until the settlement date, will be recorded as an asset of a Fund and will be subject to the risk of market fluctuation. The purchase price of the delayed delivery securities is a liability of a Fund until settlement. Absent extraordinary circumstances, a Fund will not sell or otherwise transfer the delayed delivery securities prior to settlement. If cash is not available to a Fund at the time of settlement, the Fund may be required to dispose of portfolio securities that it would otherwise hold to maturity in order to meet its obligation to accept delivery under a delayed delivery agreement. The Board of Trustees has determined that entering into delayed delivery agreements does not present a materially increased risk of loss to shareholders, but the Board of Trustees may restrict the use of delayed delivery agreements if the risk of loss is determined to be material.
WHEN-ISSUED SECURITIES: ALL FUNDS
Each Fund may purchase 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 payment obligation and, if applicable, the interest rate that will be received on the securities are fixed at the time the buyer enters into the commitment. A Fund will only make commitments to purchase such securities with the intention of actually acquiring such securities, but the Fund may sell these securities before the settlement date if it is deemed advisable. No additional when-issued commitments will be made if as a result more than 25% of a Fund's total assets would become committed to purchases of when-issued securities and delayed delivery agreements.
If a Fund purchases a when-issued security, it will direct its custodian bank to collateralize the when-issued commitment by segregating liquid assets in the same fashion as required for a delayed delivery agreement. Such segregated liquid assets will likewise be marked-to-market, and the amount segregated will be increased if necessary to maintain adequate coverage of the when-issued commitments.
Securities purchased on a when-issued basis and the securities held in a Fund's portfolio are subject to changes in market value based upon the public's perception of the creditworthiness of the
issuer and, if applicable, changes in the level of interest rates. Therefore, if a Fund is to remain substantially fully invested at the same time that it has purchased securities on a when-issued basis, there will be a possibility that the market value of the Fund's assets will fluctuate to a greater degree. Furthermore, when the time comes for the Fund to meet its obligations under when-issued commitments, the Fund will do so by using then available cash flow, by sale of the segregated liquid assets, by sale of other securities or, although it would not normally expect to do so, by directing the sale of the when-issued securities themselves (which may have a market value greater or less than the Fund's payment obligation).
Investment in securities on a when-issued or delayed delivery basis may increase a Fund's exposure to market fluctuation and may increase the possibility that the Fund will incur short-term gains subject to federal taxation or short-term losses if the Fund must engage in portfolio transactions in order to honor a when-issued or delayed deliver commitment. In a delayed delivery transaction, the Fund relies on the other party to complete the transaction. If the transaction is not completed, the Fund may miss a price or yield considered to be advantageous. A Fund will employ techniques designed to reduce such risks. If a Fund purchases a when-issued security, the Fund's custodian bank will segregate liquid assets in an amount equal to the when-issued commitment. If the market value of such segregated assets declines, additional liquid assets 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 commitments. To the extent liquid assets are segregated, they will not be available for new investments or to meet redemptions. Securities purchased on a delayed delivery basis may require a similar segregation of liquid assets.
INVESTMENTS IN FOREIGN SECURITIES: ALL FUNDS
Each Fund may invest up to 25% of its total assets (at least 65% for AIM EUROPEAN SMALL COMPANY FUND and AIM INTERNATIONAL EMERGING GROWTH FUND, and up to 80% for AIM GLOBAL UTILITIES FUND AND AIM EXPLORER FUND) in foreign securities. To the extent it invests in securities denominated in foreign currencies, each Fund bears the risks of changes in the exchange rates between U.S. currency and the foreign currency, as well as the availability and status of foreign securities markets. Each Fund may invest in securities of foreign issuers which are in the form of American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"), or other securities representing underlying securities of foreign issuers, and such investments are treated as foreign securities for purposes of percentage limitations on investments in foreign securities. For a discussion of the risks pertaining to investments in foreign securities, see "Risk Factors Regarding Foreign Securities" below.
RISK FACTORS REGARDING FOREIGN SECURITIES
Investments by a Fund in foreign securities, whether denominated in U.S. dollars or foreign currencies, may entail all of the risks set forth below. Investments by a Fund in ADRs, EDRs or similar securities also may entail some or all of the risks described below.
Currency Risk. The value of the Funds' foreign investments will be affected by changes in currency exchange rates. The U.S. dollar value of a foreign security decreases when the value of the U.S. dollar rises against the foreign currency in which the security is denominated, and increases when the value of the U.S. dollar falls against such currency.
Political and Economic Risk. The economies of many of the countries in which the Funds may invest may not be as developed as the United States' economy and may be subject to significantly different forces. Political or social instability, expropriation or confiscatory taxation, and limitations on the removal of funds or other assets could also adversely affect the value of the Funds' investments.
Regulatory Risk. Foreign companies are not registered with the Securities and Exchange Commission and are generally not subject to the regulatory controls imposed on United States issuers and, as a consequence, there is generally less publicly available information about foreign securities than is available about domestic securities. Foreign companies are not subject to uniform accounting, auditing and financial reporting standards, practices and requirements comparable to those applicable to domestic
companies. Income from foreign securities owned by the Funds may be reduced by a withholding tax at the source, which tax would reduce dividend income payable to the Fund's shareholders.
Market Risk. The securities markets in many of the countries in which the Funds invest will have substantially less trading volume than the major United States markets. As a result, the securities of some foreign companies may be less liquid and experience more price volatility than comparable domestic securities. Increased custodian costs as well as administrative costs (such as the need to use foreign custodians) may be associated with the maintenance of assets in foreign jurisdictions. There is generally less government regulation and supervision of foreign stock exchanges, brokers and issuers which may make it difficult to enforce contractual obligations. In addition, transaction costs in foreign securities markets are likely to be higher, since brokerage commission rates in foreign countries are likely to be higher than in the United States.
On January 1, 1999, certain members of the European Economic and Monetary Union ("EMU"), namely Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain established a common European currency known as the "euro" and each member's local currency became a denomination of the euro. It is anticipated that each participating country will replace its local currency with the euro on July 1, 2002. Any other European country that is a member of the European Union and satisfies the criteria for participation in the EMU may elect to participate in the EMU and may supplement its existing currency with the euro. The anticipated replacement of existing currencies with the euro on July 1, 2002 could cause market disruptions before or after July 1, 2002 and could adversely affect the value of securities held by a Fund.
FOREIGN EXCHANGE TRANSACTIONS: ALL FUNDS
Each Fund has authority to deal in foreign exchange between currencies of the different countries in which it will invest either for the settlement of transactions or as a hedge against possible variations in the foreign exchange rates between those currencies. This may be accomplished through direct purchases of futures contracts with respect to foreign currency, and contractual agreements to purchase or sell a specified currency at a specified future date (up to one year) at a price set at the time of the contract. Such contractual commitments may be forward contracts entered into directly with another party or exchange traded futures contracts.
The Funds may purchase and sell options on futures contracts, forward contracts or futures contracts which are denominated in a particular foreign currency to hedge the risk of fluctuations in the value of another currency. Each Fund's dealings in foreign exchange will be limited to hedging foreign currency exposure and may involve either specific transactions or portfolio positions. Transaction hedging is the purchase or sale of foreign currency with respect to specific receivables or payables of the Fund accruing in connection with the purchase or sale of its portfolio securities, the sale and redemption of shares of the Fund, or the payment of dividends and distributions by the Fund. Position hedging is the purchase or sale of foreign currency with respect to portfolio security positions (or underlying portfolio security positions, such as in an ADR) denominated or quoted in a foreign currency. The Funds will not speculate in foreign exchange. No Fund will commit a larger percentage of its total assets to foreign exchange hedges than the percentage of its total assets which it could invest in foreign securities. Further information concerning futures contracts and related options is set forth under the heading "Options, Futures and Currency Strategies."
ILLIQUID SECURITIES: ALL FUNDS
Each Fund may invest up to 15% of its net assets 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 Trust's 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.
RULE 144A SECURITIES: ALL FUNDS
Each of the Funds may purchase securities which, while privately
placed, are eligible for purchase and resale pursuant to Rule 144A under the
Securities Act of 1933 (the "1933 Act"). This Rule permits certain qualified
institutional buyers, such as the Funds, to trade in privately placed securities
even though such securities are not registered under the 1933 Act. AIM, under
the supervision of the Trust's Board of Trustees, will consider whether
securities purchased under Rule 144A are illiquid and thus subject to the Funds'
restriction of investing no more than 15% of their respective net assets in
illiquid securities. Determination of whether a Rule 144A security is liquid or
not is a question of fact. In making this determination AIM will consider the
trading markets for the specific security taking into account the unregistered
nature of a Rule 144A security. In addition, AIM could consider the (i)
frequency of trades and quotes, (ii) number of dealers and potential purchasers,
(iii) dealer undertakings to make a market, and (iv) nature of the security and
of market place trades (for example, the time needed to dispose of the security,
the method of soliciting offers and the mechanics of transfer). The liquidity of
Rule 144A securities will also be monitored by AIM and, if as a result of
changed conditions, it is determined that a Rule 144A security is no longer
liquid, a Fund's holdings of illiquid securities will be reviewed to determine
what, if any, action is required to assure that such Fund does not invest more
than 15% of its net assets in illiquid securities. Investing in Rule 144A
securities could have the effect of increasing the amount of each Fund's
investments in illiquid securities if qualified institutional buyers are
unwilling to purchase such securities.
REPURCHASE AGREEMENTS: ALL FUNDS
Each of the Funds may engage in repurchase agreement transactions involving the types of securities in which it is permitted to invest. Repurchase agreements are agreements under which the purchaser (for example, a Fund) acquires ownership of a security and the seller agrees, at the time of the sale, to repurchase the security at a mutually agreed upon time and price, thereby determining the yield during the purchaser's holding period. A Fund may, however, enter into a "continuing contract" or "open" repurchase agreement under which the seller is under a continuing obligation to repurchase the underlying obligation from the Fund on demand and the effective interest rate is negotiated on a daily basis. In general, a Fund will enter into repurchase agreements only with domestic banks with total assets of at least $1 billion or with primary dealers in U.S. Government securities; however, total assets will not be the sole determinative factor, and a Fund may enter into repurchase agreements with other institutions which the Board of Trustees believes present minimal credit risks. Nevertheless, if the seller of a repurchase agreement fails to repurchase the debt instrument in accordance with the terms of the agreement, the Fund which entered into the repurchase agreement may incur a loss to the extent that the proceeds it realizes on the sale of the underlying obligation are less than the repurchase price. Repurchase agreements are considered to be loans by a Fund under the 1940 Act.
REVERSE REPURCHASE AGREEMENTS: ALL FUNDS
Reverse repurchase agreements are agreements which involve the sale of securities held by a Fund, with an agreement that the Fund will repurchase the securities at an agreed upon price and date. A Fund may employ reverse repurchase agreements (i) for temporary emergency purposes, such as to meet unanticipated net redemptions so as to avoid liquidating other portfolio securities during unfavorable market conditions; (ii) to cover short-term cash requirements resulting from the timing of trade settlements; or (iii) to take advantage of market situations where the interest income to be earned from the investment of the proceeds of the transaction is greater than the interest expense of the transaction. At the time it enters into a reverse repurchase agreement, a Fund will segregate liquid assets having a
dollar value equal to the repurchase price. Reverse repurchase agreements are considered borrowings by a Fund under the 1940 Act.
EQUITY-LINKED DERIVATIVES: ALL FUNDS
Each of the Funds may invest in equity-linked derivative products designed to replicate the composition and performance of particular indices. Examples of such products include S&P Depositary Receipts ("SPDRs"), World Equity Benchmark Series ("WEBs"), NASDAQ 100 tracking shares ("QQQs"), Dow Jones Industrial Average Instruments ("DIAMONDS") and Optomised Portfolios as Listed Securities ("OPALS"). Investments in equity-linked derivatives involve the same risks associated with a direct investment in the types of securities included in the indices such products are designed to track. There can be no assurance that the trading price of the equity-linked derivatives will equal the underlying value of the basket of securities purchased to replicate a particular index or that such basket will replicate the index. Investments in equity-linked derivatives may constitute investments in other investment companies. See "Investment in Other Investment Companies."
INVESTMENT IN OTHER INVESTMENT COMPANIES: ALL FUNDS
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 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.
INVESTMENT IN UNSEASONED ISSUERS: ALL FUNDS
Each of the Funds may purchase securities of unseasoned issuers. Securities in such issuers may provide opportunities for long term capital growth. Greater risks are associated with investments in securities of unseasoned issuers than in the securities of more established companies because unseasoned issuers have only a brief operating history and may have more limited markets and financial resources. As a result, securities of unseasoned issuers tend to be more volatile than securities of more established companies.
TEMPORARY DEFENSIVE INVESTMENTS: ALL FUNDS
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.
OPTIONS, FUTURES AND CURRENCY STRATEGIES
INTRODUCTION
The Funds may each use forward contracts, futures contracts, options on securities, options on indices, options on currencies, and options on futures contracts to attempt to hedge against the overall level of investment and currency risk normally associated with each Fund's investments. These
instruments are often referred to as "derivatives," which may be defined as financial instruments whose performance is derived, at least in part, from the performance of another asset (such as a security, currency or an index of securities).
GENERAL RISK OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
The use by the Funds of options, futures contracts and forward currency contracts involves special considerations and risks, as described below. Risks pertaining to particular strategies are described in the sections that follow.
(1) Successful use of hedging transactions depends upon AIM's ability to correctly predict the direction of changes in the value of the applicable markets and securities, contracts and/or currencies. While AIM is experienced in the use of these instruments, there can be no assurance that any particular hedging strategy will succeed.
(2) There might be imperfect correlation, or even no correlation, between the price movements of an instrument (such as an option contract) and the price movements of the investments being hedged. For example, if a "protective put" is used to hedge a potential decline in a security and the security does decline in price, the put option's increased value may not completely offset the loss in the underlying security. Such a lack of correlation might occur due to factors unrelated to the value of the investments being hedged, such as changing interest rates, market liquidity, and speculative or other pressures on the markets in which the hedging instrument is traded.
(3) Hedging strategies, if successful, can reduce risk of loss by wholly or partially offsetting the negative effect of unfavorable price movements in the investments being hedged. However, hedging strategies can also reduce opportunity for gain by offsetting the positive effect of favorable price movements in the hedged investments.
(4) There is no assurance that a liquid secondary market will exist for any particular option, futures contract, forward contract or option thereon at any particular time.
(5) As described below, a Fund might be required to maintain assets as "cover," maintain segregated accounts or make margin payments when it takes positions in instruments involving obligations to third parties. If a Fund were unable to close out its positions in such instruments, it might be required to continue to maintain such assets or accounts or make such payments until the position expired or matured. The requirements might impair the Fund's ability to sell a portfolio security or make an investment at a time when it would otherwise be favorable to do so, or require that the Fund sell a portfolio security at a disadvantageous time.
(6) 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.
COVER
Transactions using forward contracts, futures contracts and options (other than options purchased by a Fund) expose a Fund to an obligation to another party. A Fund will not enter into any such transactions unless it owns either (1) an offsetting ("covered") position in securities, currencies, or other options, forward contracts or futures contracts or (2) cash, liquid assets and/or short-term debt securities with a value sufficient at all times to cover its potential obligations not covered as provided in (1) above. Each Fund will comply with SEC guidelines regarding cover for these instruments and, if the guidelines so require, set aside cash or liquid securities. To the extent that a futures contract, forward contract or option is deemed to be illiquid, the assets used to "cover" the Fund's obligation will also be treated as illiquid for purposes of determining the Fund's maximum allowable investment in illiquid securities.
Even though options purchased by the Funds do not expose the Funds to an obligation to another party, but rather provide the Funds with a right to exercise, the Funds intend to "cover" the cost of any such exercise. To the extent that a purchased option is deemed illiquid, the Fund will treat the market value of the option (i.e., the amount at risk to the Fund) as illiquid, but will not treat the assets used as cover on such transactions as illiquid.
Assets used as cover cannot be sold while the position in the corresponding forward contract, futures contract or option is open, unless they are replaced with other appropriate assets. If a large portion of a Fund's assets is used for cover or otherwise set aside, it could affect portfolio management or the Fund's ability to meet redemption requests or other current obligations.
WRITING CALL OPTIONS
Each of the Funds may write (sell) covered call options on securities,
futures contracts, forward contracts, indices and currencies. As the writer of a
call option, a Fund would have the obligation to deliver the underlying
security, cash or currency (depending on the type of derivative) to the holder
(buyer) at a specified price (the exercise price) at any time until (American
style) or on (European style) a certain date (the expiration date). So long as
the obligation of a Fund continues, it may be assigned an exercise notice,
requiring it to deliver the underlying security, cash or currency against
payment of the exercise price. This obligation terminates upon the expiration of
the call option, or such earlier time at which a Fund effects a closing purchase
transaction by purchasing an option identical to that previously sold.
When writing a call option a Fund, in return for the premium, gives up the opportunity for profit from a price increase in the underlying security, contract or currency above the exercise price, and retains the risk of loss should the price of the security, contract or currency decline. Unlike one who owns securities, contracts or currencies not subject to an option, a Fund has no control over when it may be required to sell the underlying securities, contracts or currencies, since most options may be exercised at any time prior to the option's expiration. If a call option that a Fund has written expires, it will realize a gain in the amount of the premium; however, such gain may be offset by a decline in the market value of the underlying security, contract or currency during the option period. If the call option is exercised, a Fund will realize a gain or loss from the sale of the underlying security, contract or currency, which will be increased or offset by the premium received.
Writing call options can serve as a limited hedge because declines in the value of the hedged investment would be offset to the extent of the premium received for writing the option.
Closing transactions may be effected in order to realize a profit on an outstanding call option, to prevent an underlying security, contract or currency from being called or to permit the sale of the underlying security, contract or currency. Furthermore, effecting a closing transaction will permit a Fund to write another call option on the underlying security, contract or currency with either a different exercise price or expiration date, or both.
WRITING PUT OPTIONS
Each of the Funds may write (sell) covered put options on securities, futures contracts, forward contracts, indices and currencies. As the writer of a put option, a Fund would have the obligation to buy the underlying security, contract or currency (depending on the type of derivative) at the exercise price at any time until (American style) or on (European style) the expiration date. This obligation terminated upon the expiration of the put option, or such earlier time at which a Fund effects a closing purchase transaction by purchasing an option identical to that previously sold.
A Fund would write a put option at an exercise price that, reduced by the premium received on the option, reflects the lower price it is willing to pay for the underlying security, contract or currency. The risk in such a transaction would be that the market price of the underlying security, contract or currency would decline below the exercise price less the premium received.
PURCHASING PUT OPTIONS
Each of the Funds may purchase covered put options on securities, futures contracts, forward contracts, indices and currencies. As the holder of a put option, a Fund would have the right to sell the underlying security, contract or currency at the exercise price at any time until (American style) or on (European style) the expiration date. A Fund may enter into closing sale transactions with respect to such options, exercise such option or permit such option to expire.
A Fund may purchase a put option on an underlying security, contract or currency ("protective put") owned by the Fund in order to protect against an anticipated decline in the value of the security, contract or currency. Such hedge protection is provided only during the life of the put option. The premium paid for the put option and any transaction costs would reduce any profit realized when the security, contract or currency is delivered upon exercise of said option. Conversely, if the underlying security, contract or currency does not decline in value, the option may expire worthless and the premium paid for the protective put would be lost.
A Fund may also purchase put options on underlying securities, contracts or currencies against which it has written other put options. For example, where a Fund has written a put option on an underlying security, rather than entering a closing transaction of the written option, it may purchase a put option with a different exercise price and/or expiration date that would eliminate some or all of the risk associated with the written put. Used in combinations, these strategies are commonly referred to as "put spreads." Likewise, a Fund may write call options on underlying securities, contracts or currencies against which it has purchased protective put options. This strategy is commonly referred to as a "collar."
PURCHASING CALL OPTIONS
Each of the Funds may purchase covered call options on securities, futures contracts, forward contracts, indices and currencies. As the holder of a call option, a Fund would have the right to purchase the underlying security, contract or currency at the exercise price at any time until (American style) or on (European style) the expiration date. A Fund may enter into closing sale transactions with respect to such options, exercise such options or permit such options to expire.
Call options may be purchased by a Fund for the purpose of acquiring the underlying security, contract or currency for its portfolio. Utilized in this fashion, the purchase of call options would enable a Fund to acquire the security, contract or currency at the exercise price of the call option plus the premium paid. So long as it holds such a call option, rather than the underlying security or currency itself, the Fund is partially protected from any unexpected decline in the market price of the underlying security, contract or currency and, in such event, could allow the call option to expire, incurring a loss only to the extent of the premium paid for the option.
Each of the Funds may also purchase call options on underlying securities, contracts or currencies against which it has written other call options. For example, where a Fund has written a call option on an underlying security, rather than entering a closing transaction of the written option, it may purchase a call option with a different exercise strike and/or expiration date that would eliminate some or all of the risk associated with the written call. Used in combinations, these strategies are commonly referred to as "call spreads."
OVER-THE-COUNTER OPTIONS
Options may be either listed on an exchange or traded in over-the-counter ("OTC") markets. Listed options are third-party contracts (i.e., performance of the obligations of the purchaser and seller is guaranteed by the exchange or clearing corporation) and have standardized strike prices and expiration dates. OTC options are two-party contracts with negotiated strike prices and expiration dates. A Fund will not purchase an OTC option unless it believes that daily valuations for such options are readily obtainable. OTC options differ from exchange-traded options in that OTC options are transacted with
dealers directly and not through a clearing corporation (which guarantees performance). Consequently, there is a risk of non-performance by the dealer. Since no exchange is involved, OTC options are valued on the basis of an average of the last bid prices obtained from dealers, unless a quotation from only one dealer is available, in which case only that dealer's price will be used. In the case of OTC options, there can be no assurance that a liquid secondary market will exist for any particular option at any specific time. Although a Fund will enter into OTC options only with dealers that are expected to be capable of entering into closing transactions with it, there is no assurance that the Fund will in fact be able to close out an OTC option position at a favorable price prior to expiration. In the event of insolvency of the dealer, a Fund might be unable to close out an OTC option position at any time prior to its expiration.
The staff of the SEC considers purchased OTC options (i.e., the market value of the option) to be illiquid securities. A Fund may also sell OTC options and, in connection therewith, segregate assets or cover its obligations with respect to OTC options written by it. The assets used as cover for OTC options written by the Fund will be considered illiquid unless the OTC options are sold to qualified dealers who agree that the Fund may repurchase any OTC option it writes at a maximum price to be calculated by a formula set forth in the option agreement. The cover for an OTC option written subject to this procedure would be considered illiquid only to the extent that the maximum repurchase price under the formula exceeds the intrinsic value of the option.
INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures contracts except that all settlements are in cash and gain or loss depends on changes in the index in question (and thus on price movements in the securities market or a particular market sector generally) rather than on price movements in individual securities or futures contracts. The amount of cash is equal to the difference between the closing price of the index and the exercise price of the call or put times a specified multiple (the "multiplier"), which determines the total dollar value for each point of such difference.
The risks of investment in index options may be greater than options on securities. Because index options are settled in cash, when a Fund writes a call on an index it cannot provide in advance for its potential settlement obligations by acquiring and holding the underlying securities. A Fund can offset some of the risk of writing a call index option position by holding a diversified portfolio of securities similar to those on which the underlying index is based. However, the Fund cannot, as a practical matter, acquire and hold a portfolio containing exactly the same securities as underlie the index and, as a result, bears a risk that the value of the securities held will not be perfectly correlated with the value of the index.
LIMITATIONS ON OPTIONS
A Fund will not write options if, immediately after such sale, the aggregate value of securities or obligations underlying the outstanding options exceeds 20% of the Fund's total assets. A Fund will not purchase options if, at any time of the investment, the aggregate premiums paid for the options will exceed 5% of the Fund's total assets.
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS
Each of the Funds may enter into interest rate, currency or stock index futures contracts (collectively, "Futures" or "Futures Contracts") as a hedge against changes in prevailing levels of interest rates, currency exchange rates or stock price levels, respectively, in order to establish more definitely the effective return on securities or currencies held or intended to be acquired by it. A Fund's hedging may include sales of Futures as an offset against the effect of expected increases in interest rates, and decreases in currency exchange rates and stock prices, and purchases of Futures as an offset against the effect of expected declines in interest rates, and increases in currency exchange rates or stock prices.
A Future Contract is a two party agreement to buy or sell a specified amount of a specified security or currency (or delivery of a cash settlement price, in the case of an index future) for a specified price at a designated date, time and place. A stock index future provides for the delivery, at a designated
date, time and place, of an amount of cash equal to a specified dollar amount times the difference between the stock index value at the close of trading on the contract and the price agreed upon in the Futures Contract; no physical delivery of stocks comprising the index is made. Brokerage fees are incurred when a Futures Contract is bought or sold, and margin deposits must be maintained at all times the Future is outstanding.
The Funds will only enter into Futures Contracts that are traded (either domestically or internationally) on futures exchanges and are standardized as to maturity date and underlying financial instrument. Futures exchanges and trading thereon in the United States are regulated under the Commodity Exchange Act and by the Commodity Futures Trading Commission ("CFTC"). Foreign futures exchanges and trading thereon are not regulated by the CFTC and are not subject to the same regulatory controls. For a further discussion of the risks associated with investments in foreign securities, see "Foreign Securities" in this Statement of Additional Information.
Closing out an open Future is effected by entering into an offsetting Future for the same aggregate amount of the identical financial instrument or currency and the same delivery date. There can be no assurance, however, that a Fund will be able to enter into an offsetting transaction with respect to a particular Future at a particular time. If a Fund is not able to enter into an offsetting transaction, it will continue to be required to maintain the margin deposits on the Future.
A Fund's Futures transactions will be entered into for hedging purposes only; that is, Futures will be sold to protect against a decline in the price of securities or currencies that the Fund owns, or Futures will be purchased to protect the Fund against an increase in the price of securities or currencies it has committed to purchase or expects to purchase.
"Margin" with respect to Futures is the amount of funds that must be deposited by a Fund in order to initiate Futures trading and maintain its open positions in Futures. A margin deposit made when the Futures Contract is entered ("initial margin") is intended to ensure the Fund's performance under the Futures Contract. The margin required for a particular Future is set by the exchange on which the Future is traded and may be significantly modified from time to time by the exchange during the term of the Futures Contract.
Subsequent payments, called "variation margin," to and from the futures commission merchant through which a Fund entered into the Futures Contract will be made on a daily basis as the price of the underlying security, currency or index fluctuates making the Futures more or less valuable, a process known as marking-to-market.
If a Fund were unable to liquidate a Future or an option on a Futures position due to the absence of a liquid secondary market or the imposition of price limits, it could incur substantial losses. The Fund would continue to be subject to market risk with respect to the position. In addition, except in the case of purchased options, the Fund would continue to be required to make daily variation margin payments and might be required to maintain the position being hedged by the Future or option or to maintain cash or securities in a segregated account.
OPTIONS ON FUTURES CONTRACTS
Options on Futures Contracts are similar to options on securities or currencies except that options on Futures Contracts give 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 period of the option. Upon exercise of the option, the delivery of the Futures position by the writer of the option to the holder of the option will be accompanied by delivery of the accumulated balance in the writer's Futures margin account.
FORWARD CONTRACTS
A forward contract is an obligation, usually arranged with a commercial bank or other currency dealer, to purchase or sell a currency against another currency at a future date and price as agreed upon by the parties. A Fund either may accept or make delivery of the currency at the maturity of the forward contract. A Fund may also, if its contra party agrees prior to maturity, enter into a closing transaction involving the purchase or sale of an offsetting contract. Forward contracts are traded over-the-counter, and not on organized commodities or securities exchanges. As a result, it may be more difficult to value such contracts, and it may be difficult to enter into closing transactions.
Each of the Funds may engage in forward currency transactions in anticipation of, or to protect itself against, fluctuations in exchange rates. A Fund may enter into forward contracts with respect to a specific purchase or sale of a security, or with respect to its portfolio positions generally. When a Fund purchases a security denominated in a foreign currency for settlement in the near future, it may immediately purchase in the forward market the currency needed to pay for and settle the purchase. By entering into a forward contract with respect to the specific purchase or sale of a security denominated in a foreign currency, the Fund can secure an exchange rate between the trade and settlement dates for that purchase or sale transaction. This practice is sometimes referred to as "transaction hedging." Position hedging is the purchase or sale of foreign currency with respect to portfolio security positions denominated or quoted in a foreign currency.
The cost to a Fund of engaging in forward contracts varies with factors such as the currencies involved, the length of the contract period and the market conditions then prevailing. Because forward contracts are usually entered into on a principal basis, no fees or commissions are involved. The use of forward contracts does not eliminate fluctuations in the prices of the underlying securities a Fund owns or intends to acquire, but it does establish a rate of exchange in advance. In addition, while forward contract sales limit the risk of loss due to a decline in the value of the hedged currencies, they also limit any potential gain that might result should the value of the currencies increase.
LIMITATIONS ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON CURRENCIES
To the extent that a Fund enters into Futures Contracts, options on Futures Contracts and options on foreign currencies traded on a CFTC-regulated exchange, in each case other than for bona fide hedging purposes (as defined by the CFTC), the aggregate initial margin and premiums required to establish those positions (excluding the amount by which options are "in-the-money") will not exceed 5% of the total assets of the Fund, after taking into account unrealized profits and unrealized losses on any contracts it has entered into. This guideline may be modified by the Board, without a shareholder vote. This limitation does not limit the percentage of the Fund's assets at risk to 5%.
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 that AIM EUROPEAN SMALL COMPANY FUND and AIM INTERNATIONAL EMERGING GROWTH FUND are not subject to restriction (1) and AIM GLOBAL UTILITIES FUND is not subject to restrictions (1) or (4). 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. 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) 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.
(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, or (ii) tax-exempt obligations issued by governments or political subdivisions of governments. 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.
AIM GLOBAL UTILITIES FUND will concentrate (as such term may be defined or interpreted by the 1940 Act Laws, Interpretations and Exemptions) its investments in the securities of domestic and foreign public utility companies.
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 non-fundamental investment restrictions apply to each of the Funds, except AIM EUROPEAN SMALL COMPANY FUND and AIM INTERNATIONAL EMERGING GROWTH FUND are not subject to restriction (1) and AIM GLOBAL UTILITIES FUND is not subject to restrictions (1) or (3). They may be changed for any Fund without approval of that Fund's voting securities.
(1) In complying with the fundamental restriction regarding issuer diversification, the Fund will not, with respect to 75% 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, 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.
(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 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 an 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 AIM GLOBAL UTILITIES FUND's fundamental restriction regarding industry concentration, public utility companies shall consist of companies that produce or supply electricity, natural gas, water, sanitary services, and telephone, cable, satellite, telegraph or other communication or information transmission services, as well as developing utility technology companies and holding companies which derive at least 40% of their revenues from utility-related activities.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of September 15, 2000, the trustees and officers of the Trust as a group owned less than 1% of all classes of outstanding shares of the Trust.
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 the Trust's equity securities as of September 15, 2000, and the percentage of the outstanding shares held by such holders are set forth below:
Percent
Owned of
Percent Record
Name and Address of Owned of and
Beneficial Owner Record* Beneficially
---------------- ------- ------------
AIM BALANCED FUND -
Class A shares
Merrill Lynch Pierce Fenner & Smith 11.97% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
American Express Trust Co. 8.01% - 0 -
FBO American Express Trust
Retirement Service Plans
1200 Northstar
West P.O. Box 534
Minneapolis, MN 55440-0534
Class B shares
Merrill Lynch Pierce Fenner & Smith 10.30% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Class C shares
Merrill Lynch Pierce Fenner & Smith 23.49% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
|
* The Trust has no knowledge as to whether all or any portion of the shares owned of record are also owned beneficially.
Percent
Owned of
Percent Record
Name and Address of Owned of and
Beneficial Owner Record* Beneficially
---------------- ------- ------------
AIM EUROPEAN SMALL COMPANY FUND -
Class A shares
A I M Advisors, Inc. 24.83% - 0 -
ATTN: David Hessel
11 Greenway Plaza, Suite 100
Houston, TX 77046
Class B shares
Merrill Lynch Pierce Fenner & Smith 50.20% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
First Union Securities, Inc. - 0 - 5.69%
H. S. Joachim Family
111 East Kilbourn Avenue
Milwaukee, WI 53202
Class C shares
Dain Rauscher Incorporated - 0 - 19.30%
FBO Tobias Hlavinka
P.O. Box 1068
East Bernard, TX 77435-1068
First Clearing Corporation - 0 - 9.87%
Harry J. Owens
P.O. Box 524
Longview, TX 75606-0524
First Trust Corp., Trustee - 0 - 8.27%
FBO E. Scott Nielsen
P.O. Box 173301
Denver, CO 80217-3301
Merrill Lynch Pierce Fenner & Smith 7.84% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
|
* The Trust has no knowledge as to whether all or any portion of the shares owned of record are also owned beneficially.
Percent
Owned of
Percent Record
Name and Address of Owned of and
Beneficial Owner Record* Beneficially
---------------- ------- ------------
First Union Securities, Inc. - 0 - 6.76%
Venita N. Giles
Mark H. Lawley
111 East Kilbourn Avenue
Milwaukee, WI 53202
James J. Murata, Trustee - 0 - 6.61%
James J. Murata Revocable Trust
3117 Westminster Dr.
Boca Raton, FL 33496-2521
AIM GLOBAL UTILITIES FUND -
Class A shares
Charles Schwab & Co., Inc. 16.65% - 0 -
Reinvestment Account
101 Montgomery Street
San Francisco, CA 94104-0000
Class B shares
Merrill Lynch Pierce Fenner & Smith 8.07% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Class C shares
Merrill Lynch Pierce Fenner & Smith 11.34% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
AIM INTERNATIONAL EMERGING GROWTH FUND -
Class A shares
A I M Advisors, Inc. 38.52% - 0 -
ATTN: David Hessel
11 Greenway Plaza, Suite 100
Houston, TX 77046
|
* The Trust has no knowledge as to whether all or any portion of the shares owned of record are also owned beneficially.
Percent
Owned of
Percent Record
Name and Address of Owned of and
Beneficial Owner Record* Beneficially
---------------- ------- ------------
Bear Stearns Securities Corp. 6.74% - 0 -
1 Metrotech Center North
Brooklyn, NY 11201-3859
Class B shares
Merrill Lynch Pierce Fenner & Smith 21.64% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Dain Rauscher Inc. - 0 - 7.67%
FBO Dr. Oscar R. Mangani &
Dr. Ragini D. Lakhla
Mangani-Lakhia Pathology Lab
10161 Harwin Drive
Houston, TX 77036
Class C shares
Dain Rauscher Incorporated - 0 - 13.87%
FBO Tobias Hlavinka
P.O. Box 1068
East Bernard, TX 77435-1068
DLJSC, Custodian - 0 - 13.47%
FBO Erwin Steiner
15 Duckhook Circle
Lake Wylie, SC 29710-9214
Simpson Electric Co., Inc. - 0 - 8.42%
Danny Simpson, Trustee
8100 Tower Point Drive
Charlotte, NC 28227-7725
Donaldson Lufkin Jenrette
Securities Corporation, Inc. 7.56% - 0 -
P.O. Box 2052
Jersey City, NJ 07303-2052
Painewebber - 0 - 7.20%
FBO Robert E. Binda, Jr
P.O. Box 3321
Weehawken, NJ 07087-8154
|
* The Trust has no knowledge as to whether all or any portion of the shares owned of record are also owned beneficially.
Percent
Owned of
Percent Record
Name and Address of Owned of and
Beneficial Owner Record* Beneficially
---------------- ------- ------------
Donaldson Lufkin Jenrette
Securities Corporation, Inc. 6.99% - 0 -
P.O. Box 2052
Jersey City, NJ 07303-9998
Donaldson Lufkin Jenrette
Securities Corporation, Inc. 5.19% - 0 -
P.O. Box 2052
Jersey City, NJ 07303-9998
AIM NEW TECHNOLOGY FUND -
Class A shares
Merrill Lynch Pierce Fenner & Smith 8.52% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
A I M Advisors, Inc. 7.15% - 0 -
Attn: David Hessel
11 Greenway Plaza, Suite 100
Houston, TX 77046
Lanny H. Sachnowitz - 0 - 6.93%
6317 Belmont Street
Houston, TX 77005
Class B shares
Merrill Lynch Pierce Fenner & Smith 13.58% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Class C shares
Merrill Lynch Pierce Fenner & Smith 14.72% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
|
* The Trust has no knowledge as to whether all or any portion of the shares owned of record are also owned beneficially.
Percent
Owned of
Percent Record
Name and Address of Owned of and
Beneficial Owner Record* Beneficially
---------------- ------- ------------
NFSC - 0 - 5.87%
FBO Stanley J. Vinson
1531 Moonshadow Court
Sugar Land, TX 77479
AIM SELECT GROWTH FUND -
Class B shares
Merrill Lynch Pierce Fenner & Smith 14.70% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Class C shares
Merrill Lynch Pierce Fenner & Smith 13.03% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
AIM SMALL CAP EQUITY FUND -
Class A shares
Bear Stearns Securities Corp. 29.64% - 0 -
1 Metrotech Center North
Brooklyn, NY 11201-3859
A I M Advisors, Inc. 13.73% - 0 -
ATTN: David Hessel
11 Greenway Plaza, Suite 100
Houston, TX 77046
Class B shares
Merrill Lynch Pierce Fenner & Smith 14.03% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
|
* The Trust has no knowledge as to whether all or any portion of the shares owned of record are also owned beneficially.
Percent
Owned of
Percent Record
Name and Address of Owned of and
Beneficial Owner Record* Beneficially
---------------- ------- ------------
Class C shares
Donaldson Lufkin Jenrette
Securities Corporation, Inc. 12.19% - 0 -
P.O. Box 2052
Jersey City, NJ 07303-9998
Dain Rauscher Incorporated - 0 - 9.76%
FBO Tobias Hlavinka
P.O. Box 1068
East Bernard, TX 77435-1068
Painewebber
FBO Eugene Singer - 0 - 6.83%
P.O. Box 3321
Weehawken, NJ 07087-8154
AIM VALUE FUND -
Class A shares
Merrill Lynch Pierce Fenner & Smith 11.09% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Class B shares
Merrill Lynch Pierce Fenner & Smith 14.16% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Class C shares
Merrill Lynch Pierce Fenner & Smith 27.30% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
|
* The Trust has no knowledge as to whether all or any portion of the shares owned of record are also owned beneficially.
Percent
Owned of
Percent Record
Name and Address of Owned of and
Beneficial Owner Record* Beneficially
---------------- ------- ------------
AIM VALUE II FUND -
Class A shares
A I M Advisors, Inc. 7.27% - 0 -
ATTN: David Hessel
11 Greenway Plaza, Suite 100
Houston, TX 77046
Charles Mitchell Minges, Trustee - 0 - 7.08%
P.O. Box 1639
Broone, NC 28607
Lanny H. Sachnowitz - 0 - 5.96%
6317 Belmont Street
Houston, TX 77005
Class B shares
Merrill Lynch Pierce Fenner & Smith 10.85% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Class C shares
Merrill Lynch Pierce Fenner & Smith 29.55% - 0 -
FBO The Sole Benefit of Customers
ATTN: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
|
AIM EXPLORER FUND
AIM provided the initial capitalization of the Fund and, accordingly, as of the date of this Statement of Additional Information, owned more than 25% of the issued and outstanding shares of the Fund and therefore could be deemed to "control" the Fund as that term is defined in the 1940 Act. It is anticipated that after commencement of the public offering of the Fund's shares, AIM will cease to control the Fund for purposes of the 1940 Act.
MANAGEMENT
The overall management of the business and affairs of the Funds and the Trust is vested in the Board of Trustees. The Board of Trustees approves all significant agreements between the Trust, on behalf of one or more 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
* The Trust has no knowledge as to whether all or any portion of the shares owned of record are also owned beneficially.
to the objective(s), 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. All of the Trust's executive officers hold similar offices with some or all of the other AIM Funds.
----------------------------------------------------------------------------------------------------------------------
POSITIONS
NAME, ADDRESS AND AGE HELD WITH PRINCIPAL OCCUPATION DURING AT LEAST
REGISTRANT THE PAST 5 YEARS
----------------------------------------------------------------------------------------------------------------------
*ROBERT H. GRAHAM (54) Trustee, Chairman Director, President and Chief Executive Officer,
and President A I M Management Group Inc.; Director and
President, A I M Advisors, Inc.; Director and
Senior Vice President, A I M Capital Management,
Inc., A I M Distributors, Inc., A I M Fund
Services, Inc. and Fund Management Company; and
Director and Chief Executive Officer, Managed
Products, AMVESCAP PLC.
----------------------------------------------------------------------------------------------------------------------
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).
----------------------------------------------------------------------------------------------------------------------
OWEN DALY II (76) Trustee Formerly, Director, Cortland Trust Inc.
Six Blythewood Road (investment company), CF & I Steel Corp.,
Baltimore, MD 21210 Monumental Life Insurance Company and Monumental
General Insurance Company; and Chairman of the
Board of Equitable Bancorporation.
----------------------------------------------------------------------------------------------------------------------
EDWARD K. DUNN, JR. (65) Trustee Formerly, Chairman of the Board of Directors,
2 Hopkins Plaza Mercantile Mortgage Corp.; Vice Chairman of the
8th Floor, Suite 805 Board of Directors, President and Chief Operating
Baltimore, MD 21201 Officer, Mercantile-Safe Deposit & Trust Co.; and
President, Mercantile Bankshares.
----------------------------------------------------------------------------------------------------------------------
JACK FIELDS (48) Trustee Chief Executive Officer, Texana Global, Inc.
434 New Jersey Avenue, SE (foreign trading company) and Twenty First
Washington, DC 20003 Century Group, Inc. (governmental affairs
company). Formerly, Member of the U.S. House of
Representatives.
----------------------------------------------------------------------------------------------------------------------
**CARL FRISCHLING (63) Trustee Partner, Kramer Levin Naftalis & Frankel LLP (law
919 Third Avenue firm).
New York, NY 10022
----------------------------------------------------------------------------------------------------------------------
|
* A trustee who is an interested person of the trust and AIM as defined in the 1940 Act.
** A trustee who is an "interested person" of the Trust as defined in the 1940 Act.
----------------------------------------------------------------------------------------------------------------------
POSITIONS
NAME, ADDRESS AND AGE HELD WITH PRINCIPAL OCCUPATION DURING AT LEAST
REGISTRANT THE PAST 5 YEARS
----------------------------------------------------------------------------------------------------------------------
PREMA MATHAI-DAVIS (50) Trustee Formerly, Chief Executive Officer, YWCA of the
370 East 76th Street U.S.A.
New York, NY 10021
----------------------------------------------------------------------------------------------------------------------
LEWIS F. PENNOCK (58) Trustee Partner, Pennock & Cooper (law firm).
6363 Woodway, Suite 825
Houston, TX 77057
----------------------------------------------------------------------------------------------------------------------
LOUIS S. SKLAR (61) Trustee Executive Vice President, Development and
The Williams Tower Operations, Hines Interests Limited Partnership
50th Floor (real estate development).
2800 Post Oak Blvd.
Houston, TX 77056
----------------------------------------------------------------------------------------------------------------------
GARY T. CRUM (53) Senior Vice Director and President, A I M Capital Management,
President 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.
----------------------------------------------------------------------------------------------------------------------
CAROL F. RELIHAN (46) Senior Vice Director, Senior Vice President, General Counsel
President and and Secretary, A I M Advisors, Inc.; Senior Vice
Secretary 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.
----------------------------------------------------------------------------------------------------------------------
DANA R. SUTTON (41) Vice President Vice President and Fund Controller, A I M
and Treasurer Advisors, Inc.; and Assistant Vice President and
Assistant Treasurer, Fund Management Company.
----------------------------------------------------------------------------------------------------------------------
ROBERT G. ALLEY (52) Vice President Senior Vice President, A I M Capital Management,
Inc.; and Vice President, A I M Advisors, Inc.
----------------------------------------------------------------------------------------------------------------------
STUART W. COCO (45) Vice President Senior Vice President, A I M Capital Management,
Inc.; and Vice President, A I M Advisors, Inc.
----------------------------------------------------------------------------------------------------------------------
|
----------------------------------------------------------------------------------------------------------------------
POSITIONS
NAME, ADDRESS AND AGE HELD WITH PRINCIPAL OCCUPATION DURING AT LEAST
REGISTRANT THE PAST 5 YEARS
----------------------------------------------------------------------------------------------------------------------
MELVILLE B. COX (57) 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
----------------------------------------------------------------------------------------------------------------------
KAREN DUNN KELLEY (40) Vice President Senior Vice President, A I M Capital Management,
Inc.; and Vice President, A I M Advisors, Inc.
----------------------------------------------------------------------------------------------------------------------
EDGAR M. LARSEN (60) Vice President Vice President, A I M Capital Management, Inc.
----------------------------------------------------------------------------------------------------------------------
|
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. Crockett, Daly, Dunn, Fields, Frischling, [Graham], Pennock and Sklar (Chairman) and Dr. Mathai-Davis. The Investments Committee is responsible for: (i) overseeing AM'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 dis-interested 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 dis-interested trustees; and (iii) making recommendations to the Board regarding matters related to compensation, including deferred compensation plans and retirement plans for the dis-interested 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 during the year ended December 31, 1999:
----------------------------------------------------------------------------------------------------
RETIREMENT
AGGREGATE BENEFITS TOTAL
COMPENSATION FROM ACCRUED COMPENSATION
THE BY ALL FROM ALL AIM
TRUSTEE TRUST(1) AIM FUNDS(2) FUNDS(3)
----------------------------------------------------------------------------------------------------
Charles T. Bauer(4) $ 0 $ 0 $ 0
----------------------------------------------------------------------------------------------------
Bruce L. Crockett 23,116 37,485 103,500
----------------------------------------------------------------------------------------------------
Owen Daly II 23,116 122,898 103,500
----------------------------------------------------------------------------------------------------
Edward K. Dunn, Jr. 21,954 55,565 103,500
----------------------------------------------------------------------------------------------------
Jack Fields 22,660 15,826 101,500
----------------------------------------------------------------------------------------------------
Carl Frischling(5) 23,116 97,791 103,500
----------------------------------------------------------------------------------------------------
Robert H. Graham 0 0 0
----------------------------------------------------------------------------------------------------
Prema Mathai-Davis 21,474 11,870 101,500
----------------------------------------------------------------------------------------------------
Lewis F. Pennock 23,116 45,766 103,500
----------------------------------------------------------------------------------------------------
Ian W. Robinson(6) 5,618 94,442 25,000
----------------------------------------------------------------------------------------------------
Louis S. Sklar 22,664 90,232 101,500
----------------------------------------------------------------------------------------------------
|
(1) The total amount of compensation deferred by all trustees of the Trust during the fiscal year ended December 31, 1999, including earnings thereon, was $176,057.
(2) During the fiscal year ended December 31,1999, the total amount of expenses allocated to the Trust in respect of such retirement benefits was $54,659. Data reflects compensation estimated for the calendar year ended December 31, 1999.
(3) Each trustee serves as a 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) Mr. Bauer was a trustee and officer until September 30, 2000, when he retired.
(5) During the fiscal year ended December 31,1999, the Trust paid $93,776 in legal fees to Mr. Frischling's law firm, Kramer Levin Naftalis & Frankel LLP, for services rendered to the dis-interested trustees of the Trust. Mr. Frischling, a trustee of the Trust, is a partner in such firm.
(6) Mr. Robinson was a trustee 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, the normal retirement date is the date on which the eligible trustee has attained age 65 and has completed at least five years of continuous service with one or more of the regulated investment companies managed, administered or distributed by AIM or its affiliates (the "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 for Messrs. Crockett, Daly, Dunn, Fields, Frischling, Pennock, Robinson and Sklar and Dr. Mathai-Davis are 13, 13, 2, 3, 23, 18, 11, 10, and 1 years, respectively.
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT
--------------------------------------------------
Number of Years Annual Retirement
of Service With Compensation
Applicable AIM Paid By All
Funds 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 (for purposes of this paragraph only, the "Deferring Trustees") have each executed a Deferred Compensation Agreement (collectively, the "Compensation Agreements"). Pursuant to the 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 was organized in 1976, and along with its subsidiaries, manages or advises over 125 investment portfolios encompassing a broad range of investment objectives. The address of AIM is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. AIM is a direct, wholly owned subsidiary of AIM Management, a holding company that has been engaged in the financial services business since 1976. AIM is the sole shareholder of the Funds' principal underwriter, A I M Distributors, Inc. ("AIM Distributors"). AIM Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire Square, London, EC2M 4YR, England. AMVESCAP PLC and its subsidiaries are an independent investment management group engaged in institutional investment management and retail mutual fund businesses in the United States, Europe and the Pacific Region. Certain of the directors and officers of AIM are also executive officers of the Trust and their affiliations are shown under "Management" herein.
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 transactions; (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 a Master Investment Advisory Agreement, dated June 1, 2000, as amended. A prior investment advisory agreement with substantially similar terms to the Master Investment Advisory Agreement was in effect prior to June 1, 2000. The Master Investment Advisory Agreement will remain in effect until June 30, 2001, and continue from year to year only if such continuance is specifically approved at least annually by the Trust's Board of Trustees and by the affirmative vote of a majority of the trustees who are not parties to the agreement or "interested persons" of any such party by votes cast in person at a meeting called for such purpose. The agreement provides that either party may terminate such agreement on 60 days' written notice without penalty. The agreement terminates automatically in the event of its assignment.
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 Master Investment Advisory Agreement, AIM supervises all aspects of the Funds' operations and provides investment advisory services to the Funds. AIM obtains and evaluates economic, statistical and financial information to formulate and implement investment programs for the Funds. AIM will not be liable to the Funds or their shareholders except in the case of AIM's willful misfeasance, bad faith, gross negligence or reckless disregard of duty.
Pursuant to the Master Investment Advisory Agreement, AIM receives a fee from AIM BALANCED FUND calculated at the following annual rates, based on the average daily net assets of the Fund during the year:
NET ASSETS ANNUAL RATE
---------- -----------
First $150 million 0.75%
Amount over $150 million 0.50%
|
Pursuant to the Master Investment Advisory Agreement, AIM receives a fee from AIM SELECT GROWTH FUND and AIM VALUE FUND calculated at the following annual rates, based on the average daily net assets of each Fund during the year:
NET ASSETS ANNUAL RATE
---------- -----------
First $150 million 0.80%
Amount over $150 million 0.625%
|
Pursuant to the Master Investment Advisory Agreement, AIM receives a fee from AIM GLOBAL UTILITIES FUND calculated at the following annual rates, based on the average daily net assets of the Fund during the year:
NET ASSETS ANNUAL RATE
---------- -----------
First $200 million 0.60%
Next $300 million 0.50%
Next $500 million 0.40%
Amount over $1 billion 0.30%
|
Pursuant to the Master Investment Advisory Agreement, AIM receives a fee from AIM EUROPEAN SMALL COMPANY FUND and AIM INTERNATIONAL EMERGING GROWTH FUND calculated at the following annual rate, based on the average daily net assets of each Fund during the year:
NET ASSETS ANNUAL RATE ---------- ----------- All Assets 0.95% |
Pursuant to the Master Investment Advisory Agreement, AIM receives a fee from AIM NEW TECHNOLOGY FUND calculated at the following annual rate, based on the average daily net assets of the Fund during the year:
NET ASSETS ANNUAL RATE ---------- ----------- All Assets 1.00% |
Pursuant to the Master Investment Advisory Agreement, AIM receives a fee from AIM SMALL CAP EQUITY FUND calculated at the following annual rate, based on the average daily net assets of the Fund during the year:
NET ASSETS ANNUAL RATE ---------- ----------- All Assets 0.85% |
Pursuant to the Master Investment Advisory Agreement, AIM receives a fee from AIM VALUE II FUND calculated at the following annual rate, based on the average daily net assets of the Fund during the year:
NET ASSETS ANNUAL RATE ---------- ----------- All Assets 0.75% |
Pursuant to the Master Investment Advisory Agreement, AIM receives a fee from AIM EXPLORER FUND calculated at the following annual rate, based on the average daily net assets of the Fund during the year:
NET ASSETS ANNUAL RATE ---------- ----------- First $1 billion 0.85% Amount over $1 billion 0.80% |
AIM has voluntarily agreed, effective July 1, 2000, to waive advisory fees payable by AIM VALUE FUND in an amount equal to 0.025% for each $5 billion increment in net assets over $5 billion, up to a maximum waiver of 0.175% on net assets in excess of $35 billion, so that the effective fee schedule is as follows:
NET ASSETS ANNUAL RATE
---------- -----------
First $150 million 0.80%
Over $150 million to and including $5 billion 0.625%
Over $5 billion to and including $10 billion 0.60%
Over $10 billion to and including $15 billion 0.575%
Over $15 billion to and including $20 billion 0.55%
Over $20 billion to and including $25 billion 0.525%
Over $25 billion to and including $30 billion 0.50%
Over $30 billion to and including $35 billion 0.475%
Over $35 billion 0.45%
|
In addition, pursuant to a prior fee waiver arrangement, AIM waived through June 30, 2000 a portion of its advisory fees payable by AIM VALUE FUND, so that the effective fee schedule was as follows: 0.80% of the first $150 million of the Fund's average daily net assets, plus 0.625% of the Fund's average daily net assets in excess of $150 million to and including $2 billion, plus 0.60% of the Fund's average daily net assets in excess of $2 billion. During the year ended December 31, 1999, AIM VALUE FUND waived 0.02% in advisory fees.
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.
Each Fund paid to AIM the following management fees net of any expense limitations and fee waivers for the years ended December 31, 1999, 1998 and 1997:
1999 1998 1997
---- ---- ----
AIM Balanced Fund................................ $ 13,624,208 $ 9,043,320 $ 4,789,939
AIM Global Utilities Fund........................ 1,802,726 1,652,662 1,440,692
AIM Select Growth Fund........................... 5,507,389 4,362,261 3,901,342
AIM Value Fund................................... 136,059,101 94,937,000 72,810,450
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For the fiscal years ended December 31, 1999, 1998 and 1997, AIM waived advisory fees for each Fund as follows:
1999 1998 1997
---- ---- ----
AIM Balanced Fund................................ -0- -0- -0-
AIM Global Utilities Fund........................ -0- -0- -0-
AIM Select Growth Fund........................... -0- -0- -0-
AIM Value Fund................................... $5,137,356 $3,423,939 $2,501,999
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For the fiscal years ended December 31, 1999, 1998 and 1997, AIM did not reimburse expenses of any of the Funds.
The Trust pays all expenses not specifically assumed by AIM or AIM Distributors including compensation and expenses of trustees who are not directors, officers or employees of AIM, AIM Distributors or any other affiliates of AIM Management; registration, filing and other fees in connection with filings with regulatory authorities; the fees and expenses of independent accountants; costs of printing and mailing registration statements, prospectuses, proxy statements, and annual and periodic reports to shareholders; custodian and transfer agent fees; brokerage commissions and securities transactions costs incurred by the Funds; taxes and corporate fees; legal fees incurred in connection with the affairs of the Funds; and expenses of meetings of shareholders and trustees.
AIM and the Trust have entered into a Master Administrative Services Agreement, as amended, pursuant to which AIM is entitled to receive from the Funds 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 Trust's principal financial officer and her staff, and any expenses related to fund accounting services.
AIM, at its own expense, furnishes to the Trust office space and facilities. AIM furnishes to the Trust all personnel for managing the affairs of the Trust and each of its series of shares and is reimbursed under the Master Administrative Services Agreement for the services of a principal financial officer of the Trust and her staff. The Master Administrative Services Agreement between the Trust and AIM provides that AIM may perform or arrange for the provision of certain accounting, and other administrative services to each Fund which are not required to be performed by AIM under the Master Investment Advisory Agreement. The Master Administrative Services Agreement will continue from year to year only if such continuance is specifically approved at least annually by the Trust's Board of Trustees, including the "dis-interested" trustees, by votes cast in person at a meeting called for such purpose.
The Funds paid AIM the following amounts, which represented the indicated annualized percentage of average net assets for such period, as reimbursement of administrative services costs for the years ended December 31, 1999, 1998 and 1997:
1999 1998 1997
---- ---- ----
PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF
AVERAGE AVERAGE AVERAGE
AMOUNT PAID NET ASSETS AMOUNT PAID NET ASSETS AMOUNT PAID NET ASSETS
----------- ---------- ----------- ---------- ----------- ----------
AIM Balanced Fund............... $158,046 0.006% $ 104,952 0.006% $ 87,375 0.01%
AIM Global Utilities Fund....... 88,999 0.03% 85,383 0.03% 77,375 0.03%
AIM Select Growth Fund.......... 110,205 0.01% 78,567 0.01% 74,201 0.01%
AIM Value Fund.................. 631,457 0.003% 323,939 0.002% 225,784 0.002%
|
In addition, the Transfer Agency and Service Agreement between the Trust and A I M Fund Services, Inc. ("AFS"), a registered transfer agent and wholly-owned subsidiary of AIM, provides that AFS 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.
THE 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 and Class C shares of the Funds (the "Class A and C Plan"). Such plan provides that for AIM EUROPEAN SMALL COMPANY FUND, AIM EXPLORER FUND, AIM INTERNATIONAL EMERGING GROWTH FUND, AIM NEW TECHNOLOGY FUND, AIM SMALL CAP EQUITY FUND AND AIM VALUE II FUND the Class A shares pay 0.35% per annum of their average daily net assets and for AIM BALANCED FUND, AIM GLOBAL UTILITIES FUND, AIM SELECT GROWTH FUND AND AIM VALUE FUND, the 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. Such plan provides that the Class C shares pay compensation to AIM Distributors at an annual rate of 1.00% per annum of the average daily net assets attributable to Class C shares for the purpose of financing any activity which is primarily intended to result in the sale of Class C shares. 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 of a Fund. 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 of each Fund and who provide continuing personal services to their customers who own such shares of a Fund. 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.
Of the aggregate amount payable under the Class A and C Plan, payments to dealers and other financial institutions including AIM Distributors, acting as principal, for providing 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 including AIM Distributors, acting as principal, 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, as amended, pursuant to Rule 12b-1 under the 1940 Act relating to Class B shares of the Funds (the "Class B Plan",
and collectively with the Class A and C Plan, the "Plans"). Under the Class B Plan, each Fund pays compensation to AIM Distributors at an annual rate of 1.00% of the average daily net assets attributable to Class B shares. Of such amount, each Fund pays a service fee of 0.25% of the average daily net assets attributable to Class B shares to selected dealers and other institutions which furnish continuing personal shareholder services to their customers who purchase and own Class B shares. 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 a Fund and the Trust; performing sub-accounting; establishing and maintaining shareholder accounts and records; processing customer purchase and redemption transactions; providing periodic statements showing a shareholder's account balance and the integration of such statements with those of other transactions and balances in the shareholder's other accounts serviced by the bank; forwarding applicable prospectuses, proxy statements, reports and notices to bank clients who hold Fund shares; and such other administrative services as a Fund reasonably may request, to the extent permitted by applicable statute, rule or regulation.
The Trust may also enter into Variable Group Annuity Contractholder
Service Agreements ("Variable Contract Agreements") on behalf of the Funds
authorizing payments to selected insurance companies offering variable annuity
contracts to employers as funding vehicles for retirement plans qualified under
Section 401(a) of the Code. Services provided pursuant to such Variable Contract
Agreements may include some or all of the following: answering inquiries
regarding the Fund and the Trust; performing sub-accounting; establishing and
maintaining contractholder accounts and records; processing and bunching
purchase and redemption transactions; providing periodic statements of contract
account balances; forwarding such reports and notices to contractholders
relative to the Fund as deemed necessary; generally, facilitating communications
with contractholders concerning investments in a Fund on behalf of plan
participants; and performing such other administrative services as deemed to be
necessary or desirable, to the extent permitted by applicable statute, rule or
regulation to provide such services.
Similar agreements may be permitted under the Plans for institutions which provide recordkeeping for and administrative services to 401(k) plans.
In addition, Shareholder Service Agreements may be permitted under the Plans for bank trust departments and brokers for bank trust departments which provide shareholder services to their customers.
AIM Distributors, acting as principal, may also enter into Shareholder Service Agreements with the Funds, substantially identical to those agreements entered into with investment dealers or other financial institutions, authorizing payments to AIM Distributors for providing continuing personal shareholder services to those customers for which AIM Distributors serves as dealer of record.
Financial intermediaries and any other person entitled to receive compensation for selling Fund shares may receive different compensation for selling shares of one particular class over another.
Under a Shareholder Service Agreement, a Fund agrees 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 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 such Fund's shares are held.
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 and Class C shares. 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 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 to dealers and other financial institutions under the Plans. These payments are an obligation of the Funds and not of AIM Distributors.
For the year ended December 31, 1999, the various classes of the Funds paid to AIM Distributors the following amounts pursuant to the Plans:
CLASS A SHARES CLASS B SHARES CLASS C SHARES
-------------- -------------- --------------
AIM Balanced Fund....................... $ 3,755,133 $ 10,013,693 $ 1,464,190
AIM Global Utilities Fund............... 500,106 1,165,993 39,036
AIM Select Growth Fund.................. 896,196 4,672,685 134,325
AIM Value Fund.......................... 26,140,479 116,152,779 4,781,281
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An estimate by category of the allocation of actual fees paid by Class A shares of the Funds under the Class A and C Plan during the year ended December 31, 1999, was as follows:
PRINTING COMPENSATION
ADVERTISING AND MAILING SEMINARS TO DEALERS
----------- ----------- -------- ----------
AIM Balanced Fund.......................... $ 118,519 $ 11,106 $ 28,773 $ 3,596,735
AIM Global Utilities Fund.................. 3,311 311 836 495,648
AIM Select Growth Fund..................... 11,864 1,102 2,881 880,350
AIM Value Fund............................. 401,488 37,437 97,758 25,603,796
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An estimate by category of the allocation of actual fees paid by the Funds under the Class B Plan during the year ended December 31, 1999, was as follows:
COMPENSATION COMPENSATION
PRINTING AND TO TO
ADVERTISING MAILING SEMINARS UNDERWRITERS DEALERS
----------- ------- -------- ------------ -------
AIM Balanced Fund................... $ 404,810 $ 38,350 $ 103,333 $ 7,510,270 $ 1,956,931
AIM Global Utilities Fund........... 19,626 1,823 4,766 874,495 265,284
AIM Select Growth Fund.............. 62,281 5,914 15,431 3,504,514 1,084,546
AIM Value Fund...................... 2,728,649 254,704 666,084 87,113,351 25,388,347
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An estimate by category of the allocation of actual fees paid by Class C shares of the Funds under the Class A and C Plan during the year ended December 31, 1999, was as follows:
COMPENSATION COMPENSATION
PRINTING AND TO TO
ADVERTISING MAILING SEMINARS UNDERWRITERS DEALERS
----------- ------- -------- ------------ -------
AIM Balanced Fund................... $ -0- $ -0- $ -0- $ 835,196 $ 628,994
AIM Global Utilities Fund........... -0- -0- -0- 24,428 14,608
AIM Select Growth Fund.............. -0- -0 -0- 68,795 65,530
AIM Value Fund...................... -0- -0- -0- 3,259,285 1,521,996
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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 (the "Independent 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 the Funds and its respective shareholders.
Amounts payable by a Fund under the Plans need not be directly related to the expenses actually incurred by AIM Distributors on behalf of each Fund. 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.
The Plans requires 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.
Unless terminated earlier in accordance with their terms, the Plans continue from year to year as long as such continuance is specifically approved at least annually by the Board of Trustees, including a majority of the Independent Trustees.
The Plans may be terminated by the vote of a majority of the Independent 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 Independent
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 Independent Trustees is committed to the discretion of the
Independent 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 by holders of Class A shares under the Class A and C Plan, the Class B
shares of the Funds will no longer convert into Class A shares of the 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
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 0.35% of average daily net assets of the Class A shares of AIM EUROPEAN SMALL COMPANY FUND, AIM EXPLORER FUND, AIM INTERNATIONAL EMERGING GROWTH FUND, AIM NEW TECHNOLOGY FUND, AIM SMALL CAP EQUITY FUND AND AIM VALUE II FUND, and of up to 0.25% of average daily net assets of the Class A shares of AIM BALANCED FUND, AIM GLOBAL UTILITIES FUND, AIM SELECT GROWTH FUND AND AIM VALUE FUND, as compared to 1.00% of such assets of each Fund's Class B and Class C shares; (ii) the Class B Plan obligates 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 master distribution agreements, as amended, relating to the Funds (the "Distribution Agreements") with A I M Distributors, Inc. ("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, Class B and Class C shares of the Funds. 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.
The Distribution Agreements provide AIM Distributors with the exclusive right to distribute shares of the Funds directly and through institutions with whom AIM Distributors has entered into selected dealer agreements. Under the Distribution Agreement for the Class B shares, AIM Distributors sells Class B shares at net asset value subject to a contingent deferred sales charge established by AIM Distributors. AIM Distributors is authorized to advance to institutions through whom Class B shares are sold a sales commission under schedules established by AIM Distributors. The Distribution Agreement for the Class B shares provides that AIM Distributors (or its assignee or transferee) will receive 0.75% (of the total 1.00% payable under the distribution plan applicable to Class B shares) of each Fund's average daily net assets attributable to Class B shares attributable to the sales efforts of AIM Distributors.
The Distribution Agreements provide that AIM Distributors will bear the expenses of printing from the final proof and distributing the Funds' prospectuses and statements of additional information relating to public offerings made by AIM Distributors pursuant to the Distribution Agreements (other than those prospectuses and statements of additional information distributed to existing shareholders of the Funds), and any promotional or sales literature used by AIM Distributors or furnished by AIM Distributors to
dealers in connection with the public offering of the Funds' shares, including expenses of advertising in connection with such public offerings. AIM Distributors has not undertaken to sell any specified number of shares of any classes of the Funds.
AIM Distributors expects to pay sales commissions from its own resources to dealers and institutions who sell Class B and Class C shares of the Funds at the time of such sales.
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 requires 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 a 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 the 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 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.
The Trust (on behalf of any class of any Fund) or AIM Distributors may terminate the Distribution Agreements on sixty (60) days' written notice without penalty. The Distribution Agreements will terminate automatically in the event of their assignment. In the event the Class B shares Distribution Agreement is terminated, AIM Distributors would continue to receive payments of asset-based distribution fees in respect of the outstanding Class B shares attributable to the distribution efforts of AIM Distributors; provided, however that a complete termination of the Class B Plan (as defined in such Plan) would terminate all payments to AIM Distributors. Termination of the Class B Plan or the Distribution Agreement for Class B shares would not affect the obligation of a Fund and its Class B shareholders to pay contingent deferred sales charges.
From time to time, AIM Distributors may transfer and sell its 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 for the years ending December 31, 1999, 1998 and 1997:
1999 1998 1997
---- ---- ----
SALES AMOUNT SALES AMOUNT SALES AMOUNT
CHARGES RETAINED CHARGES RETAINED CHARGES RETAINED
------- -------- ------- -------- ------- ---------
AIM Balanced Fund.................. $ 4,738,340 $ 823,856 $ 6,719,092 $1,172,743 $ 4,100,493 $ 672,146
AIM Global Utilities Fund.......... 363,844 56,996 407,940 71,338 376,255 57,864
AIM Select Growth Fund............. 1,100,704 176,131 778,128 136,229 895,672 143,669
AIM Value Fund..................... 47,407,647 7,218,373 30,111,088 4,259,204 31,118,672 4,660,735
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The following chart reflects the contingent deferred sales charges paid by Class A and Class B shareholders for the years ended December 31, 1999, 1998 and 1997, and by Class C shareholders for the years ended December 31, 1999 and 1998, and for the period from August 4, 1997 through December 31, 1997:
1999 1998 1997
---- ---- ----
AIM Balanced Fund.................................... $ 150,341 $ 106,255 $ 99,075
AIM Global Utilities Fund............................ 67,367 71,709 88,250
AIM Select Growth Fund............................... 75,951 105,783 109,547
AIM Value Fund....................................... 1,053,955 1,498,642 1,752,662
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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 European Small Company Fund, AIM Euroland Growth Fund, AIM Explorer Fund, AIM Global Utilities Fund, AIM International Emerging Growth Fund, AIM International Equity Fund, AIM Japan Growth Fund, AIM Large Cap Basic Value Fund, AIM Large Cap Growth Fund, AIM Mid Cap Equity Fund, AIM Mid Cap Growth Fund, AIM Mid Cap Opportunities Fund, AIM New Technology Fund, AIM Select Growth Fund, AIM Small Cap Equity Fund, AIM Small Cap Growth Fund, AIM Small Cap Opportunities Fund, AIM Value Fund, AIM Value II 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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(1) AIM Small Cap Opportunities Fund will not accept any single purchase in excess of $250,000.
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(1) 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(1) 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 Find'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-Exempt Intermediate Fund as follows: 1% of the first $2 million or 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 shares 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) Class B and Class C 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) Class B and Class C 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 contract 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) Class B and Class C 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 of 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 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 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 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 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 form 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: (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 account,
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 1/2or 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 purchases, 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 description of the manner in which shares of the Funds may be purchased appears in the Prospectus under the headings "Purchasing Shares - How to Purchase Shares."
The sales charge normally deducted on purchases of Class A shares of the Funds is used to compensate AIM Distributors and participating dealers for their expenses incurred in connection with the distribution of the Funds' Class A shares. Since there is little expense associated with unsolicited orders placed directly with AIM Distributors by persons who, because of their relationship with the Funds or with AIM and its affiliates, are familiar with the Funds, or whose programs for purchase involve little expense (e.g., because of the size of the transaction and shareholder records required), AIM Distributors believes that it is appropriate and in the Funds' best interests that such persons, and certain other persons whose purchases result in relatively low expenses of distribution, be permitted to purchase Class A shares of the Funds through AIM Distributors without payment of a sales charge. The persons who may purchase Class A shares of the Funds without a sales charge are listed under the caption "Reductions in Initial Sales Charges - Purchases at Net Asset Value." You may also be charged a transaction or other fee by the financial institution managing your account.
Complete information concerning the method of exchanging shares of the Funds for shares of the other mutual funds managed or advised by AIM is set forth in each Prospectus under the caption "Exchanging Shares."
Information concerning redemption of the Funds' shares is set forth in the Prospectuses under the caption "Redeeming Shares - How to Redeem Shares." Shares of the AIM Funds may be redeemed directly through AIM Distributors or through any dealer who has entered into an agreement with AIM Distributors. In addition to the 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 at (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 an arrangement is subject to timely receipt by AFS, the Funds' 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 a Fund 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. AIM intends to redeem all shares of the Funds in cash.
The right of redemption may be suspended or the date of payment postponed when (a) trading on the New York Stock Exchange ("NYSE") is restricted, as determined by applicable rules and regulations of the SEC, (b) the NYSE is closed for other than customary weekend and holiday closings, (c) the SEC has by order permitted such suspension, or (d) an emergency as determined by the SEC exists making disposition of portfolio securities or the valuation of the net assets of a Fund not reasonably practicable.
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.
The following formula may be used to determine the public offering price per Class A share of an investor's investment:
Net Asset Value / (1 - Sales Charge as % of Offering Price ) = Offering Price.
For example, at the close of business on December 31, 1999, AIM VALUE FUND - Class A shares had 258,850,990 shares outstanding, net assets of $12,640,072,795 and a net asset value per share of $48.83. The offering price, therefore, was $51.67.
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.
Interest and dividend payments are subject to backup 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 applies.
Certain payees and payments are exempt from backup withholding and information reporting. A complete listing of such exempt entities appears in the Instructions for the Requester of Form W-9 (which can be obtained from the IRS) and includes, among others, the following:
o a corporation
o an organization exempt from tax under Section 501(a), an
individual retirement plan (IRA), or a custodial account under
Section 403(b)(7)
o the United States or any of its agencies or instrumentalities
o a state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities
o a foreign government or any of its political subdivisions, agencies or instrumentalities
o an international organization or any of its agencies or instrumentalities
o a foreign central bank of issue
o a dealer in securities or commodities required to register in the U.S. or a possession of the U.S.
o a futures commission merchant registered with the Commodity Futures Trading Commission
o a real estate investment trust
o an entity registered at all times during the tax year under the 1940 Act
o a common trust fund operated by a bank under Section 584(a)
o a financial institution
o a middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List
o a trust exempt from tax under Section 664 or described in
Section 4947
Investors should contact the IRS if they have any questions concerning entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
IRS PENALTIES - Investors who do not supply the AIM Funds with a correct TIN will be subject to a $50 penalty imposed by the IRS unless such failure is due to reasonable cause and not willful neglect. If an investor falsifies information on this form or makes any other false statement resulting in no backup withholding on an account which should be subject to backup withholding, such investor may be subject to a $500 penalty imposed by the IRS and to certain criminal penalties including fines and/or imprisonment.
NONRESIDENT ALIENS - Nonresident alien individuals and foreign entities are not subject to the backup withholding previously discussed, but must certify their foreign status by attaching IRS Form W-8 to their application. Form W-8 remains in effect for three calendar years beginning with the calendar year in which it is received by the Fund. Such shareholders may, however, be subject to federal income tax withholding at a 30% rate on ordinary income dividends and distributions and return of capital distributions. Under applicable treaty law, residents of treaty countries may qualify for a reduced rate of withholding or a withholding exemption.
NET ASSET VALUE DETERMINATION
The net asset value of a share of each Fund is normally determined once daily as of the close 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 share of each Fund 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 of the NYSE will generally be used. Net asset value per share is determined by dividing the value of a Fund's securities, cash and other assets (including interest accrued but not collected) attributable to a particular class, less all its liabilities (including accrued expenses and dividends payable) attributable to that class, by the total number of shares outstanding of that class. Determination of a Fund's net asset value per share is made in accordance with generally accepted accounting principles.
Each equity security held by a Fund is valued at its last sales price on the exchange where the security is principally traded or, lacking any sales on a particular day, the security is valued at the closing bid price on that day, prior to the determination of net asset value. Each security traded in the over-the-counter market (but not including securities reported on the NASDAQ National Market System) is valued at the closing bid price furnished by independent pricing services or market makers. Each security reported on the NASDAQ National Market System is valued at the last sales price on the valuation date or absent a last sales price, at the closing bid price on that day; option contracts are valued at the mean between the closing bid and asked prices on the exchange where the contracts are principally traded; futures contracts are valued at final settlement price quotations from the primary exchange on which they are traded. Debt securities (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, dividend rate, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data. 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. Short-term obligations having 60 days or less to maturity are valued on the basis of amortized cost, which approximates market value.
Generally, trading in foreign securities, corporate bonds, U.S. Government securities and money market instruments is substantially completed each day at various times prior to the close of the customary trading session 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 customary trading session 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.
Fund securities primarily traded in foreign markets may be traded in such markets on days which are not business days of the Fund. Because the net asset value per share of each Fund is determined only on business days of the Fund, the net asset value per share of a Fund may be significantly affected on days when an investor cannot exchange or redeem shares of the Fund.
TAX MATTERS
The following is only a summary of certain additional tax considerations generally affecting the Funds and their shareholders that are not described in the Prospectus. No attempt is made to present a detailed explanation of the tax treatment of each Fund or its shareholders, and the discussion here and in the Prospectus is not intended as a substitute for careful tax planning.
Each Fund is treated as a separate association taxable as a corporation. Each Fund intends to qualify under the Internal Revenue Code of 1986, as amended (the "Code"), as a regulated investment company ("RIC") for each taxable year. Accordingly, each Fund must, among other things, generally derive at least 90% of its gross income from dividends, interest, payments with respect to securities loans, gains from the sale or other disposition of stock, securities, foreign currencies, or other income derived with respect to its business of investing in such stock, securities or currencies. Each 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, U.S. Government securities 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 assets and not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of its assets is invested in the securities of any one issuer (other than U.S. Government securities).
As a RIC, each Fund will generally not be subject to federal income tax ("FIT") on its income and gains distributed to shareholders if it currently distributes the sum of (i) at least 90% of its investment company taxable income (net investment taxable income and the excess of net short-term capital gains over net long-term capital losses) for the taxable year and (ii) at least 90% of the excess of its tax-exempt interest income under Code Section 103(a) over its deductions disallowed under Code Sections 265 and 171(a)(2) (the "Distribution Requirement"). Distributions made by a Fund during its taxable year, or under certain circumstances within 12 months after the end of its taxable year, will be considered distributions made during the taxable year and will therefore satisfy the Distribution Requirement.
Each Fund may use "equalization accounting" in determining the portion of its net investment income and capital gain net income that has been distributed. A Fund that elects to use equalization accounting will allocate a portion of its realized investment income and capital gains to redemptions of Fund shares and will reduce the amount of such income and gains that it distributes in cash. However, each Fund intends to make cash distributions for each taxable year in an aggregate amount that is sufficient to satisfy the Distribution Requirement without taking into account its use of equalization accounting. The IRS has not published any guidance concerning the methods to be used in allocating investment income and capital gains to redemptions of shares. In the event that the IRS determines that a Fund is using an improper method of allocation and has underdistributed its net investment income and capital gain net income for any taxable year, such Fund may be liable for additional federal income tax.
Each Fund is subject to a nondeductible 4% excise tax if it does not meet certain distribution requirements under the Code. To avoid this excise tax, during each calendar year, each Fund must distribute: (1) at least 90% of its ordinary income (not taking into account any capital gains or losses) for the calendar year (except that any foreign currency gain or loss occurring after October 31 shall be taken into account the following year), (2) at least 98% of its capital gains in excess of its capital losses for the
12-month period ending on October 31, and (3) all ordinary income and capital gains from previous calendar years that were not distributed during such years. Dividends declared to shareholders of record on a date in October, November or December will be taxable to shareholders on December 31 in the year declared as long as the Fund pays the dividends no later than January 31 of the following year.
The Code and the regulations promulgated thereunder are subject to change, and interpretations of the Code and the regulations may be modified or affected at any time by Congress, the Department of the Treasury or judicial decision. It should be noted that any such change could be applied retroactively.
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, the Funds 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 and 246 of the Code and the regulations thereunder also suspend the holding periods for straddle positions with possible adverse effects regarding long-term capital gain treatment and the corporate dividends received deduction.
Section 1256 of the Code generally requires that futures contracts and options on future contracts be "marked-to-market" at the end of each year for FIT 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 (taxable to noncorporate shareholders at a maximum rate of 20%) 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 the Fund.
The Funds may have invested in certain foreign currency transactions, the gain or loss from which may be subject to taxation as ordinary income or loss under Code Section 988.
For federal income tax purposes, exercise of the reinstatement privilege with respect to Class A shares of a Fund that have not been held for more than ninety days may increase the amount of gain or reduce the amount of loss recognized in the original redemption transaction because the initial sales charge will not be taken into account in determining such gain or loss to the extent there has been a reduction in the initial sales charge that would otherwise be imposed upon reinvestment. Wash sale rules may defer any loss recognized.
The Funds may engage in certain hedging transactions (such as short sales "against the box") that may result in "constructive sales" of offsetting appreciated positions under Section 1259 of the Code. In the event of such a constructive sale, a Fund will be deemed to recognize gain as if the offsetting position were sold or otherwise terminated at its fair market value and will take such gain into account in the taxable year in which the appreciated position was hedged unless the closed transaction exception applies.
AIM EUROPEAN SMALL COMPANY FUND, AIM EXPLORER FUND, AIM GLOBAL UTILITIES FUND AND AIM INTERNATIONAL EMERGING GROWTH FUND: Pursuant to the investment objectives of the Funds, AIM EUROPEAN SMALL COMPANY FUND AND AIM INTERNATIONAL EMERGING GROWTH FUND will invest at least 65% of their respective total assets in foreign securities. AIM EXPLORER FUND AND AIM GLOBAL UTILITIES FUND may invest up to 80% of their respective total assets in foreign securities. Dividends and interest received by each Fund with respect to these investments may give rise to withholding and other taxes imposed by foreign countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. If more than 50% in value of a Fund's total assets at the close of its taxable year consists of stock or securities of foreign corporations, that Fund will be eligible to file an election with the IRS pursuant to which shareholders of that Fund will be required to include their
proportionate share of such withholding taxes in their United States income tax returns as gross income, treat such proportionate share as taxes paid by them, and deduct such proportionate share in computing their taxable income or, alternatively, use them as foreign tax credits to the extent allowed against their United States income taxes subject to certain provisions and limitations contained in the Code. If the election is made, that Fund will report annually to its shareholders the amount per share of such withholding taxes. Please note that such foreign tax credits are non-refundable and therefore cannot be claimed by certain retirement accounts and other persons not otherwise subject to United States income taxation.
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 AFS. Any loss resulting from the dealer's failure to submit an order within the prescribed time frame will be borne by that dealer. If a check used to purchase shares does not clear, or if any investment order must be canceled due to nonpayment, the investor will be responsible for any resulting loss to an AIM Fund or to AIM Distributors.
SHARE CERTIFICATES. AIM Funds will issue share certificates upon written request to AFS. Otherwise, shares are held on the shareholder's behalf and recorded on the Fund books. AIM Funds will not issue certificates for shares held in prototype retirement plans.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, all shares are to be held by AFS and all dividends and distributions are reinvested in shares of the applicable AIM Fund by AFS. To provide funds for payments made under the Systematic Withdrawal Plan, AFS 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 Funds), 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 disadvantages 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 AFS as long as such request is received prior to the close of the customary trading session of
the NYSE. AFS 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 AFS as his true and lawful attorney-in-fact to surrender for redemption any and all unissued shares held by AFS 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. AFS 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 AFS 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 transaction. AFS 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 AFS as his true and lawful attorney-in-fact to surrender for redemption any and all unissued shares held by AFS in the designated account(s), present or future, with full power of substitution in the premises. AFS 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 AFS 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. AFS 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 AFS' current Signature Guarantee Standards and Procedures, such as certain domestic banks, credit unions, securities dealers, or securities exchanges. AFS will also accept signature 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 AFS 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 Connect option, he will notify AFS 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 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 AFS and are effective as to any subsequent payment if such notice is received by AFS prior to the record date of such payment. Any dividend and distribution election remains in effect until AFS 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
CHARGES FOR CERTAIN ACCOUNT INFORMATION
AFS 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 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 each Fund.
LEGAL MATTERS
Certain legal matters for the Trust have been passed upon by Ballard Spahr Andrews & Ingersoll, LLP, 1735 Market Street, Philadelphia, Pennsylvania 19103.
CUSTODIANS AND TRANSFER AGENT
State Street Bank and Trust Company (the "Custodian"), 225 Franklin Street, Boston, Massachusetts 02110 is custodian of all securities and cash of the Funds. 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), P.O. Box 4739, Houston, Texas 77210-4739 acts as transfer and dividend disbursing agent for the Funds. These services do not include any supervisory function over management or provide any protection against any possible depreciation of assets. The Funds pay the Custodians and AFS 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.
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") has entered into an agreement with the Trust (and certain other AIM Funds), First Data Investor Service Group and Financial Data Services, Inc., pursuant to which MLPF&S has agreed to perform certain shareholder sub-accounting services for its customers who beneficially own shares of the Fund(s).
OTHER INFORMATION
Each Prospectus and this Statement of Additional Information omit certain information contained in the Registration Statement which the Company has filed with the SEC under the 1933 Act and reference is hereby made to the Registration Statement for further information with respect to the Funds and the securities offered hereby. The Registration Statement is available for inspection by the public at the SEC in Washington, D.C.
RATINGS OF SECURITIES
The following is a description of the factors underlying the debt ratings of Moody's, S&P, Fitch IBCA, Inc. ("Fitch") and Duff & Phelps:
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. These 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 prospectus 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.
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 lowest 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+).
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 of 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.
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 of 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.
AAA: Highest credit quality. The risk factors are negligible, being only slightly more than risk-free U.S. Treasury debt.
AA+, AA AND AA-: High credit quality. Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions.
A+, A AND A-: Protection factors are average but adequate. However, risk factors are more variable and greater in periods of economic stress.
BBB+, BBB AND BBB-: Below average protection factors but still considered sufficient for prudent investment. Considerable variability in risk during economic cycles.
BB+, BB AND BB-: Below investment grade but deemed likely to meet obligations when due. Present or prospective financial protection factors fluctuate according to industry conditions or company fortunes. Overall quality may move up or down frequently within this category.
B+, B AND B-: Below investment grade and possessing risk that obligations will not be met when due. Financial protection factors will fluctuate widely according to economic cycles, industry conditions and/or company fortunes. Potential exists for frequent changes in the rating within this category or into a higher or lower rating grade.
CCC: Well below investment grade securities. Considerable uncertainty exists as to timely payment of principal, interest or preferred dividends. Protection factors are narrow and risk can be substantial with unfavorable economic/industry conditions, and/or with unfavorable company developments.
DD: Defaulted debt obligations. Issuer failed to meet scheduled principal and/or interest payments.
DP: Preferred stock with dividend arrearages.
FINANCIAL STATEMENTS
FS
SCHEDULE OF INVESTMENTS
JUNE 30, 2000
(UNAUDITED)
PRINCIPAL MARKET
AMOUNT VALUE
U.S. DOLLAR DENOMINATED BONDS & NOTES-31.24%
AIRLINES-1.08%
Airplanes Pass Through
Trust-Series D, Gtd. Sub.
Bonds, 10.88%, 03/15/19 $ 493,850 $ 401,507
---------------------------------------------------------------
America West Airlines,
Inc.,-Series C, Pass Through
Ctfs., 6.86%, 07/02/04 4,010,286 3,875,180
---------------------------------------------------------------
American Airlines, Inc.-Series
87-A, Equipment Trust Ctfs.,
9.90%, 01/15/11 2,955,000 3,290,865
---------------------------------------------------------------
AMR Corp., Deb., 10.00%,
04/15/21 4,300,000 4,590,207
---------------------------------------------------------------
Delta Air Lines, Inc.,
Deb., 9.00%, 05/15/16 4,200,000 4,045,020
---------------------------------------------------------------
Deb., 10.38%, 12/15/22 2,300,000 2,465,048
---------------------------------------------------------------
Unsec. Notes, 7.90%, 12/15/09 5,800,000 5,475,420
---------------------------------------------------------------
Series B, Medium Term Notes,
8.52%, 01/30/04 2,000,000 2,010,880
---------------------------------------------------------------
Series C, Medium Term Notes,
6.65%, 03/15/04 2,900,000 2,741,399
---------------------------------------------------------------
Northwest Airlines Inc.-Series
971B, Pass Through Ctfs.,
7.25%, 07/02/14 4,390,716 3,946,309
---------------------------------------------------------------
United Air Lines, Inc.,
Deb., 9.75%, 08/15/21 3,600,000 3,473,820
---------------------------------------------------------------
Series 95A2, Pass Through
Ctfs., 9.56%, 10/19/18 3,750,000 4,138,425
---------------------------------------------------------------
40,454,080
---------------------------------------------------------------
AUTOMOBILES-0.50%
DaimlerChrysler N.A. Holding
Corp., Gtd. Notes, 8.00%,
06/15/10 5,400,000 5,495,580
---------------------------------------------------------------
Notes, 7.40%, 01/20/05 5,750,000 5,725,275
---------------------------------------------------------------
Ford Motor Co., Bonds 6.63%,
10/01/28 4,000,000 3,389,720
---------------------------------------------------------------
ROCS Chrysler Corp.-Series
1998-1, Collateral Trust,
6.50%, 08/01/18 4,748,500 4,159,662
---------------------------------------------------------------
18,770,237
---------------------------------------------------------------
BANKS (MAJOR REGIONAL)-1.31%
BB&T Corp., Putable Sub. Notes,
6.38%, 06/30/05 6,110,000 5,716,822
---------------------------------------------------------------
Crestar Financial Corp., Sub.
Notes, 8.75%, 11/15/04 3,750,000 3,890,100
---------------------------------------------------------------
Midland Bank PLC (United
Kingdom), Yankee Sub. Notes,
7.65%, 05/01/25 2,105,000 2,098,496
---------------------------------------------------------------
Regions Financial Corp., Putable
Sub. Notes, 7.75%, 09/15/24 6,300,000 6,330,492
---------------------------------------------------------------
Republic New York Corp., Sub.
Deb., 9.50%, 04/15/14 5,400,000 5,977,314
---------------------------------------------------------------
Sub. Notes, 9.70%, 02/01/09 4,600,000 5,033,826
---------------------------------------------------------------
Skandinaviska Enskilda Banken
(Sweden), Sub. Yankee Notes,
6.88%, 02/15/09 8,500,000 7,859,780
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
BANKS (MAJOR REGIONAL)-(CONTINUED)
Union Planters Bank N.A., Unsec.
Sub. Notes, 6.50%, 03/15/08 $ 14,000,000 $ 12,258,680
---------------------------------------------------------------
49,165,510
---------------------------------------------------------------
BANKS (MONEY CENTER)-0.91%
Bank of Tokyo-Mitsubishi Ltd.
(The) (Japan), Sr. Sub. Yankee
Notes, 8.40%, 04/15/10 1,700,000 1,719,135
---------------------------------------------------------------
First Union Corp., Putable Sub.
Deb., 6.55%, 10/15/35 11,100,000 10,474,071
---------------------------------------------------------------
7.50%, 04/15/35 4,200,000 4,142,586
---------------------------------------------------------------
NCNB Corp., Sub. Notes, 9.38%,
09/15/09 9,750,000 10,642,905
---------------------------------------------------------------
Santander Financial Issuances
Ltd. (Cayman Islands), Unsec.
Gtd. Yankee Sub. Notes, 7.25%,
11/01/15 5,000,000 4,638,950
---------------------------------------------------------------
Sanwa Finance Aruba AEC (Aruba),
Gtd. Unsec. Sub. Notes, 8.35%,
07/15/09 2,550,000 2,543,528
---------------------------------------------------------------
34,161,175
---------------------------------------------------------------
BANKS (REGIONAL)-1.39%
Banponce Trust I-Series A, Gtd.
Notes, 8.33%, 02/01/27 9,225,000 8,181,837
---------------------------------------------------------------
Mercantile Bancorp., Inc.,
Unsec. Sub. Notes, 7.30%,
06/15/07 10,405,000 10,047,276
---------------------------------------------------------------
NBD Bank N.A. Michigan, Putable
Sub. Deb., 8.25%, 11/01/24 17,150,000 17,675,476
---------------------------------------------------------------
Riggs Capital Trust II-Series C,
Gtd. Sec. Bonds, 8.88%,
03/15/27 9,550,000 7,845,229
---------------------------------------------------------------
US Bancorp, Sub. Deb., 7.50%,
06/01/26 8,400,000 8,263,668
---------------------------------------------------------------
52,013,486
---------------------------------------------------------------
BEVERAGES (ALCOHOLIC)-0.26%
J Seagram & Sons, Gtd. Deb.,
9.65%, 08/15/18 8,500,000 9,657,955
---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO & CABLE)-2.54%
AT&T Corp.-Liberty Media Group,
Bonds, 7.88%, 07/15/09 2,150,000 2,074,793
---------------------------------------------------------------
Sr. Unsec. Deb., 8.25%,
02/01/30 8,600,000 7,944,250
---------------------------------------------------------------
British Sky Broadcasting Group
PLC (United Kingdom), Sr.
Unsec. Gtd. Yankee Notes,
8.20%, 07/15/09 14,370,000 13,556,227
---------------------------------------------------------------
Comcast Cable Communications,
Unsec. Notes, 8.50%, 05/01/27 3,400,000 3,564,424
---------------------------------------------------------------
Continental Cablevision, Inc.,
Sr. Deb., 9.50%, 08/01/13 14,000,000 15,306,060
---------------------------------------------------------------
Cox Communications, Inc., Unsec.
Notes, 7.75%, 08/15/06 6,300,000 6,296,661
---------------------------------------------------------------
Cox Enterprises, Inc., Notes,
8.00%, 02/15/07 (Acquired
02/16/00-03/23/00; Cost
$6,530,542)(a) 6,550,000 6,517,970
---------------------------------------------------------------
|
FS-1
PRINCIPAL MARKET
AMOUNT VALUE
BROADCASTING (TELEVISION, RADIO & CABLE)-(CONTINUED)
CSC Holdings Inc.,
Sr. Unsec. Deb., 7.88%,
02/15/18 $ 7,100,000 $ 6,552,874
---------------------------------------------------------------
Sr. Unsec. Notes, 7.88%,
12/15/07 10,320,000 10,005,550
---------------------------------------------------------------
Lenfest Communications, Inc.,
Sr. Unsec. Notes, 8.38%,
11/01/05 7,400,000 7,536,678
---------------------------------------------------------------
Sr. Unsec. Sub. Notes, 8.25%,
02/15/08 2,550,000 2,526,208
---------------------------------------------------------------
TCI Communications, Inc., Sr.
Deb., 8.75%, 08/01/15 2,100,000 2,253,888
---------------------------------------------------------------
Tele-Communications, Inc., Sr.
Deb., 9.80%, 02/01/12 9,650,000 10,980,156
---------------------------------------------------------------
95,115,739
---------------------------------------------------------------
CHEMICALS-0.35%
Airgas, Inc., Medium Term Notes,
7.14%, 03/08/04 6,700,000 6,364,464
---------------------------------------------------------------
Union Carbide Corp., Deb.,
6.79%, 06/01/25 6,750,000 6,597,787
---------------------------------------------------------------
12,962,251
---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-0.89%
Comverse Technology, Inc., Conv.
Unsec. Sub. Deb., 4.50%,
07/01/05 7,700,000 33,562,375
---------------------------------------------------------------
COMPUTERS (HARDWARE)-0.31%
Candescent Technology Corp., Sr.
Conv. Sub. Deb., 8.00%,
05/01/03 (Acquired
04/17/98-03/07/00; Cost
$14,461,350)(a) 15,870,000 11,505,750
---------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-0.84%
VERITAS Software Corp., Conv.
Unsec. Disc. Notes, 1.86%,
08/13/06(b) 10,000,000 31,550,000
---------------------------------------------------------------
CONSUMER FINANCE-1.65%
Capital One Financial Corp.,
Unsec. Notes, 7.25%, 05/01/06 11,640,000 10,737,434
---------------------------------------------------------------
CitiFinancial Credit Co.,
Putable Notes,
6.63%, 06/01/15 2,000,000 1,963,040
---------------------------------------------------------------
7.88%, 02/01/25 4,000,000 4,030,680
---------------------------------------------------------------
Countrywide Home Loans,
Inc.-Series H, Unsec. Gtd.
Medium Term Sub. Notes, 6.25%,
04/15/09 13,700,000 11,967,909
---------------------------------------------------------------
General Motors Acceptance Corp.,
Notes, 5.75%, 11/10/03 15,500,000 14,793,820
---------------------------------------------------------------
Putable Notes, 9.00%,
10/15/02(b) 4,175,000 4,314,737
---------------------------------------------------------------
Household Finance Corp., Sr.
Unsec. Notes, 8.00%, 05/09/05 3,825,000 3,854,261
---------------------------------------------------------------
MBNA Capital I-Series A, Gtd.
Bonds, 8.28%, 12/01/26 12,415,000 10,406,998
---------------------------------------------------------------
62,068,879
---------------------------------------------------------------
ELECTRIC COMPANIES-2.51%
Arizona Public Service Co.,
Unsec. Notes, 6.25%, 01/15/05 5,000,000 4,710,100
---------------------------------------------------------------
CMS Energy Corp., Sr. Unsec.
Notes, 8.13%, 05/15/02 4,950,000 4,932,724
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
ELECTRIC COMPANIES-(CONTINUED)
Commonwealth Edison Co.-Series
94, First Mortgage Notes,
7.50%, 07/01/13 $ 9,300,000 $ 8,979,987
---------------------------------------------------------------
El Paso Electric Co.,
Series D, Sec. First Mortgage
Bonds, 8.90%, 02/01/06 6,050,000 6,298,655
---------------------------------------------------------------
Series E, Sec. First Mortgage
Bonds, 9.40%, 05/01/11 2,600,000 2,741,752
---------------------------------------------------------------
Empire District Electric Co.
(The), Sr. Notes, 7.70%,
11/15/04 8,550,000 8,545,127
---------------------------------------------------------------
Indiana Michigan Power
Co.-Series F, Sec. Lease
Obligation Bonds, 9.82%,
12/07/22 1,357,082 1,468,172
---------------------------------------------------------------
Niagara Mohawk Holdings Inc.,
Series G, Sr. Unsec. Notes,
7.75%, 10/01/08 14,300,000 13,997,126
---------------------------------------------------------------
Series H, Sr. Unsec. Disc.
Notes, 8.50%, 07/01/10(b) 12,000,000 9,179,160
---------------------------------------------------------------
Public Service Company of New
Mexico-Series A, Sr. Unsec.
Notes, 7.10%, 08/01/05 7,850,000 7,630,279
---------------------------------------------------------------
Southern Energy, Inc., Sr.
Notes, 7.90%, 07/15/09
(Acquired 07/21/99-02/11/00;
Cost $10,065,817)(a) 10,225,000 9,460,375
---------------------------------------------------------------
Texas-New Mexico Power Co., Sr.
Sec. Notes, 6.25%, 01/15/09 5,800,000 4,978,430
---------------------------------------------------------------
UtiliCorp United, Inc., Sr.
Unsec. Putable Notes, 6.70%,
10/15/06 6,350,000 6,194,362
---------------------------------------------------------------
Western Resources, Inc., Sr.
Unsec. Notes, 7.13%, 08/01/09 6,000,000 4,915,440
---------------------------------------------------------------
94,031,689
---------------------------------------------------------------
ELECTRONICS (COMPONENT DISTRIBUTORS)-0.23%
Israel Electric Corp. Ltd.
(Israel), Yankee Deb., 7.75%,
12/15/27 (Acquired 06/09/00;
$3,819,213)(a) 4,350,000 3,810,861
---------------------------------------------------------------
Series E, Sr. Sec. Medium Term
Yankee Notes, 7.75%,
03/01/09 (Acquired 04/13/00;
Cost $4,859,400)(a) 5,000,000 4,830,000
---------------------------------------------------------------
8,640,861
---------------------------------------------------------------
ENTERTAINMENT-0.63%
Time Warner Inc., Deb.,
9.13%, 01/15/13 13,640,000 14,826,407
---------------------------------------------------------------
9.15%, 02/01/23 7,850,000 8,615,218
---------------------------------------------------------------
23,441,625
---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-2.34%
Associates Corp. of North
America, Sr. Deb., 6.95%,
11/01/18 13,000,000 11,496,940
---------------------------------------------------------------
Beaver Valley Funding Corp.,
Sec. Lease Obligations Deb.,
9.00%, 06/01/17 12,500,000 12,363,875
---------------------------------------------------------------
Citicorp Lease-Class A2, Series
1999-1, Pass Through Ctfs.,
8.04%, 12/15/19 (Acquired
06/01/00; Cost $5,432,185)(a) 5,500,000 5,483,940
---------------------------------------------------------------
Dow Capital B.V. (Netherlands),
Gtd. Yankee Deb., 9.20%,
06/01/10 10,250,000 11,374,527
---------------------------------------------------------------
|
FS-2
PRINCIPAL MARKET
AMOUNT VALUE
FINANCIAL (DIVERSIFIED)-(CONTINUED)
General Electric Capital
Corp.-Series A, Medium Term
Notes, 7.38%, 01/19/10 $ 16,160,000 $ 16,304,470
---------------------------------------------------------------
Heller Financial, Inc., Sr.
Unsec. Notes,
7.38%, 11/01/09 11,600,000 10,920,704
---------------------------------------------------------------
8.00%, 06/15/05 9,700,000 9,678,951
---------------------------------------------------------------
Hutchison Delta Finance
Ltd.-Series REGS (Cayman
Islands), Conv. Unsec. Euro
Notes, 7.00%, 11/08/02 2,250,000 2,643,750
---------------------------------------------------------------
Source One Mortgage Services
Corp., Deb., 9.00%, 06/01/12 5,700,000 6,056,261
---------------------------------------------------------------
Sun Canada Financial Co., Gtd.
Sub. Notes, 6.63%, 12/15/07
(Acquired 10/14/99; Cost
$1,402,095)(a) 1,500,000 1,430,427
---------------------------------------------------------------
87,753,845
---------------------------------------------------------------
FOODS-0.62%
ConAgra, Inc.,
Sr. Putable Notes, 6.70%,
08/01/27 7,500,000 6,903,975
---------------------------------------------------------------
Sr. Unsec. Putable Notes,
7.13%, 10/01/26 12,755,000 12,316,993
---------------------------------------------------------------
Grand Metropolitan Investment
Corp., Gtd. Bonds, 7.45%,
04/15/35 4,000,000 4,004,800
---------------------------------------------------------------
23,225,768
---------------------------------------------------------------
HOUSEHOLD PRODUCTS (NON-DURABLES)-0.16%
Procter & Gamble Co. (The),
Putable Deb., 8.00%, 09/01/24 5,650,000 5,980,243
---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-0.73%
American General Finance Corp.,
Sr. Notes, 8.45%, 10/15/09 10,900,000 11,208,688
---------------------------------------------------------------
John Hancock Global Funding II,
Sec., Medium Term Notes,
7.90%, 07/02/10 (Acquired
06/23/00; Cost $5,686,377)(a) 5,700,000 5,739,330
---------------------------------------------------------------
Torchmark Corp., Notes,
7.38%, 08/01/13 3,000,000 2,643,840
---------------------------------------------------------------
7.88%, 05/15/23 9,200,000 7,829,844
---------------------------------------------------------------
27,421,702
---------------------------------------------------------------
INSURANCE (MULTI-LINE)-0.24%
AIG SunAmerica Global Financing
II, Sr. Sec. Notes, 7.60%,
06/15/05 (Acquired 06/08/00;
Cost $9,100,000)(a) 9,100,000 9,165,611
---------------------------------------------------------------
INSURANCE (PROPERTY & CASUALTY)-0.42%
GE Global Insurance Holdings
Corp., Notes, 7.75%, 06/15/30 7,000,000 6,941,830
---------------------------------------------------------------
Terra Nova Insurance PLC (United
Kingdom), Sr. Unsec. Gtd.
Yankee Notes,
7.00%, 05/15/08 2,350,000 2,201,339
---------------------------------------------------------------
7.20%, 08/15/07 7,000,000 6,664,210
---------------------------------------------------------------
15,807,379
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
INVESTMENT BANKING/BROKERAGE-1.19%
Bear Stearns Cos., Inc., Sr.
Unsec. Notes, 7.63%, 12/07/09 $ 8,600,000 $ 8,253,506
---------------------------------------------------------------
E*Trade Group Inc.,
Conv. Sub Notes, 6.00%,
02/01/07 (Acquired
04/17/00-05/24/00; Cost
$5,407,526)(a) 6,100,000 5,566,250
---------------------------------------------------------------
Conv. Unsec. Sub. Notes,
6.00%, 02/01/07 4,400,000 4,015,000
---------------------------------------------------------------
Lehman Brothers Holdings Inc.,
Notes, 8.50%, 08/01/15 11,945,000 11,776,576
---------------------------------------------------------------
Sr. Sub. Notes, 7.38%,
01/15/07 5,300,000 5,030,972
---------------------------------------------------------------
Putable Sr. Notes, 8.80%,
03/01/15 9,855,000 9,959,660
---------------------------------------------------------------
44,601,964
---------------------------------------------------------------
NATURAL GAS-1.96%
CMS Panhandle Holding Co., Sr.
Notes, 6.13%, 03/15/04 6,600,000 6,212,646
---------------------------------------------------------------
Enron Corp.,
Sr. Sub. Deb., 8.25%, 09/15/12 4,300,000 4,389,010
---------------------------------------------------------------
Series A, Medium Term Notes,
8.38%, 05/23/05 2,550,000 2,618,774
---------------------------------------------------------------
Ferrellgas Partners L.P.,-Series
B, Sr. Sec. Gtd. Notes, 9.38%,
06/15/06 4,950,000 4,801,500
---------------------------------------------------------------
Kinder Morgan Energy Partners,
L.P., Sr. Unsec. Notes, 6.30%,
02/01/09 8,400,000 7,581,924
---------------------------------------------------------------
Kinder Morgan, Inc., Unsec.
Deb., 7.35%, 08/01/26 7,800,000 7,675,824
---------------------------------------------------------------
KN Capital Trust III, Gtd. Sub.
Bonds, 7.63%, 04/15/28 8,500,000 7,311,615
---------------------------------------------------------------
National Fuel Gas Co.-Series D,
Medium Term Notes, 6.30%,
05/27/08 8,600,000 7,778,614
---------------------------------------------------------------
Nova Gas Transmission Ltd.
(Canada), Yankee Deb., 8.50%,
12/15/12 5,015,000 5,239,722
---------------------------------------------------------------
Panhandle Eastern Pipe Line,
Notes, 7.88%, 08/15/04 1,500,000 1,489,980
---------------------------------------------------------------
Sonat Inc., Unsec. Notes, 7.63%,
07/15/11 6,335,000 6,210,581
---------------------------------------------------------------
Tennessee Gas Pipeline Co.,
Unsec. Deb., 7.50%, 04/01/17 12,800,000 12,319,360
---------------------------------------------------------------
73,629,550
---------------------------------------------------------------
OIL & GAS (DRILLING & EQUIPMENT)-0.13%
NRG Energy, Inc., Sr. Unsec.
Notes, 7.50%, 06/01/09 5,000,000 4,710,800
---------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-0.46%
ONEOK, Inc., Unsec. Notes,
7.75%, 08/15/06 3,100,000 3,092,064
---------------------------------------------------------------
Den Norske Stats Oljeselskap
(Norway), Yankee Deb., 7.38%,
05/01/16 (Acquired 06/01/00;
Cost $5,161,695)(a) 5,500,000 5,204,650
---------------------------------------------------------------
Talisman Energy Inc. (Canada),
Yankee Deb., 7.13%, 06/01/07 1,500,000 1,432,935
---------------------------------------------------------------
Union Pacific Resources Group
Inc., Unsec. Deb., 7.50%,
10/15/26 8,100,000 7,612,947
---------------------------------------------------------------
17,342,596
---------------------------------------------------------------
|
FS-3
PRINCIPAL MARKET
AMOUNT VALUE
OIL & GAS (REFINING & MARKETING)-0.30%
Quaker State Corp., Unsec.
Notes, 6.63%, 10/15/05 $ 2,840,000 $ 2,526,010
---------------------------------------------------------------
Tosco Corp., Unsec. Deb., 7.80%,
01/01/27 8,950,000 8,665,480
---------------------------------------------------------------
11,191,490
---------------------------------------------------------------
OIL (DOMESTIC INTEGRATED)-0.47%
Amerada Hess Corp., Bonds,
7.88%, 10/01/29 4,400,000 4,302,056
---------------------------------------------------------------
Occidental Petroleum Corp.,
Sr. Deb., 9.25%, 08/01/19 7,340,000 8,007,500
---------------------------------------------------------------
Sr. Unsec. Notes, 7.38%,
11/15/08 5,590,000 5,394,126
---------------------------------------------------------------
17,703,682
---------------------------------------------------------------
OIL (INTERNATIONAL INTEGRATED)-0.12%
YPF Sociedad Anonima
(Argentina), Yankee Bonds,
9.13%, 02/24/09 4,550,000 4,627,578
---------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-0.40%
AES Corp. (The),
Sr. Notes, 8.00%, 12/31/08 220,000 190,300
---------------------------------------------------------------
Sr. Unsec. Sub. Notes, 8.38%,
08/15/07 3,000,000 2,752,500
---------------------------------------------------------------
Sr. Unsec. Sub. Notes, 10.25%,
07/15/06 1,800,000 1,804,500
---------------------------------------------------------------
CE Generation LLC, Sr. Sec. Sub.
Deb., 7.42%, 12/15/18 7,698,600 7,080,325
---------------------------------------------------------------
Kincaid Generation LLC, Sec.
Bonds, 7.33%, 06/15/20
(Acquired 04/30/98; Cost
$3,468,546)(a) 3,460,000 3,148,704
---------------------------------------------------------------
14,976,329
---------------------------------------------------------------
PUBLISHING (NEWSPAPERS)-0.55%
News America Holdings, Inc.,
Putable Notes, 8.45%, 08/01/34 4,325,000 4,399,952
---------------------------------------------------------------
Sr. Gtd. Deb., 9.25%, 02/01/13 10,150,000 10,867,605
---------------------------------------------------------------
Sr. Unsec. Gtd. Putable Bonds,
7.43%, 10/01/26 5,450,000 5,240,393
---------------------------------------------------------------
20,507,950
---------------------------------------------------------------
RAILROADS-0.45%
CSX Corp., Deb., 9.00%, 08/15/06 6,750,000 6,997,590
---------------------------------------------------------------
Norfolk Southern Corp., Notes,
7.05%, 05/01/37 10,000,000 9,811,800
---------------------------------------------------------------
16,809,390
---------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS-0.20%
ERP Operating L.P., Unsec.
Notes, 7.13%, 10/15/17 3,250,000 2,691,910
---------------------------------------------------------------
Health Care REIT, Inc., Sr.
Unsec. Notes, 7.63%, 03/15/08 1,150,000 953,189
---------------------------------------------------------------
Spieker Properties, Inc., Unsec.
Deb., 7.35%, 12/01/17 4,600,000 4,028,634
---------------------------------------------------------------
7,673,733
---------------------------------------------------------------
RETAIL (FOOD CHAINS)-0.13%
Great Atlantic & Pacific Tea
Co., Inc. (Canada), Gtd.
Yankee Notes, 7.78%,
11/01/00(c) 5,000,000 5,029,650
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
SAVINGS & LOAN COMPANIES-0.77%
Dime Capital Trust I-Series A,
Gtd. Bonds, 9.33%, 05/06/27 $ 10,700,000 $ 9,785,685
---------------------------------------------------------------
Sovereign Bancorp, Inc., Medium
Term Sub. Notes, 8.00%,
03/15/03 5,330,000 5,055,505
---------------------------------------------------------------
St. Paul Bancorp, Inc., Sr.
Unsec. Notes, 7.13%, 02/15/04 5,500,000 5,303,265
---------------------------------------------------------------
Washington Mutual Cap I,
Sec. Gtd. Bonds, 8.38%,
06/01/27 4,285,000 3,842,874
---------------------------------------------------------------
Sub. Notes, 8.25%, 04/01/10 5,000,000 4,969,800
---------------------------------------------------------------
28,957,129
---------------------------------------------------------------
SOVEREIGN DEBT-0.97%
British Columbia (Province of)
(Canada), Unsec. Unsub. Yankee
Notes, 5.38%, 10/29/08 2,750,000 2,427,975
---------------------------------------------------------------
Hydro-Quebec-Series B (Canada),
Gtd. Medium Term Yankee Notes,
8.62%, 12/15/11 5,000,000 5,453,650
---------------------------------------------------------------
Manitoba (Province of)-Series AZ
(Canada), Putable Yankee Deb.,
7.75%, 07/17/16 9,850,000 10,143,333
---------------------------------------------------------------
Newfoundland (Province of)
(Canada), Unsec. Yankee Deb.,
9.00%, 06/01/19 3,960,000 4,465,969
---------------------------------------------------------------
Quebec (Province of) (Canada),
Series A, Medium Term Putable
Yankee Notes, 6.29%,
03/06/26(d) 9,300,000 9,075,963
---------------------------------------------------------------
Unsec. Yankee Deb., 6.50%,
01/17/06 4,900,000 4,705,029
---------------------------------------------------------------
36,271,919
---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-0.22%
Vodafone AirTouch PLC (United
Kingdom), Unsec. Unsub. Yankee
Notes, 7.75%, 02/15/10
(Acquired 02/07/00; Cost
$8,298,314)(a) 8,350,000 8,305,077
---------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-1.19%
AT&T Corp., Deb., 8.63%,
12/01/31 12,700,000 12,649,073
---------------------------------------------------------------
MCI Communications Corp.,
Sr. Unsec. Notes, 6.50%,
04/15/10 7,900,000 7,181,574
---------------------------------------------------------------
Sr. Unsec. Putable Deb.,
7.13%, 06/15/27 10,150,000 10,047,790
---------------------------------------------------------------
Sprint Corp., Putable Deb.,
9.00%, 10/15/19 2,400,000 2,727,504
---------------------------------------------------------------
WorldCom, Inc., Notes, 8.00%,
05/15/06 12,000,000 12,176,040
---------------------------------------------------------------
44,781,981
---------------------------------------------------------------
TELEPHONE-1.50%
AT&T Canada Inc. (Canada),
Sr. Unsec. Yankee Notes 7.65%,
09/15/06 4,200,000 4,163,943
---------------------------------------------------------------
Sr. Unsec. Yankee Sub Notes,
7.63%, 03/15/05 10,100,000 10,067,862
---------------------------------------------------------------
BellSouth Capital Funding,
Putable Deb., 6.04%, 11/15/26 4,000,000 3,925,080
---------------------------------------------------------------
Deutsche Telekom International
Finance B.V. (Netherlands),
Unsec. Unsub. Yankee Bonds,
8.00%, 06/15/10 6,700,000 6,774,169
---------------------------------------------------------------
|
FS-4
PRINCIPAL MARKET
AMOUNT VALUE
TELEPHONE-(CONTINUED)
Electric Lightwave, Inc., Notes,
6.05%, 05/15/04 (Acquired
04/21/99; Cost $9,792,846)(a) $ 9,800,000 $ 9,249,436
---------------------------------------------------------------
GTE Corp., Unsec. Deb., 6.84%,
04/15/18 5,500,000 4,937,735
---------------------------------------------------------------
NTL Inc., Conv. Sub. Notes,
5.75%, 12/15/09 (Acquired
12/17/99-03/01/00; Cost
$11,765,664)(a) 11,700,000 9,345,375
---------------------------------------------------------------
Qwest Communications
International Inc., Sr. Unsec.
Notes, 7.50%, 11/01/08 7,900,000 7,633,375
---------------------------------------------------------------
56,096,975
---------------------------------------------------------------
WASTE MANAGEMENT-0.32%
Browning-Ferris Industries,
Inc., Deb., 7.40%, 09/15/35 4,170,000 2,606,250
---------------------------------------------------------------
Waste Management, Inc., Sr.
Unsec. Notes,
7.13%, 10/01/07 850,000 777,903
---------------------------------------------------------------
7.13%, 12/15/17 520,000 429,889
---------------------------------------------------------------
Unsec. Putable Notes, 7.10%,
08/01/26 8,550,000 8,137,206
---------------------------------------------------------------
11,951,248
---------------------------------------------------------------
Total U.S. Dollar
Denominated Bonds & Notes
(Cost $1,166,510,664) 1,171,625,201
---------------------------------------------------------------
|
SHARES
DOMESTIC COMMON STOCKS-43.44%
AUTO PARTS & EQUIPMENT-0.01%
Visteon Corp.(e) 24,223 293,699
---------------------------------------------------------------
AUTOMOBILES-0.21%
Ford Motor Co. 185,000 7,955,000
---------------------------------------------------------------
BANKS (MONEY CENTER)-0.54%
Chase Manhattan Corp. (The) 442,500 20,382,656
---------------------------------------------------------------
BIOTECHNOLOGY-0.65%
Genzyme Corp.(e) 412,000 24,488,250
---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO & CABLE)-3.38%
Clear Channel Communications,
Inc.(e) 251,000 18,825,000
---------------------------------------------------------------
Comcast Corp.-Class A(e) 303,000 12,271,500
---------------------------------------------------------------
Hispanic Broadcasting Corp.(e) 452,000 14,972,500
---------------------------------------------------------------
Infinity Broadcasting
Corp.-Class A(e) 526,250 19,175,234
---------------------------------------------------------------
UnitedGlobalCom Inc.-Class A(e) 67,000 3,132,250
---------------------------------------------------------------
Univision Communications,
Inc.-Class A(e) 305,000 31,567,500
---------------------------------------------------------------
Viacom Inc.-Class B(e) 392,119 26,737,614
---------------------------------------------------------------
126,681,598
---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-3.92%
Copper Mountain Networks,
Inc.(e) 142,000 12,513,750
---------------------------------------------------------------
Corning Inc. 66,300 17,892,712
---------------------------------------------------------------
JDS Uniphase Corp.(e) 131,000 15,703,625
---------------------------------------------------------------
Juniper Networks, Inc.(e) 165,000 24,017,812
---------------------------------------------------------------
Lucent Technologies Inc. 470,000 27,847,500
---------------------------------------------------------------
Redback Networks Inc.(e) 120,000 21,360,000
---------------------------------------------------------------
|
MARKET
SHARES VALUE
COMMUNICATIONS EQUIPMENT-(CONTINUED)
Sycamore Networks, Inc.(e) 250,000 $ 27,593,750
---------------------------------------------------------------
146,929,149
---------------------------------------------------------------
COMPUTERS (HARDWARE)-1.33%
International Business Machines
Corp. 100,000 10,956,250
---------------------------------------------------------------
Sun Microsystems, Inc.(e) 428,000 38,921,250
---------------------------------------------------------------
49,877,500
---------------------------------------------------------------
COMPUTERS (NETWORKING)-1.87%
Cisco Systems, Inc.(e) 710,000 45,129,375
---------------------------------------------------------------
Foundry Networks, Inc.(e) 66,000 7,293,000
---------------------------------------------------------------
VeriSign, Inc.(e) 100,200 17,685,300
---------------------------------------------------------------
70,107,675
---------------------------------------------------------------
COMPUTERS (PERIPHERALS)-2.16%
Brocade Communications Systems,
Inc.(e) 154,700 28,385,033
---------------------------------------------------------------
EMC Corp.(e) 618,000 47,547,375
---------------------------------------------------------------
Immersion Corp.(e) 173,200 5,196,000
---------------------------------------------------------------
81,128,408
---------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-4.09%
America Online, Inc.(e) 499,200 26,332,800
---------------------------------------------------------------
BEA Systems, Inc.(e) 380,500 18,810,969
---------------------------------------------------------------
InfoSpace, Inc.(e) 739,200 40,840,800
---------------------------------------------------------------
ISS Group, Inc.(e) 220,000 21,721,562
---------------------------------------------------------------
Microsoft Corp.(e) 235,000 18,800,000
---------------------------------------------------------------
Oracle Corp.(e) 198,000 16,644,375
---------------------------------------------------------------
PSINet Inc.(e) 135,000 3,391,875
---------------------------------------------------------------
VERITAS Software Corp.(e) 59,100 6,679,223
---------------------------------------------------------------
153,221,604
---------------------------------------------------------------
ELECTRICAL EQUIPMENT-0.53%
General Electric Co. 375,000 19,875,000
---------------------------------------------------------------
ELECTRONICS (DEFENSE)-0.44%
General Motors Corp.-Class H(e) 189,000 16,584,750
---------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-3.79%
Analog Devices, Inc.(e)(f) 392,000 29,792,000
---------------------------------------------------------------
Intel Corp. 233,500 31,216,031
---------------------------------------------------------------
Microchip Technology Inc.(e) 204,000 11,886,187
---------------------------------------------------------------
SDL, Inc.(e) 170,400 48,595,950
---------------------------------------------------------------
Vitesse Semiconductor Corp.(e) 279,200 20,538,650
---------------------------------------------------------------
142,028,818
---------------------------------------------------------------
ENGINEERING & CONSTRUCTION-0.86%
Quanta Services, Inc.(e) 588,000 32,340,000
---------------------------------------------------------------
ENTERTAINMENT-0.33%
Time Warner Inc. 165,000 12,540,000
---------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-0.60%
Applied Materials, Inc.(e) 250,000 22,656,250
---------------------------------------------------------------
|
FS-5
MARKET
SHARES VALUE
FINANCIAL (DIVERSIFIED)-0.98%
American Express Co. 225,000 $ 11,728,125
---------------------------------------------------------------
Citigroup Inc. 254,200 15,315,550
---------------------------------------------------------------
MGIC Investment Corp. 210,000 9,555,000
---------------------------------------------------------------
36,598,675
---------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-0.54%
American Home Products Corp. 342,000 20,092,500
---------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC & OTHER)-0.42%
Forest Laboratories, Inc.(e) 156,000 15,756,000
---------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)-1.76%
Merck & Co., Inc. 244,000 18,696,500
---------------------------------------------------------------
Pfizer Inc. 982,500 47,160,000
---------------------------------------------------------------
65,856,500
---------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-1.48%
Baxter International, Inc. 288,400 20,278,125
---------------------------------------------------------------
Guidant Corp.(e) 220,000 10,890,000
---------------------------------------------------------------
Medtronic, Inc. 490,000 24,408,125
---------------------------------------------------------------
55,576,250
---------------------------------------------------------------
HEALTH CARE (SPECIALIZED SERVICES)-0.12%
MAXIMUS, Inc.(e) 200,000 4,425,000
---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-0.28%
AXA Financial, Inc. 314,000 10,676,000
---------------------------------------------------------------
INSURANCE (MULTI-LINE)-0.55%
American International Group,
Inc. 175,000 20,562,500
---------------------------------------------------------------
INVESTMENT BANKING/BROKERAGE-1.77%
Merrill Lynch & Co., Inc. 196,000 22,540,000
---------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 300,000 24,975,000
---------------------------------------------------------------
Schwab (Charles) Corp. (The) 556,750 18,720,719
---------------------------------------------------------------
66,235,719
---------------------------------------------------------------
NATURAL GAS-0.90%
Enron Corp. 295,000 19,027,500
---------------------------------------------------------------
Williams Cos., Inc. (The) 353,000 14,715,687
---------------------------------------------------------------
33,743,187
---------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-0.53%
Apache Corp. 103,900 6,110,619
---------------------------------------------------------------
Kerr-McGee Corp. 234,900 13,844,419
---------------------------------------------------------------
19,955,038
---------------------------------------------------------------
OIL (INTERNATIONAL INTEGRATED)-0.21%
Exxon Mobil Corp. 100,644 7,900,554
---------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-0.52%
AES Corp. (The)(e) 430,000 19,618,750
---------------------------------------------------------------
RETAIL (BUILDING SUPPLIES)-0.39%
Home Depot, Inc. (The) 295,500 14,756,531
---------------------------------------------------------------
|
MARKET
SHARES VALUE
RETAIL (FOOD CHAINS)-0.32%
Safeway Inc.(e) 266,000 $ 12,003,250
---------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)-0.51%
Target Corp. 329,100 19,087,800
---------------------------------------------------------------
RETAIL (SPECIALTY)-0.69%
Amazon.com, Inc.(e) 115,000 4,175,938
---------------------------------------------------------------
Bed Bath & Beyond, Inc.(e) 374,500 13,575,625
---------------------------------------------------------------
Linens 'n Things, Inc.(e) 305,200 8,278,550
---------------------------------------------------------------
26,030,113
---------------------------------------------------------------
SERVICES (ADVERTISING/MARKETING)-0.82%
Lamar Advertising Co.(e) 387,000 16,761,938
---------------------------------------------------------------
Omnicom Group Inc. 158,000 14,071,875
---------------------------------------------------------------
30,833,813
---------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-0.59%
Critical Path, Inc.(e) 241,100 14,059,144
---------------------------------------------------------------
MarchFirst, Inc.(e) 432,500 7,893,125
---------------------------------------------------------------
21,952,269
---------------------------------------------------------------
SERVICES (DATA PROCESSING)-0.22%
DST Systems, Inc.(e) 106,000 8,069,250
---------------------------------------------------------------
TELECOMMUNICATIONS-0.29%
Williams Communications Group,
Inc.(e) 331,700 11,008,294
---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-1.11%
Level 3 Communications, Inc.(e) 136,140 11,980,320
---------------------------------------------------------------
Phone.com, Inc.(e) 248,000 16,151,000
---------------------------------------------------------------
Western Wireless Corp.-Class
A(e) 247,300 13,477,850
---------------------------------------------------------------
41,609,170
---------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-0.40%
Winstar Communications, Inc.(e) 15,600 528,450
---------------------------------------------------------------
WorldCom, Inc.(e) 318,000 14,588,250
---------------------------------------------------------------
15,116,700
---------------------------------------------------------------
TELEPHONE-3.33%
Bell Atlantic Corp. 215,000 10,924,688
---------------------------------------------------------------
Broadwing Inc.(e) 489,520 12,696,925
---------------------------------------------------------------
McLeodUSA, Inc.-Class A(e) 967,000 20,004,813
---------------------------------------------------------------
NEXTLINK Communications,
Inc.-Class A(e) 449,600 17,056,700
---------------------------------------------------------------
Qwest Communications
International Inc.(e) 665,000 33,042,188
---------------------------------------------------------------
SBC Communications Inc. 243,000 10,509,750
---------------------------------------------------------------
Time Warner Telecom, Inc.-Class
A(e) 319,900 20,593,563
---------------------------------------------------------------
124,828,627
---------------------------------------------------------------
Total Domestic Common Stocks
(Cost $917,344,283) 1,629,382,847
---------------------------------------------------------------
DOMESTIC PREFERRED STOCKS & OTHER EQUITY INTERESTS-1.79%
OIL & GAS (EXPLORATION & PRODUCTION)-0.28%
Kerr-McGee Corp.-$1.83 Pfd. DECS 209,800 10,437,550
---------------------------------------------------------------
|
FS-6
MARKET
SHARES VALUE
POWER PRODUCERS (INDEPENDENT)-0.54%
Calpine Capital Trust-$2.88
Conv. Pfd. 170,000 $ 20,102,500
---------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-0.02%
Cendant Corp.-Rts., expiring
02/14/01 110,000 928,125
---------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-0.45%
Winstar Communications,
Inc.-Series F, $72.50 Conv.
Pfd. 16,950 16,772,025
---------------------------------------------------------------
TELEPHONE-0.30%
Broadwing Inc.-Series B, $3.38
Conv. Pfd. 70,000 3,290,000
---------------------------------------------------------------
NEXTLINK Communications, Inc.
$3.25 Conv. Pfd. 24,200 4,271,300
---------------------------------------------------------------
$3.25 Conv. Pfd. (Acquired
03/26/98-06/02/98; Cost
$975,188)(a) 20,800 3,671,200
---------------------------------------------------------------
11,232,500
---------------------------------------------------------------
WATER UTILITIES-0.20%
AES Trust III-$3.38 Conv. Pfd. 108,600 7,493,400
---------------------------------------------------------------
Total Domestic Preferred
Stocks & Other Equity
Interests (Cost
$50,960,247) 66,966,100
---------------------------------------------------------------
|
PRINCIPAL
AMOUNT(g)
NON-U.S. DOLLAR DENOMINATED
BONDS & NOTES-0.97%
AUSTRALIA-0.10%
State Bank New South
Wales-Series E (Banks-Major
Regional), Sr. Unsec. Gtd.
Medium Term Notes, 8.63%,
08/20/01 AUD 6,125,000 3,744,462
---------------------------------------------------------------
CANADA-0.47%
AT&T Canada Inc. (Telephone),
Sr. Unsec. Notes, 7.15%,
09/23/04 CAD 1,700,000 1,161,808
---------------------------------------------------------------
Bell Mobility Cellular Inc.
(Telecommunications-(Cellular/
Wireless), Deb., 6.55%,
06/02/08 CAD 2,500,000 1,656,774
---------------------------------------------------------------
Canadian Oil Debco Inc. (Oil &
Gas-Exploration &
Production), Deb., 11.00%,
10/31/00 CAD 2,500,000 1,715,454
---------------------------------------------------------------
Clearnet Communications Inc.
(Telecommunications-
Cellular/Wireless),
Sr. Unsec. Disc. Notes,
10.75%, 02/15/09(b) CAD 5,000,000 1,892,915
---------------------------------------------------------------
Export Development Corp.
(Sovereign Debt), Sr. Unsec.
Unsub. Notes, 6.50%,
12/21/04 NZD 6,000,000 2,680,223
---------------------------------------------------------------
Poco Petroleums Ltd. (Oil & Gas-
Exploration & Production),
Medium Term Notes, 6.60%,
09/11/07 CAD 4,800,000 3,162,672
---------------------------------------------------------------
Ontario (Province of) (Sovereign
Debt), Unsec. Unsub. Notes,
6.25%, 12/03/08 NZD 3,750,000 1,567,148
---------------------------------------------------------------
Teleglobe Canada Inc.
(Telecommunications-Long
Distance), Unsec. Deb., 8.35%,
06/20/03 CAD 1,000,000 695,106
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT(g) VALUE
CANADA-(CONTINUED)
TransCanada Pipelines-Series Q
(Natural Gas), Deb., 10.63%,
10/20/09 CAD 1,100,000 $ 916,506
---------------------------------------------------------------
Westcoast Energy Inc.-Series V
(Natural Gas), Unsec. Deb.,
6.45%, 12/18/06 CAD 3,000,000 2,010,215
---------------------------------------------------------------
17,458,821
---------------------------------------------------------------
CAYMAN ISLANDS-0.12%
Sutton Bridge Financial Ltd.
(Power Producers-Independent),
Gtd. Euro Bonds, 8.63%,
06/30/22(c) GBP 3,000,000 4,659,511
---------------------------------------------------------------
NETHERLANDS-0.10%
Mannesmann Finance B.V.
(Machinery-Diversified), Gtd.
Unsec. Unsub. Notes, 4.75%,
05/27/09 EUR 1,300,000 1,083,541
---------------------------------------------------------------
Tecnost International
N.V.-Series E (Telephone),
Gtd. Medium Term Notes, 6.13%,
07/30/09 EUR 3,210,000 2,746,238
---------------------------------------------------------------
3,829,779
---------------------------------------------------------------
NEW ZEALAND-0.10%
International Bank for
Reconstruction &
Development-Class E
(Banks-Money Center), Unsec.
Medium Term Notes, 5.50%,
04/15/04 NZD 8,500,000 3,716,833
---------------------------------------------------------------
UNITED KINGDOM-0.08%
British Sky Broadcasting Group
PLC (Broadcasting-Television,
Radio & Cable), Sr. Gtd.
Unsec. Unsub. Notes, 7.75%,
07/09/09 GBP 2,100,000 3,062,721
---------------------------------------------------------------
Total Non-U.S. Dollar
Denominated Bonds & Notes
(Cost $40,917,768) 36,472,127
---------------------------------------------------------------
|
SHARES
FOREIGN STOCKS & OTHER
EQUITY INTERESTS-4.97%
BERMUDA-0.63%
Global Crossing Ltd.
(Telecommunications-Long
Distance)(e) 393,852 10,363,231
---------------------------------------------------------------
Tyco International Ltd.
(Manufacturing-Diversified) 284,000 13,454,500
---------------------------------------------------------------
23,817,731
---------------------------------------------------------------
CANADA-1.14%
360networks Inc.
(Telecommunications-Long
Distance)(e) 641,600 9,784,400
---------------------------------------------------------------
AT&T Canada Inc. (Telephone)(e) 350,000 11,615,625
---------------------------------------------------------------
Nortel Networks Corp.
(Communications Equipment) 310,600 21,198,450
---------------------------------------------------------------
42,598,475
---------------------------------------------------------------
FINLAND-1.20%
Nokia Oyj-ADR (Communications
Equipment) 600,000 29,962,500
---------------------------------------------------------------
Sonera Oyj
(Telecommunications-Cellular/
Wireless) 333,900 15,191,978
---------------------------------------------------------------
45,154,478
---------------------------------------------------------------
|
FS-7
MARKET
SHARES VALUE
FRANCE-0.39%
AXA (Insurance-Multi-Line) 36,800 $ 5,785,705
---------------------------------------------------------------
AXA-ADR (Insurance-Multi-Line) 110,000 8,751,875
---------------------------------------------------------------
14,537,580
---------------------------------------------------------------
JAPAN-0.17%
NTT DoCoMo, Inc.
(Telecommunications-
Cellular/Wireless) 242 6,542,081
---------------------------------------------------------------
MEXICO-0.28%
Grupo Televisa S.A.-GDR
(Entertainment)(e) 150,000 10,340,625
---------------------------------------------------------------
NETHERLANDS-0.19%
Libertel N.V.
(Telecommunications-Cellular/
Wireless)(e) 467,200 7,100,486
---------------------------------------------------------------
SOUTH KOREA-0.24%
Korea Telecom Corp.-ADR
(Telephone) 189,796 9,181,381
---------------------------------------------------------------
SPAIN-0.36%
Telefonica S.A. (Telephone)(e) 628,000 13,463,771
---------------------------------------------------------------
UNITED KINGDOM-0.37%
Vodafone AirTouch PLC
(Telecommunications-
Cellular/Wireless) 3,410,805 13,777,752
---------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests (Cost
$123,619,308) 186,514,360
---------------------------------------------------------------
|
PRINCIPAL
AMOUNT
U.S. TREASURY SECURITIES-9.16%
U.S. TREASURY NOTES-9.16%
6.63%, 05/31/02 $ 39,500,000 39,674,985
---------------------------------------------------------------
7.25%, 08/15/04 35,000,000 36,194,550
---------------------------------------------------------------
5.88%, 11/15/04 13,000,000(h) 12,818,130
---------------------------------------------------------------
6.75%, 05/15/05 43,500,000 44,540,085
---------------------------------------------------------------
6.50%, 08/15/05 to 02/15/10 149,500,000(h) 151,908,120
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
U.S. TREASURY SECURITIES-(CONTINUED)
9.38%, 02/15/06 $ 20,000,000 $ 22,895,200
---------------------------------------------------------------
6.88%, 05/15/06 34,500,000 35,526,375
---------------------------------------------------------------
Total U.S. Treasury
Securities (Cost
$343,555,096) 343,557,445
---------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-1.74%
FEDERAL HOME LOAN MORTGAGE CORP.
("FHLMC")-0.34%
Pass through ctfs., 6.50%,
12/01/28 13,516,235 12,760,136
---------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION ("FNMA")-0.93%
Pass through ctfs.,
7.00%, 05/01/28 19,381,870 18,703,505
---------------------------------------------------------------
6.50%, 11/01/28 to 12/01/28 17,194,857 16,206,153
---------------------------------------------------------------
34,909,658
---------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION ("GNMA")-0.47%
Pass through ctfs., 6.50%,
09/15/28 to 03/15/29 18,592,611 17,645,503
---------------------------------------------------------------
Total U.S. Government Agency
Securities (Cost
$68,947,331) 65,315,297
---------------------------------------------------------------
|
SHARES
MONEY MARKET FUNDS-5.91%
STIC Liquid Assets Portfolio(i) 110,725,582 110,725,582
---------------------------------------------------------------
STIC Prime Portfolio(i) 110,725,582 110,725,582
---------------------------------------------------------------
Total Money Market Funds
(Cost $221,451,164) 221,451,164
---------------------------------------------------------------
TOTAL INVESTMENTS-99.22%
(Cost $2,933,305,861) 3,721,284,541
---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-0.78% 29,346,161
===============================================================
NET ASSETS-100.00% $3,750,630,702
===============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt AUD - Australian Dollar CAD - Canadian Dollar |
Conv. - Convertible
Ctfs. - Certificates
Deb. - Debentures
DECS - Dividend Enhanced Convertible Stock
Disc. - Discounted
EUR - Euro GBP - British Pound Sterling GDR - Global Depositary Receipt Gtd. - Guaranteed NZD - New Zealand Dollar Pfd. - Preferred REIT - Real Estate Investment Trust ROCS - Receipts on Corporate Securities Rts. - Rights Sec. - Secured Sr. - Senior Sub. - Subordinated |
Unsec. - Unsecured
Unsub. - Unsubordinated
Notes to Schedule of Investments:
(a) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Trustees. The
aggregate market value of these securities at 06/30/00 was $102,434,956
which represented 2.73% of the Fund's net assets.
(b) Discounted bond at purchase. The interest rate represents the coupon rate at
which the bond will accrue at a specified future date.
(c) Represents a security sold under Rule 144A, which is exempt from
registration and may be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1993, as amended.
(d) Step-up bond. The interest rate represents the coupon rate at which the bond
will accrue at a specified future date.
(e) Non-income producing security.
(f) A portion of this security is subject to call options written. See Note 7.
(g) Foreign denominated security. Par value is denominated in currency
indicated.
(h) A portion of the principal balance was pledged as collateral to cover margin
requirements for open futures contracts. See Note 8.
(i) The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
FS-8
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
(Unaudited)
ASSETS:
Investments, at market value (cost
$2,933,305,861) $3,721,284,541
---------------------------------------------------------
Foreign currencies at value (cost
$94,411) 93,632
---------------------------------------------------------
Receivables for:
Foreign currency contracts closed 175,200
---------------------------------------------------------
Investments sold 13,060,724
---------------------------------------------------------
Variation margin 2,347,900
---------------------------------------------------------
Fund shares sold 16,554,327
---------------------------------------------------------
Dividends and interest 31,636,862
---------------------------------------------------------
Investment for deferred compensation plan 45,094
---------------------------------------------------------
Other assets 259,079
---------------------------------------------------------
Total assets 3,785,457,359
---------------------------------------------------------
LIABILITIES:
Payables for:
---------------------------------------------------------
Investments purchased 22,833,965
---------------------------------------------------------
Fund shares reacquired 6,969,919
---------------------------------------------------------
Foreign currency contracts outstanding 48,960
---------------------------------------------------------
Options written (premiums received
$698,102) 23,438
---------------------------------------------------------
Deferred compensation plan 45,094
---------------------------------------------------------
Accrued advisory fees 1,542,469
---------------------------------------------------------
Accrued administrative services fees 17,652
---------------------------------------------------------
Accrued distribution fees 3,074,166
---------------------------------------------------------
Accrued trustees' fees 3,739
---------------------------------------------------------
Accrued transfer agent fees 213,479
---------------------------------------------------------
Accrued operating expenses 53,776
---------------------------------------------------------
Total liabilities 34,826,657
---------------------------------------------------------
Net assets applicable to shares
outstanding $3,750,630,702
=========================================================
NET ASSETS:
Class A $2,121,436,680
=========================================================
Class B $1,326,870,596
=========================================================
Class C $ 302,323,426
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 64,377,369
=========================================================
Class B 40,371,335
=========================================================
Class C 9,188,207
=========================================================
Class A:
Net asset value and redemption price
per share $ 32.95
---------------------------------------------------------
Offering price per share:
(Net asset value of $32.95 divided
by 95.25%) $ 34.59
=========================================================
Class B:
Net asset value and offering price per
share $ 32.87
=========================================================
Class C:
Net asset value and offering price per
share $ 32.90
=========================================================
|
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000
(Unaudited)
INVESTMENT INCOME:
Interest $ 50,585,986
---------------------------------------------------------
Dividends (net of foreign withholding tax
$67,343) 10,910,329
---------------------------------------------------------
Total investment income 61,496,315
---------------------------------------------------------
EXPENSES:
Advisory fees 8,679,593
---------------------------------------------------------
Administrative services fee 104,148
---------------------------------------------------------
Custodian fees 147,478
---------------------------------------------------------
Distribution fees-Class A 2,384,739
---------------------------------------------------------
Distribution fees-Class B 6,179,107
---------------------------------------------------------
Distribution fees-Class C 1,238,933
---------------------------------------------------------
Transfer agent fees-Class A 1,191,239
---------------------------------------------------------
Transfer agent fees-Class B 1,155,925
---------------------------------------------------------
Transfer agent fees-Class C 231,866
---------------------------------------------------------
Trustees' fees 8,297
---------------------------------------------------------
Other 355,008
---------------------------------------------------------
Total expenses 21,676,333
---------------------------------------------------------
Less: Expenses paid indirectly (24,610)
---------------------------------------------------------
Net expenses 21,651,723
---------------------------------------------------------
Net investment income 39,844,592
---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN
CURRENCIES, FOREIGN CURRENCY CONTRACTS,
FUTURES AND OPTION CONTRACTS
Net realized gain (loss) from:
Investment securities 3,906,222
---------------------------------------------------------
Foreign currencies (780,040)
---------------------------------------------------------
Foreign currency contracts 2,677,793
---------------------------------------------------------
Futures contracts 1,638,951
---------------------------------------------------------
Option contracts written 822,091
---------------------------------------------------------
8,265,017
---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 19,312,806
---------------------------------------------------------
Foreign currencies (51,117)
---------------------------------------------------------
Foreign currency contracts (704,602)
---------------------------------------------------------
Futures contracts (4,728,431)
---------------------------------------------------------
Option contracts written 348,117
---------------------------------------------------------
14,176,773
---------------------------------------------------------
Net gain from investment securities,
foreign currencies, foreign currency
contracts, futures and option contracts 22,441,790
---------------------------------------------------------
Net increase in net assets resulting from
operations $ 62,286,382
=========================================================
|
See Notes to Financial Statements.
FS-9
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 and the year ended December 31, 1999
(Unaudited)
JUNE 30, DECEMBER 31,
2000 1999
-------------- --------------
OPERATIONS:
Net investment income $ 39,844,592 $ 65,090,620
---------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, foreign currency contracts, futures and
option contracts 8,265,017 46,845,306
---------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies, foreign currency
contracts, futures and option contracts 14,176,773 374,938,596
---------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 62,286,382 486,874,522
---------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (22,078,942) (42,749,278)
---------------------------------------------------------------------------------------------
Class B (9,212,097) (20,909,084)
---------------------------------------------------------------------------------------------
Class C (1,945,200) (3,188,689)
---------------------------------------------------------------------------------------------
Share transactions-net:
Class A 303,485,670 243,729,476
---------------------------------------------------------------------------------------------
Class B 133,575,699 132,034,584
---------------------------------------------------------------------------------------------
Class C 100,369,018 61,800,642
---------------------------------------------------------------------------------------------
Net increase in net assets 566,480,530 857,592,173
---------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 3,184,150,172 2,326,557,999
---------------------------------------------------------------------------------------------
End of period $3,750,630,702 $3,184,150,172
=============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $2,932,591,776 $2,395,161,389
---------------------------------------------------------------------------------------------
Undistributed net investment income 7,013,280 404,927
---------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies, foreign currency
contracts, futures and option contracts 23,217,672 14,952,655
---------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies, foreign currency contracts, futures and
option contracts 787,807,974 773,631,201
---------------------------------------------------------------------------------------------
$3,750,630,702 $3,184,150,172
=============================================================================================
|
See Notes to Financial Statements.
FS-10
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Balanced Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The Trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of four separate portfolios, each
having an unlimited number of shares of beneficial interest. The Fund currently
offers three different classes of shares: Class A shares, Class B shares and
Class C shares. Class A shares are sold with a front-end sales charge. Class B
shares and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class will be 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 the Fund. The Fund's investment objective
is to achieve as high a total return as possible, consistent with preservation
of capital.
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 -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price as of the close of the
customary trading session on the exchange where the security is principally
traded, or lacking any sales on a particular day, the security is valued at
the closing bid price on that day. Each security reported on the NASDAQ
National Market System is valued at the last sales price as of the close of
the customary trading session on the valuation date or absent a last sales
price, at the closing bid price. Debt obligations (including convertible
bonds) are valued on the basis of prices provided by an independent pricing
service. Prices provided by the pricing service may be determined without
exclusive reliance on quoted prices, and may reflect appropriate factors such
as yield, type of issue, coupon rate and maturity date. Securities for which
market prices are not provided by any of the above methods are valued based
upon quotes furnished by independent sources and are valued at the last bid
price in the case of equity securities and in the case of debt obligations,
the mean between the last bid and asked prices. 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.
Short-term obligations having 60 days or less to maturity are valued at
amortized cost which approximates market value. For purposes of determining
net asset value per share, futures and option contracts generally will be
valued 15 minutes after the close of the customary trading session of the New
York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the customary
trading session of the NYSE which would not be reflected in the computation
of the Fund's net asset value. If events materially affecting the value of
such securities occur during such period, then these securities will be
valued at their fair value as determined in good faith by or under the
supervision of the Board of Trustees.
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 on the accrual basis from settlement date.
Dividend income is recorded on the ex-dividend date.
C. Distributions -- Distributions from income are declared and paid quarterly
and are recorded on ex-dividend date. 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 from 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.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions. The Fund does
not separately account for the portion of the results of operations resulting
from changes in foreign exchange rates on investments and the fluctuations
arising from changes in market prices of securities held. Such fluctuations
are included with the net realized and unrealized gain or loss from
investments.
FS-11
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
Outstanding foreign currency contracts at June 30, 2000 were as follows:
CONTRACT TO UNREALIZED
SETTLEMENT ---------------------- APPRECIATION
DATE DELIVER RECEIVE VALUE (DEPRECIATION)
---------- --------- ---------- ---------- --------------
07/26/00 EUR 4,000,000 $3,769,200 $3,818,160 $(48,960)
|
G. Futures Contracts -- The Fund may purchase or sell futures contracts as a
hedge against changes in market conditions. Initial margin deposits required
upon entering into futures contracts are satisfied by the segregation of
specific securities as collateral for the account of the broker (the Fund's
agent in acquiring the futures position). During the period the futures
contracts are open, changes in the value of the contracts are recognized as
unrealized gains or losses by "marking to market" on a daily basis to reflect
the market value of the contracts at the end of each day's trading. Variation
margin payments are made or received depending upon whether unrealized gains
or losses are incurred. When the contracts are closed, the Fund recognizes a
realized gain or loss equal to the difference between the proceeds from, or
cost of, the closing transaction and the Fund's basis in the contract. Risks
include the possibility of an illiquid market and that a change in value of
the contracts may not correlate with changes in the value of the securities
being hedged.
H. Covered Call Options -- The Fund may write call options, on a covered basis;
that is, the Fund will own the underlying security. Options written by the
Fund normally will have expiration dates between three and nine months from
the date written. 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 mean between the last bid
and asked prices on that day. 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 during the option period. The purchaser of a call
option 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 that received when the call option was
written) a call option identical to the one originally written.
I. Bond Premiums -- It is the policy of the Fund not to amortize
market premiums on bonds for financial reporting purposes.
J. Expenses -- Distribution expenses and certain transfer agency expenses
directly attributable to a class of shares are charged to those classes'
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 Trust 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 0.75% of the first
$150 million of the Fund's average daily net assets, plus 0.50% of the Fund's
average daily net assets in excess of $150 million.
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 six months ended June 30, 2000, AIM was
paid $104,148 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 and
shareholder services to the Fund. For the six months ended June 30, 2000, AFS
was paid $1,068,615 for such services.
The Trust 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 Trust 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 the 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
FS-12
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 six months ended June 30, 2000, the Class A, Class B
and Class C shares paid AIM Distributors $2,384,739, $6,179,107 and $1,238,933,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $712,451 from sales of the Class A
shares of the Fund during the six months ended June 30, 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 six months ended June 30,
2000, AIM Distributors received $167,847 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the six months ended June 30, 2000, the Fund paid legal fees of $4,020
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the six months ended June 30, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian fees of $18,173 and $6,437, respectively, under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $24,610.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, 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 Citibank, N.A. 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 six months ended June 30,
2000, the Fund did not borrow under the line of credit agreement. The funds
which are party to the line of credit are charged a commitment fee of 0.09% on
the unused balance of the committed line. The commitment fee is allocated among
the funds based on their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended June 30, 2000 was
$1,461,631,934 and $881,066,300, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of June 30, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $871,595,938 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (84,000,599) --------------------------------------------------------- Net unrealized appreciation of investment securities $787,595,339 --------------------------------------------------------- Cost of investments for tax purposes is $2,933,689,202. |
FS-13
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the six months ended June 30, 2000 are summarized as follows:
CALL OPTION CONTRACTS
----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ----------
Beginning of period 3,490 $1,494,360
------------------------------------------------------------------------------------
Written 1,250 698,102
------------------------------------------------------------------------------------
Closed (2,210) (851,926)
------------------------------------------------------------------------------------
Exercised (1,280) (642,434)
------------------------------------------------------------------------------------
End of period 1,250 $ 698,102
------------------------------------------------------------------------------------
|
Open call option contract written at June 30, 2000 was as follows:
JUNE 30,
CONTRACT STRIKE NUMBER OF PREMIUMS 2000 MARKET UNREALIZED
ISSUE MONTH PRICE CONTRACTS RECEIVED VALUE APPRECIATION
----- -------- ------ --------- -------- ------------ ------------
Analog Devices, Inc. Jul-00 $105 1,250 $698,102 $23,438 $674,664
---------------------------------------------------------------------------------------------------------------------------------
|
NOTE 8-FUTURES CONTRACTS
On June 30, 2000, $13,160,000 principal amount of U.S. Treasury obligations was pledged as collateral to cover margin requirements for open futures contracts. Open futures contracts were as follows:
UNREALIZED
NO. OF MONTH/ APPRECIATION
CONTRACT CONTRACTS COMMITMENT MARKET VALUE (DEPRECIATION)
-------- --------- ---------- ------------ --------------
NASDAQ 100 Index 246 Sep-00/Buy $ 93,898,200 $(307,079)
--------------------------------------------------------------------------------------------------------------------
S&P 500 Index 92 Sep-00/Buy 33,766,300 (443,900)
--------------------------------------------------------------------------------------------------------------------
$127,664,500 $(750,979)
--------------------------------------------------------------------------------------------------------------------
|
NOTE 9-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2000 and the year ended December 31, 1999 were as follows:
JUNE 30, 2000 DECEMBER 31, 1999
-------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ----------- -------------
Sold:
Class A 16,962,853 $ 555,650,374 24,207,279 $ 705,353,097
----------------------------------------------------------------------------------------------------------------------
Class B 6,894,100 225,853,854 9,923,280 287,877,047
----------------------------------------------------------------------------------------------------------------------
Class C 3,754,968 123,721,814 3,295,250 96,614,771
----------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 557,012 18,976,415 1,334,538 39,562,999
----------------------------------------------------------------------------------------------------------------------
Class B 226,957 7,718,800 652,505 19,306,388
----------------------------------------------------------------------------------------------------------------------
Class C 41,665 1,417,176 92,159 2,744,998
----------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (8,217,331) (271,141,119) (17,165,067) (501,186,620)
----------------------------------------------------------------------------------------------------------------------
Class B (3,032,190) (99,996,955) (6,020,681) (175,148,851)
----------------------------------------------------------------------------------------------------------------------
Class C (752,816) (24,769,972) (1,289,864) (37,559,127)
----------------------------------------------------------------------------------------------------------------------
16,435,218 $ 537,430,387 15,029,399 $ 437,564,702
======================================================================================================================
|
FS-14
NOTE 10-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one share of the Fund outstanding throughout the periods indicated.
CLASS A
----------------------------------------------------------------------
DECEMBER 31,
JUNE 30, ------------------------------------------------------
2000(a) 1999(a) 1998(a) 1997 1996 1995
---------- ---------- ---------- -------- -------- -------
Net asset value, beginning of period $ 32.69 $ 28.23 $ 25.78 $ 21.84 $ 19.22 $ 14.62
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Income from investment operations:
Net investment income 0.44 0.82 0.71 0.60 0.66 0.49
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Net gains on securities (both realized and unrealized) 0.19 4.46 2.45 4.66 2.99 4.57
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Total from investment operations 0.63 5.28 3.16 5.26 3.65 5.06
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Less distributions:
Dividends from net investment income (0.37) (0.82) (0.65) (0.55) (0.55) (0.46)
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Distributions from net realized gains -- -- (0.06) (0.77) (0.48) --
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Total distributions (0.37) (0.82) (0.71) (1.32) (1.03) (0.46)
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Net asset value, end of period(d) $ 32.95 $ 32.69 $ 28.23 $ 25.78 $ 21.84 $ 19.22
======================================================== ========== ========== ========== ======== ======== =======
Total return(b) 1.89% 19.04% 12.46% 24.41% 19.25% 34.97%
======================================================== ========== ========== ========== ======== ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $2,121,437 $1,800,350 $1,318,230 $683,633 $334,189 $92,241
======================================================== ========== ========== ========== ======== ======== =======
Ratio of expenses to average net assets 0.92%(c) 0.94% 0.95% 0.98% 1.15% 1.43%(d)
======================================================== ========== ========== ========== ======== ======== =======
Ratio of net investment income to average net assets 2.71%(c) 2.81% 2.81% 2.48% 2.97% 2.81%
======================================================== ========== ========== ========== ======== ======== =======
Portfolio turnover rate 27% 65% 43% 66% 72% 77%
======================================================== ========== ========== ========== ======== ======== =======
|
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges and is not annualized for periods less than
one year.
(c) Ratios are annualized and based on average net assets of $1,918,273,271.
(d) After fee waivers and/or expenses reimbursements. The ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements was
1.46% for 1995.
Class B
-----------------------------------------------------------------------
DECEMBER 31,
JUNE 30, -------------------------------------------------------
2000(a) 1999(a) 1998(a) 1997 1996 1995
---------- ---------- ---------- -------- -------- -------
Net asset value, beginning of period $ 32.61 $ 28.18 $ 25.75 $ 21.83 $ 19.22 $ 14.62
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Income from investment operations:
Net investment income 0.31 0.58 0.42 0.38 0.48 0.31
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Net gains on securities (both realized and unrealized) 0.19 4.45 2.51 4.68 2.99 4.61
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Total from investment operations 0.50 5.03 2.93 5.06 3.47 4.92
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Less distributions:
Dividends from net investment income (0.24) (0.60) (0.44) (0.37) (0.38) (0.32)
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Distributions from net realized gains -- -- (0.06) (0.77) (0.48) --
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Total distributions (0.24) (0.60) (0.50) (1.14) (0.86) (0.32)
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Net asset value, end of period $ 32.87 $ 32.61 $ 28.18 $ 25.75 $ 21.83 $ 19.22
======================================================== ========== ========== ========== ======== ======== =======
Total return(b) 1.51% 18.08% 11.53% 23.42% 18.28% 33.93%
======================================================== ========== ========== ========== ======== ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,326,871 $1,183,215 $ 894,165 $486,506 $237,082 $72,634
======================================================== ========== ========== ========== ======== ======== =======
Ratio of expenses to average net assets 1.74%(c) 1.75% 1.76% 1.79% 1.97% 2.21%
======================================================== ========== ========== ========== ======== ======== =======
Ratio of net investment income to average net assets 1.89%(c) 2.00% 2.00% 1.67% 2.15% 2.03%
======================================================== ========== ========== ========== ======== ======== =======
Portfolio turnover rate 27% 65% 43% 66% 72% 77%
======================================================== ========== ========== ========== ======== ======== =======
|
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average net assets of $1,242,611,708.
(d) After fee waivers and/or expenses reimbursements. The ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements was
2.23% for 1995.
FS-15
NOTE 10-FINANCIAL HIGHLIGHTS-(CONTINUED)
AUGUST 4,
1997
CLASS C (DATE SALES
----------------------------------- COMMENCED)
DECEMBER 31, TO
JUNE 30, -------------------- DECEMBER 31,
2000(a) 1999(a) 1998(a) 1997
-------- -------- -------- ------------
Net asset value, beginning of period $ 32.65 $ 28.21 $ 25.76 $ 25.55
------------------------------------------------------------ -------- -------- -------- ------------
Income from investment operations:
Net investment income 0.31 0.58 0.42 0.16
------------------------------------------------------------ -------- -------- -------- ------------
Net gains on securities (both realized and unrealized) 0.18 4.46 2.53 1.01
------------------------------------------------------------ -------- -------- -------- ------------
Total from investment operations 0.49 5.04 2.95 1.17
------------------------------------------------------------ -------- -------- -------- ------------
Less distributions:
Dividends from net investment income (0.24) (0.60) (0.44) (0.19)
------------------------------------------------------------ -------- -------- -------- ------------
Distributions from net realized gains -- -- (0.06) (0.77)
------------------------------------------------------------ -------- -------- -------- ------------
Total distributions (0.24) (0.60) (0.50) (0.96)
------------------------------------------------------------ -------- -------- -------- ------------
Net asset value, end of period $ 32.90 $ 32.65 $ 28.21 $ 25.76
============================================================ ======== ======== ======== ============
Total return(b) 1.47% 18.09% 11.60% 4.67%
============================================================ ======== ======== ======== ============
Ratios/supplemental data:
Net assets, end of period (000s omitted) $302,323 $200,585 $114,163 $ 9,394
============================================================ ======== ======== ======== ============
Ratio of expenses to average net assets 1.74%(c) 1.75% 1.73% 1.78%(d)
============================================================ ======== ======== ======== ============
Ratio of net investment income to average net assets 1.89%(c) 2.00% 2.03% 1.68%(d)
============================================================ ======== ======== ======== ============
Portfolio turnover rate 27% 65% 43% 66%
============================================================ ======== ======== ======== ============
|
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average net assets of $249,147,984.
(d) Annualized.
FS-16
PROXY RESULTS (UNAUDITED)
A Special Meeting of Shareholders of AIM Funds Group, a Delaware business trust (the "Trust"), was held on May 3, 2000. The meeting was held for the following purposes:
(1) To elect Trustees as follows: Charles T. Bauer, Bruce L. Crockett, Owen Daly II, Edward K. Dunn, Jr., Jack M. Fields, Carl Frischling, Robert H. Graham, Prema Mathai-Davis, Lewis F. Pennock and Louis S. Sklar.
(2) To approve a new Master Investment Advisory Agreement for AIM Balanced Fund (the "Fund").
(3) To approve changing the fundamental investment restrictions of the Fund.
(4) To approve changing the investment objective of the Fund and making it non-fundamental.
(5) To ratify the selection of KPMG LLP as independent accountants of the Fund for the fiscal year ending in 2000.
The results of the proxy solicitation on the above matters were as follows:
VOTES WITHHELD/
TRUSTEES/MATTER VOTES FOR AGAINST ABSTENTIONS
--------------- ------------- ------- -----------
(1) Charles T. Bauer............................................ 1,514,464,534 N/A 46,493,668
Bruce L. Crockett........................................... 1,516,486,806 N/A 44,471,396
Owen Daly II................................................ 1,515,115,325 N/A 45,842,877
Edward K. Dunn, Jr. ........................................ 1,516,300,879 N/A 44,657,323
Jack M. Fields.............................................. 1,516,328,985 N/A 44,629,217
Carl Frischling............................................. 1,515,733,560 N/A 45,224,642
Robert H. Graham............................................ 1,516,470,809 N/A 44,487,393
Prema Mathai-Davis.......................................... 1,515,583,756 N/A 45,374,446
Lewis F. Pennock............................................ 1,516,458,889 N/A 44,499,313
Louis S. Sklar.............................................. 1,516,220,167 N/A 44,738,035
(2) Adjournment of approval of a new Investment Advisory
Agreement................................................... 34,593,906 487,772 17,953,971*
(3)(a) Adjournment of approval of changing the Fundamental
Restriction on Issuer Diversification....................... 34,116,165 656,991 18,262,493*
(3)(b) Adjournment of approval of changing the Fundamental
Restriction on Borrowing Money and Issuing Senior
Securities.................................................. 33,923,529 857,077 18,255,043*
(3)(c) Adjournment of changing or adding the Fundamental
Restriction on Underwriting Securities...................... 34,111,021 669,623 18,255,005*
(3)(d) Adjournment of changing or adding the Fundamental
Restriction on Industry Concentration....................... 34,110,121 666,758 18,258,770*
(3)(e) Adjournment of approval of changing the Fundamental
Restriction on Purchasing or Selling Real Estate............ 33,895,130 889,699 18,250,820*
(3)(f) Adjournment of approval of changing the Fundamental
Restriction on Purchasing or Selling Commodities and
Elimination of Fundamental Restriction on Puts and Calls.... 33,850,670 911,613 18,273,366*
(3)(g) Adjournment of approval of changing the Fundamental
Restriction on Making Loans................................. 33,769,910 921,974 18,343,765*
(3)(h) Adjournment of approval of a new Fundamental Investment
Restriction on Investing all of the Fund's assets in an
Open-End Fund............................................... 33,902,131 777,127 18,356,391*
(3)(i) Adjournment of approval of the Elimination of the
Fundamental Restriction on Short Sales of Securities........ 33,696,700 961,584 18,377,365*
(4) Adjournment of approval of changing the Investment Objective
and Making it Non-Fundamental............................... 33,666,539 958,519 18,410,591*
(5) Ratification of the selection of KPMG LLP as Independent
Accountants of the Fund..................................... 50,706,856 276,785 2,052,008
|
FS-17
The Special Meeting of Shareholders of the Trust was reconvened on May 31, 2000. The following matters were then considered:
VOTES WITHHELD/
MATTER VOTES FOR AGAINST ABSTENTIONS
------ ------------- --------- -----------
(2) Approval of a new Investment Advisory Agreement............. 43,783,995 1,340,207 14,923,198*
(3)(a) Change to Fundamental Restriction on Issuer
Diversification............................................. 43,937,220 844,115 15,266,065*
(3)(b) Change to Fundamental Restriction on Borrowing Money and
Issuing Senior Securities................................... 43,725,158 1,069,614 15,252,628*
(3)(c) Change to or Addition of Fundamental Restriction on
Underwriting Securities..................................... 43,934,817 852,930 15,259,653*
(3)(d) Change to or Addition of Fundamental Restriction on Industry
Concentration............................................... 43,940,399 849,973 15,257,028*
(3)(e) Change to Fundamental Restriction on Purchasing or Selling
Real Estate................................................. 43,692,085 1,104,425 15,250,890*
(3)(f) Change to Fundamental Restriction on Purchasing or Selling
Commodities and Elimination of Fundamental Restriction on
Puts and Calls.............................................. 43,552,319 1,223,365 15,271,716*
(3)(g) Change to Fundamental Restriction on Making Loans........... 43,542,325 1,166,776 15,338,299*
(3)(h) Approval of a new Fundamental Investment Restriction on
Investing all of the Fund's assets in an Open-End Fund...... 43,638,489 1,045,495 15,363,416*
(3)(i) Elimination of the Fundamental Restriction on Short Sales of
Securities.................................................. 43,476,785 1,186,248 15,384,367*
(4) Approval of Changing the Investment Objective and Making it
Non-Fundamental............................................. 42,349,558 2,267,737 15,430,105*
|
* Includes Broker Non-Votes.
FS-18
SCHEDULE OF INVESTMENTS
JUNE 30, 2000
(UNAUDITED)
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-54.91%
BROADCASTING (TELEVISION, RADIO &
CABLE)-2.24%
Comcast Corp.-Class A(a) 64,700 $ 2,620,350
--------------------------------------------------------------
UnitedGlobalCom Inc.-Class A(a) 92,000 4,301,000
--------------------------------------------------------------
Univision Communications, Inc.-Class
A(a) 32,000 3,312,000
--------------------------------------------------------------
10,233,350
--------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-9.11%
Aether Systems, Inc.(a) 19,000 3,895,000
--------------------------------------------------------------
Copper Mountain Networks, Inc.(a) 42,300 3,727,687
--------------------------------------------------------------
Corning Inc. 7,800 2,105,025
--------------------------------------------------------------
Efficient Networks, Inc.(a) 31,100 2,287,794
--------------------------------------------------------------
JDS Uniphase Corp.(a) 16,300 1,953,962
--------------------------------------------------------------
Juniper Networks, Inc.(a) 20,200 2,940,362
--------------------------------------------------------------
Lucent Technologies Inc. 87,200 5,166,600
--------------------------------------------------------------
Redback Networks Inc.(a) 93,800 16,696,400
--------------------------------------------------------------
Sycamore Networks, Inc.(a) 26,000 2,869,750
--------------------------------------------------------------
41,642,580
--------------------------------------------------------------
COMPUTERS (NETWORKING)-0.91%
Cisco Systems, Inc.(a) 50,800 3,228,975
--------------------------------------------------------------
Foundry Networks, Inc.(a) 8,600 950,300
--------------------------------------------------------------
4,179,275
--------------------------------------------------------------
COMPUTERS (PERIPHERALS)-0.45%
Net2000 Communications, Inc.(a) 124,100 2,032,137
--------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-0.21%
Caminus Corp.(a) 38,800 950,600
--------------------------------------------------------------
ELECTRIC COMPANIES-12.11%
Allegheny Energy, Inc. 210,600 5,765,175
--------------------------------------------------------------
Constellation Energy Group 171,000 5,568,187
--------------------------------------------------------------
Duke Power Co. 99,000 5,581,125
--------------------------------------------------------------
Energy East Corp. 262,400 5,002,000
--------------------------------------------------------------
FPL Group, Inc. 121,300 6,004,350
--------------------------------------------------------------
Montana Power Co. (The) 95,500 3,372,344
--------------------------------------------------------------
Niagara Mohawk Holdings Inc.(a) 459,600 6,405,675
--------------------------------------------------------------
NiSource, Inc. 340,100 6,334,362
--------------------------------------------------------------
Peco Energy Co. 117,500 4,736,719
--------------------------------------------------------------
Pinnacle West Capital Corp. 194,800 6,598,850
--------------------------------------------------------------
55,368,787
--------------------------------------------------------------
ELECTRICAL EQUIPMENT-0.51%
Capstone Turbine Corp.(a) 51,900 2,338,744
--------------------------------------------------------------
|
MARKET
SHARES VALUE
ELECTRONICS (DEFENSE)-0.37%
General Motors Corp.-Class H(a) 19,500 $ 1,711,125
--------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-1.97%
SDL, Inc.(a) 25,800 7,357,837
--------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 22,200 1,633,088
--------------------------------------------------------------
8,990,925
--------------------------------------------------------------
ENGINEERING & CONSTRUCTION-1.34%
Quanta Services, Inc.(a) 111,000 6,105,000
--------------------------------------------------------------
NATURAL GAS-4.50%
Dynegy Inc.-Class A 89,400 6,107,138
--------------------------------------------------------------
Enron Corp. 75,000 4,837,500
--------------------------------------------------------------
Williams Cos., Inc. (The) 230,800 9,621,475
--------------------------------------------------------------
20,566,113
--------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-1.03%
AES Corp. (The)(a) 102,800 4,690,250
--------------------------------------------------------------
SERVICES (COMMERCIAL &
CONSUMER)-0.74%
Convergys Corp.(a) 65,000 3,371,875
--------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-0.58%
Clarent Corp.(a) 36,900 2,638,350
--------------------------------------------------------------
TELECOMMUNICATIONS-0.48%
Williams Communications Group,
Inc.(a) 66,100 2,193,694
--------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-2.41%
Level 3 Communications, Inc.(a) 14,000 1,232,000
--------------------------------------------------------------
Phone.com, Inc.(a) 60,900 3,966,113
--------------------------------------------------------------
TeleCorp PCS, Inc.(a) 40,300 1,624,594
--------------------------------------------------------------
Tritel, Inc.(a) 69,000 2,048,438
--------------------------------------------------------------
Western Wireless Corp.-Class A(a) 39,700 2,163,650
--------------------------------------------------------------
11,034,795
--------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-2.03%
Universal Access, Inc.(a) 58,500 1,433,250
--------------------------------------------------------------
Winstar Communications, Inc.(a) 2,392 81,029
--------------------------------------------------------------
WorldCom, Inc.(a) 169,589 7,779,895
--------------------------------------------------------------
9,294,174
--------------------------------------------------------------
TELEPHONE-13.92%
Bell Atlantic Corp. 122,300 6,214,369
--------------------------------------------------------------
BellSouth Corp. 66,800 2,847,350
--------------------------------------------------------------
Broadwing Inc.(a) 342,344 8,879,548
--------------------------------------------------------------
CenturyTel, Inc. 146,000 4,197,500
--------------------------------------------------------------
GTE Corp. 62,100 3,865,725
--------------------------------------------------------------
McLeodUSA, Inc.-Class A(a) 284,400 5,883,525
--------------------------------------------------------------
|
FS-19
MARKET
SHARES VALUE
TELEPHONE-(CONTINUED)
NEXTLINK Communications, Inc.-Class
A(a) 86,800 $ 3,292,975
--------------------------------------------------------------
Qwest Communications International
Inc.(a) 152,100 7,557,469
--------------------------------------------------------------
SBC Communications Inc. 331,093 14,319,772
--------------------------------------------------------------
Time Warner Telecom, Inc.-Class A(a) 102,000 6,566,250
--------------------------------------------------------------
63,624,483
--------------------------------------------------------------
Total Domestic Common Stocks
(Cost $127,519,609) 250,966,257
--------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY INTERESTS-24.10%
AUSTRALIA-0.55%
Telstra Corp. Ltd. (Telephone) 581,000 2,352,872
--------------------------------------------------------------
Telstra Corp. Ltd.-Installment
Receipts (Telephone) 72,000 163,421
--------------------------------------------------------------
2,516,293
--------------------------------------------------------------
BELGIUM-1.13%
Electrabel S.A. (Electric Companies) 21,000 5,180,550
--------------------------------------------------------------
BERMUDA-0.19%
Global Crossing Ltd.
(Telecommunications-Long
Distance)(a) 32,523 855,761
--------------------------------------------------------------
CANADA-2.42%
360networks Inc.
(Telecommunications-Long
Distance)(a) 120,000 1,830,000
--------------------------------------------------------------
AT&T Canada Inc. (Telephone)(a) 86,900 2,883,994
--------------------------------------------------------------
BCT.Telus Communications, Inc.
(Telephone) 55,382 1,478,900
--------------------------------------------------------------
BCT.Telus Communications, Inc.-Class
A (Telephone) 18,460 492,325
--------------------------------------------------------------
Nortel Networks Corp. (Communications
Equipment) 34,500 2,354,625
--------------------------------------------------------------
Rogers Cantel Mobile Communications
Inc.-Class B
(Telecommunications-
Cellular/Wireless)(a) 34,400 1,145,349
--------------------------------------------------------------
Westcoast Energy, Inc. (Natural Gas) 57,400 889,700
--------------------------------------------------------------
11,074,893
--------------------------------------------------------------
DENMARK-0.48%
Tele Danmark A.S.-ADR (Telephone) 65,000 2,210,000
--------------------------------------------------------------
FINLAND-2.15%
Nokia Oyj-ADR (Communications
Equipment) 146,600 7,320,838
--------------------------------------------------------------
Sonera Group Oyj
(Telecommunications-Cellular/
Wireless) 54,900 2,497,873
--------------------------------------------------------------
9,818,711
--------------------------------------------------------------
FRANCE-2.02%
France Telecom S.A.-ADR (Telephone) 39,000 5,557,500
--------------------------------------------------------------
Suez Lyonnaise des Eaux S.A.
(Manufacturing-Diversified) 20,900 3,654,323
--------------------------------------------------------------
9,211,823
--------------------------------------------------------------
|
MARKET
SHARES VALUE
GERMANY-0.54%
E.On A.G.
(Manufacturing-Diversified)(a) 50,560 $ 2,476,251
--------------------------------------------------------------
HUNGARY-0.32%
Magyar Tavkozlesi Rt-ADR
(Telecommunications-Long Distance) 42,700 1,470,481
--------------------------------------------------------------
IRELAND-0.88%
eircom PLC (Telecommunications-Long
Distance) 1,499,100 3,999,569
--------------------------------------------------------------
ITALY-2.19%
ACEA S.p.A. (Water Utilities) 388,800 6,183,112
--------------------------------------------------------------
AEM S.p.A. (Electric Companies) 645,000 2,550,541
--------------------------------------------------------------
Enel S.p.A. (Electric Companies) 293,100 1,295,861
--------------------------------------------------------------
10,029,514
--------------------------------------------------------------
JAPAN-1.19%
Nippon Telegraph & Telephone Corp.
(Telecommunications-Long Distance) 125 1,660,152
--------------------------------------------------------------
Nippon Telegraph & Telephone
Corp.-ADR
(Telecommunications-Long Distance) 30,000 2,051,250
--------------------------------------------------------------
NTT DoCoMo, Inc.
(Telecommunications-Cellular/
Wireless) 63 1,703,104
--------------------------------------------------------------
5,414,506
--------------------------------------------------------------
MEXICO-0.18%
Grupo Iusacell S.A.-ADR
(Telecommunications-
Cellular/Wireless)(a) 51,600 806,250
--------------------------------------------------------------
NETHERLANDS-2.74%
Completel Europe N.V.
(Telecommunications-Long
Distance)(a) 121,000 1,498,833
--------------------------------------------------------------
KPNQwest N.V.
(Telecommunications-Long
Distance)(a) 65,700 2,579,213
--------------------------------------------------------------
Libertel N.V.
(Telecommunications-Cellular/
Wireless)(a) 121,000 1,838,953
--------------------------------------------------------------
Versatel Telecom International N.V.
(Telecommunications-Long
Distance)(a) 158,000 6,624,213
--------------------------------------------------------------
12,541,212
--------------------------------------------------------------
SOUTH KOREA-0.82%
Korea Telecom Corp.-ADR (Telephone) 77,800 3,763,575
--------------------------------------------------------------
SPAIN-2.48%
Endesa S.A. (Electric Companies) 227,000 4,388,665
--------------------------------------------------------------
Telefonica S.A. (Telephone)(a) 322,838 6,921,364
--------------------------------------------------------------
11,310,029
--------------------------------------------------------------
SWEDEN-0.38%
Telia A.B. (Telephone)(a) 185,800 1,746,320
--------------------------------------------------------------
UNITED KINGDOM-3.44%
COLT Telecom Group PLC (Telephone) 51,800 1,724,101
--------------------------------------------------------------
Kelda Group PLC (Water Utilities) 538,407 2,631,016
--------------------------------------------------------------
National Grid Group PLC (Electric
Companies) 131,526 1,036,715
--------------------------------------------------------------
Scottish Power PLC (Electric
Companies) 711,850 6,030,964
--------------------------------------------------------------
|
FS-20
MARKET
SHARES VALUE
UNITED KINGDOM-(CONTINUED)
United Utilities PLC (Water
Utilities) 151,936 $ 1,503,310
--------------------------------------------------------------
Vodafone AirTouch PLC
(Telecommunications-Cellular/Wireless) 693,665 2,802,020
--------------------------------------------------------------
15,728,126
--------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests (Cost
$79,500,719) 110,153,864
--------------------------------------------------------------
DOMESTIC CONVERTIBLE PREFERRED STOCKS-4.71%
COMPUTERS (SOFTWARE & SERVICES)-0.64%
PSINet, Inc.-Series C, $3.38 Conv.
Pfd. 60,000 2,932,500
--------------------------------------------------------------
NATURAL GAS-1.05%
El Paso Energy Cap Trust, Inc.- $2.38
Conv. Pfd. 74,500 4,795,937
--------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-1.19%
Calpine Capital Trust-$2.88 Conv.
Pfd. 46,100 5,451,325
--------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-0.26%
MediaOne Group, Inc.-$3.04 Conv. Pfd. 29,200 1,182,600
--------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-1.23%
Viatel, Inc., $3.88 Conv. Pfd.
(Acquired 04/07/00; Cost
$4,025,000)(b) 80,500 3,079,125
--------------------------------------------------------------
Winstar Communications, Inc.-Series
F, $72.50 Conv. Pfd. 2,600 2,572,700
--------------------------------------------------------------
5,651,825
--------------------------------------------------------------
TELEPHONE-0.34%
Broadwing Inc.-Series B, $3.38 Conv.
Pfd. 8,000 376,000
--------------------------------------------------------------
NEXTLINK Communications, Inc.-$3.25
Conv. Pfd. 3,000 529,500
--------------------------------------------------------------
NEXTLINK Communications, Inc.-$3.25
Conv. Pfd. (Acquired 03/26/98; Cost
$180,000)(b) 3,600 635,400
--------------------------------------------------------------
1,540,900
--------------------------------------------------------------
Total Domestic Convertible
Preferred Stocks
(Cost $18,844,973) 21,555,087
--------------------------------------------------------------
|
PRINCIPAL
AMOUNT
U.S. DOLLAR DENOMINATED BONDS & NOTES-4.39%
COMPUTERS (HARDWARE)-0.73%
Candescent Technology Corp., Sr.
Conv. Sub. Deb., 8.00%,
05/01/03 (Acquired
04/17/98-11/30/98; Cost
$4,509,350)(b) $ 4,605,000 3,338,625
---------------------------------------------------------------
ELECTRIC COMPANIES-1.16%
Indiana Michigan Power Co.-Series
F, Sec. Lease Obligation Bonds,
9.82%, 12/07/22 3,020,393 3,267,642
---------------------------------------------------------------
Western Resources, Inc., Sr.
Unsec. Notes, 6.25%, 08/15/03 1,500,000 1,312,110
---------------------------------------------------------------
7.13%, 08/01/09 900,000 737,316
---------------------------------------------------------------
5,317,068
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
FINANCIAL (DIVERSIFIED)-1.01%
Limestone Electron Trust, Sr.
Notes, 8.63%, 03/15/03,
(Acquired 03/15/00; Cost
$4,550,000)(b) $ 4,550,000 $ 4,593,043
---------------------------------------------------------------
NATURAL GAS-0.27%
Dynegy Inc., Sr. Unsec. Deb.,
7.13%, 05/15/18 1,400,000 1,231,118
---------------------------------------------------------------
POWER PRODUCERS
(INDEPENDENT)-0.28%
AES Corp. (The),
Sr. Notes, 8.00%, 12/31/08 330,000 285,450
---------------------------------------------------------------
Sr. Unsec. Sub. Notes, 10.25%,
07/15/06 1,000,000 1,002,500
---------------------------------------------------------------
1,287,950
---------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-0.41%
AT&T Corp., Sr. Notes, 7.75%,
03/01/07 1,850,000 1,883,929
---------------------------------------------------------------
TELEPHONE-0.53%
NTL Inc., Conv. Sub. Notes,
5.75%, 12/15/09
(Acquired 12/17/99-03/01/00;
(Cost $3,029,184)(b) 3,000,000 2,396,250
---------------------------------------------------------------
Total U.S. Dollar Denominated
Bonds & Notes (Cost
$22,955,559) 20,047,983
---------------------------------------------------------------
|
PRINCIPAL
AMOUNT(c)
NON-U.S. DOLLAR DENOMINATED BONDS &
NOTES-2.80%
CANADA-0.93%
Clearnet Communications Inc.
(Telecommunications-Cellular/Wireless),
Sr. Unsec. Disc. Notes, 10.75%,
02/15/09(d) CAD 3,000,000 1,135,749
---------------------------------------------------------------
Teleglobe Canada Inc.
(Telecommunications-Long
Distance) Unsec. Deb., 8.34%,
06/20/03 CAD 2,400,000 1,668,253
---------------------------------------------------------------
TransCanada Pipelines-Series Q
(Natural Gas), Deb., 10.63%,
10/20/09 CAD 1,750,000 1,458,077
---------------------------------------------------------------
4,262,079
---------------------------------------------------------------
FRANCE-0.38%
France Telecom (Telephone), Conv.
Bonds, 2.00%, 01/01/04 FRF 6,455,040 1,758,786
---------------------------------------------------------------
UNITED KINGDOM-1.49%
COLT Telecom Group PLC
(Telephone), Conv. Bonds,
2.00%, 12/16/06
(Acquired 12/09/99; Cost
$1,513,645)(b) EUR 1,475,000 1,261,395
---------------------------------------------------------------
|
FS-21
PRINCIPAL MARKET
AMOUNT VALUE
UNITED KINGDOM-(CONTINUED)
National Grid Co. PLC (Electric
Companies) Conv. Bond 4.25%,
02/17/08 (Acquired 02/05/98;
Cost $4,574,700)(b) GBP 2,760,000 $ 5,527,456
---------------------------------------------------------------
6,788,851
---------------------------------------------------------------
Total Non-U.S. Dollar
Denominated Bonds & Notes
(Cost $11,882,331) 12,809,716
---------------------------------------------------------------
SHARES
MONEY MARKET FUNDS-8.33%
STIC Liquid Assets Portfolio(e) 19,047,372 19,047,372
---------------------------------------------------------------
STIC Prime Portfolio(e) 19,047,372 19,047,372
---------------------------------------------------------------
Total Money Market Funds
(Cost $38,094,744) 38,094,744
---------------------------------------------------------------
TOTAL INVESTMENTS-99.24%
(Cost $298,797,935) 453,627,651
---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-0.76% 3,453,203
---------------------------------------------------------------
NET ASSETS-100.00% $ 457,080,854
===============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
CAD - Canadian Dollars
Conv. - Convertible
Deb. - Debentures
Disc. - Discounted
EUR - Euro FRF - French Franc GBP - British Pound Sterling Gtd. - Guaranteed Pfd. - Preferred Sec. - Secured Sr. - Senior Sub. - Subordinated |
Unsec. - Unsecured
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Trustees. The
aggregate market value of these securities at 06/30/00 was $20,831,294 which
represented 4.56% of the Fund's net assets.
(c) Foreign denominated security. Par value is denominated in currency
indicated.
(d) Discounted bond at purchase. The interest rate represents the coupon rate at
which the bond will accrue at a specified future date.
(e) The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
FS-22
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
(Unaudited)
ASSETS:
Investments, at market value (cost
$298,797,935) $453,627,651
---------------------------------------------------------
Foreign currencies, at value (cost
$1,119,675) 1,121,147
---------------------------------------------------------
Receivables for:
---------------------------------------------------------
Investments sold 3,472,112
---------------------------------------------------------
Fund shares sold 1,803,007
---------------------------------------------------------
Dividends and interest 1,050,798
---------------------------------------------------------
Investment for deferred compensation plan 34,503
---------------------------------------------------------
Total assets 461,109,218
---------------------------------------------------------
LIABILITIES:
Payables for:
---------------------------------------------------------
Investments purchased 2,189,839
---------------------------------------------------------
Fund shares reacquired 1,067,015
---------------------------------------------------------
Deferred compensation plan 34,503
---------------------------------------------------------
Accrued advisory fees 203,519
---------------------------------------------------------
Accrued administrative services fees 9,102
---------------------------------------------------------
Accrued distribution fees 381,988
---------------------------------------------------------
Accrued trustees' fees 1,835
---------------------------------------------------------
Accrued transfer agent fees 66,330
---------------------------------------------------------
Accrued operating expenses 74,233
---------------------------------------------------------
Total liabilities 4,028,364
---------------------------------------------------------
Net assets applicable to shares outstanding $457,080,854
=========================================================
NET ASSETS:
Class A $276,171,324
=========================================================
Class B $166,457,343
=========================================================
Class C $ 14,452,187
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 10,115,231
=========================================================
Class B 6,113,681
=========================================================
Class C 531,005
=========================================================
Class A:
Net asset value and redemption price per
share $ 27.30
---------------------------------------------------------
Offering price per share:
(Net asset value of $27.30 divided by
94.50%) $ 28.89
=========================================================
Class B:
Net asset value and offering price per
share $ 27.23
=========================================================
Class C:
Net asset value and offering price per
share $ 27.22
=========================================================
|
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000
(Unaudited)
INVESTMENT INCOME:
Dividends (net of foreign withholding tax
$146,812) $ 3,533,165
---------------------------------------------------------
Interest 1,138,376
---------------------------------------------------------
Total investment income 4,671,541
---------------------------------------------------------
EXPENSES:
Advisory fees 1,199,544
---------------------------------------------------------
Administrative services fee 54,716
---------------------------------------------------------
Custodian fees 88,002
---------------------------------------------------------
Distribution fees -- Class A 335,673
---------------------------------------------------------
Distribution fees -- Class B 798,790
---------------------------------------------------------
Distribution fees -- Class C 54,807
---------------------------------------------------------
Transfer agent fees -- Class A 162,464
---------------------------------------------------------
Transfer agent fees -- Class B 124,965
---------------------------------------------------------
Transfer agent fees -- Class C 8,582
---------------------------------------------------------
Trustee's fees 4,196
---------------------------------------------------------
Other 109,221
---------------------------------------------------------
Total expenses 2,940,960
---------------------------------------------------------
Less: Expenses paid indirectly (2,396)
---------------------------------------------------------
Net expenses 2,938,564
---------------------------------------------------------
Net investment income 1,732,977
---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES AND FOREIGN
CURRENCIES
Net realized gain from:
Investment securities 37,292,462
---------------------------------------------------------
Foreign currencies 4,060
---------------------------------------------------------
37,296,522
---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities (21,987,676)
---------------------------------------------------------
Foreign currencies 2,587
---------------------------------------------------------
(21,985,089)
---------------------------------------------------------
Net gain on investment securities and
foreign currencies 15,311,433
---------------------------------------------------------
Net increase in net assets resulting from
operations $17,044,410
=========================================================
|
See Notes to Financial Statements.
FS-23
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 and the year ended December 31, 1999
(Unaudited)
JUNE 30, DECEMBER 31,
2000 1999
------------ ------------
OPERATIONS:
Net investment income $ 1,732,977 $ 4,536,854
--------------------------------------------------------------------------------------------
Net realized gain from investment securities and foreign
currencies 37,296,522 30,572,537
--------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities and foreign currencies (21,985,089) 64,063,548
--------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 17,044,410 99,172,939
--------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (1,235,944) (3,130,474)
--------------------------------------------------------------------------------------------
Class B (206,587) (980,604)
--------------------------------------------------------------------------------------------
Class C (17,534) (28,383)
--------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A -- (13,462,484)
--------------------------------------------------------------------------------------------
Class B -- (8,054,908)
--------------------------------------------------------------------------------------------
Class C -- (355,717)
--------------------------------------------------------------------------------------------
Share transactions-net:
Class A 28,412,342 (3,558,143)
--------------------------------------------------------------------------------------------
Class B 17,692,322 3,957,825
--------------------------------------------------------------------------------------------
Class C 7,626,471 2,679,799
--------------------------------------------------------------------------------------------
Net increase in net assets 69,315,480 76,239,850
--------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 387,765,374 311,525,524
--------------------------------------------------------------------------------------------
End of period $457,080,854 $387,765,374
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $257,007,401 $203,276,266
--------------------------------------------------------------------------------------------
Undistributed net investment income 231,600 (41,312)
--------------------------------------------------------------------------------------------
Undistributed net realized gain from investment securities
and foreign currencies 45,011,822 7,715,300
--------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 154,830,031 176,815,120
--------------------------------------------------------------------------------------------
$457,080,854 $387,765,374
============================================================================================
|
See Notes to Financial Statements.
FS-24
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Utilities Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of four separate portfolios,
each having an unlimited number of shares of beneficial interest. The Fund
currently offers three different classes of shares: Class A shares, Class B
shares and Class C shares. Class A shares are sold with a front-end sales
charge. Class B shares and Class C shares are sold with a contingent deferred
sales charge. Matters affecting each portfolio or class will be 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 the Fund.
The Fund's investment objective is to achieve a high total return.
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 -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price as of the close of the
customary trading session on the exchange where the security is principally
traded, or lacking any sales on a particular day, the security is valued at
the closing bid price on that day. Each security reported on the NASDAQ
National Market System is valued at the last sales price as of the close of
the customary trading session on the valuation date or absent a last sales
price, at the closing bid price. Debt obligations (including convertible
bonds) are valued on the basis of prices provided by an independent pricing
service. Prices provided by the pricing service may be determined without
exclusive reliance on quoted prices, and may reflect appropriate factors such
as yield, type of issue, coupon rate and maturity date. Securities for which
market prices are not provided by any of the above methods are valued based
upon quotes furnished by independent sources and are valued at the last bid
price in the case of equity securities and in the case of debt obligations,
the mean between the last bid and asked prices. 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.
Short-term obligations having 60 days or less to maturity are valued at
amortized cost which approximates market value. For purposes of determining
net asset value per share, futures and option contracts generally will be
valued 15 minutes after the close of the customary trading session of the New
York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the customary
trading session of the NYSE which would not be reflected in the computation
of the Fund's net asset value. If events materially affecting the value of
such securities occur during such period, then these securities will be
valued at their fair value as determined in good faith by or under the
supervision of the Board of Trustees.
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 on the accrual basis from settlement date.
Dividend income is recorded on the ex-dividend date.
C. Distributions -- Distributions from income are recorded on ex-dividend date,
and are declared and paid quarterly. 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 from 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.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions. The Fund does
not separately account for the portion of the results of operations resulting
from changes in foreign exchange rates on investments and the fluctuations
arising from changes in market prices of securities held. Such fluctuations
are included with the net realized and unrealized gain or loss from
investments.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a
FS-25
foreign currency contract to attempt to minimize the risk to the Fund from
adverse changes in the relationship between currencies. The Fund may also
enter into a foreign currency contract for the purchase or sale of a security
denominated in a foreign currency in order to "lock in" the U.S. dollar price
of that security. The Fund could be exposed to risk if counterparties to the
contracts are unable to meet the terms of their contracts or if the value of
the foreign currency changes unfavorably.
G. Bond Premiums -- It is the policy of the Fund not to amortize market premiums
on bonds for financial reporting purposes.
H. Expenses -- Distribution expenses and certain transfer agency expenses
directly attributable to a class of shares are charged to those classes'
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 Trust 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 an annual rate of 0.60% on the first
$200 million of the Fund's average daily net assets, plus 0.50% on the next $300
million of the Fund's average daily net assets, plus 0.40% on the next $500
million of the Fund's average daily net assets, plus 0.30% on 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 six months ended June 30, 2000, AIM was
paid $54,716 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 and
shareholder services to the Fund. For the six months ended June 30, 2000, AFS
was paid $170,188 for such services.
The Trust 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 Trust 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 the 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 six months ended June 30,
2000, the Class A, Class B and Class C shares paid AIM Distributors $335,673,
$798,790 and $54,807, respectively, as compensation under the Plans.
AIM Distributors received commissions of $98,419 from sales of the Class A
shares of the Fund during the six months ended June 30, 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 six months ended June 30,
2000, AIM Distributors received $7,794 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the six months ended June 30, 2000, the Fund paid legal fees of $2,028
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the six months ended June 30, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) $2,396 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $2,396.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, 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 Citibank, N.A.. 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 six months ended June 30, 2000, the Fund did not borrow under the line of credit agreement. The funds which are party to the line of credit are charged a commitment fee of 0.09% on the unused balance of the committed line. The commitment fee is allocated among the funds based on their respective average net assets for the period.
FS-26
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities) purchased and sold by the Fund during the six months ended June 30, 2000 was $139,923,811 and $109,442,371, respectively. The amount of unrealized appreciation (depreciation) of investment securities, for tax purposes, as of June 30, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $167,951,847 --------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (13,122,131) --------------------------------------------------------------------------- Net unrealized appreciation of investment securities $154,829,716 =========================================================================== Investments have the same cost for tax and financial statement purposes. |
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2000 and the year ended December 31, 1999 were as follows:
JUNE 30, 2000 DECEMBER 31, 1999
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
Sold:
Class A 2,325,401 $ 67,388,696 1,548,711 $ 34,438,387
-------------------------------------------------------------------------------------------------------------------
Class B 1,095,314 30,639,781 884,404 19,574,340
-------------------------------------------------------------------------------------------------------------------
Class C 307,327 8,575,491 183,463 4,121,099
-------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 37,756 1,091,836 636,523 15,200,629
-------------------------------------------------------------------------------------------------------------------
Class B 6,415 178,790 332,374 7,978,341
-------------------------------------------------------------------------------------------------------------------
Class C 571 15,901 14,370 346,523
-------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (1,389,230) (40,068,190) (2,406,262) (53,197,159)
-------------------------------------------------------------------------------------------------------------------
Class B (466,854) (13,126,249) (1,070,971) (23,594,856)
-------------------------------------------------------------------------------------------------------------------
Class C (34,418) (964,921) (83,100) (1,787,823)
-------------------------------------------------------------------------------------------------------------------
1,882,282 $ 53,731,135 39,512 $ 3,079,481
===================================================================================================================
|
FS-27
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one share of the Fund outstanding throughout the periods indicated.
Class A
-----------------------------------------------------------------------
Six months ended Year Ended December 31,
June 30, ----------------------------------------------------
2000 1999 1998 1997 1996 1995
---------------- -------- -------- -------- -------- --------
Net asset value, beginning of period $ 26.08 $ 21.01 $ 19.26 $ 16.01 $ 14.59 $ 11.85
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.15 0.38 0.48 0.47 0.55 0.55
---------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 1.19 6.60 2.53 3.26 1.43 2.71
---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.34 6.98 3.01 3.73 1.98 3.26
---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.12) (0.35) (0.46) (0.47) (0.56) (0.52)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (1.56) (0.80) (0.01) -- --
---------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.12) (1.91) (1.26) (0.48) (0.56) (0.52)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 27.30 $ 26.08 $ 21.01 $ 19.26 $ 16.01 $ 14.59
=================================================================================================================================
Total return(a) 5.12% 34.15% 16.01% 23.70% 13.88% 28.07%
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $276,171 $238,432 $196,665 $179,456 $164,001 $170,624
=================================================================================================================================
Ratio of expenses to average net assets 1.03%(b) 1.10% 1.06% 1.13% 1.17% 1.21%
=================================================================================================================================
Ratio of net investment income to average net assets 1.10%(b) 1.69% 2.39% 2.79% 3.62% 4.20%
=================================================================================================================================
Portfolio turnover rate 27% 37% 38% 26% 48% 88%
=================================================================================================================================
|
(a) Total returns are not annualized for periods less than one year.
(b) Ratios are annualized and based on average net assets of $270,013,609.
Class B
-----------------------------------------------------------------------
Six months ended Year Ended December 31,
June 30, ----------------------------------------------------
2000 1999 1998 1997 1996 1995
---------------- -------- -------- -------- -------- --------
Net asset value, beginning of period $ 26.03 $ 20.98 $ 19.24 $ 16.01 $ 14.60 $ 11.84
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.04 0.21 0.33 0.34 0.42 0.44
---------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 1.19 6.59 2.53 3.25 1.44 2.73
---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.23 6.80 2.86 3.59 1.86 3.17
---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.03) (0.19) (0.32) (0.35) (0.45) (0.41)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (1.56) (0.80) (0.01) -- --
---------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.03) (1.75) (1.12) (0.36) (0.45) (0.41)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 27.23 $ 26.03 $ 20.98 $ 19.24 $ 16.01 $ 14.60
=================================================================================================================================
Total return(a) 4.74% 33.16% 15.14% 22.74% 12.98% 27.16%
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $166,457 $142,632 $111,866 $ 94,227 $ 79,530 $ 70,693
=================================================================================================================================
Ratio of expenses to average net assets 1.82%(b) 1.84% 1.81% 1.91% 1.96% 1.97%
=================================================================================================================================
Ratio of net investment income to average net assets 0.31%(b) 0.95% 1.64% 2.01% 2.83% 3.44%
=================================================================================================================================
Portfolio turnover rate 27% 37% 38% 26% 48% 88%
=================================================================================================================================
|
(a) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(b) Ratios are annualized and based on average net assets of $160,635,719.
FS-28
NOTE 8-FINANCIAL HIGHLIGHTS-(CONTINUED)
Class C
----------------------------------------------------
August 4, 1997
(Date sales
Year Ended commenced)
Six months ended December 31, through
June 30, ---------------- December 31,
2000 1999(a) 1998 1997
---------------- ------- ------ --------------
Net asset value, beginning of period $ 26.02 $20.97 $19.24 $17.67
---------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.04 0.21 0.33 0.13
---------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 1.19 6.59 2.52 1.58
---------------------------------------------------------------------------------------------------------------
Total from investment operations 1.23 6.80 2.85 1.71
---------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.03) (0.19) (0.32) (0.13)
---------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (1.56) (0.80) (0.01)
---------------------------------------------------------------------------------------------------------------
Total distributions (0.03) (1.75) (1.12) (0.14)
---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 27.22 $26.02 $20.97 $19.24
===============================================================================================================
Total return(b) 4.74% 33.18% 15.09% 9.74%
===============================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $14,452 $6,702 $2,994 $1,183
===============================================================================================================
Ratio of expenses to average net assets 1.82%(c) 1.84% 1.81% 1.90%(d)
===============================================================================================================
Ratio of net investment income to average net assets 0.31%(c) 0.95% 1.64% 2.02%(d)
===============================================================================================================
Portfolio turnover rate 27% 37% 38% 26%
===============================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average net assets of $11,021,649.
(d) Annualized.
FS-29
PROXY RESULTS (UNAUDITED)
A Special Meeting of Shareholders of AIM Funds Group, a Delaware business trust (the "Trust"), was held on May 3, 2000. The meeting was held for the following purposes:
(1) To elect Trustees as follows: Charles T. Bauer, Bruce L. Crockett, Owen Daly II, Edward K. Dunn, Jr., Jack M. Fields, Carl Frischling, Robert H. Graham, Prema Mathai-Davis, Lewis F. Pennock and Louis S. Sklar.
(2) To approve a new Master Investment Advisory Agreement for AIM Global Utilities Fund (the "Fund").
(3) To approve changing the fundamental investment restrictions of the Fund.
(4) To approve changing the investment objective of the Fund and making it non-fundamental.
(5) To ratify the selection of KPMG LLP as independent accountants of the Fund for the fiscal year ending in 2000.
The results of the proxy solicitation on the above matters were as follows:
VOTES WITHHELD/
TRUSTEES/MATTER VOTES FOR AGAINST ABSTENTIONS
--------------- ------------- ------- -----------
(1) Charles T. Bauer............................................ 1,514,464,534 N/A 46,493,668
Bruce L. Crockett........................................... 1,516,486,806 N/A 44,471,396
Owen Daly II................................................ 1,515,115,325 N/A 45,842,877
Edward K. Dunn, Jr. ........................................ 1,516,300,879 N/A 44,657,323
Jack M. Fields.............................................. 1,516,328,985 N/A 44,629,217
Carl Frischling............................................. 1,515,733,560 N/A 45,224,642
Robert H. Graham............................................ 1,516,470,809 N/A 44,487,393
Prema Mathai-Davis.......................................... 1,515,583,756 N/A 45,374,446
Lewis F. Pennock............................................ 1,516,458,889 N/A 44,499,313
Louis S. Sklar.............................................. 1,516,220,167 N/A 44,738,035
(2) Approval of a new Investment Advisory Agreement............. 7,098,827 164,859 2,230,187*
(3)(a) Change to Fundamental Restriction on Issuer
Diversification............................................. 7,007,256 211,907 2,274,710*
(3)(b) Change to Fundamental Restriction on Borrowing Money and
Issuing Senior Securities................................... 6,972,175 243,425 2,278,273*
(3)(c) Change to or Addition of Fundamental Restriction on
Underwriting Securities..................................... 7,000,255 212,165 2,281,453*
(3)(d) Change to or Addition of Fundamental Restriction on Industry
Concentration............................................... 7,004,582 221,930 2,267,361*
(3)(e) Change to Fundamental Restriction on Purchasing or Selling
Real Estate................................................. 6,977,645 239,916 2,276,312*
(3)(f) Change to Fundamental Restriction on Purchasing or Selling
Commodities and Elimination of Fundamental Restriction on
Puts and Calls.............................................. 6,929,042 278,574 2,286,257*
(3)(g) Change to Fundamental Restriction on Making Loans........... 6,921,097 271,552 2,301,224*
(3)(h) Approval of a new Fundamental Investment Restriction on
Investing all of the Fund's assets in an Open-End Fund...... 6,956,037 236,412 2,301,424*
(3)(i) Elimination of Fundamental Restriction on Margin
Transactions................................................ 6,821,021 359,241 2,313,611*
(3)(j) Elimination of Fundamental Restriction on Short Sales of
Securities.................................................. 6,861,377 322,438 2,310,058*
(4) Approval of Changing the Investment Objective and Making it
Non-Fundamental............................................. 6,837,392 332,712 2,323,769*
(5) Ratification of the selection of KPMG LLP as Independent
Accountants of the Fund..................................... 9,002,666 55,703 435,504
|
* Includes Broker Non-Votes
FS-30
SCHEDULE OF INVESTMENTS
JUNE 30, 2000
(UNAUDITED)
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-77.04%
BIOTECHNOLOGY-0.63%
Amgen Inc.(a) 120,000 $ 8,430,000
---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO &
CABLE)-0.87%
AT&T Corp.-Liberty Media
Group-Class A(a) 250,000 6,062,500
---------------------------------------------------------------
Radio One, Inc.-Class A(a) 74,000 2,187,625
---------------------------------------------------------------
Radio One, Inc.-Class D(a) 148,000 3,265,250
---------------------------------------------------------------
11,515,375
---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-5.96%
Avanex Corp.(a) 30,700 2,931,850
---------------------------------------------------------------
Comverse Technology, Inc.(a) 429,900 39,980,700
---------------------------------------------------------------
Finisar Corp.(a) 49,200 1,288,425
---------------------------------------------------------------
JDS Uniphase Corp.(a) 62,800 7,528,150
---------------------------------------------------------------
Juniper Networks, Inc.(a) 129,600 18,864,900
---------------------------------------------------------------
ONI Systems Corp.(a) 24,500 2,871,477
---------------------------------------------------------------
Sycamore Networks, Inc.(a) 52,200 5,761,575
---------------------------------------------------------------
79,227,077
---------------------------------------------------------------
COMPUTERS (HARDWARE)-2.68%
National Instruments Corp.(a) 165,000 7,198,125
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 312,000 28,372,500
---------------------------------------------------------------
35,570,625
---------------------------------------------------------------
COMPUTERS (NETWORKING)-2.92%
Cisco Systems, Inc.(a) 288,000 18,306,000
---------------------------------------------------------------
Extreme Networks, Inc.(a) 131,000 13,820,500
---------------------------------------------------------------
VeriSign, Inc.(a) 38,000 6,707,000
---------------------------------------------------------------
38,833,500
---------------------------------------------------------------
COMPUTERS (PERIPHERALS)-6.48%
Brocade Communications Systems,
Inc.(a) 102,000 18,715,406
---------------------------------------------------------------
EMC Corp.(a) 636,280 48,953,792
---------------------------------------------------------------
Network Appliance, Inc.(a) 144,800 11,656,400
---------------------------------------------------------------
QLogic Corp.(a) 103,000 6,804,437
---------------------------------------------------------------
86,130,035
---------------------------------------------------------------
|
MARKET
SHARES VALUE
COMPUTERS (SOFTWARE &
SERVICES)-10.49%
Affiliated Computer Services,
Inc.-Class A(a) 22,600 $ 747,212
---------------------------------------------------------------
America Online, Inc.(a) 92,000 4,853,000
---------------------------------------------------------------
BEA Systems, Inc.(a) 294,000 14,534,625
---------------------------------------------------------------
Citrix Systems, Inc.(a) 219,000 4,147,312
---------------------------------------------------------------
InfoSpace, Inc.(a) 519,000 28,674,750
---------------------------------------------------------------
ISS Group, Inc.(a) 16,400 1,619,244
---------------------------------------------------------------
Marimba, Inc.(a) 17,000 236,937
---------------------------------------------------------------
Oracle Corp.(a) 432,000 36,315,000
---------------------------------------------------------------
Secure Computing Corp.(a) 630,000 11,851,875
---------------------------------------------------------------
Siebel Systems, Inc.(a) 74,000 12,103,625
---------------------------------------------------------------
StorageNetworks, Inc.(a) 5,100 460,275
---------------------------------------------------------------
VERITAS Software Corp.(a) 168,750 19,071,387
---------------------------------------------------------------
WatchGuard Technologies, Inc.(a) 85,000 4,669,687
---------------------------------------------------------------
139,284,929
---------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-0.41%
McKesson HBOC, Inc. 260,000 5,443,750
---------------------------------------------------------------
ELECTRIC COMPANIES-0.82%
Niagara Mohawk Holdings Inc.(a) 214,300 2,986,806
---------------------------------------------------------------
Northeast Utilities 218,600 4,754,550
---------------------------------------------------------------
TXU Corp. 107,000 3,156,500
---------------------------------------------------------------
10,897,856
---------------------------------------------------------------
ELECTRICAL EQUIPMENT-3.07%
American Power Conversion Corp.(a) 318,000 12,978,375
---------------------------------------------------------------
Cohu, Inc. 134,000 3,613,812
---------------------------------------------------------------
Cree, Inc.(a) 70,000 9,345,000
---------------------------------------------------------------
Sanmina Corp.(a) 174,400 14,911,200
---------------------------------------------------------------
40,848,387
---------------------------------------------------------------
ELECTRONICS
(INSTRUMENTATION)-2.20%
Tektronix, Inc. 256,000 18,944,000
---------------------------------------------------------------
Waters Corp.(a) 82,000 10,234,625
---------------------------------------------------------------
29,178,625
---------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-5.25%
Altera Corp.(a) 280,800 28,624,050
---------------------------------------------------------------
Amkor Technology, Inc.(a) 150,000 5,296,875
---------------------------------------------------------------
Broadcom Corp.-Class A(a) 33,000 7,224,937
---------------------------------------------------------------
Linear Technology Corp. 177,600 11,355,300
---------------------------------------------------------------
Maxim Integrated Products, Inc.(a) 140,000 9,511,250
---------------------------------------------------------------
Zoran Corp.(a) 117,000 7,714,687
---------------------------------------------------------------
69,727,099
---------------------------------------------------------------
|
FS-31
MARKET
SHARES VALUE
ENGINEERING & CONSTRUCTION-2.41%
Quanta Services, Inc.(a) 582,500 $ 32,037,500
---------------------------------------------------------------
ENTERTAINMENT-0.84%
SFX Entertainment, Inc.-Class A(a) 246,300 11,160,469
---------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-1.22%
Teradyne, Inc.(a) 220,000 16,170,000
---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-2.64%
American Express Co. 120,300 6,270,637
---------------------------------------------------------------
Citigroup Inc. 255,375 15,386,344
---------------------------------------------------------------
Freddie Mac 161,860 6,555,330
---------------------------------------------------------------
MGIC Investment Corp. 149,300 6,793,150
---------------------------------------------------------------
35,005,461
---------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC &
OTHER)-1.96%
Forest Laboratories, Inc.(a) 105,200 10,625,200
---------------------------------------------------------------
Jones Pharma Inc. 220,000 8,786,250
---------------------------------------------------------------
Medicis Pharmaceutical Corp.-Class
A(a) 117,000 6,669,000
---------------------------------------------------------------
26,080,450
---------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-2.66%
Pfizer Inc. 736,200 35,337,600
---------------------------------------------------------------
HEALTH CARE (HOSPITAL
MANAGEMENT)-1.38%
Health Management Associates,
Inc.-Class A(a) 790,000 10,319,375
---------------------------------------------------------------
LifePoint Hospitals, Inc.(a) 360,000 8,010,000
---------------------------------------------------------------
18,329,375
---------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-1.03%
UnitedHealth Group Inc. 159,100 13,642,825
---------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-2.78%
Beckman Coulter, Inc. 68,500 3,998,687
---------------------------------------------------------------
Biomet, Inc. 120,600 4,635,563
---------------------------------------------------------------
Edwards Lifesciences Corp.(a) 440,000 8,140,000
---------------------------------------------------------------
Guidant Corp.(a) 105,000 5,197,500
---------------------------------------------------------------
Medtronic, Inc. 300,000 14,943,750
---------------------------------------------------------------
36,915,500
---------------------------------------------------------------
INSURANCE
(PROPERTY-CASUALTY)-0.63%
Radian Group Inc. 57,000 2,949,750
---------------------------------------------------------------
XL Capital Ltd.-Class A 100,000 5,412,500
---------------------------------------------------------------
8,362,250
---------------------------------------------------------------
LEISURE TIME (PRODUCTS)-0.38%
Mattel, Inc. 383,800 5,061,363
---------------------------------------------------------------
NATURAL GAS-0.95%
Enron Corp. 195,000 12,577,500
---------------------------------------------------------------
|
MARKET
SHARES VALUE
OIL & GAS (DRILLING &
EQUIPMENT)-2.33%
Cooper Cameron Corp.(a) 120,000 $ 7,920,000
---------------------------------------------------------------
Diamond Offshore Drilling, Inc. 125,000 4,390,625
---------------------------------------------------------------
ENSCO International Inc. 344,600 12,340,988
---------------------------------------------------------------
Schlumberger Ltd. 73,400 5,477,475
---------------------------------------------------------------
Transocean Sedco Forex Inc. 14,210 759,347
---------------------------------------------------------------
30,888,435
---------------------------------------------------------------
PAPER & FOREST PRODUCTS-0.22%
International Paper Co. 96,700 2,882,869
---------------------------------------------------------------
PHOTOGRAPHY/IMAGING-0.37%
Pinnacle Systems, Inc.(a) 220,000 4,946,563
---------------------------------------------------------------
RAILROADS-0.69%
Kansas City Southern Industries,
Inc. 103,000 9,134,813
---------------------------------------------------------------
RESTAURANTS-0.63%
CEC Entertainment Inc.(a) 328,000 8,405,000
---------------------------------------------------------------
RETAIL (BUILDING SUPPLIES)-0.81%
Home Depot, Inc. (The) 106,800 5,333,325
---------------------------------------------------------------
Sherwin-Williams Co. (The) 255,000 5,402,813
---------------------------------------------------------------
10,736,138
---------------------------------------------------------------
RETAIL (COMPUTERS &
ELECTRONICS)-0.75%
CDW Computer Centers, Inc.(a) 160,000 10,000,000
---------------------------------------------------------------
RETAIL (FOOD CHAINS)-0.43%
Albertson's, Inc. 172,000 5,719,000
---------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)-1.12%
Costco Wholesale Corp.(a) 152,000 5,016,000
---------------------------------------------------------------
Target Corp. 170,000 9,860,000
---------------------------------------------------------------
14,876,000
---------------------------------------------------------------
RETAIL (SPECIALTY)-0.83%
Zale Corp.(a) 304,000 11,096,000
---------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-1.56%
Men's Wearhouse, Inc. (The)(a) 596,000 13,298,250
---------------------------------------------------------------
Too Inc.(a) 290,000 7,376,875
---------------------------------------------------------------
20,675,125
---------------------------------------------------------------
SERVICES (COMMERCIAL &
CONSUMER)-1.33%
Convergys Corp.(a) 98,000 5,083,750
---------------------------------------------------------------
H&R Block, Inc. 220,000 7,122,500
---------------------------------------------------------------
Iron Mountain Inc.(a) 161,000 5,474,000
---------------------------------------------------------------
17,680,250
---------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-0.14%
Critical Path, Inc.(a) 32,000 1,866,000
---------------------------------------------------------------
|
FS-32
MARKET
SHARES VALUE
SERVICES (DATA PROCESSING)-2.56%
Concord EFS, Inc.(a) 174,825 $ 4,545,450
---------------------------------------------------------------
CSG Systems International, Inc.(a) 180,000 10,091,250
---------------------------------------------------------------
DST Systems, Inc.(a) 58,100 4,422,863
---------------------------------------------------------------
Fiserv, Inc.(a) 85,275 3,688,144
---------------------------------------------------------------
NOVA Corp.(a) 102,232 2,856,107
---------------------------------------------------------------
Paychex, Inc. 200,250 8,410,500
---------------------------------------------------------------
34,014,314
---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-1.45%
Nextel Communications, Inc.-Class
A(a) 200,000 12,237,500
---------------------------------------------------------------
Powerwave Technologies, Inc.(a) 159,000 6,996,000
---------------------------------------------------------------
19,233,500
---------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-0.54%
Primus Telecommunications Group,
Inc.(a) 150,000 3,731,250
---------------------------------------------------------------
Viatel, Inc.(a) 120,000 3,427,500
---------------------------------------------------------------
7,158,750
---------------------------------------------------------------
WASTE MANAGEMENT-0.62%
Waste Management, Inc. 431,600 8,200,400
---------------------------------------------------------------
Total Domestic Common Stocks
(Cost $551,567,087) 1,023,280,708
---------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-10.13%
BERMUDA-0.19%
Global Crossing Ltd.
(Telecommunications-Long
Distance)(a) 98,842 2,600,780
---------------------------------------------------------------
CANADA-4.53%
Celestica Inc.
(Electronics-Semiconductors)(a) 190,000 9,428,750
---------------------------------------------------------------
Nortel Networks Corp.
(Communications Equipment) 240,000 16,380,000
---------------------------------------------------------------
PMC-Sierra, Inc.
(Electronics-Semiconductors)(a) 193,200 34,329,225
---------------------------------------------------------------
60,137,975
---------------------------------------------------------------
|
MARKET
SHARES VALUE
FINLAND-1.86%
Nokia Oyj A.B.-ADR (Communications
Equipment) 494,400 $ 24,689,100
---------------------------------------------------------------
HONG KONG-0.23%
UTStarcom, Inc. (Communications
Equipment)(a) 100,000 3,037,500
---------------------------------------------------------------
NETHERLANDS-1.59%
Koninklijke (Royal) Phillips
Electronics N.V.-ADR (Electrical
Equipment) 444,544 21,115,840
---------------------------------------------------------------
SINGAPORE-0.92%
Flextronics International Ltd.
(Manufacturing-Specialized)(a) 178,710 12,275,144
---------------------------------------------------------------
SWEDEN-0.81%
Telefonaktiebolaget LM Ericsson
A.B.-ADR (Communications
Equipment) 536,000 10,720,000
---------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests (Cost
$56,543,017) 134,576,339
---------------------------------------------------------------
|
PRINCIPAL
AMOUNT
U.S. TREASURY SECURITIES-0.11%
U.S. TREASURY BILLS-0.11%
5.66%, 09/21/00(b) $1,460,000(c) 1,441,044
---------------------------------------------------------------
Total U.S. Treasury
Securities
(Cost $1,441,044) 1,441,044
---------------------------------------------------------------
|
SHARES
MONEY MARKET FUNDS-12.60%
STIC Liquid Assets Portfolio(d) 83,705,878 83,705,878
---------------------------------------------------------------
STIC Prime Portfolio(d) 83,705,878 83,705,878
---------------------------------------------------------------
Total Money Market Funds
(Cost $167,411,756) 167,411,756
---------------------------------------------------------------
TOTAL INVESTMENTS-99.88%
(Cost $776,962,904) 1,326,709,847
---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-0.12% 1,564,689
---------------------------------------------------------------
NET ASSETS-100.00% $1,328,274,536
===============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(c) A portion of the principal balance was pledged as collateral to cover margin
requirements for open futures contracts. See Note 7.
(d) The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
FS-33
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
(Unaudited)
ASSETS:
Investments, at market value (cost
$776,962,904) $1,326,709,847
----------------------------------------------------------
Receivables for:
Investments sold 749,164
----------------------------------------------------------
Fund shares sold 4,703,673
----------------------------------------------------------
Dividends 1,048,169
----------------------------------------------------------
Variation margin 176,750
----------------------------------------------------------
Investment for deferred compensation plan 66,712
----------------------------------------------------------
Other assets 13,594
----------------------------------------------------------
Total assets 1,333,467,909
----------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 137,700
----------------------------------------------------------
Fund shares reacquired 2,892,445
----------------------------------------------------------
Deferred compensation plan 66,712
----------------------------------------------------------
Accrued advisory fees 687,468
----------------------------------------------------------
Accrued administrative services fees 11,794
----------------------------------------------------------
Accrued distribution fees 1,234,629
----------------------------------------------------------
Accrued transfer agent fees 159,994
----------------------------------------------------------
Accrued trustees' fees 2,631
----------------------------------------------------------
Total liabilities 5,193,373
----------------------------------------------------------
Net assets applicable to shares
outstanding $1,328,274,536
==========================================================
NET ASSETS:
Class A $ 555,800,496
==========================================================
Class B $ 717,858,759
==========================================================
Class C $ 54,615,281
==========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 18,242,911
==========================================================
Class B 25,248,915
==========================================================
Class C 1,923,142
==========================================================
Class A:
Net asset value and redemption price per
share $ 30.47
----------------------------------------------------------
Offering price per share:
(Net asset value of $30.47 divided by
94.50%) $ 32.24
==========================================================
Class B:
Net asset value and offering price per
share $ 28.43
==========================================================
Class C:
Net asset value and offering price per
share $ 28.40
==========================================================
|
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000
(Unaudited)
INVESTMENT INCOME:
Dividends (net of foreign withholding tax
$53,469) $ 4,554,512
---------------------------------------------------------
Interest 8,176
---------------------------------------------------------
Total investment income 4,562,688
---------------------------------------------------------
EXPENSES:
Advisory fees 3,936,407
---------------------------------------------------------
Administrative services fee 70,430
---------------------------------------------------------
Custodian fees 53,424
---------------------------------------------------------
Distribution fees -- Class A 640,707
---------------------------------------------------------
Distribution fees -- Class B 3,314,037
---------------------------------------------------------
Distribution fees -- Class C 202,873
---------------------------------------------------------
Transfer agent fees -- Class A 275,683
---------------------------------------------------------
Transfer agent fees -- Class B 508,155
---------------------------------------------------------
Transfer agent fees -- Class C 31,139
---------------------------------------------------------
Trustees' fees 3,983
---------------------------------------------------------
Other 176,265
---------------------------------------------------------
Total expenses 9,213,103
---------------------------------------------------------
Less: Expenses paid indirectly (18,930)
---------------------------------------------------------
Net expenses 9,194,173
---------------------------------------------------------
Net investment income (loss) (4,631,485)
---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES AND FUTURES
CONTRACTS
Net realized gain from investment
securities 162,938,533
---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 14,201,930
---------------------------------------------------------
Futures contracts (435,750)
---------------------------------------------------------
13,766,180
---------------------------------------------------------
Net gain on investment securities and
futures contracts 176,704,713
---------------------------------------------------------
Net increase in net assets resulting from
operations $172,073,228
=========================================================
|
See Notes to Financial Statements.
FS-34
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 and the year ended December 31, 1999
(Unaudited)
JUNE 30, DECEMBER 31,
2000 1999
-------------- --------------
OPERATIONS:
Net investment income (loss) $ (4,631,485) $ (6,500,213)
------------------------------------------------------------------------------------------------
Net realized gain from investment securities 162,938,533 46,613,838
------------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities and futures contracts 13,766,180 268,442,968
------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 172,073,228 308,556,593
------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS:
Class A -- (17,929,351)
------------------------------------------------------------------------------------------------
Class B -- (24,484,976)
------------------------------------------------------------------------------------------------
Class C -- (997,756)
------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS-NET:
Class A 19,218,667 25,912,665
------------------------------------------------------------------------------------------------
Class B 32,576,653 19,950,492
------------------------------------------------------------------------------------------------
Class C 24,947,654 11,803,897
------------------------------------------------------------------------------------------------
Net increase in net assets 248,816,202 322,811,564
------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 1,079,458,334 756,646,770
------------------------------------------------------------------------------------------------
End of period $1,328,274,536 $1,079,458,334
================================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 624,913,082 $ 548,170,108
------------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (4,720,303) (88,818)
------------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities 158,770,564 (4,167,969)
------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 549,311,193 535,545,013
------------------------------------------------------------------------------------------------
$1,328,274,536 $1,079,458,334
================================================================================================
|
See Notes to Financial Statements.
FS-35
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Select Growth Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of four separate portfolios,
each having an unlimited number of shares of beneficial interest. The Fund
currently offers three different classes of shares: Class A shares, Class B
shares and Class C shares. Class A shares are sold with a front-end sales
charge. Class B shares and Class C shares are sold with a contingent deferred
sales charge. Matters affecting each portfolio or class will be 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 the Fund.
The Fund's investment objective is to achieve long-term growth of capital.
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 -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price as of the close of the
customary trading session on the exchange where the security is principally
traded, or lacking any sales on a particular day, the security is valued at
the closing bid price on that day. Each security reported on the NASDAQ
National Market System is valued at the last sales price as of the close of
the customary trading session on the valuation date or absent a last sales
price, at the closing bid price. Debt obligations (including convertible
bonds) are valued on the basis of prices provided by an independent pricing
service. Prices provided by the pricing service may be determined without
exclusive reliance on quoted prices, and may reflect appropriate factors such
as yield, type of issue, coupon rate and maturity date. Securities for which
market prices are not provided by any of the above methods are valued based
upon quotes furnished by independent sources and are valued at the last bid
price in the case of equity securities and in the case of debt obligations,
the mean between the last bid and asked prices. 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.
Short-term obligations having 60 days or less to maturity are valued at
amortized cost which approximates market value. For purposes of determining
net asset value per share, futures and option contracts generally will be
valued 15 minutes after the close of the customary trading session of the New
York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each day
at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the customary
trading session of the NYSE which would not be reflected in the computation
of the Fund's net asset value. If events materially affecting the value of
such securities occur during such period, then these securities will be
valued at their fair value as determined in good faith by or under the
supervision of the Board of Trustees.
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 on the accrual basis from settlement date.
Dividend income is recorded on the ex-dividend date.
C. Distributions -- Distributions from income and 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 from 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.
E. Futures Contracts -- The Fund may purchase or sell futures contracts as a
hedge against changes in market conditions. Initial margin deposits required
upon entering into futures contracts are satisfied by the segregation of
specific securities as collateral for the account of the broker (the Fund's
agent in acquiring the futures position). During the period the futures
contracts are open, changes in the value of the contracts are recognized as
unrealized gains or losses by "marking to market" on a daily basis to reflect
the market value of the contracts at the end of each day's trading. Variation
margin payments are made or received depending upon whether unrealized gains
or losses are incurred. When the contracts are closed, the Fund recognizes a
realized gain or loss equal to the difference between the proceeds from, or
cost of, the closing transaction and the Fund's basis in the contract. Risks
include the possibility of an illiquid market and that a change in value of
the contracts may not correlate with changes in the value of the securities
being hedged.
FS-36
F. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions. The Fund does
not separately account for the portion of the results of operations resulting
from changes in foreign exchange rates on investments and the fluctuations
arising from changes in market prices of securities held. Such fluctuations
are included with the net realized and unrealized gain or loss from
investments.
G. Expenses -- Distribution expenses and certain transfer agency expenses
directly attributable to a class of shares are charged to those classes'
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 Trust 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 0.80% of the first
$150 million of the Fund's average daily net assets, plus 0.625% of the Fund's
average daily net assets in excess of $150 million.
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 six months ended June 30, 2000, AIM was
paid $70,430 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 and
shareholder services to the Fund. For the six months ended June 30, 2000, AFS
was paid $461,653 for such services.
The Trust 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 Trust 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 the 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 six months ended June 30,
2000, the Class A, Class B and Class C shares paid AIM Distributors $640,707,
$3,314,037 and $202,873, respectively, as compensation under the Plans.
AIM Distributors received commissions of $195,466 from sales of the Class A
shares of the Fund during the six months ended June 30, 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 six months ended June 30,
2000, AIM Distributors received $10,324 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of
AIM, AFS and AIM Distributors.
During the six months ended June 30, 2000, the Fund paid legal fees of
$2,537 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel
to the Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the six months ended June 30, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian fees of $6,566 and $12,364, respectively, under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $18,930.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, 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 Citibank, N.A. 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 six months ended June 30,
2000, the Fund did not borrow under the line of credit agreement. The funds
which are party to the line of credit are charged a commitment fee of 0.09% on
the unused balance of the committed line. The commitment fee is allocated among
the funds based on their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended June 30, 2000 was
$303,886,854 and $341,954,108, respectively.
The amount of unrealized appreciation (depreciation) of investment
securities, for tax purposes, as of June 30, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $589,528,643 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (39,934,558) --------------------------------------------------------- Net unrealized appreciation of investment securities $549,594,085 ========================================================= Cost of investments for tax purposes is $777,115,762. |
FS-37
NOTE 7-FUTURES CONTRACTS
On June 30, 2000, $1,460,000 principal amount of U.S. Treasury obligations were pledged as collateral to cover margin requirements for open futures contracts. Open futures contracts were as follows:
UNREALIZED
NO. OF MONTH/ MARKET APPRECIATION
CONTRACT CONTRACTS COMMITMENT VALUE (DEPRECIATION)
-------- --------- ---------- ----------- --------------
S&P 500 Index 70 Sep-00/Buy $25,691,750 $(435,750)
===================================================================================================================
|
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2000 and the year ended December 31, 1999 were as follows:
JUNE 30, 2000 DECEMBER 31, 1999
------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- -------------
Sold:
Class A 2,572,113 $ 75,421,293 8,174,582 $ 169,122,203
--------------------------------------------------------------------------------------------------------------------
Class B 3,478,565 95,416,373 5,441,024 110,096,224
--------------------------------------------------------------------------------------------------------------------
Class C 1,039,602 28,794,250 820,566 16,761,504
--------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A -- -- 702,598 17,072,219
--------------------------------------------------------------------------------------------------------------------
Class B -- -- 996,161 22,682,713
--------------------------------------------------------------------------------------------------------------------
Class C -- -- 41,870 952,496
--------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (1,931,091) (56,202,626) (7,818,939) (160,281,757)
--------------------------------------------------------------------------------------------------------------------
Class B (2,345,162) (62,839,720) (5,672,316) (112,828,445)
--------------------------------------------------------------------------------------------------------------------
Class C (146,119) (3,846,596) (296,926) (5,910,103)
--------------------------------------------------------------------------------------------------------------------
2,667,908 $ 76,742,974 2,388,620 $ 57,667,054
====================================================================================================================
|
FS-38
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one share of the Fund outstanding throughout the periods indicated.
CLASS A
-----------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ----------------------------------------------------
2000(a) 1999 1998 1997(a) 1996 1995(a)
---------- -------- -------- -------- -------- --------
Net asset value, beginning of period $ 26.23 $ 19.35 $ 15.67 $ 14.78 $ 13.05 $ 10.32
-------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.06) (0.04) 0.01 0.07 0.02
-------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 4.28 8.00 4.24 2.82 2.34 3.50
-------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 4.24 7.94 4.20 2.83 2.41 3.52
-------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income -- -- -- (0.01) -- --
-------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (1.06) (0.52) (1.93) (0.68) (0.79)
-------------------------------------------------------------------------------------------------------------------------------
Total distributions -- (1.06) (0.52) (1.94) (0.68) (0.79)
-------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 30.47 $ 26.23 $ 19.35 $ 15.67 $ 14.78 $ 13.05
===============================================================================================================================
Total return(b) 16.16% 41.48% 27.09% 19.54% 18.61% 34.31%
===============================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $555,800 $461,628 $320,143 $266,168 $227,882 $168,217
===============================================================================================================================
Ratio of expenses to average net assets 1.06%(c) 1.09% 1.11% 1.13% 1.18% 1.28%
===============================================================================================================================
Ratio of net investment income (loss) to average net assets (0.30)%(c) (0.31)% (0.22)% 0.04% 0.46% 0.20%
===============================================================================================================================
Portfolio turnover rate 27% 31% 68% 110% 97% 87%
===============================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges and is not annualized for periods less than
one year.
(c) Ratios are annualized and based on average net assets of $515,381,818.
CLASS B
-----------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ----------------------------------------------------
2000(a) 1999(a) 1998 1997(a) 1996 1995(a)
---------- -------- -------- -------- -------- --------
Net asset value, beginning of period $ 24.57 $ 18.33 $ 14.98 $ 14.32 $ 12.77 $ 10.21
-------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.15) (0.23) (0.17) (0.13) (0.05) (0.08)
-------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 4.01 7.53 4.04 2.72 2.28 3.43
-------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.86 7.30 3.87 2.59 2.23 3.35
-------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized gains -- (1.06) (0.52) (1.93) (0.68) (0.79)
-------------------------------------------------------------------------------------------------------------------------------
Total distributions -- (1.06) (0.52) (1.93) (0.68) (0.79)
-------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 28.43 $ 24.57 $ 18.33 $ 14.98 $ 14.32 $ 12.77
===============================================================================================================================
Total return(b) 15.71% 40.29% 26.13% 18.50% 17.60% 33.00%
===============================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $717,859 $592,555 $428,002 $356,186 $280,807 $138,034
===============================================================================================================================
Ratio of expenses to average net assets 1.85%(c) 1.90% 1.93% 1.99% 2.03% 2.13%
===============================================================================================================================
Ratio of net investment income (loss) to average net assets (1.10)%(c) (1.12)% (1.04)% (0.82)% (0.39)% (0.65)%
===============================================================================================================================
Portfolio turnover rate 27% 31% 68% 110% 97% 87%
===============================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average net assets of $666,449,287.
FS-39
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
-----------------------------------------------
AUGUST 4,
1997
(DATE SALES
SIX MONTHS YEAR ENDED COMMENCED
ENDED DECEMBER 31, TO
JUNE 30, ------------------ DECEMBER 31,
2000(a) 1999(a) 1998(a) 1997(a)
---------- ------- ------- ------------
Net asset value, beginning of period $ 24.55 $ 18.32 $14.98 $17.65
-------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.15) (0.23) (0.17) (0.04)
-------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 4.00 7.52 4.03 (0.70)
-------------------------------------------------------------------------------------------------------------
Total from investment operations 3.85 7.29 3.86 (0.74)
-------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized gains -- (1.06) (0.52) (1.93)
-------------------------------------------------------------------------------------------------------------
Total distributions -- (1.06) (0.52) (1.93)
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 28.40 $ 24.55 $18.32 $14.98
=============================================================================================================
Total return(b) 15.68% 40.26% 26.07% (3.86)%
=============================================================================================================
Ratios/supplemental data:
Ratio of expenses to average net assets 1.85%(c) 1.90% 1.93% 1.95%(d)
=============================================================================================================
Ratio of net investment income (loss) to average net assets (1.10)%(c) (1.12)% (1.04)% (0.77)%(d)
=============================================================================================================
Portfolio turnover rate 27% 31% 68% 110%
=============================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average net assets of $40,797,439.
(d) Annualized.
FS-40
PROXY RESULTS (UNAUDITED)
A Special Meeting of Shareholders of AIM Funds Group, a Delaware business trust (the "Trust"), was held on May 3, 2000. The meeting was held for the following purposes:
(1) To elect Trustees as follows: Charles T. Bauer, Bruce L. Crockett, Owen Daly II, Edward K. Dunn, Jr., Jack M. Fields, Carl Frischling, Robert H. Graham, Prema Mathai-Davis, Lewis F. Pennock and Louis S. Sklar.
(2) To approve a new Master Investment Advisory Agreement for AIM Select Growth Fund (the "Fund").
(3) To approve changing the fundamental investment restrictions of the Fund.
(4) To approve changing the investment objective of the Fund and making it non-fundamental.
(5) To ratify the selection of KPMG LLP as independent accountants of the Fund for the fiscal year ending in 2000.
The results of the proxy solicitation on the above matters were as follows:
VOTES WITHHELD/
TRUSTEES/MATTER VOTES FOR AGAINST ABSTENTIONS
--------------- ------------- --------- -----------
(1) Charles T. Bauer............................................ 1,514,464,534 N/A 46,493,668
Bruce L. Crockett........................................... 1,516,486,806 N/A 44,471,396
Owen Daly II................................................ 1,515,115,325 N/A 45,842,877
Edward K. Dunn, Jr. ........................................ 1,516,300,879 N/A 44,657,323
Jack M. Fields.............................................. 1,516,328,985 N/A 44,629,217
Carl Frischling............................................. 1,515,733,560 N/A 45,224,642
Robert H. Graham............................................ 1,516,470,809 N/A 44,487,393
Prema Mathai-Davis.......................................... 1,515,583,756 N/A 45,374,446
Lewis F. Pennock............................................ 1,516,458,889 N/A 44,499,313
Louis S. Sklar.............................................. 1,516,220,167 N/A 44,738,035
(2) Approval of a new Investment Advisory Agreement............. 18,162,974 407,664 5,398,751*
(3)(a) Change to Fundamental Restriction on Issuer
Diversification............................................. 17,793,323 585,554 5,590,512*
(3)(b) Change to Fundamental Restriction on Borrowing Money and
Issuing Senior Securities................................... 17,643,057 707,140 5,619,192*
(3)(c) Change to or Addition of Fundamental Restriction on
Underwriting Securities..................................... 17,735,470 633,715 5,600,204*
(3)(d) Change to or Addition of Fundamental Restriction on Industry
Concentration............................................... 17,759,968 590,848 5,618,573*
(3)(e) Change to Fundamental Restriction on Purchasing or Selling
Real Estate................................................. 17,644,028 719,740 5,605,621*
(3)(f) Change to Fundamental Restriction on Purchasing or Selling
Commodities and Elimination of Fundamental Restriction on
Puts and Calls.............................................. 17,532,142 794,076 5,643,171*
(3)(g) Change to Fundamental Restriction on Making Loans........... 17,497,192 788,242 5,683,955*
(3)(h) Approval of a new Fundamental Investment Restriction on
Investing all of the Fund's assets in an Open-End Fund...... 17,607,939 712,143 5,649,307*
(3)(i) Elimination of Fundamental Restriction on Margin
Transactions................................................ 17,270,430 1,018,370 5,680,589*
(3)(j) Elimination of Fundamental Restriction on Short Sales of
Securities.................................................. 17,425,580 867,238 5,676,571*
(4) Approval of changing the Investment Objective and Making it
Non-Fundamental............................................. 17,458,745 805,507 5,705,137*
(5) Ratification of the selection of KPMG LLP as Independent
Accountants of the Fund..................................... 22,780,259 180,753 1,008,377
|
* Includes Broker Non-Votes
FS-41
SCHEDULE OF INVESTMENTS
JUNE 30, 2000
(UNAUDITED)
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-75.79%
BANKS (MONEY CENTER)-1.75%
Chase Manhattan Corp. (The) 11,250,000 $ 518,203,125
----------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO
& CABLE)-10.33%
Comcast Corp.-Class A(a)(b) 45,000,000 1,822,500,000
----------------------------------------------------------------
Cox Communications, Inc.-Class
A(a) 27,188,900 1,238,794,256
----------------------------------------------------------------
3,061,294,256
----------------------------------------------------------------
COMPUTERS (HARDWARE)-8.63%
Apple Computer, Inc.(a)(b) 20,000,000 1,047,500,000
----------------------------------------------------------------
Dell Computer Corp.(a) 14,127,800 696,677,137
----------------------------------------------------------------
Gateway, Inc.(a) 7,605,750 431,626,313
----------------------------------------------------------------
Sun Microsystems, Inc.(a) 4,200,000 381,937,500
----------------------------------------------------------------
2,557,740,950
----------------------------------------------------------------
COMPUTERS (PERIPHERALS)-2.40%
EMC Corp.(a) 1,157,600 89,062,850
----------------------------------------------------------------
Lexmark International Group,
Inc.-Class A(a)(b) 9,254,100 622,338,225
----------------------------------------------------------------
711,401,075
----------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-1.93%
At Home Corp.-Series A(a) 16,500,000 342,375,000
----------------------------------------------------------------
Citrix Systems, Inc.(a) 2,000,000 37,875,000
----------------------------------------------------------------
Oracle Corp.(a) 1,500,000 126,093,750
----------------------------------------------------------------
Unisys Corp.(a) 4,500,000 65,531,250
----------------------------------------------------------------
571,875,000
----------------------------------------------------------------
ELECTRICAL EQUIPMENT-0.79%
Solectron Corp.(a) 5,600,000 234,500,000
----------------------------------------------------------------
ELECTRONICS
(SEMICONDUCTORS)-3.22%
Analog Devices, Inc.(a) 10,851,900 824,744,400
----------------------------------------------------------------
Texas Instruments Inc. 1,900,000 130,506,250
----------------------------------------------------------------
955,250,650
----------------------------------------------------------------
ENTERTAINMENT-0.18%
Time Warner Inc. 698,700 53,101,200
----------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-4.24%
Applied Materials, Inc.(a) 9,009,900 816,522,188
----------------------------------------------------------------
Teradyne, Inc.(a) 5,976,700 439,287,450
----------------------------------------------------------------
1,255,809,638
----------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-2.64%
American Express Co. 7,500,000 390,937,500
----------------------------------------------------------------
|
MARKET
SHARES VALUE
FINANCIAL
(DIVERSIFIED)-(CONTINUED)
Citigroup Inc. 6,500,000 $ 391,625,000
----------------------------------------------------------------
782,562,500
----------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-1.09%
Johnson & Johnson 3,180,800 324,044,000
----------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-2.11%
Pfizer Inc. 13,000,000 624,000,000
----------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.92%
Guidant Corp.(a) 11,500,000 569,250,000
----------------------------------------------------------------
HOUSEHOLD PRODUCTS (NON-
DURABLES)-1.11%
Colgate-Palmolive Co. 1,200,000 71,850,000
----------------------------------------------------------------
Kimberly-Clark Corp. 4,500,000 258,187,500
----------------------------------------------------------------
330,037,500
----------------------------------------------------------------
INSURANCE (MULTI-LINE)-2.85%
American International Group,
Inc. 6,750,000 793,125,000
----------------------------------------------------------------
Hartford Financial Services
Group, Inc. (The) 900,000 50,343,750
----------------------------------------------------------------
843,468,750
----------------------------------------------------------------
INVESTMENT
BANKING/BROKERAGE-4.22%
Merrill Lynch & Co., Inc. 1,900,000 218,500,000
----------------------------------------------------------------
Morgan Stanley Dean Witter &
Co. 12,400,000 1,032,300,000
----------------------------------------------------------------
1,250,800,000
----------------------------------------------------------------
NATURAL GAS-1.55%
Williams Cos., Inc. (The) 11,000,000 458,562,500
----------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-0.39%
Schlumberger Ltd. 1,532,400 114,355,350
----------------------------------------------------------------
PAPER & FOREST PRODUCTS-0.24%
Weyerhaeuser Co. 1,670,000 71,810,000
----------------------------------------------------------------
PHOTOGRAPHY/IMAGING-0.23%
Eastman Kodak Co. 1,142,200 67,960,900
----------------------------------------------------------------
RETAIL (BUILDING
SUPPLIES)-0.06%
Lowe's Cos., Inc. 435,300 17,874,506
----------------------------------------------------------------
RETAIL (COMPUTERS &
ELECTRONICS)-2.18%
Best Buy Co., Inc.(a) 10,190,300 644,536,475
----------------------------------------------------------------
|
FS-42
MARKET
SHARES VALUE
RETAIL (DRUG STORES)-1.76%
Walgreen Co. 16,231,000 $ 522,435,313
----------------------------------------------------------------
RETAIL (FOOD CHAINS)-2.30%
Kroger Co. (The)(a) 11,500,000 253,718,750
----------------------------------------------------------------
Safeway Inc.(a) 9,500,000 428,687,500
----------------------------------------------------------------
682,406,250
----------------------------------------------------------------
RETAIL (GENERAL
MERCHANDISE)-6.38%
Costco Wholesale Corp.(a) 18,146,800 598,844,400
----------------------------------------------------------------
Target Corp. 22,248,000 1,290,384,000
----------------------------------------------------------------
1,889,228,400
----------------------------------------------------------------
SERVICES (ADVERTISING/
MARKETING)-1.87%
Omnicom Group Inc. 6,208,800 552,971,250
----------------------------------------------------------------
SERVICES (DATA
PROCESSING)-3.64%
Automatic Data Processing, Inc. 4,200,000 224,962,500
----------------------------------------------------------------
First Data Corp. 17,200,000 853,550,000
----------------------------------------------------------------
1,078,512,500
----------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-5.78%
Nextel Communications,
Inc.-Class A(a) 28,000,000 1,713,250,000
----------------------------------------------------------------
Total Domestic Common Stocks
(Cost $17,360,600,180) 22,457,242,088
----------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-12.95%
BERMUDA-3.92%
Tyco International Ltd.
(Manufacturing-Diversified) 24,500,000 1,160,687,500
----------------------------------------------------------------
|
MARKET
SHARES VALUE
CANADA-3.59%
360networks Inc.
(Telecommunications-Long
Distance)(a) 1,757,400 $ 26,800,350
----------------------------------------------------------------
Celestica Inc.
(Electronics-Semiconductors)(a) 7,600,000 377,150,000
----------------------------------------------------------------
Nortel Networks Corp.
(Communications Equipment) 9,689,300 661,294,725
----------------------------------------------------------------
1,065,245,075
----------------------------------------------------------------
FINLAND-5.44%
Nokia Oyj-ADR (Communications
Equipment) 32,272,700 1,611,617,956
----------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests (Cost
$1,995,069,524) 3,837,550,531
----------------------------------------------------------------
MONEY MARKET FUNDS-11.90%
STIC Liquid Assets Portfolio(c) 1,763,215,408 1,763,215,408
----------------------------------------------------------------
STIC Prime Portfolio(c) 1,763,215,408 1,763,215,408
----------------------------------------------------------------
Total Money Market Funds (Cost
$3,526,430,816) 3,526,430,816
----------------------------------------------------------------
TOTAL INVESTMENTS-100.64%
(Cost $22,882,100,520) 29,821,223,435
----------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(0.64%) (188,412,801)
----------------------------------------------------------------
NET ASSETS-100.00% $29,632,810,634
================================================================
|
Investment Abbreviation:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a)Non-income producing security.
(b)Affiliated issuers are those in which the Fund's holdings of an issuer
represent 5% or more of the outstanding voting securities of the issuer. The
Fund has not owned enough of the outstanding voting securities of the issuer
to have control (as defined in the Investment Company Act of 1940) of that
issuer. The aggregate market value of these securities at 06/30/00 was
$3,492,338,225 which represented 11.79% of the Fund's net assets.
(c)The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
FS-43
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
(UNAUDITED)
ASSETS:
Investments, at market value (cost
$22,882,100,520) $29,821,223,435
----------------------------------------------------------
Receivables for:
Investments sold 239,298,145
----------------------------------------------------------
Collateral for securities loaned 147,712,500
----------------------------------------------------------
Fund shares sold 70,104,384
----------------------------------------------------------
Dividends and interest 17,998,796
----------------------------------------------------------
Investment for deferred compensation plan 219,447
----------------------------------------------------------
Other assets 1,771,120
----------------------------------------------------------
Total assets 30,298,327,827
----------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 391,248,330
----------------------------------------------------------
Collateral upon return of securities
loaned 147,712,500
----------------------------------------------------------
Fund shares reacquired 41,325,510
----------------------------------------------------------
Foreign currency contracts 23,122,250
----------------------------------------------------------
Foreign currency contracts outstanding 15,249,663
----------------------------------------------------------
Deferred compensation plan 219,447
----------------------------------------------------------
Accrued advisory fees 14,698,512
----------------------------------------------------------
Accrued administrative services fees 81,586
----------------------------------------------------------
Accrued distribution fees 27,771,025
----------------------------------------------------------
Accrued trustees' fees 17,808
----------------------------------------------------------
Accrued transfer agent fees 3,090,963
----------------------------------------------------------
Accrued operating expenses 979,599
----------------------------------------------------------
Total liabilities 665,517,193
----------------------------------------------------------
Net assets applicable to shares
outstanding $29,632,810,634
==========================================================
NET ASSETS:
Class A $13,179,118,202
==========================================================
Class B $15,045,846,702
==========================================================
Class C $ 1,407,845,730
==========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 270,965,434
==========================================================
Class B 321,290,347
==========================================================
Class C 30,050,887
==========================================================
Class A:
Net asset value and redemption price
per share $ 48.64
----------------------------------------------------------
Offering price per share:
(Net asset value of $48.64 divided
by 94.50%) $ 51.47
==========================================================
Class B:
Net asset value and offering price per
share $ 46.83
==========================================================
Class C:
Net asset value and offering price per
share $ 46.85
==========================================================
|
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
INVESTMENT INCOME:
Dividends (net of foreign withholding tax
of $1,171,572) $ 118,821,805
----------------------------------------------------------
Security lending income 5,559
----------------------------------------------------------
Total investment income 118,827,364
----------------------------------------------------------
EXPENSES:
Advisory fees 90,852,320
----------------------------------------------------------
Administrative services fee 486,487
----------------------------------------------------------
Custodian fees 638,270
----------------------------------------------------------
Distribution fees -- Class A 16,257,781
----------------------------------------------------------
Distribution fees -- Class B 73,947,416
----------------------------------------------------------
Distribution fees -- Class C 5,815,346
----------------------------------------------------------
Transfer agent fees -- Class A 7,049,274
----------------------------------------------------------
Transfer agent fees -- Class B 11,520,807
----------------------------------------------------------
Transfer agent fees -- Class C 906,688
----------------------------------------------------------
Trustees' fees 34,495
----------------------------------------------------------
Other 3,177,298
----------------------------------------------------------
Total expenses 210,686,182
----------------------------------------------------------
Less: Fees waived by advisor (3,379,542)
----------------------------------------------------------
Expenses paid indirectly (200,309)
----------------------------------------------------------
Net expenses 207,106,331
----------------------------------------------------------
Net investment income (loss) (88,278,967)
----------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES, FOREIGN CURRENCY
CONTRACTS AND OPTION CONTRACTS
Net realized gain from:
Investment securities 2,006,329,041
----------------------------------------------------------
Foreign currency contracts 167,189,435
----------------------------------------------------------
Option contracts written 2,054,631
----------------------------------------------------------
2,175,573,107
----------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities (2,204,825,230)
----------------------------------------------------------
Foreign currency contracts (84,198,640)
----------------------------------------------------------
(2,289,023,870)
----------------------------------------------------------
Net gain (loss) on investment securities,
foreign currency contracts and option
contracts (113,450,763)
----------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $ (201,729,730)
==========================================================
|
See Notes to Financial Statements.
FS-44
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND THE YEAR ENDED DECEMBER 31, 1999
(UNAUDITED)
JUNE 30, DECEMBER 31,
2000 1999
--------------- ---------------
OPERATIONS:
Net investment income (loss) $ (88,278,967) $ (115,945,323)
--------------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currency contracts and option contracts 2,175,573,107 2,580,583,708
--------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities, foreign currency contracts and
option contracts (2,289,023,870) 3,559,362,924
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (201,729,730) 6,024,001,309
--------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A -- (788,853,278)
--------------------------------------------------------------------------------------------------
Class B -- (918,638,257)
--------------------------------------------------------------------------------------------------
Class C -- (52,550,069)
--------------------------------------------------------------------------------------------------
Share transactions-net:
Class A 598,571,109 1,781,344,407
--------------------------------------------------------------------------------------------------
Class B 833,307,858 2,515,709,918
--------------------------------------------------------------------------------------------------
Class C 563,643,077 562,747,820
--------------------------------------------------------------------------------------------------
Net increase in net assets 1,793,792,314 9,123,761,850
--------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 27,839,018,320 18,715,256,470
--------------------------------------------------------------------------------------------------
End of period $29,632,810,634 $27,839,018,320
==================================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $19,880,460,414 $17,884,938,370
--------------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (88,856,301) (577,334)
--------------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currency contracts and option
contracts 2,917,333,269 741,760,162
--------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currency contracts and option contracts 6,923,873,252 9,212,897,122
--------------------------------------------------------------------------------------------------
$29,632,810,634 $27,839,018,320
==================================================================================================
|
See Notes to Financial Statements.
FS-45
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Value Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The Trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of four separate portfolios, each
having an unlimited number of shares of beneficial interest. The Fund currently
offers three different classes of shares: Class A shares, Class B shares and
Class C shares. Class A shares are sold with a front-end sales charge. Class B
shares and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class will be 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 the Fund. The Fund's investment objective
is to achieve long-term growth of capital. Income is a secondary objective.
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 -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price as of the close of the
customary trading session on the exchange where the security is principally
traded, or lacking any sales on a particular day, the security is valued at
the closing bid price on that day. Each security reported on the NASDAQ
National Market System is valued at the last sales price as of the close of
the customary trading session on the valuation date or absent a last sales
price, at the closing bid price. Debt obligations (including convertible
bonds) are valued on the basis of prices provided by an independent pricing
service. Prices provided by the pricing service may be determined without
exclusive reliance on quoted prices, and may reflect appropriate factors such
as yield, type of issue, coupon rate and maturity date. Securities for which
market prices are not provided by any of the above methods are valued based
upon quotes furnished by independent sources and are valued at the last bid
price in the case of equity securities and in the case of debt obligations,
the mean between the last bid and asked prices. 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.
Short-term obligations having 60 days or less to maturity are valued at
amortized cost which approximates market value. For purposes of determining
net asset value per share, futures and option contracts generally will be
valued 15 minutes after the close of the customary trading session of the New
York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the customary
trading session of the NYSE which would not be reflected in the computation
of the Fund's net asset value. If events materially affecting the value of
such securities occur during such period, then these securities will be
valued at their fair value as determined in good faith by or under the
supervision of the Board of Trustees.
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 on the accrual basis from settlement date.
Dividend income is recorded on the ex-dividend date.
C. Distributions -- Distributions from income and 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 from 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.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions. The Fund does
not separately account for the portion of the results of operations resulting
from changes in foreign exchange rates on investments and the fluctuations
arising from changes in market prices of securities held. Such fluctuations
are included with the net realized and unrealized gain or loss from
investments.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a
FS-46
foreign currency contract to attempt to minimize the risk to the Fund from
adverse changes in the relationship between currencies. The Fund may also
enter into a foreign currency contract for the purchase or sale of a security
denominated in a foreign currency in order to "lock in" the U.S. dollar price
of that security. The Fund could be exposed to risk if counterparties to the
contracts are unable to meet the terms of their contracts or if the value of
the foreign currency changes unfavorably.
Outstanding foreign currency contracts at June 30, 2000 were as follows:
CONTRACT TO UNREALIZED
SETTLEMENT ------------------------------ APPRECIATION
DATE CURRENCY DELIVER RECEIVE VALUE (DEPRECIATION)
--------------------- -------- ------------- -------------- -------------- --------------
09/29/00 CAD 999,250,000 $ 675,207,719 $ 677,086,822 $ (1,879,103)
--------------------------------------------------------------------------------------------------
08/28/00 EUR 971,500,000 916,758,880 929,137,742 (12,378,862)
--------------------------------------------------------------------------------------------------
10/03/00 EUR 643,500,000 615,813,600 616,805,298 (991,698)
==================================================================================================
2,614,250,000 $2,207,780,199 $2,223,029,862 $(15,249,663)
==================================================================================================
|
G. Covered Call Options -- The Fund may write call options, on a covered basis;
that is, the Fund will own the underlying security. Options written by the
Fund normally will have expiration dates between three and nine months from
the date written. 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 mean between the last bid
and asked prices on that day. 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 during the option period. The purchaser of a call
option 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 that received when the call option was
written) a call option identical to the one originally written.
H. Expenses -- Distribution expenses and certain transfer agency expenses
directly attributable to a class of shares are charged to those classes'
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 Trust 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 0.80% of the first
$150 million of the Fund's average daily net assets, plus 0.625% of the Fund's
average daily net assets in excess of $150 million. AIM has agreed to waive
advisory fees payable by the Fund to AIM at the annual rate of 0.025% of the
Fund's average daily net assets in excess of $2 billion. During the six months
ended June 30, 2000, AIM waived fees of $3,379,542. Effective July 1, 2000, AIM
has agreed to waive advisory fees payable by the Fund to AIM at the annual rate
of 0.025% for each $5 billion increment in net assets over $5 billion, up to a
maximum waiver of 0.175% on net assets in excess of $35 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 six months ended June 30, 2000, AIM was
paid $486,487 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 and
shareholder services to the Fund. For the six months ended June 30, 2000, AFS
was paid $10,272,491 for such services.
The Trust 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 Trust 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 the 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 six months ended June 30,
2000, the Class A, Class B and Class C shares paid AIM Distributors $16,257,781,
$73,947,416 and $5,815,346, respectively, as compensation under the Plans.
FS-47
AIM Distributors received commissions of $4,634,493 from sales of the Class A
shares of the Fund during the six months ended June 30, 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 six months ended June 30,
2000, AIM Distributors received $504,317 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the six months ended June 30, 2000, the Fund paid legal fees of $21,575
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the six months ended June 30, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian fees of $157,093 and $43,216, respectively, under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $200,309.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, 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 Citibank, N.A. 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 six months ended June 30,
2000, the Fund did not borrow under the line of credit agreement. The funds
which are party to the line of credit are charged a commitment fee of 0.09% on
the unused balance of the committed line. The commitment fee is allocated among
the funds based on their respective average net assets for the period.
NOTE 6-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the
Fund's total assets. Such loans would be secured by collateral equal to no less
than the market value, determined daily, of the loaned securities. Such
collateral will be cash or debt securities issued or guaranteed by the U.S.
Government or any of its agencies. Cash collateral pursuant to these loans would
be invested in short-term money market instruments or affiliated money market
funds. Lending securities entails a risk of loss to the Fund 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.
At June 30, 2000, securities with an aggregate value of $143,508,131 were on
loan to brokers. The loans were secured by cash collateral of $147,712,500
received by the Fund. For the six months ended June 30, 2000, the Fund received
fees of $5,559 for securities lending.
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended June 30, 2000 was
$10,365,117,281 and $8,962,704,154, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of June 30, 2000 is as follows:
Aggregate unrealized appreciation of: Investment securities $7,468,216,888 ---------------------------------------------------------- Aggregate unrealized (depreciation) of: Investment securities (557,776,391) ---------------------------------------------------------- Net unrealized appreciation of investment securities $6,910,440,497 ========================================================== Cost of investments for tax purposes is $22,910,782,938. |
NOTE 8-CALL OPTION CONTRACTS
Transactions in call options written during the six months ended June 30, 2000 are summarized as follows:
CALL OPTION CONTRACTS
------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- -----------
Beginning of period -- $ --
----------------------------------------------------------
Written 10,000 2,054,631
----------------------------------------------------------
Exercised (10,000) (2,054,631)
----------------------------------------------------------
End of period -- $ --
==========================================================
|
FS-48
NOTE 9-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2000 and the year ended December 31, 1999 were as follows:
JUNE 30, DECEMBER 31,
2000 1999
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ----------- ---------------
Sold:
Class A 37,036,705 $ 1,831,971,299 65,309,195 $ 2,905,872,208
---------------------------------------------------------------------------------------------------------------------------
Class B 37,058,764 1,765,032,348 67,138,813 2,915,628,481
---------------------------------------------------------------------------------------------------------------------------
Class C 13,471,717 642,296,830 13,738,072 600,569,156
---------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A -- -- 16,150,747 754,887,097
---------------------------------------------------------------------------------------------------------------------------
Class B -- -- 19,043,747 860,577,418
---------------------------------------------------------------------------------------------------------------------------
Class C -- -- 1,098,977 49,675,082
---------------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (24,922,261) (1,233,400,190) (42,137,878) (1,879,414,898)
---------------------------------------------------------------------------------------------------------------------------
Class B (19,537,739) (931,724,490) (29,076,106) (1,260,495,981)
---------------------------------------------------------------------------------------------------------------------------
Class C (1,652,310) (78,653,753) (2,008,443) (87,496,418)
---------------------------------------------------------------------------------------------------------------------------
41,454,876 $ 1,995,522,044 109,257,124 $ 4,859,802,145
===========================================================================================================================
|
NOTE 10-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one share of the Fund outstanding throughout the periods indicated.
CLASS A
---------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, -------------------------------------------------------------------
2000 1999 1998 1997 1996(a) 1995
---------------- ----------- ---------- ---------- ---------- ----------
Net asset value, beginning of period $ 48.83 $ 40.19 $ 32.42 $ 29.15 $ 26.81 $ 21.14
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss) (0.04) (0.04) 0.09 0.17 0.43 0.14
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Net gains (losses) on securities (both
realized and unrealized) (0.15) 11.93 10.38 6.78 3.42 7.21
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Total from investment operations (0.19) 11.89 10.47 6.95 3.85 7.35
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income -- -- (0.09) (0.04) (0.41) (0.09)
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Distributions from net realized gains -- (3.25) (2.61) (3.64) (1.10) (1.59)
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Total distributions -- (3.25) (2.70) (3.68) (1.51) (1.68)
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 48.64 $ 48.83 $ 40.19 $ 32.42 $ 29.15 $ 26.81
======================================== =========== =========== ========== ========== ========== ==========
Total return(b) (0.39)% 29.95% 32.76% 23.95% 14.52% 34.85%
======================================== =========== =========== ========== ========== ========== ==========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $13,179,118 $12,640,073 $8,823,094 $6,745,253 $5,100,061 $3,408,952
======================================== =========== =========== ========== ========== ========== ==========
Ratio of expenses to average net assets:
With fee waivers 1.00%(c) 1.00% 1.00% 1.04% 1.11% 1.12%
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Without fee waivers 1.02%(c) 1.02% 1.02% 1.06% 1.13% 1.13%
======================================== =========== =========== ========== ========== ========== ==========
Ratio of net investment income (loss) to
average net assets (0.17)%(c) (0.09)% 0.26% 0.57% 1.65% 0.74%
======================================== =========== =========== ========== ========== ========== ==========
Portfolio turnover rate 33% 66% 113% 137% 126% 151%
======================================== =========== =========== ========== ========== ========== ==========
|
(a) Calculated using average shares outstanding.
(b) Total returns are not annualized for periods less than one year.
(c) Ratios are annualized and based on average net assets of $13,077,687,445.
FS-49
NOTE 10-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
---------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, -------------------------------------------------------------------
2000(a) 1999(a) 1998 1997 1996(a) 1995
---------------- ----------- ---------- ---------- ---------- ----------
Net asset value, beginning of period $ 47.20 $ 39.24 $ 31.89 $ 28.92 $ 26.65 $ 21.13
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss) (0.23) (0.39) (0.18) (0.07) 0.20 (0.01)
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Net gains (losses) on securities (both
realized and unrealized) (0.14) 11.60 10.14 6.68 3.38 7.12
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Total from investment operations (0.37) 11.21 9.96 6.61 3.58 7.11
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income -- -- -- -- (0.21) --
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Distributions from net realized gains -- (3.25) (2.61) (3.64) (1.10) (1.59)
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Total distributions -- (3.25) (2.61) (3.64) (1.31) (1.59)
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 46.83 $ 47.20 $ 39.24 $ 31.89 $ 28.92 $ 26.65
======================================== =========== =========== ========== ========== ========== ==========
Total return(b) (0.79)% 28.94% 31.70% 22.96% 13.57% 33.73%
======================================== =========== =========== ========== ========== ========== ==========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $15,045,847 $14,338,087 $9,680,068 $6,831,796 $4,875,933 $2,860,531
======================================== =========== =========== ========== ========== ========== ==========
Ratio of expenses to average net assets:
With fee waivers 1.79%(c) 1.79% 1.80% 1.85% 1.94% 1.94%
---------------------------------------- ----------- ----------- ---------- ---------- ---------- ----------
Without fee waivers 1.81%(c) 1.81% 1.82% 1.87% 1.96% 1.96%
======================================== =========== =========== ========== ========== ========== ==========
Ratio of net investment income (loss) to
average net assets (0.97)%(c) (0.88)% (0.54)% (0.24)% 0.82% (0.08)%
======================================== =========== =========== ========== ========== ========== ==========
Portfolio turnover rate 33% 66% 113% 137% 126% 151%
======================================== =========== =========== ========== ========== ========== ==========
|
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average net assets of $14,870,744,134.
CLASS C
------------------------------------------------------------------
YEAR ENDED AUGUST 4, 1997
SIX MONTHS ENDED DECEMBER 31, (DATE SALES COMMENCED)
JUNE 30, -------------------- TO DECEMBER 31,
2000(a) 1999(a) 1998(a) 1997
---------------- -------- -------- ----------------------
Net asset value, beginning of period $ 47.22 $ 39.26 $ 31.90 $ 35.60
------------------------------------------------------------ ---------- -------- -------- -------
Income from investment operations:
Net investment income (loss) (0.23) (0.39) (0.19) (0.01)
------------------------------------------------------------ ---------- -------- -------- -------
Net gains (losses) on securities (both realized and
unrealized) (0.14) 11.60 10.16 (0.05)
------------------------------------------------------------ ---------- -------- -------- -------
Total from investment operations (0.37) 11.21 9.97 (0.06)
------------------------------------------------------------ ---------- -------- -------- -------
Less distributions from net realized gains -- (3.25) (2.61) (3.64)
------------------------------------------------------------ ---------- -------- -------- -------
Net asset value, end of period $ 46.85 $ 47.22 $ 39.26 $ 31.90
============================================================ ========== ======== ======== =======
Total return(b) (0.79)% 28.92% 31.72% (0.08)%
============================================================ ========== ======== ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,407,846 $860,859 $212,095 $32,900
============================================================ ========== ======== ======== =======
Ratio of expenses to average net assets:
With fee waivers 1.79%(c) 1.79% 1.80% 1.84%(d)
------------------------------------------------------------ ---------- -------- -------- -------
Without fee waivers 1.81%(c) 1.81% 1.82% 1.86%(d)
============================================================ ========== ======== ======== =======
Ratio of net investment income (loss) to average net assets (0.97)%(c) (0.88)% (0.54)% (0.23)%(d)
============================================================ ========== ======== ======== =======
Portfolio turnover rate 33% 66% 113% 137%
============================================================ ========== ======== ======== =======
|
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average net assets of $1,169,459,644.
(d) Annualized.
FS-50
PROXY RESULTS (UNAUDITED)
A Special Meeting of Shareholders of AIM Funds Group, a Delaware business trust (the "Trust"), was held on May 3, 2000. The meeting was held for the following purposes:
(1) To elect Trustees as follows: Charles T. Bauer, Bruce L. Crockett, Owen Daly
II, Edward K. Dunn, Jr., Jack M. Fields, Carl Frischling, Robert H. Graham,
Prema Mathai-Davis, Lewis F. Pennock and Louis S. Sklar.
(2) To approve a new Master Investment Advisory Agreement for AIM Value Fund
(the "Fund").
(3) To approve changing the fundamental investment restrictions of the Fund.
(4) To approve changing the investment objective of the Fund and making it
non-fundamental.
(5) To ratify the selection of KPMG LLP as independent accountants of the Fund
for the fiscal year ending in 2000.
The results of the proxy solicitation on the above matters were as follows:
VOTES WITHHELD/
TRUSTEES/MATTER VOTES FOR AGAINST ABSTENTIONS
--------------- ------------- ---------- -----------
(1) Charles T. Bauer............................................ 1,514,464,534 N/A 46,493,668
Bruce L. Crockett........................................... 1,516,486,806 N/A 44,471,396
Owen Daly II................................................ 1,515,115,325 N/A 45,842,877
Edward K. Dunn, Jr. ........................................ 1,516,300,879 N/A 44,657,323
Jack M. Fields.............................................. 1,516,328,985 N/A 44,629,217
Carl Frischling............................................. 1,515,733,560 N/A 45,224,642
Robert H. Graham............................................ 1,516,470,809 N/A 44,487,393
Prema Mathai-Davis.......................................... 1,515,583,756 N/A 45,374,446
Lewis F. Pennock............................................ 1,516,458,889 N/A 44,499,313
Louis S. Sklar.............................................. 1,516,220,167 N/A 44,738,035
(2) Adjournment of approval of a new Investment Advisory
Agreement................................................... 191,756,409 4,816,012 108,195,950*
(3)(a) Adjournment of approval of changing the Fundamental
Restriction on Issuer Diversification....................... 187,717,392 6,540,842 110,510,137*
(3)(b) Adjournment of approval of changing the Fundamental
Restriction on Borrowing Money and Issuing Senior
Securities.................................................. 186,284,410 8,037,809 110,446,152*
(3)(c) Adjournment of changing or adding the Fundamental
Restriction on Underwriting Securities...................... 187,218,156 6,925,728 110,624,487*
(3)(d) Adjournment of changing or adding the Fundamental
Restriction on Industry Concentration....................... 187,505,371 6,702,153 110,560,847*
(3)(e) Adjournment of approval of changing the Fundamental
Restriction on Purchasing or Selling Real Estate............ 186,217,466 8,043,249 110,507,656*
(3)(f) Adjournment of approval of changing the Fundamental
Restriction on Purchasing or Selling Commodities and
Elimination of Fundamental Restriction on Puts and Calls.... 185,048,605 8,985,770 110,733,996*
(3)(g) Adjournment of approval of changing the Fundamental
Restriction on Making Loans................................. 184,779,726 8,944,132 111,044,513*
(3)(h) Adjournment of approval of a new Fundamental Investment
Restriction on Investing all of the Fund's assets in an
Open-End Fund............................................... 185,779,835 7,875,928 111,112,608*
(3)(i) Adjournment of approval of Elimination of Fundamental
Restriction on Margin Transactions.......................... 182,648,511 10,841,899 111,277,961*
(3)(j) Adjournment of approval of the Elimination of Fundamental
Restriction on Short Sales of Securities.................... 183,638,975 9,899,004 111,230,392*
(4) Adjournment of approval of changing the Investment Objective
and Making it Non-Fundamental............................... 183,529,516 10,693,894 110,554,961*
(5) Ratification of the selection of KPMG LLP as Independent
Accountants of the Fund..................................... 289,695,341 2,418,289 12,654,741
|
FS-51
The Special Meeting of Shareholders of the Trust was reconvened on May 31, 2000. The following matters were then considered:
VOTES WITHHELD/
MATTER VOTES FOR AGAINST ABSTENTIONS
------ ------------- ---------- -----------
(2) Approval of a new Investment Advisory Agreement............. 239,955,914 5,760,855 80,591,160*
(3)(a) Change to Fundamental Restriction on Issuer
Diversification............................................. 234,952,693 8,222,652 83,132,584*
(3)(b) Change to Fundamental Restriction on Borrowing Money and
Issuing Senior Securities................................... 233,192,994 10,067,830 83,047,105*
(3)(c) Change to or Addition of Fundamental Restriction on
Underwriting Securities..................................... 234,457,639 8,642,550 83,207,740*
(3)(d) Change to or Addition of Fundamental Restriction on Industry
Concentration............................................... 234,767,814 8,381,327 83,158,788*
(3)(e) Change to Fundamental Restriction on Purchasing or Selling
Real Estate................................................. 233,198,772 10,043,220 83,065,937*
(3)(f) Change to Fundamental Restriction on Purchasing or Selling
Commodities and Elimination of Fundamental Restriction on
Puts and Calls.............................................. 231,707,980 11,237,370 83,362,579*
(3)(g) Change to Fundamental Restriction on Making Loans........... 231,525,618 11,086,285 83,696,026*
(3)(h) Approval of a new Fundamental Investment Restriction on
Investing all of the Fund's assets in an Open-End Fund...... 232,828,307 9,613,226 83,866,396*
(3)(i) Elimination of Fundamental Restriction on Margin
Transactions................................................ 228,538,311 13,776,449 83,993,169*
(3)(j) Elimination of Fundamental Restriction on Short Sales of
Securities.................................................. 229,892,758 12,523,443 83,891,728*
(4) Approval of Changing the Investment Objective and Making it
Non-Fundamental............................................. 228,889,507 14,059,822 83,358,600*
|
* Includes Broker Non-Votes.
FS-52
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM Balanced Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Balanced Fund (a portfolio of AIM
Funds Group), including the schedule of investments, as
of December 31, 1999, and 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 generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of
securities owned as of December 31, 1999, 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 Balanced
Fund as of December 31, 1999, 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 generally accepted accounting principles.
/s/ KPMG LLP KPMG LLP February 4, 2000 Houston, Texas |
FS-53
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1999
PRINCIPAL MARKET
AMOUNT VALUE
U.S. DOLLAR DENOMINATED BONDS &
NOTES-25.23%
AIRLINES-1.37%
Airplanes Pass Through
Trust-Series D, Gtd. Sub.
Bonds, 10.88%, 03/15/19 $ 500,000 $ 440,000
---------------------------------------------------------------
America West Airlines,
Inc.,-Series C, Pass Through
Ctfs., 6.86%, 07/02/04 4,581,363 4,481,352
---------------------------------------------------------------
American Airlines, Inc.-Series
87-A, Equipment Trust Ctfs.,
9.90%, 01/15/11 2,955,000 3,271,510
---------------------------------------------------------------
AMR Corp., Deb., 10.00%,
04/15/21 4,300,000 4,878,049
---------------------------------------------------------------
Delta Air Lines, Inc.,
Deb., 9.00%, 05/15/16 5,000,000 5,172,100
---------------------------------------------------------------
Deb., 10.38%, 12/15/22 2,300,000 2,702,845
---------------------------------------------------------------
Notes, 7.90%, 12/15/09
(Acquired 12/07/99; Cost
$5,958,360)(a) 6,000,000 5,884,080
---------------------------------------------------------------
Series B, Medium Term Notes,
8.52%, 01/30/04 2,000,000 2,054,980
---------------------------------------------------------------
Series C, Medium Term Notes,
6.65%, 03/15/04 2,900,000 2,781,912
---------------------------------------------------------------
Northwest Airlines Inc.-Series
971B, Pass Through Ctfs.,
7.25%, 07/02/14 4,471,394 4,044,041
---------------------------------------------------------------
United Air Lines, Inc.,
Deb., 9.75%, 08/15/21 3,600,000 3,943,224
---------------------------------------------------------------
Series 95A2, Pass Through
Ctfs., 9.56%, 10/19/18 3,750,000 4,006,237
---------------------------------------------------------------
43,660,330
---------------------------------------------------------------
AUTOMOBILES-0.33%
DaimlerChrysler N.A. Holdings,
Gtd. Notes, 7.20%, 09/01/09 5,950,000 5,853,372
---------------------------------------------------------------
General Motors Corp., Putable
Deb., 8.80%, 03/01/21 400,000 440,096
---------------------------------------------------------------
Rocs Series CHR-1998-1,
Collateral Trust, 6.50%,
08/01/18 4,814,270 4,283,040
---------------------------------------------------------------
10,576,508
---------------------------------------------------------------
BANKS (MAJOR REGIONAL)-0.20%
Bank One Corp.-Series A, Medium
Term Sub. Notes, 6.00%,
02/17/09 4,750,000 4,218,047
---------------------------------------------------------------
Midland Bank PLC (United
Kingdom), Yankee Sub. Notes,
7.65%, 05/01/25 2,105,000 2,099,990
---------------------------------------------------------------
6,318,037
---------------------------------------------------------------
BANKS (MONEY CENTER)-0.68%
First Union Corp., Putable Sub.
Deb., 7.50%, 04/15/35 5,700,000 5,690,025
---------------------------------------------------------------
Republic New York Corp.,
Sub. Deb., 9.50%, 04/15/14 5,400,000 5,951,232
---------------------------------------------------------------
Sub. Notes, 9.70%, 02/01/09 5,000,000 5,517,800
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
BANKS (MONEY CENTER)-(CONTINUED)
Santander Financial Issuances
Ltd. (Cayman Islands), Unsec.
Gtd. Yankee Sub. Notes, 7.25%,
11/01/15 $ 5,000,000 $ 4,626,300
---------------------------------------------------------------
21,785,357
---------------------------------------------------------------
BANKS (REGIONAL)-0.91%
Marshall & Ilsley Corp.-Series
D, Medium Term Notes, 6.43%,
10/15/02 4,000,000 3,937,840
---------------------------------------------------------------
Mercantile Bancorp., Inc.,
Unsec. Sub. Notes, 7.30%,
06/15/07 8,300,000 8,126,945
---------------------------------------------------------------
Riggs Capital Trust II-Series C,
Gtd. Bonds, 8.88%, 03/15/27 9,550,000 8,711,348
---------------------------------------------------------------
US Bancorp, Sub. Deb., 7.50%,
06/01/26 8,400,000 8,314,068
---------------------------------------------------------------
29,090,201
---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO
& CABLE)-1.98%
British Sky Broadcasting Group
PLC (United Kingdom), Sr.
Unsec. Gtd. Yankee Notes,
8.20%, 07/15/09 11,520,000 11,094,071
---------------------------------------------------------------
Clear Channel Communications,
Inc., Conv. Unsec. Notes,
1.50%, 12/01/02 10,500,000 10,788,750
---------------------------------------------------------------
Comcast Cable Communications,
Unsec. Notes, 8.50%, 05/01/27 3,400,000 3,609,848
---------------------------------------------------------------
Continental Cablevision, Inc.,
Sr. Notes, 8.30%, 05/15/06 8,350,000 8,662,540
---------------------------------------------------------------
Cox Communications, Inc., Unsec.
Notes, 7.75%, 08/15/06 6,300,000 6,347,187
---------------------------------------------------------------
CSC Holdings Inc.,
Sr. Unsec. Deb., 7.63%,
07/15/18 7,100,000 6,626,430
---------------------------------------------------------------
Sr. Unsec. Deb., 7.88%,
02/15/18 1,420,000 1,358,883
---------------------------------------------------------------
Sr. Unsec. Notes, 7.88%,
12/15/07 5,545,000 5,470,420
---------------------------------------------------------------
Lenfest Communications, Inc.,
Sr. Unsec. Sub. Notes, 8.25%,
02/15/08 2,300,000 2,311,500
---------------------------------------------------------------
TCI Communications, Inc., Sr.
Notes, 8.00%, 08/01/05 6,500,000 6,697,925
---------------------------------------------------------------
62,967,554
---------------------------------------------------------------
CHEMICALS-0.40%
Airgas, Inc., Medium Term Notes,
7.14%, 03/08/04 6,700,000 6,317,028
---------------------------------------------------------------
Union Carbide Corp., Deb.,
6.79%, 06/01/25 6,750,000 6,476,760
---------------------------------------------------------------
12,793,788
---------------------------------------------------------------
CHEMICALS (DIVERSIFIED)-0.18%
Equistar Chemical, L.P., Sr.
Unsec. Notes, 8.50%, 02/15/04 5,750,000 5,721,946
---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-0.83%
Comverse Technology, Inc., Conv.
Unsec. Sub. Deb., 4.50%,
07/01/05 7,700,000 26,266,625
---------------------------------------------------------------
|
FS-54
PRINCIPAL MARKET
AMOUNT VALUE
COMPUTERS (HARDWARE)-0.31%
Candescent Technology Corp., Sr.
Conv. Sub. Deb., 7.00%,
05/01/03 (Acquired
04/17/98-07/12/99; Cost
$11,901,350)(a) $ 12,670,000 $ 9,882,600
---------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-0.85%
VERITAS Software Corp., Conv.
Unsec. Disc. Notes, 1.86%,
08/13/06(b) 10,000,000 26,962,500
---------------------------------------------------------------
CONSUMER FINANCE-1.36%
Capital One Financial Corp.,
Unsec. Notes, 7.25%, 05/01/06 3,890,000 3,674,533
---------------------------------------------------------------
CitiFinancial Credit Co.,
Putable Notes,
6.63%, 06/01/15 2,000,000 1,979,820
---------------------------------------------------------------
7.88%, 02/01/25 4,000,000 3,892,800
---------------------------------------------------------------
Countrywide Capital III-Series
B, Gtd. Bonds, 8.05%, 06/15/27 4,300,000 3,960,171
---------------------------------------------------------------
General Motors Acceptance Corp.,
Notes, 9.00%, 10/15/02 4,175,000 4,367,509
---------------------------------------------------------------
Household Finance Corp., Notes,
7.13%, 09/01/05 4,700,000 4,604,449
---------------------------------------------------------------
Sr. Unsec. Unsub. Notes,
6.40%, 06/17/08 10,900,000 10,060,918
---------------------------------------------------------------
MBNA Capital I-Series A, Gtd.
Bonds, 8.28%, 12/01/26 12,415,000 10,893,418
---------------------------------------------------------------
43,433,618
---------------------------------------------------------------
ELECTRIC COMPANIES-2.53%
Arizona Public Service Co.,
Unsec. Notes, 6.25%, 01/15/05 5,000,000 4,717,850
---------------------------------------------------------------
CMS Energy Corp., Sr. Unsec.
Notes, 8.13%, 05/15/02 4,950,000 4,932,823
---------------------------------------------------------------
Commonwealth Edison Co.-Series
94, First Mortgage Notes,
7.50%, 07/01/13 9,300,000 9,086,100
---------------------------------------------------------------
El Paso Electric Co.-Series E,
Sec. First Mortgage Bonds,
9.40%, 05/01/11 4,000,000 4,237,720
---------------------------------------------------------------
Empire District Electric Co.
(The), Sr. Notes, 7.70%,
11/15/04 8,550,000 8,383,189
---------------------------------------------------------------
Indiana Michigan Power
Co.-Series F, Sec. Lease
Obligation Bonds, 9.82%,
12/07/22 1,357,218 1,501,735
---------------------------------------------------------------
Niagara Mohawk Power Co.,
First Mortgage Notes, 6.63%,
07/01/05 7,200,000 6,881,184
---------------------------------------------------------------
Series G, Sr. Unsec. Notes,
7.75%, 10/01/08 11,700,000 11,716,497
---------------------------------------------------------------
Series H, Sr. Unsec. Disc.
Notes, 8.50%, 07/01/10(c) 12,000,000 8,989,440
---------------------------------------------------------------
Southern Energy, Inc., Sr.
Notes, 7.90%, 07/15/09
(Acquired 07/21/99-12/03/99;
Cost $7,165,447)(a) 7,225,000 6,966,056
---------------------------------------------------------------
Texas-New Mexico Power Co., Sr.
Sec. Notes, 6.25%, 01/15/09 2,750,000 2,365,302
---------------------------------------------------------------
UtiliCorp United, Inc., Sr.
Unsec. Putable Notes, 6.70%,
10/15/06 3,000,000 2,963,820
---------------------------------------------------------------
Western Resources, Inc., Sr.
Unsec. Notes,
6.25%, 08/15/03 2,425,000 2,292,837
---------------------------------------------------------------
7.13%, 08/01/09 6,000,000 5,428,920
---------------------------------------------------------------
80,463,473
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
ENTERTAINMENT-0.62%
Time Warner Inc., Deb.,
9.13%, 01/15/13 $ 10,000,000 $ 10,984,700
---------------------------------------------------------------
9.15%, 02/01/23 7,850,000 8,764,996
---------------------------------------------------------------
19,749,696
---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-1.01%
BellSouth Capital Funding,
Putable Deb., 6.04%, 11/15/26 4,000,000 3,943,240
---------------------------------------------------------------
Chrysler Financial Corp., Deb.,
8.50%, 02/01/18 150,000 150,219
---------------------------------------------------------------
Dow Capital B.V. (Netherlands),
Gtd. Yankee Deb., 9.20%,
06/01/10 10,250,000 11,282,175
---------------------------------------------------------------
Heller Financial, Inc., Notes,
7.38%, 11/01/09 (Acquired
11/23/99; Cost $9,469,885)(a) 9,500,000 9,265,635
---------------------------------------------------------------
Source One Mortgage Services
Corp., Deb., 9.00%, 06/01/12 5,700,000 6,208,662
---------------------------------------------------------------
Sun Canada Financial Co., Gtd.
Sub. Notes, 6.63%, 12/15/07
(Acquired 10/14/99; Cost
$1,402,095)(a) 1,500,000 1,404,550
---------------------------------------------------------------
32,254,481
---------------------------------------------------------------
FOODS-0.58%
ConAgra, Inc.,
Sr. Putable Notes, 6.70%,
08/01/27 7,500,000 6,981,075
---------------------------------------------------------------
Sr. Unsec. Putable Notes,
7.13%, 10/01/26 7,700,000 7,461,377
---------------------------------------------------------------
Grand Metropolitan Investment
Corp., Gtd. Bonds, 7.45%,
04/15/35 4,000,000 3,967,600
---------------------------------------------------------------
18,410,052
---------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC &
OTHER)-0.20%
Alpharma, Inc., Conv. Sr. Unsec.
Sub. Notes, 3.00%, 06/01/06
(Acquired 05/27/99; Cost
$6,000,000)(a) 6,000,000 6,465,000
---------------------------------------------------------------
HOUSEHOLD PRODUCTS
(NON-DURABLES)-0.19%
Procter & Gamble Co. (The),
Putable Deb., 8.00%, 09/01/24 5,650,000 5,998,718
---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-0.66%
Conseco, Inc., Unsec. Notes,
6.80%, 06/15/05 6,700,000 6,259,207
---------------------------------------------------------------
9.00%, 10/15/06 2,560,000 2,634,829
---------------------------------------------------------------
Torchmark Corp., Notes,
7.38%, 08/01/13 3,000,000 2,728,560
---------------------------------------------------------------
7.88%, 05/15/23 10,500,000 9,385,215
---------------------------------------------------------------
21,007,811
---------------------------------------------------------------
INSURANCE
(PROPERTY-CASUALTY)-0.36%
Florida Windstorm, Underwriting
Association, Sr. Sec. Notes,
7.13%, 02/25/19 (Acquired
03/26/99; Cost $2,834,354)(a) 2,850,000 2,625,449
---------------------------------------------------------------
|
FS-55
PRINCIPAL MARKET
AMOUNT VALUE
INSURANCE (PROPERTY-CASUALTY)-(CONTINUED)
Terra Nova Insurance PLC (United
Kingdom),
Sr. Unsec. Gtd. Notes, 7.00%,
05/15/08 $ 2,350,000 $ 2,161,483
---------------------------------------------------------------
Sr. Unsec. Gtd. Yankee Notes,
7.20%, 08/15/07 7,000,000 6,553,330
---------------------------------------------------------------
11,340,262
---------------------------------------------------------------
INVESTMENT
BANKING/BROKERAGE-0.52%
HSBC America Capital Trust II,
Gtd. Bonds, 8.38%, 05/15/27
(Acquired 08/12/99; Cost
$1,907,256)(a) 1,990,000 1,842,700
---------------------------------------------------------------
Lehman Brothers Holdings Inc.,
Notes, 8.50%, 08/01/15 5,350,000 5,481,664
---------------------------------------------------------------
Sr. Notes, 8.80%, 03/01/15 4,855,000 5,075,903
---------------------------------------------------------------
Sr. Sub. Notes, 7.38%,
01/15/07 4,400,000 4,272,400
---------------------------------------------------------------
16,672,667
---------------------------------------------------------------
NATURAL GAS-1.38%
CMS Panhandle Holding Co., Sr.
Notes, 6.13%, 03/15/04 6,600,000 6,250,688
---------------------------------------------------------------
Enron Corp., Sr. Sub. Deb.,
6.75%, 07/01/05 4,550,000 4,367,727
---------------------------------------------------------------
8.25%, 09/15/12 4,300,000 4,367,768
---------------------------------------------------------------
Ferrellgas Partners L.P.-Series
B, Sr. Sec. Gtd. Notes, 9.38%,
06/15/06 4,950,000 4,875,750
---------------------------------------------------------------
Kinder Morgan, Inc., Unsec.
Deb., 7.35%, 08/01/26 7,800,000 7,591,116
---------------------------------------------------------------
National Fuel Gas Co.-Series D,
Medium Term Notes, 6.30%,
05/27/08 8,600,000 7,830,386
---------------------------------------------------------------
Nova Gas Transmission Ltd.
(Canada), Yankee Deb., 8.50%,
12/15/12 5,015,000 5,217,054
---------------------------------------------------------------
PanEnergy Corp., Notes, 7.88%,
08/15/04 1,500,000 1,505,505
---------------------------------------------------------------
Sonat Inc., Unsec. Notes, 7.63%,
07/15/11 2,000,000 1,967,120
---------------------------------------------------------------
43,973,114
---------------------------------------------------------------
OIL & GAS (DRILLING & EQUIPMENT)-0.15%
NRG Energy, Inc., Sr. Unsec.
Notes, 7.50%, 06/01/09 5,000,000 4,603,500
---------------------------------------------------------------
OIL & GAS (EXPLORATION &
PRODUCTION)-0.14%
ONEOK, Inc., Unsec. Notes,
7.75%, 08/15/06 3,100,000 3,068,969
---------------------------------------------------------------
Talisman Energy Inc. (Canada),
Yankee Deb., 7.13%, 06/01/07 1,500,000 1,441,425
---------------------------------------------------------------
4,510,394
---------------------------------------------------------------
OIL & GAS (REFINING &
MARKETING)-0.22%
Quaker State Corp., Notes,
6.63%, 10/15/05 2,840,000 2,660,938
---------------------------------------------------------------
Tosco Corp., Unsec. Deb., 7.80%,
01/01/27 4,450,000 4,194,837
---------------------------------------------------------------
6,855,775
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
POWER PRODUCERS
(INDEPENDENT)-0.70%
AES Corp.,
Sr. Notes, 8.00%, 12/31/08 $ 1,000,000 $ 917,500
---------------------------------------------------------------
Sr. Unsec. Sub. Notes, 8.38%,
08/15/07 3,000,000 2,797,500
---------------------------------------------------------------
Sr. Unsec. Sub. Notes, 10.25%,
07/15/06 1,800,000 1,836,000
---------------------------------------------------------------
CE Generation LLC, Sr. Sec.
Notes, 7.42%, 12/15/18
(Acquired 02/24/99-08/19/99;
Cost $7,913,190)(a) 7,800,000 7,187,926
---------------------------------------------------------------
Hydro-Quebec,
Series B (Canada), Gtd. Medium
Term Notes, 8.62%, 12/15/11 4,750,000 5,127,245
---------------------------------------------------------------
Series IO (Canada), Gtd.
Yankee Bond, 8.05%, 07/07/24 1,300,000 1,364,246
---------------------------------------------------------------
Kincaid Generation LLC, Sec.
Bonds, 7.33%, 06/15/20
(Acquired 04/30/98; Cost
$3,508,645)(a) 3,500,000 3,095,355
---------------------------------------------------------------
22,325,772
---------------------------------------------------------------
PUBLISHING (NEWSPAPERS)-0.62%
News America Holdings, Inc.,
Putable Notes, 8.45%, 08/01/34 3,125,000 3,173,688
---------------------------------------------------------------
Sr. Gtd. Deb., 9.25%, 02/01/13 10,150,000 11,062,485
---------------------------------------------------------------
Sr. Unsec. Gtd. Putable Bonds,
7.43%, 10/01/26 5,450,000 5,353,045
---------------------------------------------------------------
19,589,218
---------------------------------------------------------------
RAILROADS-0.50%
CSX Corp.,
Deb., 9.00%, 08/15/06 6,750,000 7,146,225
---------------------------------------------------------------
Sr. Unsec. Putable Deb.,
6.95%, 05/01/27 3,530,000 3,507,020
---------------------------------------------------------------
Norfolk Southern Corp., Notes,
7.05%, 05/01/37 5,500,000 5,391,265
---------------------------------------------------------------
16,044,510
---------------------------------------------------------------
REAL ESTATE INVESTMENT
TRUSTS-0.27%
Health Care REIT, Inc., Sr.
Unsec. Notes, 7.63%, 03/15/08 1,150,000 952,189
---------------------------------------------------------------
Spieker Properties, Inc., Unsec.
Deb., 7.35%, 12/01/17 8,800,000 7,767,848
---------------------------------------------------------------
8,720,037
---------------------------------------------------------------
RETAIL (FOOD CHAINS)-0.16%
Great Atlantic & Pacific Tea
Co., Inc. (Canada), Yankee
Gtd. Notes, 7.78%, 11/01/00(c) 5,000,000 5,048,200
---------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-0.25%
AnnTaylor Stores Corp., Conv.
Unsec. Gtd. Sub. Bonds, 0.55%,
06/18/19 (Acquired
11/04/99-11/17/99; Cost
$9,000,250)(a) 14,600,000 7,829,250
---------------------------------------------------------------
SAVINGS & LOAN COMPANIES-0.69%
Dime Capital Trust I-Series A,
Gtd. Bonds, 9.33%, 05/06/27 5,400,000 5,091,768
---------------------------------------------------------------
Sovereign Bancorp, Inc., Medium
Term Sub. Notes, 8.00%,
03/15/03 5,330,000 5,090,203
---------------------------------------------------------------
|
FS-56
PRINCIPAL MARKET
AMOUNT VALUE
SAVINGS & LOAN COMPANIES-(CONTINUED)
St. Paul Bancorp, Inc., Sr.
Unsec. Notes, 7.13%, 02/15/04 $ 5,500,000 $ 5,361,070
---------------------------------------------------------------
Washington Mutual, Inc.,
Gtd. Bonds, 8.38%, 06/01/27 4,285,000 4,094,403
---------------------------------------------------------------
Notes, 7.50%, 08/15/06 2,215,000 2,204,523
---------------------------------------------------------------
21,841,967
---------------------------------------------------------------
SERVICES (ADVERTISING/MARKETING)-0.24%
Lamar Advertising Co., Conv.
Unsec. Notes, 5.25%, 09/15/06 5,300,000 7,751,250
---------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-0.47%
Laidlaw Inc. (Canada),
Putable Yankee Deb., 6.72%,
10/01/27 3,000,000 2,552,100
---------------------------------------------------------------
Unsec. Yankee Deb., 6.70%,
05/01/08 8,100,000 6,894,477
---------------------------------------------------------------
Unsec. Yankee Notes, 7.65%,
05/15/06 5,965,000 5,541,783
---------------------------------------------------------------
14,988,360
---------------------------------------------------------------
SHIPPING-0.08%
Hutchison Delta Finance
Ltd.-Series REGS (Cayman
Islands), Conv. Unsec. Notes,
7.00%, 11/25/01 2,250,000 2,610,000
---------------------------------------------------------------
SOVEREIGN DEBT-0.76%
Province of Manitoba (Canada),
Yankee Unsec. Deb., 5.50%,
10/01/08 2,000,000 1,794,160
---------------------------------------------------------------
Series AZ, Putable Yankee
Deb., 7.75%, 07/17/16 5,850,000 5,990,108
---------------------------------------------------------------
Province of Newfoundland
(Canada), Unsec. Yankee Deb.,
9.00%, 06/01/19 2,500,000 2,804,975
---------------------------------------------------------------
Province of Quebec-Series A
(Canada), Medium Term Putable
Yankee Notes,
5.74%, 03/02/26 4,430,000 4,392,877
---------------------------------------------------------------
6.29%, 03/06/26 9,300,000 9,144,132
---------------------------------------------------------------
24,126,252
---------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-1.02%
AT&T Corp., Deb., 8.63%,
12/01/31 12,700,000 13,017,373
---------------------------------------------------------------
MCI Communications Corp.,
Sr. Unsec. Notes, 6.50%,
04/15/10 7,900,000 7,373,544
---------------------------------------------------------------
Sr. Unsec. Putable Deb.,
7.13%, 06/15/27 10,150,000 10,198,720
---------------------------------------------------------------
Sprint Corp., Putable Deb.,
9.00%, 10/15/19 1,800,000 1,994,346
---------------------------------------------------------------
32,583,983
---------------------------------------------------------------
TELEPHONE-1.17%
AT&T Corp.-Liberty Media Group,
Bonds, 7.88%, 07/15/09
(Acquired 06/30/99; Cost
$2,833,014)(a) 2,850,000 2,841,778
---------------------------------------------------------------
Cable & Wireless Communications
PLC (United Kingdom), Yankee
Notes, 6.75%, 12/01/08 3,400,000 3,349,578
---------------------------------------------------------------
Electric Lightwave, Inc. Notes,
6.05%, 05/15/04 (Acquired
04/21/99; Cost $9,792,846)(a) 9,800,000 9,247,378
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
TELEPHONE-(CONTINUED)
GTE Corp., Unsec. Deb., 6.84%,
04/15/18 $ 5,500,000 $ 5,040,860
---------------------------------------------------------------
NTL Inc., Conv. Sub. Notes,
5.75%, 12/15/09 (Acquired
12/17/99; Cost $9,000,000)(a) 9,000,000 9,720,000
---------------------------------------------------------------
SBC Communications, Inc., Deb.,
7.38%, 07/15/43 7,930,000 7,133,352
---------------------------------------------------------------
37,332,946
---------------------------------------------------------------
WASTE MANAGEMENT-0.34%
Browning-Ferris Industries,
Inc., Deb., 7.40%, 09/15/35 4,170,000 3,023,250
---------------------------------------------------------------
Waste Management, Inc.,
Sr. Unsec. Notes, 7.13%,
12/15/17 1,020,000 799,292
---------------------------------------------------------------
Unsec. Putable Notes, 7.10%,
08/01/26 7,500,000 6,955,650
---------------------------------------------------------------
10,778,192
---------------------------------------------------------------
Total U.S. Dollar
Denominated Bonds & Notes
(Cost $804,332,607) 803,333,944
---------------------------------------------------------------
|
SHARES
COMMON STOCKS & OTHER EQUITY
INTERESTS-45.04%
AUTOMOBILES-0.31%
Ford Motor Co. 185,000 9,885,937
---------------------------------------------------------------
BANKS (MONEY CENTER)-0.49%
Chase Manhattan Corp. (The) 200,000 15,537,500
---------------------------------------------------------------
BIOTECHNOLOGY-0.66%
Biogen, Inc.(d) 155,000 13,097,500
---------------------------------------------------------------
Genzyme Corp.(d) 175,000 7,875,000
---------------------------------------------------------------
20,972,500
---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO
& CABLE)-2.80%
CBS Corp.(d) 361,400 23,107,012
---------------------------------------------------------------
Hispanic Broadcasting Corp.(d) 193,000 17,798,219
---------------------------------------------------------------
Infinity Broadcasting
Corp.-Class A(d) 474,250 17,161,922
---------------------------------------------------------------
Univision Communications,
Inc.-Class A(d) 305,000 31,167,187
---------------------------------------------------------------
89,234,340
---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-3.36%
ANTEC Corp.(d) 260,600 9,511,900
---------------------------------------------------------------
JDS Uniphase Corp.(d) 58,000 9,356,125
---------------------------------------------------------------
Lucent Technologies Inc. 517,000 38,678,062
---------------------------------------------------------------
Motorola, Inc. 100,000 14,725,000
---------------------------------------------------------------
Sycamore Networks, Inc.(d) 47,000 14,476,000
---------------------------------------------------------------
Tellabs, Inc.(d) 190,000 12,195,625
---------------------------------------------------------------
Williams Communications Group,
Inc.(d) 275,700 7,978,069
---------------------------------------------------------------
106,920,781
---------------------------------------------------------------
COMPUTERS (HARDWARE)-1.64%
Dell Computer Corp.(d) 135,000 6,885,000
---------------------------------------------------------------
International Business Machines
Corp.(e) 133,000 14,364,000
---------------------------------------------------------------
|
FS-57
MARKET
SHARES VALUE
COMPUTERS (HARDWARE)-(CONTINUED)
Sun Microsystems, Inc.(d) 398,000 $ 30,820,125
---------------------------------------------------------------
52,069,125
---------------------------------------------------------------
COMPUTERS (NETWORKING)-1.46%
Cisco Systems, Inc.(d) 340,000 36,422,500
---------------------------------------------------------------
Foundry Networks, Inc.(d) 33,000 9,955,687
---------------------------------------------------------------
46,378,187
---------------------------------------------------------------
COMPUTERS (PERIPHERALS)-1.16%
EMC Corp.(d) 309,000 33,758,250
---------------------------------------------------------------
Immersion Corp.(d) 85,400 3,277,225
---------------------------------------------------------------
37,035,475
---------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-5.63%
America Online, Inc.(d)(e) 442,000 33,343,375
---------------------------------------------------------------
Concord Communications, Inc.(d) 81,100 3,598,812
---------------------------------------------------------------
eSPEED, Inc.-Class A(d) 128,700 4,576,894
---------------------------------------------------------------
FreeMarkets, Inc.(d) 94,700 32,322,293
---------------------------------------------------------------
InfoSpace.com, Inc.(d) 184,800 39,547,200
---------------------------------------------------------------
ISS Group, Inc.(d) 220,000 15,647,500
---------------------------------------------------------------
Microsoft Corp.(d) 200,000 23,350,000
---------------------------------------------------------------
Telemate.Net Software, Inc.(d) 282,700 4,593,875
---------------------------------------------------------------
USWeb Corp.(d) 500,000 22,218,750
---------------------------------------------------------------
179,198,699
---------------------------------------------------------------
CONSUMER FINANCE-0.21%
SLM Holding Corp. 155,000 6,548,750
---------------------------------------------------------------
ELECTRIC COMPANIES-0.09%
Plug Power, Inc.(d) 100,000 2,825,000
---------------------------------------------------------------
ELECTRICAL EQUIPMENT-0.67%
Conexant Systems, Inc.(d) 30,300 2,011,162
---------------------------------------------------------------
General Electric Co. 125,000 19,343,750
---------------------------------------------------------------
21,354,912
---------------------------------------------------------------
ELECTRONICS (COMPONENT
DISTRIBUTORS)-0.00%
Sensormatic Electronics Corp.
(Acquired 06/30/98; Cost
$59,993)(a) 4,392 76,585
---------------------------------------------------------------
ELECTRONICS (DEFENSE)-0.29%
General Motors Corp.-Class
H(d)(e) 95,000 9,120,000
---------------------------------------------------------------
ELECTRONICS
(SEMICONDUCTORS)-2.05%
Analog Devices, Inc.(d) 196,000 18,228,000
---------------------------------------------------------------
Intel Corp. 233,500 19,219,969
---------------------------------------------------------------
Microchip Technology, Inc.(d) 136,000 9,307,500
---------------------------------------------------------------
SDL, Inc.(d) 85,200 18,573,600
---------------------------------------------------------------
65,329,069
---------------------------------------------------------------
ENTERTAINMENT-0.33%
Time Warner Inc. 144,200 10,445,488
---------------------------------------------------------------
|
MARKET
SHARES VALUE
EQUIPMENT (SEMICONDUCTOR)-0.50%
Applied Materials, Inc.(d) 125,000 $ 15,835,938
---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-1.82%
American Express Co. 75,000 12,468,750
---------------------------------------------------------------
Citigroup Inc. 242,998 13,501,576
---------------------------------------------------------------
Fannie Mae 175,000 10,926,563
---------------------------------------------------------------
Freddie Mac 238,000 11,200,875
---------------------------------------------------------------
MGIC Investment Corp. 163,000 9,810,563
---------------------------------------------------------------
57,908,327
---------------------------------------------------------------
FOODS-0.21%
Keebler Foods Co.(d) 234,000 6,581,250
---------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-1.27%
American Home Products Corp. 196,000 7,729,750
---------------------------------------------------------------
Bristol-Myers Squibb Co. 135,000 8,665,313
---------------------------------------------------------------
Johnson & Johnson 100,000 9,312,500
---------------------------------------------------------------
Warner-Lambert Co. 178,000 14,584,875
---------------------------------------------------------------
40,292,438
---------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC &
OTHER)-0.30%
Forest Laboratories, Inc.(d) 156,000 9,584,250
---------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-1.09%
Lilly (Eli) & Co. 141,000 9,376,500
---------------------------------------------------------------
Merck & Co., Inc. 122,000 8,181,625
---------------------------------------------------------------
Pfizer Inc. 331,000 10,736,813
---------------------------------------------------------------
Schering-Plough Corp. 152,000 6,412,500
---------------------------------------------------------------
34,707,438
---------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.76%
Baxter International, Inc. 150,400 9,447,000
---------------------------------------------------------------
Guidant Corp.(d) 280,000 13,160,000
---------------------------------------------------------------
Medtronic, Inc. 490,000 17,854,375
---------------------------------------------------------------
VISX, Inc.(d) 300,000 15,525,000
---------------------------------------------------------------
55,986,375
---------------------------------------------------------------
HEALTH CARE (SPECIALIZED SERVICES)-0.21%
MAXIMUS, Inc.(d) 200,000 6,787,500
---------------------------------------------------------------
HOUSEHOLD FURNISHING & APPLIANCES-0.27%
Ethan Allen Interiors, Inc. 270,000 8,656,875
---------------------------------------------------------------
HOUSEHOLD PRODUCTS (NON-DURABLES)-0.38%
Procter & Gamble, Co. (The) 110,000 12,051,875
---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-0.46%
AXA Financial, Inc. 314,000 10,636,750
---------------------------------------------------------------
Nationwide Financial Services,
Inc.-Class A 140,000 3,911,250
---------------------------------------------------------------
14,548,000
---------------------------------------------------------------
INSURANCE (MULTI-LINE)-0.87%
American International Group,
Inc. 175,000 18,921,875
---------------------------------------------------------------
|
FS-58
MARKET
SHARES VALUE
INSURANCE (MULTI-LINE)-(CONTINUED)
CIGNA Corp. 110,000 $ 8,861,875
---------------------------------------------------------------
27,783,750
---------------------------------------------------------------
INSURANCE
(PROPERTY-CASUALTY)-0.21%
Travelers Property Casualty
Corp.-Class A 195,000 6,678,750
---------------------------------------------------------------
INVESTMENT
BANKING/BROKERAGE-1.29%
Goldman Sachs Group, Inc. (The) 52,300 4,926,006
---------------------------------------------------------------
Merrill Lynch & Co., Inc. 176,000 14,696,000
---------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 150,000 21,412,500
---------------------------------------------------------------
41,034,506
---------------------------------------------------------------
INVESTMENT MANAGEMENT-0.13%
Federated Investors, Inc.-Class B 206,400 4,140,900
---------------------------------------------------------------
LODGING-HOTELS-0.76%
Carnival Corp. 230,000 10,996,875
---------------------------------------------------------------
Royal Caribbean Cruises Ltd. 270,400 13,334,100
---------------------------------------------------------------
24,330,975
---------------------------------------------------------------
MANUFACTURING
(DIVERSIFIED)-0.35%
Tyco International Ltd. 284,000 11,040,500
---------------------------------------------------------------
NATURAL GAS-0.65%
Enron Corp. 295,000 13,090,625
---------------------------------------------------------------
Williams Companies, Inc. (The) 251,000 7,671,188
---------------------------------------------------------------
20,761,813
---------------------------------------------------------------
OIL & GAS (EXPLORATION &
PRODUCTION)-0.23%
Apache Corp. 200,000 7,387,500
---------------------------------------------------------------
OIL (DOMESTIC INTEGRATED)-0.23%
Conoco Inc.-Class B 300,000 7,462,500
---------------------------------------------------------------
OIL (INTERNATIONAL
INTEGRATED)-0.25%
Exxon Mobil Corp. 100,644 8,108,132
---------------------------------------------------------------
PERSONAL CARE-0.14%
Steiner Leisure Ltd.(d) 275,000 4,589,063
---------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-0.50%
AES Corp.(d) 215,000 16,071,250
---------------------------------------------------------------
RETAIL (BUILDING SUPPLIES)-0.56%
Home Depot, Inc. (The) 262,500 17,997,656
---------------------------------------------------------------
RETAIL (FOOD CHAINS)-0.25%
Safeway Inc.(d) 228,000 8,108,250
---------------------------------------------------------------
RETAIL (GENERAL
MERCHANDISE)-0.50%
Dayton Hudson Corp. 215,100 15,796,406
---------------------------------------------------------------
RETAIL (SPECIALTY)-0.83%
Amazon.com, Inc.(d) 95,000 7,231,875
---------------------------------------------------------------
Bed Bath & Beyond, Inc.(d) 290,000 10,077,500
---------------------------------------------------------------
Linens 'n Things, Inc.(d) 305,200 9,041,550
---------------------------------------------------------------
26,350,925
---------------------------------------------------------------
|
MARKET
SHARES VALUE
SERVICES (ADVERTISING/MARKETING)-0.94%
Omnicom Group, Inc. 130,000 $ 13,000,000
---------------------------------------------------------------
Young & Rubicam Inc. 241,000 17,050,750
---------------------------------------------------------------
30,050,750
---------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-0.93%
National Information Consortium,
Inc.(d) 278,000 8,896,000
---------------------------------------------------------------
Official Payments Corp.(d) 186,300 9,687,600
---------------------------------------------------------------
Quanta Services, Inc.(d) 392,000 11,074,000
---------------------------------------------------------------
29,657,600
---------------------------------------------------------------
SERVICES (DATA PROCESSING)-0.25%
DST Systems, Inc.(d) 106,000 8,089,125
---------------------------------------------------------------
TELECOMMUNICATIONS-0.49%
Broadwing Inc.(d) 419,520 15,469,800
---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-0.72%
Infonet Services Corp.-Class
B(d) 370,000 9,712,500
---------------------------------------------------------------
Western Wireless Corp.-Class
A(d) 196,300 13,103,025
---------------------------------------------------------------
22,815,525
---------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-1.56%
AT&T Corp. 216,450 10,984,838
---------------------------------------------------------------
Global TeleSystems Group,
Inc.(d) 475,450 16,462,456
---------------------------------------------------------------
MCI WorldCom, Inc.(d) 420,000 22,286,250
---------------------------------------------------------------
49,733,544
---------------------------------------------------------------
TELEPHONE-2.98%
Bell Atlantic Corp. 158,000 9,726,875
---------------------------------------------------------------
McLeodUSA, Inc.-Class A(d) 290,000 17,073,750
---------------------------------------------------------------
NEXTLINK Communications,
Inc.-Class A(d) 224,800 18,672,450
---------------------------------------------------------------
Qwest Communications
International, Inc.(d) 665,000 28,595,000
---------------------------------------------------------------
SBC Communications, Inc. 204,000 9,945,000
---------------------------------------------------------------
Time Warner Telecom, Inc.(d) 218,500 10,911,344
---------------------------------------------------------------
94,924,419
---------------------------------------------------------------
Total Common Stocks & Other
Equity Interests (Cost
$765,923,442) 1,434,256,253
---------------------------------------------------------------
DOMESTIC PREFERRED STOCKS-2.43%
COMPUTERS (SOFTWARE & SERVICES)-0.45%
PSINet, Inc.-Series C, $3.375
Conv. Pfd. 100,000 5,837,500
---------------------------------------------------------------
Verio Inc.-$3.375 Conv. Pfd.
(Acquired 07/15/99-10/01/99;
Cost $7,092,498)(a) 150,000 8,475,000
---------------------------------------------------------------
14,312,500
---------------------------------------------------------------
ELECTRIC COMPANIES-0.28%
Calpine Capital Trust-$2.875
Conv. Pfd. 139,000 8,982,875
---------------------------------------------------------------
OIL & GAS (EXPLORATION &
PRODUCTION)-0.22%
Kerr-McGee Corp.-5.50% Pfd. DECS 209,800 6,818,500
---------------------------------------------------------------
|
FS-59
MARKET
SHARES VALUE
PERSONAL CARE-0.16%
Estee Lauder Cos. Inc.-$3.805
Conv. Pfd. 60,000 $ 5,193,750
---------------------------------------------------------------
TELECOMMUNICATIONS-0.13%
Broadwing Inc.-Series B, $3.375
Conv. Pfd. 70,000 4,147,500
---------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-0.71%
WinStar Communications,
Inc.-Series F, $72.50 Conv.
Pfd. 16,950 22,585,875
---------------------------------------------------------------
TELEPHONE-0.27%
NEXTLINK Communications,
Inc.-$3.25 Conv. Pfd. 24,200 4,643,375
---------------------------------------------------------------
NEXTLINK Communications,
Inc.-$3.25 Conv. Pfd.
(Acquired 03/26/98-06/02/98;
Cost $975,188)(a) 20,800 3,991,000
---------------------------------------------------------------
8,634,375
---------------------------------------------------------------
WATER UTILITIES-0.21%
AES Trust III-$3.375 Conv. Pfd. 108,600 6,692,475
---------------------------------------------------------------
Total Domestic Preferred
Stocks (Cost $63,730,828) 77,367,850
---------------------------------------------------------------
|
PRINCIPAL
AMOUNT(f)
NON-U.S. DOLLAR DENOMINATED
NON-CONVERTIBLE BONDS &
NOTES-3.50%
AUSTRALIA-0.22%
New South Wales Treasury
Corp.-Series 4 (Sovereign
Debt), Gtd. Notes, 7.00%,
04/01/04 AUD 4,300,000 2,838,785
---------------------------------------------------------------
State Bank New South
Wales-Series E (Banks-Major
Regional), Sr. Unsec. Gtd.
Medium Term Notes, 8.63%,
08/20/01 AUD 6,125,000 4,155,283
---------------------------------------------------------------
6,994,068
---------------------------------------------------------------
CANADA-0.71%
AT&T Canada Inc. (Telephone),
Sr. Unsec. Notes, 7.15%,
09/23/04 CAD 1,700,000 1,163,734
---------------------------------------------------------------
Bell Mobility Cellular, Inc.
(Telecommunications-Cellular/Wireless),
Deb., 6.55%, 06/02/08 CAD 2,500,000 1,659,721
---------------------------------------------------------------
Canadian Oil Debco Inc. (Oil &
Gas- Exploration &
Production), Deb., 11.00%,
10/31/00 CAD 2,500,000 1,790,601
---------------------------------------------------------------
Clearnet Communications Inc.
(Telecommunications-Cellular/Wireless),
Sr. Unsec. Disc. Notes,
10.75%, 02/15/09(c) CAD 5,000,000 2,026,606
---------------------------------------------------------------
Export Development Corp.
(Sovereign Debt), Sr. Unsub.
Notes, 6.50%, 12/21/04 NZD 6,000,000 2,970,914
---------------------------------------------------------------
Poco Petroleums Ltd. (Oil & Gas-
Exploration & Production),
Unsec. Deb., 6.60%,
09/11/07 CAD 5,400,000 3,540,923
---------------------------------------------------------------
Province of British Columbia
(Sovereign Debt), Notes,
7.50%, 12/31/03 GBP 950,000 1,553,548
---------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT(f) VALUE
CANADA-(CONTINUED)
Province of Ontario (Sovereign
Debt),
Notes, 6.38%, 06/10/04 GBP 950,000 $ 1,498,329
---------------------------------------------------------------
Unsec. Unsub. Notes, 6.25%,
12/03/08 NZD 3,750,000 1,711,057
---------------------------------------------------------------
Province of Quebec (Sovereign
Debt), Unsec. Notes, 5.13%,
01/04/09 DEM 1,600,000 770,578
---------------------------------------------------------------
Teleglobe Canada Inc.
(Telephone), Unsec. Deb.,
8.35%, 06/20/03 CAD 1,000,000 709,423
---------------------------------------------------------------
TransCanada Pipelines-Series Q
(Natural Gas), Deb., 10.63%,
10/20/09 CAD 1,500,000 1,282,478
---------------------------------------------------------------
Westcoast Energy Inc.-Series V
(Natural Gas), Unsec. Deb.,
6.45%, 12/18/06 CAD 3,000,000 2,037,497
---------------------------------------------------------------
22,715,409
---------------------------------------------------------------
DENMARK-0.21%
Kingdom of Denmark (Sovereign
Debt), Bonds, 5.00%,
08/15/05 DKK 51,000,000 6,806,533
---------------------------------------------------------------
GERMANY-0.25%
Bundesrepublik Deutschland
(Sovereign Debt), Series 92
Bonds, 7.25%, 10/21/02 EUR 2,790,000 3,004,448
---------------------------------------------------------------
Landesbank Baden-Wuerttemberg
(Banks- Major Regional), Sr.
Unsec. Unsub. Medium Term
Notes, 6.25%, 12/15/04 AUD 5,700,000 3,572,998
---------------------------------------------------------------
Treuhandanstalt (Sovereign
Debt), Gtd. Notes, 6.00%,
11/12/03 EUR 1,140,000 1,195,434
---------------------------------------------------------------
7,772,880
---------------------------------------------------------------
GREECE-0.24%
Hellenic Republic (Sovereign
Debt), Bonds, 6.60%,
01/15/04 GRD 2,500,000,000 7,669,388
---------------------------------------------------------------
NETHERLANDS-0.48%
Dresdner Finance B.V.-Series 11
(Banks- Major Regional),
Floating Rate Gtd. Notes,
3.53%, 07/30/03 EUR 7,250,000 7,281,476
---------------------------------------------------------------
Hypovereins Finance N.V.-Series
E (Banks- Major Regional),
Gtd. Medium Term Notes, 6.00%,
03/12/07 DEM 2,900,000 1,496,248
---------------------------------------------------------------
Mannesmann Finance B.V.
(Machinery- Diversified), Gtd.
Unsec. Unsub. Notes, 4.75%,
05/27/09 EUR 1,300,000 1,153,665
---------------------------------------------------------------
SPT Telecom A.S.
(Telecommunications- Long
Distance), Gtd. Unsec. Unsub.
Notes, 5.13%, 05/07/03 DEM 4,600,000 2,346,111
---------------------------------------------------------------
Tecnost International Finance
N.V.-Series E (Telephone),
Medium Term Gtd. Notes, 6.13%,
07/30/09 EUR 3,210,000 3,111,084
---------------------------------------------------------------
15,388,584
---------------------------------------------------------------
NEW ZEALAND-0.22%
International Bank for
Reconstruction & Development
(Banks-Money Center), Unsec.
Notes, 5.50%, 04/15/04 NZD 8,500,000 4,113,246
---------------------------------------------------------------
|
FS-60
PRINCIPAL MARKET
AMOUNT(f) VALUE
NEW ZEALAND-(CONTINUED)
New Zealand Government
(Sovereign Debt)
Series 302 Bonds, 10.00%,
03/15/02 NZD 2,650,000 $ 1,478,054
---------------------------------------------------------------
Series 404 Bonds, 8.00%,
04/15/04 NZD 2,650,000 1,430,651
---------------------------------------------------------------
7,021,951
---------------------------------------------------------------
SWEDEN-0.26%
Stadshypotek A.B.-Series 1562
(Banks- Regional), Bonds,
3.50%, 09/15/04 SEK 43,000,000 4,544,805
---------------------------------------------------------------
Swedish Government-Series 1035
(Sovereign Debt), Bonds,
6.00%, 02/09/05 SEK 30,000,000 3,609,571
---------------------------------------------------------------
8,154,376
---------------------------------------------------------------
UNITED KINGDOM-0.79%
Lloyds Bank PLC-Series E
(Banks-Major Regional), Medium
Term Sub. Notes, 5.25%,
07/14/08 DEM 6,800,000 3,325,110
---------------------------------------------------------------
Merrill Lynch & Co., Inc.-Series
E (Investment
Banking/Brokerage), Sr. Unsec.
Unsub. Medium Term Notes,
7.38%, 12/17/07 GBP 6,650,000 10,887,514
---------------------------------------------------------------
National Power PLC (Electric
Companies), Sr. Unsec. Unsub.
Bonds, 8.00%, 02/21/07 AUD 3,100,000 2,012,382
---------------------------------------------------------------
National Westminster Bank
PLC-Series E (Banks-Money
Center), Unsec. Unsub. Medium
Term Bonds, 5.13%, 06/30/11EUR 2,500,000 2,255,470
---------------------------------------------------------------
Sutton Bridge Financial
Ltd.-Series REGS (Power
Producers-Independent), Gtd.
Eurobonds, 8.63%, 06/30/22
(Acquired 05/29/97; Cost
$4,890,565)(a) GBP 3,000,000 5,090,868
---------------------------------------------------------------
Union Bank Switzerland London,
(Banks- Major Regional),
Unsec. Sub. Notes, 7.38%,
11/26/04 GBP 1,000,000 1,637,219
---------------------------------------------------------------
25,208,563
---------------------------------------------------------------
UNITED STATES OF AMERICA-0.12%
General Electric Capital
Corp.-Series E
(Financial-Diversified), Sr.
Unsec. Unsub. Medium Term
Notes, 6.00%, 07/27/01 GBP 2,400,000 3,814,070
---------------------------------------------------------------
Total Non-U.S. Dollar
Denominated
Non-Convertible Bonds &
Notes (Cost $117,303,454) 111,545,822
---------------------------------------------------------------
|
SHARES
FOREIGN STOCKS-5.46%
BERMUDA-0.88%
Global Crossing Ltd.
(Telecommunications- Long
Distance)(d) 559,252 27,962,600
---------------------------------------------------------------
CANADA-0.37%
AT&T Canada, Inc. (Telephone)(d) 291,000 11,712,750
---------------------------------------------------------------
FINLAND-2.03%
Nokia Oyj-ADR (Communications
Equipment) 220,000 41,800,000
---------------------------------------------------------------
|
MARKET
SHARES VALUE
FINLAND-(CONTINUED)
Sonera Oyj
(Telecommunications-Cellular/
Wireless) 333,900 $ 22,868,451
---------------------------------------------------------------
64,668,451
---------------------------------------------------------------
FRANCE-0.41%
AXA (Insurance-Multi-Line) 36,800 5,125,971
---------------------------------------------------------------
AXA-ADR (Insurance-Multi-Line) 110,000 7,810,000
---------------------------------------------------------------
12,935,971
---------------------------------------------------------------
GERMANY-0.36%
Mannesmann A.G.
(Machinery-Diversified) 47,823 11,527,482
---------------------------------------------------------------
ISRAEL-0.19%
Partner Communications Co.
Ltd.-ADR
(Telecommunications-Cellular/
Wireless)(d) 228,300 5,907,263
---------------------------------------------------------------
NETHERLANDS-0.38%
Libertel N.V.
(Telecommunications-Cellular/
Wireless)(d) 467,200 12,225,549
---------------------------------------------------------------
SOUTH KOREA-0.34%
Korea Telecom Corp.-ADR
(Telephone) 143,596 10,733,801
---------------------------------------------------------------
SPAIN-0.50%
Telefonica S.A. (Telephone)(d) 495,000 12,355,180
---------------------------------------------------------------
Terra Networks, S.A.
(Computers-Software &
Services)(d) 68,100 3,718,254
---------------------------------------------------------------
16,073,434
---------------------------------------------------------------
Total Foreign Stocks (Cost
$72,168,443) 173,747,301
---------------------------------------------------------------
|
PRINCIPAL
AMOUNT
U.S. TREASURY SECURITIES-7.14%
U.S. TREASURY BONDS-0.71%
9.375%, 02/15/06 $ 20,000,000 22,820,200
---------------------------------------------------------------
U.S. TREASURY NOTES-6.43%
7.25%, 08/15/04 35,000,000 36,099,000
---------------------------------------------------------------
5.875%, 11/15/04 2,000,000 1,960,620
---------------------------------------------------------------
6.50%, 08/15/05 to 10/15/06 121,000,000(g) 120,776,810
---------------------------------------------------------------
6.875%, 05/15/06 34,500,000(g) 35,088,225
---------------------------------------------------------------
6.625%, 05/15/07 7,000,000(g) 7,027,230
---------------------------------------------------------------
5.63%, 05/15/08 4,000,000 3,763,160
---------------------------------------------------------------
204,715,045
---------------------------------------------------------------
Total U.S. Treasury
Securities (Cost
$231,414,173) 227,535,245
---------------------------------------------------------------
U.S. GOVERNMENT AGENCY
SECURITIES-2.14%
FEDERAL HOME LOAN MORTGAGE CORP.
("FHLMC")-0.42%
Pass through ctfs.
6.50%, 12/01/28 13,995,426 13,199,366
---------------------------------------------------------------
|
FS-61
PRINCIPAL MARKET
AMOUNT VALUE
FEDERAL NATIONAL MORTGAGE
ASSOCIATION ("FNMA")-1.16%
Pass through ctfs.
7.00%, 05/01/28 $ 20,690,733 $ 19,998,836
---------------------------------------------------------------
6.50%, 11/01/28 to 12/01/28 18,009,410 16,968,105
---------------------------------------------------------------
36,966,941
---------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION ("GNMA")-0.56%
Pass through ctfs.
6.50%, 09/15/28 to 03/15/29 19,065,864 17,898,080
---------------------------------------------------------------
Total U.S. Government Agency
Securities (Cost
$72,041,945) 68,064,387
---------------------------------------------------------------
|
NUMBER
OF EXERCISE EXPIRATION
CONTRACTS PRICE DATE
OPTIONS
PURCHASED-0.01%
ELECTRONICS
(DEFENSE)-0.01%
General Motors
Corp.-Class H (Cost
$465,975) 95,000 $ 90 Jan-00 195,938
--------------------------------------------------------------------------
|
MARKET
SHARES VALUE
MONEY MARKET FUNDS-7.50%
STIC Liquid Assets Portfolio(h) $119,363,406 $ 119,363,406
---------------------------------------------------------------
STIC Prime Portfolio(h) 119,363,406 119,363,406
---------------------------------------------------------------
Total Money Market Funds
(Cost $238,726,812) 238,726,812
---------------------------------------------------------------
TOTAL INVESTMENTS-98.45% (Cost
$2,366,107,679) 3,134,773,552
---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-1.55% 49,376,620
---------------------------------------------------------------
NET ASSETS-100.00% $3,184,150,172
===============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt AUD - Australian Dollar CAD - Canadian Dollars Conv. - Convertible Ctfs. - Certificates Deb. - Debentures DECS - Dividend Enhanced Convertible Stock DEM - German Deutsche Mark DKK - Danish Krone Disc. - Discounted EUR - Euro GBP - British Pound Sterling GRD - Greek Drachma Gtd. - Guaranteed NZD - New Zealand Dollar Pfd. - Preferred REIT - Real Estate Investment Trust Sec. - Secured SEK - Swedish Krona Sr. - Senior Sub. - Subordinated |
Unsec. - Unsecured
Unsub. - Unsubordinated
Notes to Schedule of Investments:
(a) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Trustees. The market
value at 12/31/99 represented 3.20% of the Fund's net assets.
(b) Discounted bond at purchase. Interest rate shown represents the coupon rate
at which the bond will accrue at a specified future date.
(c) Represents a security sold under Rule 144A, which is exempt from
registration and may be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended.
(d) Non-income producing security.
(e) A portion of this security is subject to call options written. See Note 7.
(f) Foreign denominated security. Par value and coupon are denominated in
currency indicated.
(g) A portion of this principal was pledged as collateral to cover margin
requirements for open future contracts. See Note 8.
(h) The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
FS-62
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
ASSETS:
Investments, at market value (cost
$2,366,107,679) $3,134,773,552
---------------------------------------------------------
Receivables for:
Investments sold 18,914,453
---------------------------------------------------------
Foreign currency contracts closed 24,825
---------------------------------------------------------
Fund shares sold 25,083,485
---------------------------------------------------------
Interest and dividends 22,904,366
---------------------------------------------------------
Variation margin 276,250
---------------------------------------------------------
Foreign currency contracts 655,642
---------------------------------------------------------
Investment for deferred compensation plan 42,523
---------------------------------------------------------
Other assets 40,344
---------------------------------------------------------
Total assets 3,202,715,440
---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 4,357,824
---------------------------------------------------------
Fund shares reacquired 8,656,785
---------------------------------------------------------
Options written (premiums $1,494,360) 1,167,812
---------------------------------------------------------
Deferred compensation plan 42,523
---------------------------------------------------------
Accrued advisory fees 1,343,610
---------------------------------------------------------
Accrued distribution fees 2,543,619
---------------------------------------------------------
Accrued transfer agent fees 249,013
---------------------------------------------------------
Accrued operating expenses 204,082
---------------------------------------------------------
Total liabilities 18,565,268
---------------------------------------------------------
Net assets applicable to shares
outstanding $3,184,150,172
=========================================================
NET ASSETS:
Class A $1,800,349,970
=========================================================
Class B $1,183,215,180
=========================================================
Class C $ 200,585,022
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 55,074,835
=========================================================
Class B 36,282,468
=========================================================
Class C 6,144,390
=========================================================
Class A:
Net asset value and redemption price
per share $ 32.69
---------------------------------------------------------
Offering price per share:
(Net asset value of $32.69 / 95.25%) $ 34.32
=========================================================
Class B:
Net asset value and offering price per
share $ 32.61
=========================================================
Class C:
Net asset value and offering price per
share $ 32.65
=========================================================
|
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
INVESTMENT INCOME:
Interest $ 85,768,860
---------------------------------------------------------
Dividends (net of $91,426 foreign
withholding tax) 13,436,438
---------------------------------------------------------
Total investment income 99,205,298
---------------------------------------------------------
EXPENSES:
Advisory fees 13,624,208
---------------------------------------------------------
Administrative services fees 158,046
---------------------------------------------------------
Custodian fees 240,252
---------------------------------------------------------
Distribution fees-Class A 3,755,133
---------------------------------------------------------
Distribution fees-Class B 10,013,693
---------------------------------------------------------
Distribution fees-Class C 1,464,190
---------------------------------------------------------
Trustees' fees 22,015
---------------------------------------------------------
Transfer agent fees-Class A 2,032,670
---------------------------------------------------------
Transfer agent fees-Class B 2,032,007
---------------------------------------------------------
Transfer agent fees-Class C 297,956
---------------------------------------------------------
Other 550,475
---------------------------------------------------------
Total expenses 34,190,645
---------------------------------------------------------
Less: Expenses paid indirectly (75,967)
---------------------------------------------------------
Net expenses 34,114,678
---------------------------------------------------------
Net investment income 65,090,620
---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN
CURRENCIES, FOREIGN CURRENCY CONTRACTS,
FUTURES AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 436,666
---------------------------------------------------------
Foreign currencies (154,053)
---------------------------------------------------------
Foreign currency contracts 534,910
---------------------------------------------------------
Futures contracts 45,119,738
---------------------------------------------------------
Option contracts written 908,045
---------------------------------------------------------
46,845,306
---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 384,287,115
---------------------------------------------------------
Foreign currencies 5,416
---------------------------------------------------------
Foreign currency contracts 396,014
---------------------------------------------------------
Futures contracts (10,141,023)
---------------------------------------------------------
Option contracts written 391,074
---------------------------------------------------------
374,938,596
---------------------------------------------------------
Net gain from investment securities,
foreign currencies, foreign currency
contracts, futures and option contracts 421,783,902
---------------------------------------------------------
Net increase in net assets resulting from
operations $486,874,522
=========================================================
|
FS-63
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
-------------- --------------
OPERATIONS:
Net investment income $ 65,090,620 $ 42,651,746
---------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currencies, foreign currency contracts, futures
and option contracts 46,845,306 (34,961,701)
---------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies, foreign currency
contracts, futures and option contracts 374,938,596 202,514,022
---------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 486,874,522 210,204,067
---------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (42,749,278) (25,009,619)
---------------------------------------------------------------------------------------------
Class B (20,909,084) (12,164,517)
---------------------------------------------------------------------------------------------
Class C (3,188,689) (1,261,081)
---------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A -- (2,990,460)
---------------------------------------------------------------------------------------------
Class B -- (2,026,544)
---------------------------------------------------------------------------------------------
Class C -- (260,076)
---------------------------------------------------------------------------------------------
Share transactions-net:
Class A 243,729,476 537,064,636
---------------------------------------------------------------------------------------------
Class B 132,034,584 344,386,485
---------------------------------------------------------------------------------------------
Class C 61,800,642 99,082,872
---------------------------------------------------------------------------------------------
Net increase in net assets 857,592,173 1,147,025,763
---------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 2,326,557,999 1,179,532,236
---------------------------------------------------------------------------------------------
End of period $3,184,150,172 $2,326,557,999
=============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $2,395,161,389 $1,957,596,687
---------------------------------------------------------------------------------------------
Undistributed net investment income 404,927 5,095,292
---------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies, foreign currency
contracts, futures and option contracts 14,952,655 (34,826,585)
---------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies, foreign currency contracts, futures and
option contracts 773,631,201 398,692,605
---------------------------------------------------------------------------------------------
$3,184,150,172 $2,326,557,999
=============================================================================================
|
See Notes to Financial Statements.
FS-64
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Balanced Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The Trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of nine separate portfolios, each
having an unlimited number of shares of beneficial interest. The Fund currently
offers three different classes of shares: Class A shares, Class B shares and
Class C shares. Class A shares are sold with a front-end sales charge. Class B
shares and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class will be 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 the Fund. The Fund's investment objective
is to achieve as high a total return as possible, consistent with preservation
of capital, by investing in a broadly diversified portfolio of high-yielding
securities, including common stocks, preferred stocks, convertible securities
and bonds.
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 -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price on the exchange where
the security is principally traded, or lacking any sales on a particular day,
the security is valued at the closing bid price on that day. Each security
reported on the NASDAQ National Market System is valued at the last sales
price on the valuation date or absent a last sales price, at the closing bid
price. Debt obligations (including convertible bonds) are valued on the basis
of prices provided by an independent pricing service. Prices provided by the
pricing service may be determined without exclusive reliance on quoted
prices, and may reflect appropriate factors such as yield, type of issue,
coupon rate and maturity date. Securities for which market prices are not
provided by any of the above methods are valued based upon quotes furnished
by independent sources and are valued at the last bid price in the case of
equity securities and in the case of debt obligations, the mean between the
last bid and asked prices. 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. Short-term obligations
having 60 days or less to maturity are valued at amortized cost which
approximates market value. For purposes of determining net asset value per
share, futures and option contracts generally will be valued 15 minutes after
the close of trading of the New York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the NYSE
which would not be reflected in the computation of the Fund's net asset
value. If events materially affecting the value of such securities occur
during such period, then these securities will be valued at their fair value
as determined in good faith by or under the supervision of the Board of
Trustees.
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 and is recorded on
the accrual basis. Dividend income is recorded on the ex-dividend date. On
December 31, 1999, undistributed net investment income was decreased by
$2,933,934 and undistributed net realized gains increased by $2,933,934 as a
result of differing book/tax treatment of foreign currency transactions and
other reclassifications. Net assets of the Fund were unaffected by the
reclassifications.
C. Distributions -- Distributions from income are recorded on ex-dividend date,
and are declared and paid quarterly. 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.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions. The Fund does
not separately account for that portion of the results of operations
resulting from changes in foreign exchange rates on investments and the
fluctuations arising from changes in market prices of securities held. Such
fluctuations
FS-65
are included with the net realized and unrealized gain or loss from investments.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund may enter into a foreign currency contract to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. The Fund may also enter into a foreign currency contract for the purchase or sale of a security denominated in a foreign currency in order to "lock in" the U.S. dollar price of that security. The Fund could be exposed to risk if counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably.
Outstanding foreign currency contracts at December 31, 1999 were as follows:
CONTRACT TO
------------------------- UNREALIZED
SETTLEMENT DATE DELIVER RECEIVE VALUE APPRECIATION
--------------------- ----------- ----------- ----------- ------------
01/24/00 SEK 68,000,000 $ 8,381,403 $ 8,004,163 $377,240
-----------------------------------------------------------------------------
02/28/00 EUR 10,000,000 10,385,000 10,110,458 274,542
-----------------------------------------------------------------------------
02/28/00 GBP 500,000 811,250 807,390 3,860
-----------------------------------------------------------------------------
78,500,000 $19,577,653 $18,922,011 $655,642
=============================================================================
|
G. Futures Contracts -- The Fund may purchase or sell futures contracts as a hedge against changes in market conditions. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities as collateral for the account of the broker (the Fund's agent in acquiring the futures position). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by "marking to market" on a daily basis to reflect the market value of the contracts at the end of each day's trading. Variation margin payments are made or received depending upon whether unrealized gains or losses are incurred. When the contracts are closed, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund's basis in the contract. Risks include the possibility of an illiquid market and that a change in value of the contracts may not correlate with changes in the value of the securities being hedged.
H. Covered Call Options -- The Fund may write call options, on a covered basis;
that is, the Fund will own the underlying security. Options written by the
Fund normally will have expiration dates between three and nine months from
the date written. 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 mean between the last bid
and asked prices on that day. 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 during the option period. The purchaser of a call
option 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 that received when the call option was
written) a call option identical to the one originally written.
I. Put Options -- The Fund may purchase put options. By purchasing a put option, the Fund obtains the right (but not the obligation) to sell the option's underlying instrument at a fixed strike price. In return for this right, the Fund pays an option premium. The option's underlying instrument may be a security or a futures contract. Put options may be used by the Fund to hedge securities it owns by locking in a minimum price at which the Fund can sell. If security prices fall, the put option could be exercised to offset all or a portion of the Fund's resulting losses. At the same time, because the maximum the Fund has at risk is the cost of the option, purchasing put options does not eliminate the potential for the Fund to profit from an increase in the value of the securities hedged.
J. Bond Premiums -- It is the policy of the Fund not to amortize market premiums on bonds for financial reporting purposes.
K. Expenses -- Distribution expenses 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 Trust 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 0.75% of
the first $150 million of the Fund's average daily net assets, plus 0.50% of the
Fund's average daily net assets in excess of $150 million.
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
FS-66
the Fund. For the year ended December 31, 1999, AIM was paid $158,046 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 and
shareholder services to the Fund. For the year ended December 31, 1999, AFS was
paid $1,916,453 for such services.
The Trust 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 Trust 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 the 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 December 31,
1999, the Class A, Class B and Class C shares paid AIM Distributors $3,755,133,
$10,013,693 and $1,464,190, respectively, as compensation under the Plans.
AIM Distributors received commissions of $823,856 from sales of the Class A
shares of the Fund during the year ended December 31, 1999. 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 December 31, 1999,
AIM Distributors received $150,341 in contingent deferred sales charges imposed
on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the year ended December 31, 1999, the Fund paid legal fees of $7,985
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
During the year ended December 31, 1999, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian fees of $29,183 and $46,784, respectively, under expense offset arrangements. The effect of the above arrangements resulted in a reduction of the Fund's total expenses of $75,967 during the year ended December 31, 1999.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, 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 December 31, 1999, the Fund did not borrow under the line of credit agreement. The funds which are party to the line of credit are charged a commitment fee of 0.09% on the unused balance of the committed line. Prior to May 28, 1999, the commitment fee rate was 0.05%. The commitment fee is allocated among the funds based on their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 1999 was
$2,017,133,351 and $1,619,226,894, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of December 31, 1999 was as follows:
Aggregate unrealized appreciation of investment securities $826,568,954 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (58,369,796) --------------------------------------------------------- Net unrealized appreciation of investment securities $768,199,158 ========================================================= Cost of investments for tax purposes is $2,366,574,394. |
FS-67
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the year ended December 31, 1999 are summarized as follows:
CALL OPTION CONTRACTS
----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ----------
Beginning of year 500 $ 797,973
------------------------------------------------------------------------------------
Written 6,745 4,420,253
------------------------------------------------------------------------------------
Closed (3,755) (3,723,866)
------------------------------------------------------------------------------------
End of year 3,490 $1,494,360
====================================================================================
|
Open call option contracts written at December 31, 1999 were as follows:
UNREALIZED
CONTRACT STRIKE NUMBER OF PREMIUMS MARKET APPRECIATION
ISSUE MONTH PRICE CONTRACTS RECEIVED VALUE (DEPRECIATION)
------------------------------------------------------ -------- ------- --------- ---------- ---------- --------------
America Online Inc. Jan-00 $ 88 2,210 $ 851,927 $ 414,374 $ 437,553
---------------------------------------------------------------------------------------------------------------------------------
General Motors Corp. - Class H Jan-00 100 950 412,761 279,063 133,698
---------------------------------------------------------------------------------------------------------------------------------
International Business Machines Corp. Jan-00 95 330 229,672 474,375 (244,703)
---------------------------------------------------------------------------------------------------------------------------------
3,490 $1,494,360 $1,167,812 $ 326,548
=================================================================================================================================
|
NOTE 8-FUTURES CONTRACTS
On December 31, 1999, $7,619,000 principal amount of U.S. Treasury obligations was pledged as collateral to cover margin requirements for open futures contracts. Open futures contracts were as follows:
VALUE OF
NO. OF MONTH/ OPEN FUTURES UNREALIZED
CONTRACT CONTRACTS COMMITMENT CONTRACTS APPRECIATION
------------------------------------------------------------ --------- ---------- ------------ ------------
S&P 500 Index 325 Mar-00/Buy $120,591,250 $3,977,452
------------------------------------------------------------------------------------------------------------------
|
NOTE 9-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1999 and 1998 were as follows:
1999 1998
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
Sold:
Class A 24,207,279 $ 705,353,097 29,663,763 $ 789,886,049
-----------------------------------------------------------------------------------------------------------------------
Class B 9,923,280 287,877,047 15,995,669 427,423,474
-----------------------------------------------------------------------------------------------------------------------
Class C 3,295,250 96,614,771 4,375,455 117,461,185
-----------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 1,334,538 39,562,999 872,547 23,134,563
-----------------------------------------------------------------------------------------------------------------------
Class B 652,505 19,306,388 492,389 13,073,889
-----------------------------------------------------------------------------------------------------------------------
Class C 92,159 2,744,998 54,578 1,446,813
-----------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (17,165,067) (501,186,620) (10,355,432) (275,955,976)
-----------------------------------------------------------------------------------------------------------------------
Class B (6,020,681) (175,148,851) (3,657,104) (96,110,878)
-----------------------------------------------------------------------------------------------------------------------
Class C (1,289,864) (37,559,127) (747,879) (19,825,126)
-----------------------------------------------------------------------------------------------------------------------
15,029,399 $ 437,564,702 36,693,986 $ 980,533,993
=======================================================================================================================
|
FS-68
NOTE 10-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A and a share of Class B outstanding during each of the years in the five-year period ended December 31, 1999, and for a share of Class C outstanding during each of the years in the two-year period ended December 31, 1999 and the period August 4, 1997 (date sales commenced) through December 31, 1997.
CLASS A
--------------------------------------------------------
1999(a) 1998(a) 1997 1996 1995
---------- ---------- -------- -------- -------
Net asset value, beginning of period $ 28.23 $ 25.78 $ 21.84 $ 19.22 $ 14.62
------------------------------------------------------------ ---------- ---------- -------- -------- -------
Income from investment operations:
Net investment income 0.82 0.71 0.60 0.66 0.49
------------------------------------------------------------ ---------- ---------- -------- -------- -------
Net gains on securities (both realized and unrealized) 4.46 2.45 4.66 2.99 4.57
------------------------------------------------------------ ---------- ---------- -------- -------- -------
Total from investment operations 5.28 3.16 5.26 3.65 5.06
------------------------------------------------------------ ---------- ---------- -------- -------- -------
Less distributions:
Dividends from net investment income (0.82) (0.65) (0.55) (0.55) (0.46)
------------------------------------------------------------ ---------- ---------- -------- -------- -------
Distributions from net realized gains -- (0.06) (0.77) (0.48) --
------------------------------------------------------------ ---------- ---------- -------- -------- -------
Total distributions (0.82) (0.71) (1.32) (1.03) (0.46)
------------------------------------------------------------ ---------- ---------- -------- -------- -------
Net asset value, end of period $ 32.69 $ 28.23 $ 25.78 $ 21.84 $ 19.22
============================================================ ========== ========== ======== ======== =======
Total return(b) 19.04% 12.46% 24.41% 19.25% 34.97%
============================================================ ========== ========== ======== ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,800,350 $1,318,230 $683,633 $334,189 $92,241
============================================================ ========== ========== ======== ======== =======
Ratio of expenses to average net assets 0.94%(c) 0.95% 0.98% 1.15% 1.43%(d)
============================================================ ========== ========== ======== ======== =======
Ratio of net investment income to average net assets 2.81%(c) 2.81% 2.48% 2.97% 2.81%(e)
============================================================ ========== ========== ======== ======== =======
Portfolio turnover rate 65% 43% 66% 72% 77%
============================================================ ========== ========== ======== ======== =======
|
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges.
(c) Ratios are based on average net assets of $1,502,053,346.
(d) After fee waivers and/or expense reimbursements. The ratio
of expenses to average net assets prior to fee waivers
and/or expense reimbursements was 1.46% for 1995.
(e) After fee waivers and/or expense reimbursements. The ratio
of net investment income to average net assets prior to fee
waivers and/or expense reimbursements was 2.78% for 1995.
|
CLASS B CLASS C
------------------------------------------------------ ------------------------------
1999(a) 1998(a) 1997 1996 1995 1999(a) 1998(a) 1997
---------- -------- -------- -------- ------- -------- -------- -------
Net asset value, beginning of period $ 28.18 $ 25.75 $ 21.83 $ 19.22 $ 14.62 $ 28.21 $ 25.76 $ 25.55
---------------------------------------- ---------- -------- -------- -------- ------- -------- -------- -------
Income from investment operations:
Net investment income 0.58 0.42 0.38 0.48 0.31 0.58 0.42 0.16
---------------------------------------- ---------- -------- -------- -------- ------- -------- -------- -------
Net gains on securities (both realized
and unrealized) 4.45 2.51 4.68 2.99 4.61 4.46 2.53 1.01
---------------------------------------- ---------- -------- -------- -------- ------- -------- -------- -------
Total from investment operations 5.03 2.93 5.06 3.47 4.92 5.04 2.95 1.17
---------------------------------------- ---------- -------- -------- -------- ------- -------- -------- -------
Less distributions:
Dividends from net investment income (0.60) (0.44) (0.37) (0.38) (0.32) (0.60) (0.44) (0.19)
---------------------------------------- ---------- -------- -------- -------- ------- -------- -------- -------
Distributions from net realized gains -- (0.06) (0.77) (0.48) -- -- (0.06) (0.77)
---------------------------------------- ---------- -------- -------- -------- ------- -------- -------- -------
Total distributions (0.60) (0.50) (1.14) (0.86) (0.32) (0.60) (0.50) (0.96)
---------------------------------------- ---------- -------- -------- -------- ------- -------- -------- -------
Net asset value, end of period $ 32.61 $ 28.18 $ 25.75 $ 21.83 $ 19.22 $ 32.65 $ 28.21 $ 25.76
======================================== ========== ======== ======== ======== ======= ======== ======== =======
Total return(b) 18.08% 11.53% 23.42% 18.28% 33.93% 18.09% 11.60% 4.67%
======================================== ========== ======== ======== ======== ======= ======== ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,183,215 $894,165 $486,506 $237,082 $72,634 $200,585 $114,163 $ 9,394
======================================== ========== ======== ======== ======== ======= ======== ======== =======
Ratio of expenses to average net assets 1.75%(c) 1.76% 1.79% 1.97% 2.21%(d) 1.75%(c) 1.73% 1.78%(f)
======================================== ========== ======== ======== ======== ======= ======== ======== =======
Ratio of net investment income to
average net assets 2.00%(c) 2.00% 1.67% 2.15% 2.03%(e) 2.00%(c) 2.03% 1.68%(f)
======================================== ========== ======== ======== ======== ======= ======== ======== =======
Portfolio turnover rate 65% 43% 66% 72% 77% 65% 43% 66%
======================================== ========== ======== ======== ======== ======= ======== ======== =======
|
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not
annualized for periods less than one year.
(c) Ratios are based on average net assets of $1,001,369,340 and
$146,419,005 for Class B and Class C, respectively.
(d) After fee waivers and/or expense reimbursements. The ratio
of expenses to average net assets prior to fee waivers
and/or expense reimbursements was 2.23% for 1995.
(e) After fee waivers and/or expense reimbursements. The ratio
of net investment income to average net assets prior to fee
waivers and/or expense reimbursements was 2.01% for 1995.
(f) Annualized.
|
FS-69
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM Global Utilities Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Global Utilities Fund (a portfolio of
AIM Funds Group), including the schedule of investments,
as of December 31, 1999, 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 generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of
securities owned as of December 31, 1999, 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 Global
Utilities Fund as of December 31, 1999, 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 generally accepted accounting principles.
/s/ KPMG LLP KPMG LLP February 4, 2000 Houston, Texas |
FS-70
SCHEDULE OF INVESTMENTS
December 31, 1999
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-53.50%
BROADCASTING (TELEVISION, RADIO & CABLE)-3.30%
UnitedGlobalCom Inc.-Class A(a) 90,000 $ 6,356,250
--------------------------------------------------------------
Univision Communications,
Inc.-Class A(a) 63,000 6,437,812
--------------------------------------------------------------
12,794,062
--------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-6.28%
Aether Systems, Inc.(a) 38,100 2,728,912
--------------------------------------------------------------
ANTEC Corp.(a) 45,000 1,642,500
--------------------------------------------------------------
Copper Mountain Networks, Inc.(a) 29,700 1,447,875
--------------------------------------------------------------
Covad Communications Group, Inc.(a) 14,100 788,719
--------------------------------------------------------------
JDS Uniphase Corp.(a) 7,000 1,129,187
--------------------------------------------------------------
Juniper Networks, Inc.(a) 8,100 2,754,000
--------------------------------------------------------------
Lucent Technologies Inc. 102,200 7,645,837
--------------------------------------------------------------
Sycamore Networks, Inc.(a) 5,400 1,663,200
--------------------------------------------------------------
Tellabs, Inc.(a) 45,000 2,888,437
--------------------------------------------------------------
Williams Communications Group,
Inc.(a) 57,800 1,672,587
--------------------------------------------------------------
24,361,254
--------------------------------------------------------------
COMPUTERS (NETWORKING)-5.11%
Cisco Systems, Inc.(a) 25,400 2,720,975
--------------------------------------------------------------
Foundry Networks, Inc.(a) 11,600 3,499,575
--------------------------------------------------------------
Redback Networks, Inc.(a) 72,800 12,922,000
--------------------------------------------------------------
Rhythms NetConnections, Inc.(a) 22,000 682,000
--------------------------------------------------------------
19,824,550
--------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-0.36%
GRIC Communications, Inc.(a) 54,900 1,393,087
--------------------------------------------------------------
ELECTRIC COMPANIES-7.20%
Allegheny Energy, Inc. 82,100 2,211,569
--------------------------------------------------------------
DQE, Inc. 76,500 2,648,813
--------------------------------------------------------------
Edison International 143,800 3,765,762
--------------------------------------------------------------
Energy East Corp. 112,000 2,331,000
--------------------------------------------------------------
FirstEnergy Corp. 50,000 1,134,375
--------------------------------------------------------------
FPL Group, Inc. 55,500 2,376,094
--------------------------------------------------------------
IPALCO Enterprises, Inc. 42,000 716,625
--------------------------------------------------------------
NiSource, Inc. 101,000 1,805,375
--------------------------------------------------------------
NSTAR 29,531 1,196,005
--------------------------------------------------------------
Pinnacle West Capital Corp. 85,500 2,613,094
--------------------------------------------------------------
Southern Co. (The) 114,400 2,688,400
--------------------------------------------------------------
Teco Energy, Inc. 115,000 2,134,688
--------------------------------------------------------------
Texas Utilities Co. 64,800 2,304,450
--------------------------------------------------------------
27,926,250
--------------------------------------------------------------
|
MARKET
SHARES VALUE
ELECTRICAL EQUIPMENT-0.09%
Conexant Systems, Inc.(a) 5,400 $ 358,425
--------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-0.72%
SDL, Inc.(a) 12,900 2,812,200
--------------------------------------------------------------
ENTERTAINMENT-0.40%
Time Warner Inc. 21,200 1,535,675
--------------------------------------------------------------
NATURAL GAS-2.85%
Enron Corp. 75,000 3,328,125
--------------------------------------------------------------
Public Service Co. of North
Carolina, Inc. 40,000 1,292,500
--------------------------------------------------------------
Williams Companies, Inc. (The) 209,900 6,415,069
--------------------------------------------------------------
11,035,694
--------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-1.32%
AES Corp.(a) 40,000 2,990,000
--------------------------------------------------------------
MidAmerican Energy Holdings Co.(a) 63,200 2,129,050
--------------------------------------------------------------
5,119,050
--------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS-0.43%
Alexandria Real Estate Equities,
Inc. 52,500 1,670,156
--------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-1.81%
Convergys Corp.(a) 160,000 4,920,000
--------------------------------------------------------------
Quanta Services, Inc.(a) 74,000 2,090,500
--------------------------------------------------------------
7,010,500
--------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-0.74%
Clarent Corp.(a) 36,900 2,868,975
--------------------------------------------------------------
TELECOMMUNICATIONS-2.99%
Broadwing Inc.(a) 314,344 11,591,435
--------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-4.20%
Infonet Services Corp.-Class B(a) 65,200 1,711,500
--------------------------------------------------------------
Phone.com, Inc.(a) 51,400 5,959,188
--------------------------------------------------------------
TeleCorp PCS, Inc.(a) 56,300 2,139,400
--------------------------------------------------------------
Tritel, Inc.(a) 82,700 2,620,556
--------------------------------------------------------------
Triton PCS Holdings, Inc.-Class A(a) 40,800 1,856,400
--------------------------------------------------------------
Western Wireless Corp.-Class A(a) 30,200 2,015,850
--------------------------------------------------------------
16,302,894
--------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-3.59%
AT&T Corp. 58,350 2,961,263
--------------------------------------------------------------
Global TeleSystems Group, Inc.(a) 38,200 1,322,675
--------------------------------------------------------------
MCI WorldCom, Inc.(a) 181,389 9,624,954
--------------------------------------------------------------
13,908,892
--------------------------------------------------------------
|
FS-71
MARKET
SHARES VALUE
TELEPHONE-12.11%
Bell Atlantic Corp. 49,000 $ 3,016,563
--------------------------------------------------------------
BellSouth Corp. 41,800 1,956,763
--------------------------------------------------------------
CenturyTel, Inc. 118,800 5,628,150
--------------------------------------------------------------
GTE Corp. 31,600 2,229,775
--------------------------------------------------------------
McLeodUSA Inc.-Class A(a) 80,000 4,710,000
--------------------------------------------------------------
NEXTLINK Communications, Inc.-Class
A(a) 43,400 3,604,913
--------------------------------------------------------------
Qwest Communications International,
Inc.(a) 150,000 6,450,000
--------------------------------------------------------------
SBC Communications, Inc. 308,893 15,058,534
--------------------------------------------------------------
Time Warner Telecom, Inc.(a) 86,300 4,309,606
--------------------------------------------------------------
46,964,304
--------------------------------------------------------------
Total Domestic Common Stocks
(Cost $83,442,776) 207,477,403
--------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-28.16%
ARGENTINA-0.44%
El Sitio, Inc. (Computers-Software
& Services)(a) 46,000 1,690,500
--------------------------------------------------------------
AUSTRALIA-0.34%
Telstra Corp. Ltd. (Telephone) 195,000 1,060,792
--------------------------------------------------------------
Telstra Corp. Ltd.-Installment
Receipts (Telephone)(a) 72,000 254,023
--------------------------------------------------------------
1,314,815
--------------------------------------------------------------
AUSTRIA-0.45%
Oesterreichische
Elektrizitactswirtschafts A.G.-
Class A (Electric Companies) 12,500 1,754,997
--------------------------------------------------------------
BELGIUM-0.40%
Electrabel S.A. (Electric
Companies) 4,700 1,537,352
--------------------------------------------------------------
BERMUDA-0.91%
Global Crossing Ltd.
(Telecommunications-Long
Distance)(a) 70,523 3,526,150
--------------------------------------------------------------
CANADA-1.47%
AT&T Canada, Inc. (Telephone)(a) 74,600 3,002,650
--------------------------------------------------------------
BCT.Telus Communications, Inc.
(Telephone) 55,382 1,348,768
--------------------------------------------------------------
BCT.Telus Communications,
Inc.-Class A (Telephone) 18,460 445,736
--------------------------------------------------------------
Westcoast Energy, Inc. (Natural
Gas) 57,400 921,988
--------------------------------------------------------------
5,719,142
--------------------------------------------------------------
DENMARK-0.63%
Tele Danmark A.S.-ADR (Telephone) 65,000 2,453,750
--------------------------------------------------------------
FINLAND-3.24%
Nokia Oyj-ADR (Communications
Equipment) 46,400 8,816,000
--------------------------------------------------------------
Sonera Group Oyj
(Telecommunications-
Cellular/Wireless) 54,900 3,760,042
--------------------------------------------------------------
12,576,042
--------------------------------------------------------------
|
MARKET
SHARES VALUE
FRANCE-2.20%
France Telecom S.A.-ADR
(Telecommunications) 39,000 $ 5,206,500
--------------------------------------------------------------
Suez Lyonnaise des Eaux S.A.
(Manufacturing- Diversified) 10,900 1,745,376
--------------------------------------------------------------
Vivendi (Manufacturing-Diversified) 17,600 1,588,017
--------------------------------------------------------------
8,539,893
--------------------------------------------------------------
GERMANY-1.35%
Mannesmann A.G.
(Machinery-Diversified) 11,391 2,745,766
--------------------------------------------------------------
RWE A.G. (Electric Companies) 28,100 1,100,140
--------------------------------------------------------------
Viag A.G.
(Manufacturing-Diversified) 75,400 1,381,131
--------------------------------------------------------------
5,227,037
--------------------------------------------------------------
GREECE-0.09%
Panafon Hellenic Telecom S.A.-GDR
(Telecommunications-Cellular/Wireless)
(Acquired 11/20/98; Cost
$244,080)(b) 27,000 348,300
--------------------------------------------------------------
HUNGARY-0.40%
Magyar Tavkozlesi Rt-ADR
(Telecommunications-Long
Distance) 42,700 1,537,200
--------------------------------------------------------------
IRELAND-1.68%
eircom PLC (Telecommunications-Long
Distance) 1,499,100 6,532,971
--------------------------------------------------------------
ISRAEL-0.63%
Partner Communications Co. Ltd.-ADR
(Telecommunications-Cellular/
Wireless)(a) 94,000 2,432,250
--------------------------------------------------------------
ITALY-2.83%
ACEA S.p.A. (Water Utilities)(a) 388,800 5,400,047
--------------------------------------------------------------
AEM S.p.A. (Electric Companies) 645,000 2,583,658
--------------------------------------------------------------
Enel S.p.A. (Electric Companies)(a) 293,100 1,227,161
--------------------------------------------------------------
Societa Nordelettrica S.p.A.
(Electric Companies) 570,000 1,749,713
--------------------------------------------------------------
10,960,579
--------------------------------------------------------------
JAPAN-1.00%
Nippon Telegraph & Telephone Corp.
(Telephone) 125 2,141,983
--------------------------------------------------------------
Nippon Telegraph & Telephone
Corp.-ADR (Telephone) 20,000 1,722,500
--------------------------------------------------------------
3,864,483
--------------------------------------------------------------
MEXICO-0.20%
Nuevo Grupo Iusacell A.A. de
C.V.-ADR
(Telecommunications-Cellular/
Wireless)(a) 51,600 770,775
--------------------------------------------------------------
NETHERLANDS-3.09%
KPNQWest N.V.
(Telecommunications-Long
Distance)(a) 65,700 4,370,781
--------------------------------------------------------------
Libertel N.V.
(Telecommunications-Cellular/
Wireless)(a) 79,000 2,067,248
--------------------------------------------------------------
|
FS-72
MARKET
SHARES VALUE
NETHERLANDS-(CONTINUED)
Versatel Telecom International N.V.
(Telecommunications-Long
Distance)(a) 158,000 $ 5,565,669
--------------------------------------------------------------
12,003,698
--------------------------------------------------------------
SOUTH KOREA-0.86%
Korea Telecom Corp.-ADR (Telephone) 44,800 3,348,800
--------------------------------------------------------------
SPAIN-3.20%
Autopistas Concesionaria Espanola
S.A. (Services-Commercial &
Consumer) 80,850 785,235
--------------------------------------------------------------
Endesa S.A. (Electric Companies) 75,000 1,487,785
--------------------------------------------------------------
Telefonica S.A. (Telephone)(a) 255,738 6,383,210
--------------------------------------------------------------
Terra Networks, S.A.
(Computers-Software &
Services)(a) 68,500 3,740,094
--------------------------------------------------------------
12,396,324
--------------------------------------------------------------
UNITED KINGDOM-2.75%
COLT Telecom Group PLC
(Communications Equipment)(a) 19,000 972,227
--------------------------------------------------------------
Kelda Group PLC (Water Utilities) 270,407 1,528,192
--------------------------------------------------------------
National Grid Group PLC (Electric
Companies) 131,526 1,000,286
--------------------------------------------------------------
PowerGen PLC (Electric Companies) 136,949 984,035
--------------------------------------------------------------
PowerGen PLC-ADR (Electric
Companies) 47,800 1,511,675
--------------------------------------------------------------
Scottish Power PLC (Electric
Companies) 223,850 1,695,203
--------------------------------------------------------------
Thus PLC (Telecommunications-Long
Distance)(a) 218,500 1,379,495
--------------------------------------------------------------
United Utilities PLC (Water
Utilities) 151,936 1,578,705
--------------------------------------------------------------
10,649,818
--------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests (Cost
$58,428,005) 109,184,876
--------------------------------------------------------------
DOMESTIC CONVERTIBLE PREFERRED
STOCKS-4.34%
BROADCASTING (TELEVISION, RADIO &
CABLE)-0.36%
MediaOne Group, Inc., $3.04 Conv.
Pfd. 29,200 1,401,600
--------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-0.90%
PSINet, Inc.-Series C, $3.375 Conv.
Pfd. 60,000 3,502,500
--------------------------------------------------------------
ELECTRIC COMPANIES-0.77%
Calpine Capital Trust, $2.875 Conv.
Pfd. 46,100 2,979,212
--------------------------------------------------------------
NATURAL GAS-0.97%
El Paso Energy Cap Trust, Inc.,
$2.375 Conv. Pfd. 74,500 3,752,938
--------------------------------------------------------------
TELECOMMUNICATIONS-0.12%
Broadwing Inc.-Series B, $3.375
Conv. Pfd. 8,000 474,000
--------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-0.89%
WinStar Communications, Inc.-Series
F, $72.50 Conv. Pfd. 2,600 3,464,500
--------------------------------------------------------------
|
MARKET
SHARES VALUE
TELEPHONE-0.33%
NEXTLINK Communications, Inc.
$3.25 Conv. Pfd. 3,000 $ 575,625
--------------------------------------------------------------
$3.25 Conv. Pfd. (Acquired
03/26/98; Cost $180,000)(b) 3,600 690,750
--------------------------------------------------------------
1,266,375
--------------------------------------------------------------
Total Domestic Convertible
Preferred Stocks (Cost
$14,819,973) 16,841,125
--------------------------------------------------------------
|
PRINCIPAL
AMOUNT
U.S. DOLLAR DENOMINATED BONDS &
NOTES-5.98%
BROADCASTING (TELEVISION, RADIO &
CABLE)-0.24%
Comcast Corp., Sr. Sub. Deb.,
9.50%, 01/15/08 $ 900,000 925,875
--------------------------------------------------------------
COMPUTERS (HARDWARE)-0.93%
Candescent Technology Corp., Sr.
Conv. Sub. Deb., 7.00%, 05/01/03
(Acquired 04/17/98-11/30/98; Cost
$4,509,350)(b) 4,605,000 3,591,900
--------------------------------------------------------------
ELECTRIC COMPANIES-1.96%
El Paso Electric Co.-Series E, Sec.
First Mortgage Bonds, 9.40%,
05/01/11 1,900,000 2,012,917
--------------------------------------------------------------
Indiana Michigan Power Co.-Series
F, Sec. Lease Obligation Bonds,
9.82%, 12/07/22 3,020,696 3,342,340
--------------------------------------------------------------
Western Resources, Inc., Sr. Unsec.
Notes,
6.25%, 08/15/03 1,500,000 1,418,250
--------------------------------------------------------------
7.13%, 08/01/09 900,000 814,338
--------------------------------------------------------------
7,587,845
--------------------------------------------------------------
NATURAL GAS-0.32%
Dynegy Inc., Sr. Unsec. Deb.,
7.13%, 05/15/18 1,400,000 1,247,288
--------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-0.62%
AES Corp.,
Sr. Notes, 8.00%, 12/31/08 1,500,000 1,376,250
--------------------------------------------------------------
Sr. Unsec. Sub. Notes, 10.25%,
07/15/06 1,000,000 1,020,000
--------------------------------------------------------------
2,396,250
--------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-1.04%
AT&T Corp., Sr. Notes, 7.75%,
03/01/07 1,850,000 1,889,109
--------------------------------------------------------------
Global TeleSystems Group, Inc.,
Conv. Notes, 8.75%, 06/30/00 620,000 2,152,175
--------------------------------------------------------------
4,041,284
--------------------------------------------------------------
TELEPHONE-0.87%
NTL Inc., Conv. Sub. Notes, 5.75%,
12/15/09 (Acquired 12/17/99; Cost
$1,800,000)(b) 1,800,000 1,944,000
--------------------------------------------------------------
SBC Communications, Inc., Deb.,
7.38%, 07/15/43 1,600,000 1,439,264
--------------------------------------------------------------
3,383,264
--------------------------------------------------------------
Total U.S. Dollar Denominated
Bonds & Notes (Cost
$24,349,922) 23,173,706
--------------------------------------------------------------
|
FS-73
PRINCIPAL MARKET
AMOUNT VALUE
NON-U.S. DOLLAR DENOMINATED BONDS &
NOTES-3.36%
CANADA-1.14%
Clearnet Communications Inc.
(Telecommunications-Cellular/Wireless),
Sr. Unsec. Disc. Notes, 10.75%,
02/15/09(d) CAD 3,000,000 $ 1,215,963
--------------------------------------------------------------
Teleglobe Canada Inc. (Telephone),
Unsec. Deb., 8.35%, 06/20/03 CAD 2,400,000 1,702,615
--------------------------------------------------------------
TransCanada Pipelines-Series Q
(Natural Gas), Deb., 10.63%,
10/20/09 CAD 1,750,000 1,496,224
--------------------------------------------------------------
4,414,802
--------------------------------------------------------------
FRANCE-0.42%
France Telecom (Telephone), Conv.
Bonds, 2.00%, 01/01/04 FRF 6,455,040 1,641,494
--------------------------------------------------------------
UNITED KINGDOM-1.80%
COLT Telecom Group PLC
(Communications Equipment), Conv.
Bonds, 2.00%,
12/16/06 (Acquired 12/09/99;
Cost $1,513,645)(b) EUR 1,475,000 1,597,708
--------------------------------------------------------------
|
PRINCIPAL MARKET
AMOUNT VALUE
UNITED KINGDOM-(CONTINUED)
National Grid Co. PLC (Electric
Companies), Conv. Bonds, 4.25%,
02/17/08 (Acquired 02/05/98; Cost
$4,574,700)(b) GBP 2,760,000 $ 5,375,740
--------------------------------------------------------------
6,973,448
--------------------------------------------------------------
Total Non-U.S. Dollar
Denominated Bonds & Notes
(Cost $11,848,786) 13,029,744
--------------------------------------------------------------
|
SHARES
MONEY MARKET FUNDS-4.66%
STIC Liquid Assets Portfolio(e) 9,033,715 9,033,715
--------------------------------------------------------------
STIC Prime Portfolio(e) 9,033,715 9,033,715
--------------------------------------------------------------
Total Money Market Funds (Cost
$18,067,430) 18,067,430
--------------------------------------------------------------
TOTAL INVESTMENTS-100.00%
(Cost $210,956,892) 387,774,284
--------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(0.00%) (8,910)
--------------------------------------------------------------
NET ASSETS-100.00% $387,765,374
==============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
CAD - Canadian Dollars
Conv. - Convertible
Deb. - Debentures
Disc. - Discounted
EUR - Euro FRF - French Franc GBP - British Pound Sterling GDR - Global Depositary Receipt Pfd. - Preferred Sec. - Secured Sr. - Senior Sub. - Subordinated |
Unsec. - Unsecured
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Trustees. The
aggregate market value of these securities at 12/31/99 was $13,548,398 which
represented 3.49% of the Fund's net assets.
(c) Foreign denominated security. Par value and coupon are denominated in
currency indicated.
(d) Step bond issued at discount. The interest rate represents the coupon rate
at which the bond will accrue at a specified future date.
(e) The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
FS-74
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
ASSETS:
Investments, at market value (cost
$210,956,892) $387,774,284
---------------------------------------------------------
Foreign currencies, at value (cost $5,703) 5,723
---------------------------------------------------------
Receivables for:
Fund shares sold 634,820
---------------------------------------------------------
Dividends and interest 950,990
---------------------------------------------------------
Investment for deferred compensation plan 33,815
---------------------------------------------------------
Other assets 15,540
---------------------------------------------------------
Total assets 389,415,172
---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 472,480
---------------------------------------------------------
Fund shares reacquired 536,539
---------------------------------------------------------
Deferred compensation 33,815
---------------------------------------------------------
Accrued advisory fees 175,431
---------------------------------------------------------
Accrued administrative services fees 7,144
---------------------------------------------------------
Accrued distribution fees 307,833
---------------------------------------------------------
Accrued transfer agent fees 40,453
---------------------------------------------------------
Accrued operating expenses 76,103
---------------------------------------------------------
Total liabilities 1,649,798
---------------------------------------------------------
Net assets applicable to shares outstanding $387,765,374
=========================================================
NET ASSETS:
Class A $238,431,599
=========================================================
Class B $142,632,134
=========================================================
Class C $ 6,701,641
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 9,141,304
=========================================================
Class B 5,478,806
=========================================================
Class C 257,525
=========================================================
Class A:
Net asset value and redemption price per
share $ 26.08
---------------------------------------------------------
Offering price per share:
(Net asset value of $26.08 / 94.50%) $ 27.60
=========================================================
Class B:
Net asset value and offering price per
share $ 26.03
=========================================================
Class C:
Net asset value and offering price per
share $ 26.02
=========================================================
|
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
INVESTMENT INCOME:
Dividends (net of $161,589 foreign
withholding tax) $ 4,612,201
---------------------------------------------------------
Interest 4,338,134
---------------------------------------------------------
Total investment income 8,950,335
---------------------------------------------------------
EXPENSES:
Advisory fees 1,802,726
---------------------------------------------------------
Administrative services fees 88,999
---------------------------------------------------------
Custodian fees 112,375
---------------------------------------------------------
Trustees' fees 7,164
---------------------------------------------------------
Distribution fees -- Class A 500,106
---------------------------------------------------------
Distribution fees -- Class B 1,165,993
---------------------------------------------------------
Distribution fees -- Class C 39,036
---------------------------------------------------------
Transfer agent fees -- Class A 308,147
---------------------------------------------------------
Transfer agent fees -- Class B 179,611
---------------------------------------------------------
Transfer agent fees -- Class C 6,013
---------------------------------------------------------
Other 207,892
---------------------------------------------------------
Total expenses 4,418,062
---------------------------------------------------------
Less: Expenses paid indirectly (4,581)
---------------------------------------------------------
Net expenses 4,413,481
---------------------------------------------------------
Net investment income 4,536,854
---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN
CURRENCIES:
Net realized gain (loss) from:
Investment securities 30,857,872
---------------------------------------------------------
Foreign currencies (285,335)
---------------------------------------------------------
30,572,537
---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 64,067,017
---------------------------------------------------------
Foreign currencies (3,469)
---------------------------------------------------------
64,063,548
---------------------------------------------------------
Net gain from investment securities and
foreign currencies 94,636,085
---------------------------------------------------------
Net increase in net assets resulting from
operations $99,172,939
=========================================================
|
See Notes to Financial Statements.
FS-75
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999 and 1998
1999 1998
------------ ------------
OPERATIONS:
Net investment income $ 4,536,854 $ 6,163,727
--------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and option contracts 30,572,537 11,466,949
--------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies and option contracts 64,063,548 25,167,621
--------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 99,172,939 42,798,297
--------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A (3,130,474) (4,323,452)
--------------------------------------------------------------------------------------------
Class B (980,604) (1,627,090)
--------------------------------------------------------------------------------------------
Class C (28,383) (23,697)
--------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A (13,462,484) (7,225,608)
--------------------------------------------------------------------------------------------
Class B (8,054,908) (4,089,137)
--------------------------------------------------------------------------------------------
Class C (355,717) (109,604)
--------------------------------------------------------------------------------------------
Share transactions-net:
Class A (3,558,143) 865,940
--------------------------------------------------------------------------------------------
Class B 3,957,825 8,749,835
--------------------------------------------------------------------------------------------
Class C 2,679,799 1,643,746
--------------------------------------------------------------------------------------------
Net increase in net assets 76,239,850 36,659,230
--------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 311,525,524 274,866,294
--------------------------------------------------------------------------------------------
End of period $387,765,374 $311,525,524
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $203,276,266 $198,796,429
--------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (41,312) (68,800)
--------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and option contracts 7,715,300 46,323
--------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and option contracts 176,815,120 112,751,572
--------------------------------------------------------------------------------------------
$387,765,374 $311,525,524
============================================================================================
|
See Notes to Financial Statements.
FS-76
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Utilities Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of nine separate portfolios,
each having an unlimited number of shares of beneficial interest. The Fund
currently offers three different classes of shares: Class A shares, Class B
shares and Class C shares. Class A shares are sold with a front-end sales
charge. Class B shares and Class C shares are sold with a contingent deferred
sales charge. Matters affecting each portfolio or class will be 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 the Fund.
The Fund's investment objectives are to achieve a high level of current income
and secondarily, growth of capital, by investing primarily in the common and
preferred stocks of public utility companies.
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 -- A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price on the exchange where the security is principally traded, or lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each security reported on the NASDAQ National Market System is valued at the last sales price on the valuation date or absent a last sales price, at the closing bid price. Debt obligations (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as yield, type of issue, coupon rate and maturity date. Securities for which market prices are not provided by any of the above methods are valued based upon quotes furnished by independent sources and are valued at the last bid price in the case of equity securities and in the case of debt obligations, the mean between the last bid and asked prices. 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. Short-term obligations having 60 days or less to maturity are valued at amortized cost which approximates market value. For purposes of determining net asset value per share, futures and option contracts generally will be valued 15 minutes after the close of trading of the New York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each day
at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the NYSE
which would not be reflected in the computation of the Fund's net asset
value. If events materially affecting the value of such securities occur
during such period, then these securities will be valued at their fair value
as determined in good faith by or under the supervision of the Board of
Trustees.
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 and is recorded
on the accrual basis. Dividend income is recorded on the ex-dividend date.
On December 31, 1999, undistributed net investment income was decreased by
$369,905, undistributed net realized gains decreased by $1,030,451 and
paid-in capital increased by $1,400,356 as a result of differing book/tax
treatment of foreign currency transactions, equalization credits and other
reclassifications. Net assets of the Fund were unaffected by the
reclassifications.
C. Distributions -- Distributions from income are recorded on ex-dividend date,
and are declared and paid quarterly. 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.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions. The Fund does
not separately account for that portion of the results of operations
resulting from changes in foreign exchange rates on investments and the
fluctuations arising from
FS-77
changes in market prices of securities held. Such fluctuations are included
with the net realized and unrealized gain or loss from investments.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
G. Bond Premiums -- It is the policy of the Fund not to amortize market premiums
on bonds for financial reporting purposes.
H. Expenses -- Distribution expenses 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 Trust 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 an annual rate of 0.60% on
the first $200 million of the Fund's average daily net assets, plus 0.50% on the
next $300 million of the Fund's average daily net assets, plus 0.40% on the next
$500 million of the Fund's average daily net assets, plus 0.30% on 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 December 31, 1999, AIM was
paid $88,999 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 and
shareholder services to the Fund. For the year ended December 31, 1999, AFS was
paid $339,533 for such services.
The Trust 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 Trust 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 the 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 December
31, 1999, the Class A, Class B and Class C shares paid AIM Distributors
$500,106, $1,165,993 and $39,036, respectively, as compensation under the Plans.
AIM Distributors received commissions of $56,996 from sales of the Class A
shares of the Fund during the year ended December 31, 1999. 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 December 31, 1999,
AIM Distributors received $67,367 in contingent deferred sales charges imposed
on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the year ended December 31, 1999, the Fund paid legal fees of $4,002
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
During the year ended December 31, 1999, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian fees of $3,537 and $1,044, respectively, under expense offset arrangements. The effect of the above arrangements resulted in a reduction of the Fund's total expenses of $4,581 during the year ended December 31, 1999.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, 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 December 31, 1999, the Fund did not borrow under the line of credit agreement. The funds which are party to the line of credit are charged a commitment fee of 0.09% on the unused balance of the committed line. Prior to May 28, 1999, the commitment fee rate was 0.05%. The commitment fee is allocated among the funds based on their respective average net assets for the period.
FS-78
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities) purchased and sold by the Fund during the year ended December 31, 1999 was $111,927,760 and $138,238,897, respectively.
The amount of unrealized appreciation (depreciation) of investment securities, for tax purposes, as of December 31, 1999 was as follows:
Aggregate unrealized appreciation of investment securities $182,332,667 -------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (5,515,275) -------------------------------------------------------------------------- Net unrealized appreciation of investment securities $176,817,392 ========================================================================== Investments have the same cost for tax and financial statement purposes. |
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1999 and 1998 were as follows:
1999 1998
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
Sold:
Class A 1,548,711 $ 34,438,387 2,025,020 $ 40,729,263
-------------------------------------------------------------------------------------------------------------------
Class B 884,404 19,574,340 1,124,804 22,635,167
-------------------------------------------------------------------------------------------------------------------
Class C 183,463 4,121,099 196,103 3,960,554
-------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 636,523 15,200,629 520,447 10,555,882
-------------------------------------------------------------------------------------------------------------------
Class B 332,374 7,978,341 246,404 4,994,635
-------------------------------------------------------------------------------------------------------------------
Class C 14,370 346,523 5,787 117,358
-------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (2,406,262) (53,197,159) (2,500,981) (50,419,205)
-------------------------------------------------------------------------------------------------------------------
Class B (1,070,971) (23,594,856) (935,494) (18,879,967)
-------------------------------------------------------------------------------------------------------------------
Class C (83,100) (1,787,823) (120,588) (2,434,166)
-------------------------------------------------------------------------------------------------------------------
39,512 $ 3,079,481 561,502 $ 11,259,521
===================================================================================================================
|
FS-79
NOTE 8-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A and a share of Class B outstanding during each of the years in the five-year period ended December 31, 1999, and for a share of Class C outstanding during each of the years in the two-year period ended December 31, 1999 and the period August 4, 1997 (date sales commenced) through December 31, 1997.
CLASS A
----------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
Net asset value, beginning of period $ 21.01 $ 19.26 $ 16.01 $ 14.59 $ 11.85
--------------------------------------------------------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.38 0.48 0.47 0.55 0.55
--------------------------------------------------------- -------- -------- -------- -------- --------
Net gains on securities (both realized and unrealized) 6.60 2.53 3.26 1.43 2.71
--------------------------------------------------------- -------- -------- -------- -------- --------
Total from investment operations 6.98 3.01 3.73 1.98 3.26
--------------------------------------------------------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.35) (0.46) (0.47) (0.56) (0.52)
--------------------------------------------------------- -------- -------- -------- -------- --------
Distributions from net realized gains (1.56) (0.80) (0.01) -- --
--------------------------------------------------------- -------- -------- -------- -------- --------
Total distributions (1.91) (1.26) (0.48) (0.56) (0.52)
--------------------------------------------------------- -------- -------- -------- -------- --------
Net asset value, end of period $ 26.08 $ 21.01 $ 19.26 $ 16.01 $ 14.59
========================================================= ======== ======== ======== ======== ========
Total return(a) 34.15% 16.01% 23.70% 13.88% 28.07%
========================================================= ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $238,432 $196,665 $179,456 $164,001 $170,624
========================================================= ======== ======== ======== ======== ========
Ratio of expenses to average net assets 1.10%(b) 1.06% 1.13% 1.17% 1.21%
========================================================= ======== ======== ======== ======== ========
Ratio of net investment income to average net assets 1.69%(b) 2.39% 2.79% 3.62% 4.20%
========================================================= ======== ======== ======== ======== ========
Portfolio turnover rate 37% 38% 26% 48% 88%
========================================================= ======== ======== ======== ======== ========
|
(a) Does not deduct sales charges.
(b) Ratios are based on average net assets of $200,042,322.
Class B Class C
------------------------------------------------- -------------------------
1999 1998 1997 1996 1995 1999(A) 1998 1997
-------- -------- ------- ------- ------- ------- ------ ------
Net asset value, beginning of period $ 20.98 $ 19.24 $ 16.01 $ 14.60 $ 11.84 $20.97 $19.24 $17.67
---------------------------------------------- -------- -------- ------- ------- ------- ------ ------ ------
Income from investment operations:
Net investment income 0.21 0.33 0.34 0.42 0.44 0.21 0.33 0.13
---------------------------------------------- -------- -------- ------- ------- ------- ------ ------ ------
Net gains on securities (both realized and
unrealized) 6.59 2.53 3.25 1.44 2.73 6.59 2.52 1.58
---------------------------------------------- -------- -------- ------- ------- ------- ------ ------ ------
Total from investment operations 6.80 2.86 3.59 1.86 3.17 6.80 2.85 1.71
---------------------------------------------- -------- -------- ------- ------- ------- ------ ------ ------
Less distributions:
Dividends from net investment income (0.19) (0.32) (0.35) (0.45) (0.41) (0.19) (0.32) (0.13)
---------------------------------------------- -------- -------- ------- ------- ------- ------ ------ ------
Distributions from net realized gains (1.56) (0.80) (0.01) -- -- (1.56) (0.80) (0.01)
---------------------------------------------- -------- -------- ------- ------- ------- ------ ------ ------
Total distributions (1.75) (1.12) (0.36) (0.45) (0.41) (1.75) (1.12) (0.14)
---------------------------------------------- -------- -------- ------- ------- ------- ------ ------ ------
Net asset value, end of period $ 26.03 $ 20.98 $ 19.24 $ 16.01 $ 14.60 $26.02 $20.97 $19.24
============================================== ======== ======== ======= ======= ======= ====== ====== ======
Total return(b) 33.16% 15.14% 22.74% 12.98% 27.16% 33.18% 15.09% 9.74%
============================================== ======== ======== ======= ======= ======= ====== ====== ======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $142,632 $111,866 $94,227 $79,530 $70,693 $6,702 $2,994 $1,183
============================================== ======== ======== ======= ======= ======= ====== ====== ======
Ratio of expenses to average net assets 1.84%(c) 1.81% 1.91% 1.96% 1.97% 1.84%(c) 1.81% 1.90%(d)
============================================== ======== ======== ======= ======= ======= ====== ====== ======
Ratio of net investment income to average net
assets 0.95%(c) 1.64% 2.01% 2.83% 3.44% 0.95%(c) 1.64% 2.02%(d)
============================================== ======== ======== ======= ======= ======= ====== ====== ======
Portfolio turnover rate 37% 38% 26% 48% 88% 37% 38% 26%
============================================== ======== ======== ======= ======= ======= ====== ====== ======
|
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average net assets of $116,599,341 and $3,903,633 for
Class B and Class C, respectively.
(d) Annualized.
FS-80
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM Select Growth Fund:
We have audited the accompanying statement of assets and
liabilities of the AIM Select Growth Fund (a portfolio of
AIM Funds Group), including the schedule of investments,
as of December 31, 1999, and 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 generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatements.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statement. Our procedures included confirmation of
securities owned as of December 31, 1999, by
correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion
In our opinion, the financial statements and financial
highlights referred to above presently fairly, in all
material respects, the financial position of AIM Select
Growth Fund as of December 31, 1999, 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 generally accepted accounting principles.
/s/ KPMG LLP KPMG LLP February 4, 2000 Houston, Texas |
FS-81
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1999
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY
INTERESTS-93.93%
BROADCASTING (TELEVISION, RADIO &
CABLE)-2.91%
AMFM Inc.(a) 76,000 $ 5,947,000
---------------------------------------------------------------
CBS Corp.(a) 122,400 7,825,950
---------------------------------------------------------------
Clear Channel Communications, Inc.(a) 197,956 17,667,573
---------------------------------------------------------------
31,440,523
---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-7.19%
Comverse Technology, Inc.(a) 214,950 31,114,012
---------------------------------------------------------------
Finisar Corp.(a) 16,400 1,473,950
---------------------------------------------------------------
Juniper Networks, Inc.(a) 21,600 7,344,000
---------------------------------------------------------------
Lucent Technologies Inc. 160,800 12,029,850
---------------------------------------------------------------
Nokia Oyj A.B.-ADR (Finland) 123,600 23,484,000
---------------------------------------------------------------
Sycamore Networks, Inc.(a) 7,000 2,156,000
---------------------------------------------------------------
77,601,812
---------------------------------------------------------------
COMPUTERS (HARDWARE)-3.67%
Dell Computer Corp.(a) 179,000 9,129,000
---------------------------------------------------------------
National Instruments Corp.(a) 165,000 6,311,250
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 312,000 24,160,500
---------------------------------------------------------------
39,600,750
---------------------------------------------------------------
COMPUTERS (NETWORKING)-1.43%
Cisco Systems, Inc.(a) 144,000 15,426,000
---------------------------------------------------------------
COMPUTERS (PERIPHERALS)-3.54%
EMC Corp.(a) 274,000 29,934,500
---------------------------------------------------------------
QLogic Corp.(a) 51,500 8,233,562
---------------------------------------------------------------
38,168,062
---------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-16.10%
America Online, Inc.(a) 92,000 6,940,250
---------------------------------------------------------------
AppNet, Inc.(a) 190,700 8,343,125
---------------------------------------------------------------
Citrix Systems, Inc.(a) 123,300 15,165,900
---------------------------------------------------------------
Electronic Arts Inc.(a) 96,700 8,122,800
---------------------------------------------------------------
InfoSpace.com, Inc.(a) 165,000 35,310,000
---------------------------------------------------------------
ISS Group, Inc.(a) 16,400 1,166,450
---------------------------------------------------------------
Lycos, Inc.(a) 90,000 7,160,625
---------------------------------------------------------------
Marimba, Inc.(a) 17,000 783,062
---------------------------------------------------------------
Microsoft Corp.(a) 279,600 32,643,300
---------------------------------------------------------------
Oracle Corp.(a) 216,000 24,205,500
---------------------------------------------------------------
Siebel Systems, Inc.(a) 74,000 6,216,000
---------------------------------------------------------------
USWeb Corp.(a) 261,000 11,598,187
---------------------------------------------------------------
VERITAS Software Corp.(a) 112,500 16,101,562
---------------------------------------------------------------
173,756,761
---------------------------------------------------------------
|
MARKET
CONSUMER FINANCE-1.16% SHARES VALUE
Capital One Financial Corp. 93,000 $ 4,481,437
---------------------------------------------------------------
Providian Financial Corp. 88,050 8,018,053
---------------------------------------------------------------
12,499,490
---------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-0.54%
McKesson HBOC, Inc. 260,000 5,866,250
---------------------------------------------------------------
ELECTRIC COMPANIES-1.05%
Niagara Mohawk Holdings Inc.(a) 214,300 2,986,806
---------------------------------------------------------------
Northeast Utilities 218,600 4,494,963
---------------------------------------------------------------
Texas Utilities Co. 107,000 3,805,187
---------------------------------------------------------------
11,286,956
---------------------------------------------------------------
ELECTRICAL EQUIPMENT-4.57%
American Power Conversion Corp.(a) 318,000 8,387,250
---------------------------------------------------------------
DII Group, Inc.(a) 111,000 7,877,531
---------------------------------------------------------------
Koninklijke (Royal) Phillips
Electronics N.V.-ADR
(Netherlands) 111,136 15,003,360
---------------------------------------------------------------
Sanmina Corp.(a) 87,200 8,709,100
---------------------------------------------------------------
Solectron Corp.(a) 98,000 9,322,250
---------------------------------------------------------------
49,299,491
---------------------------------------------------------------
ELECTRONICS
(INSTRUMENTATION)-1.32%
Tektronix, Inc. 256,000 9,952,000
---------------------------------------------------------------
Waters Corp.(a) 82,000 4,346,000
---------------------------------------------------------------
14,298,000
---------------------------------------------------------------
ELECTRONICS
(SEMICONDUCTORS)-7.50%
Altera Corp.(a) 280,800 13,917,150
---------------------------------------------------------------
Celestica Inc. (Canada)(a) 190,000 10,545,000
---------------------------------------------------------------
Linear Technology Corp. 88,800 6,354,750
---------------------------------------------------------------
Maxim Integrated Products, Inc.(a) 140,000 6,606,250
---------------------------------------------------------------
PMC-Sierra, Inc.(a) 271,600 43,540,875
---------------------------------------------------------------
80,964,025
---------------------------------------------------------------
ENTERTAINMENT-0.83%
SFX Entertainment, Inc.-Class A(a) 246,300 8,912,981
---------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-1.34%
Teradyne, Inc.(a) 220,000 14,520,000
---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-4.29%
American Express Co. 40,100 6,666,625
---------------------------------------------------------------
Citigroup Inc. 255,375 14,189,273
---------------------------------------------------------------
Fannie Mae 81,500 5,088,656
---------------------------------------------------------------
Freddie Mac 241,020 11,343,004
---------------------------------------------------------------
MGIC Investment Corp. 149,300 8,985,994
---------------------------------------------------------------
46,273,552
---------------------------------------------------------------
|
FS-82
MARKET
SHARES VALUE
FOODS-0.35%
Keebler Foods Co.(a) 135,000 $ 3,796,875
---------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-1.37%
Warner-Lambert Co. 180,000 14,748,750
---------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC &
OTHER)-1.06%
Forest Laboratories, Inc.(a) 105,200 6,463,225
---------------------------------------------------------------
Medicis Pharmaceutical
Corp.-Class A(a) 117,000 4,979,813
---------------------------------------------------------------
11,443,038
---------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-0.72%
Pfizer Inc. 241,200 7,823,925
---------------------------------------------------------------
HEALTH CARE (HOSPITAL
MANAGEMENT)-0.63%
Health Management Associates,
Inc.- Class A(a) 510,000 6,821,250
---------------------------------------------------------------
HEALTH CARE (LONG TERM CARE)-0.40%
Manor Care, Inc.(a) 270,700 4,331,200
---------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-0.99%
Express Scripts, Inc.-Class A(a) 34,600 2,214,400
---------------------------------------------------------------
United Healthcare Corp. 159,100 8,452,188
---------------------------------------------------------------
10,666,588
---------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.86%
Beckman Coulter, Inc. 68,500 3,484,938
---------------------------------------------------------------
Biomet, Inc. 120,600 4,824,000
---------------------------------------------------------------
Guidant Corp.(a) 173,100 8,135,700
---------------------------------------------------------------
Sybron International Corp.(a) 149,000 3,678,438
---------------------------------------------------------------
20,123,076
---------------------------------------------------------------
HEALTH CARE (SPECIALIZED
SERVICES)-0.20%
Capital Senior Living Corp.(a) 425,000 2,151,563
---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-0.43%
UnumProvident Corp. 145,000 4,649,063
---------------------------------------------------------------
INSURANCE
(PROPERTY-CASUALTY)-0.73%
Radian Group Inc. 57,000 2,721,750
---------------------------------------------------------------
XL Capital Ltd.-Class A 100,000 5,187,500
---------------------------------------------------------------
7,909,250
---------------------------------------------------------------
INVESTMENT MANAGEMENT-2.08%
Affiliated Managers Group, Inc.(a) 54,300 2,195,756
---------------------------------------------------------------
Knight/Trimark Group, Inc.-Class A(a) 440,000 20,240,000
---------------------------------------------------------------
22,435,756
---------------------------------------------------------------
LEISURE TIME (PRODUCTS)-0.47%
Mattel, Inc. 383,800 5,037,375
---------------------------------------------------------------
LODGING-HOTELS-0.41%
Carnival Corp. 91,700 $ 4,384,406
---------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-1.34%
Tyco International Ltd. 372,640 14,486,380
---------------------------------------------------------------
NATURAL GAS-0.46%
Enron Corp. 112,000 4,970,000
---------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-2.05%
Cooper Cameron Corp.(a) 120,000 5,872,500
---------------------------------------------------------------
Diamond Offshore Drilling, Inc. 125,000 3,820,313
---------------------------------------------------------------
ENSCO International Inc. 344,600 7,882,725
---------------------------------------------------------------
Schlumberger Ltd. 73,400 4,128,750
---------------------------------------------------------------
Transocean Sedco Forex Inc. 14,240 479,697
---------------------------------------------------------------
22,183,985
---------------------------------------------------------------
OIL (DOMESTIC INTEGRATED)-0.42%
Atlantic Richfield Co. 52,900 4,575,850
---------------------------------------------------------------
PAPER & FOREST PRODUCTS-0.51%
International Paper Co. 96,700 5,457,506
---------------------------------------------------------------
RAILROADS-0.71%
Kansas City Southern Industries, Inc. 103,000 7,686,375
---------------------------------------------------------------
RETAIL (BUILDING SUPPLIES)-1.20%
Home Depot, Inc. (The) 106,800 7,322,475
---------------------------------------------------------------
Lowe's Cos., Inc. 93,600 5,592,600
---------------------------------------------------------------
12,915,075
---------------------------------------------------------------
RETAIL (COMPUTERS & ELECTRONICS)-1.11%
CDW Computer Centers, Inc.(a) 152,100 11,958,863
---------------------------------------------------------------
RETAIL (DEPARTMENT STORES)-0.41%
Saks Inc.(a) 284,500 4,427,531
---------------------------------------------------------------
RETAIL (DISCOUNTERS)-0.38%
Dollar Tree Stores, Inc.(a) 84,025 4,069,961
---------------------------------------------------------------
RETAIL (FOOD CHAINS)-1.40%
Albertson's, Inc. 172,000 5,547,000
---------------------------------------------------------------
Kroger Co. (The)(a) 229,800 4,337,475
---------------------------------------------------------------
Safeway Inc.(a) 146,000 5,192,125
---------------------------------------------------------------
15,076,600
---------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)-1.80%
Costco Wholesale Corp.(a) 76,000 6,935,000
---------------------------------------------------------------
Dayton Hudson Corp. 170,000 12,484,375
---------------------------------------------------------------
19,419,375
---------------------------------------------------------------
RETAIL (SPECIALTY)-0.29%
Linens 'n Things, Inc.(a) 105,000 3,110,625
---------------------------------------------------------------
|
FS-83
MARKET
SHARES VALUE
RETAIL (SPECIALTY-APPAREL)-2.08%
Men's Wearhouse, Inc. (The)(a) 596,000 $ 17,507,500
---------------------------------------------------------------
Too Inc.(a) 290,000 5,002,500
---------------------------------------------------------------
22,510,000
---------------------------------------------------------------
SERVICES
(ADVERTISING/MARKETING)-0.78%
Media Metrix, Inc.(a) 33,000 1,179,750
---------------------------------------------------------------
Snyder Communications, Inc.(a) 74,000 1,424,500
---------------------------------------------------------------
Young & Rubicam Inc. 82,600 5,843,950
---------------------------------------------------------------
8,448,200
---------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-2.04%
Convergys Corp.(a) 98,000 3,013,500
---------------------------------------------------------------
Iron Mountain Inc.(a) 161,000 6,329,313
---------------------------------------------------------------
Quanta Services, Inc.(a) 295,000 8,333,750
---------------------------------------------------------------
Regis Corp. 230,000 4,341,250
---------------------------------------------------------------
22,017,813
---------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-1.23%
Brocade Communications Systems,Inc.(a) 29,000 5,133,000
---------------------------------------------------------------
Critical Path, Inc.(a) 32,000 3,020,000
---------------------------------------------------------------
Insight Enterprises, Inc.(a) 126,000 5,118,750
---------------------------------------------------------------
13,271,750
---------------------------------------------------------------
SERVICES (DATA PROCESSING)-2.68%
Affiliated Computer Services,
Inc.-Class A(a) 22,600 1,039,600
---------------------------------------------------------------
Concord EFS, Inc.(a) 174,825 4,501,744
---------------------------------------------------------------
CSG Systems International, Inc.(a) 180,000 7,177,500
---------------------------------------------------------------
DST Systems, Inc.(a) 58,100 4,433,756
---------------------------------------------------------------
Fiserv, Inc.(a) 85,275 3,267,098
---------------------------------------------------------------
NOVA Corp.(a) 102,232 3,226,698
---------------------------------------------------------------
Paychex, Inc. 133,500 $ 5,340,000
---------------------------------------------------------------
28,986,396
---------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-3.47%
Global Crossing Ltd. (Bermuda)(a) 98,842 4,942,100
---------------------------------------------------------------
MCI WorldCom, Inc.(a) 491,945 26,103,805
---------------------------------------------------------------
Viatel, Inc.(a) 120,000 6,435,000
---------------------------------------------------------------
37,480,905
---------------------------------------------------------------
WASTE MANAGEMENT-0.43%
Waste Management, Inc. 271,600 4,668,125
---------------------------------------------------------------
Total Common Stocks & Other
Equity Interests (Cost
$482,564,675) 1,013,958,083
---------------------------------------------------------------
|
PRINCIPAL
AMOUNT
U.S. DOLLAR DENOMINATED
CONVERTIBLE NOTES-0.45%
COMPUTERS (PERIPHERALS)-0.45%
EMC Corp., Conv. Sub. Notes,
3.25%, 03/15/02 (Cost $677,145) $ 500,000 4,828,750
---------------------------------------------------------------
|
SHARES
MONEY MARKET FUNDS-5.69%
STIC Liquid Assets Portfolio(b) 30,735,705 30,735,705
---------------------------------------------------------------
STIC Prime Portfolio(b) 30,735,705 30,735,705
---------------------------------------------------------------
Total Money Market Funds
(Cost $61,471,410) 61,471,410
---------------------------------------------------------------
TOTAL INVESTMENTS-100.07% (Cost
$544,713,230) 1,080,258,243
---------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(0.07%) (799,909)
---------------------------------------------------------------
NET ASSETS-100.00% $1,079,458,334
===============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Conv. - Convertible
Sub. - Subordinated
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) This money market fund has the same investment advisor as the fund.
See Notes to Financial Statements.
FS-84
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
ASSETS:
Investments, at market value (cost
$544,713,230) $1,080,258,243
----------------------------------------------------------
Receivables for:
Fund shares sold 2,382,050
----------------------------------------------------------
Dividends and interest 477,981
----------------------------------------------------------
Investment for deferred compensation plan 71,413
----------------------------------------------------------
Other assets 31,284
----------------------------------------------------------
Total assets 1,083,220,971
----------------------------------------------------------
LIABILITIES:
Payables for:
Fund shares reacquired 1,950,932
----------------------------------------------------------
Deferred compensation plan 71,413
----------------------------------------------------------
Accrued advisory fees 560,995
----------------------------------------------------------
Accrued administrative services fees 11,504
----------------------------------------------------------
Accrued distribution fees 945,546
----------------------------------------------------------
Accrued transfer agent fees 125,614
----------------------------------------------------------
Accrued operating expenses 96,633
----------------------------------------------------------
Total liabilities 3,762,637
----------------------------------------------------------
Net assets applicable to shares
outstanding $1,079,458,334
==========================================================
NET ASSETS:
Class A $ 461,628,075
==========================================================
Class B $ 592,554,822
==========================================================
Class C $ 25,275,437
==========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 17,601,889
==========================================================
Class B 24,115,512
==========================================================
Class C 1,029,659
==========================================================
Class A:
Net asset value and redemption price per
share $ 26.23
----------------------------------------------------------
Offering price per share:
(Net asset value of $26.23 divided
by 94.50%) $ 27.76
==========================================================
Class B:
Net asset value and offering price per
share $ 24.57
==========================================================
Class C:
Net asset value and offering price per
share $ 24.55
==========================================================
|
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
INVESTMENT INCOME:
Dividends (net of $40,337 foreign
withholding tax) $ 3,941,209
---------------------------------------------------------
Interest 2,584,817
---------------------------------------------------------
Total investment income 6,526,026
---------------------------------------------------------
EXPENSES:
Advisory fees 5,507,389
---------------------------------------------------------
Administrative services fees 110,205
---------------------------------------------------------
Custodian fees 79,919
---------------------------------------------------------
Transfer agent fees-Class A 444,403
---------------------------------------------------------
Transfer agent fees-Class B 871,807
---------------------------------------------------------
Transfer agent fees-Class C 25,522
---------------------------------------------------------
Trustees' fees 13,787
---------------------------------------------------------
Distribution fees-Class A 896,196
---------------------------------------------------------
Distribution fees-Class B 4,672,685
---------------------------------------------------------
Distribution fees-Class C 134,325
---------------------------------------------------------
Other 281,205
---------------------------------------------------------
Total expenses 13,037,443
---------------------------------------------------------
Less: Expenses paid indirectly (11,204)
---------------------------------------------------------
Net expenses 13,026,239
---------------------------------------------------------
Net investment income (loss) (6,500,213)
---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT
SECURITIES, FOREIGN CURRENCIES AND FUTURES CONTRACTS:
Net realized gain from:
Investment securities 45,120,492
---------------------------------------------------------
Foreign currencies 84
---------------------------------------------------------
Futures contracts 1,493,262
---------------------------------------------------------
46,613,838
---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 269,570,221
---------------------------------------------------------
Foreign currencies (153)
---------------------------------------------------------
Futures contracts (1,127,100)
---------------------------------------------------------
268,442,968
---------------------------------------------------------
Net gain from investment securities,
foreign currencies and futures
contracts 315,056,806
---------------------------------------------------------
Net increase in net assets resulting from
operations $308,556,593
=========================================================
|
See Notes to Financial Statements.
FS-85
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
-------------- ------------
OPERATIONS:
Net investment income (loss) $ (6,500,213) $ (4,533,684)
---------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, future and option contracts 46,613,838 17,616,351
---------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies and future contracts 268,442,968 148,755,001
---------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 308,556,593 161,837,668
---------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS:
Class A (17,929,351) (8,360,767)
---------------------------------------------------------------------------------------------
Class B (24,484,976) (11,756,791)
---------------------------------------------------------------------------------------------
Class C (997,756) (234,011)
---------------------------------------------------------------------------------------------
SHARE TRANSACTIONS-NET:
Class A 25,912,665 (7,618,676)
---------------------------------------------------------------------------------------------
Class B 19,950,492 (6,948,989)
---------------------------------------------------------------------------------------------
Class C 11,803,897 6,185,419
---------------------------------------------------------------------------------------------
Net increase in net assets 322,811,564 133,103,853
---------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 756,646,770 623,542,917
---------------------------------------------------------------------------------------------
End of period $1,079,458,334 $756,646,770
=============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 548,170,108 $494,529,257
---------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (88,818) (71,168)
---------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, future and option contracts (4,167,969) (4,913,364)
---------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and future contracts 535,545,013 267,102,045
---------------------------------------------------------------------------------------------
$1,079,458,334 $756,646,770
=============================================================================================
|
See Notes to Financial Statements.
FS-86
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Select Growth Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of nine separate portfolios,
each having an unlimited number of shares of beneficial interest. The Fund
currently offers three different classes of shares: Class A shares, Class B
shares and Class C shares. Class A shares are sold with a front-end sales
charge. Class B shares and Class C shares are sold with a contingent deferred
sales charge. Matters affecting each portfolio or class will be 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 the Fund.
The Fund's investment objective is to achieve long-term growth of capital by
investing primarily in the common stocks of established medium to large size
companies with prospects for above average, long term earnings growth.
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 -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price on the exchange where
the security is principally traded, or lacking any sales on a particular
day, the security is valued at the closing bid price on that day. Each
security reported on the NASDAQ National Market System is valued at the last
sales price on the valuation date or absent a last sales price, at the
closing bid price. Debt obligations (including convertible bonds) are valued
on the basis of prices provided by an independent pricing service. Prices
provided by the pricing service may be determined without exclusive reliance
on quoted prices, and may reflect appropriate factors such as yield, type of
issue, coupon rate and maturity date. Securities for which market prices are
not provided by any of the above methods are valued based upon quotes
furnished by independent sources and are valued at the last bid price in the
case of equity securities and in the case of debt obligations, the mean
between the last bid and asked prices. 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.
Short-term obligations having 60 days or less to maturity are valued at
amortized cost which approximates market value. For purposes of determining
net asset value per share, futures and option contracts generally will be
valued 15 minutes after the close of trading of the New York Stock Exchange
("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the NYSE
which would not be reflected in the computation of the Fund's net asset
value. If events materially affecting the value of such securities occur
during such period, then these securities will be valued at their fair value
as determined in good faith by or under the supervision of the Board of
Trustees.
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 and is recorded
on the accrual basis. Dividend income is recorded on the ex-dividend date.
On December 31, 1999, undistributed net investment income was increased by
$6,482,563, undistributed net realized gains decreased by $2,456,360 and
paid-in capital decreased by $4,026,203 as a result of differing book/tax
treatment of equalization credits and other reclassifications. Net assets of
the Fund were unaffected by the reclassifications.
C. Distributions -- Distributions from income and 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.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at date of valuation. Purchases and sales of portfolio
securities and income items denominated in foreign currencies are translated
into U.S. dollar amounts on the respective dates of such transactions. The
Fund does not separately account for that portion of the results of
operations resulting from changes in foreign exchange rates on investments
and the fluctuations arising from changes in market prices of securities
held. Such
FS-87
fluctuations are included with the net realized and unrealized gain or loss
from investments.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation
to purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
G. Futures Contracts -- The Fund may purchase or sell futures contracts as a
hedge against changes in market conditions. Initial margin deposits required
upon entering into futures contracts are satisfied by the segregation of
specific securities as collateral for the account of the broker (the Fund's
agent in acquiring the futures position). During the period the futures
contracts are open, changes in the value of the contracts are recognized as
unrealized gains or losses by "marking to market" on a daily basis to
reflect the market value of the contracts at the end of each day's trading.
Variation margin payments are made or received depending upon whether
unrealized gains or losses are incurred. When the contracts are closed, the
Fund recognizes a realized gain or loss equal to the difference between the
proceeds from, or cost of, the closing transaction and the Fund's basis in
the contract. Risks include the possibility of an illiquid market and that a
change in value of the contracts may not correlate with changes in the value
of the securities being hedged.
H. Expenses -- Distribution expenses 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 Trust 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 0.80% of
the first $150 million of the Fund's average daily net assets, plus 0.625% of
the Fund's average daily net assets in excess of $150 million.
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 December 31, 1999, AIM was
paid $110,205 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 and
shareholder services to the Fund. For the year ended December 31, 1999, AFS was
paid $776,902 for such services.
The Trust 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 Trust 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 the 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 December 31,
1999, the Class A, Class B and Class C shares paid AIM Distributors $896,196,
$4,672,685 and $134,325, respectively, as compensation under the Plans.
AIM Distributors received commissions of $176,131 from sales of the Class A
shares of the Fund during the year ended December 31, 1999. 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 December 31, 1999,
AIM Distributors received $75,951 in contingent deferred sales charges imposed
on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the year ended December 31, 1999, the Fund paid legal fees of $4,890
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
During the year ended December 31, 1999, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian fees of $9,190 and $2,014, respectively, under expense offset arrangements. The effect of the above arrangements resulted in a reduction of the Fund's total expenses of $11,204 during the year ended December 31, 1999.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, 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
FS-88
borrow on a first come, first served basis. During the year ended December 31, 1999, the Fund did not borrow under the line of credit agreement. The funds which are party to the line of credit are charged a commitment fee of 0.09% on the unused balance of the committed line. Prior to May 28, 1999, the commitment fee rate was 0.05%. The commitment fee is allocated among the funds based on their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 1999 was
$250,121,433 and $239,081,137, respectively.
The amount of unrealized appreciation (depreciation) of investment
securities, for tax purposes, as of December 31, 1999 was as follows:
Aggregate unrealized appreciation of investment securities $553,509,579 -------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (18,117,424) -------------------------------------------------------------------------- Net unrealized appreciation of investment securities $535,392,155 ========================================================================== |
Cost of investments for tax purposes is $544,866,088.
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1999 and 1998 were as follows:
1999 1998
-------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ----------- -------------
Sold:
Class A 8,174,582 $ 169,122,203 31,005,519 $ 526,456,274
----------------------------------------------------------------------------------------------------------------------
Class B 5,441,024 110,096,224 5,430,217 86,111,821
----------------------------------------------------------------------------------------------------------------------
Class C 820,566 16,761,504 569,912 9,220,769
----------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 702,598 17,072,219 444,090 7,953,651
----------------------------------------------------------------------------------------------------------------------
Class B 996,161 22,682,713 649,261 11,017,972
----------------------------------------------------------------------------------------------------------------------
Class C 41,870 952,496 13,022 220,846
----------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (7,818,939) (160,281,757) (31,896,692) (542,028,601)
----------------------------------------------------------------------------------------------------------------------
Class B (5,672,316) (112,828,445) (6,508,718) (104,078,782)
----------------------------------------------------------------------------------------------------------------------
Class C (296,926) (5,910,103) (198,182) (3,256,196)
----------------------------------------------------------------------------------------------------------------------
2,388,620 $ 57,667,054 (491,571) $ (8,382,246)
======================================================================================================================
|
FS-89
NOTE 8-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A and a share of Class B outstanding during each of the years in the five-year period ended December 31, 1999, and for a share of Class C outstanding during each of the years in the two-year period ended December 31, 1999 and the period August 4, 1997 (date sales commenced) through December 31, 1997.
CLASS A
-----------------------------------------------------------
1999 1998 1997(a) 1996 1995(a)
-------- -------- -------- -------- --------
Net asset value, beginning of period $ 19.35 $ 15.67 $ 14.78 $ 13.05 $ 10.32
------------------------------------------------------------ -------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss) (0.06) (0.04) 0.01 0.07 0.02
------------------------------------------------------------ -------- -------- -------- -------- --------
Net gains (losses) on securities (both realized and
unrealized) 8.00 4.24 2.82 2.34 3.50
------------------------------------------------------------ -------- -------- -------- -------- --------
Total from investment operations 7.94 4.20 2.83 2.41 3.52
------------------------------------------------------------ -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income -- -- (0.01) -- --
------------------------------------------------------------ -------- -------- -------- -------- --------
Distributions from net realized gains (1.06) (0.52) (1.93) (0.68) (0.79)
------------------------------------------------------------ -------- -------- -------- -------- --------
Total distributions (1.06) (0.52) (1.94) (0.68) (0.79)
------------------------------------------------------------ -------- -------- -------- -------- --------
Net asset value, end of period $ 26.23 $ 19.35 $ 15.67 $ 14.78 $ 13.05
============================================================ ======== ======== ======== ======== ========
Total return(b) 41.48% 27.09% 19.54% 18.61% 34.31%
============================================================ ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $461,628 $320,143 $266,168 $227,882 $168,217
============================================================ ======== ======== ======== ======== ========
Ratio of expenses to average net assets 1.09%(c) 1.11% 1.13% 1.18% 1.28%
============================================================ ======== ======== ======== ======== ========
Ratio of net investment income (loss) to average net assets (0.31)%(c) (0.22)% 0.04% 0.46% 0.20%
============================================================ ======== ======== ======== ======== ========
Portfolio turnover rate 31% 68% 110% 97% 87%
============================================================ ======== ======== ======== ======== ========
|
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges.
(c) Ratios are based on average net assets of $358,478,474.
CLASS B CLASS C
-------------------------------------------------------- --------------------------------
1999(a) 1998 1997(a) 1996 1995(a) 1999(a) 1998(a) 1997(a)
-------- -------- ------- -------- -------- -------- -------- --------
Net asset value, beginning of
period $ 18.33 $ 14.98 $ 14.32 $ 12.77 $ 10.21 $ 18.32 $ 14.98 $ 17.65
--------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income (loss) (0.23) (0.17) (0.13) (0.05) (0.08) (0.23) (0.17) (0.04)
--------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Net gains (losses) on securities
(both realized and unrealized) 7.53 4.04 2.72 2.28 3.43 7.52 4.03 (0.70)
--------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations 7.30 3.87 2.59 2.23 3.35 7.29 3.86 (0.74)
--------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Less distributions:
Distributions from net realized
gains (1.06) (0.52) (1.93) (0.68) (0.79) (1.06) (0.52) (1.93)
--------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Total distributions (1.06) (0.52) (1.93) (0.68) (0.79) (1.06) (0.52) (1.93)
--------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 24.57 $ 18.33 $ 14.98 $ 14.32 $ 12.77 $ 24.55 $ 18.32 $ 14.98
================================= ======== ======== ======== ======== ======== ======== ======== ========
Total return(b) 40.29% 26.13% 18.50% 17.60% 33.00% 40.26% 26.07% (3.86)%
================================= ======== ======== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $592,555 $428,002 $356,186 $280,807 $138,034 $ 25,275 $ 8,501 $ 1,189
================================= ======== ======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net
assets 1.90%(c) 1.93% 1.99% 2.03% 2.13% 1.90%(c) 1.93% 1.95%(d)
================================= ======== ======== ======== ======== ======== ======== ======== ========
Ratio of net investment income
(loss) to average net assets (1.12)%(c) (1.04)% (0.82)% (0.39)% (0.65)% (1.12)%(c) (1.04)% (0.77)%(d)
================================= ======== ======== ======== ======== ======== ======== ======== ========
Portfolio turnover rate 31% 68% 110% 97% 87% 31% 68% 110%
================================= ======== ======== ======== ======== ======== ======== ======== ========
|
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average net assets of $467,268,589 and $13,432,524 for
Class B and Class C, respectively.
(d) Annualized.
FS-90
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders of
AIM Value Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Value Fund (a portfolio of AIM Funds
Group), including the schedule of investments, as of
December 31, 1999, and the related statement of
operations for the year then ended, and 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 generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of
securities owned as of December 31, 1999, by
correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM Value
Fund as of December 31, 1999, the results of its
operations for the year then ended, the 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, in conformity with
generally accepted accounting principles.
/s/ KPMG LLP KPMG LLP February 4, 2000 Houston, Texas |
FS-91
SCHEDULE OF INVESTMENTS
December 31, 1999
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY
INTERESTS-90.13%
BANKS (MONEY CENTER)-1.21%
Chase Manhattan Corp. (The) 4,350,000 $ 337,940,625
----------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO
& CABLE)-8.83%
Comcast Corp.-Class A 26,600,000 1,336,650,000
----------------------------------------------------------------
Cox Communications, Inc.-Class
A(a) 18,075,600 930,893,400
----------------------------------------------------------------
MediaOne Group, Inc. 2,500,000 192,031,250
----------------------------------------------------------------
2,459,574,650
----------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-10.06%
Comverse Technology, Inc.(a) 725,000 104,943,750
----------------------------------------------------------------
Lucent Technologies Inc. 1,800,000 134,662,500
----------------------------------------------------------------
Motorola, Inc. 3,200,000 471,200,000
----------------------------------------------------------------
Nokia Oyj-ADR (Finland) 11,000,000 2,090,000,000
----------------------------------------------------------------
2,800,806,250
----------------------------------------------------------------
COMPUTERS (HARDWARE)-9.05%
Apple Computer, Inc.(a) 8,000,000 822,500,000
----------------------------------------------------------------
Gateway Inc.(a) 11,361,100 818,709,269
----------------------------------------------------------------
International Business Machines
Corp. 4,257,400 459,799,200
----------------------------------------------------------------
Sun Microsystems, Inc.(a) 5,400,000 418,162,500
----------------------------------------------------------------
2,519,170,969
----------------------------------------------------------------
COMPUTERS (PERIPHERALS)-2.44%
EMC Corp.(a) 987,400 107,873,450
----------------------------------------------------------------
Lexmark International Group,
Inc.- Class A(a) 6,300,000 570,150,000
----------------------------------------------------------------
678,023,450
----------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-6.15%
At Home Corp.-Series A(a) 12,000,000 514,500,000
----------------------------------------------------------------
BMC Software, Inc.(a) 2,200,000 175,862,500
----------------------------------------------------------------
Citrix Systems, Inc.(a) 656,000 80,688,000
----------------------------------------------------------------
Microsoft Corp.(a) 4,200,000 490,350,000
----------------------------------------------------------------
Unisys Corp.(a) 14,108,100 450,577,444
----------------------------------------------------------------
1,711,977,944
----------------------------------------------------------------
CONSUMER FINANCE-0.20%
Providian Financial Corp. 600,000 54,637,500
----------------------------------------------------------------
ELECTRICAL EQUIPMENT-0.48%
Solectron Corp.(a) 1,400,000 133,175,000
----------------------------------------------------------------
ELECTRONICS
(INSTRUMENTATION)-0.09%
Waters Corp.(a) 500,000 26,500,000
----------------------------------------------------------------
|
MARKET
SHARES VALUE
ELECTRONICS
(SEMICONDUCTORS)-1.47%
Analog Devices, Inc.(a) 1,600,000 $ 148,800,000
----------------------------------------------------------------
Texas Instruments Inc. 2,700,000 261,562,500
----------------------------------------------------------------
410,362,500
----------------------------------------------------------------
ENTERTAINMENT-3.12%
Time Warner Inc. 12,000,000 869,250,000
----------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-2.89%
Applied Materials, Inc.(a) 5,000,000 633,437,500
----------------------------------------------------------------
Teradyne, Inc.(a) 2,584,100 170,550,600
----------------------------------------------------------------
803,988,100
----------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-3.62%
American Express Co. 1,638,800 272,450,500
----------------------------------------------------------------
Associates First Capital
Corp.-Class A 10,600,000 290,837,500
----------------------------------------------------------------
Citigroup Inc. 6,500,000 361,156,250
----------------------------------------------------------------
Freddie Mac 1,800,000 84,712,500
----------------------------------------------------------------
1,009,156,750
----------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-1.62%
Bristol-Myers Squibb Co. 6,000,000 385,125,000
----------------------------------------------------------------
Warner-Lambert Co. 800,000 65,550,000
----------------------------------------------------------------
450,675,000
----------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-1.82%
Pharmacia & Upjohn, Inc. 11,266,600 506,997,000
----------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-2.55%
Guidant Corp. 15,100,000 709,700,000
----------------------------------------------------------------
HOUSEHOLD PRODUCTS
(NON-DURABLES)-1.39%
Colgate-Palmolive Co. 3,925,500 255,157,500
----------------------------------------------------------------
Kimberly-Clark Corp. 2,000,000 130,500,000
----------------------------------------------------------------
385,657,500
----------------------------------------------------------------
INSURANCE (MULTI-LINE)-3.66%
American International Group,
Inc. 8,100,000 875,812,500
----------------------------------------------------------------
Hartford Financial Services
Group, Inc. (The) 3,000,000 142,125,000
----------------------------------------------------------------
1,017,937,500
----------------------------------------------------------------
INVESTMENT
BANKING/BROKERAGE-2.46%
Morgan Stanley Dean Witter &
Co. 4,801,500 685,414,125
----------------------------------------------------------------
LODGING-HOTELS-1.48%
Carnival Corp. 8,600,000 411,187,500
----------------------------------------------------------------
|
FS-92
MARKET
SHARES VALUE
MANUFACTURING
(DIVERSIFIED)-2.69%
Tyco International Ltd. 19,241,100 $ 747,997,762
----------------------------------------------------------------
PAPER & FOREST PRODUCTS-0.79%
Weyerhaeuser Co. 3,076,300 220,916,794
----------------------------------------------------------------
RESTAURANTS-0.38%
McDonald's Corp. 2,600,000 104,812,500
----------------------------------------------------------------
RETAIL (BUILDING
SUPPLIES)-0.79%
Lowe's Cos., Inc. 3,700,000 221,075,000
----------------------------------------------------------------
RETAIL (COMPUTERS &
ELECTRONICS)-1.84%
Best Buy Co., Inc.(a) 10,190,300 511,425,681
----------------------------------------------------------------
RETAIL (FOOD CHAINS)-1.90%
Kroger Co. (The)(a) 18,232,200 344,132,775
----------------------------------------------------------------
Safeway Inc.(a) 5,200,000 184,925,000
----------------------------------------------------------------
529,057,775
----------------------------------------------------------------
RETAIL (GENERAL
MERCHANDISE)-6.71%
Costco Wholesale Corp.(a) 5,650,000 515,562,500
----------------------------------------------------------------
Dayton Hudson Corp. 18,428,100 1,353,313,594
----------------------------------------------------------------
1,868,876,094
----------------------------------------------------------------
SERVICES (ADVERTISING/
MARKETING)-1.80%
Omnicom Group, Inc. 5,000,000 500,000,000
----------------------------------------------------------------
|
MARKET
SHARES VALUE
SERVICES (DATA
PROCESSING)-1.88%
First Data Corp. 10,600,000 $ 522,712,500
----------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-4.82%
Nextel Communications,
Inc.-Class A(a) 13,000,000 1,340,625,000
----------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-1.94%
MCI WorldCom, Inc.(a) 10,200,000 541,237,500
----------------------------------------------------------------
Total Common Stocks & Other
Equity Interests (Cost
$15,946,920,824) 25,090,868,969
----------------------------------------------------------------
MONEY MARKET FUNDS-9.74%
STIC Liquid Assets Portfolio(b) 1,356,024,528 1,356,024,528
----------------------------------------------------------------
STIC Prime Portfolio(b) 1,356,024,528 1,356,024,528
----------------------------------------------------------------
Total Money Market Funds
(Cost $2,712,049,056) 2,712,049,056
----------------------------------------------------------------
TOTAL INVESTMENTS-99.87% (Cost
$18,658,969,880) 27,802,918,025
----------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-0.13% 36,100,295
----------------------------------------------------------------
NET ASSETS-100.00% $27,839,018,320
================================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
FS-93
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
ASSETS:
Investments, at market value (cost
$18,658,969,880) $27,802,918,025
----------------------------------------------------------
Receivables for:
Fund shares sold 84,271,237
----------------------------------------------------------
Dividends and interest 16,004,305
----------------------------------------------------------
Foreign currency contracts 68,948,977
----------------------------------------------------------
Investment for deferred compensation plan 206,592
----------------------------------------------------------
Other assets 308,310
----------------------------------------------------------
Total assets 27,972,657,446
----------------------------------------------------------
LIABILITIES:
Payables for:
Fund shares reacquired 90,605,579
----------------------------------------------------------
Deferred compensation plan 206,592
----------------------------------------------------------
Accrued advisory fees 13,810,980
----------------------------------------------------------
Accrued distribution fees 24,487,687
----------------------------------------------------------
Accrued transfer agent fees 2,563,943
----------------------------------------------------------
Accrued trustees' fees 15,000
----------------------------------------------------------
Accrued operating expenses 1,949,345
----------------------------------------------------------
Total liabilities 133,639,126
----------------------------------------------------------
Net assets applicable to shares
outstanding $27,839,018,320
==========================================================
NET ASSETS:
Class A $12,640,072,795
==========================================================
Class B $14,338,086,751
==========================================================
Class C $ 860,858,774
==========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 258,850,990
==========================================================
Class B 303,769,322
==========================================================
Class C 18,231,480
==========================================================
Class A:
Net asset value and redemption price
per share $ 48.83
----------------------------------------------------------
Offering price per share:
(Net asset value of $48.83 divided by
94.50%) $ 51.67
==========================================================
Class B:
Net asset value and offering price per
share $ 47.20
==========================================================
Class C:
Net asset value and offering price per
share $ 47.22
==========================================================
|
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
INVESTMENT INCOME:
Dividends (net of $1,003,035 foreign
withholding tax) $ 131,189,187
----------------------------------------------------------
Interest 74,202,959
----------------------------------------------------------
Total investment income 205,392,146
----------------------------------------------------------
EXPENSES:
Advisory fees 141,196,457
----------------------------------------------------------
Administrative services fees 631,457
----------------------------------------------------------
Custodian fees 1,130,367
----------------------------------------------------------
Distribution fees -- Class A 26,140,479
----------------------------------------------------------
Distribution fees -- Class B 116,152,779
----------------------------------------------------------
Distribution fees -- Class C 4,781,281
----------------------------------------------------------
Trustees' fees 122,469
----------------------------------------------------------
Transfer agent fees -- Class A 12,324,007
----------------------------------------------------------
Transfer agent fees -- Class B 19,092,344
----------------------------------------------------------
Transfer agent fees -- Class C 785,923
----------------------------------------------------------
Other 4,391,436
----------------------------------------------------------
Total expenses 326,748,999
----------------------------------------------------------
Less: Expenses paid indirectly (274,174)
----------------------------------------------------------
Fees waived by advisor (5,137,356)
----------------------------------------------------------
Net expenses 321,337,469
----------------------------------------------------------
Net investment income (loss) (115,945,323)
----------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN
CURRENCIES, FOREIGN CURRENCY CONTRACTS
AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 2,503,452,928
----------------------------------------------------------
Foreign currencies (312,317)
----------------------------------------------------------
Foreign currency contracts 51,130,896
----------------------------------------------------------
Option contracts written 26,312,201
----------------------------------------------------------
2,580,583,708
----------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 3,495,072,669
----------------------------------------------------------
Foreign currencies (2,929)
----------------------------------------------------------
Foreign currency contracts 64,405,814
----------------------------------------------------------
Option contracts written (112,630)
----------------------------------------------------------
3,559,362,924
----------------------------------------------------------
Net gain from investment securities,
foreign currencies, foreign currency
contracts and option contracts 6,139,946,632
----------------------------------------------------------
Net increase in net assets resulting from
operations $6,024,001,309
==========================================================
|
See Notes to Financial Statements.
FS-94
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999 AND 1998
1999 1998
--------------- ---------------
OPERATIONS:
Net investment income (loss) $ (115,945,323) $ (24,044,585)
--------------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, foreign currency contracts, futures and
option contracts 2,580,583,708 1,197,383,660
--------------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies, foreign currency
contracts, futures and option contracts 3,559,362,924 3,328,905,060
--------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 6,024,001,309 4,502,244,135
--------------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A -- (18,008,475)
--------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (788,853,278) (539,610,813)
--------------------------------------------------------------------------------------------------
Class B (918,638,257) (602,045,865)
--------------------------------------------------------------------------------------------------
Class C (52,550,069) (12,727,398)
--------------------------------------------------------------------------------------------------
Share transactions-net:
Class A 1,781,344,407 439,374,153
--------------------------------------------------------------------------------------------------
Class B 2,515,709,918 1,179,878,726
--------------------------------------------------------------------------------------------------
Class C 562,747,820 156,203,496
--------------------------------------------------------------------------------------------------
Net increase in net assets 9,123,761,850 5,105,307,959
--------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 18,715,256,470 13,609,948,511
--------------------------------------------------------------------------------------------------
End of period $27,839,018,320 $18,715,256,470
==================================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $17,884,938,370 $12,965,142,636
--------------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (577,334) (391,429)
--------------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign
currencies, foreign currency contracts, futures and
option contracts 741,760,162 96,971,065
--------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies, foreign currency contracts, futures and
option contracts 9,212,897,122 5,653,534,198
--------------------------------------------------------------------------------------------------
$27,839,018,320 $18,715,256,470
==================================================================================================
|
See Notes to Financial Statements.
FS-95
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Value Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The Trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of nine separate portfolios, each
having an unlimited number of shares of beneficial interest. The Fund currently
offers three different classes of shares: Class A shares, Class B shares and
Class C shares. Class A shares are sold with a front-end sales charge. Class B
shares and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class will be 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 the Fund. The Fund's investment objective
is to achieve long-term growth of capital by investing primarily in equity
securities judged by the Fund's investment advisor to be undervalued relative to
the investment advisor's appraisal of the current or projected earnings of the
companies issuing the securities, or relative to current market values of assets
owned by the companies issuing the securities or relative to the equity markets
generally. Income is a secondary objective.
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 -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price on the exchange where
the security is principally traded, or lacking any sales on a particular day,
the security is valued at the closing bid price on that day. Each security
reported on the NASDAQ National Market System is valued at the last sales
price on the valuation date or absent a last sales price, at the closing bid
price. Debt obligations (including convertible bonds) are valued on the basis
of prices provided by an independent pricing service. Prices provided by the
pricing service may be determined without exclusive reliance on quoted
prices, and may reflect appropriate factors such as yield, type of issue,
coupon rate and maturity date. Securities for which market prices are not
provided by any of the above methods are valued based upon quotes furnished
by independent sources and are valued at the last bid price in the case of
equity securities and in the case of debt obligations, the mean between the
last bid and asked prices. 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. Short-term obligations
having 60 days or less to maturity are valued at amortized cost which
approximates market value. For purposes of determining net asset value per
share, futures and option contracts generally will be valued 15 minutes after
the close of trading of the New York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the NYSE
which would not be reflected in the computation of the Fund's net asset
value. If events materially affecting the value of such securities occur
during such period, then these securities will be valued at their fair value
as determined in good faith by or under the supervision of the Board of
Trustees.
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 and is recorded on
the accrual basis. Dividend income is recorded on the ex-dividend date. On
December 31, 1999, undistributed net investment income was increased by
$115,759,418, undistributed net realized gains decreased by $175,753,007 and
paid-in capital increased by $59,993,589 as a result of differing book/tax
treatment of foreign currency transactions, equalization credits and other
reclassifications. Net assets of the Fund were unaffected by the
reclassifications.
C. Distributions -- Distributions from income and 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.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such
FS-96
transactions. The Fund does not separately account for that portion of the
results of operations resulting from changes in foreign exchange rates on
investments and the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
Outstanding foreign currency contracts at December 31, 1999 were as follows:
CONTRACT TO
SETTLEMENT ------------------------------ UNREALIZED
DATE CURRENCY DELIVER RECEIVE VALUE APPRECIATION
--------------------- -------- ------------- -------------- -------------- ------------
01/20/00 EUR 690,000,000 $ 730,747,420 $ 695,508,498 $35,238,922
--------------------- -------- ------------- -------------- -------------- ------------
01/21/00 EUR 237,000,000 251,193,790 238,910,220 12,283,570
--------------------- -------- ------------- -------------- -------------- ------------
01/24/00 EUR 404,000,000 428,775,645 407,349,160 21,426,485
--------------------- -------- ------------- -------------- -------------- ------------
1,331,000,000 $1,410,716,855 $1,341,767,878 $68,948,977
===================== ======== ============= ============== ============== ============
|
G. Covered Call Options -- The Fund may write call options, on a covered basis;
that is, the Fund will own the underlying security. Options written by the
Fund normally will have expiration dates between three and nine months from
the date written. 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 mean between the last bid
and asked prices on that day. 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 during the option period. The purchaser of a call
option 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 that received when the call option was
written) a call option identical to the one originally written.
H. Expenses -- Distribution expenses 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 Trust 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 0.80% of
the first $150 million of the Fund's average daily net assets, plus 0.625% of
the Fund's average daily net assets in excess of $150 million. AIM has
contractually agreed to waive a portion of its advisory fees paid by the Fund to
AIM to the extent necessary to reduce the fees paid by the Fund at net asset
levels higher than those currently incorporated in the present advisory fee
schedule. Under the contractual waiver, AIM will receive a fee calculated at the
annual rate of 0.80% of the first $150 million of the Fund's average daily net
assets, plus 0.625% of the Fund's average daily net assets in excess of $150
million to and including $2 billion, plus 0.60% of the Fund's average daily net
assets in excess of $2 billion. The waiver is contractual and may not be
terminated without approval of the Board of Trustees. During the year ended
December 31, 1999, AIM waived fees of $5,137,356.
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 December 31, 1999, AIM was
paid $631,457 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 and
shareholder services to the Fund. For the year ended December 31, 1999, AFS was
paid $20,339,409 for such services.
The Trust 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 Trust 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 the 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.
FS-97
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 December 31, 1999, the Class A, Class B and Class C
shares paid AIM Distributors $26,140,479, $116,152,779 and $4,781,281,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $7,218,373 from sales of the Class A
shares of the Fund during the year ended December 31, 1999. 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 December 31, 1999,
AIM Distributors received $1,053,955 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the year ended December 31, 1999, the Fund paid legal fees of $48,355
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
During the year ended December 31, 1999, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian fees of $246,830 and $27,344, respectively, under expense offset arrangements. The effect of the above arrangements resulted in a reduction of the Fund's total expenses of $274,174 during the year ended December 31, 1999.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an "interested person" of AIM. The Trust invests trustees' fees, if so elected by a trustee, 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 December 31, 1999, the Fund did not borrow under the line of credit agreement. The funds which are party to the line of credit are charged a commitment fee of 0.09% on the unused balance of the committed line. Prior to May 28, 1999, the commitment fee rate was 0.05%. The commitment fee is allocated among the funds based on their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 1999 was
$15,678,784,868 and $13,551,728,590, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of December 31, 1999 was as follows:
Aggregate unrealized appreciation of investment securities $9,404,563,463 ---------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (341,731,444) ---------------------------------------------------------- Net unrealized appreciation of investment securities $9,062,832,019 ========================================================== |
Cost of investments for tax purposes is $18,740,086,006.
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the year ended December 31, 1999 are summarized as follows:
CALL OPTION CONTRACTS
------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ------------
Beginning of period 2,995 $ 1,254,474
---------------------------- --------- ------------
Written 127,809 94,367,695
---------------------------- --------- ------------
Closed (17,839) (9,759,499)
---------------------------- --------- ------------
Exercised (60,465) (51,484,198)
---------------------------- --------- ------------
Expired (52,500) (34,378,472)
---------------------------- --------- ------------
End of period -- $ --
============================ ========= ============
|
FS-98
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1999 and 1998 were as follows:
1999 1998
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ----------- ---------------
Sold:
Class A 65,309,195 $ 2,905,872,208 61,939,114 $ 2,232,305,973
---------------------------------------------------------------------------------------------------------------------------
Class B 67,138,813 2,915,628,481 44,964,399 1,587,327,551
---------------------------------------------------------------------------------------------------------------------------
Class C 13,738,072 600,569,156 4,634,085 164,861,278
---------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 16,150,747 754,887,097 13,921,013 529,914,065
---------------------------------------------------------------------------------------------------------------------------
Class B 19,043,747 860,577,418 15,274,620 567,695,520
---------------------------------------------------------------------------------------------------------------------------
Class C 1,098,977 49,675,082 327,964 12,197,171
---------------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (42,137,878) (1,879,414,898) (64,405,244) (2,322,845,885)
---------------------------------------------------------------------------------------------------------------------------
Class B (29,076,106) (1,260,495,981) (27,805,340) (975,144,345)
---------------------------------------------------------------------------------------------------------------------------
Class C (2,008,443) (87,496,418) (590,550) (20,854,953)
---------------------------------------------------------------------------------------------------------------------------
109,257,124 $ 4,859,802,145 48,260,061 $ 1,775,456,375
===========================================================================================================================
|
NOTE 9-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A and a share of Class B outstanding during each of the years in the five-year period ended December 31, 1999 and for a share of Class C outstanding during each of the years in the two-year period ended December 31, 1999 and the period August 4, 1997 (date sales commenced) through December 31, 1997.
CLASS A
-------------------------------------------------------------------------
1999 1998 1997 1996(a) 1995
----------- ---------- ---------- ---------- ----------
Net asset value, beginning of period $ 40.19 $ 32.42 $ 29.15 $ 26.81 $ 21.14
----------------------------------------------------- ----------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss) (0.04) 0.09 0.17 0.43 0.14
----------------------------------------------------- ----------- ---------- ---------- ---------- ----------
Net gains on securities (both realized and
unrealized) 11.93 10.38 6.78 3.42 7.21
----------------------------------------------------- ----------- ---------- ---------- ---------- ----------
Total from investment operations 11.89 10.47 6.95 3.85 7.35
----------------------------------------------------- ----------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income -- (0.09) (0.04) (0.41) (0.09)
----------------------------------------------------- ----------- ---------- ---------- ---------- ----------
Distributions from net realized gains (3.25) (2.61) (3.64) (1.10) (1.59)
----------------------------------------------------- ----------- ---------- ---------- ---------- ----------
Total distributions (3.25) (2.70) (3.68) (1.51) (1.68)
----------------------------------------------------- ----------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 48.83 $ 40.19 $ 32.42 $ 29.15 $ 26.81
===================================================== =========== ========== ========== ========== ==========
Total return(b) 29.95% 32.76% 23.95% 14.52% 34.85%
===================================================== =========== ========== ========== ========== ==========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $12,640,073 $8,823,094 $6,745,253 $5,100,061 $3,408,952
===================================================== =========== ========== ========== ========== ==========
Ratio of expenses to average net assets(c) 1.00%(d) 1.00% 1.04% 1.11% 1.12%
===================================================== =========== ========== ========== ========== ==========
Ratio of net investment income (loss) to average net
assets(e) (0.09)%(d) 0.26% 0.57% 1.65% 0.74%
===================================================== =========== ========== ========== ========== ==========
Portfolio turnover rate 66% 113% 137% 126% 151%
===================================================== =========== ========== ========== ========== ==========
|
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges.
(c) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
1.02%, 1.02%, 1.06%, 1.13% and 1.13% for 1999-1995, respectively.
(d) Ratios are based on average net assets of $10,456,191,563.
(e) After fee waivers and/or expense reimbursements. Ratios of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements were (0.11)%, 0.24%, 0.55%, 1.63% and 0.73% for 1999-1995,
respectively.
FS-99
NOTE 9-FINANCIAL HIGHLIGHTS (continued)
CLASS B CLASS C
--------------------------------------------------------------------- --------
1999(a) 1998 1997 1996(a) 1995 1999(a)
----------- ----------- ---------- ---------- ---------- --------
Net asset value, beginning of period $ 39.24 $ 31.89 $ 28.92 $ 26.65 $ 21.13 $ 39.26
------------------------------------------- ----------- ----------- ---------- ---------- ---------- --------
Income from investment operations:
Net investment income (loss) (0.39) (0.18) (0.07) 0.20 (0.01) (0.39)
------------------------------------------- ----------- ----------- ---------- ---------- ---------- --------
Net gains (losses) on securities (both
realized and unrealized) 11.60 10.14 6.68 3.38 7.12 11.60
------------------------------------------- ----------- ----------- ---------- ---------- ---------- --------
Total from investment operations 11.21 9.96 6.61 3.58 7.11 11.21
------------------------------------------- ----------- ----------- ---------- ---------- ---------- --------
Less distributions:
Dividends from net investment income -- -- -- (0.21) -- --
------------------------------------------- ----------- ----------- ---------- ---------- ---------- --------
Distributions from net realized gains (3.25) (2.61) (3.64) (1.10) (1.59) (3.25)
------------------------------------------- ----------- ----------- ---------- ---------- ---------- --------
Total distributions (3.25) (2.61) (3.64) (1.31) (1.59) (3.25)
------------------------------------------- ----------- ----------- ---------- ---------- ---------- --------
Net asset value, end of period $ 47.20 $ 39.24 $ 31.89 $ 28.92 $ 26.65 $ 47.22
=========================================== =========== =========== ========== ========== ========== ========
Total return(b) 28.94% 31.70% 22.96% 13.57% 33.73% 28.92%
=========================================== =========== =========== ========== ========== ========== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $14,338,087 $19,680,068 $6,831,796 $4,875,933 $2,860,531 $860,859
=========================================== =========== =========== ========== ========== ========== ========
Ratio of expenses to average net assets(c) 1.79%(d) 1.80% 1.85% 1.94% 1.94% 1.79%(d)
=========================================== =========== =========== ========== ========== ========== ========
Ratio of net investment income (loss) to
average net assets(e) (0.88)%(d) (0.54)% (0.24)% 0.82% (0.08)% (0.88)%(d)
=========================================== =========== =========== ========== ========== ========== ========
Portfolio turnover rate 66% 113% 137% 126% 151% 66%
=========================================== =========== =========== ========== ========== ========== ========
CLASS C
------------------------
1998(a) 1997
-------- ------------
Net asset value, beginning of period $ 31.90 $ 35.60
------------------------------------------- -------- -------
Income from investment operations:
Net investment income (loss) (0.19) (0.01)
------------------------------------------- -------- -------
Net gains (losses) on securities (both
realized and unrealized) 10.16 (0.05)
------------------------------------------- -------- -------
Total from investment operations 9.97 (0.06)
------------------------------------------- -------- -------
Less distributions:
Dividends from net investment income -- --
------------------------------------------- -------- -------
Distributions from net realized gains (2.61) (3.64)
------------------------------------------- -------- -------
Total distributions (2.61) (3.64)
------------------------------------------- -------- -------
Net asset value, end of period $ 39.26 $ 31.90
=========================================== ======== =======
Total return(b) 31.72% (0.08)%
=========================================== ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $212,095 $32,900
=========================================== ======== =======
Ratio of expenses to average net assets(c) 1.80% 1.84%(f)
=========================================== ======== =======
Ratio of net investment income (loss) to
average net assets(e) (0.54)% (0.23)%(f)
=========================================== ======== =======
Portfolio turnover rate 113% 137%
=========================================== ======== =======
|
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
1.81%, 1.82%, 1.87%, 1.96% and 1.96% for 1999-1995 for Class B,
respectively, and 1.81%, 1.82% and 1.86% (annualized) for 1999-1997,
respectively, for Class C.
(d) Ratios are based on average net assets of $11,615,113,487 and $478,128,084
for Class B and Class C, respectively.
(e) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were (0.90)%, (0.56)%, (0.26)%, 0.81% and (0.09)% for
1999-1995, respectively, for Class B, and (0.90)%, (0.56)% and (0.25)%
(annualized) for 1999-1997, respectively, for Class C.
(f) Annualized.
FS-100
PART C
OTHER INFORMATION
Item 23. Exhibits
Exhibit
Number
a (1) - (a) Agreement and Declaration of Trust of the Registrant was
filed as an Exhibit to Post-Effective Amendment No. 66 on
September 15, 1993, and was filed electronically as an Exhibit
to Post-Effective Amendment No. 70 on November 17, 1995.
- (b) First Amendment to Agreement and Declaration of Trust of
the Registrant was filed as an Exhibit to Post-Effective
Amendment No. 66 on September 15, 1993, and was filed
electronically as an Exhibit to Post-Effective Amendment No.
70 on November 17, 1995.
- (c) Second Amendment to Agreement and Declaration of Trust of
the Registrant (name change of AIM Utilities Fund) was filed
electronically as an Exhibit to Post-Effective Amendment No.
70 on November 17, 1995.
- (d) Third Amendment to Agreement and Declaration of Trust of
the Registrant (name change of AIM Government Securities Fund)
was filed electronically as an Exhibit to Post-Effective
Amendment No. 70 on November 17, 1995.
- (e) Fourth Amendment to Agreement and Declaration of Trust of
the Registrant (name change of Class C Shares of AIM Money
Market Fund) was filed electronically as an Exhibit to
Post-Effective Amendment No. 73 on July 25, 1997.
- (f) Fifth Amendment to Agreement and Declaration of Trust of
the Registrant (designation of Class C Shares of the Funds)
was filed electronically as an Exhibit to Post-Effective
Amendment No. 73 on July 25, 1997.
- (g) Sixth Amendment to Agreement and Declaration of Trust of
the Registrant (name change of AIM Growth Fund) was filed
electronically as an Exhibit to Post-Effective Amendment No.
74 on February 27, 1998.
- (h) Seventh Amendment to Agreement and Declaration of Trust of
the Registrant, dated September 26, 1998 was filed
electronically as an Exhibit to Post-Effective Amendment No.
77 on March 9, 2000.
(2) - (a) Amended and Restated Agreement and Declaration of Trust of
the Registrant, dated as of November 5, 1998, was filed
electronically as an Exhibit to Post-Effective Amendment No.
75 on February 12, 1999, and is hereby incorporated by
reference.
- (b) Amendment No. 1, dated December 21, 1998 to Amended and
Restated Agreement and Declaration of Trust of the Registrant
(reclassification of Class A Shares of AIM Money Market Fund),
dated as of November 5, 1998, was filed electronically as an
Exhibit to Post-Effective Amendment No. 75 on February 12,
1999, and is hereby incorporated by reference.
- (c) Amendment No. 2, dated June 1, 2000, to Amended and
Restated Agreement and Declaration of Trust of the Registrant
was filed electronically as an Exhibit to Post-Effective
Amendment No. 80 on June 15, 2000, and is hereby incorporated
by reference.
|
- (d) Amendment No. 3, dated June 14, 2000, to Amended and Restated Agreement and Declaration of Trust of the Registrant was filed electronically as an Exhibit to Post-Effective Amendment No. 80 on June 15, 2000, and is hereby incorporated by reference.
- (e) Amendment No. 4, dated September 22, 2000, to Amended and Restated Agreement and Declaration of Trust of the Registrant is filed herewith electronically.
b (1) - (a) By-Laws of the Registrant were filed as an Exhibit to
Post-Effective Amendment No. 66 on September 15, 1993, and
were filed electronically as an Exhibit to Post-Effective
Amendment No. 70 on November 17, 1995.
- (b) Amendment to By-Laws of the Registrant was filed as an
Exhibit to Post-Effective Amendment No. 68 on April 11, 1994,
and was filed electronically as an Exhibit to Post-Effective
Amendment No. 70 on November 17, 1995.
- (c) Second Amendment to By-Laws of the Registrant was filed
electronically as an Exhibit to Post-Effective Amendment No.
70 on November 17,1995.
(2) - Amended and Restated By-Laws of the Registrant were filed
electronically as an Exhibit to Post-Effective Amendment No.
72 on April 28, 1997.
(3) - (a) Amended and Restated Bylaws of the Registrant were filed
electronically as an Exhibit to Post-Effective Amendment No.
75 on February 12, 1999, and are hereby incorporated by
reference.
- (b) First Amendment to Amended and Restated Bylaws of the
Registrant, adopted June 9, 1999 was filed electronically as
an Exhibit to Post-Effective Amendment No. 77 on March 9,
2000, and is hereby incorporated by reference.
- (c) Amendment No. 2 to Amended and Restated Bylaws of the
Registrant, adopted June 14, 2000, was filed electronically as
an Exhibit to Post-Effective Amendment No. 80 on June 15,
2000, and is hereby incorporated by reference.
c - Instruments Defining Rights of Security Holders - None.
d (1) - Master Investment Advisory Agreement, dated August 6, 1993,
between the Registrant and A I M Advisors, Inc. was filed as
an Exhibit to Post-Effective Amendment No. 67 on October 15,
1993.
(2) - (a) Master Investment Advisory Agreement, dated October 18,
1993, between the Registrant and A I M Advisors, Inc. was
filed as an Exhibit to Post-Effective Amendment No. 68 on
February 28, 1995, and was filed electronically as an Exhibit
to Post-Effective Amendment No. 71 on April 26, 1996.
- (b) Amendment No. 1, dated as of September 28, 1994, to the
Master Investment Advisory Agreement between the Registrant
and A I M Advisors, Inc., with respect to AIM Growth Fund was
filed as an Exhibit to Post-Effective Amendment No. 69 on
February 28, 1995, and was filed electronically as an Exhibit
to Post-Effective Amendment No. 71 on April 26, 1996.
- (c) Amendment No. 2, dated as of November 14, 1994, to the
Master Investment Advisory Agreement between Registrant and
A I M Advisors, Inc., with respect to AIM Value Fund was filed
as an Exhibit to Post-Effective Amendment No. 69 on February
28, 1995, and was filed electronically as an Exhibit to
Post-Effective Amendment No. 71 on April 26, 1996.
|
(3) - (a) Master Investment Advisory Agreement, dated February 28,
1997, between the Registrant and A I M Advisors, Inc. was
filed electronically as an Exhibit to Post-Effective Amendment
No. 72 on April 28, 1997.
- (b) Amendment No. 1 dated as of May 1, 1998, to the Master
Investment Advisory Agreement, dated February 28, 1997 between
Registrant and A I M Advisors, Inc., was filed electronically
as an Exhibit to Post-Effective Amendment No. 76 on April 15,
1999.
(4) - (a) Master Investment Advisory Agreement, dated June 1, 2000,
between the Registrant and A I M Advisors, Inc. was filed
electronically as an Exhibit to Post-Effective Amendment No.
80 on June 15, 2000, and is hereby incorporated by reference.
- (b) Amendment No. 1, dated August 30, 2000, to the Master
Investment Advisory Agreement, dated June 1, 2000, between
Registrant and A I M Advisors, Inc. is filed herewith
electronically.
- (c) Form of Amendment No. 2, dated ____________, 2000, to the
Master Investment Advisory Agreement, dated June 1, 2000,
between Registrant and A I M Advisors, Inc. is filed herewith
electronically.
(5) - (a) Foreign Country Selection and Mandatory Securities
Depository Responsibilities Delegation Agreement, dated
September 9, 1998, between Registrant and A I M Advisors, Inc.
was filed electronically as an Exhibit to Post-Effective
Amendment No. 75 on February 12, 1999, and is hereby
incorporated by reference.
- (b) Amendment No. 1, dated September 28, 1998 to Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, between Registrant and A I M Advisors, Inc. was filed
electronically as an Exhibit to Post-Effective Amendment No.
75 on February 12, 1999, and is hereby incorporated by
reference.
- (c) Amendment No. 2, dated as of December 14, 1998 to Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, between Registrant and A I M Advisors, Inc. was filed
electronically as an Exhibit to Post-Effective Amendment No.
76 on April 15, 1999, and is hereby incorporated by reference.
- (d) Amendment No. 3, dated as of December 22, 1998 to Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, between Registrant and A I M Advisors, Inc. was filed
electronically as an Exhibit to Post-Effective Amendment No.
76 on April 15, 1999, and is hereby incorporated by reference.
- (e) Amendment No. 4, dated as of January 26, 1999 to Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, between Registrant and A I M Advisors, Inc. was filed
electronically as an Exhibit to Post-Effective Amendment No.
76 on April 15, 1999, and is hereby incorporated by reference.
- (f) Amendment No. 5, dated as of March 1, 1999 to Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, between Registrant and A I M Advisors, Inc. was filed
electronically as
|
an Exhibit to Post-Effective Amendment No. 76 on April 15,
1999, and is hereby incorporated by reference.
- (g) Amendment No. 6, dated as of March 18, 1999 to Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, between Registrant and A I M Advisors, Inc. was filed
electronically as an Exhibit to Post-Effective Amendment No.
76 on April 15, 1999, and is hereby incorporated by reference.
- (h) Amendment No. 7, dated as of November 15, 1999 to Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, between Registrant and A I M Advisors, Inc. was filed
electronically as an Exhibit to Post-Effective Amendment No.
77 on March 9, 2000, and is hereby incorporated by reference.
(6) - Form of Sub-Advisory Agreement, dated August 6, 1993, among
the Registrant, A I M Advisors, Inc. and CIGNA Investments,
Inc. was filed as an Exhibit to Post-Effective Amendment No.
66 on September 15, 1993.
(7) - Sub-Advisory Agreement, dated October 18, 1993, among the
Registrant, A I M Advisors, Inc. and CIGNA Investments, Inc.
was filed as an Exhibit to Post-Effective Amendment No. 68 on
April 11, 1994.
e (1) - Master Distribution Agreement, dated August 6, 1993, between
the Registrant (on behalf of its Class A Shares and Class C
Shares) and A I M Distributors, Inc. was filed as an Exhibit
to Post-Effective Amendment No. 67 on October 15, 1993.
(2) - Master Distribution Agreement, dated August 6, 1993, between
the Registrant (on behalf of its Class B Shares) and A I M
Distributors, Inc. was filed as an Exhibit to Post-Effective
Amendment No. 67 on October 15, 1993.
(3) - Master Distribution Agreement, dated October 18, 1993, between
the Registrant (on behalf of its Class A Shares and Class C
Shares) and A I M Distributors, Inc. was filed as an Exhibit
to Post-Effective Amendment No. 68 on April 11, 1994, and was
filed electronically as an Exhibit to Post-Effective Amendment
No. 71 on April 26, 1997.
(4) - Master Distribution Agreement, dated October 18, 1993, between
the Registrant (on behalf of its Class B Shares) and A I M
Distributors, Inc. was filed as an Exhibit to Post-Effective
Amendment No. 68 on April 11, 1994.
(5) - Amended and Restated Master Distribution Agreement, dated May
2, 1995, between the Registrant (on behalf of its Class B
Shares) and A I M Distributors, Inc. was filed electronically
as an Exhibit to Post-Effective Amendment No. 70 on November
17, 1995.
(6) - Master Distribution Agreement, dated February 28, 1997,
between the Registrant (on behalf of its Class A Shares and
its AIM Cash Reserve Shares) and A I M Distributors, Inc. was
filed electronically as an Exhibit to Post-Effective Amendment
No. 72 on April 28, 1997.
(7) - (a) Master Distribution Agreement, dated February 28, 1997,
between the Registrant (on behalf of its Class B Shares) and
A I M Distributors, Inc. was filed electronically as an
Exhibit to Post-Effective Amendment No. 72 on April 28, 1997
and is hereby incorporated by reference.
|
- (b) Amendment No. 1, dated as of May 1, 1998, to the Master Distribution Agreement, dated as of February 28, 1997, between Registrant (on behalf of its Class B Shares) and A I M Distributors, Inc. was filed electronically as an Exhibit to Post-Effective Amendment No. 76 on April 15, 1999 and is hereby incorporated by reference.
- (c) Amendment No. 2, dated as of June 1, 2000, to the Master Distribution Agreement, dated as of February 28, 1997, between Registrant (on behalf of its Class B Shares) and A I M Distributors, Inc. was filed electronically as an Exhibit to Post-Effective Amendment No. 80 on June 15, 2000, and is hereby incorporated by reference.
- (d) Amendment No. 3, dated as of August 30, 2000, to the Master Distribution Agreement, dated as of February 28, 1997, between Registrant (on behalf of its Class B Shares) and A I M Distributors, Inc. is filed herewith electronically.
- (e) Form of Amendment No. 4, dated as of __________, 2000, to the Master Distribution Agreement, dated as of February 28, 1997, between Registrant (on behalf of its Class B Shares) and A I M Distributors, Inc. is filed herewith electronically.
(8) - (a) Amended and Restated Master Distribution Agreement, dated
August 4, 1997, between the Registrant (on behalf of its Class
A Shares, Class C Shares and AIM Cash Reserve Shares) and
A I M Distributors, Inc. was filed electronically as an
Exhibit to Post-Effective Amendment No. 74 on February 27,
1998.
|
- (b) Amendment No. 1, dated as of December 21, 1998, to the Amended and Restated Master Distribution Agreement between Registrant (on behalf of its Class A Shares, Class C Shares and AIM Cash Reserve Shares) and A I M Distributors, Inc. was filed electronically as an Exhibit to Post-Effective Amendment No. 76 on April 15, 1999.
- (c) Amendment No. 2, dated as of June 1, 2000, to the Amended and Restated Master Distribution Agreement between Registrant (on behalf of its Class A Shares and Class C Shares) and A I M Distributors, Inc. was filed electronically as an Exhibit to Post-Effective Amendment No. 80 on June 15, 2000.
(9) - (a) Second Amended and Restated Master Distribution Agreement,
dated July 1, 2000, between Registrant (on behalf of its Class
A Shares and Class C Shares) and A I M Distributors, Inc. is
filed herewith electronically.
|
- (b) Amendment No. 1, dated as of August 30, 2000, to the Second Amended and Restated Master Distribution Agreement between Registrant (on behalf of its Class A Shares and Class C Shares) and A I M Distributors, Inc. is filed herewith electronically.
- (c) Form of Amendment No. 2, dated _________, 2000, to the Second Amended and Restated Master Distribution Agreement between Registrant (on behalf of its Class A Shares and Class C Shares) and A I M Distributors, Inc. is filed herewith electronically.
(10) - Form of Selected Dealer Agreement between A I M Distributors,
Inc. and selected dealers was filed electronically as an
Exhibit to Post-Effective Amendment No. 75 on February 12,
1999, and is hereby incorporated by reference.
(11) - Form of Bank Selling Group Agreement between A I M
Distributors, Inc. and banks was filed electronically as an
Exhibit to Post-Effective Amendment No. 75 on February 12,
1999, and is hereby incorporated by reference.
|
f (1) - AIM Funds Retirement Plan for Eligible Directors/Trustees,
effective as of March 8, 1994, as restated September 18, 1995,
was filed electronically as an Exhibit to Post-Effective
Amendment No. 71 on April 26, 1996.
(2) - AIM Funds Retirement Plan for Eligible Directors/Trustees was
filed as an Exhibit to Post-Effective Amendment No. 69 on
February 28, 1995.
(3) - AIM Funds Retirement Plan for Eligible Directors/Trustees, as
restated March 7, 2000, was filed electronically as an Exhibit
to Post-Effective Amendment No. 80 on June 15, 2000, and is
hereby incorporated by reference.
(4) - Form of Deferred Compensation Agreement for Non-Affiliated
Directors, approved March 12, 1997, was filed electronically
as an Exhibit to Post-Effective Amendment No. 74 on February
27, 1998.
(5) - Form of Deferred Compensation Plan for Eligible
Directors/Trustees as approved on December 5, 1995, was filed
electronically as an Exhibit to Post-Effective Amendment No.
71 on April 26, 1996.
(6) - Form of Deferred Compensation Plan for Eligible
Directors/Trustees was filed as an Exhibit to Post-Effective
Amendment No. 69 on February 28, 1995.
(7) - Form of Director Deferred Compensation Agreement for
Registrant's Non-Affiliated Directors, as amended March 7,
2000, was filed electronically as an Exhibit to Post-Effective
Amendment No. 80 on June 15, 2000, and is hereby incorporated
by reference.
g (1) - (a) Custodian Contract, dated October 15, 1993, between the
Registrant and State Street Bank and Trust Company was filed
as an Exhibit to Post-Effective Amendment No. 68 on April 11,
1994, and was filed electronically as an Exhibit to
Post-Effective Amendment No. 71 on April 26, 1996.
|
- (b) Amendment No. 1, dated as of September 19, 1995, to the Custodian Contract, dated October 15, 1993, between the Registrant and State Street Bank and Trust Company was filed electronically as an Exhibit to Post-Effective Amendment No. 71 on April 26, 1996.
- (c) Amendment No. 2, dated September 28, 1996, to the Custodian Contract, dated October 15, 1993, between Registrant and State Street Bank and Trust Company was filed electronically as an Exhibit to Post-Effective Amendment No. 75 on February 12, 1999.
- (d) Amendment, dated September 9, 1998, to the Custodian Contract, dated October 15, 1993, between the Registrant and State Street Bank and Trust Company was filed electronically as an Exhibit to Post-Effective Amendment No. 75 on February 12, 1999.
(2) - (a) Master Custodian Contract, dated May 1, 2000, between the
Registrant and State Street Bank and Trust Company is filed
herewith electronically.
- (b) Amendment, dated May 1, 2000, to the Master Custodian
Contract, dated May 1, 2000, between Registrant and State
Street Bank and Trust Company is filed herewith
electronically.
(3) - (a) Subcustodian Agreement, dated September 9, 1994, among the
Registrant, Texas Commerce Bank National Association, State
Street Bank and Trust Company and A I M Fund Services, Inc.,
was filed as an Exhibit to Post-Effective Amendment No. 69 on
|
February 28, 1995, and was filed electronically as an Exhibit to Post-Effective Amendment No. 71 on April 26, 1996, and is hereby incorporated by reference.
- (b) Amendment No. 1, dated October 2, 1998 to Subcustodian Agreement, dated September 9, 1994, among the Registrant, Chase Bank of Texas N.A. (formerly Texas Commerce Bank), State Street Bank and Trust Company and A I M Fund Services, Inc., was filed electronically as an Exhibit to Post-Effective Amendment No. 77 on March 9, 2000, and is hereby incorporated by reference.
(4) - (a) Custody Agreement, dated October 19, 1995, between the
Registrant, on behalf of AIM Municipal Bond Fund, and The Bank
of New York was filed electronically as an Exhibit to
Post-Effective Amendment No. 70 on November 17, 1995.
|
- (b) Amendment, dated July 30, 1996, to the Custodian Contract, dated October 19, 1995, between the Registrant, on behalf of AIM Municipal Bond Fund, and The Bank of New York was filed electronically as an Exhibit to Post-Effective Amendment No. 75 on February 12, 1999.
h (1) - Form of Transfer Agency and Registrar Agreement, dated as of
June 7, 1993, between AIM Funds Group, a Massachusetts
business trust, and The Shareholder Services Group, Inc. was
filed as an Exhibit to Post-Effective Amendment No. 65 on July
16, 1993.
(2) - (a) Transfer Agency and Service Agreement, dated as of
November 1, 1994, between the Registrant and A I M Fund
Services, Inc. was filed electronically as an Exhibit to
Post-Effective Amendment No. 70 on November 17, 1995, and is
hereby incorporated by reference.
- (b) Amendment No. 1, dated August 4, 1997, to the Transfer
Agency and Service Agreement, dated as of November 1, 1994,
between Registrant and A I M Fund Services, Inc. was filed
electronically as an Exhibit to Post-Effective Amendment No.
74 on February 27, 1998, and is hereby incorporated by
reference.
- (c) Amendment No. 2, dated January 1, 1999, to the Transfer
Agency and Service Agreement, dated as of November 1, 1994,
between Registrant and A I M Fund Services, Inc. was filed
electronically as an Exhibit to Post-Effective Amendment No.
77 on March 9, 2000.
|
- (d) Amendment No. 3, dated July 1, 2000, to the Transfer Agency and Service Agreement, dated as of November 1, 1994, between Registrant and A I M Fund Services, Inc.
(3) - (a) Remote Access and Related Service Agreement, dated as of
December 23, 1994, between the 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. 71 on April 26, 1996, and is
hereby incorporated by reference.
- (b) Amendment No. 1, effective October 4, 1995, to the Remote
Access and Related Services Agreement, dated as of December
23, 1994, between the Registrant and First Data Investor
Services Group, Inc. was filed electronically as an Exhibit to
Post-Effective Amendment No. 71 on April 26, 1996, and is
hereby incorporated by reference.
- (c) Addendum No. 2, effective October 12, 1995, to the Remote
Access and Related Services Agreement, dated as of December
23, 1994, between the Registrant and First Data Investor
Services Group, Inc. was filed electronically as an Exhibit to
Post-Effective Amendment No. 71 on April 26, 1996, and is
hereby incorporated by reference.
|
- (d) Amendment No. 3, effective February 1, 1997, to the Remote Access and Related Services Agreement, dated December 23, 1994, between the Registrant and First Data Investor Services Group, Inc. was filed electronically as an Exhibit to Post-Effective Amendment No. 73 on July 25, 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 electronically as an Exhibit to Post-Effective Amendment No. 75 on February 12, 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 electronically as an Exhibit to Post-Effective Amendment No. 75 on February 12, 1999, and is hereby incorporated by reference.
- (g) Exhibit 1, effective as of August 4, 1997, to the Remote Access and Related Services Agreement, dated December 23, 1994, between the Registrant and First Data Investor Services Group, Inc. was filed electronically as an Exhibit to Post-Effective Amendment No. 74 on February 27, 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. was filed electronically as an Exhibit to Post-Effective Amendment 77 on March 9, 2000, and is hereby incorporated by reference.
- (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.
(4) - Preferred Registration Technology Escrow Agreement, dated
September 10, 1997, between the Registrant and First Data
Investor Services Group, Inc. was filed electronically as an
Exhibit to Post-Effective Amendment No. 74 on February 27,
1998, and is hereby incorporated by reference.
(5) - Shareholder Sub-Accounting Services Agreement, dated as of
October 1, 1993, between the Registrant and First Data
Investor Services Group, Inc., Financial Data Services, Inc.
and Merrill, Lynch, Pierce, Fenner & Smith Incorporated was
filed electronically as an Exhibit to Post-Effective Amendment
No. 71 on April 26, 1996, and is hereby incorporated by
reference.
(6) - Master Administrative Services Agreement, dated August 6,
1993, between the Registrant and A I M Advisors, Inc. was
filed as an Exhibit to Post-Effective Amendment No. 67 on
October 15, 1993.
(7) - Master Administrative Services Agreement, dated October 18,
1993, between the Registrant and A I M Advisors, Inc. was
filed as an Exhibit to Post-Effective Amendment No. 68 on
April 11, 1994, and was filed electronically as an Exhibit to
Post-Effective Amendment No. 71 on April 26, 1996.
(8) - (a) Administrative Services Agreement, dated October 18, 1993,
between A I M Advisors, Inc., on behalf of the Registrant's
portfolios, and A I M Fund Services, Inc. was filed as an
Exhibit to Post-Effective Amendment No. 68 on April 11, 1994.
|
- (b) Amendment No. 1, dated as of May 11, 1994, to the
Administrative Services Agreement, dated October 18, 1993,
between A I M Advisors, Inc., on behalf of the Registrant's
portfolios, and A I M Fund Services, Inc. was filed as an
Exhibit to Post-Effective Amendment No. 69 on February 28,
1995.
- (c) Amendment No. 2, dated as of July 1, 1994, to the
Administrative Services Agreement, dated October 18, 1993,
between A I M Advisors, Inc., on behalf of the Registrant's
portfolios, and A I M Fund Services, Inc. was filed as an
Exhibit to Post-Effective Amendment No. 69 on February 28,
1995.
- (d) Amendment No. 3, dated as of September 16, 1994, to the
Administrative Services Agreement, dated October 18, 1993,
between A I M Advisors, Inc., on behalf of the Registrant's
portfolios, and A I M Fund Services, Inc. was filed as an
Exhibit to Post-Effective Amendment No. 69 on February 28,
1995.
(9) - (a) Master Administrative Services Agreement, dated February
28, 1997, between the Registrant and A I M Advisors, Inc. was
filed electronically as an Exhibit to Post-Effective Amendment
No. 72 on April 28, 1997.
- (b) Amendment No. 1, dated as of May 1, 1998, to the Master
Administrative Services Agreement, dated February 28, 1997,
between Registrant and A I M Advisors, Inc. was filed
electronically as an Exhibit to Post-Effective Amendment No.
76 on April 15, 1999.
(10) - (a) Master Administrative Services Agreement, dated June 1,
2000, between the Registrant and A I M Advisors, Inc. was
filed electronically as an Exhibit to Post-Effective Amendment
No. 80 on June 15, 2000, and is hereby incorporated by
reference.
|
- (b) Amendment No. 1, dated August 30, 2000, to the Master Administrative Services Agreement, dated June 1, 2000, between Registrant and A I M Advisors, Inc. is filed herewith electronically.
- (c) Form of Amendment No. 2, dated ______________, 2000, to the Master Administrative Services Agreement, dated June 1, 2000, between Registrant and A I M Advisors, Inc. is filed herewith electronically.
(11) - Agreement and Plan of Reorganization, dated as of December 7,
1999, between Registrant and AIM Investment Securities Funds
was filed electronically as an Exhibit To Post-Effective
Amendment No. 78 on March 13, 2000, and is hereby incorporated
by reference.
i (1) - Opinion of Ballard Spahr Andrews & Ingersoll was filed in
connection with the Registrant's Rule 24f-2 Notice on or about
February 27, 1997.
(2) - Opinion and Consent of Ballard Spahr Andrews & Ingersoll, LLP
for AIM Explorer Fund is filed herewith electronically.
j (1) - Consent of Ballard Spahr Andrews & Ingersoll, LLP included as
part of i(2).
(2) - Consent of KPMG LLP is filed herewith electronically.
k - Financial Statements - None.
|
l (1) - Initial Capitalization Agreement for AIM European Small
Company Fund, AIM International Emerging Growth Fund, AIM New
Technology Fund, AIM Small Cap Equity Fund and AIM Value II
Fund is filed herewith electronically.
(2) - Form of Initial Capitalization Agreement for AIM Explorer Fund
is filed herewith electronically.
m (1) - Master Distribution Plan for Registrant's Class A Shares and
Class C Shares, and related forms, were filed as an Exhibit to
Post-Effective Amendment No. 68 on April 11, 1994.
(2) - Amended Master Distribution Plan for Registrant's Class A
Shares and AIM Cash Reserve Shares (formerly, Class C Shares),
and related forms, were filed electronically as an Exhibit to
Post-Effective Amendment No. 71 on April 26, 1996.
(3) - Amended and Restated Master Distribution Plan for Registrant's
Class A Shares and AIM Cash Reserve Shares was filed
electronically as an Exhibit to Post-Effective Amendment No.
73 on July 25, 1997.
(4) - Second Amended and Restated Master Distribution Plan for
Registrant's Class A Shares, Class C Shares and AIM Cash
Reserve Shares was filed electronically as an Exhibit to
Post-Effective Amendment No. 74 on February 27, 1998.
(5) - Master Distribution Plan for Registrant's Class B Shares, and
related forms, were filed as an Exhibit to Post-Effective
Amendment No. 68 on April 11, 1994.
(6) - Amended and Restated Master Distribution Plan for Registrant's
Class B Shares, and related forms, were filed electronically
as an Exhibit to Post-Effective Amendment No. 70 on November
17, 1995.
(7) - (a) Second Amended and Restated Master Distribution Plan for
Registrant's Class B Shares was filed electronically as an
Exhibit to Post-Effective Amendment No. 73 on July 25, 1997
and is hereby incorporated by reference.
- (b) Amendment No. 1, dated as of May 1, 1998, to the Second
Amended and Restated Master Distribution Plan for Registrant's
Class B Shares, dated as of June 30, 1997, was filed
electronically as an Exhibit to Post-Effective Amendment No.
76 on April 15, 1999 and is hereby incorporated by reference.
- (c) Amendment No. 2, dated as of June 1, 2000, to the Second
Amended and Restated Master Distribution Plan for Registrant's
Class B Shares, dated as of June 30, 1997, was filed
electronically as an Exhibit to Post-Effective Amendment No.
80 on June 15, 2000, and is hereby incorporated by reference.
|
- (d) Amendment No. 3, dated as of August 30, 2000, to the Second Amended and Restated Master Distribution Plan for Registrant's Class B Shares, dated as of June 30, 1997, is filed herewith electronically.
- (e) Form of Amendment No. 4, dated as of ________________, 2000, to the Second Amended and Restated Master Distribution Plan for Registrant's Class B Shares, dated as of June 30, 1997, is filed herewith electronically.
(8) - (a) Third Amended and Restated Master Distribution Plan for
Registrant's Class A Shares, Class C Shares and AIM Cash
Reserve Shares was filed electronically as an Exhibit to
Post-Effective Amendment No. 75 on February 12, 1999.
|
- (b) Amendment No. 1, dated as of December 21, 1998, to the Third Amended and Restated Master Distribution Plan for Registrant's Class A Shares, Class C Shares and AIM Cash Reserve Shares was filed electronically as an Exhibit to Post-Effective Amendment No. 76 on April 15, 1999.
(9) - Fourth Amended and Restated Master Distribution Plan, for
Registrant's Class A Shares and Class C Shares was filed
electronically as an Exhibit to Post-Effective Amendment No.
80 on June 15, 2000.
(10) - (a) Fifth Amended and Restated Master Distribution Plan for
Registrant's Class A Shares and Class C Shares is filed
herewith electronically.
|
- (b) Amendment No. 1, dated as of August 30, 2000, to the Fifth Amended and Restated Master Distribution Plan for Registrant's Class A Shares and Class C Shares is filed herewith electronically.
- (c) Form of Amendment No. 2, dated as of ___________, 2000, to the Fifth Amended and Restated Master Distribution Plan for Registrant's Class A Shares and Class C Shares is filed herewith electronically.
(11) - Form of Shareholder Service Agreement to be used in connection
with Registrant's Master Distribution Plan is filed herewith
electronically.
(12) - Form of Bank Shareholder Service Agreement to be used in
connection with Registrant's Master Distribution Plan is filed
herewith electronically.
(13) - Form of Variable Group Annuity Contractholder Service
Agreement to be used in connection with Registrant's Master
Distribution Plan is filed herewith electronically.
(14) - Form of Agency Pricing Agreement to be used in connection with
Registrant's Master Distribution Plan is filed herewith
electronically.
(15) - 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 Plan are filed herewith
electronically.
(16) - Form of Shareholder Service Agreement for Shares of the AIM
Mutual Funds is filed herewith electronically.
n (1) - Rule 18f-3 Amended and Restated Multiple Class Plan (effective
July 1, 1997) was filed electronically as an Exhibit to
Post-Effective Amendment No. 73 on July 25, 1997.
(2) - Rule 18f-3 Second Amended and Restated Multiple Class Plan
(effective September 1, 1997) was filed electronically as an
Exhibit to Post-Effective Amendment No. 74 on February 27,
1998.
(3) - Rule 18f-3 Third Amended and Restated Multiple Class Plan
(effective August 5, 1999) was filed electronically as an
Exhibit to Post-Effective Amendment No. 77 on March 9, 2000,
and is hereby incorporated by reference.
o - Reserved
|
p (1) - (a) 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 electronically as an Exhibit to
Post-Effective Amendment No. 77 on March 9, 2000.
- (b) The A I M Management Group Inc. Code of Ethics, as revised
August 25, 2000, is filed herewith electronically.
(2) - (a) Code of Ethics of the Registrant was filed electronically
as an Exhibit to Post-Effective Amendment No. 77 on March 9,
2000.
|
- (b) AIM Funds Code of Ethics of the Registrant, effective June 14, 2000, is filed herewith electronically.
- (c) AIM Funds Code of Ethics of the Registrant, effective September 23, 2000, is filed herewith electronically.
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 Amended and Restated Agreement and Declaration of
Trust, dated November 5, 1998, as amended, provides, among other things
(i) that trustees shall not be liable for any act or omission or any
conduct whatsoever (except for liabilities to the Registrant or its
shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of duty); (ii) for the indemnification
by the Registrant of the trustees and officers to the fullest extent
permitted by the Delaware Business Trust Act and Bylaws; and (iii) that
the shareholders and former shareholders of the Registrant are held
harmless by the Registrant (or applicable portfolio or class) from
personal liability arising from their status as such, and are
indemnified by the Registrant (or applicable portfolio or class)
against all loss and expense arising from such personal liability in
accordance with the Registrant's Bylaws and applicable law.
A I M Advisors, Inc., the Registrant and other investment companies managed by A I M Advisors, Inc., their respective officers, trustees, directors and employees (the "Insured Parties") are insured under a joint Mutual Fund and Investment Advisory Professional and Directors and 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 of the Registrant, 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 caption "Fund Management--The Advisor" in the Prospectus which comprises Part A of the Registration Statement, and to the caption "Management" of the Statement of Additional Information which comprises Part B of the Registration Statement, and to Item 27(b) of this Part C.
Item 27. Principal Underwriters
(a) State the name of each investment company (other than the Registrant) for which each principal underwriter currently distributing the Registrant's securities also acts as a principal underwriter, depositor, or investment advisor.
A I M Distributors, Inc., the Registrant's principal underwriter, also acts as a principal underwriter to the following investment companies:
AIM Advisor Funds
AIM Equity Funds (Retail Classes)
AIM Floating Rate Fund
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 Tax-Exempt Funds
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:
Name and Principal Position and Offices Position and Offices Business Address* with Underwriter with Registrant ---------------- ---------------- --------------- Charles T. Bauer Chairman & Director Chairman & 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 |
Name and Principal Position and Offices Position and Offices
Business Address* with Underwriter with Registrant
---------------- ---------------- ---------------
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 K. Coleman Vice President None
Mary A. Corcoran Vice President None
Melville B. Cox Vice President & Chief Vice President
Compliance 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
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
|
Name and Principal Position and Offices Position and Offices
Business Address* with Underwriter with Registrant
----------------- ---------------- ---------------
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 and Controller
Simon R. Hoyle Assistant Vice President None
Kathryn A. Jordan Capage 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
P. Michelle Grace Assistant Secretary Assistant Secretary
Lisa A. Moss Assistant Secretary Assistant Secretary
|
(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:
None.
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, will maintain 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 Custodians, State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110, and the Registrant's Transfer Agent and Dividend Paying Agent, A I M Fund Services, Inc., P. O. Box 4739, Houston, Texas 77210-4739.
Item 29. Management Services
Provide a summary of the substantive provisions of any management-related service contract not discussed in Part A or Part B, disclosing the parties to the contract and the total amount paid and by whom for the Registrant's last three fiscal years.
None.
Item 30. Undertakings
In initial registration statements filed under the Securities Act, provide an undertaking to file an amendment to the registration statement with certified financial statements showing the initial capital received before accepting subscriptions from more than 25 persons if the Registrant intends to raise its initial capital under section 14(a)(3) [15 U.S.C. 80a-14(a)(3)].
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Houston, Texas on the 29th day of September, 2000.
REGISTRANT: AIM FUNDS GROUP
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 September 29, 2000
------------------------
(Charles T. Bauer)
/s/ ROBERT H. GRAHAM Trustee & President September 29, 2000
------------------------ (Principal Executive Officer)
(Robert H. Graham)
/s/ BRUCE L. CROCKETT Trustee September 29, 2000
------------------------
(Bruce L. Crockett)
/s/ OWEN DALY II Trustee September 29, 2000
------------------------
(Owen Daly II)
/s/ EDWARD K. DUNN, JR. Trustee September 29, 2000
------------------------
(Edward K. Dunn, Jr.)
/s/ JACK FIELDS Trustee September 29, 2000
------------------------
(Jack Fields)
/s/ CARL FRISCHLING Trustee September 29, 2000
------------------------
(Carl Frischling)
/s/ PREMA MATHAI-DAVIS Trustee September 29, 2000
------------------------
(Prema Mathai-Davis)
/s/ LEWIS F. PENNOCK Trustee September 29, 2000
------------------------
(Lewis F. Pennock)
/s/ LOUIS S. SKLAR Trustee September 29, 2000
-------------------------
(Louis S. Sklar)
/s/ DANA R. SUTTON Vice President & Treasurer September 29, 2000
------------------------- (Principal Financial and
(Dana R. Sutton) Accounting Officer)
|
INDEX TO EXHIBITS
AIM FUNDS GROUP
EXHIBIT
NUMBER DESCRIPTION
------- -----------
a(2)(e) Amendment No. 4, dated September 22, 2000, to Amended and
Restated Agreement and Declaration of Trust of the Registrant
d(4)(b) Amendment No. 1, dated August 30, 2000, to the Master
Investment Advisory Agreement, dated June 1, 2000
d(4)(c) Form of Amendment No. 2, dated ___________, 2000, to the
Master Investment Advisory Agreement dated June 1, 2000
e(7)(d) Amendment No. 3, dated as of August 30, 2000, to the Master
Distribution Agreement, dated as of February 28, 1997, between
Registrant (on behalf of its Class B Shares) and A I M
Distributors, Inc.
e(7)(e) Form of Amendment No. 4, dated as of __________, 2000, to the
Master Distribution Agreement, dated as of February 28, 1997,
between Registrant (on behalf of its Class B Shares) and A I M
Distributors, Inc.
e(9)(a) Second Amended and Restated Master Distribution Agreement,
dated July 1, 2000, between Registrant (on behalf of its Class
A Shares and Class C Shares) and A I M Distributors, Inc.
e(9)(b) Amendment No. 1, dated as of August 30, 2000, to the Second
Amended and Restated Master Distribution Agreement between
Registrant (on behalf of its Class A Shares and Class C
Shares) and A I M Distributors, Inc.
e(9)(c) Form of Amendment No. 2, dated ____, 2000, to the Second
Amended and Restated Master Distribution Agreement between
Registrant (on behalf of its Class A Shares and Class C
Shares) and A I M Distributors, Inc.
g(2)(a) Master Custodian Contract, dated May 1, 2000
g(2)(b) Amendment, dated May 1, 2000, to the Master Custodian
Contract, dated May 1, 2000
h(2)(d) Amendment No. 3, dated July 1, 2000, to the Transfer Agency
and Service Agreement, dated as of November 1, 1994
h(3)(i) Amendment No. 7, dated February 29, 2000, to the Remote Access
and Related Services Agreement, dated December 23, 1994
h(10)(b) Amendment No. 1, dated August 30, 2000, to the Master
Administrative Services Agreement, dated June 1, 2000
h(10)(c) Form of Amendment No. 2, dated ______________, 2000, to the
Master Administrative Services Agreement, dated June 1, 2000
i(2) Opinion and Consent of Ballard Spahr Andrews & Ingersoll, LLP
for AIM Explorer Fund
|
j(2) Consent of KPMG LLP
l(1) Initial Capitalization Agreement for AIM European Small
Company Fund, AIM International Emerging Growth Fund, AIM New
Technology Fund, AIM Small Cap Equity Fund and AIM Value II
Fund
l(2) Form of Initial Capitalization Agreement for AIM Explorer Fund
m(7)(d) Amendment No. 3, dated as of August 30, 2000, to the Second
Amended and Restated Master Distribution Plan for Registrant's
Class B Shares, dated as of June 30, 1997
m(7)(e) Form of Amendment No. 4, dated as of ____________, 2000, to
the Second Amended and Restated Master Distribution Plan for
Registrant's Class B Shares, dated as of June 30, 1997
m(10)(a) Fifth Amended and Restated Master Distribution Plan for
Registrant's Class A Shares and Class C Shares
m(10)(b) Amendment No. 1, dated as of August 30, 2000, to the Fifth
Amended and Restated Master Distribution Plan for Registrant's
Class A Shares and Class C Shares
m(10(c) Form of Amendment No. 2, dated as of ____________, 2000, to
the Fifth Amended and Restated Master Distribution Plan for
Registrant's Class A Shares and Class C Shares
m(11) Form of Shareholder Service Agreement to be used in connection
with Registrant's Master Distribution Plan
m(12) Form of Bank Shareholder Service Agreement to be used in
connection with Registrant's Master Distribution Plan
m(13) Form of Variable Group Annuity Contractholder Service
Agreement to be used in connection with Registrant's Master
Distribution Plan
m(14) Form of Agency Pricing Agreement to be used in connection with
Registrant's Master Distribution Plan
m(15) 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 Plan
m(16) Form of Shareholder Service Agreement for Shares of the AIM
Mutual Funds
p(1)(b) The A I M Management Group Inc. Code of Ethics, as revised
February 24, 2000
p(2)(b) AIM Funds Code of Ethics of the Registrant, effective June 14,
2000
p(2)(c) AIM Funds Code of Ethics of the Registrant, effective
September 23, 2000
|
EXHIBIT a(2)(e)
AMENDMENT NO. 4
TO
AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
OF
AIM FUNDS GROUP
This Amendment No. 4 to the Amended and Restated Agreement and Declaration of Trust of AIM Funds Group (this "Amendment") amends, effective as of September 22, 2000, the Amended and Restated Agreement and Declaration of Trust of AIM Funds Group dated as of November 5, 1998 (the "Restated Agreement").
Under Section 9.7 of the Restated Agreement, this Amendment may be executed by a duly authorized officer of the Trust.
NOW, THEREFORE, the Restated Agreement is hereby amended as follows:
1. Schedule A of the Restated Agreement is hereby amended and restated to read in its entirety as set forth on Exhibit 1 to this Amendment.
2. All references in the Restated Agreement to "this Agreement" shall mean the Restated Agreement as amended by this Amendment and all prior amendments thereto.
3. Except as specifically amended by this Amendment, the Restated Agreement (including all prior amendments) is hereby confirmed and remains in full force and effect.
IN WITNESS WHEREOF, the undersigned, a duly authorized officer of the Trust, has executed this Amendment as of September 22, 2000.
/s/ ROBERT H. GRAHAM ---------------------------- Name: Robert H. Graham Title: President |
EXHIBIT 1 TO AMENDMENT NO. 4
TO
AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
OF
AIM FUNDS GROUP
"SCHEDULE A
AIM FUNDS GROUP
PORTFOLIOS AND CLASSES THEREOF
AIM Balanced Fund AIM European Small Company Fund ----------------- ------------------------------- Class A Shares Class A Shares Class B Shares Class B Shares Class C Shares Class C Shares AIM Explorer Fund AIM Global Utilities Fund ----------------- ------------------------- Class A Shares Class A Shares Class B Shares Class B Shares Class C Shares Class C Shares AIM International Emerging Growth Fund AIM New Technology Fund -------------------------------------- ----------------------- Class A Shares Class A Shares Class B Shares Class B Shares Class C Shares Class C Shares AIM Select Growth Fund AIM Small Cap Equity Fund ---------------------- ------------------------- Class A Shares Class A Shares Class B Shares Class B Shares Class C Shares Class C Shares AIM Value Fund AIM Value II Fund -------------- ----------------- Class A Shares Class A Shares Class B Shares Class B Shares Class C Shares Class C Shares" |
EXHIBIT d(4)(b)
AMENDMENT NO. 1
TO
MASTER INVESTMENT ADVISORY AGREEMENT
This Amendment dated as of August 30, 2000, amends the Master Investment Advisory Agreement (the "Agreement"), dated June 1, 2000, between AIM Funds Group, a Delaware business trust, and A I M Advisors, Inc., a Delaware corporation.
W I T N E S S E T H:
WHEREAS, the parties desire to amend the Agreement to add five new portfolios, the AIM European Small Company Fund, the AIM International Emerging Growth Fund, the AIM New Technology Fund, the AIM Small Cap Equity Fund and the AIM Value II Fund;
NOW, THEREFORE, the parties agree as follows;
1. Appendix A and Appendix B to the Agreement are hereby deleted in their entirety and replaced with the following:
"APPENDIX A
FUNDS AND EFFECTIVE DATES
NAME OF FUND EFFECTIVE DATE OF ADVISORY AGREEMENT ------------ ------------------------------------ AIM Balanced Fund June 1, 2000 AIM Global Utilities Fund June 1, 2000 AIM Select Growth Fund June 1, 2000 AIM Value Fund June 1, 2000 AIM European Small Company Fund August 30, 2000 AIM International Emerging Growth Fund August 30, 2000 AIM New Technology Fund August 30, 2000 AIM Small Cap Equity Fund August 30, 2000 AIM Value II Fund August 30, 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 BALANCED FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $150 million................................................. 0.75% Over $150 million.................................................. 0.50% |
AIM GLOBAL UTILITIES FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $200 million................................................. 0.60% Next $300 million.................................................. 0.50% Next $500 million.................................................. 0.40% Amount over $1 billion............................................. 0.30% |
AIM SELECT GROWTH FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $150 million................................................. 0.80% Over $150 million.................................................. 0.625% |
AIM VALUE FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $150 million................................................. 0.80% Over $150 million.................................................. 0.625% |
AIM EUROPEAN SMALL COMPANY FUND
AIM INTERNATIONAL EMERGING GROWTH FUND
NET ASSETS ANNUAL RATE ---------- ----------- All Assets......................................................... 0.95% |
AIM NEW TECHNOLOGY FUND
NET ASSETS ANNUAL RATE ---------- ----------- All Assets......................................................... 1.00% |
AIM SMALL CAP EQUITY FUND
NET ASSETS ANNUAL RATE ---------- ----------- All Assets......................................................... 0.85% |
AIM VALUE II FUND
NET ASSETS ANNUAL RATE ---------- ----------- All Assets......................................................... 0.75%" |
2. In all other respects, the Agreement is hereby confirmed and remains in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers on the date first written above.
AIM FUNDS GROUP
Attest:: /s/ RENEE A. FRIEDLI By: /s/ ROBERT H. GRAHAM
------------------------------- ----------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M ADVISORS, INC.
Attest: /s/ P. MICHELLE GRACE By: /s/ ROBERT H. GRAHAM
------------------------------- ----------------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
EXHIBIT d(4)(c)
AMENDMENT NO. 2
TO
MASTER INVESTMENT ADVISORY AGREEMENT
This Amendment dated as of December ____, 2000, amends the Master Investment Advisory Agreement (the "Agreement"), dated June 1, 2000, between AIM Funds Group, a Delaware business trust, and A I M Advisors, Inc., a Delaware corporation.
WITNESSETH:
WHEREAS, the parties desire to amend the Agreement to add a new portfolio, the AIM Explorer Fund;
NOW, THEREFORE, the parties agree as follows;
1. Appendix A and Appendix B to the Agreement are hereby deleted in their entirety and replaced with the following:
"APPENDIX A
FUNDS AND EFFECTIVE DATES
NAME OF FUND EFFECTIVE DATE OF ADVISORY AGREEMENT ------------ ------------------------------------ AIM Balanced Fund June 1, 2000 AIM Global Utilities Fund June 1, 2000 AIM Select Growth Fund June 1, 2000 AIM Value Fund June 1, 2000 AIM European Small Company Fund August 30, 2000 AIM International Emerging Growth Fund August 30, 2000 AIM New Technology Fund August 30, 2000 AIM Small Cap Equity Fund August 30, 2000 AIM Value II Fund August 30, 2000 AIM Explorer Fund December ___, 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 BALANCED FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $150 million..................................................... 0.75% Over $150 million...................................................... 0.50% |
AIM GLOBAL UTILITIES FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $200 million..................................................... 0.60% Next $300 million...................................................... 0.50% Next $500 million...................................................... 0.40% Over $1 billion........................................................ 0.30% |
AIM SELECT GROWTH FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $150 million..................................................... 0.80% Over $150 million...................................................... 0.625% |
AIM VALUE FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $150 million..................................................... 0.80% Over $150 million...................................................... 0.625% |
AIM EUROPEAN SMALL COMPANY FUND
AIM INTERNATIONAL EMERGING GROWTH FUND
NET ASSETS ANNUAL RATE ---------- ----------- All Assets............................................................. 0.95% |
AIM NEW TECHNOLOGY FUND
NET ASSETS ANNUAL RATE ---------- ----------- All Assets............................................................. 1.00% |
AIM SMALL CAP EQUITY FUND
NET ASSETS ANNUAL RATE ---------- ----------- All Assets............................................................. 0.85% |
AIM VALUE II FUND
NET ASSETS ANNUAL RATE ---------- ----------- All Assets............................................................ 0.75% |
AIM EXPLORER FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $1 billion...................................................... 0.85% Over $1 billion....................................................... 0.80%" |
2. In all other respects, the Agreement is hereby confirmed and remains in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers on the date first written above.
AIM FUNDS GROUP
Attest: By:
----------------------------- -----------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M ADVISORS, INC.
Attest: By:
----------------------------- -----------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
|
EXHIBIT e(7)(d)
AMENDMENT NO. 3
TO
MASTER DISTRIBUTION AGREEMENT
(CLASS B SHARES)
The Master Distribution Agreement (the "Agreement"), dated February 28, 1997, by and between AIM Funds Group, a Delaware business trust, and A I M Distributors, Inc., a Delaware corporation, is hereby amended as follows:
Schedule A to the Agreement is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
MASTER DISTRIBUTION AGREEMENT
OF
AIM FUNDS GROUP
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: August 30, 2000
AIM FUNDS GROUP
Attest: /s/ RENEE A. FRIEDLI By: /s/ ROBERT H. GRAHAM
--------------------------------- -------------------------------
Assistant Secretary President
A I M DISTRIBUTORS, INC.
Attest: /s/ P. MICHELLE GRACE By: /s/ MICHAEL J. CEMO
--------------------------------- -------------------------------
Assistant Secretary President
|
EXHIBIT e(7)(e)
AMENDMENT NO. 4
TO
MASTER DISTRIBUTION AGREEMENT
(CLASS B SHARES)
The Master Distribution Agreement (the "Agreement"), dated February 28, 1997, by and between AIM Funds Group, a Delaware business trust, and A I M Distributors, Inc., a Delaware corporation, is hereby amended as follows:
Schedule A to the Agreement is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
MASTER DISTRIBUTION AGREEMENT
OF
AIM FUNDS GROUP
AIM Balanced Fund
AIM European Small Company Fund
AIM Explorer Fund
AIM Global Utilities Fund
AIM International Emerging Growth Fund
AIM New Technology Fund
AIM Select Growth Fund
AIM Small Cap Equity Fund
AIM Value Fund
AIM Value II Fund"
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: December ___, 2000
AIM FUNDS GROUP
Attest: By:
----------------------------- -----------------------------
Assistant Secretary Robert H. Graham
President
A I M DISTRIBUTORS, INC.
Attest: By:
----------------------------- -----------------------------
Assistant Secretary Michael J. Cemo
President
|
EXHIBIT e(9)(a)
SECOND AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
BETWEEN
AIM FUNDS GROUP
(CLASS A SHARES AND CLASS C SHARES)
AND
A I M DISTRIBUTORS, INC.
THIS AGREEMENT made this 1st day of July, 2000, by and between AIM FUNDS GROUP, a Delaware business trust (the "Company"), with respect to the series of beneficial interest set forth on Appendix A to this Agreement, and any applicable classes thereof, (the "Portfolios"), and A I M DISTRIBUTORS, INC., a Delaware corporation (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt whereof is hereby acknowledged, the parties hereto agree as follows:
FIRST: The Company on behalf of the Portfolios hereby appoints the Distributor as its exclusive agent for the sale of shares of the Portfolios to the public directly and through investment dealers and financial institutions in the United States and throughout the world.
SECOND: The Company shall not sell any shares of the Portfolios except through the Distributor and under the terms and conditions set forth in paragraph FOURTH below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Company may issue shares of the Portfolios to any other investment company or personal holding company, or to the shareholders thereof, in exchange for all or a majority of the shares or assets of any such company; and
(B) the Company may issue shares of the Portfolios 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 Portfolio.
THIRD: The Distributor hereby accepts appointment as exclusive agent for the sale of the shares of the Portfolios and agrees that it will use its best efforts to sell such shares; provided, however, that:
(A) the Distributor may, and when requested by the Company on behalf of a Portfolio shall, suspend its efforts to effectuate such sales at any time when, in the opinion of the Distributor or of the Company, no sales should be made because of market or other economic considerations or abnormal circumstances of any kind; and
(B) the Company may withdraw the offering of the shares of a Portfolio
(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 shares of the Portfolios. The Company shall have the right to specify minimum amounts for initial and subsequent orders for the purchase of shares of any Portfolio.
FOURTH:
(A) The public offering price of Class A shares of a Portfolio (the "offering price") shall be the net asset value per share of the applicable Portfolio 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 applicable Portfolio. The sales charge shall be established by the Distributor, may reflect scheduled variations in, or the elimination of, sales charges on sales of a Portfolio's 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 applicable Portfolio. 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 of a Portfolio 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 current prospectus of the applicable Portfolio. The Distributor and the Company shall apply any then applicable scheduled variation in or waiver of contingent deferred sales charges uniformly to all shareholders and/or all transactions belonging to a specified class.
(B) The Company shall allow directly to investment dealers and other financial institutions through whom Class A shares of the Portfolios 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 Company on behalf of a Portfolio pursuant to Rule 12b-1 under the 1940 Act.
FIFTH: The Distributor shall act as agent of the Company on behalf of the Portfolios in connection with the sale and repurchase of shares of the Portfolios. Except with respect to such
sales and repurchases, the Distributor shall act as principal in all matters relating to the promotion of the sale of shares of the Portfolios 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 shares of the Portfolios 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 Company on behalf of the Portfolios.
SIXTH: The Portfolios shall bear:
(A) the expenses of qualification of shares of the Portfolios for sale in connection with such public offerings in such states as shall be selected by the Distributor, and of continuing the qualification therein until the Distributor notifies the Company that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the final proof and distributing the 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 the Portfolios), 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 Company 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 shares of the Portfolios only to the extent of purchase orders actually received and not in excess of such orders. It is mutually understood and agreed that the Company may reject purchase orders where, in the judgment of the Company, such rejection is in the best interest of the Company.
NINTH: The Company, on behalf of the 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 shares of the Portfolios.
TENTH:
(A) In the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of the Distributor, the Company on
behalf of the 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 a Portfolio, or any omission to state a material fact therein, the omission of which makes any statement contained therein misleading, unless such statement or omission was made in reliance upon, and in conformity with, information furnished to the Company or a Portfolio in connection therewith by or on behalf of the Distributor. The Distributor agrees to indemnify the Company and the Portfolios against any and all claims, demands, liabilities and expenses which the Company or a Portfolio may incur arising out of or based upon any act or deed of the Distributor or its sales representatives which has not been authorized by the Company or a Portfolio in its prospectus or in this Agreement.
(B) The Distributor agrees to indemnify the Company and the Portfolios against any and all claims, demands, liabilities and expenses which the Company 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 a Portfolio, or any omission to state a material fact therein if such statement or omission was made in reliance upon, and in conformity with, information furnished to the Company or a Portfolio 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 Company 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 with respect to each Portfolio 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 with respect to such Portfolio at least annually (a) (i) by the Board of Trustees of the Company or (ii) by the vote of a majority of the outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act), and (b) by vote of a majority of the Company's trustees 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 with respect to any Portfolio at any time, without the payment of any penalty, by vote of the Board of Trustees of the Company or by vote of a majority of the outstanding voting securities of the applicable 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 Company and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046.
FIFTEENTH: 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 Company individually, but are binding only upon the assets and property of the Company and that the shareholders shall be entitled, to the fullest extent permitted by applicable law, to the same limitation on personal liability as stockholders of private corporations for profit.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate on the day and year first above written.
AIM FUNDS GROUP
By: /s/ ROBERT H. GRAHAM
---------------------------------
Name: Robert H. Graham
Title: President
Attest:
/s/ SAMUEL D. SIRKO
--------------------------
Name: Samuel D. Sirko
Title: Assistant Secretary
|
A I M DISTRIBUTORS, INC.
By: /s/ MICHAEL J. CEMO
---------------------------------
Name: Michael J. Cemo
Title: President
Attest:
/s/ OFELIA M. MAYO
--------------------------
Name: Ofelia M. Mayo
Title: Assistant Secretary
|
APPENDIX A
TO
SECOND AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
OF
AIM FUNDS GROUP
EXHIBIT e(9)(b)
AMENDMENT NO. 1
TO THE SECOND AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
(APPLICABLE TO CLASS A AND CLASS C SHARES)
The Second Amended and Restated Master Distribution Agreement (the "Agreement"), dated July 1, 2000 by and between AIM Funds Group, a Delaware business trust, and A I M Distributors, Inc., a Delaware corporation, is hereby amended as follows:
Appendix A to the Agreement is hereby deleted in its entirety and replaced with the following:
"APPENDIX A
TO
MASTER DISTRIBUTION AGREEMENT
OF
AIM FUNDS GROUP
AIM Balanced Fund
AIM European Small Company Fund
AIM Global Utilities Fund
AIM International Emerging Growth Fund
AIM New Technology Fund
AIM Select Growth Fund
AIM Small Cap Equity Fund
AIM Value Fund
AIM Value II Fund
AIM Balanced Fund
AIM European Small Company Fund
AIM Global Utilities Fund
AIM International Emerging Growth Fund
AIM New Technology Fund
AIM Select Growth Fund
AIM Small Cap Equity Fund
AIM Value Fund
AIM Value II Fund"
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: August 30, 2000
AIM FUNDS GROUP
Attest: /s/ RENEE A. FRIEDLI By: /s/ ROBERT H. GRAHAM
---------------------- ----------------------------------
Assistant Secretary President
|
A I M DISTRIBUTORS, INC.
Attest: /s/ P. MICHELLE GRACE By: /s/ MICHAEL J. CEMO
---------------------- ----------------------------------
Assistant Secretary President
|
EXHIBIT e(9)(c)
AMENDMENT NO. 2
TO THE SECOND AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
(APPLICABLE TO CLASS A AND CLASS C SHARES)
The Second Amended and Restated Master Distribution Agreement (the "Agreement"), dated July 1, 2000, by and between AIM Funds Group, a Delaware business trust, and A I M Distributors, Inc., a Delaware corporation, is hereby amended as follows:
Appendix A to the Agreement is hereby deleted in its entirety and replaced with the following:
"APPENDIX A
TO
MASTER DISTRIBUTION AGREEMENT
OF
AIM FUNDS GROUP
AIM Balanced Fund
AIM European Small Company Fund
AIM Explorer Fund
AIM Global Utilities Fund
AIM International Emerging Growth Fund
AIM New Technology Fund
AIM Select Growth Fund
AIM Small Cap Equity Fund
AIM Value Fund
AIM Value II Fund
AIM Balanced Fund
AIM European Small Company Fund
AIM Explorer Fund
AIM Global Utilities Fund
AIM International Emerging Growth Fund
AIM New Technology Fund
AIM Select Growth Fund
AIM Small Cap Equity Fund
AIM Value Fund
AIM Value II Fund"
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: December ____, 2000
AIM FUNDS GROUP
Attest: By:
----------------------------- -----------------------------
Assistant Secretary Robert H. Graham
President
A I M DISTRIBUTORS, INC.
Attest: By:
----------------------------- -----------------------------
Assistant Secretary Michael J. Cemo
President
|
EXHIBIT g(2)(a)
This Contract between each entity set forth in Appendix A hereto (as such Appendix A may be amended from time to time) (each such entity and each entity made subject to this Contract in accordance with Paragraphs 17 and 18, referred to herein as a "Fund") and State Street Bank and Trust Company, a Massachusetts trust company, having its principal place of business at 225 Franklin Street, Boston, Massachusetts, 02110, hereinafter called the "Custodian",
WITNESSETH:
WHEREAS, a Fund may be authorized to issue shares in separate series, with each such series representing interests in a separate portfolio of securities and other assets; and
WHEREAS, each Fund so authorized intends that this Contract be applicable to each of its series set forth on Appendix A hereto (as such Appendix A may be amended from time to time) (such series together with all other series subsequently established by the Fund and made subject to this Contract in accordance with paragraph 17, being herein referred to as the "Portfolio(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter contained, the parties hereto agree as follows:
Each Fund hereby employs the Custodian as the custodian of the assets of the Portfolios of the Fund, including securities which the Fund, on behalf of the applicable Portfolio desires to be held in places within the United States ("domestic securities") and securities it desires to be held outside the United States ("foreign securities") pursuant to the provisions of the Fund's articles of incorporation, agreement and declaration of trust, by-laws and/or registration statement (as applicable, the "Governing Documents"). Each Fund on behalf of its Portfolio(s) agrees to deliver to the Custodian all securities and cash of such Portfolios, and all payments of income, payments of principal or capital distributions received by it with respect to all securities owned by such Portfolio(s) from time to time, and the cash consideration received by it for such new or treasury shares of capital stock or beneficial interest of each Fund representing interests in the Portfolios, ("Shares") as may be issued or sold from time to time. The Custodian shall not be responsible for any property of a Portfolio held or received by the Portfolio and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article
5), the Custodian shall on behalf of the applicable Portfolio(s) from time to
time employ one or more sub-custodians, located in the United States but only in
accordance with an applicable vote by the Board of Directors or the Board of
Trustees of the applicable Fund on behalf of the applicable Portfolio(s) (as
appropriate and in each case, the "Board"), and provided that the Custodian
shall have no more or less responsibility or liability to the Fund on account of
any actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodian
for each Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the applicable provisions of
Article 3.
2.1 Holding Securities. The Custodian shall hold and physically segregate for the account of each Portfolio all non-cash property, to be held by it in the United States including all domestic securities owned by such Portfolio, other than (a) securities which are maintained pursuant to Section 2.10 in a U.S. Securities System (as defined in Section 2.10) and b) commercial paper of an issuer for which State Street Bank and Trust Company acts as issuing and paying agent ("Direct Paper") which is deposited and/or maintained in the Direct Paper System of the Custodian (the "Direct Paper System") pursuant to Section 2.11.
2.2 Delivery of Securities. The Custodian shall release and deliver domestic securities owned by a Portfolio held by the Custodian or in a U.S. Securities System account of the Custodian or in the Custodian's Direct Paper book entry system account ("Direct Paper System Account") only upon receipt of Proper Instructions from the Fund on behalf of the applicable Portfolio, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio and receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase agreement related to such securities entered into by the Portfolio;
3) In the case of a sale effected through a U.S. Securities System, in accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are called, redeemed, retired or otherwise become payable; provided that, in any such case, the cash or other consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of the Portfolio or into the name of any nominee or nominees of the Custodian or into the name or nominee name of any agent appointed pursuant to Section 2.9 or into the name or nominee name of any sub-custodian appointed pursuant to Article 1; or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units; provided that, in any such case, the new securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the Portfolio, to the broker or its clearing agent, against a receipt, for examination in accordance with "street delivery" custom; provided that in any such case, the Custodian shall have no responsibility or liability for any loss arising from the delivery of such securities prior to receiving payment for such
securities except as may arise from the Custodian's own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the securities of the issuer of such securities, or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement; provided that, in any such case, the new securities and cash, if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities; provided that, in any such case, the new securities and cash, if any, are to be delivered to the Custodian;
10) For delivery in connection with any loans of securities made by the Portfolio, but only against receipt of adequate collateral as agreed upon from time to time by the Custodian and the Fund on behalf of the Portfolio, which may be in the form of cash or obligations issued by the United States government, its agencies or instrumentalities, except that in connection with any loans for which collateral is to be credited to the Custodian's account in the book-entry system authorized by the U.S. Department of the Treasury, the Custodian will not be held liable or responsible for the delivery of securities owned by the Portfolio prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings by the Fund on behalf of the Portfolio requiring a pledge of assets by the Fund on behalf of the Portfolio, but only against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any agreement among the Fund on behalf of the Portfolio, the Custodian and a broker-dealer registered under the Securities Exchange Act of 1934 (the "Exchange Act") and a member of The National Association of Securities Dealers, Inc. ("NASD"), relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange, or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any agreement among the Fund on behalf of the Portfolio, the Custodian, and a futures commission merchant registered under the Commodity Exchange Act, relating to compliance with the rules of the Commodity Futures Trading Commission ("CFTC") and/or any Contract Market, or any similar organization or organizations, regarding account deposits in connection with transactions by the Portfolio of the Fund;
14) Upon receipt of instructions from the transfer agent for the Fund ("Transfer Agent"), for delivery to such Transfer Agent or to the holders of shares in connection with distributions in kind, as may be described from
time to time in the currently effective prospectus and statement of additional information of the Fund, related to the Portfolio ("Prospectus"), in satisfaction of requests by holders of Shares for repurchase or redemption; and
15) For any other proper trust or corporate purpose, but only upon receipt of, in addition to Proper Instructions from the Fund on behalf of the applicable Portfolio, a certified copy of a resolution of the Board of Trustees or of the Executive Committee signed by an officer of the Fund and certified by the Secretary or an Assistant Secretary, specifying the securities of the Portfolio to be delivered, setting forth the purpose for which such delivery is to be made, declaring such purpose to be a proper trust or corporate purpose, as applicable, and naming the person or persons to whom delivery of such securities shall be made.
2.3 Registration of Securities. Domestic securities held by the Custodian (other than bearer securities) shall be registered in the name of the Portfolio or in the name of any nominee of the Fund on behalf of a Portfolio or of any nominee of the Custodian which nominee shall be assigned exclusively to the Portfolio, unless the Fund has authorized in writing the appointment of a nominee to be used in common with other registered investment companies having the same investment advisor as the Portfolio, or in the name or nominee name of any agent appointed pursuant to Section 2.9 or in the name or nominee name of any sub-custodian appointed pursuant to Article 1. All securities accepted by the Custodian on behalf of a Portfolio under the terms of this Contract shall be in "street name" or other good delivery form. If, however, a Fund directs the Custodian to maintain securities in "street name", the Custodian shall utilize its best efforts only to timely collect income due the Fund on such securities and to notify the Fund on a best efforts basis only of relevant corporate actions including, without limitation, pendency of calls, maturities, tender or exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank account or accounts in the United States in the name of each Portfolio of each Fund, subject only to draft or order by the Custodian acting pursuant to the terms of this Contract, and shall hold in such account or accounts, subject to the provisions hereof, all cash received by it from or for the account of the Portfolio, other than cash maintained by the Portfolio in a bank account established and used in accordance with Rule 17f-3 under the Investment Company Act of 1940, as amended (the "1940 Act"). Funds held by the Custodian for a Portfolio may be deposited by it to its credit as Custodian in the banking department of the Custodian or in such other banks or trust companies as it may in its discretion deem necessary or desirable; provided, however, that every such bank or trust company shall be qualified to act as a custodian under the 1940 Act and that each such bank or trust company and the funds to be deposited with each such bank or trust company shall on behalf of each applicable Portfolio be approved by vote of a majority of the Board. Such funds shall be deposited by the Custodian in its capacity as Custodian and shall be withdrawable by the Custodian only in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between any Fund on behalf of each applicable Portfolio and the Custodian, the Custodian shall, upon the receipt of Proper Instructions from such Fund on behalf of a Portfolio, make federal funds available to such Portfolio as of specified times agreed upon from time to time by the Fund and the Custodian in the amount of checks received in payment for Shares of such Portfolio which are deposited into the Portfolio's account.
2.6 Collection of Income. Subject to the provisions of Section 2.3, the Custodian shall collect on a timely basis all income and other payments with respect to registered domestic securities held hereunder to which each Portfolio shall be entitled either by law or pursuant to custom in the securities business, and shall collect on a timely basis all income and other payments with respect to bearer domestic securities if, on the date of payment by the issuer, such securities are held by the Custodian or its agent thereof and shall credit such income, as collected, to such Portfolio's custodian account. Without limiting the generality of the foregoing the Custodian shall detach and present for payment all coupons and other income items requiring presentation as and when they become due and shall collect interest when due on securities held hereunder. Income due each Portfolio on securities loaned pursuant to the provisions of Section 2.2 (10) shall be the responsibility of the applicable Fund. The Custodian will have no duty or responsibility in connection therewith, other than to provide the Fund with such information or data in its possession as may be necessary to assist the Fund in arranging, for the timely delivery to the Custodian of the income to which the Portfolio is properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions from the Fund on behalf of the applicable Portfolio, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures contracts or options on futures contracts for the account of the Portfolio but only (a) against the delivery of such securities or evidence of title to such options, futures contracts or options on futures contracts to the Custodian (or any bank, banking firm or trust company doing business in the United States or abroad which is qualified under the 1940 Act to act as a custodian and has been designated by the Custodian as its agent for this purpose) registered in the name of the Portfolio or in the name of a nominee of the Custodian referred to in Section 2.3 hereof or in proper form for transfer; (b) in the case of a purchase effected through a U.S. Securities System, in accordance with the conditions set forth in Section 2.10 hereof; (c) in the case of a purchase involving the Direct Paper System, in accordance with the conditions set forth in Section 2.11; (d) in the case of repurchase agreements entered into between the Fund on behalf of the Portfolio and the Custodian, or another bank, or a broker-dealer which is a member of NASD, (i) against delivery of the securities either in certificate form or through an entry crediting the Custodian's account at the Federal Reserve Bank with such securities or (ii) against delivery of the receipt evidencing purchase by the Portfolio of securities owned by the Custodian along with written evidence of the agreement by
the Custodian to repurchase such securities from the Portfolio or (e) for transfer to a time deposit account of the Fund in any bank, whether domestic or foreign; such transfer may be effected prior to receipt of a confirmation from a broker and/or the applicable bank pursuant to Proper Instructions from the Fund as defined in Article 5 of this Contract;
2) In connection with conversion, exchange or surrender
of securities owned by the Portfolio as set forth in
Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Portfolio as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred
by the Portfolio, including but not limited to the
following payments for the account of the Portfolio:
interest, taxes, management, accounting, transfer
agent and legal fees, and operating expenses of the
Fund whether or not such expenses are to be in whole
or part capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares declared pursuant to the Fund's Governing Documents;
6) For payment of the amount of dividends received in respect of securities sold short; and
7) For any other proper purpose, but only upon receipt of, in addition to Proper Instructions from the Fund on behalf of the Portfolio, a certified copy of a resolution of the Board or of the Executive Committee of the Fund signed by an officer of the Fund and certified by its Secretary or an Assistant Secretary, specifying the amount of such payment, setting forth the purpose for which such payment is to be made, declaring such purpose to be a proper trust or corporate purpose, as applicable, and naming the person or persons to whom such payment is to be made.
2.8 Liability for Payment in Advance of Receipt of Securities Purchased. Except as specifically stated otherwise in this Contract, in any and every case where payment for purchase of domestic securities for the account of a Portfolio is made by the Custodian in advance of receipt of the securities purchased in the absence of specific written instructions from a Fund on behalf of a Portfolio to so pay in advance, the Custodian shall be absolutely liable to such Fund for such securities to the same extent as if the securities had been received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in its discretion appoint (and may at any time remove) any other bank or trust company which is itself qualified under the 1940 Act to act as a custodian, as its agent to carry out such of the provisions of this Article 2 as the Custodian may at any time to time direct; provided, however, that the appointment of any agent shall not relieve the Custodian of its responsibilities or liabilities hereunder.
2.10 Deposit of Fund Assets in U.S Securities Systems. The
Custodian may deposit and/or maintain securities owned by a
Portfolio in a clearing agency registered with the SEC under
Section 17A of the Securities Exchange Act of 1934, which acts
as a securities depository, or in the book-entry system
authorized by the U.S. Department of the Treasury and certain
federal agencies, collectively referred to herein as "U.S.
Securities System" in accordance with applicable Federal
Reserve Board and SEC rules and regulations, if any, and
subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a U.S. Securities System provided that such securities are represented in an account of the Custodian in the U.S. Securities System (a "U.S. Securities System Account") which shall not include any assets of the Custodian other than assets held as a fiduciary, custodian or otherwise for customers;
2) The records of the Custodian with respect to securities of the Portfolio which are maintained in a U.S. Securities System shall identify by book-entry those securities belonging to the Portfolio;
3) The Custodian shall pay for securities purchased for the account of the Portfolio upon (i) receipt of advice from the U.S. Securities System that such securities have been transferred to the U.S. Securities System Account, and (ii) the making of an entry on the records of the Custodian to reflect such payment and transfer for the account of the Portfolio. The Custodian shall transfer securities sold for the account of the Portfolio upon (i) receipt of advice from the U.S. Securities System that payment for such securities has been transferred to the U.S. Securities System Account, and (ii) the making of an entry on the records of the Custodian to reflect such transfer and payment for the account of the Portfolio. Copies of all advices from the U.S. Securities System of transfers of securities for the account of the Portfolio shall identify the Portfolio, be maintained for the Portfolio by the Custodian and be provided to the Fund at its request. Upon request, the Custodian shall furnish the Fund on behalf of the Portfolio confirmation of each transfer to or from the account of the Portfolio in the form of a written advice or notice and shall furnish to the Fund on behalf of the Portfolio copies of daily transaction sheets reflecting each day's transactions in the U.S. Securities System for the account of the Portfolio;
4) The Custodian shall provide the Fund for the Portfolio with any report obtained by the Custodian on the U.S. Securities System's accounting system, internal accounting control and procedures for safeguarding securities deposited in the U.S Securities System;
5) The Custodian shall have received from the Fund on behalf of the Portfolio the initial or annual certificate, as the case may be, required by Article 14 hereof; and
6) Anything to the contrary in this Contract notwithstanding, the Custodian shall be liable to the Fund for the benefit of the Portfolio for any loss or damage to the Portfolio resulting from use of the U.S. Securities System
by reason of any negligence, misfeasance or misconduct of the Custodian or any of its agents or of any of its or their employees or from failure of the Custodian or any such agent to enforce effectively such rights as it may have against the U.S. Securities System; at the election of the Fund, it shall be entitled to be subrogated to the rights of the Custodian with respect to any claim against the U.S. Securities System or any other person which the Custodian may have as a consequence of any such loss or damage if and to the extent that the Portfolio has not been made whole for any such loss or damage.
2.11 Fund Assets Held in the Custodian's Direct Paper System. The Custodian may deposit and/or maintain securities owned by a Portfolio in the Direct Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper System will be effected in the absence of Proper Instructions from the applicable Fund on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the Direct Paper System only if such securities are represented in an account ("Account") of the Custodian in the Direct Paper System which shall not include any assets of the Custodian other than assets held as a fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities of the Portfolio which are maintained in the Direct Paper System shall identify by book-entry those securities belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for the account of the Portfolio upon the making of an entry on the records of the Custodian to reflect such payment and transfer of securities to the account of the Portfolio. The Custodian shall transfer securities sold for the account of the Portfolio upon the making of an entry on the records of the Custodian to reflect such transfer and receipt of payment for the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the Portfolio confirmation of each transfer to or from the account of the Portfolio, in the form of a written advice or notice, of Direct Paper on the next business day following such transfer and shall furnish to the Fund on behalf of the Portfolio copies of daily transaction sheets reflecting each day's transaction in the Direct Paper System for the account of the Portfolio; and
6) The Custodian shall provide the Fund on behalf of the Portfolio with any report on its system of internal accounting control as the Fund may reasonably request from time to time.
2.12 Segregated Account. The Custodian shall upon receipt of Proper Instructions on behalf of each applicable Portfolio establish and maintain a segregated account or accounts for and on behalf of each such Portfolio, into which account or
accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant
to Section 2.10 hereof, (i) in accordance with the provisions
of any agreement among the Fund on behalf of the Portfolio,
the Custodian and a broker-dealer registered under the
Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities
exchange (or the CFTC or any registered contract market), or
of any similar organization or organizations, regarding escrow
or other arrangements in connection with transactions by the
Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or
written by the Portfolio or commodity futures contracts or
options thereon purchased or sold by the Portfolio, (iii) for
the purposes of compliance by the Portfolio with the
procedures required by Investment Company Act Release No.
10666, or any subsequent release or releases of the Securities
and Exchange Commission ("SEC") or interpretative opinion of
the staff of the SEC, relating to the maintenance of
segregated accounts by registered investment companies and
(iv) for other proper corporate purposes, but only, in the
case of clause (iv), upon receipt of, in addition to Proper
Instructions from the Fund on behalf of the applicable
Portfolio, a certified copy of a resolution of the applicable
Board or of the Executive Committee signed by an officer of
the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such
segregated account and declaring such purposes to be proper
corporate or trust purposes, as applicable.
2.13 Ownership Certificates for Tax Purposes. The Custodian shall execute ownership and other certificates and affidavits for all federal and state tax purposes in connection with receipt of income or other payments with respect to domestic securities of each Portfolio held by it and in connection with transfers of securities.
2.14 Proxies. The Custodian shall, with respect to the domestic securities held hereunder, cause to be promptly executed by the registered holder of such securities, if the securities are registered otherwise than in the name of the Portfolio or a nominee of the Portfolio, all proxies, without indication of the manner in which such proxies are to be voted, and shall promptly deliver to the Portfolio such proxies, all proxy soliciting materials and all notices relating to such securities.
2.15 Communications Relating to Portfolio Securities. Subject to the provisions of Section 2.3, the Custodian shall transmit promptly to the Fund for each Portfolio all written information (including, without limitation, pendency of calls and maturities of domestic securities and expirations of rights in connection therewith and notices of exercise of call and put options written by the Fund on behalf of the Portfolio and the maturity of futures contracts purchased or sold by the Portfolio) received by the Custodian from issuers of the securities being held for the Portfolio. With respect to tender or exchange offers, the Custodian shall transmit promptly to the Portfolio all written information received by the Custodian from issuers of the securities whose tender or exchange is sought and from the party (or his agents) making the tender or exchange offer. If the Portfolio desires to take action with respect to any tender offer, exchange offer or any other similar
transaction, the Portfolio shall notify the Custodian at least three business days prior to the date on which the Custodian is to take such action.
3.1 Appointment of Foreign Sub-Custodians. Each Fund hereby authorizes and instructs the Custodian to employ as sub-custodians for the Portfolio's securities and other assets maintained outside the United States the foreign banking institutions and foreign securities depositories designated on Schedule A hereto ("foreign sub-custodians"). Upon receipt of "Proper Instructions", as defined in Section 5 of this Contract, together with a certified resolution of the Fund's Board, the Custodian and the Fund may agree to amend Schedule A hereto from time to time to designate additional foreign banking institutions and foreign securities depositories to act as sub-custodian. Upon receipt of Proper Instructions, each Fund may instruct the Custodian to cease the employment of any one or more such sub-custodians for maintaining custody of the Portfolio's assets.
3.2 Assets to be Held. The Custodian shall limit the securities and other assets maintained in the custody of the foreign sub-custodians to: (a) "foreign securities", as defined in paragraph (c)(1) of Rule 17f-5 under the 1940 Act, and b) cash and cash equivalents in such amounts as the Custodian or the applicable Fund may determine to be reasonably necessary to effect the Portfolio's foreign securities transactions. The Custodian shall identify on its books as belonging to the applicable Fund, the foreign securities of the Fund held by each foreign sub-custodian.
3.3 Foreign Securities Systems. Except as may otherwise be agreed upon in writing by the Custodian and each Fund, assets of the Portfolios shall be maintained in a clearing agency which acts as a securities depository or in a book-entry system for the central handling of securities located outside of the United States (each a "Foreign Securities System") only through arrangements implemented by the foreign banking institutions serving as sub-custodians pursuant to the terms hereof (Foreign Securities Systems and U.S. Securities Systems are collectively referred to herein as the "Securities Systems"). Where possible, such arrangements shall include entry into agreements containing the provisions set forth in Section 3.5 hereof.
3.4 [Reserved.]
3.5 Agreements with Foreign Banking Institutions. Each agreement
with a foreign banking institution shall provide that: (a) the
assets of each Portfolio will not be subject to any right,
charge, security interest, lien or claim of any kind in favor
of the foreign banking institution or its creditors or agent,
except a claim of payment for their safe custody or
administration; (b) beneficial ownership for the assets of
each Portfolio will be freely transferable without the payment
of money or value other than for custody or administration;
(c) adequate records will be maintained identifying the assets
as belonging to each applicable Portfolio; (d) officers of or
auditors employed by, or other representatives of the
Custodian, including to the extent permitted under applicable
law the independent public accountants for the Fund, will be
given access to the books and records of the foreign banking
institution relating to its actions under its agreement with the Custodian; and (e) assets of the Portfolios held by the foreign sub-custodian will be subject only to the instructions of the Custodian or its agents.
3.6 Access of Independent Accountants of the Fund. Upon request of any Fund, the Custodian will use its best efforts to arrange for the independent accountants of such Fund to be afforded access to the books and records of any foreign banking institution employed as a foreign sub-custodian insofar as such books and records relate to the performance of such foreign banking institution under its agreement with the Custodian.
3.7 Reports by Custodian. The Custodian will supply to each Fund from time to time, as mutually agreed upon, statements in respect of the securities and other assets of the Portfolio(s) held by foreign sub-custodians, including but not limited to an identification of entities having possession of the Portfolio(s) securities and other assets and advices or notifications of any transfers of securities to or from each custodial account maintained by a foreign banking institution for the Custodian on behalf of each applicable Portfolio indicating, as to securities acquired for a Portfolio, the identity of the entity having physical possession of such securities.
3.8 Transactions in Foreign Custody Account. (a) Except as otherwise provided in paragraph Co) of this Section 3.8, the provision of Sections 2.2 and 2.7 of this Contract shall apply, mutatis mutandis to the foreign securities of each Fund held outside the United States by foreign sub-custodians. (b) Notwithstanding any provision of this Contract to the contrary, settlement and payment for securities received for the account of each applicable Portfolio and delivery of securities maintained for the account of each applicable Portfolio may be effected in accordance with the customary established securities trading or securities processing practices and procedures in the jurisdiction or market in which the transaction occurs, including, without limitation, delivering securities to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) against a receipt with the expectation of receiving later payment for such securities from such purchaser or dealer. (c) Securities maintained in the custody of a foreign sub-custodian may be maintained in the name of such entity's nominee to the same extent as set forth in Section 2.3 of this Contract, and each Fund agrees to hold any such nominee harmless from any liability as a holder of record of such securities.
3.9 Liability of Foreign Sub-Custodians. Each agreement pursuant to which the Custodian employs a foreign banking institution as a foreign sub-custodian shall require the institution to exercise reasonable care in the performance of its duties and to indemnify, and hold harmless, the Custodian and each Fund from and against any loss, damage, cost, expense, liability or claim arising out of or in connection with the institution's performance of such obligations. At the election of any Fund, it shall be entitled to be subrogated to the fights of the Custodian with respect to any claims against a foreign banking institution as a consequence of any such loss, damage, cost, expense, liability or claim if and to the extent that such Fund has not been made whole for any such loss, damage, cost, expense, liability or claim.
3.10 Liability of Custodian. The Custodian shall be liable for the acts or omissions of a foreign banking institution to the same extent as set forth with respect to sub-custodians generally in this Contract and, regardless of whether assets are maintained in the custody of a foreign banking institution, a foreign securities depository or a branch of a U.S. bank as contemplated by paragraph 3.13 hereof, the Custodian shall not be liable for any loss, damage, cost, expense, liability or claim resulting from nationalization, expropriation, currency restrictions, or acts of war or terrorism or any loss where the sub-custodian has otherwise exercised reasonable care. Notwithstanding the foregoing provisions of this paragraph 3.10, in delegating custody duties to State Street London Ltd., the Custodian shall not be relieved of any responsibility to the Fund for any loss due to such delegation, except such loss as may result from (a) political risk (including, but not limited to, exchange control restrictions, confiscation, expropriation, nationalization, insurrection, civil strife or armed hostilities) or Co) other losses (excluding a bankruptcy or insolvency of State Street London Ltd. not caused by political risk) due to Acts of God, nuclear incident or other losses under circumstances where the Custodian and State Street London Ltd. have exercised reasonable care.
3.11 Reimbursement for Advances. If any Fund requires the Custodian to advance cash or securities for any purpose for the benefit of a Portfolio including the purchase or sale of foreign exchange or of contracts for foreign exchange, or in the event that the Custodian or its nominee shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of this Contract, except such as may arise from its or its nominee's own negligent action, negligent failure to act or willful misconduct, any property at any time held for the account of the applicable Portfolio shall be security therefor and should such Fund fail to repay the Custodian promptly, the Custodian shall be entitled to utilize available cash and to dispose of such Portfolios assets to the extent necessary to obtain reimbursement.
3.12 Monitoring Responsibilities. The Custodian shall furnish annually to each Fund, during the month of June, information concerning the foreign sub-custodians employed by the Custodian. Such information shall be similar in kind and scope to that furnished to each Fund in connection with the initial approval of this Contract. In addition, the Custodian will promptly inform each Fund in the event that the Custodian learns of a material adverse change in the financial condition of a foreign sub-custodian or any material loss of the assets of a Fund or in the case of any foreign sub-custodian not the subject of an exemptive order from the SEC is notified by such foreign sub-custodian that there appears to be a substantial likelihood that its shareholders' equity will decline below $200 million (U.S. dollars or the equivalent thereof) or that its shareholders' equity has declined below $200 million (in each case computed in accordance with generally accepted U.S. accounting principles).
3.13 Branches of U.S. Banks. (a) Except as otherwise set forth in this Contract, the provisions hereof shall not apply where the custody of the Portfolios assets are maintained in a foreign branch of a banking institution which is a "bank" as defined by Section 2(a)(5) of the 1940 Act meeting the qualification set forth in Section 26(a) of said Act. The appointment of any such branch as a sub-custodian shall be governed by paragraph 1 of this Contract Cash held for each
Portfolio of each Fund in the United Kingdom shall be maintained in an interest beating account established for the Fund with the Custodian's London branch, which account shall be subject to the direction of the Custodian, State Street London Ltd. or both.
3.14 Tax Law. The Custodian shall have no responsibility or liability for any obligations now or hereafter imposed on any Fund or the Custodian as custodian of such Fund by the tax law of the United States of America or any state or political subdivision thereof. It shall be the responsibility of each Fund to notify the Custodian of the obligations imposed on such Fund or the Custodian as custodian of the Fund by the tax law of jurisdictions other than those mentioned in the above sentence, including responsibility for withholding and other taxes, assessments or other governmental charges, certifications and governmental reporting. The sole responsibility of the Custodian with regard to such tax law shall be to use reasonable efforts to assist each Fund with respect to any claim for exemption or refund under the tax law of jurisdictions for which each Fund has provided such information.
The Custodian shall receive from the distributor for the Shares or from the Transfer Agent of each Fund and deposit into the account of the appropriate Portfolio such payments as are received for Shares of that Portfolio issued or sold from time to time by applicable Fund. The Custodian will provide timely notification to such Fund on behalf of each such Portfolio and the Transfer Agent of any receipt by it of payments for Shares of such Portfolio.
From such funds as may be available for the purpose but subject to the limitations of the Governing Documents and any applicable votes of the Board of any Fund pursuant thereto, the Custodian shall, upon receipt of instructions from the Transfer Agent, make funds available for payment to holders of Shares who have delivered to the Transfer Agent a request for redemption or repurchase of their Shares. In connection with the redemption or repurchase of Shares, the Custodian is authorized upon receipt of instructions from the Transfer Agent to wire funds to or through a commercial bank designated by the redeeming shareholders. In connection with the redemption or repurchase of Shares, the Custodian shall honor checks drawn on the Custodian by a holder of Shares, which checks have been furnished by a Fund to the holder of Shares, when presented to the Custodian in accordance with such procedures and controls as are mutually agreed upon from time to time between a Fund and the Custodian.
Proper Instructions as used throughout this Contract includes the following:
(a) a writing signed or initialed by one or more person or persons as a Board shall have from time to time authorized. Each such writing shall set forth the specific transaction or type or transaction involved, including a specific statement of the purpose for which such action is requested;
(b) communications effected directly between electro-mechanical or electronic devices provided that each Fund and the Custodian agree to securities procedures, including but not limited to, the security procedures listed on the Funds Transfer Addendum attached hereto;
(c) oral instructions will be considered Proper Instructions if the Custodian reasonably believes them to have been given by a person authorized to give such instructions with respect to the transaction involved. Each Fund shall cause all oral instructions to be confirmed in writing or through electro-mechanical or electronic devices; or
(d) Proper Instructions in connection with a segregated asset account which has been established pursuant to Section 2.12 hereof, shall include instructions received by the Custodian in accordance with the provisions of any three-party agreement, to which any Fund and the Custodian are each a party, governing such account or accounts.
The Custodian may in its discretion, without express authority from the applicable Fund on behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses of handling securities or other similar items relating to its duties under this Contract, provided that all such payments shall be accounted for to the applicable Fund on behalf of the Portfolio;
2) surrender securities in temporary form for securities in definitive form;
3) endorse for collection, in the name of the Portfolio, checks, drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection with the sale, exchange, substitution, purchase, transfer and other dealings with the securities and property of the Portfolio except as otherwise directed by the applicable Board.
The Custodian shall be protected in acting upon any instructions, notice, request, consent, certificate or other instrument or paper believed by it to be genuine and to have been properly executed by or on behalf of the applicable Fund. The Custodian may receive and accept a certified copy of a vote of the applicable Board of a Fund as conclusive evidence (a) of the authority of any person to act in accordance with such vote or (b) of any determination or of any action by the Board pursuant to the Governing Documents as described in such vote, and such vote may be considered as in full force and effect until receipt by the Custodian of written notice to the contrary.
The Custodian shall cooperate with and supply necessary information to the entity or entities appointed by the applicable Board o to keep the books of account of each Portfolio and/or compute the net asset value per share of the outstanding Shares or, if directed in writing to do so by the applicable Fund on behalf of the Portfolio, shall itself keep such books of account and/or compute such net asset value per Share. If so directed, the Custodian shall also calculate daily the net income of the Portfolio as described in the applicable Fund's Prospectus related to such Portfolio and shall advise such Fund and the Transfer Agent daily of the total amounts of such net income and, if instructed in writing by an officer of such Fund to do so, shall advise the Transfer Agent periodically of the division of such net income among its various components. The calculations of the net asset value per share and the daily income of each Portfolio shall be made at the time or times described from time to time in the applicable Fund's Prospectus.
The Custodian shall with respect to each Portfolio create and maintain all records relating to its activities and obligations under this Contract in such manner as will meet the obligations of the applicable Fund under the 1940 Act, with particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder. All such records shall be the property of the applicable Fund and shall at all times during the regular business hours of the Custodian be open for inspection by duly authorized officers, employees or agents of such Fund and employees and agents of the SEC. The Custodian shall, at a Fund's request, supply such Fund with a tabulation of securities owned by each Portfolio and held by the Custodian and shall, when requested to do so by a Fund and for such compensation as shall be agreed upon between such Fund and the Custodian, include certificate numbers in such tabulations.
The Custodian shall take all reasonable action, as the applicable Fund on behalf of each applicable Portfolio may from time to time request, to obtain from year to year favorable opinions from such Fund's independent accountants with respect to its activities hereunder in connection with the preparation of the Fund's Form N-1A, Form N-2 (if applicable), and Form N-SAR or other annual reports to the SEC and with respect to any other requirements thereof.
The Custodian shall provide the applicable Fund, on behalf of each of the Portfolios at such times as such Fund may reasonably require, with reports by independent public accountants on the accounting system, internal accounting control and procedures for safeguarding securities, futures contracts and options on futures contracts, including securities deposited and/or maintained in a U.S. Securities System, relating to the services provided by the Custodian under this Contract; such reports, shall be of sufficient scope and in sufficient detail, as may reasonably be required by the Fund to provide reasonable assurance that any material inadequacies would be disclosed by such examination, and, if there are no such inadequacies, the reports shall so state.
The Custodian shall be entitled to reasonable compensation for its services and expenses as Custodian, as agreed upon from time to time between each Fund on behalf of each applicable Portfolio and the Custodian.
So long as and to the extent that it is in the exercise of reasonable care, the Custodian shall not be responsible for the title, validity or genuineness of any property or evidence of title thereto received by it or delivered by it pursuant to this Contract and shall be held harmless in acting upon any notice, request, consent, certificate or other instrument reasonably believed by it to be genuine and to be signed by the proper party or parties, including any futures commission merchant acting pursuant to the terms of a three-party futures or options agreement. The Custodian shall be held to the exercise of reasonable care in carrying out the provisions of this Contract, but shall be kept indemnified by and shall be without liability to any Fund for any action taken or omitted by it in good faith without negligence. It shall be entitled to rely on and may act upon advice of counsel (who may be counsel for a Fund) on all matters, and shall be without liability for any action reasonably taken or omitted pursuant to such advice.
Except as may arise from the Custodian's own negligence or willful
misconduct or the negligence or willful misconduct of a sub-custodian or agent,
the Custodian shall be without liability to any Fund for any loss, liability,
claim or expense resulting from or caused by; (i) events or circumstances beyond
the reasonable control of the Custodian or any sub-custodian or Securities
System or any agent or nominee of any of the foregoing, including, without
limitation, nationalization or expropriation, imposition of currency controls or
restrictions, the interruption, suspension or restriction of trading on or the
closure of any securities market, power or other mechanical failures or
interruptions, communications disruptions, acts of war or terrorism, riots,
revolutions, work stoppages, natural disasters or other similar events or acts;
(ii) errors by any Fund or any Investment Advisor in their instructions to the
Custodian provided such instructions have been in accordance with this Contract;
(iii) the insolvency of or acts or omissions by a Securities System; (iv) any
delay or failure of any broker, agent or intermediary, central bank or other
commercially prevalent payment or clearing system that is not an affiliate of
the Custodian to deliver to the Custodian's sub-custodian or agent securities
purchased or in the remittance or payment made in connection with securities
sold; (v) any delay or failure of any company, corporation, or other body in
charge of registering or transferring securities in the name of the Custodian,
any Fund, the Custodian's sub-custodians, nominees or agents or any
consequential losses arising out of such delay or failure to transfer such
securities including non-receipt of bonus, dividends and rights and other
accretions or benefits; (vi) delays or inability to perform its duties due to
any disorder in market infrastructure with respect to any particular security or
Securities System; and (vii) any provision of any present or future law or
regulation or order of the United States of America, or any state thereof, or
any other country, or political subdivision thereof or of any court of competent
jurisdiction.
The Custodian shall be liable for the acts or omissions of a foreign banking institution to the same extent as set forth with respect to sub-custodians generally in this Contract.
If a Fund on behalf of a Portfolio requires the Custodian to take any action with respect to securities, which action involves the payment of money or which action may, in the opinion of the Custodian, result in the Custodian or its nominee assigned to the Fund or the Portfolio being liable for the payment of money or incurring liability of some other form, such Fund on behalf of
the Portfolio, as a prerequisite to requiring the Custodian to take such action, shall provide indemnity to the Custodian in an amount and form satisfactory to it.
If a Fund requires the Custodian, its affiliates, subsidiaries or agents, to advance cash or securities for any purpose (including but not limited to securities settlements, foreign exchange contracts and assumed settlement) for the benefit of a Portfolio or in the event that the Custodian or its nominee shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of this Contract, except such as may arise from its or its nominee's own negligent action, negligent failure to act or willful misconduct, any property at any time held for the account of the applicable Portfolio shall be security therefor and should a Fund fail to repay the Custodian promptly, the Custodian shall be entitled to utilize available cash and to dispose of such Portfolio's assets to the extent necessary to obtain reimbursement.
This Contract shall become effective as of its execution, shall continue in full force and effect until terminated as hereinafter provided, may be amended at any time by mutual agreement of the parties hereto and may be terminated with respect to any party by an instrument in writing delivered or mailed, postage prepaid to the other parties, such termination to take effect not sooner than thirty (30) days after the date of such delivery or mailing; provided, however that the Custodian shall not with respect to a Portfolio act under Section 2.10 hereof in the absence of receipt of an initial certificate of the Secretary or an Assistant Secretary that the applicable Board has approved the initial use of a particular Securities System by such Portfolio, as required by Rule 17f-4 under the 1940 Act and that the Custodian shall not with respect to a Portfolio act under Section 2.11 hereof in the absence of receipt of an initial certificate of the Secretary or an Assistant Secretary that the applicable Board has approved the initial use of the Direct Paper System by such Portfolio; provided further, however, that each Fund shall not amend or terminate this Contract in contravention of any applicable federal or state regulations, or any provision of the Fund's Governing Documents, and further provided, that each Fund on behalf of one or more of the Portfolios may at any time by action of its Board (i) substitute another bank or trust company for the Custodian by giving notice as described above to the Custodian, or (ii) immediately terminate this Contract in the event of the appointment of a conservator or receiver for the Custodian by the Comptroller of the Currency or upon the happening of a like event at the direction of an appropriate regulatory agency or court of competent jurisdiction.
Termination of this Contract with respect to any particular Portfolio shall in no way affect the rights and duties under this Contract with respect to any other Funds or Portfolios.
Upon termination of the Contract with respect to any Portfolio, such Fund on behalf of each applicable Portfolio shall pay to the Custodian such compensation as may be due as of the date of such termination and shall likewise reimburse the Custodian for its costs, expenses and disbursements.
If a successor custodian for one or more Funds or Portfolios shall be appointed by the applicable Board, the Custodian shall, upon termination with respect to the applicable Fund: (i) deliver to such successor custodian at the office of the Custodian, duly endorsed and in the form for transfer, all securities of each applicable Portfolio then held by it hereunder; (ii) transfer
to an account of the successor custodian all of the securities of each such Portfolio held in a Securities System; and (iii) transfer to the successor custodian all records created and maintained by the Custodian with respect to each such Portfolio pursuant to Section 9.
If no such successor custodian shall be appointed, the Custodian shall, in like manner, upon receipt of a certified copy of a vote of the applicable Board, deliver at the office of the Custodian and transfer such securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or certified copy of a vote of the applicable Board shall have been delivered to the Custodian on or before the date when such termination shall become effective, then the Custodian shall have the right to deliver to a bank or trust company, which is a "bank" as defined in the 1940 Act, doing business in Boston, Massachusetts, of its own selection, having an aggregate capital, surplus, and undivided profits, as shown by its last published report, of not less than $25,000,000, all securities, funds and other properties held by the Custodian on behalf of each applicable Portfolio and all instruments held by the Custodian relative thereto and all other property held by it under this Contract on behalf of each applicable Portfolio and to transfer to an account of such successor custodian all of the securities of each such Portfolio held in any Securities System. Thereafter, such bank or trust company shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the possession of the Custodian after the date of termination hereof with respect to any Fund owing to failure of such Fund to procure the certified copy of the vote referred to or of the applicable Board to appoint a successor custodian, the Custodian shall be entitled to fair compensation for its services during such period as the Custodian retains possession of such securities, funds and other properties and the provisions of this Contract relating to the duties and obligations of the Custodian shall remain in full force and effect.
In connection with the operation of this Contract, the Custodian and each Fund on behalf of each of the Portfolios, may from time to time agree on such provisions interpretive of or in addition to the provisions of this Contract as may in their joint opinion be consistent with the general tenor of this Contract. Any such interpretive or additional provisions shall be in a writing signed by all parties and shall be annexed hereto, provided that no such interpretive or additional provisions shall contravene any applicable federal or state regulations or any provision of the Fund's Governing Documents. No interpretive or additional provisions made as provided in the preceding sentence shall be deemed to be an amendment of this Contract.
In the event that any Fund establishes one or more series of Shares in addition to those listed on Appendix A attached hereto with respect to which it desires to have the Custodian render services as custodian under the terms hereof, it shall so notify the Custodian in writing, and if the Custodian agrees in writing to provide such services, such series of Shares shall become a Portfolio hereunder.
In the event that any entity in addition to those listed on Appendix A
attached hereto desires to have the Custodian render services as custodian under
the terms hereof, it shall so notify the Custodian in writing, and if the
Custodian agrees in writing to provide such services, such entity shall become a
Fund hereunder and be bound by all terms, conditions and provisions hereof
including, without limitation, the representations and warranties set forth in
Section 22 below.
This Contract shall be construed and the provisions thereof interpreted under and in accordance with laws of The Commonwealth of Massachusetts.
This Contract supersedes and terminates, as of the date hereof, all prior contracts between each Fund on behalf of each of the Portfolios and the Custodian relating to the custody of each Fund's assets.
This Contract and all schedules, exhibits, attachments and amendments hereto may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties hereto all/each agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.
All references herein to the "Fund" are to each of the funds listed on Appendix A hereto individually, as if this Contract were between such individual Fund and the Custodian. In the case of a series fund or trust, all references to the "Portfolio" are to the individual series or portfolio of such fund or trust, or to such fund or trust on behalf of the individual series or portfolio, as appropriate. Any reference in this Contract to "the parties" shall mean the Custodian and such other individual Fund as to which the matter pertains. Each party hereby represents and warrants to each other that (i) it has the requisite power and authority under applicable laws and its Governing Documents, as applicable, to enter into and perform this Contract, (ii) all requisite proceedings have been taken to authorize it to enter into and perform this Contract, and (iii) its entrance into this Contract shall not cause a material breach or be in material conflict with any other agreement or obligation of any party or any law or regulation applicable to it.
With respect to any Fund which is a party to this Contract and which is organized as a Delaware business trust, the term "Fund" means and refers to the trustees from time to time serving under the applicable trust agreement of such trust, as the same may be amended from time to time (the "Declaration of Trust"). It is expressly agreed that the obligations of any such
Fund hereunder shall not be binding upon any of the trustees, shareholders, nominees, officers, agents or employees of the Fund personally, but bind only the trust property of the Fund as set forth in the applicable Declaration of Trust. In the case of each Fund which is a Delaware business trust (in each case, a "Trust"), the execution and delivery of this Agreement on behalf of the Trust has been authorized by the trustees, and signed by an authorized officer of the Trust, in each case acting in such capacity and not individually, and neither such authorization by the trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually, but shall bind only the trust property of the Trust as provided in its Declaration of Trust.
SEC Rule 14b-2 requires banks which hold securities for the account of customers to respond to requests by issuers of securities for the names, addresses and holdings of beneficial owners of securities of that issuer held by the bank unless the beneficial owner has expressly objected to disclosure of this information. In order to comply with the role, the Custodian needs each Fund to indicate whether it authorizes the Custodian to provide such Fund's name, address, and share position to requesting companies whose stock the Fund owns. If the Fund tells the Custodian "no", the Custodian will not provide this information to requesting companies. If the Fund tells the Custodian "yes" or do not check either "yes" or "no" below, the Custodian is required by the rule to treat the Fund as consenting to disclosure of this information for all securities owned by the Fund or any funds or accounts established by the Fund. For the Fund's protection, the Rule prohibits the requesting company from using the Fund's name and address for any purpose other than corporate communications. Please indicate below whether the Fund consent or object by checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's
name, address, and share positions.
NO [X] The Custodian is not authorized to release the
Fund's name, address, and share positions.
|
The Custodian and each Fund agree to be bound by the terms of the Remote Access Services Addendum attached hereto.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be executed in its name and behalf by its duly authorized representative and its seal to be hereunder affixed as of the 1st day of May, 2000.
ATTEST EACH OF THE ENTITIES SET FORTH ON
APPENDIX A ATTACHED HERETO
By: /s/ STEPHEN I. WINER By: /s/ CAROL F. RELIHAN
----------------------------- -------------------------------
Name: Carol F. Relihan
-----------------------------
Title: Senior Vice President
----------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
By: /s/ STEPHANIE L. POSTER By: /s/ RONALD E. LOGUE
----------------------------- -------------------------------
Vice President
Name: Ronald E. Logue
-----------------------------
Title: Vice Chairman
----------------------------
|
APPENDIX A
AIM ADVISOR FUNDS, INC. AIM INVESTMENT SECURITIES FUNDS
o AIM Advisor Flex Fund o AIM High Yield Fund II
o AIM Advisor International Value Fund
o AIM Advisor Large Cap Value Fund AIM VARIABLE INSURANCE FUNDS
o AIM Advisor Real Estate Fund o AIM V.I. Aggressive Growth Fund
o AIM V.I. Balanced Fund
AIM EQUITY FUNDS, INC. o AIM V.I. Blue Chip Fund
o AIM Aggressive Growth Fund o AIM V.I. Capital Appreciation Fund
o AIM Blue Chip Fund o AIM V.I. Capital Development Fund
o AIM Capital Development Fund o AIM V.I. Dent Demographic Trends Fund
o AIM Charter Fund o AIM V.I. Diversified Income Fund
o AIM Constellation Fund o AIM V.I. Global Growth and Income Fund
o AIM Dent Demographic Trends Fund o AIM V.I. Global Utilities Fund
o AIM Emerging Growth Fund o AIM V.I. Government Securities Fund
o AIM Large Cap Basic Value Fund o AIM V.I. Growth and Income Fund
o AIM Large Cap Growth Fund o AIM V.I. Growth Fund
o AIM MidCap Growth Fund o AIM V.I. High Yield Fund
o AIM Weingarten Fund o AIM V.I. International Equity Fund
o AIM V.I. Money Market Fund
AIM FUNDS GROUP o AIM V.I. Telecommunications and
o AIM Balanced Fund Technology Fund
o AIM Global Utilities Fund o AIM V.I. Value Fund
o AIM High Yield Fund
o AIM Income Fund AIM FLOATING RATE FUND
o AIM Intermediate Government Fund
o AIM Money Market Fund AIM GROWTH SERIES
o AIM Select Growth Fund
o AIM Value Fund o AIM Basic Value Fund
o AIM New Pacific Growth Fund
AIM INTERNATIONAL FUNDS, INC. o AIM Euroland Growth Fund
o AIM Asian Growth Fund o AIM Japan Growth Fund
o AIM European Development Fund o AIM Mid Cap Equity Fund
o AIM Global Aggressive Growth Fund o AIM Small Cap Growth Fund
o AIM Global Growth Fund
o AIM Global Income Fund AIM INVESTMENT FUNDS
o AIM International Equity Fund
o AIM Global Health Care Fund
AIM SPECIAL OPPORTUNITIES FUNDS o AIM Global Telecommunications and Technology Fund
o AIM Small Cap Opportunities Fund o AIM Latin American Growth Fund
o AIM Mid Cap Opportunities Fund o AIM Developing Markets Fund
o AIM Large Cap Opportunities Fund o AIM Global Government Income Fund
o AIM Strategic Income Fund
AIM SUMMIT FUND, INC. o AIM Global Growth & Income Fund
AIM SERIES TRUST
o AIM Global Trends Fund
|
o GLOBAL INVESTMENT PORTFOLIO
o Global Consumer Products and
Services Portfolio
o Global Financial Services Portfolio
o Global Infrastructure Portfolio
o Global Resources Portfolio
o GROWTH PORTFOLIO
o Small Cap Portfolio
o Value Portfolio
o EMERGING MARKETS DEBT PORTFOLIO
SCHEDULE A
17f-5 APPROVAL
The Board of Directors/Trustees of each entity set forth on Appendix A to the Master Custodian Contract to which this Schedule A is attached has approved certain foreign banking institutions and foreign securities depositories within State Street's Global Custody Network for use as subcustodians for the Fund's securities, cash and cash equivalents held outside of the United States. Board approval is as indicated by the Fund's Authorized Officer:
FUND
OFFICER
INITIALS COUNTRY SUBCUSTODIAN CENTRAL DEPOSITORY
-------- ------- ------------ ------------------
STATE STREET'S ENTIRE GLOBAL CUSTODY NETWORK LISTED BELOW
-------
/s/ CFR Argentina Citibank, N.A. Caja de Valores S.A.
-------
/s/ CFR Australia Westpac Banking Corporation Austraclear Limited
-------
Reserve Bank Information and
Transfer System
/s/ CFR Austria Erste Bank der Oesterreichischen Oesterreichische Kontrollbank AG
------- Sparkassen AG (Wertpapiersammelbank Division)
Bahrain HSBC Bank Middle East None
------- (as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
/s/ CFR Bangladesh Standard Chartered Bank None
-------
/s/ CFR Belgium Fortis Bank NV/as. Caisse Interprofessionnelle de Depots
------- et de Virements de Titres S.A.
Banque Nationale de Belgique
/s/ CFR Bermuda The Bank of Bermuda Limited None
-------
Bolivia Citibank, N.A. None
-------
Botswana Barclays Bank of Botswana Limited None
-------
|
FUND
OFFICER
INITIALS COUNTRY SUBCUSTODIAN CENTRAL DEPOSITORY
-------- ------- ------------ ------------------
/s/ CFR Brazil Citibank, N.A. Companhia Brasileira be Liquidacao e
------- Custodia
------- Bulgaria ING Bank N.V. Central Depository AD
Bulgarian National Bank
/s/ CFR Canada State Street Trust Company Canada Canadian Depository
------- for Securities Limited
/s/ CFR Chile Citibank, N.A. Deposito Central de Valores S.A.
-------
/s/ CFR People's Republic The HongKong and Shanghai Shanghai Securities Central Clearing &
------- of China Banking Corporation Limited, Registration Corporation
Shanghai and Shenzhen branches
Shenzhen Securities Clearing
Co., Ltd.
/s/ CFR Colombia Citibank Colombia S.A. Deposito Centralizado de Valores
------- Sociedad Fiduciaria
Costa Rica Banco BCT S.A. Central de Valores S.A.
-------
/s/ CFR Croatia Privredna Banka Zagreb d.d. Ministry of Finance
-------
National Bank of Croatia
Sredisnja Depozitarna Agencija
/s/ CFR Cyprus The Cyprus Popular Bank Ltd. None
-------
/s/ CFR Czech Republic Ceskoslovenska Obchodi Stredisko cennych papiru
------- Banka, A.S.
Czech National Bank
/s/ CFR Denmark Den Danske Bank Vaerdipapircentralen (Danish
------- Securities Center)
Ecuador Citibank, N.A. None
-------
/s/ CFR Egypt Egyptian British Bank Misr Company for Clearing, Settlement,
------- (as delegate of The Hongkong and and Depository
Shanghai Banking Corporation
Limited)
------- Estonia Hansabank Eesti Vaartpaberite Keskdepositoorium
/s/ CFR Finland Merita Bank Plc. Finnish Central Securities
------- Depository
|
FUND
OFFICER
INITIALS COUNTRY SUBCUSTODIAN CENTRAL DEPOSITORY
-------- ------- ------------ ------------------
/s/ CFR France Paribas, S.A. Societe Interprofessionnelle
-------- pour la Compensation des
Valeurs Mobilieres
/s/ CFR Germany Dresdner Bank AG Deutsche Borse Clearing AG
--------
Ghana Barclays Bank Of Ghana Limited None
--------
/s/ CFR Greece National Bank of Greece S.A. Central Securities Depository
-------- (Apothetirion Titlon AE)
Bank of Greece,
System for Monitoring Transactions in
Securities in Book-Entry Form
/s/ CFR Hong Kong Standard Chartered Bank Central Clearing and
-------- Settlement System
Central Moneymarkets Unit
/s/ CFR Hungary Citibank Rt. Kozponti Elszamolohaz es Ertektar
-------- (Budapest) Rt. (KELER)
Iceland Icebank Ltd. None
--------
/s/ CFR India Deutsche Bank AG The National Securities Depository
-------- Limited
Central Depository Services India
Limited
Reserve Bank of India
The Hongkong and Shanghai The National Securities Depository
-------- Banking Corporation Limited Limited
Central Depository Services India
Limited
Reserve Bank of India
/s/ CFR Indonesia Standard Chartered Bank Bank Indonesia
--------
PT Kustodian Sentral Efek Indonesia
/s/ CFR Ireland Bank of Ireland Central Bank of Ireland
-------- Securities Settlement Office
|
FUND
OFFICER
INITIALS COUNTRY SUBCUSTODIAN CENTRAL DEPOSITORY
-------- ------- ------------ ------------------
/s/ CFR Israel Bank Hapoalim B.M. Tel Aviv Stock Exchange
------- Clearing House Ltd. (TASE Clearinghouse)
Bank of Israel
(As part of the TASE Clearinghouse
system)
/s/ CFR Italy Paribas, S.A. Monte Titoli S.p.A.
-------
Banca d'Italia
Ivory Coast Societe Generale de Banques Depositaire Central -
------- en Cote d'Ivoire Banque de Reglement
Jamaica Scotiabank Jamaica Trust Jamaica Central Securities
------- and Merchant Bank Limited Depository
/s/ CFR Japan The Fuji Bank, Limited Japan Securities Depository
------- Center (JASDEC)
Bank of Japan Net System
The Sumitomo Bank, Limited Japan Securities Depository
------- Center (JASDEC)
Bank of Japan Net System
Jordan HSBC Bank Middle East None
------- (as delegate of the Hongkong and
Shanghai Banking Corporation
Limited)
Kenya Barclays Bank of Kenya Limited Central Bank of Kenya
-------
/s/ CFR Republic of Korea The Hongkong and Shanghai Korea Securities Depository Corporation
------- Banking Corporation Limited
Latvia A/s Hansabank Latvian Central Depository
-------
Lebanon HSBC Bank Middle East Custodian and Clearing Center of
------- (as delegate of the Hongkong and Financial Instruments for Lebanon and
Shanghai Banking Corporation the Middle East (MIDCLEAR) S.A.L.
Limited)
Central Bank of Lebanon
Lithuania Vilniaus Bankas AB Central Securities Depository of
------- Lithuania
|
FUND
OFFICER
INITIALS COUNTRY SUBCUSTODIAN CENTRAL DEPOSITORY
-------- ------- ------------ ------------------
/s/ CFR Malaysia Standard Chartered Bank Malaysian Central Depository Sdn.
-------- Malaysia Berhad Bhd.
Bank Negara Malaysia,
Scripless Securities Trading and
Safekeeping Systems
Mauritius The Hongkong and Shanghai Central Depository & Settlement
-------- Banking Corporation Limited Co. Ltd.
/s/ CFR Mexico Citibank Mexico, S.A. S.D. INDEVAL
-------- (Instituto para el Deposito de
Valores)
Morocco Banque Commerciale du Maroc Maroclear
--------
/s/ CFR The Netherlands MeesPierson N.V. Nederlands Centraal Instituut voor
-------- Giraal Effectenverkeer B.V. (NECIGEF)
Namibia (via) Standard Bank of South Africa None
--------
/s/ CFR New Zealand ANZ Banking Group New Zealand Central Securities
-------- (New Zealand) Limited Depository Limited
/s/ CFR Norway Christiania Bank og Verdipapirsentralen (the Norwegian
-------- Kreditkasse ASA Central Registry of Securities)
Oman HSBC Bank Middle East Muscat Securities Market Depository &
-------- (as delegate of The Hongkong and Securities Registration Company
Shanghai Banking Corporation Limited)
/s/ CFR Pakistan Deutsche Bank AG Central Depository Company of
-------- Pakistan Limited
State Bank of Pakistan
Palestine HSBC Bank Middle East The Palestine Stock Exchange
-------- (as delegate of the Hongkong and
Shanghai Banking Corporation Limited)
/s/ CFR Panama BankBoston, N.A. None
--------
/s/ CFR Peru Citibank, N.A. Caja de Valores y Liquidaciones,
-------- CAVALIICLV S.A.
/s/ CFR Philippines Standard Chartered Bank Philippines Central Depository, Inc.
--------
|
Registry of Scripless Securities (ROSS) of the Bureau of Treasury
FUND
OFFICER
INITIALS COUNTRY SUBCUSTODIAN CENTRAL DEPOSITORY
-------- ------- ------------ ------------------
/s/ CFR Poland Citibank (Poland) S.A. National Depository of Securities
------- (Krajowy Depozyt Papierow
Wartosciowych SA)
Central Treasury Bills Registrar
/s/ CFR Portugal Banco Comercial Portugues Central de Valores Mobiliarios
-------
------- Qatar HSBC Bank Middle East Doha Securities Market
/s/ CFR Romania ING Bank N.V. National Securities Clearing,
------- Settlement and Depository Company
Bucharest Stock Exchange Registry
Division
National Bank of Romania
------- Russia Credit Suisse First Boston AO, Moscow None
(as delegate of Credit Suisse
First Boston, Zurich)
/s/ CFR Singapore The Development Bank Central Depository (Pte)
------- of Singapore Limited Limited
Monetary Authority of Singapore
/s/ CFR Slovak Republic Ceskoslovenska Obchodni Stredisko cennych papierov SR
------- Banka, A.S. Bratislava, a.s.
National Bank of Slovakia
/s/ CFR Slovenia Bank Austria Creditanstalt Klirinsko Depotna Druzba d.d.
------- d.d. Ljubljana.
/s/ CFR South Africa Standard Bank of South Africa Limited The Central Depository Limited
-------
Strate Ltd.
/s/ CFR Spain Banco Santander Central Servicio de Compensacion y
------- Hispano, S.A. Liquidacion de Valores, S.A.
Banco de Espana,
Central de Anotaciones en Cuenta
/s/ CFR Sri Lanka The Hongkong and Shanghai Central Depository System
------- Banking Corporation Limited (Pvt) Limited
------- Swaziland Standard Bank Swaziland Limited None
|
FOUND
OFFICER
INITIALS COUNTRY SUBCUSTODIAN CENTRAL DEPOSITORY
-------- ------- ------------ ------------------
/s/ CFR Sweden Skandinaviska Enskilda Banken Vardepapperscentralen, VPC AB
-------- (the Swedish Central Securities
Depository)
/s/ CFR Switzerland UBS AG SIS - SegaIntersettle
--------
/s/ CFR Taiwan-R.O.C. Central Trust of China Taiwan Securities Central
-------- or Depository Co., Ltd.
-------- --------------------------------
(Client Designated Subcustodian)
/s/ CFR Thailand Standard Chartered Bank Thailand Securities Depository
-------- Company Limited
-------- Trinidad & Tobago Republic Bank Limited None
-------- Tunisia Banque Internationale Societe Tunisienne Interprofessionelle pour
Arabe de Tunisie La Compensation et de Depots de
Valeurs Mobilieres
/s/ CFR Turkey Citibank, N.A. Takas ve Saklama Bankasi A.S.
-------- (TAKASBANK)
Central Bank of Turkey
/s/ CFR Ukraine ING Bank Ukraine National Bank of Ukraine
--------
/s/ CFR United Kingdom State Street Bank and Trust The Bank of England,
-------- Company, London branch Central Gilts Office and
Central Moneymarkets Office
/s/ CFR Uruguay BankBoston N.A. None
--------
/s/ CFR Venezuela Citibank, N.A. Central Bank of Venezuela
--------
-------- Vietnam The Hongkong and Shanghai None
Banking Corporation Limited
-------- Zambia Barclays Bank of Zambia Limited LuSE Central Shares Depository Limited
Bank of Zambia
-------- Zimbabwe Barclays Bank of Zimbabwe Limited None
|
FUND OFFICER INITIALS COUNTRY SUBCUSTODIAN CENTRAL DEPOSITORY -------- ------- ------------ ------------------ -------- Euroclear (The Euroclear System)/ State Street London Limited -------- Cedelbank S.A/State Street London Limited |
CERTIFIED BY:
/s/ CAROL F. RELIHAN 5-1-2000 ------------------------------- ------------- FUND'S AUTHORIZED OFFICER DATE |
ADDENDUM to that certain Master Custodian Contract dated as of May 1, 2000 (the "Agreement") between the entities set forth on Exhibit A thereto (each, a "Customer") and State Street Bank and Trust Company ("State Street").
State Street has developed and utilizes proprietary accounting and other systems in conjunction with the custodian services which State Street provides to the Customer. In this regard, State Street maintains certain information in databases under its control and ownership which it makes available to its customers (the "Remote Access Services").
State Street agrees to provide the Customer, and its designated investment advisors, consultants or other third parties authorized by State Street who agree to abide by the terms of this Addendum ("Authorized Designees") with access to In-Sight(SM) as described in Exhibit A (the "System") on a remote basis for the purpose of obtaining and analyzing reports and information.
The Customer agrees to comply, and to cause its Authorized Designees to comply, with remote access operating standards and procedures and with user identification or other password control requirements and other security procedures as may be issued from time to time by State Street for use of the System and access to the Remote Access Services. The Customer agrees to advise State Street immediately in the event that it learns or has reason to believe that any person to whom it has given access to the System or the Remove Access Services has violated or intends to violate the terms of this Addendum and the Customer will cooperate with State Street in seeking injunctive or other equitable relief. The Customer agrees to discontinue use of the System and Remote Access Services, if requested, for any security reasons cited by State Street.
Fees and charges for the use of the System and the Remote Access Services and related payment terms shall be as set forth in the custody fee schedule in effect from time to time between the parties (the "Fee Schedule"). The Customer shall be responsible for any tariffs, duties or taxes imposed or levied by any government or governmental agency by reason of the transactions contemplated by this Addendum, including, without limitation, federal, state and local taxes, use, value added and personal property taxes (other than income, franchise or similar taxes which may be imposed or assessed against State Street). Any claimed exemption from such tariffs, duties or taxes shall be supported by proper documentary evidence delivered to State Street.
The System and Remote Access Services described herein and the databases, computer programs, screen formats, report formats, interactive design techniques, formulae, processes, systems, software, knowhow, algorithms, programs, training aids, printed materials, methods, books, records, files, documentation and other information made available to the Customer by State Street as part of the Remote Access Services and through the use of the System and all copyrights, patents, trade secrets and other proprietary rights of
State Street related thereto are the exclusive, valuable and confidential property of State Street and its relevant licensors (the "Proprietary Information"). The Customer agrees on behalf of itself and its Authorized Designees to keep the Proprietary Information confidential and to limit access to its employees and Authorized Designees (under a similar duty of confidentiality) who require access to the System for the purposes intended. The foregoing shall not apply to Proprietary Information in the public domain or required by law to be made public.
The Customer agrees to use the Remote Access Services only in connection with the proper purposes of this Addendum. The Customer will not, and will cause its employees and Authorized Designees not to, (i) permit any third party to use the System or the Remote Access Services, (ii) sell, rent, license or otherwise use the System or the Remote Access Services in the operation of a service bureau or for any purpose other than as expressly authorized under this Addendum, (iii) use the System or the Remote Access Services for any fund, trust or other investment vehicle without the prior written consent of State Street, or (iv) allow or cause any information transmitted from State Street's databases, including data from third party sources, available through use of the System or the Remote Access Services, to be redistributed or retransmitted for other than use for or on behalf of the Customer, as State Street's customer.
The Customer agrees that neither it nor its Authorized Designees will modify the System in any way, enhance or otherwise create derivative works based upon the System, nor will the Customer or its Authorized Designees reverse engineer, decompile or otherwise attempt to secure the source code for all or any part of the System.
The Customer acknowledges that the disclosure of any Proprietary Information, or of any information which at law or equity ought to remain confidential, will immediately give rise to continuing irreparable injury to State Street inadequately compensable in damages at law and that State Street shall be entitled to obtain immediate injunctive relief against the breach or threatened breach of any of the foregoing undertakings, in addition to any other legal remedies which may be available.
State Street represents and warrants that it is the owner of and has the right to grant access to the System and to provide the Remote Access Services contemplated herein. Because of the nature of computer information technology and the necessity of relying upon third party sources, and data and pricing information obtained form third parties, the System and Remote Access Services are provided "AS IS", and the Customer and its Authorized Designees shall be solely responsible for the investment decisions, regulatory reports and statements produced using the Remote Access Services. State Street and its relevant licensors will not be liable to the Customer or its Authorized Designees for any direct or indirect, special, incidental, punitive or consequential damages arising out of or in any way connected with the System or the Remote Access Services, nor shall either party be responsible for delays or nonperformance under this Addendum arising out of any cause or event beyond such party's control.
State Street will take reasonable steps to ensure that its products (and those of its third-party suppliers) reflect the available state of the art technology to offer products that are Year 2000 compliant, including, but not limited to, century recognition of dates, calculations that correctly compute same century and multi century formulas and date values, and interface values that reflect the date issues arising between now and the next one-hundred years, and if any changes are required, State Street will make the changes to its products at no cost to you and in a commercially reasonable time frame and will require third-party suppliers to do likewise. The Customer will do likewise for its systems.
EXCEPT AS EXPRESSLY SET FORTH IN THIS ADDENDUM, STATE STREET FOR ITSELF AND ITS RELEVANT LICENSORS EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES CONCERNING THE SYSTEM AND THE SERVICES TO BE RENDERED HEREUNDER, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTIBILITY OR FITNESS FOR A PARTICULAR PURPOSE.
State Street will defend or, at our option, settle any claim or action brought against the Customer to the extent that it is based upon an assertion that access to the System or use of the Remote Access Services by the Customer under this Addendum constitutes direct infringement of any United States patent or copyright or misappropriation of a trade secret, provided that the Customer notifies State Street promptly in writing of any such claim or proceeding and cooperates with State Street in the defense of such claim or proceeding. Should the System or the Remote Access Services or any part thereof become, or in State Street's opinion be likely to become, the subject of a claim of infringement or the like under the patent or copyright or trade secret laws of the United States, State Street shall have the right, at State Street's sole option, to (i) procure for the Customer the right to continue using the System or the Remote Access Services, (ii) replace or modify the System or the Remote Access Services so that the System or the Remote Access Services becomes noninfringing, or (iii) terminate this Addendum without further obligation.
Either party to the Custodian Agreement may terminate this Addendum (i) for any reason by giving the other party at least one-hundred and eighty (180) days' prior written notice in the case of notice of termination by State Street to the Customer or thirty (30) days' notice in the case of notice from the Customer to State Street of termination, or (ii) immediately for failure of the other party to comply with any material term and condition of the Addendum by giving the other party written notice of termination. This Addendum shall in any event terminate within ninety (90) days after the termination of the Custodian Agreement. In the event of termination, the Customer will return to State Street all copies of documentation and other confidential information in its possession or in the possession of its Authorized Designees. The foregoing provisions with respect to confidentiality and infringement will survive termination for a period of three (3) years.
No term hereof is intended to alter the standard of care applicable to State Street, as set forth in the Agreement, with respect to data made available to the Customer via the Remote Access Services. This Addendum and the exhibit hereto constitutes the entire understanding of the parties to the Custodian Agreement with respect to access to the System and the Remote Access Services. This Addendum cannot be modified or altered except in a writing duly executed by each of State Street and the Customer and shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts.
By its execution of the Custodian Agreement, the Customer, for itself and its Authorized Designees, accepts the terms of this Addendum.
IN-SIGHT(SM)
System Product Description
In-Sight(SM) provides information delivery and on-line access to State Street. In-Sight(SM) allows users a single point of entry into the many views of data created by the diverse systems and applications. Reports and data from systems such as Investment Policy Monitor(SM), Multicurrency Horizon(SM), Securities Lending, Performance & Analytics can be accessed though In-Sight(SM). This Internet-enabled application is designed to run from a Web browser and perform across low-speed data line or corporate high-speed backbones. In-Sight(SM) also offers users a flexible toolset, including an ad-hoc query function, a custom graphics package, a report designer, and a scheduling capability. Data and reports offered through In-Sight(SM) will continue to increase in direct proportion with the customer roll out, as it is viewed as the information delivery system will grow with State Street's customers.
EXHIBIT g(2)(b)
This Amendment to the Custodian Contract is made as of May 1, 2000, by and between each entity set forth in Appendix A hereto (each such entity referred to herein as the "Fund") and State Street Bank and Trust Company (the "Custodian"). Capitalized terms used in this Amendment without definition shall have the respective meanings ascribed to such terms in the Custodian Contract referred to below.
WHEREAS, each Fund and the Custodian entered into a Master Custodian Contract dated as of May 1, 2000 (as amended and in effect from time to time, the "Contract"); and
WHEREAS, each Fund so authorized may issue shares in separate series, with each such series representing interests in a separate portfolio of securities and other assets, (each such series, together with all other series subsequently established by each Fund and made subject to the Contract in accordance with the terms thereof, shall be referred to as a "Portfolio", and, collectively, the "Portfolios"); and
WHEREAS, each Fund and the Custodian desire to amend certain provisions of the Contract to reflect revisions to Rule 17f-5 ("Rule 17f-5") promulgated under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, each Fund and the Custodian desire to amend and restate certain other provisions of the Contract relating to the terms and conditions of the custody of assets of each of the Portfolios held outside of the United States.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter contained, the parties hereby agree to amend the Contract, pursuant to the terms thereof, as follows:
I. Article 3 of the Contract is hereby deleted, and Articles 4 through 25 of the Contract are hereby amended, as of the effective date of this Amendment, by renumbering same as Articles 5 through 26, respectively.
II. New Articles 3 and 4 of the Contract are hereby added, as of the effective date of this Amendment, as set forth below.
Capitalized terms in this Article 3 of the Contract shall have the following meanings:
"Country Risk" means all factors reasonably related to the systemic risk of holding Foreign Assets in a particular country including, but not limited to, such country's political environment; economic and financial infrastructure (including any Mandatory
Securities Depositories operating in the country); prevailing or developing custody and settlement practices; laws and regulations applicable to the safekeeping and recovery of Foreign Assets held in custody in that country; and factors comprising the "prevailing country risk", including the effects of foreign law on the safekeeping of Portfolio assets, the likelihood of expropriation, nationalization, freezing, or confiscation of a Portfolio's assets and any reasonably foreseeable difficulties in repatriating a Portfolio's assets.
"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule 17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as defined in Rule 17f-5), a bank holding company meeting the requirements of an Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate action of the SEC, or a foreign branch of a Bank (as defined in Section 2(a)(5) of the 1940 Act) meeting the requirements of a custodian under Section 17(f) of the 1940 Act, except that the term does not include Mandatory Securities Depositories.
"Foreign Assets" means any of a Portfolio's investments (including foreign currencies) for which the primary market is outside the United States, currency contracts that are settled outside the United States and such cash and cash equivalents as are reasonably necessary to effect a Portfolio's transactions in such investments.
"Foreign Custody Manager" has the meaning set forth in section (a)(2) of Rule 17f-5.
"Mandatory Securities Depository" means a foreign securities depository or
clearing agency that, either as a legal or practical matter, must be used if a
Fund determines to place Foreign Assets in a country outside the United States
(i) because required by law or regulation; (ii) because securities cannot be
withdrawn from such foreign securities depository or clearing agency; or (iii)
because maintaining or effecting trades in securities outside the foreign
securities depository or clearing agency is not consistent with prevailing or
developing custodial or market practices.
Each applicable Fund, by resolution adopted by its Board of Trustees or Board of Directors (as appropriate and in each case, the "Board"), hereby delegates to the Custodian, subject to Section (b) of Rule 17f-5, the responsibilities set forth in this Article 3 with respect to Foreign Assets held outside the United States, and the Custodian hereby accepts such delegation, as Foreign Custody Manager of each Portfolio.
The Foreign Custody Manager shall be responsible for performing the delegated responsibilities defined below only with respect to (a) the countries listed on Schedule A hereto as approved by the applicable Fund's Board, which list of Board-approved countries may be amended from time to time by a Fund with the agreement of the Foreign Custody Manager, and (b) the custody arrangements set forth on such Schedule A. The Foreign Custody Manager shall list on Schedule A the Eligible Foreign Custodians
selected by the Foreign Custody Manager to maintain the assets of each
Portfolio, which list of Eligible Foreign Custodians may be amended from time to
time in the sole discretion of the Foreign Custody Manager. Mandatory Securities
Depositories are listed on Schedule B to this Contract, which Schedule B may be
amended from time to time by the Foreign Custody Manager. The Foreign Custody
Manager will provide amended versions of Schedules A and B in accordance with
Section 3.7 of this Article 3.
Upon the receipt by the Foreign Custody Manager of Proper Instructions to open an account, or to place or maintain Foreign Assets, in a country listed on Schedule A, and the fulfillment by a Fund of the account opening requirements for such country (if any), the Foreign Custody Manager shall be deemed to have been appointed by the Board as Foreign Custody Manager with respect to that country and to have accepted the delegation. Execution of this Amendment by a Fund shall be deemed to be a Proper Instruction to open an account, or to place or maintain Foreign Assets, in each Board-approved country listed on Schedule A in which the Custodian has previously placed or currently maintains Foreign Assets pursuant to the terms of the Contract. Following the receipt of Proper Instructions directing the Foreign Custody Manager to close the account of a Portfolio with the Eligible Foreign Custodian selected by the Foreign Custody Manager in a designated country, the delegation by the Board to the Custodian as Foreign Custody Manager for that country shall be deemed to have been withdrawn and the Custodian shall immediately cease to be the Foreign Custody Manager of the Portfolio with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated responsibilities with respect to a designated country upon written notice to the applicable Fund. Thirty days (or such longer period as to which the parties agree in writing) after receipt of any such notice by the applicable Fund, the Custodian shall have no further responsibility as Foreign Custody Manager to a Portfolio with respect to the country as to which the Custodian's acceptance of delegation is withdrawn.
Subject to the provisions of this Article 3, the Foreign Custody Manager may place and maintain the Foreign Assets in the care of the Eligible Foreign Custodians selected by the Foreign Custody Manager in each country listed as "approved" on Schedule A, as such Schedule is amended from time to time.
In performing its delegated responsibilities as Foreign Custody Manager to place or maintain the Foreign Assets with an Eligible Foreign Custodian, the Foreign Custody Manager shall determine that the Foreign Assets will be subject to reasonable care, based on the standards applicable to custodians in the country in which the Foreign Assets will be held by that Eligible Foreign Custodian, after considering all factors relevant to the safekeeping of such assets, including, without limitation, the factors specified in Rule 17f-5(c)(1).
The Foreign Custody Manager shall determine that the contract (or the rules or established practices or procedures in the case of an Eligible Foreign Custodian that is a foreign securities depository or clearing agency) governing the foreign custody arrangements with each Eligible Foreign Custodian selected by the Foreign Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).
In each case in which the Foreign Custody Manager maintains Foreign Assets with an Eligible Foreign Custodian, selected by the Foreign Custody Manager, the Foreign Custody Manager shall maintain a system to monitor (i) the appropriateness of maintaining the Foreign Assets with such Eligible Foreign Custodian, and (ii) the contract governing the custody arrangements established by the Foreign Custody Manager with the Eligible Foreign Custodian (or the rules or established practices and procedures in the case of an Eligible Foreign Custodian selected by the Foreign Custody Manager which is a foreign securities depository or clearing agency that is not a Mandatory Securities Depository). The Foreign Custody Manager shall provide the Board with information at least annually as to the factors used in such monitoring system. In the event the Foreign Custody Manager determines that the custody arrangements with an Eligible Foreign Custodian that it has selected are no longer appropriate, the Foreign Custody Manager shall promptly transfer each Fund's Foreign Assets to another Eligible Foreign Custodian in the market and shall notify the Board in accordance with Section 3.7 hereunder.
For purposes of this Article 3, each Fund's Board shall be deemed to have considered and determined to accept such Country Risk as is incurred by placing and maintaining the Foreign Assets in each country for which the Custodian is serving as Foreign Custody Manager of a Portfolio, and such Board shall be deemed to be monitoring on a continuing basis such Country Risk to the extent that such Board considers necessary or appropriate.
Notwithstanding any provision of this Contract to the contrary, each Fund on behalf of the Portfolios and the Custodian expressly acknowledge and agree that the Foreign Custody Manager shall not be delegated any responsibilities under this Article 3 with respect to Mandatory Securities Depositories, and that the determination by or on behalf of each Fund's Board to place the Foreign Assets in a particular country shall be deemed to include the determination to place such Foreign Assets eligible for any Mandatory Securities Depository with such Mandatory Securities Depository, whether the Mandatory Securities Depository exists at the time the Foreign Assets are acquired, or after the acquisition thereof.
In performing the responsibilities delegated to it, the Foreign Custody Manager shall exercise reasonable care, prudence and diligence such as a person having responsibility for the safekeeping of assets of management investment companies registered under the 1940 Act would exercise.
The Foreign Custody Manager shall report at least quarterly on the Foreign Assets held with each Eligible Foreign Custodian and in connection therewith if applicable, provide to the Board amended Schedules A or B at the end of the calendar quarter in which an amendment to either Schedule has occurred. The Foreign Custody Manager will make written reports notifying the Board of any other material change in the foreign custody arrangements of the Portfolios described in this Article 3 promptly after the occurrence of the material change.
The Foreign Custody Manager represents to each Fund that it is a U.S. Bank as defined in section (a)(7) of Rule 17f-5.
Each Fund represents to the Custodian that its Board has determined that it is reasonable for such Board to rely on the Custodian to perform the responsibilities delegated pursuant to this Contract to the Custodian as the Foreign Custody Manager of each Portfolio.
Each Fund's Board's delegation to the Custodian as Foreign Custody Manager of a Portfolio shall be effective as of the date hereof and shall remain in effect until terminated at any time, without penalty, by written notice from the terminating party to the non-terminating party. Termination will become effective thirty days after receipt by the non-terminating party of such notice. The provisions of Section 3.3 hereof shall govern the delegation to and termination of the Custodian as Foreign Custody Manager of the applicable Fund with respect to designated countries.
If at any time prior to termination of this Amendment the Custodian as a matter of standard business practice, accepts delegation as Foreign Custody Manager for its U.S. mutual fund clients on terms materially different than set forth in this Amendment, the Custodian hereby agrees to negotiate with each Fund in good faith with respect thereto.
Terms used in this Article 4 and not defined below shall have the meanings ascribed them in the Contract or in this Amendment:
"Foreign Securities System" means either a clearing agency or a securities depository which is listed on Schedule A hereto or a Mandatory Securities Depository.
"Foreign Sub-Custodian" means a foreign banking institution serving as an Eligible Foreign Custodian.
The Custodian shall identify on its books as belonging to the Portfolios the foreign securities held by each Foreign Sub-Custodian or Foreign Securities System. The Custodian may hold foreign securities for all of its customers, including the Portfolios, with any Foreign Sub-Custodian in an account that is identified as belonging to the Custodian for the benefit of its customers, provided however, that (i) the records of the Custodian with respect to foreign securities of the Portfolios which are maintained in such account shall identify those securities as belonging to the Portfolios and (ii), to the extent permitted and customary in the market in which the account is maintained, the Custodian shall require that securities so held by the Foreign Sub-Custodian be held separately from any assets of such Foreign Sub-Custodian or of other customers of such Foreign Sub-Custodian.
Foreign securities shall be maintained in a Foreign Securities System in a designated country only through arrangements implemented by the Foreign Sub-Custodian in such country pursuant to the terms of this Contract.
The Custodian or a Foreign Sub-Custodian shall release and deliver foreign securities of a Portfolio held by such Foreign Sub-Custodian, or in a Foreign Securities System account, only upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases:
(i) upon sale of such foreign securities for the applicable Portfolio in accordance with reasonable market practice in the country where such Foreign Assets are held or traded, including, without limitation: (A)
delivery against expectation of receiving later payment; or (B), in the case of a sale effected through a Foreign Securities System, in accordance with the rules governing the operation of the Foreign Securities System;
(ii) in connection with any repurchase agreement related to foreign securities;
(iii) to the depository agent in connection with tender or other similar offers for foreign securities of the applicable Portfolio;
(iv) to the issuer thereof or its agent when such foreign securities are called, redeemed, retired or otherwise become payable;
(v) to the issuer thereof, or its agent, for transfer into the name of the Custodian (or the name of the respective Foreign Sub-Custodian or of any nominee of the Custodian (or such Foreign Sub-Custodian)) or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units;
(vi) to brokers, clearing banks or other clearing agents for examination or trade execution in accordance with reasonable market practices in the country where such securities are held or traded; provided that in any such case the Sub-Custodian shall have no responsibility or liability for any loss arising from the delivery of such securities prior to receiving payment for such securities except as may arise from the Sub-Custodian's own negligence or willful misconduct;
(vii) for exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the securities of the issuer of such securities, or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement;
(viii) in the case of warrants, rights or similar foreign securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities;
(ix) for delivery as security in connection with any borrowing by any Fund requiring a pledge of assets by the applicable Portfolio;
(x) in connection with trading in options and futures contracts, including delivery as original margin and variation margin;
(xi) in connection with the lending of foreign securities; and
(xii) for any other proper corporate purpose, but only upon receipt of, in addition to Proper Instructions, a copy of a resolution of the applicable
Board or of an Executive Committee of the applicable Board so authorized by the Board, signed by an officer of the applicable Fund and certified by its Secretary or an Assistant Secretary that the resolution was duly adopted and is in full force and effect (a "Certified Resolution"), specifying the Foreign Assets to be delivered, setting forth the purpose for which such delivery is to be made, declaring such purpose to be a proper corporate purpose, and naming the person or persons to whom delivery of such Foreign Assets shall be made.
Upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall pay out, or direct the respective Foreign Sub-Custodian or the respective Foreign Securities System to pay out, moneys of a Portfolio in the following cases only:
(i) upon the purchase of foreign securities for the applicable Portfolio, unless otherwise directed by Proper Instructions, in accordance with reasonable market settlement practice in the country where such foreign securities are held or traded, including, without limitation: (A) delivering money to the seller thereof or to a dealer therefor (or an agent for such seller or dealer) against expectation of receiving later delivery of such foreign securities; or (B) in the case of a purchase effected through a Foreign Securities System, in accordance with the rules governing the operation of such Foreign Securities System;
(ii) in connection with the conversion, exchange or surrender of foreign securities of the applicable Portfolio;
(iii) for the payment of any expense or liability of the applicable
Portfolio including but not limited to the following payments:
interest, taxes, investment advisory fees, transfer agency
fees, fees under this Contract, legal fees, accounting fees,
and other operating expenses;
(iv) for the purchase or sale of foreign exchange or foreign exchange contracts for the applicable Portfolio, including transactions executed with or through the Custodian or its Foreign Sub-Custodians;
(v) in connection with trading in options and futures contracts, including delivery as original margin and variation margin;
(vii) in connection with the borrowing or lending of foreign securities; and
(viii) for any other proper purpose, but only upon receipt of, in addition to Proper Instructions, a Certified Resolution specifying the amount of such
payment, setting forth the purpose for which such payment is to be made, declaring such purpose to be a proper purpose, and naming the person or persons to whom such payment is to be made.
Notwithstanding any provision of this Contract to the contrary, settlement and payment for Foreign Assets received for the account of a Portfolio and delivery of Foreign Assets maintained for the account of a Portfolio may be effected in accordance with the customary established securities trading or processing practices and procedures in the country or market in which the transaction occurs generally accepted by Institutional Clients, including, without limitation, delivering Foreign Assets to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) against a receipt with the expectation of receiving later payment for such Foreign Assets from such purchaser or dealer. For purposes of this Contract, "Institutional Clients" means U.S. registered investment companies or major U.S. based commercial banks, insurance companies, pension funds or substantially similar institutions which, as a part of their ordinary business operations, purchase or sell securities and make use of global custody services.
The Custodian shall provide to each Fund's Board the information with respect to custody and settlement practices in countries in which the Custodian employs a Foreign Sub-Custodian, including without limitation information relating to Foreign Securities Systems, described on Schedule C hereto at the time or times set forth on such Schedule. The Custodian may revise Schedule C from time to time, provided that no such revision shall result in each Fund's Board being provided with substantively less information than had been previously provided hereunder and, provided further, that the Custodian shall in any event provide to each Fund's Board and to A I M Advisors, Inc. annually the following information and opinions with respect to the Board-approved countries listed on Schedule A:
(i) legal opinions relating to whether local law restricts with
respect to U.S. registered mutual funds (a) access of a fund's
independent public accountants to books and records of a
Foreign Sub-Custodian or Foreign Securities System, (b) a
fund's ability to recover in the event of bankruptcy or
insolvency of a Foreign Sub-Custodian or Foreign Securities
System, (c) a fund's ability to recover in the event of a loss
by a Foreign Sub-Custodian or Foreign Securities System, and
(d) the ability of a foreign investor to convert cash and cash
equivalents to U.S. dollars;
(ii) summary of information regarding Foreign Securities Systems; and
(iii) country profile information containing market practice for (a) delivery versus payment, (b) settlement method, (c) currency restrictions, (d) buy-in practices, (e) foreign ownership limits, and (f) unique market arrangements.
The foreign securities maintained in the custody of a Foreign Custodian (other than bearer securities) shall be registered in the name of the applicable Fund (on behalf of the
applicable Portfolio) or in the name of the Custodian or in the name of any Foreign Sub-Custodian or in the name of any nominee of the foregoing, and the applicable Fund agrees to hold any such nominee harmless from any liability as a holder of record of such foreign securities, except to the extent that the applicable Fund incurs loss or damage due to failure of such nominee to meet its standard of care as set forth in the Contract. The Custodian or a Foreign Sub-Custodian shall not be obligated to accept securities on behalf of the applicable Fund (on behalf of the applicable Portfolio) under the terms of this Contract unless the form of such securities and the manner in which they are delivered are in accordance with reasonable market practice.
Sub-Custodians from issuers of the foreign securities being held for the account
of a Portfolio. With respect to tender or exchange offers, the Custodian shall
transmit promptly to the applicable Fund written information so received by the
Custodian from issuers of the foreign securities whose tender or exchange is
sought or from the party (or its agents) making the tender or exchange offer.
Subject to the standard of care to which the Custodian is held under this
Contract, the Custodian shall not be liable for any untimely exercise of any
tender, exchange or other right or power in connection with foreign securities
or other property of the applicable Portfolio at any time held by it unless (i)
the Custodian or the respective Foreign Sub-Custodian is in actual possession of
such foreign securities or property and (ii) the Custodian receives Proper
Instructions with regard to the exercise of any such right or power, and both
(i) and (ii) occur at least two New York business days prior to the date on
which the Custodian is to take action to exercise such right or power.
other relevant facts concerning tax treatment of such Fund and further to inform the Custodian if such Fund is or becomes the beneficiary of any special ruling or treatment not applicable to the general nationality and category of entity of which such Fund is a part under general laws and treaty provisions. The Custodian shall be entitled to rely on any information supplied by the applicable Fund. The Custodian may engage reasonable professional advisors disclosed to each Fund by the Custodian, which may include attorneys, accountants or financial institutions in the regular business of investment administration and may rely upon advice received therefrom.
The Custodian shall be liable to each Fund on account of any actions or omissions of any Foreign Sub-Custodian to the same extent as such Foreign Sub-Custodian shall be liable to the Custodian.
The Custodian shall maintain separate and distinct records for each Portfolio and the assets allocated solely with such Portfolio shall be held and accounted for separately from the assets of each Fund associated solely with any other Portfolio. The debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular Portfolio shall be enforceable against the assets of such Portfolio only, and not against the assets of any Fund generally or the assets of any other Portfolio.
III. Except as specifically superseded or modified herein, the terms and provisions of the Contract shall continue to apply with full force and effect. In the event of any conflict between the terms of the Contract prior to this Amendment and this Amendment, the terms of this Amendment shall prevail. If the Custodian is delegated the responsibilities of Foreign Custody Manager pursuant to the terms of Article 3 hereof, in the event of any conflict between the provisions of Articles 3 and 4 hereof, the provisions of Article 3 shall prevail.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be executed in its name and behalf by its duly authorized representative as of the date first above written.
WITNESSED BY: STATE STREET BANK AND TRUST COMPANY
/s/ STEPHANIE L. POSTER By: /s/ RONALD E. LOGUE ---------------------------- ---------------------------------- Stephanie L. Poster Name: Ronald E. Logue Vice President Title: Vice Chairman |
WITNESSED BY:
EACH OF THE ENTITIES SET FORTH ON
APPENDIX A ATTACHED HERETO
/s/ STEPHEN I. WINER By: /s/ CAROL F. RELIHAN ---------------------------- ---------------------------------- Name: Stephen I. Winer Name: Carol F. Relihan Title: Assistant Secretary Title: Senior Vice President |
APPENDIX A
AIM ADVISOR FUNDS, INC. AIM VARIABLE INSURANCE FUNDS
o AIM Advisor Flex Fund o AIM V.I. Aggressive Growth Fund
o AIM Advisor International Fund o AIM V.I. Balanced Fund
o AIM Advisor Large Cap Value Fund o AIM V.I. Blue Chip Fund
o AIM Advisor Real Estate Fund o AIM V.I. Capital Appreciation Fund
o AIM V.I. Capital Development Fund
AIM EQUITY FUNDS, INC. o AIM V.I. Dent Demographic Trends Fund
o AIM Aggressive Growth Fund o AIM V.I. Diversified Income Fund
o AIM Blue Chip Fund o AIM V.I. Global Growth and Income Fund
o AIM Capital Development Fund o AIM V.I. Global Utilities Fund
o AIM Charter Fund o AIM V.I. Government Securities Fund
o AIM Constellation Fund o AIM V.I. Growth and Income Fund
o AIM Dent Demographic Trends Fund o AIM V.I. Growth Fund
o AIM Emerging Growth Fund o AIM V.I. High Yield Fund
o AIM Large Cap Basic Value Fund o AIM V.I. International Equity Fund
o AIM Large Cap Growth Fund o AIM V.I. Money Market Fund
o AIM Mid Cap Growth Fund o AIM V.I. Telecommunications and
o AIM Weingarten Fund Technology Fund
o AIM V.I. Value Fund
AIM FUNDS GROUP
o AIM Balanced Fund AIM FLOATING RATE FUND
o AIM Global Utilities Fund
o AIM High Yield Fund AIM GROWTH SERIES
o AIM Income Fund
o AIM Intermediate Government Fund o AIM Basic Value Fund
o AIM Money Market Fund o AIM New Pacific Growth Fund
o AIM Select Growth Fund o AIM Euroland Growth Fund
o AIM Value Fund o AIM Japan Growth Fund
o AIM Mid Cap Equity Fund
AIM INTERNATIONAL FUNDS, INC. o AIM Small Cap Growth Fund
o AIM Asian Growth Fund
o AIM European Development Fund AIM INVESTMENT FUNDS
o AIM Global Aggressive Growth Fund
o AIM Global Growth Fund o AIM Global Health Care Fund
o AIM Global Income Fund o AIM Global Telecommunications and Technology Fund
o AIM International Equity Fund o AIM Latin American Growth Fund
o AIM Developing Markets Fund
AIM INVESTMENT SECURITIES FUNDS o AIM Global Government Income Fund
o AIM High Yield Fund II o AIM Strategic Income Fund
o AIM Global Growth & Income Fund
AIM SPECIAL OPPORTUNITIES FUNDS
o AIM Small Cap Opportunities Fund AIM SERIES TRUST
o AIM Mid Cap Opportunities Fund o AIM Global Trends Fund
o AIM Large Cap Opportunities Fund
AIM SUMMIT FUND, INC.
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o GLOBAL INVESTMENT PORTFOLIO
o Global Consumer Products and
Services Portfolio
o Global Financial Services Portfolio
o Global Infrastructure Portfolio
o Global Resources Portfolio
o GROWTH PORTFOLIO
o Small Cap Portfolio
o Value Portfolio
o EMERGING MARKETS DEBT PORTFOLIO
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Argentina Citibank, N.A. --
Australia Westpac Banking Corporation --
Austria Erste Bank der Oesterreichischen --
Sparkassen AG
Bahrain HSBC Bank Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Bangladesh Standard Chartered Bank --
Belgium Fortis Bank NV/as. --
Bermuda The Bank of Bermuda Limited --
Bolivia Citibank, N.A. --
Botswana Barclays Bank of Botswana Limited --
Brazil Citibank, N.A. --
Bulgaria ING Bank N.V. --
Canada State Street Trust Company Canada --
Chile Citibank, N.A. --
People's Republic The Hongkong and Shanghai --
of China Banking Corporation Limited,
Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A. --
Sociedad Fiduciaria
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SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Costa Rica Banco BCT S.A. --
Croatia Privredna Banka Zagreb d.d. --
Cyprus The Cyprus Popular Bank Ltd. --
Czech Republic Ceskoslovenska Obchodni --
Banka, A.S.
Denmark Den Danske Bank --
Ecuador Citibank, N.A. --
Egypt Egyptian British Bank --
(as delegate of The Hongkong
and Shanghai Banking Corporation
Limited)
Estonia Hansabank --
Finland Merita Bank Plc. --
France Paribas, S.A. --
Germany Dresdner Bank AG --
Ghana Barclays Bank of Ghana Limited --
Greece National Bank of Greece S.A. Bank of Greece,
System for Monitoring Transactions in
Securities in Book-Entry Form
Hong Kong Standard Chartered Bank --
Hungary Citibank Rt. --
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STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Iceland Icebank Ltd.
India Deutsche Bank A.G. --
The Hongkong and Shanghai
Banking Corporation Limited
Indonesia Standard Chartered Bank --
Ireland Bank of Ireland --
Israel Bank Hapoalim B.M. --
Italy Paribas, S.A. --
Ivory Coast Societe Generale de Banques --
en Cote d'Ivoire
Jamaica Scotiabank Jamaica Trust and Merchant --
Bank Limited
Japan The Fuji Bank, Limited Japan Securities Depository
Center (JASDEC)
The Sumitomo Bank, Limited
Jordan HSBC Bank Middle East --
(as delegate of the Hongkong and
Shanghai Banking Corporation
Limited)
Kenya Barclays Bank of Kenya Limited --
Republic of Korea The Hongkong and Shanghai Banking --
Corporation Limited
Latvia A/s Hansabank --
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SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Lebanon HSBC Bank Middle East
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Lithuania Vilniaus Bankas AB --
Malaysia Standard Chartered Bank --
Malaysia Berhad
Mauritius The Hongkong and Shanghai --
Banking Corporation Limited
Mexico Citibank Mexico, S.A. --
Morocco Banque Commerciale du Maroc --
Namibia (via) Standard Bank of South Africa --
The Netherlands MeesPierson N.V. --
New Zealand ANZ Banking Group --
(New Zealand) Limited
Norway Christiania Bank og --
Kreditkasse ASA
Oman HSBC Bank Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Pakistan Deutsche Bank A.G. --
Palestine HSBC Bank Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Panama BankBoston, N.A. --
Peru Citibank, N.A. --
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SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Philippines Standard Chartered Bank --
Poland Citibank (Poland) S.A. --
Portugal Banco Comercial Portugues --
Qatar HSBC Bank Middle East --
Romania ING Bank N.V. --
Russia Credit Suisse First Boston AO, Moscow --
(as delegate of Credit Suisse
First Boston, Zurich)
Singapore The Development Bank --
of Singapore Limited
Slovak Republic Ceskoslovenska Obchodni Banka, A.S. --
Slovenia Bank Austria Creditanstalt d.d. Ljubljana --
South Africa Standard Bank of South Africa Limited --
Spain Banco Santander Central Hispano, S.A. --
Sri Lanka The Hongkong and Shanghai --
Banking Corporation Limited
Swaziland Standard Bank Swaziland Limited --
Sweden Skandinaviska Enskilda Banken --
Switzerland UBS AG --
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SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Taiwan - R.O.C Central Trust of China --
Thailand Standard Chartered Bank --
Trinidad & Tobago Republic Bank Limited --
Tunisia Banque Internationale Arabe de Tunisie --
Turkey Citibank, N.A. --
Ukraine ING Bank Ukraine --
United Kingdom State Street Bank and Trust Company, --
London Branch
Uruguay BankBoston N.A. --
Venezuela Citibank, N.A. --
Vietnam The Hongkong and Shanghai --
Banking Corporation Limited
Zambia Barclays Bank of Zambia Limited --
Zimbabwe Barclays Bank of Zimbabwe Limited --
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Euroclear (The Euroclear System)/State Street London Limited
Cedelbank S.A. (Cedel Bank, societe anonyme)/State Street London Limited
INTERSETTLE (for EASDAQ Securities)
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Argentina Caja de Valores S.A.
Australia Austraclear Limited
Reserve Bank Information and Transfer System
Austria Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)
Belgium Caisse Interprofessionnelle de Depots et de Virements
de Titres S.A.
Banque Nationale de Belgique
Brazil Companhia Brasileira de Liquidacao e Custodia
Bulgaria Central Depository AD
Bulgarian National Bank
Canada Canadian Depository for Securities Limited
Chile Deposito Central de Valores S.A.
People's Republic Shanghai Securities Central Clearing & Registration
of China Corporation
Shenzhen Securities Clearing Co., Ltd.
Colombia Deposito Centralizado de Valores
Costa Rica Central de Valores S.A.
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* Mandatory depositories include entities for which use is mandatory as a matter of law or effectively mandatory as a matter of market practice.
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Croatia Ministry of Finance
National Bank of Croatia
Sredisnja Depozitarna Agencija
Czech Republic Stredisko cennych papirfi
Czech National Bank
Denmark Vaerdipapircentralen (Danish Securities Center)
Egypt Misr Company for Clearing, Settlement, and Depository
Estonia Eesti Vaartpaberite Keskdepositoorium
Finland Finnish Central Securities Depository
France Societe Interprofessionnelle pour la Compensation des
Valeurs Mobilieres
Germany Deutsche Borse Clearing AG
Greece Central Securities Depository
(Apothetirion Titlon AE)
Hong Kong Central Clearing and Settlement System
Central Moneymarkets Unit
Hungary Kozponti Elszamolohaz es Ertektar
(Budapest) Rt. (KELER)
[Mandatory for Gov't Bonds and dematerialized
equities only; SSB does not use for other securities]
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* Mandatory depositories include entities for which use is mandatory as a matter of law or effectively mandatory as a matter of market practice.
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
India The National Securities Depository Limited
Central Depository Services India Limited
Reserve Bank of India
Indonesia Bank Indonesia
PT Kustodian Sentral Efek Indonesia
Ireland Central Bank of Ireland
Securities Settlement Office
Israel Tel Aviv Stock Exchange Clearing
House Ltd. (TASE Clearinghouse)
Bank of Israel
(As part of the TASE Clearinghouse system)
Italy Monte Titoli S.p.A.
Banca d'Italia
Ivory Coast Depositaire Central - Banque de Reglement
Jamaica Jamaica Central Securities Depository
Japan Bank of Japan Net System
Kenya Central Bank of Kenya
Republic of Korea Korea Securities Depository Corporation
Latvia Latvian Central Depository
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* Mandatory depositories include entities for which use is mandatory as a matter of law or effectively mandatory as a matter of market practice.
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Lebanon Custodian and Clearing Center of Financial
Instruments for Lebanon and the Middle East
(MIDCLEAR) S.A.L.
The Central Bank of Lebanon
Lithuania Central Securities Depository of Lithuania
Malaysia Malaysian Central Depository Sdn. Bhd.
Bank Negara Malaysia,
Scripless Securities Trading and Safekeeping System
Mauritius Central Depository & Settlement Co. Ltd.
Mexico S.D. INDEVAL
(Instituto para el Deposito de Valores)
Morocco Maroclear
The Netherlands Nederlands Centraal Instituut voor Giraal
Effectenverkeer B.V. (NECIGEF)
New Zealand New Zealand Central Securities Depository Limited
Norway Verdipapirsentralen (the Norwegian Central Registry
of Securities)
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* Mandatory depositories include entities for which use is mandatory as a matter of law or effectively mandatory as a matter of market practice.
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Oman Muscat Securities Market Depository & Securities
Registration Company
Pakistan Central Depository Company of Pakistan Limited
State Bank of Pakistan
Palestine The Palestine Stock Exchange
Peru Caja de Valores y Liquidaciones
CAVALIICLV S.A.
Philippines Philippines Central Depository, Inc.
Registry of Scripless Securities
(ROSS) of the Bureau of Treasury
Poland National Depository of Securities
(Krajowy Depozyt Papierow Wartosciowych SA)
Central Treasury Bills Registrar
Portugal Central de Valores Mobiliarios
Qatar Doha Securities Market
Romania National Securities Clearing, Settlement and
Depository Company
Bucharest Stock Exchange Registry Division
National Bank of Romania
Singapore Central Depository (Pte)
Limited
Monetary Authority of Singapore
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* Mandatory depositories include entities for which use is mandatory as a matter of law or effectively mandatory as a matter of market practice.
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Slovak Republic Stredisko cennych papierov SR
Bratislava, a.s.
National Bank of Slovakia
Slovenia Klirinsko Depotna Druzba d.d.
South Africa The Central Depository Limited
Strate Ltd.
Spain Servicio de Compensacion y
Liquidacion de Valores, S.A.
Banco de Espana,
Central de Anotaciones en Cuenta
Sri Lanka Central Depository System
(Pvt) Limited
Sweden Vardepapperscentralen VPC AB
(the Swedish Central Securities Depository)
Switzerland SIS-SegaIntersettle
Taiwan - R.O.C. Taiwan Securities Central
Depository Co., Ltd.
Thailand Thailand Securities Depository
Company Limited
Tunisia Societe Tunisienne Interprofessionelle pour la
Compensation et de Depots de
Valeurs Mobilieres
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* Mandatory depositories include entities for which use is mandatory as a matter of law or effectively mandatory as a matter of market practice.
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Turkey Takas ve Saklama Bankasi A.S. (TAKASBANK)
Central Bank of Turkey
Ukraine National Bank of Ukraine
United Kingdom The Bank of England,
The Central Gilts Office and
The Central Moneymarkets Office
Venezuela Central Bank of Venezuela
Zambia LuSE Central Shares Depository Limited
Bank of Zambia
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* Mandatory depositories include entities for which use is mandatory as a matter of law or effectively mandatory as a matter of market practice.
SCHEDULE C
MARKET INFORMATION
PUBLICATION/TYPE OF
INFORMATION BRIEF DESCRIPTION
------------------- -----------------
(FREQUENCY)
The Guide to Custody in An overview of safekeeping and settlement practices and procedures in each market in which State Street
----------------------- Bank and Trust Company offers custodial services.
World Markets
-----------------------
(annually)
Global Custody Network Information relating to the operating history and structure of depositories and subcustodians located in
----------------------- the markets in which State Street Bank and Trust Company offers custodial services, including
Review transnational depositories.
-----------------------
(annually)
Global Legal Survey With respect to each market in which State Street Bank and Trust Company offers custodial services,
----------------------- opinions relating to whether local law restricts (i) access of a fund's independent public accountants
(annually) to books and records of a Foreign Sub-Custodian or Foreign Securities System, (ii) the Fund's ability
to recover in the event of bankruptcy or insolvency of a Foreign Sub-Custodian or Foreign Securities
System, (iii) the Fund's ability to recover in the event of a loss by a Foreign Sub-Custodian or Foreign
Securities System, and (iv) the ability of a foreign investor to convert cash and cash equivalents to
U.S. dollars.
Subcustodian Agreements Copies of the subcustodian contracts State Street Bank and Trust Company has entered into with each
----------------------- subcustodian in the markets in which State Street Bank and Trust Company offers subcustody services to
(annually) its US mutual fund clients.
Network Bulletins Developments of interest to investors in the markets in which State Street Bank and Trust Company offers
(weekly): custodial services.
Foreign Custody With respect to markets in which State Street Bank and Trust Company offers custodial services which
Advisories (as exhibit special custody risks, developments which may impact State Street's ability to deliver expected
necessary): levels of service.
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EXHIBIT h(2)(d)
AMENDMENT NUMBER 3 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 November 1, 1994, as amended (the "Agreement") between AIM Funds Group (the "Fund") and A I M Fund Services, Inc. ("AFS") pursuant to Article 10 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"
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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."
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All other terms and provisions of the Agreement not amended herein shall remain in full force and effect, except that Amendment Number 2 dated January 1, 1999 is hereby terminated.
AIM FUNDS GROUP
By: /s/ ROBERT H. GRAHAM
---------------------------
President
ATTEST:
/s/ CAROL F. RELIHAN
-------------------------
Secretary
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A I M FUND SERVICES, INC.
By: /s/ TONY D. GREEN
---------------------------
President
ATTEST:
/s/ LISA A. MOSS
--------------------------
Assistant Secretary
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EXHIBIT h(3)(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(10)(b)
AMENDMENT NO. 1
MASTER ADMINISTRATIVE SERVICES AGREEMENT
The Master Administrative Services Agreement (the "Agreement"), dated June 1, 2000, by and between A I M Advisors, Inc., a Delaware corporation, and AIM Funds Group, a Delaware business trust, is hereby amended as follows:
Appendix A of the Agreement is hereby deleted in its entirety and replaced with the following:
"APPENDIX A
TO
MASTER ADMINISTRATIVE SERVICES AGREEMENT
OF
AIM FUNDS GROUP
PORTFOLIOS EFFECTIVE DATE OF AGREEMENT ---------- --------------------------- AIM Balanced Fund June 1. 2000 AIM Global Utilities Fund June 1, 2000 AIM Select Growth Fund June 1, 2000 AIM Value Fund June 1, 2000 AIM European Small Company Fund August 30, 2000 AIM International Emerging Growth Fund August 30, 2000 AIM New Technology Fund August 30, 2000 AIM Small Cap Equity Fund August 30, 2000 AIM Value II Fund August 30, 2000" |
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: August 30, 2000
A I M ADVISORS, INC.
Attest: /s/ P. MICHELLE GRACE By: /s/ ROBERT H. GRAHAM
----------------------------- ------------------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
AIM FUNDS GROUP
Attest: /s/ RENEE A. FRIEDLI By: /s/ ROBERT H. GRAHAM
----------------------------- ------------------------------
Assistant Secretary Robert H. Graham
President
|
(SEAL)
EXHIBIT h(10)(c)
AMENDMENT NO. 2
MASTER ADMINISTRATIVE SERVICES AGREEMENT
The Master Administrative Services Agreement (the "Agreement"), dated June 1, 2000, by and between A I M Advisors, Inc., a Delaware corporation, and AIM Funds Group, a Delaware business trust, is hereby amended as follows:
Appendix A of the Agreement is hereby deleted in its entirety and replaced with the following:
"APPENDIX A
TO
MASTER ADMINISTRATIVE SERVICES AGREEMENT
OF
AIM FUNDS GROUP
PORTFOLIOS EFFECTIVE DATE OF AGREEMENT ---------- --------------------------- AIM Balanced Fund June 1. 2000 AIM Global Utilities Fund June 1, 2000 AIM Select Growth Fund June 1, 2000 AIM Value Fund June 1, 2000 AIM European Small Company Fund August 30, 2000 AIM International Emerging Growth Fund August 30, 2000 AIM New Technology Fund August 30, 2000 AIM Small Cap Equity Fund August 30, 2000 AIM Value II Fund August 30, 2000 AIM Explorer Fund December ___, 2000" |
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: December ____, 2000
A I M ADVISORS, INC.
Attest: By:
----------------------------- -----------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
AIM FUNDS GROUP
Attest: By:
----------------------------- -----------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
|
EXHIBIT i(2)
[LETTERHEAD OF BALLARD SPAHR ANDREWS & INGERSOLL, LLP]
September 27, 2000
AIM Funds Group
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
We have acted as counsel to AIM Funds Group, a business trust organized under the laws of the State of Delaware (the "Trust") and registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end, series management investment company.
This opinion is given in connection with the filing by the Trust of Post-Effective Amendment No. 81 to the Registration Statement on Form N-1A under the Securities Act of 1933, as amended, and Amendment No. 81 to such Registration Statement under the 1940 Act (collectively, the "Registration Statement") relating to the registration of an indefinite number of Class A, Class B and Class C shares of beneficial interest, par value $.001 per share (the "Shares"), of AIM Explorer Fund (the "Fund").
In connection with our giving this opinion, we have examined copies of the Trust's Certificate of Trust, Amended and Restated Agreement and Declaration of Trust, as amended (the "Trust Agreement"), and resolutions of the Board of Trustees adopted September 22, 2000, and originals or copies, certified or otherwise identified to our satisfaction, of such other documents, records and other instruments as we have deemed necessary or advisable for purposes of this opinion. We have also examined the prospectus for the Fund, which is included in the Registration Statement, substantially in the form in which it is to become effective (the "Prospectus"). As to various questions of fact material to our opinion, we have relied upon information provided by officers of the Trust.
Based on the foregoing, we are of the opinion that the Shares to be offered for sale pursuant to the Prospectus are duly authorized and, when sold, issued and paid for as described in the Prospectus, will be legally issued, fully paid and nonassessable.
We express no opinion concerning the laws of any jurisdiction other than the federal law of the United States of America and the Delaware Business Trust Act.
Both the Delaware Business Trust Act and the Trust Agreement provide that shareholders of the Trust shall be entitled to the same limitation on personal liability as is
AIM Funds Group
September 27, 2000
extended under the Delaware General Corporation Law to stockholders of private corporations for profit. There is a remote possibility, however, that, under certain circumstances, shareholders of a Delaware business trust may be held personally liable for that trust's obligations to the extent that 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. The Trust Agreement also provides for indemnification out of property of the Fund for all loss and expense of any shareholder held personally liable for the obligations of the Fund. Therefore, the risk of any shareholder incurring financial loss beyond his investment due to shareholder liability is limited to circumstances in which the Fund is unable to meet its obligations and the express limitation of shareholder liabilities is determined not to be effective.
We consent to the filing of this opinion as an exhibit to the Registration Statement and 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 the Fund, which is included in the Registration Statement.
Very truly yours,
/s/ BALLARD SPAHR ANDREWS & INGERSOLL, LLP |
EXHIBIT j(2)
The Board of Trustees and Shareholders
AIM Funds Group:
We consent to the use of our reports on AIM Balanced Fund, AIM Global Utilities Fund, AIM Select Growth Fund, and AIM Value Fund (series portfolios of AIM Funds Group) dated February 4, 2000 included herein and the reference to our firm under the heading "Audit Reports" in the Statement of Additional Information.
/s/KPMG LLP Houston, Texas September 29, 2000 |
EXHIBIT l(1)
August 30, 2000
[AIM LOGO APPEARS HERE]
--Registered Trademark--
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
713-626-1919
A I M Advisors, Inc.
Board of Trustees
AIM Funds Group
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Re: Initial Capital Investment in New Portfolios of AIM Funds Group (The "Fund")
Ladies and Gentlemen:
We are purchasing shares of the Fund for the purpose of providing initial investment for five new investment portfolios of the Fund. The purpose of this letter is to set out our understanding of the conditions of and our promises and representations concerning this investment.
We hereby agree to purchase shares equal to the following dollar amount for the portfolios:
FUND AMOUNT DATE
---- ------ ----
AIM European Small Company Fund - Class A Shares $ 10.00 August 30, 2000
AIM European Small Company Fund - Class B Shares $ 10.00 August 30, 2000
AIM European Small Company Fund - Class C Shares $ 10.00 August 30, 2000
AIM European Small Company Fund - Class A Shares $1,000,000 August 31, 2000
AIM International Emerging Growth Fund - Class A Shares $ 10.00 August 30, 2000
AIM International Emerging Growth Fund - Class B Shares $ 10.00 August 30, 2000
AIM International Emerging Growth Fund - Class C Shares $ 10.00 August 30, 2000
AIM International Emerging Growth Fund - Class A Shares $1,000,000 August 31, 2000
AIM New Technology Fund - Class A Shares $ 10.00 August 30, 2000
AIM New Technology Fund - Class B Shares $ 10.00 August 30, 2000
AIM New Technology Fund - Class C Shares $ 10.00 August 30, 2000
AIM New Technology Fund - Class A Shares $1,000,000 August 31, 2000
AIM Small Cap Equity Fund - Class A Shares $ 10.00 August 30, 2000
AIM Small Cap Equity Fund - Class B Shares $ 10.00 August 30, 2000
AIM Small Cap Equity Fund - Class C Shares $ 10.00 August 30, 2000
AIM Small Cap Equity Fund - Class A Shares $1,000,000 August 31, 2000
|
A Member of the AMVESCAP Group
Board of Trustees
AIM Funds Group
August 30, 2000
FUND AMOUNT DATE
---- ------ ----
AIM Value II Fund - Class A Shares $ 10.00 August 30, 2000
AIM Value II Fund - Class B Shares $ 10.00 August 30, 2000
AIM Value II Fund - Class C Shares $ 10.00 August 30, 2000
AIM Value II Fund - Class A Shares $ 1,000,000 August 31, 2000
|
We understand that the initial net asset value per share for the portfolios named above will be $10.
We hereby represent that we are purchasing these shares solely for our own account and solely for investment purposes without any intent of distributing or reselling said shares. We further represent that disposition of said shares will only be by direct redemption to or repurchase by the Fund.
We further agree to provide the Fund with at least three days' advance written notice of any intended redemption and agree that we will work with the Fund with respect to the amount of such redemption so as not to place a burden on the Fund and to facilitate normal portfolio management of the Fund.
Sincerely yours,
A I M ADVISORS, INC.
By: /s/ ROBERT H. GRAHAM
--------------------------------
Robert H. Graham
|
A Member of the AMVESCAP Group
EXHIBIT l(2)
December 28, 2000
Board of Trustees
AIM Funds Group
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Re: Initial Capital Investment in New Portfolio of AIM Funds Group (The "Fund")
Ladies and Gentlemen:
We are purchasing shares of the Fund for the purpose of providing initial investment for a new investment portfolio of the Fund. The purpose of this letter is to set out our understanding of the conditions of and our promises and representations concerning this investment.
We hereby agree to purchase shares equal to the following dollar amount for the portfolio:
FUND AMOUNT DATE
---- ------ ----
AIM Explorer Fund - Class A Shares $ 10.00 December 28, 2000
AIM Explorer Fund - Class B Shares $ 10.00 December 28, 2000
AIM Explorer Fund - Class C Shares $ 10.00 December 28, 2000
AIM Explorer Fund - Class A Shares $1,000,000 December 29, 2000
|
We understand that the initial net asset value per share for the portfolio named above will be $10.
We hereby represent that we are purchasing these shares solely for our own account and solely for investment purposes without any intent of distributing or reselling said shares. We further represent that disposition of said shares will only be by direct redemption to or repurchase by the Fund.
We further agree to provide the Fund with at least three days' advance written notice of any intended redemption and agree that we will work with the Fund with respect to the amount of such redemption so as not to place a burden on the Fund and to facilitate normal portfolio management of the Fund.
Sincerely yours,
A I M ADVISORS, INC.
President
EXHIBIT m(7)(d)
AMENDMENT NO. 3
TO THE SECOND AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
OF
AIM FUNDS GROUP
(CLASS B SHARES)
(SECURITIZATION FEATURE)
The Second Amended and Restated Master Distribution Plan (the "Plan"), dated as of June 30, 1997, pursuant to Rule 12b-1 of AIM Funds Group, a Delaware business trust, is hereby amended as follows:
Schedule A to the Plan is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
MASTER DISTRIBUTION PLAN
OF
AIM FUNDS GROUP
(CLASS B SHARES)
(DISTRIBUTION FEE)
MAXIMUM
ASSET-BASED SERVICE AGGREGATE
FUND SALES CHARGE FEE FEE
---- ------------ ------- ---------
AIM Balanced Fund 0.75% 0.25% 1.00%
AIM European Small Company Fund 0.75% 0.25% 1.00%
AIM Global Utilities Fund 0.75% 0.25% 1.00%
AIM International Emerging Growth Fund 0.75% 0.25% 1.00%
AIM New Technology Fund 0.75% 0.25% 1.00%
AIM Select Growth Fund 0.75% 0.25% 1.00%
AIM Small Cap Equity Fund 0.75% 0.25% 1.00%
AIM Value Fund 0.75% 0.25% 1.00%
AIM Value II Fund 0.75% 0.25% 1.00%"
|
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: August 30, 2000
AIM FUNDS GROUP
(on behalf of its Class B Shares)
Attest: /s/ RENEE A. FRIEDLI By: /s/ ROBERT H. GRAHAM
------------------------------------ ------------------------------
Assistant Secretary President
|
EXHIBIT m(7)(e)
AMENDMENT NO. 4
TO THE SECOND AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
OF
AIM FUNDS GROUP
(CLASS B SHARES)
(SECURITIZATION FEATURE)
The Second Amended and Restated Master Distribution Plan (the "Plan"), dated as of June 30, 1997, pursuant to Rule 12b-1 of AIM Funds Group, a Delaware business trust, is hereby amended as follows:
Schedule A to the Plan is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
MASTER DISTRIBUTION PLAN
OF
AIM FUNDS GROUP
(CLASS B SHARES)
(DISTRIBUTION FEE)
MAXIMUM
ASSET-BASED SERVICE AGGREGATE
FUND SALES CHARGE FEE FEE
---- ------------ -------- ---------
AIM Balanced Fund 0.75% 0.25% 1.00%
AIM European Small Company Fund 0.75% 0.25% 1.00%
AIM Explorer Fund 0.75% 0.25% 1.00%
AIM Global Utilities Fund 0.75% 0.25% 1.00%
AIM International Emerging Growth Fund 0.75% 0.25% 1.00%
AIM New Technology Fund 0.75% 0.25% 1.00%
AIM Select Growth Fund 0.75% 0.25% 1.00%
AIM Small Cap Equity Fund 0.75% 0.25% 1.00%
AIM Value Fund 0.75% 0.25% 1.00%
AIM Value II Fund 0.75% 0.25% 1.00%"
|
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: December ____, 2000
AIM FUNDS GROUP
(on behalf of its Class B Shares)
Attest: By:
------------------------- -----------------------
Assistant Secretary Robert H. Graham
President
|
EXHIBIT m(10)(a)
FIFTH AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
OF
AIM FUNDS GROUP
(CLASS A SHARES AND CLASS C SHARES)
SECTION 1. AIM Funds Group, a Delaware business trust (the "Fund"), on behalf of the series of shares of beneficial interest set forth in Schedule A to this plan (the "Portfolios"), may act as a distributor of the Class A Shares and Class C Shares of the Portfolios as described in Schedule A to this plan (the "Shares") of which the Fund is the issuer, pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act"), according to the terms of this Distribution Plan (the "Plan").
SECTION 2. The Fund may incur as a distributor of the Shares, expenses at the rates set forth in Schedule A per annum of the average daily net assets of the Fund attributable to the 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 Schedule A may be expended when and if authorized in advance by the Fund's Board of Trustees. Such amounts may be used to finance any activity which is primarily intended to result in the sale of the Shares, including, but not limited to, expenses of organizing and conducting sales seminars, advertising programs, finders fees, printing of prospectuses and statements of additional information (and supplements thereto) and reports for other than existing shareholders, preparation and distribution of advertising material and sales literature, supplemental payments to dealers and other institutions as asset-based sales charges. Amounts set forth in Schedule A 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. The maximum service fee paid to any service provider shall be twenty-five one-hundredths of one percent (0.25%), or such lower rate for the Portfolio as is specified on Schedule A, per annum of the average daily net assets of the Fund attributable to the Shares owned by the customers of such service provider.
(b) Pursuant to this program, Distributors may enter
into agreements substantially in the form attached hereto as
Exhibit A ("Service Agreements") with such broker-dealers
("Dealers") as may be selected from time to time by
Distributors for the provision of distribution-related
personal shareholder services in connection with the sale of
Shares to the Dealers' clients and customers ("Customers")
to Customers who may from time to time directly or
beneficially own Shares. The distribution-related personal
continuing shareholder services to be rendered by Dealers
under the Service Agreements may include, but shall not be
limited to, the following: (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 in enrolling
into 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; 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 Variable Group Annuity Contractholder Service Agreements substantially in the form attached hereto as Exhibit C ("Variable Contract Agreements") with selected insurance companies ("Companies") offering variable annuity contracts to employers as funding vehicles for retirement plans qualified under Section 401(a) of the Internal Revenue Code, where amounts contributed under such plans are invested pursuant to such variable annuity contracts in Shares of the Fund. The Companies receiving payments under such Variable Contract Agreements will provide specialized services to contractholders and plan participants, as set forth in the Variable Contract Agreements from time to time.
(e) Distributors may also enter into Agency Pricing Agreements substantially in the form attached hereto as Exhibit D ("Pricing Agreements") with selected retirement plan service providers acting in an agency capacity for their customers ("Retirement Plan Providers"). Retirement Plan Providers acting in such capacity will provide some or all of the shareholders services to their customers as set forth in the Pricing Agreements from time to time.
(f) Distributors may also enter into Shareholder Service Agreements substantially in the form attached hereto as Exhibit E ("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.
(g) Distributors, as agent of the Portfolios may also enter into a Shareholder Service Agreement substantially in the form attached hereto as Exhibit F ("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 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 Shares. If this Plan is terminated, the obligation of the Fund to make payments pursuant to this Plan will also cease and the Fund will not be required to make any payments beyond the termination date even with respect to expenses incurred prior to the termination date.
SECTION 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 Fund attributable to the Shares, on not more than sixty (60) days' written notice to any other party to the agreement; and
(b) that such agreement shall terminate automatically in the event of its assignment.
SECTION 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 FUNDS GROUP
(on behalf of its Class A Shares and
Class C Shares)
Attest: /s/ SAMUEL D. SIRKO By: /s/ ROBERT H. GRAHAM
------------------------------ ------------------------------
Assistant Secretary President
|
Effective as of August 31, 1993, as amended as of March 8, 1994 and September 10, 1994.
Amended and restated for all Portfolios as of June 30, 1997, as of August 4, 1997, as of June 30, 1998, as of June 1, 2000, and as of July 1, 2000.
SCHEDULE A
TO
FIFTH AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
OF
AIM FUNDS GROUP
(CLASS A SHARES AND CLASS C SHARES)
(DISTRIBUTION FEE)
The Fund shall pay the Distributor as full compensation for all services rendered and all facilities furnished under the Distribution Plan for each Portfolio (or Class thereof) designated below, a Distribution Fee* determined by applying the annual rate set forth below as to each Portfolio (or Class thereof) to the average daily net assets of the Portfolio (or Class thereof) for the plan year, computed in a manner used for the determination of the offering price of shares of the Portfolio.
MINIMUM
ASSET
PORTFOLIO BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
CLASS A SHARES CHARGE FEE FEE
-------------- ------- ------- ---------
AIM Balanced Fund 0.00% 0.25% 0.25%
AIM Global Utilities Fund 0.00% 0.25% 0.25%
AIM Select Growth Fund 0.00% 0.25% 0.25%
AIM Value Fund 0.00% 0.25% 0.25%
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
CLASS C SHARES CHARGE FEE FEE
-------------- ------- ------- ---------
AIM Balanced Fund 0.75% 0.25% 1.00%
AIM Global Utilities Fund 0.75% 0.25% 1.00%
AIM Select Growth Fund 0.75% 0.25% 1.00%
AIM Value Fund 0.75% 0.25% 1.00%
|
* The Distribution Fee is payable apart from the sales charge, if any, as stated in the current prospectus for the applicable Portfolio (or Class
thereof).
EXHIBIT m(10)(b)
AMENDMENT NO. 1
FIFTH AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
The Fifth Amended and Restated Master Distribution Plan (the "Plan"), dated as of July 1, 2000, pursuant to Rule 12b-1 of AIM Funds Group, a Delaware business trust, is hereby amended as follows:
Schedule A of the Plan is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
FIFTH AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
OF
AIM FUNDS GROUP
(CLASS A SHARES AND CLASS C SHARES)
(DISTRIBUTION FEE)
The Fund shall pay the Distributor as full compensation for all services rendered and all facilities furnished under the Distribution Plan for each Portfolio (or Class thereof) designated below, a Distribution Fee* determined by applying the annual rate set forth below as to each Portfolio (or Class thereof) to the average daily net assets of the Portfolio (or Class thereof) for the plan year, computed in a manner used for the determination of the offering price of shares of the Portfolio.
MINIMUM MAXIMUM MAXIMUM
PORTFOLIO ASSET BASED SERVICE AGGREGATE
CLASS A SHARES SALES CHARGE FEE FEE
-------------- ------------ ------- ---------
AIM Balanced Fund 0.00% 0.25% 0.25%
AIM European Small Company Fund 0.10% 0.25% 0.35%
AIM Global Utilities Fund 0.00% 0.25% 0.25%
AIM International Emerging Growth Fund 0.10% 0.25% 0.35%
AIM New Technology Fund 0.10% 0.25% 0.35%
AIM Select Growth Fund 0.00% 0.25% 0.25%
AIM Small Cap Equity Fund 0.10% 0.25% 0.35%
AIM Value Fund 0.00% 0.25% 0.25%
AIM Value II Fund 0.10% 0.25% 0.35%
|
MINIMUM MAXIMUM MAXIMUM
PORTFOLIO ASSET BASED SERVICE AGGREGATE
CLASS C SHARES SALES CHARGE FEE FEE
-------------- ------------ ------- ---------
AIM Balanced Fund 0.75% 0.25% 1.00%
AIM European Small Company Fund 0.75% 0.25% 1.00%
AIM Global Utilities Fund 0.75% 0.25% 1.00%
AIM International Emerging Growth Fund 0.75% 0.25% 1.00%
AIM New Technology Fund 0.75% 0.25% 1.00%
AIM Select Growth Fund 0.75% 0.25% 1.00%
AIM Small Cap Equity Fund 0.75% 0.25% 1.00%
AIM Value Fund 0.75% 0.25% 1.00%
AIM Value II Fund 0.75% 0.25% 1.00%"
|
The Distributor will waive part or all of its Distribution Fee as to a Portfolio (or Class thereof) to the extent that the ordinary business expenses of the Portfolio exceed the expense limitation as to the Portfolio (if any) as contained in the Master Investment Advisory Agreement between the Company and A I M Advisors, Inc.
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: August 30, 2000
AIM FUNDS GROUP
(on behalf of its Class A and
Class C Shares)
Attest: /s/ RENEE A. FRIEDLI By: /s/ ROBERT H. GRAHAM
----------------------------- --------------------------------
Assistant Secretary President
|
EXHIBIT m(10)(c)
AMENDMENT NO. 2
FIFTH AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
The Fifth Amended and Restated Master Distribution Plan (the "Plan"), dated as of July 1, 2000, pursuant to Rule 12b-1 of AIM Funds Group, a Delaware business trust, is hereby amended as follows:
Schedule A of the Plan is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
FIFTH AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
OF
AIM FUNDS GROUP
(CLASS A SHARES AND CLASS C SHARES)
(DISTRIBUTION FEE)
The Fund shall pay the Distributor as full compensation for all services rendered and all facilities furnished under the Distribution Plan for each Portfolio (or Class thereof) designated below, a Distribution Fee* determined by applying the annual rate set forth below as to each Portfolio (or Class thereof) to the average daily net assets of the Portfolio (or Class thereof) for the plan year, computed in a manner used for the determination of the offering price of shares of the Portfolio.
MINIMUM MAXIMUM MAXIMUM
PORTFOLIO ASSET BASED SERVICE AGGREGATE
CLASS A SHARES SALES CHARGE FEE FEE
-------------- ------------ --------- ----------
AIM Balanced Fund 0.00% 0.25% 0.25%
AIM European Small Company Fund 0.10% 0.25% 0.35%
AIM Explorer Fund 0.10% 0.25% 0.35%
AIM Global Utilities Fund 0.00% 0.25% 0.25%
AIM International Emerging Growth Fund 0.10% 0.25% 0.35%
AIM New Technology Fund 0.10% 0.25% 0.35%
AIM Select Growth Fund 0.00% 0.25% 0.25%
AIM Small Cap Equity Fund 0.10% 0.25% 0.35%
AIM Value Fund 0.00% 0.25% 0.25%
AIM Value II Fund 0.10% 0.25% 0.35%
|
MINIMUM MAXIMUM MAXIMUM
PORTFOLIO ASSET BASED SERVICE AGGREGATE
CLASS C SHARES SALES CHARGE FEE FEE
-------------- ------------ --------- ----------
AIM Balanced Fund 0.75% 0.25% 1.00%
AIM European Small Company Fund 0.75% 0.25% 1.00%
AIM Explorer Fund 0.75% 0.25% 1.00%
AIM Global Utilities Fund 0.75% 0.25% 1.00%
AIM International Emerging Growth Fund 0.75% 0.25% 1.00%
AIM New Technology Fund 0.75% 0.25% 1.00%
AIM Select Growth Fund 0.75% 0.25% 1.00%
AIM Small Cap Equity Fund 0.75% 0.25% 1.00%
AIM Value Fund 0.75% 0.25% 1.00%
AIM Value II Fund 0.75% 0.25% 1.00%"
|
The Distributor will waive part or all of its Distribution Fee as to a Portfolio (or Class thereof) to the extent that the ordinary business expenses of the Portfolio exceed the expense limitation as to the Portfolio (if any) as contained in the Master Investment Advisory Agreement between the Company and A I M Advisors, Inc.
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: December ____, 2000
AIM FUNDS GROUP
(on behalf of its Class A and Class C
Shares)
Attest: By:
-------------------------- ----------------------
Assistant Secretary Robert H. Graham
President
|
EXHIBIT m(11)
[A I M DISTRIBUTORS, INC. LOGO] SHAREHOLDER SERVICE AGREEMENT
FOR SALE OF SHARES
OF THE AIM MUTUAL FUNDS
This Shareholder Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, by each of the AIM-managed mutual funds (or designated classes of such funds) listed in Schedule A, which may be amended from time to time by AIM Distributors, Inc. ("Distributors") to this Agreement (the "Funds"), under a Distribution Plan (the "Plan") adopted pursuant to said Rule. This Agreement, being made between Distributors, solely as agent for such Funds and the undersigned authorized dealer, defines the services to be provided by the authorized dealer for which it is to receive payments pursuant to the Plan adopted by each of the Funds. The Plan and the Agreement have been approved by a majority of the directors of each of the Funds, including a majority of the directors who are not interested persons of such Funds, and who have no direct or indirect financial interest in the operation of the Plan or related agreements (the "Dis-interested Directors"), by votes cast in person at a meeting called for the purpose of voting on the Plan. Such approval included a determination that in the exercise of their reasonable business judgement and in light of their fiduciary duties, there is a reasonable likelihood that the Plan will benefit such Fund and its shareholders.
1. To the extent that you provide distribution-related and continuing personal shareholder services to customers who may, from time to time, directly or beneficially own shares of the Funds, including but not limited to, distributing sales literature, answering routine customer inquiries regarding the Funds, assisting customers in changing dividend options, account designations and addresses, and in enrolling into any of several special investment plans offered in connection with the purchase of the Funds' shares, assisting in the establishment and maintenance of customer accounts and records and in the processing of purchase and redemption transactions, investing dividends and capital gains distributions automatically in shares and providing such other services as the Funds or the customer may reasonably request, we, solely as agent for the Funds, shall pay you a fee periodically or arrange for such fee to be paid to you.
2. The fee paid with respect to each Fund will be calculated at the end of each payment period (as indicated in Schedule A) for each business day of the Fund during such payment period at the annual rate set forth in Schedule A as applied to the average net asset value of the shares of such Fund purchased or acquired through exchange on or after the Plan Calculation Date shown for such Fund on Schedule A. Fees calculated in this manner shall be paid to you only if your firm is the dealer of record at the close of business on the last business day of the applicable payment period, for the account in which such shares are held (the "Subject Shares"). In cases where Distributors has advanced payment to you of the first year's fee for shares sold at net asset value and subject to a contingent deferred sales charge, no additional payments will be made to you during the first year the Subject Shares are held.
3. The total of the fees calculated for all of the Funds listed on Schedule A for any period with respect to which calculations are made shall be paid to you within 45 days after the close of such period.
03/31/00
Shareholder Service Agreement 2
4. We reserve the right to withhold payment with respect to the Subject Shares purchased by you and redeemed or repurchased by the Fund or by us as Agent within seven (7) business days after the date of our confirmation of such purchase. We reserve the right at any time to impose minimum fee payment requirements before any periodic payments will be made to you hereunder.
5. This Agreement and Schedule A does not require any broker-dealer to provide transfer agency and recordkeeping related services as nominee for its customers.
6. You shall furnish us and the Funds with such information as shall reasonably be requested either by the directors of the Funds or by us with respect to the fees paid to you pursuant to this Agreement.
7. We shall furnish the directors of the Funds, for their review on a quarterly basis, a written report of the amounts expended under the Plan by us and the purposes for which such expenditures were made.
8. Neither you nor any of your employees or agents are authorized to make any representation concerning shares of the Funds except those contained in the then current Prospectus or Statement of Additional Information for the Funds, and you shall have no authority to act as agent for the Funds or for Distributors.
9. We may enter into other similar Shareholder Service Agreements with any other person without your consent.
10. This Agreement may be amended at any time without your consent by Distributors mailing a copy of an amendment to you at address set forth below. Such amendment shall become effective on the date specified in such amendment unless you elect to terminate this Agreement within thirty (30) days of your receipt of such amendment.
11. This Agreement may be terminated with respect to any Fund at any time without payment of any penalty by the vote of a majority of the directors of such Fund who are Dis-interested Directors or by a vote of a majority of the Fund's outstanding shares, on sixty (60) days' written notice. It will be terminated by any act which terminates either the Selected Dealer Agreement between your firm and us or the Fund's Distribution Plan, and in any event, it shall terminate automatically in the event of its assignment as that term is defined in the 1940 Act.
12. The provisions of the Distribution Agreement between any Fund and us, insofar as they relate to the Plan, are incorporated herein by reference. This Agreement shall become effective upon execution and delivery hereof and shall continue in full force and effect as long as the continuance of the Plan and this related Agreement are approved at least annually by a vote of the directors, including a majority of the Dis-interested Directors, cast in person at a meeting called for the purpose of voting thereon. All communications to us should be sent to the address of Distributors as shown at the bottom of this Agreement. Any notice to you shall be duly given if mailed or telegraphed to you at the address specified by you below.
03/31/00
Shareholder Service Agreement 3
13. You represent that you provide to your customers who own shares of the Funds personal services as defined from time to time in applicable regulations of the National Association of Securities Dealers, Inc., and that you will continue to accept payments under this Agreement only so long as you provide such services.
14. This Agreement shall be construed in accordance with the laws of the State of Texas.
A I M DISTRIBUTORS, INC.
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By:
------------------------------- -----------------------------------
Signature
-----------------------------------
Print Name Title
-----------------------------------
Dealer's Name
-----------------------------------
Address
-----------------------------------
City State Zip
-----------------------------------
Telephone
|
Please sign both copies and return one copy of each to:
A I M Distributors, Inc. 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173
03/31/00
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
|
08/31/00
Shareholder Service Agreement 5
Fund Fee Rate* Plan Calculation Date
------------------------------------------------------------------------------------------
AIM European Small Company Fund A Shares 0.25 August 31, 2000
AIM European Small Company Fund B Shares 0.25 August 31, 2000
AIM European Small Company Fund C Shares 1.00** August 31, 2000
AIM Explorer Fund A Shares 0.25 December 29, 2000
AIM Explorer Fund B Shares 0.25 December 29, 2000
AIM Explorer Fund C Shares 1.00** December 29, 2000
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 Emerging Growth Fund A Shares 0.25 August 31, 2000
AIM International Emerging Growth Fund B Shares 0.25 August 31, 2000
AIM International Emerging Growth Fund C Shares 1.00** August 31, 2000
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 Basic Value Fund B Shares 0.25 August 1, 2000
AIM Large Cap Basic Value Fund C Shares 1.00** August 1, 2000
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
|
08/31/00
Shareholder Service Agreement 6
Fund Fee Rate* Plan Calculation Date
-----------------------------------------------------------------------------------------
AIM Large Cap Opportunities Fund A Shares(1) 0.25 December 30, 1999
AIM Large Cap Opportunities Fund B Shares(1) 0.25 March 31, 2000
AIM Large Cap Opportunities Fund C Shares(1) 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
AIM Mid Cap Opportunities Fund A Shares(2) 0.25 December 30, 1998
AIM Mid Cap Opportunities Fund B Shares(2) 0.25 November 12, 1999
AIM Mid Cap Opportunities Fund C Shares(2) 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 New Technology Fund A Shares 0.25 August 31, 2000
AIM New Technology Fund B Shares 0.25 August 31, 2000
AIM New Technology Fund C Shares 1.00** August 31, 2000
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 Equity Fund A Shares 0.25 August 31, 2000
AIM Small Cap Equity Fund B Shares 0.25 August 31, 2000
AIM Small Cap Equity Fund C Shares 1.00** August 31, 2000
AIM Small Cap Opportunities Fund A Shares(2) 0.25 June 29, 1998
AIM Small Cap Opportunities Fund B Shares(2) 0.25 July 13, 1998
AIM Small Cap Opportunities Fund C Shares(2) 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 Value II Fund A Shares 0.25 August 31, 2000
AIM Value II Fund B Shares 0.25 August 31, 2000
AIM Value II Fund C Shares 1.00** August 31, 2000
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
|
(2) AIM Mid Cap Opportunities Fund and AIM Small Cap Opportunities Fund are closed to new investors.
08/31/00
Shareholder Service Agreement 7
*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.
08/31/00
Shareholder Service Agreement 8
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
|
08/31/00
Shareholder Service Agreement 9
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(3) 0.25 May 29, 1998
AIM Small Cap Growth Fund B Shares(3) 0.25 May 29, 1998
AIM Small Cap Growth Fund C Shares(3) 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
|
*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.
*** Based on number of years outstanding. First year -- 0.00%; Second year -- 0.10%; Third year -- 0.15%; Fourth year -- 0.20%; Fifth and following years -- 0.25%
08/31/00
EXHIBIT m(12)
[A I M DISTRIBUTORS, INC. LOGO] BANK SHAREHOLDER
SERVICE AGREEMENT
We desire to enter into an Agreement with A I M Distributors, Inc. (the "Company") acting as agent for the "AIM Funds", for servicing of our agency clients who are shareholders of, and the administration of such shareholder accounts in the shares of the AIM Funds (hereinafter referred to as the "Shares"). Subject to the Company's acceptance of this Agreement, the terms and conditions of this Agreement shall be as follows:
1. We shall provide continuing personal shareholder and administration services for holders of the Shares who are also our clients. Such services to our clients may include, without limitation, some or all of the following: answering shareholder inquires regarding the Shares and the AIM Funds; performing subaccounting; establishing and maintaining shareholder accounts and records; processing and bunching customer purchase and redemption transactions; providing periodic statements showing a shareholder's account balance and the integration of such statements with those of other transactions and balances in the shareholder's other accounts serviced by us; forwarding applicable AIM Funds prospectuses, proxy statements, reports and notices to our clients who are holders of Shares; and such other administrative services as you reasonably may request, to the extent we are permitted by applicable statute, rule or regulations to provide such services. We represent that we shall accept fees hereunder only so long as we continue to provide personal shareholder services to our clients.
2. Shares purchased by us as agents for our clients will be registered (choose one) (in our name or in the name of our nominee) (in the names of our clients). The client will be the beneficial owner of the Shares purchased and held by us in accordance with the client's instructions and the client may exercise all applicable rights of a holder of such Shares. We agree to transmit to the AIM Funds' transfer agent in a timely manner, all purchase orders and redemption requests of our clients and to forward to each client any proxy statements, periodic shareholder reports and other communications received form the Company by us on behalf of our clients. The Company agrees to pay all out-of-pocket expenses actually incurred by us in connection with the transfer by us of such proxy statements and reports to our clients as required by applicable law or regulation. We agree to transfer record ownership of a client's Shares to the client promptly upon the request of a client. In addition, record ownership will be promptly transferred to the client in the event that the person or entity ceases to be our client.
3. Within three (3) business days of placing a purchase order we agree to send (i) a cashiers check to the Company, or (ii) a wire transfer to the AIM Funds' transfer agent, in an amount equal to the amount of all purchase orders placed by us on behalf of our clients and accepted by the Company.
4. We agree to make available to the Company, upon the Company's request, such information relating to our clients who are beneficial owners of Shares and their transactions in such Shares as may be required by applicable laws and regulations or as may be reasonably requested by the Company. The names of our customers shall remain our sole property and shall not be used by
03/31/00
Bank Shareholder Service Agreement Page 2
the Company for any other purpose except as needed for servicing and information mailings in the normal course of business to holders of the Shares.
5. We shall provide such facilities and personnel (which may be all or any part of the facilities currently used in our business, or all or any personnel employed by us) as may be necessary or beneficial in carrying out the purposes of this Agreement.
6. Except as may be provided in a separate written agreement between the Company and us, neither we nor any of our employees or agents are authorized to assist in distribution of any of the AIM Funds' shares except those contained in the then current Prospectus applicable to the Shares; and we shall have no authority to act as agent for the Company or the AIM Funds. Neither the AIM Funds, A I M Advisors, Inc. nor A I M Distributors, Inc. will be a party, nor will they be represented as a party, to any agreement that we may enter into with our clients.
7. In consideration of the services and facilities described herein, we shall receive from the Company on behalf of the AIM Funds an annual service fee, payable at such intervals as may be set forth in Schedule A hereto, of a percentage of the aggregate average net asset value of the Shares owned beneficially by our clients during each payment period, as set forth in Schedule A hereto, which may be amended from time to time by the Company. We understand that this Agreement and the payment of such service fees has been authorized and approved by the Boards of Directors/Trustees of the AIM Funds, and is subject to limitations imposed by the National Association of Securities Dealers, Inc. In cases where the Company has advanced payments to us of the first year's fee for shares sold with a contingent deferred sales charge, no payments will be made to us during the first year the subject Shares are held.
8. The AIM Funds reserve the right, at their discretion and without notice, to suspend the sale of any Shares or withdraw the sale of Shares.
9. We understand that the Company reserves the right to amend this
Agreement or Schedule A hereto at any time without our consent by
mailing a copy of an amendment to us at the address set forth below.
Such amendment shall become effective on the date specified in such
amendment unless we elect to terminate this Agreement within thirty
(30) days of our receipt of such amendment.
10. This Agreement may be terminated at any time by the Company on not less than 15 days' written notice to us at our principal place of business. We, on 15 days' written notice addressed to the Company at its principal place of business, may terminate this Agreement, said termination to become effective on the date of mailing notice to Company of such termination. The Company's failure to terminate for any cause shall not constitute a waiver of the Company's right to terminate at a later date for any such cause. This Agreement shall terminate automatically in the event of its assignment, the term "assignment" for this purpose having the meaning defined in Section 2(a)(4) of the Investment Company Act of 1940, as amended.
11. All communications to the Company shall be sent to it at Eleven Greenway Plaza, Suite 100, Houston, Texas, 77046-1173. Any notice to us shall be duly given if mailed or telegraphed to us at this address shown on this Agreement.
12. This Agreement shall become effective as of the date when it is executed and dated below by the Company. This Agreement and all rights and obligations of the parties hereunder shall be governed by and construed under the laws of the State of Texas.
03/31/00
Bank Shareholder Service Agreement Page 3
A I M DISTRIBUTORS, INC.
Date: By: X
------------------------------- -----------------------------------
|
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By: X
------------------------------- -----------------------------------
Signature
-----------------------------------
Print Name Title
-----------------------------------
Dealer's Name
-----------------------------------
Address
-----------------------------------
City State Zip
|
Please sign both copies and return one copy of each to:
A I M Distributors, Inc. Attn: _____________________ 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173
03/31/00
Bank Shareholder Service Agreement Page 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
AIM European Small Company Fund A Shares 0.25 August 31, 2000
AIM European Small Company Fund B Shares 0.25 August 31, 2000
AIM European Small Company Fund C Shares 1.00** August 31, 2000
|
08/31/00
Bank Shareholder Service Agreement Page 5
Fund Fee Rate* Plan Calculation Date
-------------------------------------------------------------------------------------
AIM Explorer Fund A Shares 0.25 December 29, 2000
AIM Explorer Fund B Shares 0.25 December 29, 2000
AIM Explorer Fund C Shares 1.00** December 29, 2000
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 Emerging Growth Fund A Shares 0.25 August 31, 2000
AIM International Emerging Growth Fund B Shares 0.25 August 31, 2000
AIM International Emerging Growth Fund C Shares 1.00** August 31, 2000
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 Basic Value Fund B Shares 0.25 August 1, 2000
AIM Large Cap Basic Value Fund C Shares 1.00** August 1, 2000
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(1) 0.25 December 30, 1999
AIM Large Cap Opportunities Fund B Shares(1) 0.25 March 31, 2000
AIM Large Cap Opportunities Fund C Shares(1) 1.00** March 31, 2000
|
(1) AIM Large Cap Opportunities Fund intends to close to new investors on the earlier of reaching $750 million in assets or September 29, 2000.
08/31/00
Bank Shareholder Service Agreement Page 6
Fund Fee Rate* Plan Calculation Date
------------------------------------------------------------------------------------------
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
AIM Mid Cap Opportunities Fund A Shares(2) 0.25 December 30 1998
AIM Mid Cap Opportunities Fund B Shares(2) 0.25 November 12, 1999
AIM Mid Cap Opportunities Fund C Shares(2) 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 New Technology Fund A Shares 0.25 August 31, 2000
AIM New Technology Fund B Shares 0.25 August 31, 2000
AIM New Technology Fund C Shares 1.00** August 31, 2000
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 Equity Fund A Shares 0.25 August 31, 2000
AIM Small Cap Equity Fund B Shares 0.25 August 31, 2000
AIM Small Cap Equity Fund C Shares 1.00** August 31, 2000
AIM Small Cap Opportunities Fund A Shares(2) 0.25 June 29, 1998
AIM Small Cap Opportunities Fund B Shares(2) 0.25 July 13, 1998
AIM Small Cap Opportunities Fund C Shares(2) 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 Value II Fund A Shares 0.25 August 31, 2000
AIM Value II Fund B Shares 0.25 August 31, 2000
AIM Value II Fund C Shares 1.00** August 31, 2000
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
|
*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.
(2) AIM Mid Cap Opportunities Fund and AIM Small Cap Opportunities Fund are closed to new investors.
08/31/00
Bank Shareholder Service Agreement Page 7
**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.
08/31/00
Bank Shareholder Service Agreement Page 8
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
|
08/31/00
Bank Shareholder Service Agreement Page 9
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(3) 0.25 May 29, 1998
AIM Small Cap Growth Fund B Shares(3) 0.25 May 29, 1998
AIM Small Cap Growth Fund C Shares(3) 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
|
*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.
***Based on number of years outstanding. First year - 0.00%; Second year - 0.10%; Third year - 0.15%; Fourth year - 0.20%; Fifth and following years - 0.25%.
(3) AIM Small Cap Growth Fund is closed to new investors.
08/31/00
EXHIBIT m(13)
VARIABLE GROUP ANNUITY CONTRACTHOLDER SERVICE AGREEMENT
This Variable Group Annuity Contractholder Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act") under a Distribution Plan adopted pursuant to said Rule. This Agreement, being made between A I M Distributors, Inc. ("Distributors") and the authorized insurance company, sets forth the terms for the provision of specialized services to holders of Group Annuity Contracts (the "Contracts") issued by insurance company separate accounts to employers for their pension, stock bonus or profit-sharing plans qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Plans"), where amounts contributed under such plans are invested pursuant to the Contracts in shares of one or more of the series portfolios of the AIM - managed mutual funds (or designated classes of such funds) (the "Fund(s)") listed in Appendix A, attached hereto, which may be amended from time to time by Distributors. Distributors' role in these arrangements will be solely as agent for the Funds.
1. To the extent you provide specialized services to holders of Contracts who have selected the Fund(s) for purposes of their Group Annuity Contracts ("Contractholders") you will receive payment pursuant to the distribution plan adopted by each of the Funds. Such services to Group Contractholders may include, without limitation, some or all of the following: answering inquiries regarding the Fund(s); performing sub-accounting for Contractholders; establishing and maintaining Contractholder accounts and records; processing and bunching purchase and redemption transactions; providing periodic statements of Contract account balances; forwarding such reports and notices to Contractholders relative to the Fund(s) as we deem necessary; generally, facilitating communications with Contractholders concerning investments in the Fund(s) on behalf of Plan participants; and performing such other administrative services as we deem to be necessary or desirable, to the extent permitted by applicable statute, rule or regulation. You represent that you will accept a fee hereunder only so long as you continue to provide personal services to Contractholders.
2. Shares of the Fund(s) purchased by you will be registered in your name and you may exercise all applicable rights of a holder of such Shares. You agree to transmit to the Funds, in a timely manner, all purchase orders and redemption requests and to forward to each of your Contractholders as you deem necessary, periodic shareholder reports and other communications received from the Funds.
3. You agree to wire to the Fund(s)' custodian bank, within three (3) business days of the placing of a purchase order, federal funds in an amount equal to the amount of all purchase orders placed by you on behalf of your Contractholders and accepted by the Funds (net of any redemption orders placed by you on behalf of your Contractholders).
4. You shall provide such facilities and personnel (which may be all or any part of the facilities currently used in your business, or all or any personnel employed by you) as may be necessary or beneficial in carrying out the purposes of this Agreement.
5. Except as may be provided in a separate written agreement between Distributors and you, neither you nor any of your employees or agents are authorized to assist in the distribution of any shares of the Fund(s) to the public or to make any representations to Contractholders
concerning the Fund(s) except those contained in the then current prospectus applicable to the Fund(s). Neither the Funds, A I M Advisors, Inc. ("Advisors"), Distributors nor any of their affiliates will be a party, nor will they be represented as a party, to any Group Annuity Contract agreement between you and the Contractholders nor shall the Funds, Advisors, Distributors or any of their affiliates participate, directly or indirectly, in any compensation that you may receive from Contractholders and their Plans' participants.
6. In consideration of the services and facilities described herein, you shall receive an annual fee, payable quarterly, as set forth in Appendix A, of the aggregate average net asset value of shares of the Fund(s) owned by you during each quarterly period for the benefit of Contractholders' Plans' participants. You understand that this Agreement and the payment of such distribution fees have been authorized and approved by the Boards of Directors/Trustees of the Fund(s). You further understand that this Agreement and the fees payable hereunder are subject to limitations imposed by applicable rules of the National Association of Securities Dealers, Inc.
7. The Funds reserve the right, at their discretion and without notice, to suspend the sale of their shares or to withdraw the sale of their shares.
8. This Agreement may be amended at any time without your consent by mailing a copy of an amendment to you at the address set forth below. Such amendment shall become effective on the date set forth in such amendment unless you terminate this Agreement as set forth below within thirty (30) days of your receipt of such amendment.
9. This Agreement may be terminated at any time by us on not less than 60 days' written notice to you at your principal place of business. You may terminate this Agreement on 60 days' written notice addressed to us at our principal place of business. We may also terminate this Agreement for cause on violation by you of any of the provisions of this Agreement, said termination to become effective on the date of mailing notice to you of such termination. Our failure to terminate for any cause shall not constitute a waiver of our right to terminate at a later date for any such cause.
This Agreement may be terminated with respect to any Fund at any time without payment of any penalty by the vote of a majority of the directors/trustees of such Fund who are Dis-interested Directors/Trustees, as defined in the 1940 Act, or by a vote of a majority of the Fund's outstanding shares, on sixty (60) days' written notice. It will be terminated by any act which terminates either the Fund's Distribution Agreement with us, the Selected Dealer Agreement between your firm and us or the Fund's Distribution Plan, and in any event, it shall terminate automatically in the event of its assignment as that term is defined in the 1940 Act.
10. All communications to us shall be sent to 11 Greenway Plaza, Suite 100, Houston, Texas 77046. Any notice to you shall be duly given if mailed, telegraphed or sent by facsimile to you at the address shown on this Agreement.
11. This Agreement shall become effective as of the date when it is executed and dated below by us. This Agreement and all rights and obligations of the parties hereunder shall be governed by and construed under the laws of the State of Texas.
A I M DISTRIBUTORS, INC.
Date: By:
------------------------------- ---------------------------------
Signature
------------------------------------
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Print Name
The undersigned agrees to abide by the foregoing terms and conditions.
Date:
----------------------------------- ------------------------------------
(Firm Name)
------------------------------------
(Address)
------------------------------------
(City) / (State) / (County)
By:
---------------------------------
Name:
-------------------------------
Title:
-----------------------------
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APPENDIX A
TO
VARIABLE GROUP ANNUITY CONTRACTHOLDER SERVICE AGREEMENT
FUND FEE RATE*
---- --------
AIM Advisor Funds (Class A and Class C Shares)
----------------------------------------------------
AIM Advisor Flex Fund .25%
AIM Advisor International Value Fund .25%
AIM Advisor Real Estate Fund .25%
AIM Equity Funds (Class A and Class C Shares)
---------------------------------------------
AIM Aggressive Growth Fund .25%
AIM Blue Chip Fund .25%
AIM Capital Development Fund .25%
AIM Charter Fund .25%
AIM Constellation Fund .25%
AIM Dent Demographic Trends Fund .25%
AIM Emerging Growth Fund .25%
AIM Large Cap Basic Value Fund .25%
AIM Large Cap Growth Fund .25%
AIM Mid Cap Growth Fund .25%
AIM Weingarten Fund .25%
AIM Funds Group (Class A and Class C Shares)
--------------------------------------------
AIM Balanced Fund .25%
AIM European Small Company Fund .25%
AIM Explorer Fund .25%
AIM Global Utilities Fund .25%
AIM International Emerging Growth Fund .25%
AIM New Technology Fund .25%
AIM Select Growth Fund .25%
AIM Small Cap Equity Fund .25%
AIM Value Fund .25%
AIM Value II Fund .25%
AIM Growth Series (Class A and Class C Shares)
----------------------------------------------
AIM Basic Value Fund .25%
AIM Euroland Growth Fund .25%
AIM Japan Growth Fund .25%
AIM Mid Cap Equity Fund .25%
AIM Small Cap Growth Fund(1) .25%
--------------
|
* Frequency of Payments: Quarterly.
(1) AIM Small Cap Growth Fund is closed to new investors.
AIM International Funds, Inc. (Class A and Class C Shares)
-----------------------------------------------------------
AIM Asian Growth Fund .25%
AIM European Development Fund .25%
AIM Global Aggressive Growth Fund .25%
AIM Global Growth Fund .25%
AIM Global Income Fund .25%
AIM International Equity Fund .25%
AIM Investment Funds (Class A and Class C Shares)
-------------------------------------------------
AIM Developing Markets Fund .25%
AIM Global Consumer Products and Services Fund .25%
AIM Global Financial Services Fund .25%
AIM Global Health Care Fund .25%
AIM Global Infrastructure Fund .25%
AIM Global Resources Fund .25%
AIM Global Telecommunications and Technology Fund .25%
AIM Latin American Growth Fund .25%
AIM Strategic Income Fund .25%
AIM Investment Securities Funds (Class A and Class C Shares)
------------------------------------------------------------
AIM Limited Maturity Treasury Fund(2) .15%
AIM High Yield Fund II .25%
AIM High Yield Fund .25%
AIM Income Fund .25%
AIM Intermediate Government Fund .25%
AIM Municipal Bond Fund .25%
AIM Series Trust (Class A and Class C Shares)
---------------------------------------------
AIM Global Trends Fund .25%
AIM Special Opportunities Funds (Class A and Class C Shares)
------------------------------------------------------------
AIM Small Cap Opportunities Fund(3) .25%
AIM Large Cap Opportunities Fund(4) .25%
AIM Mid Cap Opportunities Fund(3) .25%
------------------
(2) AIM Limited Maturity Treasury Fund offers Class A Shares only.
|
(3) AIM Mid Cap Opportunities Fund and AIM Small Cap Opportunities Fund are
closed to new investors.
(4) AIM Large Cap Opportunities Fund intends to close to new investors on the
earlier of reaching $750 million in assets or September 29, 2000.
EXHIBIT m(14)
AGENCY PRICING AGREEMENT
(THE AIM FAMILY OF FUNDS--Registered Trademark--)
This Agreement is entered into as of the ____________ of _________________ , 2000, between (the "Plan Provider") and A I M Distributors, Inc. (the "Distributor").
Plan Provider acts as a trustee and/or servicing agent for defined contribution plans and/or deferred compensation plans (the "Plans") and invests and reinvests such Plans' assets as specified by an investment advisor, sponsor or administrative committee of the Plan (a "Plan Representative") generally upon the direction of Plan beneficiaries (the "Participants").
Plan Provider and Distributor desire to facilitate the purchase and redemption of shares (the "Shares") of the funds listed on Exhibit A hereto which may be amended from time to time by Distributor (the "Fund" or "Funds"), registered investment companies distributed by Distributor, on behalf of the Plans, through one or more accounts (not to exceed one per Plan) in each Fund (individually an "Account" and collectively the "Accounts"), subject to the terms and conditions of this Agreement. Distributor shall, on behalf of the Funds, pay to Plan Provider a fee in accordance with Exhibit A hereto.
1. SERVICES
Plan Provider shall provide shareholder and administration services for
the Plans and/or their Participants, including, without limitation:
answering questions about the Funds; assisting in changing dividend
options, account designations and addresses; establishing and
maintaining shareholder accounts and records; and assisting in
processing purchase and redemption transactions (the "Services"). Plan
Provider shall comply with all applicable laws, rules and regulations,
including requirements regarding prospectus delivery and maintenance
and preservation of records. To the extent allowed by law, Plan
Provider shall provide Distributor with copies of all records that
Distributor may reasonably request. Distributor or its affiliate will
recognize each Plan as an unallocated account in each Fund, and will
not maintain separate accounts in each Fund for each Participant.
Except to the extent provided in Section 3, all Services performed by
Plan Provider shall be as an independent contractor and not as an
employee or agent of Distributor or any of the Funds. Plan Provider and
Plan Representatives, and not Distributor, shall take all necessary
action so that the transactions contemplated by this Agreement shall
not be "Prohibited Transactions" under section 406 of the Employee
Retirement Income Security Act of 1974, or section 4975 of the Internal
Revenue Code.
2. PRICING INFORMATION
Each Fund or its designee will furnish Plan Provider on each business day that the New York Stock Exchange is open for business ("Business Day"), with (i) net asset value information as of the close of trading (currently 4:00 p.m. Eastern Time) on the New York Stock
Exchange or as at such later times at which a Fund's net asset value is
calculated as specified in such Fund's prospectus ("Close of Trading"),
(ii) dividend and capital gains information as it becomes available,
and (iii) in the case of income Funds, the daily accrual or interest
rate factor (mil rate). The Funds shall use their best efforts to
provide such information to Plan Provider by 6:00 p.m. Central Time on
the same Business Day.
Distributor or its affiliate will provide Plan Provider (a) daily confirmations of Account activity within five Business Days after each day on which a purchase or redemption of Shares is effected for the particular Account, (b) if requested by Plan Provider, quarterly statements detailing activity in each Account within fifteen Business Days after the end of each quarter, and (c) such other reports as may be reasonably requested by Plan Provider.
3. ORDERS AND SETTLEMENT
If Plan Provider receives instructions in proper form from Participants or Plan Representatives before the Close of Trading on a Business Day, Plan Provider will process such instructions that same evening. On the next Business Day, Plan Provider will transmit orders for net purchases or redemptions of Shares to Distributor or its designee by 9:00 a.m. Central Time and wire payment for net purchases by 2:00 p.m. Central Time. Distributor or its affiliate will wire payment for net redemptions on the Business Day following the day the order is executed for the Accounts. In doing so, Plan Provider will be considered the Funds' agent, and Shares will be purchased and redeemed as of the Business Day on which Plan Provider receives the instructions. Plan Provider will record time and date of receipt of instructions and will, upon request, provide such instructions and other records relating to the Services to Distributor's auditors. If Plan Provider receives instructions in proper form after the Close of Trading on a Business Day, Plan Provider will treat the instructions as if received on the next Business Day.
4. REPRESENTATIONS WITH RESPECT TO THE DISTRIBUTOR AND THE FUNDS
Plan Provider and its agents shall limit representations concerning a Fund or Shares to those contained in the then current prospectus of such Fund, in current sales literature furnished by Distributor to Plan Provider, in publicly available databases, such as those databases created by Standard & Poor's and Morningstar, and in current sales literature created by Plan Provider and submitted to and approved in writing by Distributor prior to its use.
5. USE OF NAMES
Plan Provider and its affiliates will not, without the prior written approval of Distributor, make public references to A I M Management Group Inc. or any of its subsidiaries, or to the Funds. For purposes of this provision, the public does not include Plan Providers' representatives who are actively engaged in promoting the Funds. Any brochure or other communication to the public that mentions the Funds shall be submitted to Distributor for written approval prior to use. Plan Provider shall provide copies of its regulatory filings that include any reference to A I M Management Group Inc. or its subsidiaries or the Funds to Distributor. If Plan Provider or its affiliates should make unauthorized references or representations, Plan Provider agrees to indemnify and hold harmless the Funds, A I M Management Group Inc. and its subsidiaries from any claims, losses, expenses or liability arising in any way out of or connected in any way with such references or representations.
6. TERMINATION
(a) This Agreement may be terminated with respect to any Fund at any time without any penalty by the vote of a majority of the directors of such Fund who are "disinterested directors", as that term is defined in the Investment Company Act of 1940, as amended (the "1940 Act"), or by a vote of a majority of the Fund's outstanding shares, on sixty (60) days' written notice. It will be terminated by any act which terminates either the Fund's Distribution Plan, or any related agreement thereunder, and in any event, it shall terminate automatically in the event of its assignment as that term is defined in the 1940 Act.
(b) Either party may terminate this Agreement upon ninety (90) days' prior written notice to the other party at the address specified below.
7. INDEMNIFICATION
(a) Plan Provider agrees to indemnify and hold harmless the Distributor, its affiliates, the Funds, the Funds' investment advisors, and each of their directors, officers, employees, agents and each person, if any, who controls them within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), (the "Distributor Indemnitees") against any losses, claims, damages, liabilities or expenses to which a Distributor Indemnitee may become subject insofar as those losses, claims, damages, liabilities or expenses or actions in respect thereof, arise out of or are based upon (i) Plan Provider's negligence or willful misconduct in performing the Services, (ii) any breach by Plan Provider of any material provision of this Agreement, or (iii) any breach by Plan Provider of a representation, warranty or covenant made in this Agreement; and Plan Provider will reimburse the Distributor Indemnitee for any legal or other expenses reasonably incurred, as incurred, by them in connection with investigating or defending such loss, claim or action. This indemnity agreement will be in addition to any liability which Plan Provider may otherwise have.
(b) Distributor agrees to indemnify and hold harmless Plan Provider and its affiliates, and each of its directors, officers, employees, agents and each person, if any, who controls Plan Provider within the meaning of the Securities Act (the "Plan Provider Indemnitees") against any losses, claims, damages, liabilities or expenses to which a Plan Provider Indemnitee may become subject insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement or Prospectus of a Fund, or the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make statements therein not misleading, (ii) any breach by Distributor of any material provision of this Agreement, (iii) Distributor's negligence or willful misconduct in carrying out its duties and responsibilities under this Agreement, or (iv) any breach by Distributor of a representation, warranty or covenant made in this Agreement; and Distributor will reimburse the Plan Provider Indemnitees for any legal or other expenses reasonably incurred, as incurred, by them, in connection with investigating or defending any such loss, claim or action. This indemnity agreement will be in addition to any liability which Distributor may otherwise have.
(c) If any third party threatens to commence or commences any action for which one party (the "Indemnifying Party") may be required to indemnify another person hereunder (the "Indemnified Party"), the Indemnified Party shall promptly give notice thereof to the Indemnifying Party. The Indemnifying Party shall be entitled, at its own expense and without limiting its obligations to indemnify the Indemnified Party, to assume control of the defense of such action with counsel selected by the Indemnifying Party which counsel shall be reasonably satisfactory to the Indemnified Party. If the Indemnifying Party assumes the control of the defense, the Indemnified Party may participate in the defense of such claim at its own expense. Without the prior written consent of the Indemnified Party, which consent shall not be withheld unreasonably, the Indemnifying Party may not settle or compromise the liability of the Indemnified Party in such action or consent to or permit the entry of any judgment in respect thereof unless in connection with such settlement, compromise or consent each Indemnified Party receives from such claimant an unconditional release from all liability in respect of such claim.
8. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas applicable to agreements fully executed and to be performed therein.
9. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each party represents that it is free to enter into this Agreement and that by doing so it will not breach or otherwise impair any other agreement or understanding with any other person, corporation or other entity. Each party represents that it has full power and authority under applicable law, and has taken all action necessary to enter into and perform this Agreement and the person executing this Agreement on its behalf is duly authorized and empowered to execute and deliver this Agreement. Additionally, each party represents that this Agreement, when executed and delivered, shall constitute its valid, legal and binding obligation, enforceable in accordance with its terms.
Plan Provider further represents, warrants, and covenants that:
(a) it is registered as a transfer agent pursuant to Section 17A of the Securities Exchange Act of 1934, as amended (the "1934 Act"), or is not required to be registered as such;
(b) the arrangements provided for in this Agreement will be disclosed to the Plan Representatives; and
(c) it is registered as a broker-dealer under the 1934 Act or any applicable state securities laws, or, including as a result of entering into and performing the services set forth in this Agreement, is not required to be registered as such.
Distributor further represents, warrants and covenants, that:
(a) it is registered as a broker-dealer under the 1934 Act and any applicable state securities laws; and
(b) the Funds' advisors are registered as investment advisors under the Investment Advisers Act of 1940, the Funds are registered as investment companies under the 1940 Act and Fund Shares are registered under the Securities Act.
10. MODIFICATION
This Agreement and Exhibit A may be amended at any time by Distributor without Plan Provider's consent by Distributor mailing a copy of an amendment to Plan Provider at the address set forth below. Such amendment shall become effective thirty (30) days from the date of mailing unless this Agreement is terminated by the Plan Provider within such thirty (30) days.
11. ASSIGNMENT
This Agreement shall not be assigned by a party hereto, without the prior written consent of the other parties hereto, except that a party may assign this Agreement to an affiliate having the same ultimate ownership as the assigning party without such consent.
12. SURVIVAL
The provisions of Sections 1, 5 and 7 shall survive termination of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their duly authorized officers as of the date first above written.
A I M DISTRIBUTORS, INC.
(DISTRIBUTOR)
EXHIBIT A
For the term of this Agreement, Distributor, or its affiliates, shall pay Plan Provider the following amounts for each of the following Funds with respect to the average daily net asset value of the Class A Shares of the Plans' balances for the prior quarter:
FUND ANNUAL FEE
---- ----------
AIM Advisor Funds (Class A Shares Only)
---------------------------------------
AIM Advisor Flex Fund .25%
AIM Advisor International Value Fund .25%
AIM Advisor Real Estate Fund .25%
AIM Equity Funds (Class A Shares Only)
--------------------------------------------
AIM Aggressive Growth Fund .25%
AIM Blue Chip Fund .25%
AIM Capital Development Fund .25%
AIM Charter Fund .25%
AIM Constellation Fund .25%
AIM Dent Demographic Trends Fund .25%
AIM Emerging Growth Fund .25%
AIM Large Cap Basic Value Fund .25%
AIM Large Cap Growth Fund .25%
AIM Mid Cap Growth Fund .25%
AIM Weingarten Fund .25%
AIM Floating Rate Fund (Class C Shares Only) Up to .25%
--------------------------------------------
AIM Funds Group (Class A Shares Only)
-------------------------------------
AIM Balanced Fund .25%
AIM European Small Company Fund .25%
AIM Explorer Fund .25%
AIM Global Utilities Fund .25%
AIM International Emerging Growth Fund .25%
AIM New Technology Fund .25%
AIM Select Growth Fund .25%
AIM Small Cap Equity Fund .25%
AIM Value Fund .25%
AIM Value II Fund .25%
AIM Growth Series (Class A Shares Only)
---------------------------------------
AIM Basic Value Fund .25%
AIM Euroland Growth Fund .25%
AIM Japan Growth Fund .25%
AIM Mid Cap Equity Fund .25%
AIM Small Cap Growth Fund(1) .25%
|
(1) AIM Small Cap Growth Fund is closed to new investors.
AIM International Funds, Inc. (Class A Shares Only)
---------------------------------------------------
AIM Asian Growth Fund .25%
AIM European Development Fund .25%
AIM Global Aggressive Growth Fund .25%
AIM Global Growth Fund .25%
AIM Global Income Fund .25%
AIM International Equity Fund .25%
AIM Investment Funds (Class A Shares Only)
------------------------------------------
AIM Developing Markets Fund .25%
AIM Global Consumer Products and Services Fund .25%
AIM Global Financial Services Fund .25%
AIM Global Health Care Fund .25%
AIM Global Infrastructure Fund .25%
AIM Global Resources Fund .25%
AIM Global Telecommunications and Technology Fund .25%
AIM Latin American Growth Fund .25%
AIM Strategic Income Fund .25%
AIM Investment Securities Funds (Class A Shares Only)
-----------------------------------------------------
AIM High Yield Fund II .25%
AIM Limited Maturity Treasury Fund(2) .15%
AIM High Yield Fund .25%
AIM Income Fund .25%
AIM Intermediate Government Fund .25%
AIM Municipal Bond Fund .25%
AIM Series Trust (Class A Shares Only)
--------------------------------------
AIM Global Trends Fund .25%
AIM Special Opportunities Funds (Class A Shares Only)
-----------------------------------------------------
AIM Small Cap Opportunities Fund(3) .25%
AIM Large Cap Opportunities Fund(4) .25%
AIM Mid Cap Opportunities Fund(3) .25%
|
Distributor or its affiliates shall calculate the amount of quarterly payment and shall deliver to Plan Provider a quarterly statement showing the calculation of the quarterly amounts payable to Plan Provider. Distributor reserves the right at any time to impose minimum fee payment requirements before any quarterly payments will be made to Plan Provider. Payment to Plan Provider shall occur within 30 days following the end of each quarter. All parties agree that the payments referred to herein are for record keeping and administrative services only and are not for legal, investment advisory or distribution services.
Minimum Payments: $50 (with respect to all Funds in the aggregate.)
(2) AIM Limited Maturity Treasury Fund offers Class A Shares only.
(3) AIM Mid Cap Opportunities Fund and AIM Small Cap Opportunities Fund are closed to new investors.
(4) AIM Large Cap Opportunities Fund intends to close to new investors on the earlier of reaching $750 million in assets or September 29, 2000.
EXHIBIT m(15)
[A I M DISTRIBUTORS, INC. LOGO] A I M DISTRIBUTORS, INC.
SHAREHOLDER SERVICE AGREEMENT
(BANK TRUST DEPARTMENTS)
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Gentlemen:
We desire to enter into an Agreement with A I M Distributors, Inc. ("AIM Distributors") as agent on behalf of the funds listed on Schedule A hereto (the "Funds"), for the servicing of our clients who are shareholders of, and the administration of accounts in, the Funds. We understand that this Shareholder Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act") by each of the Funds, under a Distribution Plan (the "Plan") adopted pursuant to said Rule, and is subject to applicable rules of the National Association of Securities Dealers, Inc. ("NASD"). This Agreement defines the services to be provided by us for which we are to receive payments pursuant to the Plan. The Plan and the Agreement have been approved by a majority of the directors or trustees of the applicable Fund, including a majority of directors or trustees who are not interested persons of the applicable Fund, and who have no direct or indirect financial interest in the operation of the Plan or related agreements, by votes cast in person at a meeting called for the purpose of voting on the Plan. Such approval included a determination by the directors or trustees of the applicable Fund, in the exercise of their reasonable business judgement and in light of their fiduciary duties, that there is a reasonable likelihood that the Plan will benefit the Fund and the holders of its Shares. The terms and conditions of this Agreement shall be as follows:
1. To the extent that we provide continuing personal shareholder services and administrative support services to our customers who may from time to time own shares of the Funds of record or beneficially, including but not limited to, forwarding sales literature, answering routine customer inquiries regarding the Funds, assisting customers in changing dividend options, account designations and addresses, and in enrolling into any of several special investment plans offered in connection with the purchase of the Funds' shares, assisting in the establishment and maintenance of customer accounts and records and in the processing of purchase and redemption transactions, investing dividends and capital gains distributions automatically in shares of the Funds and providing such other services as AIM Distributors or the customer may reasonably request, you shall pay us a fee periodically. We represent that we shall accept fees hereunder only so long as we continue to provide such personal shareholder services.
Shareholder Service Agreement Page 2
(Bank Trust Departments)
2. We agree to transmit to AIM Distributors in a timely manner, all purchase orders and redemption requests of our clients and to forward to each client all proxy statements, periodic shareholder reports and other communications received from AIM Distributors by us relating to shares of the Funds owned by our clients. AIM Distributors, on behalf of the Funds, agrees to pay all out-of-pocket expenses actually incurred by us in connection with the transfer by us of such proxy statements and reports to our clients as required under applicable laws or regulations.
3. We agree to make available upon AIM Distributors' request, such information relating to our clients who are beneficial owners of Fund shares and their transactions in such shares as may be required by applicable laws and regulations or as may be reasonably requested by AIM Distributors.
4. We agree to transfer record ownership of a client's Fund shares to the client promptly upon the request of a client. In addition, record ownership will be promptly transferred to the client in the event that the person or entity ceases to be our client.
5. Neither we nor any of our employees or agents are authorized to make any representation to our clients concerning the Funds except those contained in the then current prospectuses applicable to the Funds, copies of which will be supplied to us by AIM Distributors; and we shall have no authority to act as agent for any Fund or AIM Distributors. Neither a Fund, nor A I M Advisors, Inc. ("AIM") will be a party, nor will they be represented as a party, to any agreement that we may enter into with our clients and neither a Fund nor AIM shall participate, directly or indirectly, in any compensation that we may receive from our clients in connection with our acting on their behalf with respect to this Agreement.
6. In consideration of the services and facilities described herein, we shall receive a maximum annual service fee and asset-based sales charge, payable monthly, as set forth on Schedule A hereto. We understand that this Agreement and the payment of such service fees and asset-based sales charge has been authorized and approved by the Board of Directors or Trustees of the applicable Fund, and that the payment of fees thereunder is subject to limitations imposed by the rules of the NASD.
7. AIM Distributors reserves the right, in its discretion and without notice, to suspend the sale of any Fund or withdraw the sale of shares of a Fund, or upon notice to us, to amend this Agreement. We agree that any order to purchase shares of the Funds placed by us after notice of any amendment to this Agreement has been sent to us shall constitute our agreement to any such amendment.
8. All communications to AIM Distributors shall be duly given if mailed to A I M Distributors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Any notice to us shall be duly given if mailed to us at the address specified by us in this Agreement or to such other address as we shall have designated in writing to AIM Distributors.
9. This Agreement may be terminated at any time by AIM Distributors on not less than 60 days' written notice to us at our principal place of business. We, on 60 days' written notice addressed to AIM Distributors at its principal place of business, may terminate this Agreement. AIM Distributors may also terminate this Agreement for cause on violation by us of any of the provisions of this Agreement, said termination to become effective on the date of mailing notice to us of such termination. AIM Distributors' failure to terminate for any cause shall
not
Shareholder Service Agreement Page 3
(Bank Trust Departments)
constitute a waiver of AIM Distributors' right to terminate at a later date for any such cause. This Agreement may be terminated with respect to any Fund at any time by the vote of a majority of the directors or trustees of such Fund who are disinterested directors or by a vote of a majority of the Fund's outstanding shares, on not less than 60 days' written notice to us at our principal place of business. This Agreement will be terminated by any act which terminates the Agreement for Purchase of Shares of The AIM Family of Funds--Registered Trademark-- between us and AIM Distributors or a Fund's Distribution Plan, and in any event, it shall terminate automatically in the event of its assignment by us, the term "assignment" for this purpose having the meaning defined in Section 2(a)(4) of the 1940 Act.
10. We represent that our activities on behalf of our clients and pursuant to this Agreement either (i) are not such as to require our registration as a broker-dealer in the state(s) in which we engage in such activities, or (ii) we are registered as a broker-dealer in the state(s) in which we engage in such activities. We represent that we are registered as a broker-dealer with the NASD if required under applicable law.
11. This Agreement and the Agreement for Purchase of Shares of The AIM Family of Funds--Registered Trademark-- through Bank Trust Departments constitute the entire agreement between us and AIM Distributors and supersede all prior oral or written agreements between the parties hereto. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute the same instrument.
12. This Agreement and all rights and obligations of the parties hereunder shall be governed by and construed under the laws of the State of Texas.
13. This Agreement shall become effective as of the date when it is executed and dated by AIM Distributors.
Shareholder Service Agreement Page 4
(Bank Trust Departments)
The undersigned agrees to abide by the foregoing terms and conditions.
ACCEPTED:
A I M DISTRIBUTORS, INC.
Please sign both copies and return to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Shareholder Service Agreement Page 5
(Bank Trust Departments)
SCHEDULE A
Funds Fees
----- ----
AIM Advisor Funds
AIM Advisor Flex Fund
AIM Advisor International Value Fund
AIM Advisor Real Estate Fund
AIM Equity Funds
AIM Aggressive Growth Fund
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Dent Demographic Trends Fund
AIM Emerging Growth Fund
AIM Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund (Retail Class)
AIM Floating Rate Fund
AIM Funds Group
AIM Balanced Fund
AIM European Small Company Fund
AIM Explorer Fund
AIM Global Utilities Fund
AIM International Emerging Growth Fund
AIM New Technology Fund
AIM Select Growth Fund
AIM Small Cap Equity Fund
AIM Value Fund
AIM Value II Fund
AIM Growth Series
AIM Basic Value Fund
AIM Euroland Growth Fund
AIM Japan Growth Fund
AIM Mid Cap Equity Fund
AIM Small Cap Growth Fund(1)
AIM International Funds, Inc.
AIM Asian Growth Fund
AIM European Development Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM International Equity Fund
|
(1) AIM Small Cap Growth Fund is closed to new investors.
Shareholder Service Agreement Page 6
(Bank Trust Departments)
AIM Investment Funds
AIM Developing Markets Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications and Technology Fund
AIM Latin American Growth Fund
AIM Strategic Income Fund
AIM Investment Securities Funds
AIM Limited Maturity Treasury Fund(2)
AIM High Yield Fund II
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Series Trust
AIM Global Trends Fund
AIM Special Opportunities Funds
AIM Small Cap Opportunities Fund(3)
AIM Large Cap Opportunities Fund(4)
AIM Mid Cap Opportunities Fund(3)
AIM Tax-Exempt Funds
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
|
(3) AIM Mid Cap Opportunities Fund and AIM Small Cap Opportunities Fund are closed to new investors.
(4) AIM Large Cap Opportunities Fund intends to close to new investors on the earlier of reaching $750 million in assets or September 29, 2000.
[A I M DISTRIBUTORS, INC. LOGO] A I M DISTRIBUTORS, INC.
SHAREHOLDER SERVICE AGREEMENT
(BROKERS FOR BANK TRUST DEPARTMENTS)
|
A I M Distributors, Inc.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
Gentlemen:
We desire to enter into an Agreement with A I M Distributors, Inc. ("AIM Distributors") as agent on behalf of the funds listed on Schedule A hereto, which may be amended from time to time by AIM Distributors (the "Funds"), for the servicing of our clients who are shareholders of, and the administration of accounts in, the Funds. We understand that this Shareholder Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act") by each of the Funds, under a Distribution Plan (the "Plan") adopted pursuant to said Rule, and is subject to applicable rules of the National Association of Securities Dealers, Inc. ("NASD"). This Agreement defines the services to be provided by us for which we are to receive payments pursuant to the Plan. The Plan and the Agreement have been approved by a majority of the directors or trustees of the applicable Fund, including a majority of directors or trustees who are not interested persons of the applicable Fund, and who have no direct or indirect financial interest in the operation of the Plan or related agreements, by votes cast in person at a meeting called for the purpose of voting on the Plan. Such approval included a determination by the directors or trustees of the applicable Fund, in the exercise of their reasonable business judgement and in light of their fiduciary duties, that there is a reasonable likelihood that the Plan will benefit the Fund and the holders of its Shares. The terms and conditions of this Agreement shall be as follows:
1. To the extent that we provide continuing personal shareholder services and administrative support services to our customers who may from time to time own shares of the Funds of record or beneficially, including but not limited to, forwarding sales literature, answering routine customer inquiries regarding the Funds, assisting customers in changing dividend options, account designations and addresses, and in enrolling into any of several special investment plans offered in connection with the purchase of the Funds' shares, assisting in the establishment and maintenance of customer accounts and records and in the processing of purchase and redemption transactions, investing dividends and capital gains distributions automatically in shares of the Funds and providing such other services as AIM Distributors or the customer may reasonably request, you shall pay us a fee periodically. We represent that
Shareholder Service Agreement Page 2
(Brokers for Bank Trust Departments)
we shall accept fees hereunder only so long as we continue to provide such personal shareholder services.
2. We agree to transmit to AIM Distributors in a timely manner, all purchase orders and redemption requests of our clients and to forward to each client all proxy statements, periodic shareholder reports and other communications received from AIM Distributors by us relating to shares of the Funds owned by our clients. AIM Distributors, on behalf of the Funds, agrees to pay all out-of-pocket expenses actually incurred by us in connection with the transfer by us of such proxy statements and reports to our clients as required under applicable laws or regulations.
3. We agree to transfer to AIM Distributors in a timely manner as set forth in the applicable prospectus, federal funds in an amount equal to the amount of all purchase orders placed by us and accepted by AIM Distributors. In the event that AIM Distributors fails to receive such federal funds on such date (other than through the fault of AIM Distributors), we shall indemnify the applicable Fund and AIM Distributors against any expense (including overdraft charges) incurred by the applicable Fund and/or AIM Distributors as a result of the failure to receive such federal funds.
4. We agree to make available upon AIM Distributors' request, such information relating to our clients who are beneficial owners of Fund shares and their transactions in such shares as may be required by applicable laws and regulations or as may be reasonably requested by AIM Distributors.
5. We agree to transfer record ownership of a client's Fund shares to the client promptly upon the request of a client. In addition, record ownership will be promptly transferred to the client in the event that the person or entity ceases to be our client.
6. Neither we nor any of our employees or agents are authorized to make any representation to our clients concerning the Funds except those contained in the then current prospectuses applicable to the Funds, copies of which will be supplied to us by AIM Distributors; and we shall have no authority to act as agent for any Fund or AIM Distributors. Neither a Fund, nor A I M Advisors, Inc. ("AIM") will be a party, nor will they be represented as a party, to any agreement that we may enter into with our clients and neither a Fund nor AIM shall participate, directly or indirectly, in any compensation that we may receive from our clients in connection with our acting on their behalf with respect to this Agreement.
7. In consideration of the services and facilities described herein, we shall receive a maximum annual service fee and asset-based sales charge, payable monthly, as set forth on Schedule A hereto. We understand that this Agreement and the payment of such service fees and asset-based sales charge has been authorized and approved by the Board of Directors or Trustees of the applicable Fund, and that the payment of fees thereunder is subject to limitations imposed by the rules of the NASD.
8. AIM Distributors reserves the right, in its discretion and without notice, to suspend the sale of any Fund or withdraw the sale of shares of a Fund, or upon notice to us, to amend this Agreement. We agree that any order to purchase shares of the Funds placed by us after notice of any amendment to this Agreement has been sent to us shall constitute our agreement to any such amendment.
Shareholder Service Agreement Page 3
(Brokers for Bank Trust Departments)
9. All communications to AIM Distributors shall be duly given if mailed to A I M Distributors, Inc., 11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173. Any notice to us shall be duly given if mailed to us at the address specified by us in this Agreement or to such other address as we shall have designated in writing to AIM Distributors.
10. This Agreement may be terminated at any time by AIM Distributors on not less than 60 days' written notice to us at our principal place of business. We, on 60 days' written notice addressed to AIM Distributors at its principal place of business, may terminate this Agreement. AIM Distributors may also terminate this Agreement for cause on violation by us of any of the provisions of this Agreement, said termination to become effective on the date of mailing notice to us of such termination. AIM Distributors' failure to terminate for any cause shall not constitute a waiver of AIM Distributors' right to terminate at a later date for any such cause. This Agreement may be terminated with respect to any Fund at any time by the vote of a majority of the directors or trustees of such Fund who are disinterested directors or by a vote of a majority of the Fund's outstanding shares, on not less than 60 days' written notice to us at our principal place of business. This Agreement will be terminated by any act which terminates the Selected Dealer Agreement between us and AIM Distributors or a Fund's Distribution Plan, and in any event, shall terminate automatically in the event of its assignment by us, the term "assignment" for this purpose having the meaning defined in Section 2(a)(4) of the 1940 Act.
11. We represent that our activities on behalf of our clients and pursuant to this Agreement either (i) are not such as to require our registration as a broker-dealer in the state(s) in which we engage in such activities, or (ii) we are registered as a broker-dealer in the state(s) in which we engage in such activities. We represent that we are registered as a broker-dealer with the NASD if required under applicable law.
12. This Agreement and all rights and obligations of the parties hereunder shall be governed by and construed under the laws of the State of Texas. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute the same instrument. This Agreement shall not relieve us or AIM Distributors from any obligations either may have under any other agreements between us.
13. This Agreement shall become effective as of the date when it is executed and dated by AIM Distributors.
Shareholder Service Agreement Page 4
(Brokers for Bank Trust Departments)
The undersigned agrees to abide by the foregoing terms and conditions.
ACCEPTED:
A I M DISTRIBUTORS, INC.
Please sign both copies and return to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
Shareholder Service Agreement Page 5
(Brokers for Bank Trust Departments)
SCHEDULE A
Funds Fees
----- ----
AIM Advisor Funds
AIM Advisor Flex Fund
AIM Advisor International Value Fund
AIM Advisor Real Estate Fund
AIM Equity Funds
AIM Aggressive Growth Fund
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Dent Demographic Trends Fund
AIM Emerging Growth Fund
AIM Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund (Retail Class)
AIM Floating Rate Fund
AIM Funds Group
AIM Balanced Fund
AIM European Small Company Fund
AIM Explorer Fund
AIM Global Utilities Fund
AIM International Emerging Growth Fund
AIM New Technology Fund
AIM Select Growth Fund
AIM Small Cap Equity Fund
AIM Value Fund
AIM Value II Fund
AIM Growth Series
AIM Basic Value Fund
AIM Euroland Growth Fund
AIM Japan Growth Fund
AIM Mid Cap Equity Fund
AIM Small Cap Growth Fund(1)
AIM International Funds, Inc.
AIM Asian Growth Fund
AIM European Development Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM International Equity Fund
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Shareholder Service Agreement Page 6
(Brokers for Bank Trust Departments)
AIM Investment Funds
AIM Developing Markets Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications and Technology Fund
AIM Latin American Growth Fund
AIM Strategic Income Fund
AIM Investment Securities Funds
AIM Limited Maturity Treasury Fund(2)
AIM High Yield Fund II
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Series Trust
AIM Global Trends Fund
AIM Special Opportunities Funds
AIM Small Cap Opportunities Fund(3)
AIM Large Cap Opportunities Fund(4)
AIM Mid Cap Opportunities Fund(3)
AIM Tax-Exempt Funds
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
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(3) AIM Mid Cap Opportunities Fund and AIM Small Cap Opportunities Fund are closed to new investors.
(4) AIM Large Cap Opportunities Fund intends to close to new investors on the earlier of reaching $750 million in assets or September 29, 2000.
EXHIBIT m(16)
SHAREHOLDER SERVICE AGREEMENT FOR
[AIM LOGO APPEARS HERE] SHARES OF THE AIM MUTUAL FUNDS
(AIM Distributors 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 AIM 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.
Shareholder Service Agreement 2
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 Directors 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.
AIM DISTRIBUTORS, INC.
(Acting as Agent for the Funds)
Date: By:
-------------------------- --------------------------------
07/00
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Shareholder Service Agreement 3 |
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By:
-------------------------- --------------------------------
Signature
-----------------------------------
Print Name Title
-----------------------------------
Dealer's Name
AIM DISTRIBUTORS, INC.
-----------------------------------
Address
-----------------------------------
City State Zip
-----------------------------------
Telephone
Please sign both copies and return one copy of each to:
AIM Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
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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
AIM European Small Company Fund A Shares 0.25 August 31, 2000
AIM European Small Company Fund B Shares 0.25 August 31, 2000
AIM European Small Company Fund C Shares 1.00** August 31, 2000
AIM Explorer Fund A Shares 0.25 December 29, 2000
AIM Explorer Fund B Shares 0.25 December 29, 2000
AIM Explorer Fund C Shares 1.00** December 29, 2000
08/31/00
|
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 Emerging Growth Fund A Shares 0.25 August 31, 2000
AIM International Emerging Growth Fund B Shares 0.25 August 31, 2000
AIM International Emerging Growth Fund C Shares 1.00** August 31, 2000
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 Basic Value Fund B Shares 0.25 August 1, 2000
AIM Large Cap Basic Value Fund C Shares 1.00** August 1, 2000
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(1) 0.25 December 30, 1999
AIM Large Cap Opportunities Fund B Shares(1) 0.25 March 31, 2000
AIM Large Cap Opportunities Fund C Shares(1) 1.00** March 31, 2000
AIM Limited Maturity Treasury Fund A Shares 0.15 December 2, 1987
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(1) AIM Large Cap Opportunities Fund intends to close to new investors on the earlier of reaching $750 million in assets or September 29, 2000.
08/31/00
Shareholder Service Agreement 6
Fund Fee Rate* Plan Calculation Date
------------------------------------------------------------------------------------------
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
AIM Mid Cap Opportunities Fund A Shares(2) 0.25 December 30, 1998
AIM Mid Cap Opportunities Fund B Shares(2) 0.25 November 12, 1999
AIM Mid Cap Opportunities Fund C Shares(2) 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 New Technology Fund A Shares 0.25 August 31, 2000
AIM New Technology Fund B Shares 0.25 August 31, 2000
AIM New Technology Fund C Shares 1.00** August 31, 2000
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 Equity Fund A Shares 0.25 August 31, 2000
AIM Small Cap Equity Fund B Shares 0.25 August 31, 2000
AIM Small Cap Equity Fund C Shares 1.00** August 31, 2000
AIM Small Cap Opportunities Fund A Shares(2) 0.25 June 29, 1998
AIM Small Cap Opportunities Fund B Shares(2) 0.25 July 13, 1998
AIM Small Cap Opportunities Fund C Shares(2) 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 Value II Fund A Shares 0.25 August 31, 2000
AIM Value II Fund B Shares 0.25 August 31, 2000
AIM Value II Fund C Shares 1.00** August 31, 2000
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
|
*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.
08/31/00
Shareholder Service Agreement 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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08/31/00
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(3) 0.25 May 29, 1998
AIM Small Cap Growth Fund B Shares(3) 0.25 May 29, 1998
AIM Small Cap Growth Fund C Shares(3) 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
|
*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.
*** Based on number of years outstanding. First year -- 0.00%; Second year -- 0.10%; Third year -- 0.15%; Fourth year -- 0.20%; Fifth and following years -- 0.25%
08/31/00
EXHIBIT p(1)(b)
THE AIM MANAGEMENT GROUP
CODE OF ETHICS
(ADOPTED MAY 1, 1981)
(AS LAST AMENDED FEBRUARY 24, 2000)
WHEREAS, the members of the AIM Management Group are A I M Management Group Inc. ("AIM Management") and A I M Advisors, Inc. ("AIM Advisors") and its wholly owned and indirect subsidiaries (individually and collectively referred to as "AIM"); and
WHEREAS, certain members of AIM provide investment advisory services to AIM's investment companies and other clients; and
WHEREAS, certain members of AIM provide distribution services as principal underwriters for AIM's investment company clients; and
WHEREAS, certain members of AIM provide shareholder services as the transfer agent, dividend disbursing agent and shareholder processing agent for AIM's investment company clients; and
WHEREAS, the investment advisory business involves decisions and information which may have at least a temporary impact on the market price of securities, thus creating a potential for conflicts of interest between the persons engaged in such business and their clients; and
WHEREAS, the members of AIM have a fiduciary relationship with respect to each portfolio under management and the interests of the client accounts and of the shareholders of AIM's investment company clients must take precedence over the personal interests of the employees of AIM, thus requiring a rigid adherence to the highest standards of conduct by such employees; and
WHEREAS, every practical step must be taken to ensure that no intentional or inadvertent action is taken by an employee of AIM which is, or appears to be, adverse to the interests of AIM or any of its client accounts, including the defining of standards of behavior for such employees, while at the same time avoiding unnecessary interference with the privacy or personal freedom of such employees; and
WHEREAS, the members of AIM originally adopted a Code of Ethics ("the Code") on May 1, 1981, and adopted amendments thereto in January 1989, October 1989, April 1991, December 6, 1994 and December 5, 1995, December 10, 1996, and now deem it advisable to update and revise said Code in light of new investment company products developed by AIM and changing circumstances in the securities markets in which AIM conducts business; and
NOW, THEREFORE, the Boards of Directors of AIM Management and AIM Advisors hereby adopt the following revised Code pursuant to the provisions of Rule 17j-1 under the Investment Company Act of 1940 ("1940 Act"), with the intention that certain provisions of the Code shall become applicable to the officers, directors and employees of AIM.
I. APPLICABILITY
A. The provisions of AIM's Code shall apply to certain officers, directors and employees (as hereinafter designated) of AIM. Unless otherwise indicated, the term "employee" as used herein means: (i) all officers, directors and employees of AIM Advisors and its wholly owned and indirect subsidiaries and (ii) officers, directors and employees of AIM Management who
have an active part in the management, portfolio selection, underwriting or shareholder functions with respect to AIM's investment company clients or provide one or more similar services for AIM's non-investment company clients. The term "employee" does not include directors of AIM Management who do not maintain an office at the home office of AIM Management and who do not regularly obtain information concerning the investment recommendations or decisions made by AIM on behalf of client accounts ("independent directors").
B. The Code shall also apply to any person or entity appointed as a sub-advisor for an AIM investment company client account unless such person or entity has adopted a code of ethics in compliance with Section 17(j) of the 1940 Act; or, in the event that such person or entity is domiciled outside of the United States, has adopted employee standards of conduct that provide equivalent protections to AIM's client accounts. In performing sub-advisory services, such person or entity will be subject to the direction and supervision of AIM, and subject to the policies and control of the Boards of Directors/Trustees of the respective AIM investment company client(s).
II. INTERPRETATION AND ENFORCEMENT
A. The Chief Executive Officer of AIM Management shall appoint a Code of Ethics Committee ("Committee"). The Committee shall have the responsibility for interpreting the provisions of the Code, for adopting and implementing Procedures for the enforcement of the provisions of the Code, and for determining whether a violation of the provisions of the Code, or of any such related Procedures has occurred. The Committee will appoint an officer to monitor personal investment activity by "Covered Persons" (as defined in the Procedures adopted hereunder), both before and after any trade occurs and to prepare periodic and annual reports, conduct education seminars and obtain employee certifications as deemed appropriate. In the event of a finding that a violation has occurred requiring significant remedial action, the Committee shall take such action as it deems appropriate on the imposition of sanctions or initiation of disgorgement proceedings. The Committee shall also make recommendations and submit reports to the Boards of Directors/Trustees of AIM's investment company clients.
B. If a sub-advisor has adopted a code of ethics in accordance with
Section 17(j) of the 1940 Act, then pursuant to a sub-advisory
agreement with AIM, it shall be the duty of such sub-advisor to
furnish AIM with a copy of the following:
o code of ethics and related procedures of the sub-advisor, and a statement as to its employees' compliance therewith;
o any statement or policy on insider trading adopted pursuant to Section 204A under the 1940 Act; and the procedures designed to prevent the misuse of material non-public information by any person associated with such sub-advisor; and
o such other information as may reasonably be necessary for AIM to report to the Boards of Directors/Trustees of its investment company client account(s) as to such sub-advisor's adherence to the Boards' policies and controls referenced in Section I.B. above.
III. PROCEDURES ADOPTED UNDER THE CODE
From time to time, AIM's Committee shall adopt Procedures to carry out the intent of the Code. Among other things, the Procedures require certain new employees to complete an Asset Disclosure Form, a Brokerage Accounts Listing Form and such other forms as deemed appropriate by the Committee. Such Procedures are hereby incorporated into the Code and are made a part of the Code. Therefore, a violation of the Procedures shall be deemed a violation of the Code itself.
IV. COMPLIANCE WITH GOVERNING LAWS, REGULATIONS AND PROCEDURES
A. Each employee shall have and maintain knowledge of and 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/her actions as an employee.
B. Each employee shall comply with all laws and regulations, and AIM's prohibition against insider trading. Trading on or communicating material non-public information, or "inside information", of any sort, whether obtained in the course of research activities, through a client relationship or otherwise, is strictly prohibited.
C. Each employee shall comply with the procedures and guidelines established by AIM to ensure compliance with applicable federal and state laws and regulations of governmental agencies and self-regulatory organizations. No employee shall knowingly participate in, assist, or condone any act in violation of any statute or regulation governing AIM or any act that would violate any provision of this Code, or of the Procedures adopted hereunder.
D. Each employee shall have and maintain knowledge of and shall comply with the provisions of this Code and any Procedures adopted hereunder.
E. Each employee having supervisory responsibility shall exercise reasonable supervision over employees subject to his/her control, with a view to preventing any violation by such persons of applicable statutes or regulations, AIM's corporate procedures, or the provisions of the Code, or the Procedures adopted hereunder.
F. Any employee obtaining evidence that an act in violation of
applicable statutes, regulations or provisions of the Code or of
any Procedures adopted hereunder has occurred shall immediately
report such evidence to the Chief Compliance Officer of AIM. Such
action by the employee will remain confidential, unless the
employee waives confidentiality or federal or state authorities
compel disclosure. Failure to report such evidence may result in
disciplinary proceedings and may include sanctions as set forth in
Section VI hereof.
V. ETHICAL STANDARDS
A. Employees shall conduct themselves in a manner consistent with the highest ethical and fiduciary standards. They shall avoid any action, whether for personal profit or otherwise, that results in an actual or potential conflict of interest with AIM or its client accounts, or which may be otherwise detrimental to the interests of the members of AIM or its client accounts.(1)
B. Employees shall act in a manner consistent with their fiduciary obligation to clients of AIM, and shall not deprive any client account of an investment opportunity in order to personally benefit from that opportunity.
(1) Conflicts of interest generally result from a situation in which an individual has a personal interest in a matter that is or may be competitive with his or her responsibilities to other persons or entities (such as AIM or its client accounts) 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 a client account on the one hand, and AIM, its officers, directors and employees, on the other hand, such conflict may result from the purchase or sale of securities for a client account and for the personal account of the individual involved or the account of any "affiliate" of such individual, as such term is defined in the 1940 Act. Such conflict may also arise from the purchase or sale for a client account of securities in which an officer, director or employee of AIM has an economic interest. Moreover, such conflict may arise in connection with vendor relationships in which such employee has any direct or indirect financial interest, family interests or other personal interest. To the extent of conflicts of interest between AIM and a vendor, such conflicts must be resolved in a manner that is not disadvantageous to AIM. In any such case, potential or actual conflicts must be disclosed to AIM 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 that is not disadvantageous to a client.
C. Without the knowledge and approval of the Chief Executive Officer of AIM Management, employees shall not engage in a business activity or practice for compensation in competition with the members of AIM. Each employee, who is deemed to be a "Covered Person" as defined in the Procedures adopted hereunder, shall obtain the written approval of AIM Management's Chief Executive Officer to participate on a board of directors/trustees of any of the following organizations:
o publicly traded company, partnership or trust;
o hospital or philanthropic institution;*
o local or state municipal authority;* and/or
o charitable organization.*
* These restrictions relate to organizations that have or intend to raise proceeds in a public securities offering.
In the relatively small number of instances in which board approval is authorized, investment personnel serving as directors shall be isolated from those making investment decisions through AIM's "Chinese Wall" Procedures.
D. Each employee, in making an investment recommendation or taking any investment action, shall exercise diligence and thoroughness, and shall have a reasonable and adequate basis for any such recommendation or action.
E. Each employee shall not attempt to improperly influence for such person's personal benefit any investment strategy to be followed or investment action to be taken by the members of AIM for its client accounts.
F. Each employee shall not improperly use for such person's personal benefit any knowledge, whether obtained through such person's relationship with AIM or otherwise, of any investment recommendation made or to be made, or of any investment action taken or to be taken by AIM for its client accounts.
G. Employees shall not disclose any non-public information relating to a client account's portfolio or transactions or to the investment recommendations of AIM, nor shall any employee disclose any non-public information relating to the business or operations of the members of AIM, unless properly authorized to do so.
H. Employees shall not accept, directly or indirectly, from a broker/dealer or other vendor who transacts business with AIM or its client accounts, any gifts, gratuities or other things of more than de minimis value or significance that their acceptance might reasonably be expected to interfere with or influence the exercise of independent and objective judgment in carrying out such person's duties or otherwise gives the appearance of a possible impropriety. For this purpose, gifts, gratuities and other things of value shall not include unsolicited entertainment so long as such unsolicited entertainment is not so frequent or extensive as to raise any question of impropriety.
I. Employees who are registered representatives and/or principals of AIM shall not acquire securities for an account for which he/she has a direct or indirect beneficial interest in an initial public offering ("IPO") or on behalf of any person, entity or organization that is not an AIM client. All other employees shall not acquire securities for an account for which he/she has a direct or indirect beneficial interest offered in an IPO or on behalf of any person, entity or organization that is not an AIM client account except in those circumstances where different amounts of such offerings are specified for different investor types (e.g., private investors and institutional investors) and such transaction has been pre-cleared by the Compliance Office.
J. All personal securities transactions by employees must be conducted consistent with this Code and the Procedures adopted hereunder, and in such a manner as to avoid any actual or potential conflicts of interest or any abuse of such employee's position of trust and responsibility. Unless an exemption is available, employees who are deemed to be "Covered Persons" as defined in the Procedures adopted hereunder, shall pre-clear all personal securities transactions in securities in accordance with the Procedures adopted hereunder.
K. Each employee, who is deemed to be a "Covered Person" as defined in the Procedures adopted hereunder, (or registered representative and/or principal of AIM), shall refrain from engaging in personal securities transactions in connection with a security that is not registered under Section 12 of the Securities Act of 1933 (i.e., a private placement security) unless such transaction has been pre-approved by the Chief Compliance Officer or the Director of Investments (or their designees).
L. Employees, who are deemed to be "Covered Persons" as defined in the Procedures adopted hereunder, may not engage in a transaction in connection with the purchase or sale of a security within seven calendar days before and after an AIM investment company client trades in that same (or equivalent) security unless the de minimis exemption is available.
M. Each employee, who is deemed to be a "Covered Person" as defined in the Procedures adopted hereunder, may not purchase and voluntarily sell, or sell and voluntarily purchase the same (or equivalent) securities of the same issuer within 60 calendar days unless such employee complies with the disgorgement procedures adopted by the Code of Ethics Committee. Subject to certain limited exceptions set forth in the related Procedures, any transaction under this provision may result in disgorgement proceedings for any profits received in connection with such transaction by such employee.
VI. SANCTIONS
Employees violating the provisions of AIM's Code or any Procedures adopted hereunder may be subject to sanctions, which may include, among other things, restrictions on such person's personal securities transactions; a letter of admonition, education or formal censure; fines, suspension, re-assignment, demotion or termination of employment; or other significant remedial action. Employees may also be subject to disgorgement proceedings for transactions in securities that are inconsistent with Sections V.L. and V.M. above.
VII. ADDITIONAL DISCLOSURE
This Code and the related Procedures cannot, and do not, cover every situation in which choices and decisions must be made, because other company policies, practices and procedures (as well as good common sense) and good business judgment also apply. Every person subject to this Code should read and understand these documents thoroughly. They present important rules of conduct and operating controls for all employees. Employees are also expected to present questions to the attention of their supervisors and to the Chief Compliance Officer (or designee) and to report suspected violations as specified in these documents.
For the Boards of Directors:
The AIM Management Group
by: /s/CHARLES T. BAUER
-------------------------------------------------
Charles T. Bauer
FEBRUARY 24, 2000
-------------------------------------------------
Date
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EXHIBIT p(2)(b)
AIM FUNDS
CODE OF ETHICS
OF
AIM FUNDS GROUP
WHEREAS, AIM Funds Group (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. This Code shall not be applicable to access persons who are subject to Code of Ethics adopted by the Company's investment advisor or principal underwriter. Accordingly, access persons who are independent directors/trustees, as defined in Section I.H. below, are covered under this 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 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 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 AIM's Code of Ethics Officer as well as 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. The Company's Board of Directors/Trustees must base its approval upon a determination that the Code contains provisions reasonably necessary to prevent "access persons" from violating the anti-fraud provisions of the rule.
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.
EXHIBIT p(2)(c)
AIM FUNDS
CODE OF ETHICS
OF
AIM FUNDS GROUP
WHEREAS, AIM Funds Group (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 September 23, 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. This Code shall not be applicable to access persons who are subject to Code of Ethics adopted by the Company's investment advisor or principal underwriter. Accordingly, access persons who are independent directors/trustees, as defined in Section I.H. below, are covered under this 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 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 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 AIM's Code of Ethics Officer as well as 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. The Company's Board of Directors/Trustees must base its approval upon a determination that the Code contains provisions reasonably necessary to prevent "access persons" from violating the anti-fraud provisions of the rule.
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.