As filed with the Securities and Exchange Commission on February 23, 2001
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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. 67 X
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and/or
(Check appropriate box or boxes.)
Copy to:
Lisa A. Moss, 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 77046-1173 Philadelphia, Pennsylvania 19103-7599
Approximate Date of
Proposed Public Offering: As soon as practicable after the
effective date of this Amendment.
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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 post-effective amendment.
Title of Securities Being Registered: Shares of Beneficial Interest
AIM AGGRESSIVE GROWTH FUND
AIM Aggressive Growth Fund seeks to provide long-term growth of capital.
AIM--Registered Trademark--
PROSPECTUS
MARCH 1, 2001
This prospectus contains important
information about the Class A, B and C
shares of the fund. Please read it
before investing and keep it for
future reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
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INVESTMENT OBJECTIVE AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - PERFORMANCE INFORMATION 2 - - - - - - - - - - - - - - - - - - - - - - - - Annual Total Returns 2 Performance Table 2 FEE TABLE AND EXPENSE EXAMPLE 3 - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 3 Expense Example 3 FUND MANAGEMENT 4 - - - - - - - - - - - - - - - - - - - - - - - - The Advisor 4 Advisor Compensation 4 Portfolio Managers 4 OTHER INFORMATION 4 - - - - - - - - - - - - - - - - - - - - - - - - Sales Charges 4 Dividends and Distributions 4 Future Fund Closure 4 FINANCIAL HIGHLIGHTS 5 - - - - - - - - - - - - - - - - - - - - - - - - SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - Choosing a Share Class A-1 Purchasing Shares A-3 Redeeming Shares A-4 Exchanging Shares A-6 Pricing of Shares A-8 Taxes A-8 OBTAINING ADDITIONAL INFORMATION Back Cover - - - - - - - - - - - - - - - - - - - - - - - - |
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investor, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE are registered service marks and AIM Bank Connection and AIM Internet Connect are service marks of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.
The fund's investment objective is to achieve 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 by investing primarily in common stocks of companies whose earnings the fund's portfolio managers expect to grow more than 15% per year. The fund will invest in securities of small- and medium-sized growth companies. The portfolio managers focus on companies they believe 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 consider whether to sell a particular security when any of those factors materially changes. The fund may also invest up to 25% of its total assets in foreign securities. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
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 smaller companies, whose prices may go up and down more than equity securities of larger, more-established companies. Also, since equity securities of smaller companies may not be traded as often as equity securities of larger, more-established companies, it may be difficult or impossible for the fund to sell securities at a desirable price.
Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, the relative lack of information about these companies, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance is not necessarily an indication of its future performance.
The following bar chart shows changes in the performance of the fund's Class A shares from year to year. The bar chart does not reflect sales loads. If it did, the annual total returns shown would be lower.
[GRAPH]
ANNUAL
YEAR ENDED TOTAL
DECEMBER 31 RETURNS
----------- -------
1991.................................... 63.90%
1992.................................... 21.34%
1993.................................... 32.03%
1994.................................... 17.18%
1995.................................... 41.51%
1996.................................... 14.34%
1997.................................... 12.24%
1998.................................... 4.99%
1999.................................... 44.98%
2000.................................... 3.00%
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During the periods shown in the bar chart, the highest quarterly return was 31.35% (quarter ended December 31, 1999) and the lowest quarterly return was -22.80% (quarter ended September 30, 1998).
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of broad-based securities market indices. The fund's performance reflects payment of sales loads.
AVERAGE ANNUAL TOTAL RETURNS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (for the periods ended SINCE INCEPTION December 31, 2000) 1 YEAR 5 YEARS 10 YEARS INCEPTION DATE ---------------------------------------------------------------------------------------------------------- Class A (2.67)% 13.71% 23.54% 16.11% 05/01/84 Class B (1.83) -- -- 28.70 03/01/99 Class C 1.35 -- -- 30.41 03/01/99 Russell 2500(TM) Index(1) 4.27 13.98 17. 41 14.27(2) 04/30/84(2) Russell 2000--Registered Trademark-- Index(3) (3.02) 10.31 15.53 11.63(2) 4/30/84(2) ---------------------------------------------------------------------------------------------------------- |
(1) The Russell 2500(TM) Index measures the performance of the 2,500 smallest companies in the Russell 3000(TM) Index, which represents approximately 17% of the total market capitalization of the Russell 3000--Registered Trademark-- Index. The Fund has elected to use the Russell 2500(TM) Index as its primary index rather than the Russell 2000--Registered Trademark-- Index since the Russell 2500(TM) Index more closely reflects the performance of the securities in which the fund invests.
(2) The average annual total return given is since the date closest to the inception date of the class with the longest performance history.
(3) The Russell 2000--Registered Trademark-- Index is a widely recognized, unmanaged index of common stocks that measures the performance of the 2,000 smallest companies in the Russell 3000--Registered Trademark-- Index, which measures the performance of the 3,000 largest U.S. companies based on total market capitalization.
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 0.63% 0.63% 0.63% Distribution and/or Service (12b-1) Fees 0.25 1.00 1.00 Other Expenses 0.16 0.23 0.23 Total Annual Fund Operating Expenses 1.04 1.86 1.86 --------------------------------------------------------- |
(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.
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 5 YEARS 10 YEARS
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Class A $650 $863 $1,092 $1,751
Class B 689 885 1,206 1,965
Class C 289 585 1,006 2,180
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You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
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Class A $650 $863 $1,092 $1,751
Class B 189 585 1,006 1,965
Class C 189 585 1,006 2,180
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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 130 investment portfolios, including the fund, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended October 31, 2000, the advisor received compensation of 0.63% of average daily net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual members of the team who are primarily responsible for the day-to-day management of the fund's portfolio are
- Ryan E. Crane, Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with the advisor and/or its affiliates since 1994.
- Robert M. Kippes, Senior Portfolio Manager, who has been responsible for the fund since 1992 and has been associated with the advisor and/or its affiliates since 1989.
- Jay K. Rushin, Portfolio Manager, who has been responsible for the fund since 2000 and has been associated with the advisor and/or its affiliates since 1998. From 1996 to 1998, he was an associate equity analyst with Prudential Securities.
SALES CHARGES
Purchases of Class A shares of AIM Aggressive Growth 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.
FUTURE FUND CLOSURE
Due to the sometimes limited availability of common stocks of smaller companies that meet the investment criteria for the fund, the fund may periodically suspend or limit the offering of its shares.
During closed periods, the fund may impose different standards for additional investments. Also, during those periods the fund will continue to pay Rule 12b-1 fees.
The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
CLASS A(a)
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YEAR ENDED OCTOBER 31,
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2000 1999 1998 1997 1996
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Net asset value, beginning of period $ 13.90 $ 10.04 $ 12.49 $ 11.23 $ 10.03
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Income from investment operations:
Net investment income (loss) (0.13) (0.09) (0.08) (0.06) (0.08)
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Net gains (losses) on securities (both realized and
unrealized) 11.08 4.05 (1.93) 1.90 1.52
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Total from investment operations 10.95 3.96 (2.01) 1.84 1.44
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Less distributions:
Distributions from net realized gains (6.44) (0.10) (0.44) (0.58) (0.24)
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Net asset value, end of period $ 18.41 $ 13.90 $ 10.04 $ 12.49 $ 11.23
__________________________________________________________________________________________________________________________
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Total return(b) 47.53% 39.73% (16.36)% 17.35% 14.77%
__________________________________________________________________________________________________________________________
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Ratios/supplemental data:
Net assets, end of period (000s omitted) $4,444,515 $2,808,451 $2,638,038 $3,864,257 $2,750,564
__________________________________________________________________________________________________________________________
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Ratio of expenses to average net assets 1.04%(c) 1.09% 1.06% 1.06% 1.11%
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Ratio of net investment income (loss) to average net
assets (0.77)%(c) (0.69)% (0.64)% (0.65)% (0.76)%
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Portfolio turnover rate 79% 75% 69% 73% 79%
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(a)Per share information and shares have been restated to reflect a 4 for 1 stock split, effected in the form of a 300% stock dividend, on July 14, 2000.
(b)Does not include sales charges.
(c)Ratios are based on average daily net assets of $4,036,834,917.
CLASS B(a)
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MARCH 1, 1999
(DATE SALES
YEAR ENDED COMMENCED)
OCTOBER 31, TO OCTOBER 31,
2000 1999
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Net asset value, beginning of period $ 13.81 $ 10.85
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Income from investment operations:
Net investment income (loss) (0.29) (0.07)
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Net gains (losses) on securities (both realized and
unrealized) 11.04 3.03
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Total from investment operations 10.75 2.96
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Less distributions:
Distributions from net realized gains (6.44) --
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Net asset value, end of period $ 18.12 $ 13.81
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Total return(b) 46.29% 27.27%
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Ratios/supplemental data:
Net assets, end of period (000s omitted) $374,010 $24,914
____________________________________________________________________________________________
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Ratio of expenses to average net assets 1.86%(c) 2.08%(d)
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Ratio of net investment income (loss) to average net assets (1.59)%(c) (1.68)%(d)
____________________________________________________________________________________________
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Portfolio turnover rate 79% 75%
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(a)Per share information and shares have been restated to reflect a 4 for 1 stock split, effected in the form of a 300% stock dividend, on July 14, 2000.
(b)Does not include contingent deferred sales charges and is not annualized for periods less than one year.
(c)Ratios are based on average daily net assets of $180,936,805.
(d)Annualized.
CLASS C(a)
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MARCH 1, 1999
(DATE SALES
YEAR ENDED COMMENCED)
OCTOBER 31, TO OCTOBER 31,
2000 1999
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Net asset value, beginning of period $ 13.81 $ 10.85
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Income from investment operations:
Net investment income (loss) (0.29) (0.07)
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Net gains (losses) on securities (both realized and
unrealized) 11.03 3.03
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Total from investment operations 10.74 2.96
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Less distributions:
Distributions from net realized gains (6.44) --
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Net asset value, end of period $ 18.11 $ 13.81
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Total return(b) 46.21% 27.27%
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Ratios/supplemental data:
Net assets, end of period (000s omitted) $120,591 $ 6,807
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Ratio of expenses to average net assets 1.86%(c) 2.08%(d)
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Ratio of net investment income (loss) to average net assets (1.59)%(c) (1.68)%(d)
____________________________________________________________________________________________
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Portfolio turnover rate 79% 75%
____________________________________________________________________________________________
============================================================================================
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(a)Per share information and shares have been restated to reflect a 4 for 1 stock split, effected in the form of a 300% stock dividend, on July 14, 2000.
(b)Does not include contingent deferred sales charges and is not annualized for periods less than one year.
(c)Ratios are based on average daily net assets of $56,563,818.
(d)Annualized.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
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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
at the end of the month shares
which is eight years after
the date on 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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(1) AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
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
-------------------------------------------------------------
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--10/00
CATEGORY II INITIAL SALES CHARGES
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INVESTOR'S
SALES CHARGE
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AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
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CATEGORY III INITIAL SALES CHARGES
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INVESTOR'S
SALES CHARGE
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AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
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CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
----------------------------------------------------------
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--10/00 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
---------------------------------------------------------------------------------------------------------
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--10/00
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. 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--10/00 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--10/00
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--10/00 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--10/00
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--10/00 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
ON THE INTERNET: You can send us a request
by e-mail or download
prospectuses, annual or
semiannual reports via
our website:
http://www.aimfunds.com
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You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
[AIM LOGO APPEARS HERE] www.aimfunds.com AGRO-PRO-1 INVEST WITH DISCIPLINE --Registered Trademark-- --Registered Trademark-- |
AIM BLUE CHIP FUND
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AIM Blue Chip Fund seeks to provide long-term growth of capital and, secondarily, current income.
AIM--Registered Trademark--
PROSPECTUS
MARCH 1, 2001
This prospectus contains important
information about the Class A, B and C
shares of the fund. Please read it
before investing and keep it for
future reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
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INVESTMENT OBJECTIVES AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - PERFORMANCE INFORMATION 2 - - - - - - - - - - - - - - - - - - - - - - - - Annual Total Returns 2 Performance Table 2 FEE TABLE AND EXPENSE EXAMPLE 3 - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 3 Expense Example 3 FUND MANAGEMENT 4 - - - - - - - - - - - - - - - - - - - - - - - - The Advisor 4 Advisor Compensation 4 Portfolio Managers 4 OTHER INFORMATION 4 - - - - - - - - - - - - - - - - - - - - - - - - Sales Charges 4 Dividends and Distributions 4 FINANCIAL HIGHLIGHTS 5 - - - - - - - - - - - - - - - - - - - - - - - - SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - Choosing a Share Class A-1 Purchasing Shares A-3 Redeeming Shares A-4 Exchanging Shares A-6 Pricing of Shares A-8 Taxes A-8 OBTAINING ADDITIONAL INFORMATION Back Cover - - - - - - - - - - - - - - - - - - - - - - - - |
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investor, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE are registered service marks and AIM Bank Connection and AIM Internet Connect are service marks of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.
The fund's primary investment objective is long-term growth of capital with a secondary objective of current income. The investment objectives of the fund may be changed by the Board of Trustees without shareholder approval.
The fund seeks to meet its objectives by investing at least 65% of its total assets in the common stocks of blue chip companies. Blue chip companies are those companies that the portfolio managers believe have the potential for above-average growth in earnings and that are well-established in their respective industries. The portfolio managers consider whether to sell a particular security when they believe the security no longer has that potential. When the portfolio managers believe securities other than common stocks offer the opportunity for long-term growth of capital and current income, the fund may invest in United States government securities, convertible securities and high-quality debt securities. The fund may also invest up to 25% of its total assets in foreign securities. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
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 objectives.
There is a risk that you could lose all or a portion of your investment in the fund and that the income you may receive from your investment may vary. The value of your investment in the fund will go up and down with the prices of the securities in which the fund invests. The prices of equity securities change in response to many factors including the historical and prospective earnings of the issuer of the stock, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.
Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, the relative lack of information about these companies, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance is not necessarily an indication of its future performance.
The following bar chart shows changes in the performance of the fund's Class A shares from year to year. The bar chart does not reflect sales loads. If it did, the annual total returns shown would be lower.
[GRAPH]
ANNUAL
YEAR ENDED TOTAL
DECEMBER 31 RETURN
----------- ------
1991 30.32%
1992 2.64%
1993 4.61%
1994 4.66%
1995 32.00%
1996 23.75%
1997 31.91%
1998 30.42%
1999 25.65%
2000 (9.29)%
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During the periods shown in the bar chart, the highest quarterly return was 24.45% (quarter ended December 31, 1998) and the lowest quarterly return was -11.11% (quarter ended December 31, 2000).
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a broad-based securities market index. The fund's performance reflects payment of sales loads.
AVERAGE ANNUAL TOTAL RETURNS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (for the periods ended SINCE INCEPTION December 31, 2000) 1 YEAR 5 YEARS 10 YEARS INCEPTION DATE --------------------------------------------------------------------------------------------------------------- Class A (14.27)% 18.06% 16.05% 13.66% 02/04/87 Class B (14.44) -- -- 17.53 10/01/96 Class C (10.82) -- -- 12.30 08/04/97 Russell 1000--Registered Trademark-- Index(1) (7.79) 18.16 17.67 14.77 01/31/87(2) --------------------------------------------------------------------------------------------------------------- |
(1) The Russell 1000--Registered Trademark-- Index is a widely recognized, unmanaged index of common stocks that measures the performance of the 1,000 largest companies in the Russell 3000--Registered Trademark-- Index, which measures the performance of the 3,000 largest U.S. companies based on total market capitalization.
(2) The average annual total return given is since the date closest to the inception date of the class with the longest performance history.
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(2) 0.63% 0.63% 0.63% Distribution and/or Service (12b-1) Fees 0.35 1.00 1.00 Other Expenses 0.21 0.25 0.25 Total Annual Fund Operating Expenses 1.19 1.88 1.88 ------------------------------------------------------- |
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares within 18 months from the date of purchase, you may pay a 1% contingent deferred sales charge (CDSC) at the time of redemption.
(2) The investment advisor has agreed, effective July 1, 2000, to waive a portion of the management fee on assets in excess of $5 billion. Termination of this agreement requires approval by the Board of Trustees.
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 gross operating expenses remain the same. To the extent fees are waived, fees will be lower. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $665 $907 $1,168 $1,914
Class B 691 891 1,216 2,021
Class C 291 591 1,016 2,201
----------------------------------------------
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You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $665 $907 $1,168 $1,914
Class B 191 591 1,016 2,021
Class C 191 591 1,016 2,201
----------------------------------------------
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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 130 investment portfolios, including the fund, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended October 31, 2000, the advisor received compensation of 0.63% of average daily net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual members of the team who are primarily responsible for the day-to-day management of the fund's portfolio are
- Monika H. Degan, Senior Portfolio Manager, who has been responsible for the fund since 1997 and has been associated with the advisor and/or its affiliates since 1995.
- Jonathan C. Schoolar, Senior Portfolio Manager, who has been responsible for the fund since 1996 and has been associated with the advisor and/or its affiliates since 1986.
SALES CHARGES
Purchases of Class A shares of AIM Blue Chip 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.
The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions).
The information for the three fiscal years ended 1999, the one month period ended October 31, 1996 and the fiscal year ended September 30, 1996 has been audited by KPMG LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request. Information for prior years was audited by other public accountants.
CLASS A(a)
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YEAR ENDED OCTOBER 31, OCTOBER 1, 1996 TO YEAR ENDED
-------------------------------------------------- OCTOBER 31, SEPTEMBER 30,
2000 1999 1998(b) 1997(b) 1996 1996
---------- ---------- ---------- -------- ------------------ -------------
Net asset value, beginning of
period $ 15.49 $ 12.05 $ 10.32 $ 8.69 $ 8.52 $ 7.94
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Income from investment operations:
Net investment income (loss) (0.05) 0.01 0.04 0.06 -- 0.11
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Net gains on securities (both
realized and unrealized) 1.85 3.47 1.92 2.31 0.17 1.54
=============================================================================================================================
Total from investment
operations 1.80 3.48 1.96 2.37 0.17 1.65
=============================================================================================================================
Less distributions:
Dividends from net investment
income -- (0.01) (0.02) (0.02) -- (0.07)
-----------------------------------------------------------------------------------------------------------------------------
Distributions from net realized
gains -- (0.03) (0.21) (0.72) -- (1.00)
=============================================================================================================================
Total distributions -- (0.04) (0.23) (0.74) -- (1.07)
=============================================================================================================================
Net asset value, end of period $ 17.29 $ 15.49 $ 12.05 $ 10.32 $ 8.69 $ 8.52
_____________________________________________________________________________________________________________________________
=============================================================================================================================
Total return(c) 11.60% 29.01% 19.36% 29.68% 2.04% 22.39%
_____________________________________________________________________________________________________________________________
=============================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $3,163,453 $2,299,551 $1,085,648 $498,178 $120,448 $106,415
_____________________________________________________________________________________________________________________________
=============================================================================================================================
Ratio of expenses to average net
assets:
With fee waivers 1.19%(d) 1.19% 1.22% 1.31% 1.30%(e) 1.26%
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Without fee waivers 1.19%(d) 1.19% 1.22% 1.32% 1.37%(e) 1.26%
=============================================================================================================================
Ratio of net investment income
(loss) to average net assets (0.31)%(d) 0.03% 0.33% 0.50% 0.12%(e) 0.53%
_____________________________________________________________________________________________________________________________
=============================================================================================================================
Portfolio turnover rate 22% 22% 27% 43% 10% 58%
_____________________________________________________________________________________________________________________________
=============================================================================================================================
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(a)Per share information and shares have been restated to reflect a 3 for 1 stock split, effected in the form of a 200% stock dividend, on September 8, 2000.
(b)Calculated using average shares outstanding.
(c)Does not include sales charges and is not annualized for periods less than one year.
(d)Ratios are based on average daily net assets of $2,852,320,679.
(e)Annualized.
CLASS B(a)
--------------------------------------------------------------------------
OCTOBER 1, 1996
YEAR ENDED OCTOBER 31, (DATE SALES COMMENCED)
------------------------------------------------ TO OCTOBER 31,
2000(b) 1999(b) 1998 1997(b) 1996
---------- ---------- -------- -------- ----------------------
Net asset value, beginning of period $ 15.22 $ 11.91 $ 10.25 $ 8.69 $ 8.52
--------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.17) (0.10) (0.04) (0.01) --
--------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and
unrealized) 1.82 3.44 1.91 2.30 0.17
==========================================================================================================================
Total from investment operations 1.65 3.34 1.87 2.29 0.17
==========================================================================================================================
Less distributions:
Dividends from net investment income -- -- -- (0.01) --
--------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (0.03) (0.21) (0.72) --
==========================================================================================================================
Total distributions -- (0.03) (0.21) (0.73) --
==========================================================================================================================
Net asset value, end of period $ 16.87 $ 15.22 $ 11.91 $ 10.25 $ 8.69
__________________________________________________________________________________________________________________________
==========================================================================================================================
Total return(c) 10.87% 28.08% 18.52% 28.81% 2.00%
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $2,746,149 $1,891,171 $745,862 $264,337 $8,101
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.88%(d) 1.91% 1.94% 2.10% 2.01%(e)
--------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.88%(d) 1.91% 1.94% 2.12% 2.08%(e)
==========================================================================================================================
Ratio of net investment income (loss) to
average net assets (1.00)%(d) (0.68)% (0.38)% (0.28)% (0.58)%(e)
__________________________________________________________________________________________________________________________
==========================================================================================================================
Portfolio turnover rate 22% 22% 27% 43% 10%
__________________________________________________________________________________________________________________________
==========================================================================================================================
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(a)Per share information and shares have been restated to reflect a 3 for 1 stock split, effected in the form of a 200% stock dividend, on September 8, 2000.
(b)Calculated using average shares outstanding.
(c)Does not include contingent deferred sales charges and is not annualized for periods less than one year.
(d)Ratios are based on average daily net assets of $2,429,821,489.
(e)Annualized.
CLASS C(a)
---------------------------------------------------------
AUGUST 4, 1997
YEAR ENDED OCTOBER 31, (DATE SALES COMMENCED)
------------------------------- TO OCTOBER 31,
2000(b) 1999(b) 1998(b) 1997(b)
-------- -------- ------- ----------------------
Net asset value, beginning of period $ 15.21 $ 11.91 $10.25 $10.57
-----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.17) (0.10) (0.04) --
-----------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 1.82 3.43 1.91 (0.32)
=======================================================================================================================
Total from investment operations 1.65 3.33 1.87 (0.32)
=======================================================================================================================
Less distributions:
Distributions from net realized gains -- (0.03) (0.21) --
=======================================================================================================================
Net asset value, end of period $ 16.86 $ 15.21 $11.91 $10.25
_______________________________________________________________________________________________________________________
=======================================================================================================================
Total return(c) 10.82% 28.09% 18.52% (3.06)%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $720,186 $349,951 $87,554 $3,947
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.88%(d) 1.90% 1.94% 2.10%(e)
-----------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.88%(d) 1.90% 1.94% 2.12%(e)
=======================================================================================================================
Ratio of net investment income (loss) to average net assets (1.00)%(d) (0.68)% (0.38)% (0.28)%(e)
_______________________________________________________________________________________________________________________
=======================================================================================================================
Portfolio turnover rate 22% 22% 27% 43%
_______________________________________________________________________________________________________________________
=======================================================================================================================
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(a)Per share information and shares have been restated to reflect a 3 for 1 stock split, effected in the form of a 200% stock dividend, on September 8, 2000.
(b)Calculated using average shares outstanding.
(c)Does not include contingent deferred sales charges and is not annualized for periods less than one year.
(d)Ratios are based on average daily net assets of $555,634,002.
(e)Annualized.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
---------------------------------------------------------------------------------------------------------
- Initial sales charge - No initial sales charge - No initial sales charge
- Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within charge on redemptions within
six years one year
- Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
at the end of the month shares
which is eight years after
the date on 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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(1) AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund. You may be charged a contingent deferred sales charge if you redeem AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain exchanges. Sales charges on all other AIM Funds and classes of those Funds are detailed below. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales charges. The "Other Information" section of your prospectus will tell you in what category your particular AIM Fund is classified.
CATEGORY I INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
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A-1 MCF--10/00
CATEGORY II INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
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CATEGORY III INITIAL SALES CHARGES
-------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
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CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
----------------------------------------------------------
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
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COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current market value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, we will assume that you have redeemed shares on which there is no CDSC first and, then, shares in the order of purchase.
REDUCED SALES CHARGES
AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial consultant must provide sufficient information at the time of purchase to verify that your purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares currently owned for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the current value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of AIM Funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full face amount of the LOI is not invested by the end of the 13-month period, your account will be adjusted to the higher initial sales charge level for the amount actually invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- on shares purchased by reinvesting dividends and distributions;
- when exchanging shares among certain AIM Funds;
- when using the reinstatement privilege; and
- when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- if you redeem Class B shares you held for more than six years;
- if you redeem Class C shares you held for more than one year;
- if you redeem shares acquired through reinvestment of dividends and distributions; and
- on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares at reduced or without sales charges. Consult the fund's Statement of Additional Information for details.
MCF--10/00 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
-----------------------------------------------------------------------------------------------------------
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
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HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
PURCHASE OPTIONS
---------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
---------------------------------------------------------------------------------------------------------
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed account application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed account application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank Connection
methods described above. form to the transfer agent. Once
the transfer agent has received the
form, call the transfer agent to
place your purchase order.
By AIM Internet Connect(SM) Open your account using one of the Select the AIM Internet Connect
methods described above. option on your completed account
application or complete an AIM
Internet Connect Authorization
Form. Mail the application or form
to the transfer agent. Once your
request for this option has been
processed (which may take up to 10
days), you may place your purchase
order at www.aimfunds.com. The
maximum purchase amount per
transaction is $100,000. You may
not purchase shares in AIM
prototype retirement accounts on
the internet.
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A-3 MCF--10/00
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. 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--10/00 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--10/00
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--10/00 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--10/00
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--10/00 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
ON THE INTERNET: You can send us a
request by e-mail or
download prospectuses,
annual or semiannual
reports via our website:
http://www.aimfunds.com
|
You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
[AIM LOGO APPEARS HERE] www.aimfunds.com BCH-PRO-1 INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
AIM CAPITAL DEVELOPMENT FUND
AIM Capital Development Fund seeks to provide long-term growth of capital.
AIM--Registered Trademark--
PROSPECTUS
MARCH 1, 2001
This prospectus contains important
information about the Class A, B and C
shares of the fund. Please read it
before investing and keep it for
future reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
|
----------------------------
|
INVESTMENT OBJECTIVE AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - PERFORMANCE INFORMATION 2 - - - - - - - - - - - - - - - - - - - - - - - - Annual Total Returns 2 Performance Table 2 FEE TABLE AND EXPENSE EXAMPLE 3 - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 3 Expense Example 3 FUND MANAGEMENT 4 - - - - - - - - - - - - - - - - - - - - - - - - The Advisor 4 Advisor Compensation 4 Portfolio Managers 4 OTHER INFORMATION 4 - - - - - - - - - - - - - - - - - - - - - - - - Sales Charges 4 Dividends and Distributions 4 FINANCIAL HIGHLIGHTS 5 - - - - - - - - - - - - - - - - - - - - - - - - SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - Choosing a Share Class A-1 Purchasing Shares A-3 Redeeming Shares A-4 Exchanging Shares A-6 Pricing of Shares A-8 Taxes A-8 OBTAINING ADDITIONAL INFORMATION Back Cover - - - - - - - - - - - - - - - - - - - - - - - - |
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investor, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE are registered service marks and AIM Bank Connection and AIM Internet Connect are service marks of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.
The fund's investment objective is 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 by investing primarily in securities, including common stocks, convertible securities and bonds, of small- and medium-sized companies. Among factors which the portfolio managers may consider when purchasing these securities are (1) the growth prospects for a company's products; (2) the economic outlook for its industry; (3) a company's new product development; (4) its operating management capabilities; (5) the relationship between the price of the security and its estimated fundamental value; (6) relevant market, economic and political environments; and (7) financial characteristics, such as balance sheet analysis and return on assets. The portfolio managers consider whether to sell a particular security when any one of these factors materially changes or when the securities are no longer considered medium-sized company securities. The fund may also invest up to 25% of its total assets in foreign securities. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
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.
The fund may engage in active and frequent trading of portfolio securities to achieve its investment objective. If the fund does trade in this way, it may incur increased transaction costs, which can lower the actual return on your investment. Active trading may also increase short-term gains and losses, which may affect the taxes you have to pay.
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 smaller companies, whose prices may go up and down more than equity securities of larger, more-established companies. Also, since equity securities of smaller companies may not be traded as often as equity securities of larger, more-established companies, it may be difficult or impossible for the fund to sell securities at a desirable price.
Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, the relative lack of information about these companies, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance is not necessarily an indication of its future performance. Total return information in the bar chart and table below has been affected by special market factors, including the fund's investments in initial public offerings (IPOs), which had a magnified impact on the fund due to its small asset base. There is no guarantee that, as the fund's assets grow, it will continue to experience substantially similar performance.
The following bar chart shows changes in the performance of the fund's Class A shares from year to year. The bar chart does not reflect sales loads. If it did, the annual total returns shown would be lower.
[GRAPH]
ANNUAL
YEAR ENDED TOTAL
DECEMBER 31 RETURNS
----------- -------
1997 23.69%
1998 4.53%
1999 27.78%
2000 9.82%
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During the periods shown in the bar chart, the highest quarterly return was 30.92% (quarter ended December 31, 1999) and the lowest quarterly return was -20.93% (quarter ended September 30, 1998).
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of broad-based securities market indices. The fund's performance reflects payment of sales loads.
AVERAGE ANNUAL TOTAL RETURNS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (for the periods ended SINCE INCEPTION December 31, 2000) 1 YEAR INCEPTION DATE ----------------------------------------------------------------------------------------------- Class A 3.76% 16.38% 06/17/96 Class B 4.36 14.74 10/01/96 Class C 8.10 12.95 08/04/97 Russell 2500(TM) Index(1) 4.27 13.40 06/30/96(2) Russell Midcap(TM) Index(3) 8.25 16.45 06/30/96(2) ----------------------------------------------------------------------------------------------- |
(1) The Russell 2500--Trademark-- Index measures the performance of the 2,500 smallest companies in the Russell 3000--Registered Trademark-- Index, which represents approximately 17% of the total market capitalization of the Russell 3000--Registered Trademark-- Index. The fund has elected to use the Russell 2500--Trademark-- Index as its primary index rather than the Russell Midcap--Trademark-- Index since the Russell 2500--Trademark-- Index has both a small cap and a mid cap component and more closely reflects the performance of the securities in which the fund invests.
(2) The average annual total return given is since the date closest to the inception date of the class with the longest performance history.
(3) The Russell Midcap--Trademark-- Index measures the performance of the 800 companies in the Russell 1000--Registered Trademark-- Index with the lowest market capitalization. These companies are considered representative of medium-sized companies.
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 0.66% 0.66% 0.66% Distribution and/or Service (12b-1) Fees 0.35 1.00 1.00 Other Expenses 0.27 0.33 0.33 Total Annual Fund Operating Expenses 1.28 1.99 1.99 ----------------------------------------------------- |
(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.
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 5 YEARS 10 YEARS
----------------------------------------------
Class A $673 $934 $1,214 $2,010
Class B 702 924 1,273 2,134
Class C 302 624 1,073 2,317
----------------------------------------------
|
You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $673 $934 $1,214 $2,010
Class B 202 624 1,073 2,134
Class C 202 624 1,073 2,317
----------------------------------------------
|
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 130 investment portfolios, including the fund, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended October 31, 2000, the advisor received compensation of 0.66% of average daily net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual members of the team who are primarily responsible for the day-to-day management of the fund's portfolio are
- Edgar M. Larsen, Senior Portfolio Manager, who has been responsible for the fund since 1996 and has been associated with the advisor and/or its affiliates since 1996. From 1981 to 1996, he was, among other offices, Senior Vice President of John Hancock Advisers, Inc. and its predecessors.
- Paul J. Rasplicka, Senior Portfolio Manager, who has been responsible for the fund since 1998 and has been associated with the advisor and/or its affiliates since 1994. From 1994 to 1998, he was Portfolio Manager of Institutional Trust Company, an affiliate of the advisor.
SALES CHARGES
Purchases of Class A shares of AIM Capital Development 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.
The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
Total return information in this table has been affected by special market factors, including the fund's investments in initial public offerings (IPOs), which have had a magnified impact on the fund due to its small asset base. There is no guarantee that, as the fund's assets grow, it will continue to experience substantially similar performance.
CLASS A
----------------------------------------------------------------
JUNE 17, 1996
(DATE OPERATIONS
COMMENCED) TO
YEAR ENDED OCTOBER 31, OCTOBER 31,
-------------------------------------------- ----------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- ----------------
Net asset value, beginning of period $ 15.24 $ 12.89 $ 14.57 $ 11.09 $ 10.00
-------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.13) (0.10)(a) (0.06)(a) (0.10)(a) (0.01)(a)
-------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 6.68 2.45 (1.62) 3.58 1.10
=========================================================================================================================
Total from investment operations 6.55 2.35 (1.68) 3.48 1.09
=========================================================================================================================
Net asset value, end of period $ 21.79 $ 15.24 $ 12.89 $ 14.57 $ 11.09
_________________________________________________________________________________________________________________________
=========================================================================================================================
Total return(b) 42.98% 18.23% (11.53)% 31.38% 10.90%
_________________________________________________________________________________________________________________________
=========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $759,838 $579,514 $717,263 $577,685 $251,253
_________________________________________________________________________________________________________________________
=========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.28%(c) 1.38% 1.28% 1.33% 1.35% (d)
-------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.28%(c) 1.38% 1.28% 1.38% 1.60% (d)
=========================================================================================================================
Ratio of net investment income (loss) to average net
assets (0.60)%(c) (0.70)% (0.40)% (0.83)% (0.29)%(d)
_________________________________________________________________________________________________________________________
=========================================================================================================================
Portfolio turnover rate 101% 117% 78% 41% 13%
_________________________________________________________________________________________________________________________
=========================================================================================================================
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(a)Calculated using average shares outstanding.
(b)Does not include sales charges and is not annualized for periods less than one year.
(c)Ratios are based on average daily net assets of $736,784,011.
(d)Annualized.
CLASS B
---------------------------------------------------------------
OCTOBER 1, 1996
(DATE SALES
COMMENCED) TO
YEAR ENDED OCTOBER 31, OCTOBER 31,
-------------------------------------------- ---------------
2000 1999(a) 1998(a) 1997(a) 1996(a)
-------- -------- -------- -------- ---------------
Net asset value, beginning of period $ 14.90 $ 12.70 $ 14.46 $ 11.08 $ 11.26
------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.26) (0.20) (0.16) (0.20) (0.01)
------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 6.52 2.40 (1.60) 3.58 (0.17)
========================================================================================================================
Total from investment operations 6.26 2.20 (1.76) 3.38 (0.18)
========================================================================================================================
Net asset value, end of period $ 21.16 $ 14.90 $ 12.70 $ 14.46 $ 11.08
________________________________________________________________________________________________________________________
========================================================================================================================
Total return(b) 42.01% 17.32% (12.17)% 30.51% (1.60)%
________________________________________________________________________________________________________________________
========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $617,576 $451,508 $493,993 $297,623 $22,435
________________________________________________________________________________________________________________________
========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.99%(c) 2.12% 2.02% 2.09% 1.89%(d)
------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.99%(c) 2.12% 2.02% 2.14% 2.28%(d)
========================================================================================================================
Ratio of net investment income (loss) to average net
assets (1.30)%(c) (1.44)% (1.14)% (1.59)% (0.83)%(d)
________________________________________________________________________________________________________________________
========================================================================================================================
Portfolio turnover rate 101% 117% 78% 41% 13%
________________________________________________________________________________________________________________________
========================================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charges and is not annualized for periods less than one year.
(c)Ratios are based on average daily net assets of $591,355,710.
(d)Annualized.
CLASS C
-----------------------------------------------
AUGUST 4, 1997
(DATE SALES
COMMENCED)
YEAR ENDED OCTOBER 31, TO OCTOBER 31,
----------------------------- --------------
2000 1999(a) 1998 1997(a)
------- ------- ------- --------------
Net asset value, beginning of period $ 14.89 $12.69 $ 14.45 $ 13.48
-------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.25) (0.20) (0.16) (0.06)
-------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 6.51 2.40 (1.60) 1.03
=============================================================================================================
Total from investment operations 6.26 2.20 (1.76) 0.97
=============================================================================================================
Net asset value, end of period $ 21.15 $14.89 $ 12.69 $ 14.45
_____________________________________________________________________________________________________________
=============================================================================================================
Total return(b) 42.04% 17.34% (12.18)% 7.20%
_____________________________________________________________________________________________________________
=============================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $82,982 $53,832 $48,293 $12,195
_____________________________________________________________________________________________________________
=============================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.99%(c) 2.12% 2.02% 2.14%(d)
-------------------------------------------------------------------------------------------------------------
Without fee waivers 1.99%(c) 2.12% 2.02% 2.19%(d)
=============================================================================================================
Ratio of net investment income (loss) to average net assets (1.30)%(c) (1.44)% (1.14)% (1.69)%(d)
_____________________________________________________________________________________________________________
=============================================================================================================
Portfolio turnover rate 101% 117% 78% 41%
_____________________________________________________________________________________________________________
=============================================================================================================
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(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charges and is not annualized for periods less than one year.
(c)Ratios are based on average daily net assets of $73,926,561.
(d)Annualized.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
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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
at the end of the month shares
which is eight years after
the date on 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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(1) AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund. You may be charged a contingent deferred sales charge if you redeem AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain exchanges. Sales charges on all other AIM Funds and classes of those Funds are detailed below. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales charges. The "Other Information" section of your prospectus will tell you in what category your particular AIM Fund is classified.
CATEGORY I INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
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A-1 MCF--10/00
CATEGORY II INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
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CATEGORY III INITIAL SALES CHARGES
-------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
-------------------------------------------------------------
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CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
----------------------------------------------------------
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
----------------------------------------------------------
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COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current market value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, we will assume that you have redeemed shares on which there is no CDSC first and, then, shares in the order of purchase.
REDUCED SALES CHARGES
AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial consultant must provide sufficient information at the time of purchase to verify that your purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares currently owned for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the current value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of AIM Funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full face amount of the LOI is not invested by the end of the 13-month period, your account will be adjusted to the higher initial sales charge level for the amount actually invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- on shares purchased by reinvesting dividends and distributions;
- when exchanging shares among certain AIM Funds;
- when using the reinstatement privilege; and
- when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- if you redeem Class B shares you held for more than six years;
- if you redeem Class C shares you held for more than one year;
- if you redeem shares acquired through reinvestment of dividends and distributions; and
- on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares at reduced or without sales charges. Consult the fund's Statement of Additional Information for details.
MCF--10/00 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
-----------------------------------------------------------------------------------------------------------
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
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HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
PURCHASE OPTIONS
---------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
---------------------------------------------------------------------------------------------------------
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed account application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed account application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank Connection
methods described above. form to the transfer agent. Once
the transfer agent has received the
form, call the transfer agent to
place your purchase order.
By AIM Internet Connect(SM) Open your account using one of the Select the AIM Internet Connect
methods described above. option on your completed account
application or complete an AIM
Internet Connect Authorization
Form. Mail the application or form
to the transfer agent. Once your
request for this option has been
processed (which may take up to 10
days), you may place your purchase
order at www.aimfunds.com. The
maximum purchase amount per
transaction is $100,000. You may
not purchase shares in AIM
prototype retirement accounts on
the internet.
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A-3 MCF--10/00
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. 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--10/00 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--10/00
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--10/00 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--10/00
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--10/00 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
ON THE INTERNET: You can send us a request
by e-mail or download
prospectuses, annual or
semiannual reports via
our website:
http://www.aimfunds.com
|
You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
[AIM LOGO APPEARS HERE] www.aimfunds.com CDV-PRO-1 INVEST WITH DISCIPLINE --Registered Trademark-- --Registered Trademark-- |
AIM CHARTER FUND
|
AIM Charter Fund seeks to provide growth of capital with a secondary objective of current income.
AIM--Registered Trademark--
PROSPECTUS
MARCH 1, 2000
This prospectus contains important
information about the Class A, B and C
shares of the fund. Please read it
before investing and keep it for
future reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
|
----------------
|
INVESTMENT OBJECTIVES AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - PERFORMANCE INFORMATION 2 - - - - - - - - - - - - - - - - - - - - - - - - Annual Total Returns 2 Performance Table 2 FEE TABLE AND EXPENSE EXAMPLE 3 - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 3 Expense Example 3 FUND MANAGEMENT 4 - - - - - - - - - - - - - - - - - - - - - - - - The Advisors 4 Advisor Compensation 4 Portfolio Managers 4 OTHER INFORMATION 4 - - - - - - - - - - - - - - - - - - - - - - - - Sales Charges 4 Dividends and Distributions 4 FINANCIAL HIGHLIGHTS 5 - - - - - - - - - - - - - - - - - - - - - - - - SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - Choosing a Share Class A-1 Purchasing Shares A-3 Redeeming Shares A-4 Exchanging Shares A-6 Pricing of Shares A-8 Taxes A-8 OBTAINING ADDITIONAL INFORMATION Back Cover - - - - - - - - - - - - - - - - - - - - - - - - |
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investor, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE are registered service marks and AIM Bank Connection and AIM Internet Connect are service marks of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.
The fund's primary investment objective is growth of capital with a secondary objective of current income. The investment objectives of the fund may be changed by the Board of Trustees without shareholder approval.
The fund seeks to meet its objectives by investing at least 65% of its total assets in securities of established companies that have long-term above-average growth in earnings and dividends, and growth companies that the portfolio managers believe have the potential for above-average growth in earnings and dividends. The portfolio managers consider whether to sell a particular security when they believe the security no longer has that potential. The fund may also invest up to 20% of its total assets in foreign securities. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
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 objectives.
The fund may engage in active and frequent trading of portfolio securities to achieve its investment objectives. If the fund does trade in this way, it may incur increased transaction costs and brokerage commissions, both of which can lower the actual return on your investment. Active trading may also increase short-term capital gains and losses, which may affect the taxes you have to pay.
There is a risk that you could lose all or a portion of your investment in the fund and that the income you receive from your investment may vary. The value of your investment in the fund will go up and down with the prices of the securities in which the fund invests. The 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. 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.
Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, the relative lack of information about these companies, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance is not necessarily an indication of its future performance.
The following bar chart shows changes in the performance of the fund's Class A shares from year to year. The bar chart does not reflect sales loads. If it did, the annual total returns shown would be lower.
[GRAPH]
ANNUAL
YEAR ENDED TOTAL
DECEMBER 31 RETURNS
----------- --------
1991 37.77%
1992 1.13%
1993 9.39%
1994 (4.26)%
1995 35.68%
1996 19.58%
1997 24.73%
1998 26.83%
1999 33.87%
2000 (14.69)%
|
During the periods shown in the bar chart, the highest quarterly return was 26.08% (quarter ended December 31, 1998) and the lowest quarterly return was -16.37% (quarter ended December 31, 2000).
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a broad-based securities market index. The fund's performance reflects payment of sales loads.
AVERAGE ANNUAL TOTAL RETURNS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (for the periods ended SINCE INCEPTION December 31, 2000) 1 YEAR 5 YEARS 10 YEARS INCEPTION DATE ----------------------------------------------------------------------------------------------------------------- Class A (19.40)% 15.34% 14.99% 13.84% 11/26/68 Class B (19.33) 15.54 -- 16.32 06/26/95 Class C (16.15) -- -- 10.28 08/04/97 S&P 500(1) (9.10) 18.33 17.44 12.00(2) 11/30/68(2) ----------------------------------------------------------------------------------------------------------------- |
(1) The Standard & Poor's 500 Index is an unmanaged index of common stocks frequently used as a general measure of U.S. stock market performance.
(2) The average annual total return given is since the date closest to the inception date of the class with the longest performance history.
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 0.63% 0.63% 0.63% Distribution and/or Service (12b-1) Fees 0.30 1.00 1.00 Other Expenses 0.15 0.19 0.19 Total Annual Fund Operating Expenses(2) 1.08 1.82 1.82 ------------------------------------------------------------- |
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares within 18 months from the date of purchase, you may pay a 1% contingent deferred sales charge (CDSC) at the time of redemption.
(2) The investment advisor has agreed, effective July 1, 2000, to waive a portion of the management fee on assets in excess of $5 billion. Total Annual Fund Operating Expenses restated for this agreement are 1.07%, 1.81% and 1.81% for Class A, Class B and Class C, respectively. Termination of this agreement requires approval by the Board of Trustees.
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 gross operating expenses remain the same. To the extent fees are waived, the expenses will be lower. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $654 $875 $1,113 $1,795
Class B 685 873 1,185 1,943
Class C 285 573 985 2,137
----------------------------------------------
|
You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $654 $875 $1,113 $1,795
Class B 185 573 985 1,943
Class C 185 573 985 2,137
----------------------------------------------
|
THE ADVISORS
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor. A I M Capital Management, Inc. (the subadvisor), a wholly owned subsidiary of the advisor, is the fund's subadvisor and is responsible for its day-to-day management. Both the advisor and the subadvisor are located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisors supervise all aspects of the fund's operations and provide 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, and the subadvisor has acted as an investment advisor since 1986. Today, the advisor, together with its subsidiaries, advises or manages over 130 investment portfolios, including the fund, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended October 31, 2000, the advisor received compensation of 0.61% of average daily net assets.
PORTFOLIO MANAGERS
The advisors use 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
- Monika H. Degan, Portfolio Manager, who has been responsible for the fund since 2000 and has been associated with the advisor and/or its affiliates since 1995.
- Lanny H. Sachnowitz, Senior Portfolio Manager, who has been responsible for the fund since 1991 and has been associated with the advisor and/or its affiliates since 1987.
SALES CHARGES
Purchases of Class A shares of AIM Charter 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.
The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
CLASS A
------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
2000(a) 1999 1998 1997 1996
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period $ 17.16 $ 13.32 $ 13.41 $ 11.19 $ 10.63
--------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) 0.02 0.12 0.10 0.19
--------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and
unrealized) 2.30 4.39 1.23 2.91 1.43
==========================================================================================================================
Total from investment operations 2.26 4.41 1.35 3.01 1.62
==========================================================================================================================
Less distributions:
Dividends from net investment income -- (0.03) (0.10) (0.12) (0.16)
--------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (1.35) (0.54) (1.34) (0.67) (0.90)
==========================================================================================================================
Total distributions (1.35) (0.57) (1.44) (0.79) (1.06)
==========================================================================================================================
Net asset value, end of period $ 18.07 $ 17.16 $ 13.32 $ 13.41 $ 11.19
__________________________________________________________________________________________________________________________
==========================================================================================================================
Total return(b) 13.60% 34.05% 11.20% 28.57% 16.70%
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $5,801,869 $4,948,666 $3,706,938 $3,466,912 $2,647,208
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.06%(c) 1.05% 1.08% 1.09% 1.12%
--------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.08%(c) 1.07% 1.10% 1.10% 1.12%
==========================================================================================================================
Ratio of net investment income (loss) to average net
assets (0.20)%(c) 0.11% 0.95% 0.79% 1.81%
__________________________________________________________________________________________________________________________
==========================================================================================================================
Portfolio turnover rate 80% 107% 154% 170% 164%
__________________________________________________________________________________________________________________________
==========================================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charges.
(c)Ratios are based on average daily net assets of $5,767,499,930.
CLASS B
----------------------------------------------------------------
YEAR ENDED OCTOBER 31,
2000(a) 1999 1998 1997 1996
---------- ---------- ---------- ---------- --------
Net asset value, beginning of period $ 16.97 $ 13.24 $ 13.37 $ 11.18 $ 10.62
-------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.17) (0.10) 0.02 0.01 0.10
-------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and
unrealized) 2.27 4.37 1.22 2.89 1.45
=========================================================================================================================
Total from investment operations 2.10 4.27 1.24 2.90 1.55
=========================================================================================================================
Less distributions:
Dividends from net investment income -- -- (0.03) (0.04) (0.09)
-------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (1.35) (0.54) (1.34) (0.67) (0.90)
=========================================================================================================================
Total distributions (1.35) (0.54) (1.37) (0.71) (0.99)
=========================================================================================================================
Net asset value, end of period $ 17.72 $ 16.97 $ 13.24 $ 13.37 $ 11.18
_________________________________________________________________________________________________________________________
=========================================================================================================================
Total return(b) 12.76% 33.06% 10.33% 27.54% 15.90%
_________________________________________________________________________________________________________________________
=========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $3,088,611 $2,206,752 $1,408,687 $1,056,094 $515,672
_________________________________________________________________________________________________________________________
=========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.80%(c) 1.80% 1.84% 1.85% 1.94%
-------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.82%(c) 1.82% 1.86% 1.86% 1.94%
=========================================================================================================================
Ratio of net investment income (loss) to average net
assets (0.94)%(c) (0.64)% 0.19% 0.03% 0.99%
_________________________________________________________________________________________________________________________
=========================================================================================================================
Portfolio turnover rate 80% 107% 154% 170% 164%
_________________________________________________________________________________________________________________________
=========================================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charges.
(c)Ratios are based on average daily net assets of $2,839,088,899.
CLASS C
----------------------------------------------------------
YEAR ENDED OCTOBER 31, AUGUST 4, 1997
-------------------------------- (DATE SALES COMMENCED)
2000(a) 1999 1998 TO OCTOBER 31, 1997
-------- -------- -------- ----------------------
Net asset value, beginning of period $ 17.01 $ 13.27 $ 13.39 $13.86
------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.17) (0.09) 0.02 --
------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 2.28 4.37 1.23 (0.45)
========================================================================================================================
Total from investment operations 2.11 4.28 1.25 (0.45)
========================================================================================================================
Less distributions:
Dividends from net investment income -- -- (0.03) --
------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (1.35) (0.54) (1.34) (0.02)
========================================================================================================================
Total distributions (1.35) (0.54) (1.37) (0.02)
========================================================================================================================
Net asset value, end of period $ 17.77 $ 17.01 $ 13.27 $13.39
________________________________________________________________________________________________________________________
========================================================================================================================
Total return(b) 12.78% 33.06% 10.39% (3.24)%
________________________________________________________________________________________________________________________
========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $412,872 $138,467 $37,846 $5,669
________________________________________________________________________________________________________________________
========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.80%(c) 1.80% 1.84% 1.82%(d)
------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.82%(c) 1.82% 1.86% 1.83%(d)
========================================================================================================================
Ratio of net investment income (loss) to average net assets (0.94)%(c) (0.64)% 0.19% 0.06%(d)
________________________________________________________________________________________________________________________
========================================================================================================================
Portfolio turnover rate 80% 107% 154% 170%
________________________________________________________________________________________________________________________
========================================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charges and is not annualized for periods less than one year.
(c)Ratios are based on average daily net assets of $287,563,743.
(d)Annualized.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
---------------------------------------------------------------------------------------------------------
- Initial sales charge - No initial sales charge - No initial sales charge
- Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within charge on redemptions within
six years one year
- Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
at the end of the month shares
which is eight years after
the date on 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
|
(1) AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund. You may be charged a contingent deferred sales charge if you redeem AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain exchanges. Sales charges on all other AIM Funds and classes of those Funds are detailed below. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales charges. The "Other Information" section of your prospectus will tell you in what category your particular AIM Fund is classified.
CATEGORY I INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
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A-1 MCF--10/00
CATEGORY II INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
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CATEGORY III INITIAL SALES CHARGES
-------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
-------------------------------------------------------------
|
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
----------------------------------------------------------
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
----------------------------------------------------------
|
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--10/00 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
-----------------------------------------------------------------------------------------------------------
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
----------------------------------------------------------------------------------------------------------
|
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
PURCHASE OPTIONS
---------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
---------------------------------------------------------------------------------------------------------
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed account application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed account application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank Connection
methods described above. form to the transfer agent. Once
the transfer agent has received the
form, call the transfer agent to
place your purchase order.
By AIM Internet Connect(SM) Open your account using one of the Select the AIM Internet Connect
methods described above. option on your completed account
application or complete an AIM
Internet Connect Authorization
Form. Mail the application or form
to the transfer agent. Once your
request for this option has been
processed (which may take up to 10
days), you may place your purchase
order at www.aimfunds.com. The
maximum purchase amount per
transaction is $100,000. You may
not purchase shares in AIM
prototype retirement accounts on
the internet.
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A-3 MCF--10/00
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. 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--10/00 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--10/00
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--10/00 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--10/00
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--10/00 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-- 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
ON THE INTERNET: You can send us a
request by e-mail or
download prospectuses,
annual or semiannual
reports via our website:
HTTP://WWW.AIMFUNDS.COM
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You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
[AIM LOGO APPEARS HERE]
--Registered Trademark--
www.aimfunds.com CHT-PRO-1 INVEST WITH DISCIPLINE
--Registered Trademark--
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AIM CONSTELLATION FUND
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AIM Constellation Fund seeks to provide growth of capital.
AIM--Registered Trademark--
PROSPECTUS
MARCH 1, 2001
This prospectus contains important
information about the Class A, B and C
shares of the fund. Please read it
before investing and keep it for
future reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
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INVESTMENT OBJECTIVE AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - PERFORMANCE INFORMATION 2 - - - - - - - - - - - - - - - - - - - - - - - - Annual Total Returns 2 Performance Table 2 FEE TABLE AND EXPENSE EXAMPLE 3 - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 3 Expense Example 3 FUND MANAGEMENT 4 - - - - - - - - - - - - - - - - - - - - - - - - The Advisors 4 Advisor Compensation 4 Portfolio Managers 4 OTHER INFORMATION 4 - - - - - - - - - - - - - - - - - - - - - - - - Sales Charges 4 Dividends and Distributions 4 FINANCIAL HIGHLIGHTS 5 - - - - - - - - - - - - - - - - - - - - - - - - SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - Choosing a Share Class A-1 Purchasing Shares A-3 Redeeming Shares A-4 Exchanging Shares A-6 Pricing of Shares A-8 Taxes A-8 OBTAINING ADDITIONAL INFORMATION Back Cover - - - - - - - - - - - - - - - - - - - - - - - - |
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investor, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE are registered service marks and AIM Bank Connection and AIM Internet Connect are service marks of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.
The fund's investment objective is 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 this objective by investing principally in common stocks of companies the portfolio managers believe 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 consider whether to sell a particular security when it no longer meets these criteria. The fund will invest without regard to market capitalization. The fund may also invest up to 20% of its total assets in foreign securities. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
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 smaller companies, whose prices may go up and down more than equity securities of larger, more-established companies. Also, since equity securities of smaller companies may not be traded as often as equity securities of larger, more-established companies, it may be difficult or impossible for the fund to sell securities at a desirable price.
Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, the relative lack of information about these companies, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance is not necessarily an indication of its future performance.
The following bar chart shows changes in the performance of the fund's Class A shares from year to year. The bar chart does not reflect sales loads. If it did, the annual total returns shown would be lower.
[GRAPH]
ANNUAL
YEAR ENDED TOTAL
DECEMBER 31 RETURNS
------------ -------
1991 70.41%
1992 15.03%
1993 17.29%
1994 1.30%
1995 35.45%
1996 16.27%
1997 12.92%
1998 18.89%
1999 44.38%
2000 (10.37)%
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During the periods shown in the bar chart, the highest quarterly return was 36.59% (quarter ended December 31, 1999) and the lowest quarterly return was -22.11% (quarter ended December 31, 2000).
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a broad-based securities market index. The fund's performance reflects payment of sales loads.
AVERAGE ANNUAL TOTAL RETURNS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (for the periods ended SINCE INCEPTION December 31, 2000) 1 YEAR 5 YEARS 10 YEARS INCEPTION DATE ----------------------------------------------------------------------------------------------------- Class A (15.30)% 13.80% 19.67% 18.01% 04/30/76 Class B (14.57) -- -- 11.08 11/03/97 Class C (11.76) -- -- 10.56 08/04/97 S&P 500(1) (9.10) 18.33 17.44 14.94(2) 04/30/76(2) ----------------------------------------------------------------------------------------------------- |
(1) The Standard & Poor's 500 Index is an unmanaged index of common stocks frequently used on a general measure of U.S. stock market performance.
(2) The average annual total return given is since the date closest to the inception date of the class with the longest performance history.
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 0.63% 0.63% 0.63% Distribution and/or Service (12b-1) Fees 0.30 1.00 1.00 Other Expenses 0.18 0.25 0.25 Total Annual Fund Operating Expenses(2) 1.11 1.88 1.88 ------------------------------------------------------- |
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares within 18 months from the date of purchase, you may pay a 1% contingent deferred sales charge (CDSC) at the time of redemption.
(2) The investment advisor has agreed, effective July 1, 2000, to waive a portion of the management fee on assets in excess of $5 billion. Total Annual Fund Operating Expenses restated for this agreement are 1.07%, 1.84% and 1.84% for Class A, Class B and Class C, respectively. Termination of this agreement requires approval by the Board of Trustees.
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 gross operating expenses remain the same. To the extent fees are waived or expenses are reimbursed, the expenses will be lower. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $657 $883 $1,128 $1,827
Class B 691 891 1,216 2,000
Class C 291 591 1,016 2,201
----------------------------------------------
|
You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $657 $883 $1,128 $1,827
Class B 191 591 1,016 2,000
Class C 191 591 1,016 2,201
----------------------------------------------
|
THE ADVISORS
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor. A I M Capital Management, Inc. (the subadvisor), a wholly owned subsidiary of the advisor, is the fund's subadvisor and is responsible for its day-to-day management. Both the advisor and the subadvisor are located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisors supervise all aspects of the fund's operations and provide 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, and the subadvisor has acted as an investment advisor since 1986. Today, the advisor, together with its subsidiaries, advises or manages over 130 investment portfolios, including the fund, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended October 31, 2000, the advisor received compensation of 0.60% of average daily net assets.
PORTFOLIO MANAGERS
The advisors use 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
- David P. Barnard, Senior Portfolio Manager, who has been responsible for the fund since 1990 and has been associated with the advisor and/or its affiliates since 1982.
- Ryan E. Crane, Portfolio Manager, who has been responsible for the fund since 2000 and has been associated with the advisor and/or its affiliates since 1994.
- Robert M. Kippes, Senior Portfolio Manager, who has been responsible for the fund since 1993 and has been associated with the advisor and/or its affiliates since 1989.
- Jay K. Rushin, Portfolio Manager, who has been responsible for the fund since 2000 and has been associated with the advisor and/or its affiliates since 1998. From 1996 to 1998, he was an associate equity analyst with Prudential Securities.
- Kenneth A. Zschappel, Senior Portfolio Manager, who has been responsible for the fund since 1996 and has been associated with the advisor and/or its affiliates since 1990.
SALES CHARGES
Purchases of Class A shares of AIM Constellation 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.
The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
CLASS A
-----------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------------------
2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 34.65 $ 26.37 $ 29.23 $ 25.48 $ 23.69
---------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.26) (0.17) (0.14) (0.11) (0.06)
---------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both
realized and unrealized) 12.39 9.18 (0.62) 4.75 2.60
===========================================================================================================================
Total from investment operations 12.13 9.01 (0.76) 4.64 2.54
===========================================================================================================================
Less distributions:
Distributions from net realized gains (3.28) (0.73) (2.10) (0.89) (0.75)
===========================================================================================================================
Net asset value, end of period $ 43.50 $ 34.65 $ 26.37 $ 29.23 $ 25.48
___________________________________________________________________________________________________________________________
===========================================================================================================================
Total return(a) 36.56% 34.81% (2.30)% 18.86% 11.26%
___________________________________________________________________________________________________________________________
===========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $19,268,977 $14,292,905 $12,391,844 $14,319,441 $11,255,506
___________________________________________________________________________________________________________________________
===========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.11%(b) 1.10% 1.10% 1.11% 1.14%
---------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.08%(b) 1.12% 1.12% 1.13% 1.16%
===========================================================================================================================
Ratio of net investment income (loss) to average
net assets (0.61)%(b) (0.50)% (0.47)% (0.40)% (0.27)%
___________________________________________________________________________________________________________________________
===========================================================================================================================
Portfolio turnover rate 88% 62% 76% 67% 58%
___________________________________________________________________________________________________________________________
===========================================================================================================================
|
(a)Does not include sales charges.
(b)Ratios are based on average daily net assets of $18,876,586,178.
CLASS B
------------------------------------------------
YEAR ENDED OCTOBER 31, NOVEMBER 3, 1997
---------------------- (DATE SALES COMMENCED)
2000(a) 1999 TO OCTOBER 31, 1998(a)
---------- -------- ----------------------
Net asset value, beginning of period $ 34.00 $ 26.11 $ 30.04
-------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.58) (0.42) (0.37)
-------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 12.14 9.04 (1.46)
=============================================================================================================
Total from investment operations 11.56 8.62 (1.83)
=============================================================================================================
Less distributions:
Distributions from net realized gains (3.28) (0.73) (2.10)
=============================================================================================================
Net asset value, end of period $ 42.28 $ 34.00 $ 26.11
_____________________________________________________________________________________________________________
=============================================================================================================
Total return(b) 35.51% 33.64% (5.86)%
_____________________________________________________________________________________________________________
=============================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,315,524 $589,718 $275,676
_____________________________________________________________________________________________________________
=============================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.88%(c) 1.98% 1.98%(d)
-------------------------------------------------------------------------------------------------------------
Without fee waivers 1.85%(c) 2.00% 2.00%(d)
=============================================================================================================
Ratio of net investment income (loss) to average net assets (1.38)%(c) (1.38)% (1.36)%(d)
_____________________________________________________________________________________________________________
=============================================================================================================
Portfolio turnover rate 88% 62% 76%
_____________________________________________________________________________________________________________
=============================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charge and is not annualized for periods less than one year.
(c)Ratios are based on average daily net assets of $1,030,956,088.
(d)Annualized.
CLASS C
---------------------------------------------------------
YEAR ENDED OCTOBER 31, AUGUST 4, 1997
------------------------------- (DATE SALES COMMENCED)
2000(a) 1999 1998(a) TO OCTOBER 31, 1997
-------- -------- ------- ----------------------
Net asset value, beginning of period $ 33.99 $ 26.10 $ 29.18 $ 30.32
-------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.59) (0.42) (0.37) (0.04)
-------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized
and unrealized) 12.15 9.04 (0.61) (1.10)
=============================================================================================================
Total from investment operations 11.56 8.62 (0.98) (1.14)
=============================================================================================================
Less distributions:
Distributions from net realized gains (3.28) (0.73) (2.10) --
=============================================================================================================
Net asset value, end of period $ 42.27 $ 33.99 $ 26.10 $ 29.18
_____________________________________________________________________________________________________________
=============================================================================================================
Total return(b) 35.52% 33.65% (3.12)% (3.76)%
_____________________________________________________________________________________________________________
=============================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $434,544 $161,490 $76,522 $21,508
_____________________________________________________________________________________________________________
=============================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.88%(c) 1.98% 1.97% 1.84%(d)
-------------------------------------------------------------------------------------------------------------
Without fee waivers 1.85%(c) 2.00% 1.99% 1.86%(d)
=============================================================================================================
Ratio of net investment income (loss) to average
net assets (1.38)%(c) (1.38)% (1.35)% (1.12)%(d)
_____________________________________________________________________________________________________________
=============================================================================================================
Portfolio turnover rate 88% 62% 76% 67%
_____________________________________________________________________________________________________________
=============================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charge and is not annualized for periods less than one year.
(c)Ratios are based on average daily net assets of $322,287,527.
(d)Annualized.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
---------------------------------------------------------------------------------------------------------
- Initial sales charge - No initial sales charge - No initial sales charge
- Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within charge on redemptions within
six years one year
- Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
at the end of the month shares
which is eight years after
the date on 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
|
(1) AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund. You may be charged a contingent deferred sales charge if you redeem AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain exchanges. Sales charges on all other AIM Funds and classes of those Funds are detailed below. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales charges. The "Other Information" section of your prospectus will tell you in what category your particular AIM Fund is classified.
CATEGORY I INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
|
A-1 MCF--10/00
CATEGORY II INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
|
CATEGORY III INITIAL SALES CHARGES
-------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
-------------------------------------------------------------
|
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
----------------------------------------------------------
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
----------------------------------------------------------
|
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--10/00 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
-----------------------------------------------------------------------------------------------------------
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
----------------------------------------------------------------------------------------------------------
|
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
PURCHASE OPTIONS
---------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
---------------------------------------------------------------------------------------------------------
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed account application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed account application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank Connection
methods described above. form to the transfer agent. Once
the transfer agent has received the
form, call the transfer agent to
place your purchase order.
By AIM Internet Connect(SM) Open your account using one of the Select the AIM Internet Connect
methods described above. option on your completed account
application or complete an AIM
Internet Connect Authorization
Form. Mail the application or form
to the transfer agent. Once your
request for this option has been
processed (which may take up to 10
days), you may place your purchase
order at www.aimfunds.com. The
maximum purchase amount per
transaction is $100,000. You may
not purchase shares in AIM
prototype retirement accounts on
the internet.
----------------------------------------------------------------------------------------------------------
|
A-3 MCF--10/00
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. 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--10/00 A-4
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record (if there has been no change communicated
to us within the last 30 days) or transferred electronically
to a pre-authorized checking account; (2) you do not hold
physical share certificates; (3) you can provide proper
identification information; (4) the proceeds of the
redemption do not exceed $50,000; and (5) you have not
previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not be redeemed by telephone. The transfer agent
must receive your call during the hours of the customary
trading session of the New York Stock Exchange (NYSE) in
order to effect the redemption at that day's closing price.
By AIM Internet
Connect Place your redemption request at www.aimfunds.com. You will
be allowed to redeem by internet if (1) you do not hold
physical share certificates; (2) you can provide proper
identification information; (3) the proceeds of the
redemption do not exceed $50,000; and (4) you have
established the internet trading option. AIM prototype
retirement accounts may not be redeemed on the internet.
The transfer agent must confirm your transaction during the
hours of the customary trading session of the NYSE in order
to effect the redemption at that day's closing price.
|
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no more than seven days, after we accept your request to redeem. If you redeem shares recently purchased by check, you will be required to wait up to ten business days before we will send your redemption proceeds. This delay is necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a check in the amount of the redemption proceeds to the address on record with us. If your request is not in good order, you may have to provide us with additional documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the redemption proceeds to your address of record (if there has been no change communicated to the transfer agent within the previous 30 days) or transmit them electronically to your pre-authorized bank account. We use reasonable procedures to confirm that instructions communicated by telephone are genuine and are not liable for telephone instructions that are reasonably believed to be genuine.
REDEMPTION BY INTERNET
If you redeem by internet, we will transmit your redemption proceeds electronically to your pre-authorized bank account. We use reasonable procedures to confirm that instructions communicated by internet are genuine and are not liable for internet instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account of at least $50. You also may make annual withdrawals if you own Class A shares. We will redeem enough shares from your account to cover the amount withdrawn. You must have an account balance of at least $5,000 to establish a Systematic Withdrawal Plan. You can stop this plan at any time by giving ten days prior notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try to transmit payment of redemption proceeds on that same day. If we receive your redemption order after 11:30 a.m. Eastern Time and before the close of the customary trading session of the NYSE, we generally will transmit payment on the next business day.
A-5 MCF--10/00
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--10/00 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--10/00
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--10/00 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
ON THE INTERNET: You can send us a
request by e-mail or
download prospectuses,
annual or semiannual
reports via our website:
http://www.aimfunds.com
|
You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
-------------------------------------
AIM Constellation Fund
SEC 1940 Act file number: 811-1424
-------------------------------------
[AIM LOGO APPEARS HERE]
--Registered Trademark--
www.aimfunds.com CST-PRO-1 INVEST WITH DISCIPLINE
--Registered Trademark--
|
AIM DENT
DEMOGRAPHIC TRENDS FUND
AIM Dent Demographic Trends Fund seeks to provide long-term growth of
capital.
AIM--Registered Trademark--
PROSPECTUS
MARCH 1, 2001
This prospectus contains important
information about the Class A, B and C
shares of the fund. Please read it
before investing and keep it for
future reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
|
--------------------------------
|
INVESTMENT OBJECTIVE AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - PERFORMANCE INFORMATION 2 - - - - - - - - - - - - - - - - - - - - - - - - Annual Total Return 2 Performance Table 2 FEE TABLE AND EXPENSE EXAMPLE 3 - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 3 Expense Example 3 FUND MANAGEMENT 4 - - - - - - - - - - - - - - - - - - - - - - - - The Advisors 4 Advisor Compensation 4 Portfolio Managers 4 OTHER INFORMATION 4 - - - - - - - - - - - - - - - - - - - - - - - - Sales Charges 4 Dividends and Distributions 4 FINANCIAL HIGHLIGHTS 5 - - - - - - - - - - - - - - - - - - - - - - - - SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - Choosing a Share Class A-1 Purchasing Shares A-3 Redeeming Shares A-4 Exchanging Shares A-6 Pricing of Shares A-8 Taxes A-8 OBTAINING ADDITIONAL INFORMATION Back Cover - - - - - - - - - - - - - - - - - - - - - - - - |
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investor, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE are registered service marks and AIM Bank Connection and AIM Internet Connect are service marks of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.
The fund's investment objective is 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 by investing in securities of companies that are likely to benefit from changing demographic, economic and lifestyle trends. These securities may include common stocks, convertible bonds, convertible preferred stocks and warrants of companies within a broad range of market capitalizations. The fund may also invest up to 25% of its total assets in foreign securities. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
The portfolio managers purchase securities of companies that have experienced, or that they believe have the potential for, above-average, long-term growth in revenues and earnings. The portfolio managers consider whether to sell a particular security when they believe the security no longer has that potential.
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 growth stocks in which the fund invests may rise and fall more than the prices of stocks generally.
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.
Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, the relative lack of information about these companies, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance is not necessarily an indication of its future performance.
ANNUAL TOTAL RETURN
The following bar chart shows the performance of the fund's Class A shares. The bar chart does not reflect sales loads. If it did, the annual total return shown would be lower.
[GRAPH]
ANNUAL
YEAR ENDED TOTAL
DECEMBER 31 RETURN
----------- ------
2000 -17.22%
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During the period shown in the bar chart, the highest quarterly return was 10.62% (quarter ended March 31, 2000) and the lowest quarterly return was -23.78% (quarter ended December 31, 2000).
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a broad-based securities market index. The fund's performance reflects payment of sales loads.
AVERAGE ANNUAL TOTAL RETURNS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (for the periods ended SINCE INCEPTION December 31, 2000) 1 YEAR INCEPTION DATE -------------------------------------------------------------------------------------- Class A (21.77)% 12.87% 06/07/99 Class B (21.90) 13.89 06/07/99 Class C (18.61) 16.24 06/07/99 Russell 3000--Registered Trademark-- Index(1) (7.46) 3.46(2) 05/31/99(2) -------------------------------------------------------------------------------------- |
(1)The Russell 3000--Registered Trademark-- Index is a widely recognized, unmanaged index of common stocks that measures the performance of the 3,000 largest U.S. companies based on total market capitalization.
(2)The average annual total return given is since the date closest to the inception date of the class with the longest performance history.
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 0.30 0.32 0.32 Total Annual Fund Operating Expenses 1.50 2.17 2.17 ------------------------------------------------------------- |
(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.
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 5 YEARS 10 YEARS
----------------------------------------------
Class A $694 $998 $1,323 $2,242
Class B 720 979 1,364 2,333
Class C 320 679 1,164 2,503
----------------------------------------------
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You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $694 $998 $1,323 $2,242
Class B 220 679 1,164 2,333
Class C 220 679 1,164 2,503
----------------------------------------------
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THE ADVISORS
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 the fund's investment decisions, the execution of securities transactions, and obtaining and evaluating economic, statistical and financial information to formulate and implement investment programs for the fund. H.S. Dent Advisors, Inc. (the subadvisor) serves as the fund's subadvisor, and is located at 6515 Gwin Road, Oakland, California 94611. The subadvisor is responsible for providing the advisor with macroeconomic, thematic, demographic, lifestyle trends and sector research, custom reports and investment and market capitalization recommendations 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 130 investment portfolios, including the fund, encompassing a broad range of investment objectives. The subadvisor has acted as an investment advisor since 1999.
ADVISOR COMPENSATION
During the fiscal year ended October 31, 2000, the advisor received compensation of 0.85% of average daily net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual members of the team who are primarily responsible for the day-to-day management of the fund's portfolio are
- Edgar M. Larsen, Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with the advisor and/or its affiliates since 1996. From 1981 to 1996, he was, among other offices, Senior Vice President of John Hancock Advisers, Inc. and its predecessors.
- Lanny H. Sachnowitz, Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with the advisor and/or its affiliates since 1987.
SALES CHARGES
Purchases of Class A shares of AIM Dent Demographic Trends 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.
The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
Total return information in this table has been affected by special market factors, including the fund's investments in initial public offerings (IPOs), which have had a magnified impact on the fund due to its small asset base. There is no guarantee that, as the fund's assets grow, it will continue to experience substantially similar performance.
CLASS A
------------------------------------
JUNE 7, 1999
(DATE OPERATIONS
YEAR ENDED COMMENCED) TO
OCTOBER 31, 2000 OCTOBER 31, 1999
---------------- ----------------
Net asset value, beginning of period $ 12.14 $ 10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.11) (0.03)
--------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 3.37 2.17
==================================================================================================
Total from investment operations 3.26 2.14
==================================================================================================
Net asset value, end of period $ 15.40 $ 12.14
__________________________________________________________________________________________________
==================================================================================================
Total return(a) 26.85% 21.40%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $666,929 $163,872
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets 1.50%(b) 1.60%(c)(d)
==================================================================================================
Ratio of net investment income (loss) to average net assets (0.93)%(b) (1.00)%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 90% 29%
__________________________________________________________________________________________________
==================================================================================================
|
(a)Does not deduct sales charges and is not annualized for periods less than one year.
(b)Ratios are based on average daily net assets of $503,312,753.
(c)After fee waivers and/or expense reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursements was 1.65% (annualized).
(d)Annualized.
CLASS B
------------------------------------
JUNE 7, 1999
(DATE OPERATIONS
YEAR ENDED COMMENCED) TO
OCTOBER 31, 2000 OCTOBER 31, 1999
---------------- ----------------
Net asset value, beginning of period $ 12.11 $ 10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.18) (0.04)
--------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 3.33 2.15
==================================================================================================
Total from investment operations 3.15 2.11
==================================================================================================
Net asset value, end of period $ 15.26 $ 12.11
__________________________________________________________________________________________________
==================================================================================================
Total return(a) 26.01% 21.10%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $748,480 $177,430
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets 2.17%(b) 2.24%(c)(d)
==================================================================================================
Ratio of net investment income (loss) to average net assets (1.60)%(b) (1.64)%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 90% 29%
__________________________________________________________________________________________________
==================================================================================================
|
(a)Does not deduct contingent deferred sales charges and is not annualized for periods less than one year.
(b)Ratios are based on average daily net assets of $550,054,811.
(c)After fee waivers and/or expense reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursements was 2.29% (annualized).
(d)Annualized.
CLASS C
------------------------------------
JUNE 7, 1999
(DATE OPERATIONS
YEAR ENDED COMMENCED) TO
OCTOBER 31, 2000 OCTOBER 31, 1999
---------------- ----------------
Net asset value, beginning of period $ 12.11 $ 10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.17) (0.04)
--------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 3.32 2.15
==================================================================================================
Total from investment operations 3.15 2.11
==================================================================================================
Net asset value, end of period $ 15.26 $ 12.11
__________________________________________________________________________________________________
==================================================================================================
Total return(a) 26.01% 21.10%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $309,821 $51,605
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets 2.17%(b) 2.24%(c)(d)
==================================================================================================
Ratio of net investment income (loss) to average net assets (1.60)%(b) (1.64)%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 90% 29%
__________________________________________________________________________________________________
==================================================================================================
|
(a)Does not deduct contingent deferred sales charges and is not annualized for periods less than one year.
(b)Ratios are based on average daily net assets of $212,236,361.
(c)After fee waivers and/or expense reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursements was 2.29% (annualized).
(d)Annualized.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
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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
at the end of the month shares
which is eight years after
the date on 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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(1) AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund. You may be charged a contingent deferred sales charge if you redeem AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain exchanges. Sales charges on all other AIM Funds and classes of those Funds are detailed below. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales charges. The "Other Information" section of your prospectus will tell you in what category your particular AIM Fund is classified.
CATEGORY I INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
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A-1 MCF--10/00
CATEGORY II INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
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CATEGORY III INITIAL SALES CHARGES
-------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
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CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
----------------------------------------------------------
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
----------------------------------------------------------
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COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current market value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, we will assume that you have redeemed shares on which there is no CDSC first and, then, shares in the order of purchase.
REDUCED SALES CHARGES
AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial consultant must provide sufficient information at the time of purchase to verify that your purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares currently owned for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the current value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of AIM Funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full face amount of the LOI is not invested by the end of the 13-month period, your account will be adjusted to the higher initial sales charge level for the amount actually invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- on shares purchased by reinvesting dividends and distributions;
- when exchanging shares among certain AIM Funds;
- when using the reinstatement privilege; and
- when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- if you redeem Class B shares you held for more than six years;
- if you redeem Class C shares you held for more than one year;
- if you redeem shares acquired through reinvestment of dividends and distributions; and
- on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares at reduced or without sales charges. Consult the fund's Statement of Additional Information for details.
MCF--10/00 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
-----------------------------------------------------------------------------------------------------------
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
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HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
PURCHASE OPTIONS
---------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
---------------------------------------------------------------------------------------------------------
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed account application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed account application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank Connection
methods described above. form to the transfer agent. Once
the transfer agent has received the
form, call the transfer agent to
place your purchase order.
By AIM Internet Connect(SM) Open your account using one of the Select the AIM Internet Connect
methods described above. option on your completed account
application or complete an AIM
Internet Connect Authorization
Form. Mail the application or form
to the transfer agent. Once your
request for this option has been
processed (which may take up to 10
days), you may place your purchase
order at www.aimfunds.com. The
maximum purchase amount per
transaction is $100,000. You may
not purchase shares in AIM
prototype retirement accounts on
the internet.
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A-3 MCF--10/00
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. 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--10/00 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--10/00
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--10/00 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--10/00
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--10/00 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
ON THE INTERNET: You can send us a
request by e-mail or
download prospectuses,
annual or semiannual
reports via our website:
http://www.aimfunds.com
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You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
[AIM LOGO APPEARS HERE] www.aimfunds.com DDT-PRO-1 INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
AIM EMERGING GROWTH FUND
AIM Emerging Growth Fund seeks to provide long-term growth of capital.
AIM--Registered Trademark--
PROSPECTUS
MARCH 1, 2001
This prospectus contains important
information about the Class A, B,
and C shares of the fund. Please
read it before investing and keep it
for future reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
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------------------------
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INVESTMENT OBJECTIVE AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - - FEE TABLE AND EXPENSE EXAMPLE 2 - - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 2 Expense Example 2 FUND MANAGEMENT 3 - - - - - - - - - - - - - - - - - - - - - - - - - The Advisor 3 Advisor Compensation 3 Portfolio Managers 3 OTHER INFORMATION 3 - - - - - - - - - - - - - - - - - - - - - - - - - Sales Charges 3 Dividends and Distributions 3 FINANCIAL HIGHLIGHTS 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 by investing in securities of companies the portfolio managers believe are likely to benefit from new or innovative products, services or processes. These securities may include common stocks, convertible bonds, convertible preferred stocks and warrants. While the fund will invest without regard to market capitalization, the fund expects to invest a significant portion of its assets in securities of small-and medium-sized companies. Under normal conditions, the top 10 holdings may comprise at least a third of the portfolio's net assets. The fund may also invest up to 25% of its total assets in foreign securities. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
The portfolio managers purchase securities of companies that have experienced, or that they believe have the potential for, above-average, long-term growth. The portfolio managers consider whether to sell a particular security when they believe the security no longer has that potential.
The fund is non-diversified. This means that with respect to 50% of its assets, it is permitted to invest more than 5% of its assets in the securities of any one issuer.
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 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.
Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, the relative lack of information about these companies, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Because a large percentage of the fund's assets may be invested in a limited number of securities, and because the fund is non-diversified, the fund will invest in fewer securities than if it were a diversified fund. Thus, 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. Because of the fund's small asset base, any investment the fund may make in IPOs may significantly increase the fund's total return. As the fund's assets grow, the impact of IPO investments will decline, which may reduce the fund's total return.
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 0.48 0.52 0.52 Total Annual Fund Operating Expenses 1.68% 2.37% 2.37% --------------------------------------------------------- |
(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.
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 5 YEARS 10 YEARS
----------------------------------------------
Class A $711 $1,050 $1,412 $2,428
Class B 740 1,039 1,465 2,535
Class C 340 739 1,265 2,706
----------------------------------------------
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You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $711 $1,050 $1,412 $2,428
Class B 240 739 1,265 2,535
Class C 240 739 1,265 2,706
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THE ADVISOR
A I M Advisors, Inc. 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 130 investment portfolios, including the fund, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended October 31, 2000, the advisor received compensation of 0.85% of average daily net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual members of the team who are primarily responsible for the day-to-day management of the fund's portfolio are
- Ryan E. Crane, Portfolio Manager, who has been responsible for the fund since 2000 and has been associated with the advisor and/or its affiliates since 1994.
- Robert M. Kippes, Portfolio Manager, who has been responsible for the fund since 2000 and has been associated with the advisor and/or its affiliates since 1989.
- Jay K. Rushin, Portfolio Manager, who has been responsible for the fund since 2000 and has been associated with the advisor and/or its affiliates since 1998. From 1996 to 1998, he was an associate equity analyst with Prudential Securities.
SALES CHARGES
Purchases of Class A shares of AIM Emerging Growth 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.
The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
Total return information in this table has been affected by special market factors, including the fund's investments in initial public offerings (IPOs), which have had a magnified impact on the fund due to its small asset base. There is no guarantee that as the fund's assets grow, it will continue to experience substantially similar performance.
CLASS A CLASS B CLASS C
---------------- ---------------- ----------------
MARCH 31, 2000 MARCH 31, 2000 MARCH 31, 2000
(DATE OPERATIONS (DATE OPERATIONS (DATE OPERATIONS
COMMENCED) TO COMMENCED) TO COMMENCED) TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 2000 2000
---------------- ---------------- ----------------
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00
--------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.07) (0.07)
--------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 0.54 0.54 0.53
====================================================================================================================
Total from investment operations 0.50 0.47 0.46
====================================================================================================================
Net asset value, end of period $ 10.50 $ 10.47 $ 10.46
____________________________________________________________________________________________________________________
====================================================================================================================
Total return(a) 5.00% 4.70% 4.60%
____________________________________________________________________________________________________________________
====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $147,101 $ 94,740 $ 41,361
____________________________________________________________________________________________________________________
====================================================================================================================
Ratio of expenses to average net assets 1.68%(b) 2.37%(b) 2.37%(b)
====================================================================================================================
Ratio of net investment income (loss) to average net assets (1.04)%(b) (1.73)%(b) (1.73)%(b)
____________________________________________________________________________________________________________________
====================================================================================================================
Portfolio turnover rate 111% 111% 111%
____________________________________________________________________________________________________________________
====================================================================================================================
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(a)Does not include sales charges or contingent deferred sales charges and is not annualized for periods less than one year.
(b)Ratios are annualized and based on average daily net assets of $96,550,776, $59,499,434 and $25,886,903 for Class A, Class B and Class C, respectively.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
---------------------------------------------------------------------------------------------------------
- Initial sales charge - No initial sales charge - No initial sales charge
- Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within charge on redemptions within
six years one year
- Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
at the end of the month shares
which is eight years after
the date on 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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(1) AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund. You may be charged a contingent deferred sales charge if you redeem AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain exchanges. Sales charges on all other AIM Funds and classes of those Funds are detailed below. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales charges. The "Other Information" section of your prospectus will tell you in what category your particular AIM Fund is classified.
CATEGORY I INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
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A-1 MCF--10/00
CATEGORY II INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
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CATEGORY III INITIAL SALES CHARGES
-------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
-------------------------------------------------------------
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CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
----------------------------------------------------------
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
----------------------------------------------------------
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COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current market value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, we will assume that you have redeemed shares on which there is no CDSC first and, then, shares in the order of purchase.
REDUCED SALES CHARGES
AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial consultant must provide sufficient information at the time of purchase to verify that your purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares currently owned for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the current value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of AIM Funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full face amount of the LOI is not invested by the end of the 13-month period, your account will be adjusted to the higher initial sales charge level for the amount actually invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- on shares purchased by reinvesting dividends and distributions;
- when exchanging shares among certain AIM Funds;
- when using the reinstatement privilege; and
- when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- if you redeem Class B shares you held for more than six years;
- if you redeem Class C shares you held for more than one year;
- if you redeem shares acquired through reinvestment of dividends and distributions; and
- on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares at reduced or without sales charges. Consult the fund's Statement of Additional Information for details.
MCF--10/00 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
-----------------------------------------------------------------------------------------------------------
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
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HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
PURCHASE OPTIONS
---------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
---------------------------------------------------------------------------------------------------------
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed account application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed account application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank Connection
methods described above. form to the transfer agent. Once
the transfer agent has received the
form, call the transfer agent to
place your purchase order.
By AIM Internet Connect(SM) Open your account using one of the Select the AIM Internet Connect
methods described above. option on your completed account
application or complete an AIM
Internet Connect Authorization
Form. Mail the application or form
to the transfer agent. Once your
request for this option has been
processed (which may take up to 10
days), you may place your purchase
order at www.aimfunds.com. The
maximum purchase amount per
transaction is $100,000. You may
not purchase shares in AIM
prototype retirement accounts on
the internet.
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A-3 MCF--10/00
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. 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--10/00 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--10/00
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--10/00 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--10/00
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--10/00 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
ON THE INTERNET: You can send us a request
by e-mail or download
prospectuses, annual or
semiannual reports via
our website:
http://www.aimfunds.com
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You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
[AIM LOGO APPEARS HERE] www.aimfunds.com EMG-PRO-1 INVEST WITH DISCIPLINE --Registered Trademark-- --Registered Trademark-- |
AIM LARGE CAP
BASIC VALUE FUND
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AIM Large Cap Basic Value Fund seeks to provide long-term growth of capital with a secondary objective of current income.
AIM--Registered Trademark--
PROSPECTUS
MARCH 1, 2001
This prospectus contains important
information about the Class A, B and C
shares of the fund. Please read it
before investing and keep it for
future reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
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------------------------------
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INVESTMENT OBJECTIVES AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - PERFORMANCE INFORMATION 2 - - - - - - - - - - - - - - - - - - - - - - - - Annual Total Return 2 Performance Table 2 FEE TABLE AND EXPENSE EXAMPLE 2 - - - - - - - - - - - - - - - - - - - - - - - - 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 FINANCIAL HIGHLIGHTS 5 - - - - - - - - - - - - - - - - - - - - - - - - SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - Choosing a Share Class A-1 Purchasing Shares A-3 Redeeming Shares A-4 Exchanging Shares A-6 Pricing of Shares A-8 Taxes A-8 OBTAINING ADDITIONAL INFORMATION Back Cover - - - - - - - - - - - - - - - - - - - - - - - - |
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investor, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE are registered service marks and AIM Bank Connection and AIM Internet Connect are service marks of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.
The fund's primary investment objective is long-term growth of capital with a secondary objective of current income. The investment objectives of the fund may be changed by the Board of Trustees without shareholder approval.
The fund seeks to meet its objectives by investing in large-capitalization company securities that offer potential for capital growth, and may offer potential for current income. These securities may include common stocks, convertible bonds, convertible preferred stocks and warrants of companies with market capitalizations that are within the range of stocks in the Russell 1000--Registered Trademark-- Value Index at the time of purchase. Under normal conditions, the top 10 holdings may comprise at least a third of the portfolio's net assets. The fund may also invest up to 25% of its total assets in foreign securities. The fund may also invest in debt instruments that are consistent with its investment objectives of long-term growth of capital and current income. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
The portfolio managers purchase securities of companies that they believe have the potential for above-average growth in revenues and earnings and that they believe are undervalued in relation to long-term earning power or other factors. The portfolio managers consider whether to sell a particular security when they believe the security no longer has that potential.
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 objectives.
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. Debt securities are particularly vulnerable to credit risk and interest rate fluctuations. When interest rates rise, bond prices fall; the longer a bond's duration, the more sensitive it is to this risk.
The prices of growth stocks in which the fund invests may rise and fall more than the prices of stocks generally.
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. Also, since a large percentage of the fund's assets will be invested in a limited number of securities, any change in value of those securities could significantly affect the value of your investment in the fund.
Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, the relative lack of information about these companies, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
The fund may participate in the initial public offering (IPO) market. Because of the fund's small asset base, any investment the fund may make in IPOs may significantly increase the fund's total return. As the fund's assets grow, the impact of IPO investments will decline, which may reduce the fund's total return.
An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance is not necessarily an indication of its future performance. Total return information in the bar chart and table below has been affected by special market factors, including the fund's investments in initial public offerings (IPOs), which had a magnified impact on the fund due to its small asset base. There is no guarantee that, as the fund's assets grow, it will continue to experience substantially similar performance.
ANNUAL TOTAL RETURN
The following bar chart shows the performance of the fund's Class A shares. The bar chart does not reflect sales loads. If it did, the annual total return shown would be lower.
[GRAPH]
ANNUAL
YEAR ENDED TOTAL
DECEMBER 31 RETURN
----------- ------
2000 21.74%
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During the periods shown in the bar chart, the highest quarterly return was 10.10% (quarter ended September 30, 2000) and the lowest quarterly return was -0.94% (quarter ended June 30, 2000).
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a broad-based securities market index. The fund's performance reflects payment of sales loads.
AVERAGE ANNUAL TOTAL RETURNS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (for the periods ended SINCE INCEPTION December 31, 2000) 1 YEAR INCEPTION DATE --------------------------------------------------------------------------------------------------- Class A 15.03% 11.68% 06/30/99 Class B -- 6.27(2) 08/01/00 Class C -- 10.27(2) 08/01/00 Russell 1000--Registered Trademark-- Index(1) (7.79) (0.03)(3) 06/30/99(3) --------------------------------------------------------------------------------------------------- |
(1) The Russell 1000--Registered Trademark-- Index is a widely recognized, unmanaged index of common stocks that measures the performance of the 1,000 largest companies in Russell 3000--Registered Trademark-- Index, which measures the performance of the 3,000 largest U.S. companies based on total market capitalization.
(2) Cumulative returns.
(3) The average annual total return given is since the date closest to the inception date of the class with the longest performance history.
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 0.60% 0.60% 0.60% Distribution and/or Service (12b-1) Fees 0.35 1.00 1.00 Other Expenses 7.26 7.29 7.29 Total Annual Fund Operating Expenses 8.21 8.89 8.89 Expense Reimbursement(2) 6.96 6.96 6.96 Net Expenses 1.25 1.93 1.93 ------------------------------------------------------- |
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares within 18 months from the date of purchase, you may pay a 1% contingent deferred sales charge (CDSC) at the time of redemption.
(2) The investment advisor has contractually agreed to waive fees and/or reimburse expenses of Class A, Class B and Class C shares to the extent necessary to limit Total Annual Fund Operating Expenses (excluding interest, taxes, dividend expense on short sales and extraordinary items and increases in expenses due to expense offset arrangements, if any) of Class A shares to 1.25% (e.g. if the advisor waives and/or reimburses 6.96% of Class A they will waive 6.96% of Class B and Class C).
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 gross operating expenses remain the same. To the extent fees are waived or expenses are reimbursed, the expenses will be lower. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $1,313 $2,767 $4,130 $7,170
Class B 1,372 2,815 4,232 7,252
Class C 972 2,515 4,032 7,339
----------------------------------------------
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You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $1,313 $2,767 $4,130 $7,170
Class B 872 2,515 4,032 7,252
Class C 872 2,515 4,032 7,339
----------------------------------------------
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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 130 investment portfolios, including the fund, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended October 31, 2000, the advisor received no compensation as a result of contractual fee waivers and/or reimbursements.
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
- Matthew W. Seinsheimer, Portfolio Manager, who has been responsible for the fund since 2000 and has been associated with the advisor and/or its affiliates since 1998. From 1995 to 1998, he was Portfolio Manager for American Indemnity Company.
- Bret W. Stanley, Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with the advisor and/or its affiliates since 1998. From 1994 to 1998, he was Vice President and Portfolio Manager with Van Kampen American Capital Asset Management, Inc.
SALES CHARGES
Purchases of Class A shares of AIM Large Cap Basic Value 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.
The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
Total return information in this table has been affected by special market factors, including the fund's investments in initial public offerings (IPOs), which have had a magnified impact on the fund due to its small asset base. There is no guarantee that, as the fund's assets grow, it will continue to experience substantially similar performance.
CLASS A
-------------------------------
JUNE 30, 1999
(DATE OPERATIONS
YEAR ENDED COMMENCED) TO
OCTOBER 31, OCTOBER 31,
2000(a) 1999
----------- ----------------
Net asset value, beginning of period $ 9.40 $10.00
-----------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.07 0.03
-----------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 2.88 (0.63)
===============================================================================================
Total from investment operations 2.95 (0.60)
===============================================================================================
Less distributions:
Dividends from net investment income (0.18) --
-----------------------------------------------------------------------------------------------
Distributions from net realized gains (0.12) --
===============================================================================================
Total distributions (0.30) --
===============================================================================================
Net asset value, end of period $12.05 $ 9.40
_______________________________________________________________________________________________
===============================================================================================
Total return(b) 32.21% (6.00)%
_______________________________________________________________________________________________
===============================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $5,888 $1,153
_______________________________________________________________________________________________
===============================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.25%(c) 1.25%(d)
-----------------------------------------------------------------------------------------------
Without fee waivers 8.21%(c) 10.02%(d)
===============================================================================================
Ratio of net investment income to average net assets 0.62%(c) 0.87%(d)
_______________________________________________________________________________________________
===============================================================================================
Portfolio turnover rate 57% 10%
_______________________________________________________________________________________________
===============================================================================================
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(a)Calculated using average shares outstanding.
(b)Does not include sales charges and is not annualized for periods less than one year.
(c)Ratios are based on average daily net assets of $1,661,756.
(d)Annualized.
CLASS B
--------------
AUGUST 1, 2000
(DATE SALES
COMMENCED) TO
OCTOBER 31,
2000
--------------
Net asset value, beginning of period $10.85
------------------------------------------------------------------------------
Income from investment operations:
Net investment income --
==============================================================================
Net gains on securities (both realized and unrealized) 1.17
==============================================================================
Total from investment operations 1.17
==============================================================================
Net asset value, end of period $12.02
______________________________________________________________________________
==============================================================================
Total return(a) 10.78%
______________________________________________________________________________
==============================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $2,815
______________________________________________________________________________
==============================================================================
Ratio of expenses to average net assets:
With fee waivers 1.93%(b)
------------------------------------------------------------------------------
Without fee waivers 8.89%(b)
==============================================================================
Ratio of net investment income (loss) to average net assets (0.06)%(b)
______________________________________________________________________________
==============================================================================
Portfolio turnover rate 57%
______________________________________________________________________________
==============================================================================
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(a)Does not include contingent deferred sales charges and is not annualized for periods less than one year.
(b)Ratios are annualized and based on average daily net assets of $1,262,046.
CLASS C
--------------
AUGUST 1, 2000
(DATE SALES
COMMENCED) TO
OCTOBER 31,
2000
--------------
Net asset value, beginning of period $10.85
------------------------------------------------------------------------------
Income from investment operations:
Net investment income --
==============================================================================
Net gains on securities (both realized and unrealized) 1.17
==============================================================================
Total from investment operations 1.17
==============================================================================
Net asset value, end of period $12.02
______________________________________________________________________________
==============================================================================
Total return(a) 10.78%
______________________________________________________________________________
==============================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,248
______________________________________________________________________________
==============================================================================
Ratio of expenses to average net assets:
With fee waivers 1.93%(b)
------------------------------------------------------------------------------
Without fee waivers 8.89%(b)
==============================================================================
Ratio of net investment income (loss) to average net assets (0.06)%(b)
______________________________________________________________________________
==============================================================================
Portfolio turnover rate 57%
______________________________________________________________________________
==============================================================================
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(a)Does not include contingent deferred sales charges and is not annualized for periods less than one year.
(b)Ratios are annualized and based on average daily net assets of $451,456.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
---------------------------------------------------------------------------------------------------------
- Initial sales charge - No initial sales charge - No initial sales charge
- Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within charge on redemptions within
six years one year
- Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
at the end of the month shares
which is eight years after
the date on 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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(1) AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund. You may be charged a contingent deferred sales charge if you redeem AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain exchanges. Sales charges on all other AIM Funds and classes of those Funds are detailed below. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales charges. The "Other Information" section of your prospectus will tell you in what category your particular AIM Fund is classified.
CATEGORY I INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
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A-1 MCF--10/00
CATEGORY II INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
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CATEGORY III INITIAL SALES CHARGES
-------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
-------------------------------------------------------------
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CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
----------------------------------------------------------
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
----------------------------------------------------------
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COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current market value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, we will assume that you have redeemed shares on which there is no CDSC first and, then, shares in the order of purchase.
REDUCED SALES CHARGES
AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial consultant must provide sufficient information at the time of purchase to verify that your purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares currently owned for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the current value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of AIM Funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full face amount of the LOI is not invested by the end of the 13-month period, your account will be adjusted to the higher initial sales charge level for the amount actually invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- on shares purchased by reinvesting dividends and distributions;
- when exchanging shares among certain AIM Funds;
- when using the reinstatement privilege; and
- when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- if you redeem Class B shares you held for more than six years;
- if you redeem Class C shares you held for more than one year;
- if you redeem shares acquired through reinvestment of dividends and distributions; and
- on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares at reduced or without sales charges. Consult the fund's Statement of Additional Information for details.
MCF--10/00 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
-----------------------------------------------------------------------------------------------------------
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
----------------------------------------------------------------------------------------------------------
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HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
PURCHASE OPTIONS
---------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
---------------------------------------------------------------------------------------------------------
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed account application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed account application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank Connection
methods described above. form to the transfer agent. Once
the transfer agent has received the
form, call the transfer agent to
place your purchase order.
By AIM Internet Connect(SM) Open your account using one of the Select the AIM Internet Connect
methods described above. option on your completed account
application or complete an AIM
Internet Connect Authorization
Form. Mail the application or form
to the transfer agent. Once your
request for this option has been
processed (which may take up to 10
days), you may place your purchase
order at www.aimfunds.com. The
maximum purchase amount per
transaction is $100,000. You may
not purchase shares in AIM
prototype retirement accounts on
the internet.
----------------------------------------------------------------------------------------------------------
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A-3 MCF--10/00
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. 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--10/00 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--10/00
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--10/00 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--10/00
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--10/00 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
ON THE INTERNET: You can send us a
request by e-mail or
download prospectuses,
annual or semiannual
reports via our website:
http://www.aimfunds.com
|
You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
[AIM LOGO APPEARS HERE] www.aimfunds.com LCBV-PRO-1 INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
AIM LARGE CAP GROWTH FUND
AIM Large Cap Growth Fund seeks to provide long-term growth of capital.
AIM--Registered Trademark--
PROSPECTUS
MARCH 1, 2001
This prospectus contains important
information about the Class A, B and C
shares of the fund. Please read it
before investing and keep it for
future reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
|
-------------------------
|
INVESTMENT OBJECTIVE AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - PERFORMANCE INFORMATION 2 - - - - - - - - - - - - - - - - - - - - - - - - Annual Total Return 2 Performance Table 2 - - - - - - - - - - - - - - - - - - - - - - - - FEE TABLE AND EXPENSE EXAMPLE 3 - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 3 Expense Example 3 FUND MANAGEMENT 4 - - - - - - - - - - - - - - - - - - - - - - - - The Advisor 4 Advisor Compensation 4 Portfolio Managers 4 OTHER INFORMATION 4 - - - - - - - - - - - - - - - - - - - - - - - - Sales Charges 4 Dividends and Distributions 4 FINANCIAL HIGHLIGHTS 5 - - - - - - - - - - - - - - - - - - - - - - - - SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - Choosing a Share Class A-1 Purchasing Shares A-3 Redeeming Shares A-4 Exchanging Shares A-6 Pricing of Shares A-8 Taxes A-8 OBTAINING ADDITIONAL INFORMATION Back Cover - - - - - - - - - - - - - - - - - - - - - - - - |
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investor, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE are registered service marks and AIM Bank Connection and AIM Internet Connect are service marks of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.
The fund's investment objective is 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 by investing in large-capitalization company securities. These securities may include common stocks, convertible bonds, convertible preferred stocks and warrants of companies with market capitalizations that are within the top 50% of stocks in the Russell 1000--Registered Trademark-- Index at the time of purchase. Under normal conditions, the top 10 holdings may comprise at least a third of the portfolio's net assets. The fund may also invest up to 25% of its total assets in foreign securities. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
The portfolio managers purchase securities of a limited number of large-cap companies that they believe have the potential for above-average growth in revenues and earnings. The portfolio managers consider whether to sell a particular security when they believe the security no longer has that potential.
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.
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. Also, since a large percentage of the fund's assets will be invested in a limited number of securities, any change in value of those securities could significantly affect the value of your investment in the fund.
Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, the relative lack of information about these companies, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
The fund may participate in the initial public offering (IPO) market. Because of the fund's small asset base, any investment the fund may make in IPOs may significantly increase the fund's total returns. As the fund's assets grow, the impact of IPO investments will decline, which may reduce the fund's total return.
An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance is not necessarily an indication of its future performance. Total return information in the bar chart and table below has been affected by special market factors, including the fund's investments in initial public offerings (IPOs), which had a magnified impact on the fund due to its small asset base. There is no guarantee that, as the fund's assets grow, it will continue to experience substantially similar performance.
ANNUAL TOTAL RETURN
The following bar chart shows the performance of the fund's Class A shares. The bar chart does not reflect sales loads. If it did, the annual total return shown would be lower.
[GRAPH]
Annual
Year Ended Total
December 31 Return
----------- ------
2000 8.52%
|
During the periods shown in the bar chart, the highest quarterly return was 26.64% (quarter ended March 31, 2000) and the lowest quarterly return was -23.00% (quarter ended December 31, 2000).
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a broad-based securities market index. The fund's performance reflects payment of sales loads.
AVERAGE ANNUAL TOTAL RETURNS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (for the periods ended SINCE INCEPTION December 31, 2000) 1 YEAR INCEPTION DATE --------------------------------------------------------------------------------------------------- Class A 2.52% 21.52% 03/01/99 Class B 2.76 16.66 04/05/99 Class C 6.76 18.75 04/05/99 Russell 1000--Registered Trademark-- Index(1) (7.79) 5.95(2) 02/28/99(2) --------------------------------------------------------------------------------------------------- |
(1) The Russell 1000--Registered Trademark-- Index is a widely recognized, unmanaged index of common stocks that measures the performance of the 1,000 largest companies in the Russell 3000--Registered Trademark-- Index, which measures the performance of the 3,000 largest U.S. companies based on total market capitalization.
(2) The average annual total return given is since the date closest to the inception date of the class with the longest performance history.
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 0.75% 0.75% 0.75% Distribution and/or Service (12b-1) Fees 0.35 1.00 1.00 Other Expenses 0.48 0.49 0.49 Total Annual Fund Operating Expenses 1.58 2.24 2.24 ------------------------------------------------------- |
(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.
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 5 YEARS 10 YEARS
----------------------------------------------
Class A $702 $1,021 $1,363 $2,325
Class B 727 1,000 1,400 2,409
Class C 327 700 1,200 2,575
----------------------------------------------
|
You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $702 $1,021 $1,363 $2,325
Class B 227 700 1,200 2,409
Class C 227 700 1,200 2,575
----------------------------------------------
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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 130 investment portfolios, including the fund, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended October 31, 2000, the advisor received compensation of 0.75% of average daily net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual members of the team who are primarily responsible for the day-to-day management of the fund's portfolio are
- Monika H. Degan, Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with the advisor and/or its affiliates since 1995.
- Geoffrey V. Keeling, Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with the advisor and/or its affiliates since 1995.
- Jonathan C. Schoolar, Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with the advisor and/or its affiliates since 1986.
- Robert L. Shoss, Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with the advisor and/or its affiliates since 1995.
SALES CHARGES
Purchases of Class A shares of AIM Large Cap Growth 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.
The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
Total return information in this table has been affected by special market factors, including the fund's investments in initial public offerings (IPOs), which have had a magnified impact on the fund due to its small asset base. There is no guarantee that, as the fund's assets grow, it will continue to experience substantially similar performance.
CLASS A
-------------------------------
MARCH 1, 1999
(DATE OPERATIONS
YEAR ENDED COMMENCED) TO
OCTOBER 31, OCTOBER 31,
2000 1999
----------- ----------------
Net asset value, beginning of period $ 11.29 $10.00
---------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.15)(a) (0.04)
---------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 6.60 1.33
=============================================================================================
Total from investment operations 6.45 1.29
=============================================================================================
Net asset value, end of period $ 17.74 $11.29
_____________________________________________________________________________________________
=============================================================================================
Total return(b) 57.13% 13.70%
_____________________________________________________________________________________________
=============================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $225,255 $7,785
_____________________________________________________________________________________________
=============================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.58%(c) 1.53%(d)
---------------------------------------------------------------------------------------------
Without fee waivers 1.58%(c) 3.63%(d)
=============================================================================================
Ratio of net investment income (loss) to average net assets (0.82)%(c) (0.59)%(d)
_____________________________________________________________________________________________
=============================================================================================
Portfolio turnover rate 113% 21%
_____________________________________________________________________________________________
=============================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charges and is not annualized for periods less than one year.
(c) Ratios are based on average daily net assets of $65,543,904.
(d) Annualized.
CLASS B
----------------------------
APRIL 5, 1999
(DATE SALES
YEAR ENDED COMMENCED) TO
OCTOBER 31, OCTOBER 31,
2000 1999
----------- -------------
Net asset value, beginning of period $ 11.25 $11.02
------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.27)(a) (0.08)(a)
------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 6.56 0.31
==========================================================================================
Total from investment operations 6.29 0.23
==========================================================================================
Net asset value, end of period $ 17.54 $11.25
__________________________________________________________________________________________
==========================================================================================
Total return(b) 55.91% 2.09%
__________________________________________________________________________________________
==========================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $210,224 $5,183
__________________________________________________________________________________________
==========================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.24%(c) 2.23%(d)
------------------------------------------------------------------------------------------
Without fee waivers 2.24%(c) 4.33%(d)
==========================================================================================
Ratio of net investment income (loss) to average net assets (1.48)%(c) (1.29)%(d)
__________________________________________________________________________________________
==========================================================================================
Portfolio turnover rate 113% 21%
__________________________________________________________________________________________
==========================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized for periods less than one year.
(c) Ratios are based on average daily net assets of $55,216,289.
(d) Annualized.
CLASS C
----------------------------
APRIL 5, 1999
(DATE SALES
YEAR ENDED COMMENCED) TO
OCTOBER 31, OCTOBER 31,
2000 1999
----------- -------------
Net asset value, beginning of period $ 11.25 $11.02
------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.27)(a) (0.08)(a)
------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 6.57 0.31
==========================================================================================
Total from investment operations 6.30 0.23
==========================================================================================
Net asset value, end of period $ 17.55 $11.25
__________________________________________________________________________________________
==========================================================================================
Total return(b) 56.00% 2.09%
__________________________________________________________________________________________
==========================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $79,392 $ 901
__________________________________________________________________________________________
==========================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.24%(c) 2.23%(d)
------------------------------------------------------------------------------------------
Without fee waivers 2.24%(c) 4.33%(d)
==========================================================================================
Ratio of net investment income (loss) to average net assets (1.48)%(c) (1.29)%(d)
__________________________________________________________________________________________
==========================================================================================
Portfolio turnover rate 113% 21%
__________________________________________________________________________________________
==========================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized for periods less than one year.
(c) Ratios are based on average daily net assets of $21,151,120.
(d) Annualized.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
---------------------------------------------------------------------------------------------------------
- Initial sales charge - No initial sales charge - No initial sales charge
- Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within charge on redemptions within
six years one year
- Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
at the end of the month shares
which is eight years after
the date on 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
|
(1) AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund. You may be charged a contingent deferred sales charge if you redeem AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain exchanges. Sales charges on all other AIM Funds and classes of those Funds are detailed below. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales charges. The "Other Information" section of your prospectus will tell you in what category your particular AIM Fund is classified.
CATEGORY I INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
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A-1 MCF--10/00
CATEGORY II INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
|
CATEGORY III INITIAL SALES CHARGES
-------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
-------------------------------------------------------------
|
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
----------------------------------------------------------
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
----------------------------------------------------------
|
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--10/00 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
-----------------------------------------------------------------------------------------------------------
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--10/00
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. 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--10/00 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--10/00
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--10/00 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--10/00
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--10/00 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
ON THE INTERNET: You can send us a request
by e-mail or download
prospectuses, annual or
semiannual reports via
our website:
http://www.aimfunds.com
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You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
[AIM LOGO APPEARS HERE] www.aimfunds.com LCG-PRO-1 INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
AIM MID CAP GROWTH FUND
AIM Mid Cap Growth Fund seeks to provide long-term growth of capital.
AIM--Registered Trademark--
PROSPECTUS
MARCH 1, 2001
This prospectus contains important
information about the Class A, B, and C
shares of the fund. Please read it
before investing and keep it for
future reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
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INVESTMENT OBJECTIVE AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - - PERFORMANCE INFORMATION 2 - - - - - - - - - - - - - - - - - - - - - - - - - Annual Total Return 2 Performance Table 2 FEE TABLE AND EXPENSE EXAMPLE 3 - - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 3 Expense Example 3 FUND MANAGEMENT 4 - - - - - - - - - - - - - - - - - - - - - - - - - The Advisor 4 Advisor Compensation 4 Portfolio Managers 4 OTHER INFORMATION 4 - - - - - - - - - - - - - - - - - - - - - - - - - Sales Charges 4 Dividends and Distributions 4 - - - - - - - - - - - - - - - - - - - - - - - - - FINANCIAL HIGHLIGHTS 5 - - - - - - - - - - - - - - - - - - - - - - - - - SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - - Choosing a Share Class A-1 Purchasing Shares A-3 Redeeming Shares A-4 Exchanging Shares A-6 Pricing of Shares A-8 Taxes A-8 OBTAINING ADDITIONAL INFORMATION Back Cover - - - - - - - - - - - - - - - - - - - - - - - - - |
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investor, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE are registered service marks and AIM Bank Connection and AIM Internet Connect are service marks of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.
The fund's investment objective is 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 by investing at least 65% of its total assets in securities of companies that have market capitalizations, at the time of purchase, within the range of market capitalizations of companies included in the Standard & Poor's MidCap 400 Index. The Standard & Poor's MidCap 400 Index is an unmanaged market-weighted index of domestic stocks that measures the performance of the mid-size company segment of the U.S. market. Under normal conditions, the top 10 holdings may comprise up to 40% of the fund's total assets. The fund will invest primarily in common stocks but may also invest in convertible securities and warrants. The fund may also invest up to 25% of its total assets in foreign securities. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
The portfolio managers focus on companies they believe 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 favorable prospects for future growth. The portfolio managers consider whether to sell a particular security when any of those factors materially changes.
In anticipation of or in response to adverse market conditions, for cash management purposes, or for defensive purposes, the fund may temporarily hold all or a portion of its assets in cash, money market instruments, 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 smaller companies, whose prices may go up and down more than equity securities of larger, more established companies. Also, since equity securities of smaller companies may not be traded as often as equity securities of larger, more established companies, it may be difficult or impossible for the fund to sell securities at a desirable price.
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.
Since a large percentage of the fund's assets will be invested in a limited number of securities, any change in value of those securities could significantly affect the value of your investment in the fund.
Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, the relative lack of information about these companies, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
The fund may participate in the initial public offering (IPO) market. Because of the fund's small asset base, any investment the fund may make in IPOs may significantly increase the fund's total returns. As the fund's assets grow, the impact of IPO investments will decline, which may reduce the fund's total return.
An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance is not necessarily an indication of its future performance. Total return information in the bar chart and table below has been affected by special market factors, including the fund's investments in initial public offerings (IPOs), which had a magnified impact on the fund due to its small asset base. There is no guarantee that, as the fund's assets grow, it will continue to experience substantially similar performance.
ANNUAL TOTAL RETURN
The following bar chart shows the performance of the fund's Class A shares. The bar chart does not reflect sales loads. If it did, the annual total return shown would be lower.
[GRAPH]
ANNUAL
YEAR ENDED TOTAL
DECEMBER 31 RETURN
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2000 (10.12)%
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During the periods shown in the bar chart, the highest quarterly return was 28.02% (quarter ended March 31, 2000) and the lowest quarterly return was -21.79% (quarter ended December 31, 2000).
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a broad-based securities market index. The fund's performance reflects payment of sales loads.
AVERAGE ANNUAL TOTAL RETURNS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (for the periods ended SINCE INCEPTION December 31, 2000) 1 YEAR INCEPTION DATE ----------------------------------------------------------------------------------------------------- Class A (15.06)% 14.21% 11/01/99 Class B (15.12) 15.61 11/01/99 Class C (11.55) 18.96 11/01/99 S&P MidCap 400 Index(1) 17.51 26.06(2) [10/31/99(2)] ----------------------------------------------------------------------------------------------------- |
(1)The Standard & Poor's MidCap 400 Index is an unmanaged index of common stocks that measures the performance of the mid-size company segment of the U.S. market.
(2)The average annual total return given is since the date closest to the inception date of the class with the longest performance history.
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 your investment) CLASS A CLASS B CLASS C --------------------------------------------------- Management Fees 0.80% 0.80% 0.80% Distribution and/or Service (12b-1) Fees 0.35 1.00 1.00 Other Expenses 0.48 0.52 0.52 Total Annual Fund Operating Expenses 1.63 2.32 2.32 --------------------------------------------------- |
(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.
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 5 YEARS 10 YEARS
----------------------------------------------
Class A $707 $1,036 $1,388 $2,377
Class B 735 1,024 1,440 2,484
Class C 335 724 1,240 2,656
----------------------------------------------
|
You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $707 $1,036 $1,388 $2,377
Class B 235 724 1,240 2,484
Class C 235 724 1,240 2,656
----------------------------------------------
|
THE ADVISOR
A I M Advisors, Inc. serves as the fund's investment adviser 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 adviser since its organization in 1976. Today, the advisor, together with its subsidiaries, advises or manages over 130 investment portfolios, including the fund, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended October 31, 2000, the advisor received compensation of 0.80% of average daily net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual members of the team who are primarily responsible for the day-to-day management of the fund's portfolio are
-Ryan E. Crane, Portfolio Manager, who has been responsible for the fund since 2000 and has been associated with the advisor and/or its affiliates since 1994.
- Robert M. Kippes, Senior Portfolio Manager, who has been responsible for the fund since 2000 and has been associated with the advisor and/or its affiliates since 1989.
- Jay K. Rushin, Portfolio Manager, who has been responsible for the fund since 2000 and has been associated with the advisor and/or its affiliates since 1998. From 1996 to 1998, he was an associate equity analyst with Prudential Securities.
- Kenneth A. Zschappel, Senior Portfolio Manager, who has been responsible for the fund since 1999 and has been associated with the advisor and/or its affiliates since 1990.
SALES CHARGES
Purchases of Class A shares of AIM Mid Cap Growth 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.
The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
Total return information in this table has been affected by special market factors, including the fund's investments in initial public offerings (IPOs), which have had a magnified impact on the fund due to its small asset base. There is no guarantee that, as the fund's assets grow, it will continue to experience substantially similar performance.
CLASS A CLASS B CLASS C
---------------- ---------------- ----------------
NOVEMBER 1, 1999 NOVEMBER 1, 1999 NOVEMBER 1, 1999
(DATE OPERATIONS (DATE OPERATIONS (DATE OPERATIONS
COMMENCED) TO COMMENCED) TO COMMENCED) TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000(a) 2000(a) 2000(a)
---------------- ---------------- ----------------
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00
--------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.12) (0.22) (0.22)
--------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 4.50 4.47 4.48
====================================================================================================================
Total from investment operations 4.38 4.25 4.26
====================================================================================================================
Net asset value, end of period $ 14.38 $ 14.25 $ 14.26
____________________________________________________________________________________________________________________
====================================================================================================================
Total return(b) 43.80% 42.50% 42.60%
____________________________________________________________________________________________________________________
====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $114,913 $103,893 $29,969
____________________________________________________________________________________________________________________
====================================================================================================================
Ratio of expenses to average net assets 1.63%(c) 2.32%(c) 2.32%(c)
====================================================================================================================
Ratio of net investment income (loss) to average net assets (0.76)%(c) (1.45)%(c) (1.45)%(c)
____________________________________________________________________________________________________________________
====================================================================================================================
Portfolio turnover rate 183% 183% 183%
____________________________________________________________________________________________________________________
====================================================================================================================
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(a)Calculated using average shares outstanding.
(b)Does not include sales charges or contingent deferred sales charges.
(c)Ratios are based on average daily net assets of $68,511,425, $55,352,933 and $16,867,070 for Class A, Class B and Class C, respectively.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
---------------------------------------------------------------------------------------------------------
- Initial sales charge - No initial sales charge - No initial sales charge
- Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within charge on redemptions within
six years one year
- Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
at the end of the month shares
which is eight years after
the date on 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
|
(1) AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund. You may be charged a contingent deferred sales charge if you redeem AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain exchanges. Sales charges on all other AIM Funds and classes of those Funds are detailed below. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales charges. The "Other Information" section of your prospectus will tell you in what category your particular AIM Fund is classified.
CATEGORY I INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
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A-1 MCF--10/00
CATEGORY II INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
|
CATEGORY III INITIAL SALES CHARGES
-------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
-------------------------------------------------------------
|
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
----------------------------------------------------------
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
----------------------------------------------------------
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COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current market value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, we will assume that you have redeemed shares on which there is no CDSC first and, then, shares in the order of purchase.
REDUCED SALES CHARGES
AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial consultant must provide sufficient information at the time of purchase to verify that your purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares currently owned for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the current value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of AIM Funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full face amount of the LOI is not invested by the end of the 13-month period, your account will be adjusted to the higher initial sales charge level for the amount actually invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- on shares purchased by reinvesting dividends and distributions;
- when exchanging shares among certain AIM Funds;
- when using the reinstatement privilege; and
- when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- if you redeem Class B shares you held for more than six years;
- if you redeem Class C shares you held for more than one year;
- if you redeem shares acquired through reinvestment of dividends and distributions; and
- on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares at reduced or without sales charges. Consult the fund's Statement of Additional Information for details.
MCF--10/00 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
-----------------------------------------------------------------------------------------------------------
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
----------------------------------------------------------------------------------------------------------
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HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
PURCHASE OPTIONS
---------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
---------------------------------------------------------------------------------------------------------
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed account application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed account application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank Connection
methods described above. form to the transfer agent. Once
the transfer agent has received the
form, call the transfer agent to
place your purchase order.
By AIM Internet Connect(SM) Open your account using one of the Select the AIM Internet Connect
methods described above. option on your completed account
application or complete an AIM
Internet Connect Authorization
Form. Mail the application or form
to the transfer agent. Once your
request for this option has been
processed (which may take up to 10
days), you may place your purchase
order at www.aimfunds.com. The
maximum purchase amount per
transaction is $100,000. You may
not purchase shares in AIM
prototype retirement accounts on
the internet.
----------------------------------------------------------------------------------------------------------
|
A-3 MCF--10/00
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. 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--10/00 A-4
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record (if there has been no change communicated
to us within the last 30 days) or transferred electronically
to a pre-authorized checking account; (2) you do not hold
physical share certificates; (3) you can provide proper
identification information; (4) the proceeds of the
redemption do not exceed $50,000; and (5) you have not
previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not be redeemed by telephone. The transfer agent
must receive your call during the hours of the customary
trading session of the New York Stock Exchange (NYSE) in
order to effect the redemption at that day's closing price.
By AIM Internet
Connect Place your redemption request at www.aimfunds.com. You will
be allowed to redeem by internet if (1) you do not hold
physical share certificates; (2) you can provide proper
identification information; (3) the proceeds of the
redemption do not exceed $50,000; and (4) you have
established the internet trading option. AIM prototype
retirement accounts may not be redeemed on the internet.
The transfer agent must confirm your transaction during the
hours of the customary trading session of the NYSE in order
to effect the redemption at that day's closing price.
|
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no more than seven days, after we accept your request to redeem. If you redeem shares recently purchased by check, you will be required to wait up to ten business days before we will send your redemption proceeds. This delay is necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a check in the amount of the redemption proceeds to the address on record with us. If your request is not in good order, you may have to provide us with additional documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the redemption proceeds to your address of record (if there has been no change communicated to the transfer agent within the previous 30 days) or transmit them electronically to your pre-authorized bank account. We use reasonable procedures to confirm that instructions communicated by telephone are genuine and are not liable for telephone instructions that are reasonably believed to be genuine.
REDEMPTION BY INTERNET
If you redeem by internet, we will transmit your redemption proceeds electronically to your pre-authorized bank account. We use reasonable procedures to confirm that instructions communicated by internet are genuine and are not liable for internet instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account of at least $50. You also may make annual withdrawals if you own Class A shares. We will redeem enough shares from your account to cover the amount withdrawn. You must have an account balance of at least $5,000 to establish a Systematic Withdrawal Plan. You can stop this plan at any time by giving ten days prior notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try to transmit payment of redemption proceeds on that same day. If we receive your redemption order after 11:30 a.m. Eastern Time and before the close of the customary trading session of the NYSE, we generally will transmit payment on the next business day.
A-5 MCF--10/00
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--10/00 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--10/00
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--10/00 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.
BY MAIL: A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
BY TELEPHONE: (800) 347-4246
ON THE INTERNET: You can send us a
request by e-mail or
download prospectuses,
annual or semiannual
reports via our website:
http://www.aimfunds.com
|
You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
[AIM LOGO APPEARS HERE] www.aimfunds.com MCG-PRO-1 INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
AIM WEINGARTEN FUND
AIM Weingarten Fund seeks to provide growth of capital.
AIM--Registered Trademark--
PROSPECTUS
MARCH 1, 2001
This prospectus contains important
information about the Class A, B and C
shares of the fund. Please read it
before investing and keep it for
future reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
|
-------------------
|
INVESTMENT OBJECTIVE AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUND 1 - - - - - - - - - - - - - - - - - - - - - - - - PERFORMANCE INFORMATION 2 - - - - - - - - - - - - - - - - - - - - - - - - Annual Total Returns 2 Performance Table 2 FEE TABLE AND EXPENSE EXAMPLE 3 - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 3 Expense Example 3 FUND MANAGEMENT 4 - - - - - - - - - - - - - - - - - - - - - - - - The Advisors 4 Advisor Compensation 4 Portfolio Managers 4 OTHER INFORMATION 4 - - - - - - - - - - - - - - - - - - - - - - - - Sales Charges 4 Dividends and Distributions 4 FINANCIAL HIGHLIGHTS 5 - - - - - - - - - - - - - - - - - - - - - - - - SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - Choosing a Share Class A-1 Purchasing Shares A-3 Redeeming Shares A-4 Exchanging Shares A-6 Pricing of Shares A-8 Taxes A-8 OBTAINING ADDITIONAL INFORMATION Back Cover - - - - - - - - - - - - - - - - - - - - - - - - |
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investor, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA and Invest with DISCIPLINE are registered service marks and AIM Bank Connection and AIM Internet Connect are service marks of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and you should not rely on such other information or representations.
The fund's investment objective is to provide growth of capital. The investment objective of the fund may be changed by the Board of Trustees without shareholder approval.
The fund will invest primarily in common stocks of seasoned and better-capitalized companies. The portfolio managers focus on companies that have experienced above-average growth in earnings and have excellent prospects for future growth. The portfolio managers consider whether to sell a particular security when any of those factors materially changes. The fund may also invest up to 20% of its total assets in foreign securities. Any percentage limitations with respect to assets of the fund are applied at the time of purchase.
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.
The fund may engage in active and frequent trading of portfolio securities to achieve its investment objective. If the fund does trade in this way, it may incur increased transaction costs, which can lower the actual return on your investment. Active trading may also increase short-term gains and losses, which may affect the taxes you have to pay.
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.
Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, the relative lack of information about these companies, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund's past performance is not necessarily an indication of its future performance.
The following bar chart shows changes in the performance of the fund's Class A shares from year to year. The bar chart does not reflect sales loads. If it did, the annual total returns shown would be lower.
[GRAPH]
ANNUAL
YEAR ENDED TOTAL
DECEMBER 31 RETURNS
----------- -------
1991 46.86%
1992 (1.37)%
1993 1.53%
1994 (0.34)%
1995 34.76%
1996 17.67%
1997 25.96%
1998 33.06%
1999 34.90%
2000 (20.37)%
|
During the periods shown in the bar chart, the highest quarterly return was 28.03% (quarter ended December 31, 1998) and the lowest quarterly return was -22.58% (quarter ended December 31, 2000).
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a broad-based securities market index. The fund's performance reflects payment of sales loads.
AVERAGE ANNUAL TOTAL RETURNS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (for the periods ended SINCE INCEPTION December 31, 2000) 1 YEAR 5 YEARS 10 YEARS INCEPTION DATE ----------------------------------------------------------------------------------------------------------- Class A (24.75)% 14.89% 14.73% 14.79% 06/17/69 Class B (24.32) 15.05 -- 15.66 06/26/95 Class C (21.60) -- -- 10.41 08/04/97 S&P 500(1) (9.10) 18.33 17.44 12.54(2) 06/30/69(2) ----------------------------------------------------------------------------------------------------------- |
(1) The Standard & Poor's 500 Index is an unmanaged index of common stocks frequently used as a general measure of U.S. stock market performance.
(2) The average annual total return given is since the date closest to the inception date of the class with the longest performance history.
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 FSales 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 0.63% 0.63% 0.63% Distribution and/or Service (12b-1) Fees 0.30 1.00 1.00 Other Expenses 0.14 0.19 0.19 Total Annual Fund Operating Expenses(2) 1.07 1.82 1.82 --------------------------------------------------------- |
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares within 18 months from the date of purchase, you may pay a 1% contingent deferred sales charge (CDSC) at the time of redemption.
(2) The investment advisor has agreed, effective July 1, 2000, to waive a portion of the management fee on assets in excess of $5 billion. Total Annual Fund Operating Expenses restated for this agreement are 1.05%, 1.80% and 1.80% for Class A, Class B and Class C, respectively. Termination of this agreement requires approval by the Board of Trustees.
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 gross operating expenses remain the same. To the extent fees are waived, the expenses will be lower. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $653 $872 $1,108 $1,784
Class B 685 873 1,185 1,940
Class C 285 573 985 2,137
----------------------------------------------
|
You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------
Class A $653 $872 $1,108 $1,784
Class B 185 573 985 1,940
Class C 185 573 985 2,137
----------------------------------------------
|
THE ADVISORS
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor. A I M Capital Management, Inc. (the subadvisor), a wholly owned subsidiary of the advisor, is the fund's subadvisor and is responsible for its day-to-day management. Both the advisor and the subadvisor are located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisors supervise all aspects of the fund's operations and provide 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, and the subadvisor has acted as an investment advisor since 1986. Today, the advisor, together with its subsidiaries, advises or manages over 130 investment portfolios, including the fund, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended October 31, 2000, the advisor received compensation of 0.59% of average daily net assets.
PORTFOLIO MANAGERS
The advisors use 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
- David P. Barnard, Senior Portfolio Manager, who has been responsible for the fund since 1986 and has been associated with the advisor and/or its affiliates since 1982.
- Monika H. Degan, Portfolio Manager, who has been responsible for the fund since 1998 and has been associated with the advisor and/or its affiliates since 1995.
- Jonathan C. Schoolar, Senior Portfolio Manager, who has been responsible for the fund since 1987 and has been associated with the advisor and/or its affiliates since 1986.
SALES CHARGES
Purchases of Class A shares of AIM Weingarten 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.
The financial highlights table is intended to help you understand the fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
CLASS A
------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------------------------------
2000(a) 1999 1998 1997 1996
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period $ 28.31 $ 21.72 $ 22.72 $ 20.19 $ 20.33
--------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.14) (0.10) 0.02 0.01 0.06
--------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and
unrealized) 3.18 8.16 2.38 4.82 2.51
==========================================================================================================================
Total from investment operations 3.04 8.06 2.40 4.83 2.57
==========================================================================================================================
Less distributions:
Dividends from net investment income -- (0.01) -- (0.06) --
--------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (3.19) (1.46) (3.40) (2.24) (2.71)
==========================================================================================================================
Total distributions (3.19) (1.47) (3.40) (2.30) (2.71)
==========================================================================================================================
Net asset value, end of period $ 28.16 $ 28.31 $ 21.72 $ 22.72 $ 20.19
__________________________________________________________________________________________________________________________
==========================================================================================================================
Total return(b) 10.61% 38.62% 12.34% 26.83% 14.81%
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $8,948,781 $8,089,739 $6,094,178 $5,810,582 $4,977,493
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.03%(c) 1.03% 1.04% 1.07% 1.12%
--------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.07%(c) 1.08% 1.09% 1.11% 1.15%
==========================================================================================================================
Ratio of net investment income (loss) to average net
assets (0.45)%(c) (0.38)% 0.07% 0.07% 0.33%
__________________________________________________________________________________________________________________________
==========================================================================================================================
Portfolio turnover rate 145% 124% 125% 128% 159%
__________________________________________________________________________________________________________________________
==========================================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Does not include sales charges.
(c)Ratios are based on average daily net assets of $9,799,594,989.
FINANCIAL HIGHLIGHTS (continued)
CLASS B
------------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------------------------
2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
---------- ---------- -------- -------- --------
Net asset value, beginning of period $ 27.29 $ 21.12 $ 22.34 $ 19.98 $ 20.28
------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.36) (0.30) (0.15) (0.15) (0.05)
------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 3.08 7.93 2.33 4.75 2.46
========================================================================================================================
Total from investment operations 2.72 7.63 2.18 4.60 2.41
========================================================================================================================
Less distributions from net realized gains (3.19) (1.46) (3.40) (2.24) (2.71)
========================================================================================================================
Net asset value, end of period $ 26.82 $ 27.29 $ 21.12 $ 22.34 $ 19.98
________________________________________________________________________________________________________________________
========================================================================================================================
Total return(b) 9.76% 37.59% 11.45% 25.78% 13.95%
________________________________________________________________________________________________________________________
========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,927,514 $1,291,456 $705,750 $486,105 $267,459
________________________________________________________________________________________________________________________
========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.78%(c) 1.82% 1.83% 1.87% 1.95%
------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.82%(c) 1.87% 1.87% 1.91% 1.98%
========================================================================================================================
Ratio of net investment income (loss) to average net
assets (1.20)%(c) (1.17)% (0.72)% (0.73)% (0.50)%
________________________________________________________________________________________________________________________
========================================================================================================================
Portfolio turnover rate 145% 124% 125% 128% 159%
________________________________________________________________________________________________________________________
========================================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charges.
(c)Ratios are based on average daily net assets of $1,839,008,229.
CLASS C
-------------------------------------------------
AUGUST 4, 1997
(DATE SALES
YEAR ENDED OCTOBER 31, COMMENCED)
------------------------------- TO OCTOBER 31,
2000(a) 1999(a) 1998(a) 1997(a)
-------- -------- ------- --------------
Net asset value, beginning of period $ 27.30 $ 21.14 $22.34 $22.83
---------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.36) (0.30) (0.15) (0.04)
---------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 3.10 7.92 2.35 (0.45)
===============================================================================================================
Total from investment operations 2.74 7.62 2.20 (0.49)
===============================================================================================================
Less distributions from net realized gains (3.19) (1.46) (3.40) --
===============================================================================================================
Net asset value, end of period $ 26.85 $ 27.30 $21.14 $22.34
_______________________________________________________________________________________________________________
===============================================================================================================
Total return(b) 9.83% 37.50% 11.54% (2.15)%
_______________________________________________________________________________________________________________
===============================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $301,590 $105,420 $23,107 $2,326
_______________________________________________________________________________________________________________
===============================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.78%(c) 1.82% 1.83% 1.84%(d)
---------------------------------------------------------------------------------------------------------------
Without fee waivers 1.82%(c) 1.87% 1.87% 1.88%(d)
===============================================================================================================
Ratio of net investment income (loss) to average net assets (1.20)%(c) (1.17)% (0.72)% (0.70)%(d)
_______________________________________________________________________________________________________________
===============================================================================================================
Portfolio turnover rate 145% 124% 125% 128%
_______________________________________________________________________________________________________________
===============================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charges and is not annualized for periods less than one year.
(c)Ratios are based on average daily net assets of $231,090,344.
(d)Annualized.
In addition to the fund, A I M Advisors, Inc. serves as investment advisor to many other mutual funds (the AIM Funds). The following information is about all the AIM Funds.
CHOOSING A SHARE CLASS
Many of the AIM Funds have multiple classes of shares, each class representing an interest in the same portfolio of investments. When choosing a share class, you should consider the factors below:
CLASS A CLASS B CLASS C
---------------------------------------------------------------------------------------------------------
- Initial sales charge - No initial sales charge - No initial sales charge
- Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within charge on redemptions within
six years one year
- Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
at the end of the month shares
which is eight years after
the date on 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
|
(1) AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc. (the distributor) for the sale and distribution of its shares and fees for services provided to shareholders, all or a substantial portion of which are paid to the dealer of record. Because the AIM Fund pays these fees out of its assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund. You may be charged a contingent deferred sales charge if you redeem AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain exchanges. Sales charges on all other AIM Funds and classes of those Funds are detailed below. As used below, the term "offering price" with respect to all categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales charges. The "Other Information" section of your prospectus will tell you in what category your particular AIM Fund is classified.
CATEGORY I INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
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A-1 MCF--10/00
CATEGORY II INITIAL SALES CHARGES
------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
-------------------------------------------------------------
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CATEGORY III INITIAL SALES CHARGES
-------------------------------------------------------------
INVESTOR'S
SALES CHARGE
----------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
-------------------------------------------------------------
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
-------------------------------------------------------------
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CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value. However, if you purchase shares of that amount in Categories I or II, they will be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them prior to 18 months after the date of purchase. The distributor may pay a dealer concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share. However, when you redeem them, they are subject to a CDSC in the following percentages:
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
----------------------------------------------------------
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
----------------------------------------------------------
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COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current market value, net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, we will assume that you have redeemed shares on which there is no CDSC first and, then, shares in the order of purchase.
REDUCED SALES CHARGES
AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify for these reductions or exceptions, you or your financial consultant must provide sufficient information at the time of purchase to verify that your purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares currently owned for the purpose of qualifying for the lower initial sales charge rates that apply to larger purchases. The applicable initial sales charge for the new purchase is based on the total of your current purchase and the current value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of AIM Funds during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full face amount of the LOI is not invested by the end of the 13-month period, your account will be adjusted to the higher initial sales charge level for the amount actually invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- on shares purchased by reinvesting dividends and distributions;
- when exchanging shares among certain AIM Funds;
- when using the reinstatement privilege; and
- when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- if you redeem Class B shares you held for more than six years;
- if you redeem Class C shares you held for more than one year;
- if you redeem shares acquired through reinvestment of dividends and distributions; and
- on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares at reduced or without sales charges. Consult the fund's Statement of Additional Information for details.
MCF--10/00 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
-----------------------------------------------------------------------------------------------------------
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
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HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
PURCHASE OPTIONS
---------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
---------------------------------------------------------------------------------------------------------
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed account application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed account application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank Connection
methods described above. form to the transfer agent. Once
the transfer agent has received the
form, call the transfer agent to
place your purchase order.
By AIM Internet Connect(SM) Open your account using one of the Select the AIM Internet Connect
methods described above. option on your completed account
application or complete an AIM
Internet Connect Authorization
Form. Mail the application or form
to the transfer agent. Once your
request for this option has been
processed (which may take up to 10
days), you may place your purchase
order at www.aimfunds.com. The
maximum purchase amount per
transaction is $100,000. You may
not purchase shares in AIM
prototype retirement accounts on
the internet.
----------------------------------------------------------------------------------------------------------
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A-3 MCF--10/00
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. 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--10/00 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--10/00
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--10/00 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--10/00
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--10/00 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
ON THE INTERNET: You can send us a request
by e-mail or download
prospectuses, annual or
semiannual reports via
our website:
http://www.aimfunds.com
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You also can review and obtain copies of the fund's SAI, reports and other information at the SEC's Public Reference Room in Washington, DC; on the EDGAR database on the SEC's Internet website (http://www.sec.gov); or, after paying a duplication fee, by sending a letter to the SEC's Public Reference Section, Washington, DC 20549-0102 or by sending an electronic mail request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for information about the Public Reference Room.
[AIM LOGO APPEARS HERE] www.aimfunds.com WEI-PRO-1 INVEST WITH DISCIPLINE --Registered Trademark-- --Registered Trademark-- |
STATEMENT OF
ADDITIONAL INFORMATION
|
RETAIL CLASSES OF
AIM AGGRESSIVE GROWTH 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 LARGE CAP BASIC VALUE FUND
AIM LARGE CAP GROWTH FUND
AIM MID CAP GROWTH FUND
AIM WEINGARTEN FUND
(SERIES PORTFOLIOS OF
AIM EQUITY FUNDS)
11 GREENWAY PLAZA
SUITE 100
HOUSTON, TX 77046-1173
(713) 626-1919
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS
AND IT SHOULD BE READ IN CONJUNCTION WITH
A PROSPECTUS OF THE ABOVE-NAMED FUNDS,
A COPY OF WHICH MAY BE OBTAINED FREE OF CHARGE
FROM AUTHORIZED DEALERS OR BY WRITING
A I M DISTRIBUTORS, INC.,
P.O. BOX 4739, HOUSTON, TX 77210-4739
OR BY CALLING (800) 347-4246.
STATEMENT OF ADDITIONAL INFORMATION DATED MARCH 1, 2001, RELATING TO
THE AIM AGGRESSIVE GROWTH FUND PROSPECTUS DATED MARCH 1, 2001,
THE AIM BLUE CHIP FUND PROSPECTUS DATED MARCH 1, 2001,
THE AIM CAPITAL DEVELOPMENT FUND PROSPECTUS DATED MARCH 1, 2001,
THE AIM CHARTER FUND PROSPECTUS DATED MARCH 1, 2001,
THE AIM CONSTELLATION FUND PROSPECTUS DATED MARCH 1, 2001,
THE AIM DENT DEMOGRAPHIC TRENDS FUND PROSPECTUS DATED MARCH 1, 2001,
THE AIM EMERGING GROWTH FUND DATED MARCH 1, 2001,
THE AIM LARGE CAP BASIC VALUE FUND PROSPECTUS DATED MARCH 1, 2001,
THE AIM LARGE CAP GROWTH FUND PROSPECTUS DATED MARCH 1, 2001,
THE AIM MID CAP GROWTH FUND PROSPECTUS DATED MARCH 1, 2001,
AND THE AIM WEINGARTEN FUND PROSPECTUS DATED MARCH 1, 2001
TABLE OF CONTENTS
PAGE
INTRODUCTION......................................................................................1
GENERAL INFORMATION ABOUT THE TRUST...............................................................1
The Trust and Its Shares.................................................................1
PERFORMANCE.......................................................................................4
Total Return Calculations................................................................5
Total Return Quotations..................................................................5
Historical Portfolio Results.............................................................5
Yield Quotations.........................................................................8
PORTFOLIO TRANSACTIONS AND BROKERAGE..............................................................9
General Brokerage Policy.................................................................9
Allocation of Portfolio Transactions....................................................10
Allocation of IPO Securities Transactions...............................................10
Section 28(e) Standards.................................................................11
Transactions with Regular Brokers.......................................................12
Brokerage Commissions Paid..............................................................12
Portfolio Turnover......................................................................13
INVESTMENT STRATEGIES AND RISKS..................................................................13
Real Estate Investment Trusts ("REITs").................................................17
Foreign Securities......................................................................18
Foreign Exchange Transactions...........................................................19
Illiquid Securities.....................................................................19
Rule 144A Securities....................................................................19
Repurchase Agreements...................................................................20
Reverse Repurchase Agreements...........................................................20
Special Situations......................................................................20
Short Sales.............................................................................21
Margin Transactions.....................................................................21
Warrants................................................................................21
Securities Issued on a When-Issued or Delayed Delivery Basis............................22
Investment in Unseasoned Issuers........................................................22
Lending of Portfolio Securities.........................................................22
Interfund Loans.........................................................................23
Borrowing...............................................................................23
Equity-Linked Derivatives...............................................................23
Investment in Other Investment Companies................................................23
Temporary Defensive Investments.........................................................24
Swaps, Caps, Floors and Collars.........................................................24
OPTIONS, FUTURES AND CURRENCY STRATEGIES.........................................................24
Introduction............................................................................24
General Risks of Options, Futures and Currency Strategies...............................24
Cover...................................................................................25
Writing Call Options....................................................................25
Writing Put Options.....................................................................26
Purchasing Put Options..................................................................26
Purchasing Call Options.................................................................27
Over-the-Counter Options................................................................27
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Index Options...........................................................................28
Limitations on Options..................................................................28
Interest Rate, Currency and Stock Index Futures Contracts...............................28
Options on Futures Contracts............................................................29
Forward Contracts.......................................................................29
Limitations on Use of Futures, Options on Futures and Certain Options on Currencies.....30
INVESTMENT RESTRICTIONS..........................................................................30
Fundamental Restrictions................................................................30
Non-Fundamental Restrictions............................................................31
MANAGEMENT.......................................................................................32
Trustees and Officers...................................................................32
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT........................................................37
INVESTMENT ADVISORY AND OTHER SERVICES...........................................................38
THE DISTRIBUTION PLANS...........................................................................43
The Class A and C Plan..................................................................43
The Class B Plan........................................................................44
Both Plans..............................................................................44
THE DISTRIBUTOR..................................................................................48
SALES CHARGES AND DEALER CONCESSIONS.............................................................50
REDUCTIONS IN INITIAL SALES CHARGES..............................................................53
CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS......................................................57
HOW TO PURCHASE AND REDEEM SHARES................................................................59
Backup Withholding......................................................................60
NET ASSET VALUE DETERMINATION....................................................................61
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS.........................................................62
Reinvestment of Dividends and Distributions.............................................62
Tax Matters.............................................................................62
Qualification as a Regulated Investment Company.........................................62
Determination of Taxable Income of a Regulated Investment Company.......................63
Excise Tax on Regulated Investment Companies............................................64
Fund Distributions......................................................................65
Sale or Redemption of Shares............................................................67
Reinstatement Privilege.................................................................67
Foreign Shareholders....................................................................67
Effect of Future Legislation; Local Tax Considerations..................................68
Passive Foreign Investment Companies....................................................68
SHAREHOLDER INFORMATION..........................................................................69
MISCELLANEOUS INFORMATION........................................................................71
Charges for Certain Account Information.................................................71
Audit Reports...........................................................................71
Legal Matters...........................................................................72
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Custodian and Transfer Agent............................................................72
Principal Holders of Securities.........................................................72
Other Information.......................................................................82
APPENDIX........................................................................................A-1
Description of Commercial Paper Ratings................................................A-1
Description of Corporate Bond Ratings..................................................A-1
FINANCIAL STATEMENTS.............................................................................FS
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INTRODUCTION
AIM Equity Funds (the "Trust") is a series mutual fund. The rules and regulations of the United States Securities and Exchange Commission (the "SEC") require all mutual funds to furnish prospective investors certain information concerning the activities of the fund being considered for investment. The information for the Retail Classes of AIM Aggressive Growth Fund ("Aggressive Growth") is included in a Prospectus dated March 1, 2001. The information for the Retail Classes of AIM Blue Chip Fund ("Blue Chip") is included in a Prospectus dated March 1, 2001. The information for the Retail Classes of AIM Capital Development Fund ("Capital Development") is included in a Prospectus dated March 1, 2001. The information for the Retail Classes of AIM Charter Fund ("Charter") is included in a Prospectus dated March 1, 2001. The information for the Retail Classes of AIM Constellation Fund ("Constellation") is included in a Prospectus dated March 1, 2001. The information for the AIM Dent Demographic Trends Fund ("Demographic Trends") is included in a Prospectus dated March 1, 2001. The information for the Retail Classes of AIM Emerging Growth Fund ("Emerging Growth") is included in a Prospectus dated March 1, 2001. The information for the Retail Classes of AIM Large Cap Basic Value Fund ("Large Cap Basic Value") is included in a Prospectus dated March 1, 2001. The information for the Retail Classes of AIM Large Cap Growth Fund ("Large Cap Growth") is included in a Prospectus dated March 1, 2001. The information for the Retail Classes of AIM Mid Cap Growth Fund ("Mid Cap") is included in a Prospectus dated March 1, 2001. The information for the Retail Classes of AIM Weingarten Fund ("Weingarten") is included in a Prospectus dated March 1, 2001. Copies of the Prospectuses 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, TX 77210-4739 or by calling (800) 347-4246. Investors must receive a Prospectus before they invest.
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 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 described under its rules and regulations.
GENERAL INFORMATION ABOUT THE TRUST
THE TRUST AND ITS SHARES
The Trust currently is organized as a Delaware business trust under an Agreement and Declaration of Trust, dated December 6, 1999, as amended (the "Trust Agreement"). The Trust was previously organized as AIM Equity Funds, Inc. ("AEF"), a Maryland corporation. Pursuant to an Agreement and Plan of Reorganization, the AEF Funds (defined below) were reorganized on June 21, 2000 as portfolios of the Trust, which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end series management investment company.
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. The Trust currently consists of eleven separate portfolios:
Aggressive Growth, Blue Chip, Capital Development, Charter, Constellation,
Demographic Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth,
Mid Cap, and Weingarten (each an "AEF Fund" and collectively, the "AEF Funds").
Charter, Weingarten and Constellation each have four separate classes: Class A,
Class B and Class C and an Institutional Class. Aggressive Growth, Blue Chip,
Capital Development, Demographic Trends, Emerging Growth, Large Cap Basic Value,
Large Cap Growth and Mid Cap each have three classes of shares: Class A, Class B
and Class C shares. Class A shares (sold with a front-end sales charge) and
Class B and Class C shares (each sold with a contingent deferred sales charge)
of the AEF Funds are also referred to as the
Retail Classes. Prior to October 15, 1993, Aggressive Growth was a portfolio of AIM Funds Group ("AFG"), a Massachusetts business trust. Pursuant to an Agreement and Plan of Reorganization between AFG and AEF, Aggressive Growth was redomesticated as a portfolio of AEF. All historical financial and other information contained in this Statement of Additional Information for periods prior to October 15, 1993, relating to Aggressive Growth is that of AFG's Aggressive Growth. Blue Chip acquired the investment portfolio of Baird Blue Chip Fund, Inc. (the "BBC Fund"), a registered management investment company, on June 3, 1996, in a corporate reorganization. All historical financial information contained in this Statement of Additional Information for periods prior to June 3, 1996, relating to Blue Chip is that of the BBC Fund. Capital Development acquired substantially all of the assets of Baird Capital Development Fund, Inc. (the "BCD Fund"), a registered management investment company, on August 12, 1996 in a corporate reorganization. All historical financial information contained in this Statement of Additional Information for periods prior to August 12, 1996, relating to Capital Development is that of the BCD Fund.
Pursuant to the Agreement and Plan of Reorganization, the Funds succeeded to the assets and assumed the liabilities of the series portfolios with corresponding names (the "Predecessor Funds") of AEF. All historical financial and other information contained in this Statement of Additional Information for periods prior to June 21, 2000 relating to the Funds (or a class thereof) is that of the Predecessor Funds (or the corresponding class thereof).
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."
This Statement of Additional Information relates solely to the Retail Classes of the Funds.
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 class represents interests in the same portfolio of investments but, as further described in the Prospectuses, each such class is subject to differing sales charges and expenses, which differences will result in differing net asset values and dividends and distributions. Upon any liquidation of the Trust, shareholders of each class are entitled to share pro rata in the net assets belonging to the applicable Fund allocable to such class available for distribution after satisfaction of outstanding liabilities of the Fund allocable to such class.
The Trust is not required to hold annual or regular meetings of shareholders. Meetings of shareholders of a Fund will be held from time to time to consider matters requiring a vote of such shareholders in accordance with the requirements of the 1940 Act, state law or the provisions of the Trust Agreement. It is not expected that shareholder meetings will be held annually.
Shares of the Retail Classes and the Institutional Class of each Fund have equal rights and privileges. Each share of a particular class is entitled to one vote, to participate equally in dividends and distributions declared by the Trust's Board of Trustees with respect to the class of such Fund and, upon liquidation of the Fund, to participate proportionately in the net assets of the Fund allocable to such class remaining after satisfaction of outstanding liabilities of the Fund allocable to such class. Fund shares are fully paid, non-assessable and fully transferable when issued and have no preemptive rights and have such conversion and exchange rights as set forth in the Prospectuses and this Statement of Additional
Information. Fractional shares have proportionately the same rights, including voting rights, as are provided for a full share.
Class B shares automatically convert to Class A shares at the end of the month which is eight years after the date of purchase. A pro rata portion of shares from reinvested dividends and distributions convert at the same time. No other shares have conversion rights. Because Class B shares convert into Class A shares, the holders of Class B shares (as well as the holders of Class A shares) of each Fund must approve any material increase in fees payable with respect to that Fund under the Class A and C Plan or a new class of shares into which the Class B shares will convert must be created which will be identical in all material respects to the Class A shares prior to the material increase in fees.
Except as specifically noted above, shareholders of each Fund are entitled to one vote per share (with proportionate voting for fractional shares), irrespective of the relative net asset value of the different classes of shares, where applicable, of a Fund. However, on matters affecting one portfolio of the Trust or one class of shares, a separate vote of shareholders of that portfolio or class is required. Shareholders of a portfolio or class are not entitled to vote on any matter which does not affect that portfolio or class but which requires a separate vote of another portfolio or class. An example of a matter which would be voted on separately by shareholders of a portfolio is the approval of an advisory agreement, and an example of a matter which would be voted on separately by shareholders of a class of shares is approval of a distribution plan.
Shareholders of the Funds do not have cumulative voting rights, and therefore the holders of more than 50% of the outstanding shares of all Funds voting together for election of trustees may elect all of the members of the Board of Trustees of the Trust. In such event, the remaining holders cannot elect any trustees of the Trust.
The Trust Agreement provides that the trustees of the Trust shall hold office during the existence of the Trust, except as follows: (a) any trustee may resign or retire; (b) any trustee may be removed by a vote of at least two-thirds of the outstanding shares of the Trust, or at any time by written instrument signed by at least two-thirds of the trustees and specifying when such removal becomes effective; or (c) any trustee who has died or become incapacitated and is unable to serve may be retired by a written instrument signed by a majority of the trustees and specifying the date of his or her retirement.
Under Delaware law, shareholders of a Delaware business trust shall be entitled to the same limitations or liability extended to shareholders of private for-profit corporations, however, there is a remote possibility that shareholders could, under certain circumstances, be held liable for the obligations of the Trust to the extent the courts of another state which does not recognize such limited liability were to apply the laws of such state to a controversy involving such obligations. However, the Trust Agreement disclaims shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by the Trust or the trustees to all parties, and each party thereto must expressly waive all rights of action directly against shareholders of the Trust. The Trust Agreement provides for indemnification out of the property of a Fund for all losses and expenses of any shareholder of such Fund held liable on account of being or having been a shareholder. Thus, the risk of a shareholder incurring financial loss due to shareholder liability is limited to circumstances in which a Fund would be unable to meet its obligations and wherein the complaining party was held not to be bound by the disclaimer.
The Trust Agreement further provides that the trustees and officers will not be liable for any act, omission or obligation of the Trust or any trustee or officer. However, nothing in the Trust Agreement protects a trustee or officer against any liability to the Trust or to the shareholders to which a trustee or officer would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office with the Trust. The Trust Agreement provides for indemnification by the Trust of the trustees, officers, employees and agents of the Trust, if it is determined that such person acted in good faith and reasonably believed: (1) in the case of conduct in his or her official capacity for the Trust, that his or her conduct was in the Trust's best interests,
(2) in all other cases, that his or her conduct was at least not opposed to the Trust's best interests and (3) in a criminal proceeding, that he or she had no reason to believe that his or her conduct was unlawful. The Trust Agreement also authorizes the purchase of liability insurance on behalf of trustees and officers.
PERFORMANCE
Each Fund's performance may be quoted in advertising in terms of yield or total return. All advertisements of the Funds will disclose the maximum sales charge, if any (including deferred sales charge) to which investments in shares of the Funds may be subject. 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.
Standardized total return for Class A shares of a Fund reflects the deduction of the maximum initial sales charge at the time of purchase. Standardized total return for Class B shares of a Fund reflects the deduction of the maximum applicable contingent deferred sales charge on a redemption of shares held for the period. Standardized total return for Class C shares of a Fund reflects the deduction of a 1% contingent deferred sales charge, if applicable, 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 and that all charges and expenses are
deducted. A cumulative total return reflects a Fund's performance over a stated
period of time. An average annual total return reflects the hypothetical
annually compounded return that would have produced the same cumulative total
return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN A 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 gain or loss.
A fund may participate in the initial public offering ("IPO") market, and a significant portion of the fund's returns may be attributable to its investment in IPOs. Investment in IPOs could have a magnified impact on a fund with a small asset base. There is no guarantee that as a fund's assets grow, it will continue to experience substantially similar performance by investing in IPOs.
Yield is computed in accordance with the standardized formula 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 is a function of the type and quality of a Fund's investments, the Fund's maturity and the Fund's operating expense ratio.
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.
Additional performance information is contained in a Fund's Annual Report to Shareholders, which is available upon request without charge.
TOTAL RETURN CALCULATIONS
Total returns quoted in advertising reflect all aspects of the applicable Fund's return, including the effect of reinvesting dividends and capital gain distributions, and any change in such Fund's net asset value per share over the period. Average annual returns are calculated by determining the growth or decline in value of a hypothetical investment in a particular Fund over a stated period, and then calculating the annually compounded percentage rate that would have produced the same result if the rate of growth or decline in value had been constant over the period. While average annual returns are a convenient means of comparing investment alternatives, investors should realize that a Fund's performance is not constant over time, but changes from year to year, and that average annual returns do not represent the actual year-to-year performance of such Fund.
In addition to average annual returns, the Retail Class of each Fund may quote unaveraged or cumulative total returns reflecting the simple change in value of an investment over a stated period. Average annual and cumulative total returns may be quoted as a percentage or as a dollar amount, and may be calculated for a single investment, a series of investments, and/or a series of redemptions, over any time period. Total returns may be broken down into their components of income and capital (including capital gains and changes in share price) in order to illustrate the relationship of these factors and their contributions to total return. Total returns, yields, and other performance information may be quoted numerically or in a table, graph or similar illustration. Total returns may be quoted with or without taking the applicable Fund's maximum applicable Class A front-end sales charge or Class B or Class C contingent deferred sales charge into account. Excluding sales charges from a total return calculation produces a higher total return figure.
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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HISTORICAL PORTFOLIO RESULTS
Total returns for Class A shares of Aggressive Growth, Blue Chip, Capital Development, Charter, Constellation, Demographic Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth, Mid Cap and Weingarten, for the one-year, five-year, ten-year, fifteen-year and twenty-year (or since inception, if shorter) periods ended October 31, 2000 (which include the maximum sales charge of 5.50% and reinvestment of all dividends and distributions), were as follows:
CLASS A AVERAGE ANNUAL RETURNS
ONE FIVE TEN FIFTEEN TWENTY SINCE
YEAR YEARS YEARS YEARS YEARS INCEPTION*
---- ----- ----- ------- ------ ----------
AGGRESSIVE GROWTH 39.41% 17.02% 27.57% 18.15% N/A 17.23%
BLUE CHIP 5.45% 21.53% 18.04% N/A N/A 14.61%
CAPITAL DEVELOPMENT 35.09% N/A N/A N/A N/A 17.97%
CHARTER 7.34% 19.14% 17.42% 16.81% 15.01% 14.41%
CONSTELLATION 29.03% 17.58% 23.81% 20.77% 16.56% 19.01%
DEMOGRAPHIC TRENDS 19.84% N/A N/A N/A N/A 30.75%
EMERGING GROWTH N/A N/A N/A N/A N/A N/A
LARGE CAP BASIC VALUE 24.90% N/A N/A N/A N/A 12.79%
LARGE CAP GROWTH 48.45% N/A N/A N/A N/A 36.85%
MID CAP N/A N/A N/A N/A N/A N/A
WEINGARTEN 4.48% 18.84% 17.88% 17.60% 16.51% 15.46%
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CLASS A CUMULATIVE RETURNS
ONE FIVE TEN FIFTEEN TWENTY SINCE
YEAR YEARS YEARS YEARS YEARS INCEPTION*
---- ----- ----- ------- ------ ----------
AGGRESSIVE GROWTH 39.41% 119.43% 1,041.87% 1,120.00% N/A 1,278.64%
BLUE CHIP 5.45%% 165.11% 425.06% N/A N/A 550.59%
CAPITAL DEVELOPMENT 35.09% N/A N/A N/A N/A 105.95%
CHARTER 7.34% 140.07% 398.37% 928.43% 1,540.40% 7,256.05%
CONSTELLATION 29.03% 124.76% 746.71% 1,595.48% 2,044.49% 7,017.61%
DEMOGRAPHIC TRENDS 19.84% N/A N/A N/A N/A 45.56%
EMERGING GROWTH N/A N/A N/A N/A N/A - 0.66%
LARGE CAP BASIC VALUE 24.90% N/A N/A N/A N/A 17.46%
LARGE CAP GROWTH 48.45% N/A N/A N/A N/A 68.79%
MID CAP N/A% N/A N/A N/A N/A 35.92%
WEINGARTEN 4.48% 137.06% 418.21% 1,038.40% 2,024.74% 8,991.04%
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* The inception dates for the Class A shares of the Funds are
May 1, 1984, February 4, 1987, June 17, 1996, November 26,
1968, April 30, 1976, June 7, 1999, March 31, 2000, June 30,
1999, March 1, 1999, November 1, 1999 and June 17, 1969,
respectively.
During the 10-year period ended October 31, 2000, a
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hypothetical $1,000 investment at the beginning of such period in Class A shares of Aggressive Growth, Blue Chip, Charter, Constellation and Weingarten would have been worth $11,419, $5,251, $4,984, $8,467 and $5,182, respectively, assuming all distributions were reinvested.
During the 15-year period ended October 31, 2000, a hypothetical $1,000 investment at the beginning of such period in Class A shares of Aggressive Growth, Charter, Constellation and Weingarten would have been worth $12,200, $10,284, $16,955 and $11,384, respectively, assuming all dividends were reinvested.
During the 20-year period ended October 31, 2000, a hypothetical $1,000 investment at the beginning of such period in Class A shares of Charter, Constellation and Weingarten would have been worth $16,404, $21,445 and $21,247 respectively, assuming all distributions were reinvested.
Total returns for each of the named Funds with respect to its Class B shares (which deduct the maximum contingent deferred sales charge of 5% and include reinvestment of all dividends and distributions), for the period ended October 31, 2000 (or since inception), were as follows:
CLASS B AVERAGE ANNUAL RETURNS
Since
One Year Inception*
-------- ---------
AGGRESSIVE GROWTH 41.29% 43.26%
BLUE CHIP 5.87% 21.10%
CAPITAL DEVELOPMENT 37.01% 16.41%
CHARTER 7.76% 19.94%
CONSTELLATION 30.51% 18.81%
DEMOGRAPHIC TRENDS 21.01% 32.70%
EMERGING GROWTH N/A N/A
LARGE CAP BASIC VALUE N/A N/A
LARGE CAP GROWTH 50.91% 32.23%
MID CAP N/A N/A
WEINGARTEN 4.81% 19.78%
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CLASS B CUMULATIVE RETURNS
Since
One Year Inception*
-------- ---------
AGGRESSIVE GROWTH 41.29% 82.18%
BLUE CHIP 5.87% 118.49%
CAPITAL DEVELOPMENT 37.01% 85.92%
CHARTER 7.76% 164.43%
CONSTELLATION 30.51% 67.48%
DEMOGRAPHIC TRENDS 21.01% 48.60%
EMERGING GROWTH N/A - 0.30%
LARGE CAP BASIC VALUE N/A 5.78%
LARGE CAP GROWTH 50.91% 55.16%
MID CAP N/A 37.50%
WEINGARTEN 4.81% 162.57%
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* The inception dates for the Class B shares of the Funds are
March 1, 1999, October 1, 1996, October 1, 1996, June 26,
1995, November 3, 1997, June 7, 1999, March 31, 2000, August
1, 2000, April 5, 1999, November 1, 1999 and June 26, 1995,
respectively.
Total returns for each of the named Funds with respect to its
Class C shares for the period ended October 31, 2000 (or since inception), were
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as follows:
CLASS C AVERAGE ANNUAL RETURNS
Since
One Year Inception*
-------- ---------
AGGRESSIVE GROWTH 45.21% 45.09%
BLUE CHIP 9.83% 16.29%
CAPITAL DEVELOPMENT 41.04% 14.91%
CHARTER 11.78% 15.67%
CONSTELLATION 34.52% 17.55%
DEMOGRAPHIC TRENDS 25.01% 35.24%
EMERGING GROWTH N/A N/A
LARGE CAP BASIC VALUE N/A N/A
LARGE CAP GROWTH 54.86% 34.43%
MID CAP N/A N/A
WEINGARTEN 8.77% 16.67%
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CLASS C CUMULATIVE RETURNS
Since
One Year Inception*
-------- ---------
AGGRESSIVE GROWTH 45.21% 86.08%
BLUE CHIP 9.83% 63.10%
CAPITAL DEVELOPMENT 41.04% 56.90%
CHARTER 11.78% 60.30%
CONSTELLATION 34.52% 68.88%
DEMOGRAPHIC TRENDS 25.01% 52.60%
EMERGING GROWTH N/A 3.60%
LARGE CAP BASIC VALUE N/A 9.78%
LARGE CAP GROWTH 54.86% 59.26%
MID CAP N/A 41.60%
WEINGARTEN 8.77% 64.84%
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* The inception date for the Class C shares of the Funds is
August 4, 1997, except the inception dates for the Class C
shares of Aggressive Growth, Demographic Trends, Emerging
Growth, Large Cap Basic Value, Large Cap Growth and Mid Cap
are March 1, 1999, June 7, 1999, March 31, 2000, August 1,
2000, April 5, 1999 and November 1, 1999, respectively.
The performance data listed above is not necessarily
indicative of the future performance of any of the Funds.
Average annual returns are not available for Class A, B and C
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shares of Emerging Growth and Class B and C shares of Large Cap Basic Value because these classes had no operations prior to October 31, 1999.
YIELD QUOTATIONS
The standard formula for calculating yield is as follows:
YIELD = 2[((a-b)/(c x d) + 1) -1]
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 = expense 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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Each Fund's performance may be compared in advertising to the performance of other mutual funds in general, or of particular types of mutual funds, especially those with similar objectives. Such performance data may be prepared by Lipper Incorporated and other independent services which monitor the performance of mutual funds. The Funds may also advertise mutual fund performance rankings which have been assigned to each respective Fund by such monitoring services.
Each Fund's performance may also be compared in advertising and other materials to the performance of comparative benchmarks such as the Consumer Price Index ("CPI"), the Russell--Registered Trademark-- indices, the Standard & Poor's 500 Stock Index, and fixed-price investments such as bank certificates of deposit and/or savings accounts.
The CPI, published by the U.S. Bureau of Labor Statistics, is a statistical measure of changes, over time, in the prices of goods and services. Standard & Poor's 500 Stock Index is a group of unmanaged securities widely regarded by investors as representative of the stock market in general. Comparisons assume the reinvestment of dividends. Fixed Price Investments, such as bank certificates of deposits and savings accounts, are generally backed by federal agencies for up to $100,000.
Each Fund's advertising may from time to time include discussions of general economic conditions and interest rates. In addition, each Fund's long-term performance may be described in advertising in relation to historical, political and/or economic events. Each Fund's advertising may also include references to the use of the Fund as part of an individual's overall retirement investment program.
From time to time, Fund sales literature and/or advertisements may disclose (i) top holdings included in the Fund's portfolio, (ii) certain selling group members, and/or (iii) certain institutional shareholders.
From time to time, Demographic Trends sales literature and/or advertisements may quote (i) Harry S. Dent, Jr.'s theories on why the coming decade may offer unprecedented opportunities for investors, including his opinions on the stock market outlook and where growth may be strongest; (ii) Harry S. Dent, Jr.'s opinions and theories from his books and publications, including, but not limited to, Job Shock, The Great Boom Ahead and The Roaring 2000s, including his beliefs that (a) people's spending patterns may help predict the stock market, (b) the stock market has tended to perform best when a generation has reached its peak spending years from ages 45-50, and (c) as more and more baby boomers reach their peak spending age, they could propel stock prices up for the next decade; and (iii) Harry S. Dent, Jr.'s S-curve analysis, a forecasting tool used to analyze products that show remarkable growth.
Large Cap Growth invests primarily in domestic "brand-name" companies that are domiciled in the U.S. and compete in the global marketplace. By investing in companies whose products and services are marketed around the world, Large Cap Growth attempts to capture potential growth in foreign markets, while benefiting from the growth opportunities and relative stability of the U.S. marketplace.
From time to time, the Funds' sales literature and/or advertisements may discuss generic topics pertaining to the mutual fund industry. These topics include, but are not limited to, literature addressing general information about mutual funds, variable annuities, dollar-cost averaging, stocks, bonds, money markets, certificates of deposit, retirement, retirement plans, asset allocation, tax-free investing, college planning and inflation.
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. ("AIM Capital") (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 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 Board of Directors/Trustees of the various AIM Funds, including the Trust. These inter-fund transactions do not generate brokerage commissions but may result in custodial fees or taxes or other related expenses.
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 or 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 participates 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 Board of 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 October 31, 2000, Blue Chip, Charter, Constellation, Dent Demographics and Weingarten held an amount of common stock issued by Merrill Lynch & Co., Inc., a regular broker/dealer of the Trust, having a market value of $70,000,000, $140,000,000, $154,000,000, $29,400,000 and $243,754,000, respectively, and common stock issued by Morgan Stanley Dean Witter & Co. having a market value of $128,500,000, $321,250,000, $313,218,750, $51,400,000 and $160,625,000, respectively. As of October 31, 2000, Charter, Constellation and Dent Demographics held an amount of common stock issued by The Goldman Sachs Group, Inc. having a market value of $99,812,500, $339,362,500 and $24,953,125, respectively, and common stock issued by The Charles Schwab Corp. having a market value of $52,687,500, $228,312,500 and $39,515,625, respectively. As of October 31, 2000, Mid Cap held amounts of common stock issued by A.G. Edwards, Inc., Legg Mason, Inc. and Lehman Brothers Holdings Inc. having market values of $1,471,750, $2,056,725 and $2,973,450, respectively.
BROKERAGE COMMISSIONS PAID
For the fiscal years ended October 31, 2000, 1999, and 1998, Aggressive Growth paid brokerage commissions of $4,003,829, $3,536,558 and $5,098,276, respectively. For the fiscal year ended October 31, 2000, AIM allocated certain of Aggressive Growth's brokerage transactions to certain broker-dealers that provided AIM with certain research, statistical and other information. Such transactions amounted to $539,795,020 and the related brokerage commissions were $620,793.
For the fiscal years ended October 31, 2000, 1999, and 1998, Blue Chip paid brokerage commissions of $3,087,012, $2,695,856 and $1,457,590, respectively. For the fiscal year ended October 31, 2000, AIM allocated certain of Blue Chip's brokerage transactions to certain broker-dealers that provide AIM with certain research, statistical and other information. Such transactions amounted to $229,625,326 and the related brokerage commissions were $219,545.
For the fiscal years ended October 31, 2000, 1999 and 1998, Capital Development paid brokerage commissions of $2,924,761, $3,324,179 and $2,277,419, respectively. For the fiscal year ended October 31, 2000, AIM allocated certain of Capital Development's brokerage transactions to certain broker-dealers that provide AIM with certain research, statistical and other information. Such transactions amounted to $135,002,227 and the related brokerage commissions were $274,916.
For the fiscal years ended October 31, 2000, 1999 and 1998, Charter paid brokerage commissions of $10,479,914, $11,856,781 and $15,567,811, respectively. For the fiscal year ended October 31, 2000, AIM allocated certain of Charter's brokerage transactions to certain broker-dealers that provided AIM with certain research, statistical and other information. Such transactions amounted to $1,220,051,212 and the related brokerage commissions were $1,192,746.
For the fiscal years ended October 31, 2000, 1999 and 1998, Constellation paid brokerage commissions of $25,382,535, $20,108,956 and $25,285,665, respectively. For the fiscal year ended October 31, 2000, AIM allocated certain of Constellation's brokerage transactions to certain
broker-dealers that provided AIM with certain research, statistical and other information. Such transactions amounted to $2,594,574,536 and the related brokerage commissions were $2,253,103.
For the fiscal year ended October 31, 2000 and the period ended October 31, 1999, Demographic Trends paid brokerage commissions of $1,831,365 and $250,423, respectively. For the year ended October 31, 2000, AIM allocated certain of Demographic Trends' brokerage transactions to certain broker-dealers that provided AIM with certain research, statistical and other information. Such transactions amounted to $237,666,007 and the related brokerage commissions were $196,100.
For the period ended October 31, 2000, Emerging Growth paid brokerage commissions of $136,048. For the period ended October 31, 2000, AIM allocated certain of Emerging Growth's brokerage transactions to certain broker-dealers that provide AIM with certain research, statistical and other information. Such transactions amounted to $2,538,253 and the related brokerage commissions were $4,200.
For the fiscal year ended October 31, 2000 and the period ended October 31, 1999, Large Cap Basic Value paid brokerage commissions of $8,679 and $1,021, respectively. For the year ended October 31, 2000, AIM allocated certain of Large Cap Basic Value's brokerage transactions to certain broker-dealers that provide AIM with certain research, statistical and other information. Such transactions amounted to $38,034 and the related brokerage commissions were $100.
For the fiscal year ended October 31, 2000 and the period ended October 31, 1999, Large Cap Growth paid brokerage commissions of $284,025 and $6,178, respectively. For the year ended October 31, 2000, AIM allocated certain of Large Cap Growth's brokerage transactions to certain broker-dealers that provided AIM with certain research, statistical and other information. Such transactions amounted to $20,392,194 and the related brokerage commissions were $15,030.
For the period ended October 31, 2000, Mid Cap paid brokerage commissions of $361,741. For the period ended October 31, 2000, AIM allocated certain of Mid Cap's brokerage transactions to certain broker-dealers that provide AIM with certain research, statistical and other information. Such transactions amounted to $25,762,008 and the related brokerage commissions were $28,964.
For the fiscal years ended October 31, 2000, 1999 and 1998, Weingarten paid brokerage commissions of $21,922,844, $20,226,511 and $19,810,852, respectively. For the fiscal year ended October 31, 2000, AIM allocated certain of Weingarten's brokerage transactions to certain broker-dealers that provided AIM with certain research, statistical and other information. Such transactions amounted to $2,804,620,891 and the related brokerage commissions were $2,451,428.
PORTFOLIO TURNOVER
The portfolio turnover rate of each Fund is shown under "Financial Highlights" in the applicable Prospectus. Higher portfolio turnover increases transaction costs to the Funds.
INVESTMENT STRATEGIES AND RISKS
Information concerning each Fund's non-fundamental investment objective(s) is set forth in the Prospectuses under the heading "Investment Objective and Strategies." There can be no assurance that any Fund will achieve its objective. The principal features of each Fund's investment program and the principal risks associated with that investment program are discussed in the Prospectuses under the heading "Investment Objective and Strategies" and "Principal Risks of Investing in the Fund."
Set forth in this section is a description of each Fund's investment policies, strategies and practices. The investment objective(s) of each Fund are non-fundamental policies and may be changed by the Board of Trustees without shareholder approval. Each Fund's investment policies, strategies and practices are also non-fundamental. The Board of Trustees of the Trust reserves the right to change any of these non-fundamental investment policies, strategies or practices without shareholder approval. However, shareholders will be notified before any material change in the investment policies becomes effective. Each Fund has adopted certain investment restrictions, some of which are fundamental and cannot be changed without shareholder approval. See "Investment Restrictions" in this Statement of Additional Information. Individuals considering the purchase of shares of any Fund should recognize that there are risks in the ownership of any security.
Any percentage limitations with respect to assets of a Fund will be applied at the time of purchase. A later change in percentage resulting from changes in asset values will not be considered a violation of the percentage limitations. The percentage limitations applicable to borrowings and reverse repurchase agreements (Charter only) 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.
The investment objective of Aggressive Growth is to achieve long-term growth of capital. The Fund will invest primarily in common stocks of companies whose earnings the Fund's portfolio managers expect to grow more than 15% per year. Many of these companies are in the small to medium-sized category. The Fund's strategy does not preclude investment in large, seasoned companies which in the judgment of AIM possess superior potential returns similar to companies with formative growth profiles. The Fund will also invest in established smaller companies (under $500 million in market capitalization) which offer exceptional value based upon substantially above average earnings growth potential relative to market value. 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 resources or may be dependent on a few key managers. Any one of the foregoing may change suddenly and have an immediate impact on the value of the Fund's securities. Furthermore, whenever the securities markets are experiencing rapid price changes due to national economic trends, secondary growth securities have historically been subject to exaggerated price changes. The Fund may invest in non-equity securities, such as corporate bonds or U.S. Government obligations during periods when, in the opinion of AIM, prevailing market, financial, or economic conditions warrant, as well as when such holdings are advisable in light of a change in circumstances of a particular company or within a particular industry.
Blue Chip's primary investment objective is long-term growth of capital with a secondary objective of current income. It is anticipated that the major portion of Blue Chip's portfolio will ordinarily be invested in common stocks, convertible securities and bonds of blue chip companies (i.e., companies with leading market positions and which possess strong financial characteristics, as described below). While current income is a secondary objective, most of the stocks in the Fund's portfolio are expected to pay dividends. The Fund will generally invest in large and medium sized companies (i.e., companies which fall in the largest 85% of market capitalization of publicly traded companies listed in the United States) which possess the following characteristics:
o MARKET CHARACTERISTICS -- Blue chip companies are
those which occupy (or in AIM's judgment have the
potential to occupy) leading market positions that
are expected to be maintained or enhanced over time.
Strong market positions, particularly in growing
industries, can give a company pricing flexibility as
well as the potential for strong unit sales. These
factors can in turn lead to higher earnings growth
and greater share price appreciation. Market leaders
can be identified within an industry as those
companies which have (i) superior growth prospects
compared with other companies in the same industry;
(ii) possession of proprietary technology with the
potential to bring about major changes within an
industry; and/or (iii) leading sales within an
industry, or the potential to become a market leader.
o FINANCIAL CHARACTERISTICS -- A blue chip company
possesses at least one of the following attributes:
(i) faster earnings growth than its competitors and
the market in general; (ii) higher profit margins
relative to its competitors; (iii) strong cash flow
relative to its competitors; and/or (iv) a balance
sheet with relatively low debt and a high return on
equity relative to its competitors.
The Fund will diversify among industries and therefore will not invest 25% or more of its total assets in any one industry. Under normal market conditions, Blue Chip's portfolio will be diversified among industries in a manner similar to the industry diversification of broad market indices.
The investment objective of Capital Development is long-term growth of capital. Production of income is incidental to this objective. The Fund's principal investments are in common stocks, convertible securities and bonds.
The Fund will invest primarily in securities of small and
medium-sized companies (i.e., companies which fall in the smallest 85% by market
capitalization of publicly traded companies in the United States). Among factors
that AIM may consider when selecting investments in a company for the Fund are
(i) the growth prospects for a company's products, (ii) the economic outlook for
its industry, (iii) a company's new product development, (iv) its operating
management capabilities, (v) the relationship between the price of the security
and its estimated fundamental value, (vi) relevant market, economic and
political environments and (vii) financial characteristics such as balance sheet
analysis and return on assets.
The primary investment objective of Charter is growth of capital with a secondary objective of current income. Although the amount of Charter's current income will vary from time to time, it is anticipated that the current income realized by Charter will generally be greater than that realized by mutual funds whose sole objective is growth of capital.
The investment objective of Constellation is growth of capital. Constellation aggressively seeks to increase shareholders' capital by investing principally in common stocks of companies the portfolio managers believe are likely to benefit from new or innovative products, services or processes that should enhance such companies' prospects for future growth in earnings.
Emerging Growth is a non-diversified portfolio (as defined in the 1940 Act), which means that it may invest a greater proportion of its assets in the securities of a smaller number of issuers and therefore may be subject to greater market and credit risk than a more broadly diversified portfolio. (A diversified portfolio may not, with respect to 75% of its total assets, invest more than 5% of its assets in securities of one issuer.) Emerging Growth intends to satisfy the diversification requirements of the Internal Revenue Code to qualify as a regulated investment company. See "Dividends, Distributions and Tax Matters" herein.
The investment objective of Weingarten is to seek growth of capital. The Fund will invest in common stocks of seasoned and better capitalized companies. Current income will not be an important criterion of investment selection, and any such income should be considered incidental. It is anticipated that common stocks will be the principal form of investment by the Fund.
Management of Aggressive Growth and Constellation will be particularly interested in companies that are likely to benefit from new or innovative products, services or processes that should enhance such companies' prospects for future growth in earnings. As a result of this policy, the market prices of many of the securities purchased and held by a Fund may fluctuate widely. Any income received from securities held by a Fund will be incidental, and an investor should not consider a purchase of shares of a Fund as equivalent to a complete investment program. Aggressive Growth, Constellation and Weingarten's portfolios are primarily comprised of securities of two basic categories of companies: (a) "core" companies, which Fund management considers to have experienced above-average and consistent long-term growth in earnings and to have excellent prospects for outstanding future growth, and (b) "earnings acceleration" companies which Fund management believes are currently enjoying a dramatic increase in profits.
Each of the Funds may invest, for cash management, temporary or defensive purposes, all or substantially all of their assets in corporate bonds, shares of affiliated money market funds, commercial paper, or U.S. Government obligations. In addition, all or a portion of each Fund's assets may be held, from time to time, in cash, repurchase agreements, shares of affiliated money market funds, bonds or other short-term debt securities when such positions are deemed advisable in light of economic or market conditions. For a description of the various rating categories of corporate bonds and commercial paper in which the Funds may invest, see the Appendix to this Statement of Additional Information.
COMMON STOCKS -- The Funds will invest in common stocks. Common stocks represent the residual ownership interest in the issuer and are entitled to the income and increase in the value of the assets and business of the entity after all of its obligations and preferred stocks are satisfied. Common stocks generally have voting rights. Common stocks fluctuate in price in response to many factors including historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.
PREFERRED STOCKS -- The Funds may invest in preferred stocks. Preferred stock has a preference over common stock in liquidation (and generally dividends as well) but is subordinated to the liabilities of the issuer in all respects. As a general rule the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer's Board of Directors. Preferred stock also may be subject to optional or mandatory redemption provisions.
CONVERTIBLE SECURITIES -- The Funds may invest in convertible securities. A convertible security is a bond, debenture, note, preferred stock or other security that may be converted into or exchanged for a prescribed amount of common stock or other equity security of the same or a different issuer within a particular period of time at a specified price or formula. A convertible security entitles the holder to receive interest paid or accrued on debt or the dividend paid on preferred stock until the convertible security matures or is redeemed, converted or exchanged. Before conversion, convertible securities have characteristics similar to nonconvertible income securities in that they ordinarily provide a stable stream of income with generally higher yields than those of common stocks of the same or similar issuers. Convertible securities rank senior to common stock in a corporation's capital structure but are usually subordinated to comparable nonconvertible securities. Convertible securities may be subject to redemption at the option of the issuer at a price established in the convertible security's governing instrument. Although each Fund will only purchase convertible securities that AIM considers to have adequate protection parameters, including an adequate capacity to pay interest and repay principal in a timely manner, it invests without regard to corporate bond ratings. Blue Chip does not intend to invest more than 10% of its total assets in convertible securities.
CORPORATE DEBT SECURITIES -- The Funds may invest in corporate debt securities. Corporations issue debt securities of various types, including bonds and debentures (which are long-term), notes (which may be short- or long-term), bankers acceptances (indirectly secured borrowings to facilitate commercial transactions) and commercial paper (short-term unsecured notes). These securities typically provide for periodic payments of interest, at a rate which may be fixed or adjustable, with payment of principal upon maturity and are generally not secured by assets of the issuer or otherwise guaranteed. The values of fixed rate income securities tend to vary inversely with changes in interest rates, with longer-term securities generally being more volatile than shorter-term securities. Corporate securities frequently are subject to call provisions that entitle the issuer to repurchase such securities at a predetermined price prior to their stated maturity. In the event that a security is called during a period of declining interest rates, the Fund may be required to reinvest the proceeds in securities having a lower yield. In addition, in the event that a security was purchased at a premium over the call price, a Fund will
experience a capital loss if the security is called. Adjustable rate corporate debt securities may have interest rate caps and floors.
Blue Chip and Large Cap Growth will not invest in non-convertible corporate debt securities rated below investment grade by Standard and Poor's Ratings Services ("S&P") and Moody's Investors Service ("Moody's") or in unrated non-convertible corporate debt securities believed by the Fund's investment adviser to be below investment grade quality. Securities rated in the four highest long-term rating categories by S&P and Moody's are considered to be "investment grade." S&P's fourth highest long-term rating category is "BBB", with BBB- being the lowest investment grade rating. Moody's fourth highest long-term rating category is "Baa", with Baa3 being the lowest investment grade rating. Publications of S&P indicate that it assigns securities to the "BBB" rating category when such securities are "regarded as having an adequate capacity to pay interest and repay principal. Such securities normally exhibit adequate protection parameters, but adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay," whereas securities rated AAA by S&P are regarded as having "capacity to pay interest and repay principal that is extremely strong." Publications of Moody's indicate that it assigns securities to the "Baa rating category when such securities 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," whereas securities rated Aaa by Moody's "are judged to be of the best quality" and "carry the smallest degree of investment risk."
U.S. GOVERNMENT SECURITIES -- The Funds may invest in securities issued or guaranteed by the United States government or its agencies or instrumentalities. These include Treasury securities (bills, notes, bonds and other debt securities) which differ only in their interest rates, maturities and times of issuance. U.S. Government agency and instrumentality securities include securities which are supported by the full faith and credit of the U.S., securities that are supported by the right of the agency to borrow from the U.S. Treasury, securities that are supported by the discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality and securities that are supported only by the credit of such agencies. While the U.S. Government may provide financial support to such U.S. government-sponsored agencies or instrumentalities, no assurance can be given that it always will do so. The U.S. government, its agencies and instrumentalities do not guarantee the market value of their securities. The values of such securities fluctuate inversely to interest rates.
REAL ESTATE INVESTMENT TRUSTS ("REITs")
To the extent consistent with their respective investment objectives and policies, the Funds may invest in equity and/or debt securities issued by Real Estate Investment Trusts ("REITs"). Such investments will not exceed 25% of the total assets of any of the Funds.
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 condition, adverse change in the climate for real estate, environmental liability risks, increases in property taxes and operating expense, changes in zoning laws, casualty or condemnation losses, limitations on rents, changes in neighborhood values, the appeal of properties to tenants, and increases in interest rates.
In addition to the risks described above, equity REITs may be affected by any changes in the value of the underlying property owned by the trusts, while mortgage REITs may be affected by the quality of any credit extended. Equity and mortgage REITs are dependent upon management skill, are not diversified, and are therefore subject to the risk of financing single or a limited number of projects.
Such trusts are also subject to heavy cash flow dependency, defaults by borrowers, self-liquidation, and the possibility of failing to 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.
FOREIGN SECURITIES
To the extent consistent with their respective investment objectives, each of the Funds may invest in foreign securities. Each of Aggressive Growth, Blue Chip, Capital Development, Demographic Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth and Mid Cap may invest up to 25% of its total assets in foreign securities. Each of Charter, Constellation and Weingarten may invest up to 20% of its total assets in foreign securities. For purposes of computing such limitation American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs") and other securities representing underlying securities of foreign issuers are treated as foreign securities. These securities may not necessarily be denominated in the same currency as the securities into which they may be converted. ADRs are receipts typically issued by a United States bank or trust company which evidence ownership of underlying securities issued by a foreign corporation. EDRs are receipts issued in Europe which evidence a similar ownership arrangement. Generally, ADRs, in registered form, are designed for use in the United States securities markets, and EDRs, in bearer form, are designed for use in European securities markets. ADRs and EDRs may be listed on stock exchanges, or traded in OTC markets in the United States or Europe, as the case may be. ADRs, like other securities traded in the United States, will be subject to negotiated commission rates.
To the extent a Fund invests in securities denominated in foreign currencies, each Fund bears the risk 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. These securities will be marketable equity securities (including common and preferred stock, depositary receipts for stock and fixed income or equity securities exchangeable for or convertible into stock) of foreign companies which generally are listed on a recognized foreign securities exchange or traded in a foreign over-the-counter market. Each of the Funds may also invest in foreign securities listed on recognized U.S. securities exchanges or traded in the U.S. over-the-counter market. Such foreign securities may be issued by foreign companies located in developing countries in various regions of the world. A "developing country" is a country in the initial stages of its industrial cycle. As compared to investment in the securities markets of developed countries, investment in the securities markets of developing countries involves exposure to markets 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.
Investments by a Fund in foreign securities, whether denominated in U.S. currencies 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 as set forth below.
Currency Risk. The value of each Fund's 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.
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.
Political and Economic Risk. The economies of many of the countries in which the Funds may invest are not 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 each Fund's investments.
Regulatory Risk. Foreign companies are not registered with the SEC 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 Funds' 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.
FOREIGN EXCHANGE TRANSACTIONS
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 or sales of foreign currency, purchases of futures contracts with respect to foreign currency (and options thereon), 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 Fund may purchase and sell options on futures contracts or forward contracts which are denominated in a particular foreign currency to hedge the risk of fluctuations in the value of another currency. The Funds' dealings in foreign exchange may involve 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 Fund will not speculate in foreign exchange, nor commit a larger percentage of its total assets to foreign exchange hedges than the percentage of its total assets that 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
None of the Funds will invest more than 15% of their net assets in illiquid securities, including repurchase agreements with maturities in excess of seven days.
RULE 144A SECURITIES
The Funds may purchase privately placed securities that are eligible for purchase and sale pursuant to Rule 144A under the Securities Act of 1933 (the "1933 Act"). This Rule permits certain qualified institutional buyers, such as a Fund, to trade in securities that have not been 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 a Fund's restriction of investing no more than 15% of its 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, the Fund's holdings of illiquid securities will be reviewed to determine
what, if any, action is required to assure that the Fund does not invest more
than 15% of its assets in illiquid securities. Investing in Rule 144A securities
could have the effect of increasing the amount of the Fund's investments in
illiquid securities if qualified institutional buyers are unwilling to purchase
such securities.
REPURCHASE AGREEMENTS
The Funds may each enter into repurchase agreements. A
repurchase agreement is an instrument under which a Fund acquires ownership of a
debt security and the seller (usually a broker or bank) agrees, at the time of
the sale, to repurchase the obligation at a mutually agreed upon time and price,
thereby determining the yield during the Fund's holding period. In the event of
bankruptcy or other default of a seller of a repurchase agreement, the Fund may
experience both delays in liquidating the underlying securities and losses,
including: (a) a possible decline in the value of the underlying security during
the period in which the Fund seeks to enforce its rights thereto; (b) a possible
subnormal level of income and lack of access to income during this period; and
(c) expenses of enforcing its rights. A repurchase agreement is collateralized
by the security acquired by the Fund and its value is marked to market daily in
order to minimize the Fund's risk. Repurchase agreements usually are for short
periods, such as one or two days, but may be entered into for longer periods of
time. Repurchase agreements are not included in each Fund's restrictions on
lending. Repurchase agreements are considered to be loans by each Fund under the
1940 Act.
Charter may enter into repurchase agreements (at any time, up to 50% of its net assets), using only U.S. Government securities, for the sole purpose of increasing its yield on idle cash.
REVERSE REPURCHASE AGREEMENTS
Consistent with Charter's, Demographic Trends', Emerging
Growth's, Large Cap Basic Value's and Mid Cap's policies on borrowings, each of
those Funds may invest in reverse repurchase agreements with banks, which
involve the sale of securities held by the Fund, with an agreement that the Fund
will repurchase the securities at an agreed upon price and date. The Funds 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 securities having a dollar
value equal to the repurchase price. Reverse repurchase agreements are
considered borrowings by the Fund under the 1940 Act.
SPECIAL SITUATIONS
Although Constellation does not currently intend to do so, it may invest in "special situations." A special situation arises when, in the opinion of the Fund's management, the securities of a particular company will, within a reasonably estimable period of time, be accorded market recognition at an appreciated value solely by reason of a development applicable to that company, and regardless of general business conditions or movements of the market as a whole. Developments creating special situations might include, among others: liquidations, reorganizations, recapitalizations, mergers, material
litigation, technical breakthroughs, and new management or management policies. Although large and well-known companies may be involved, special situations more often involve comparatively small or unseasoned companies. Investments in unseasoned companies and special situations often involve much greater risk than is inherent in ordinary investment securities.
SHORT SALES
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 of 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, 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 Aggressive Growth, Blue Chip, Capital Development, Charter, Large Cap Growth or Weingarten 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.
WARRANTS
The Funds may, from time to time, invest in warrants. Warrants are, in effect, longer-term call options. They give the holder the right to purchase a given number of shares of a particular company at specified prices within certain periods of time. The purchaser of a warrant expects that the market price of the security will exceed the purchase price of the warrant plus the exercise price of the warrant, thus giving him a profit. Of course, since the market price may never exceed the exercise price before the expiration date of the warrant, the purchaser of the warrant risks the loss of the entire purchase price of the warrant. Warrants generally trade in the open market and may be sold rather than exercised.
Warrants are sometimes sold in unit form with other securities of an issuer. Units of warrants and common stock may be employed in financing young, unseasoned companies. The purchase price of a warrant varies with the exercise price of a warrant, the current market value of the underlying security, the life of the warrant and various other investment factors.
SECURITIES ISSUED ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS
Each Fund may purchase securities on a "when-issued" basis, that is, 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). Each Fund also may purchase or sell securities on a delayed delivery basis. The payment obligation and the interest rate that will be received on the delayed delivery securities are fixed at the time the buyer enters into the commitment. A Fund will only make commitments to purchase when-issued or delayed delivery 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.
Investment in securities on a when-issued or delayed delivery basis may increase a Fund's exposure to market fluctuation and may increase the possibility that the Fund will incur short-term gains subject to federal taxation or short-term losses if the Fund must engage in portfolio transactions in order to honor a when-issued or delayed delivery commitment. In a delayed delivery transaction, 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 will segregate liquid assets in an amount equal to the when-issued commitment. If the market value of such segregated assets declines, additional cash or securities will be segregated on a daily basis so that the market value of the segregated assets will equal the amount of the Fund's when-issued commitments. To the extent cash and securities 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.
INVESTMENT IN UNSEASONED ISSUERS
Charter, Demographic Trends, Emerging Growth, Large Cap Basic Value and Mid Cap 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.
LENDING OF PORTFOLIO SECURITIES
Consistent with applicable regulatory requirements, the Funds may lend their portfolio securities (principally to broker-dealers) to the extent of one-third of their respective total assets. Such loans would be callable at any time and would be continuously secured by collateral equal to no less than the market value, determined daily, of the loaned securities. Such collateral will be cash, letters of credit, or debt securities issued or guaranteed by the U.S. Government or any of its agencies. The Funds would continue to receive the income on loaned securities and would, at the same time, earn interest on the loan collateral or on the investment of the loan collateral if it were cash. Any cash collateral pursuant to these loans would be invested in short-term money market instruments or affiliated money market funds. Where voting or consent rights with respect to loaned securities pass to the borrower, the Funds will follow the policy of calling the loan, in whole or in part as may be appropriate, to permit the exercise of such voting or consent rights if the matters involved are expected to have a material effect on the Funds' investment in the loaned securities. Lending securities entails a risk of loss to the Funds if and to the extent that the market value of the securities loaned were to increase and the lender did not increase the collateral accordingly.
INTERFUND LOANS
Each Fund may lend up to 33 1/3% of its total assets to another AIM Fund, on such terms and conditions as the SEC may require in an exemptive order. An application for exemptive relief has been filed with the SEC on behalf of the Funds and others. Each Fund may also borrow from another AIM Fund to satisfy redemption requests or to cover unanticipated cash shortfalls due to a delay in the delivery of cash to the Fund's custodian or improper delivery instructions by a broker effectuating a transaction.
BORROWING
In addition to the ability to borrow money for temporary or emergency purposes, Constellation may, but has no current intention to, borrow money from banks to purchase or carry securities. Constellation may borrow amounts to purchase or carry securities only if, immediately after such borrowing, the value of its assets, including the amount borrowed, less its liabilities, is equal to at least 300% of the amount borrowed, plus all outstanding borrowings. Any investment gains made by Constellation with the borrowed monies in excess of interest paid by the Fund will cause the net asset value of the Fund's shares to rise faster than would otherwise be the case. On the other hand, if the investment performance of the additional securities purchased with the proceeds of such borrowings fails to cover the interest paid on the money borrowed by the Fund, the net asset value of the Fund will decrease faster than would otherwise be the case. This speculative factor is known as "leveraging."
EQUITY-LINKED DERIVATIVES
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
Each of the Funds may invest in other investment companies to the extent permitted by the 1940 Act, and rules and regulations thereunder, and if applicable, exemptive orders granted by the SEC. The following restrictions apply to investments in other investment companies other than Affiliated Money Market Funds (defined below): (i) a Fund may not purchase more than 3% of the total outstanding voting stock of another investment company; (ii) a Fund may not invest more than 5% of its total assets in securities issued by another investment company; and (iii) a Fund may not invest more than 10% of its total assets in securities issued by other investment companies other than Affiliated Money Market Funds. With respect to a Fund's purchase of shares of another investment company, including Affiliated Money Market Funds, the Fund will indirectly bear its proportionate share of the advisory fees and other operating expenses of such investment company. The Funds have obtained an exemptive order from the SEC allowing them to invest uninvested cash balances and cash collateral received in connection with securities lending in money market funds that have AIM or an affiliate of AIM as an investment advisor (the "Affiliated Money Market Funds"), provided that, with respect to uninvested cash balances, investments in Affiliated Money Market Funds do not exceed 25% of the total assets of the investing Fund.
TEMPORARY DEFENSIVE INVESTMENTS
In anticipation of or in response to adverse market conditions, for cash management purposes, or for defensive purposes, each of the Funds may temporarily hold all or a portion of its assets in cash, money market instruments, bonds, or other debt securities. Each of the Funds may also invest up to 25% of its total assets in Affiliated Money Market Funds for these purposes. For a description of the various rating categories of corporate bonds and commercial paper in which the Funds may invest, see the Appendix to this Statement of Additional Information.
SWAPS, CAPS, FLOORS AND COLLARS
Consistent with its investment objective, a Fund may enter into interest rate, currency and index swaps and may purchase or sell related caps, floors and collars and other derivative instruments. The Fund expects to enter into these transactions primarily to preserve a return or spread on a particular investment or portion of its portfolio, to protect against currency fluctuations, as a technique for managing the portfolio's duration (i.e., the price sensitivity to changes in interest rates) or to protect against any increase in the price of securities the Fund anticipates purchasing at a later date. The Fund intends to use these transactions as hedges and will not sell interest rate caps, floors or collars if it does not own securities or other instruments providing an income stream roughly equivalent to what the Fund may be obligated to pay.
Interest rate swaps involve the exchange by the Fund with another party of their respective commitments to pay or receive interest (for example, an exchange of floating rate payments for fixed rate payments) with respect to a notional amount of principal. A currency swap is an agreement to exchange cash flows on a notional amount based on changes in the values of the reference indices.
The purchase of a cap entitles the purchaser to receive payments on a notional principal amount from the party selling the cap to the extent that a specified index exceeds a predetermined interest rate. The purchase of an interest rate floor entitles the purchaser to receive payments on a notional principal amount from the party selling the floor to the extent that a specified index falls below a predetermined interest rate or amount. A collar is a combination of a cap and a floor that preserves a certain return within a predetermined range of interest rates or values.
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 RISKS 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 terminates 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 price 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, a 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 Futures 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
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 Emerging Growth is not subject to restriction (1).
Fundamental restrictions may be changed only by a vote of the lesser of (i) 67%
or more of the Fund's shares present at a meeting if the holders of more than
50% of the outstanding shares are present in person or represented by proxy, or
(ii) more than 50% of the Fund's outstanding shares.
FUNDAMENTAL RESTRICTIONS
(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.
The investment restrictions set forth above provide each of the Funds with the ability to operate under new interpretations of the 1940 Act or pursuant to exemptive relief from the SEC without receiving prior shareholder approval of the change. Even though each of the Funds has this flexibility, the Board of Trustees has adopted non-fundamental restrictions for each of the Funds relating to certain of these restrictions which the advisor must follow in managing the Funds. Any changes to these non-fundamental restrictions, which are set forth below, require the approval of the Board of Trustees.
NON-FUNDAMENTAL RESTRICTIONS
The following restrictions apply to each of the Funds, except Emerging Growth is not subject to restriction (1). They may be changed for any Fund without approval of that Fund's voting securities. Any investment restriction that involves a maximum or minimum percentage of securities or assets (other than with respect to borrowing) shall not be considered to be violated unless an excess over or a deficiency under the percentage occurs immediately after, and is caused by, an acquisition or disposition of securities or utilization of assets by the Fund.
(1) In complying with the fundamental restriction
regarding issuer diversification, the Fund will not, with
respect to 75% of its total assets, 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. Other than Constellation, 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. Other than Constellation, the Fund may not purchase additional securities when any borrowings from banks exceed 5% of the Fund's total assets.
(3) In complying with the fundamental restriction regarding industry concentration, the Fund may invest up to 25% of its total assets in the securities of issuers whose principal business activities are in the same industry.
(4) In complying with the fundamental restriction with regard to making loans, the Fund may lend up to 33 1/3% of its total assets and may lend money to another AIM Advised Fund, on such terms and conditions as the SEC may require in an exemptive order.
(5) Notwithstanding the fundamental restriction with regard to investing all assets in an open-end fund, the Fund may not invest all of its assets in the securities of a single open-end management investment company with the same fundamental investment objectives, policies and restrictions as the Fund.
The following non-fundamental policy applies only to Constellation:
The amount the Fund may borrow will also be limited by the applicable margin limitations imposed by the Federal Reserve Board. If at any time the value of Constellation's assets should fail to meet the 300% asset coverage requirement, the Fund will, within three days, reduce its borrowings to the extent necessary. The Fund may be required to eliminate partially or totally its outstanding borrowings at times when it may not be desirable for it to do so. Any investment gains made by the Fund with the borrowed monies in excess of interest paid by the Fund will cause the net asset value of the Fund's shares to rise faster than would otherwise be the case. On the other hand, if the investment performance of the additional securities purchased with the proceeds of such borrowings fails to cover the interest paid on the money borrowed by Constellation, the net asset value of the Fund will decrease faster than would otherwise be the case. This speculative factor is known as "leveraging."
MANAGEMENT
The overall management of the business and affairs of the Funds and the Trust is vested with the Trust's Board of Trustees. The Board of Trustees approves all significant agreements between the Trust, on behalf of the Funds, and persons or companies furnishing services to the Funds. The day-to-day operations of each Fund are delegated to the officers of the Trust and to AIM, subject always to the objectives, restrictions and policies of the applicable Fund and to the general supervision of the Trust's Board of Trustees. Certain trustees and officers of the Trust are affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the parent corporation of AIM.
TRUSTEES AND OFFICERS
The trustees and officers of the Trust and their principal occupations during the last five years are set forth below. Unless otherwise indicated, the address of each trustee and officer is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.
POSITIONS HELD
NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING PAST 5 YEARS
--------------------- --------------- ----------------------------------------
*ROBERT H. GRAHAM (54) Trustee, Chairman Director, President and Chief Executive Officer, A
and President 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 Vice
Chairman, AMVESCAP PLC.
BRUCE L. CROCKETT (56) Trustee Director, ACE Limited (insurance company).
906 Frome Lane Formerly, Director, President and Chief Executive
McLean, VA 22102 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.
ALBERT R. DOWDEN (59)
1815 Central Park Drive Trustee Chairman of the Board of Directors, Cortland
P.O. Box 774000-PMB #222 Trust, Inc. (investment company) and DHJ Media,
Steamboat Springs, CO 80477 Inc.; and Director, Magellan Insurance Company.
Formerly, Director, President and Chief Executive
Officer, Volvo Group North America, Inc.; Senior
Vice President, AB Volvo; and Director, The Hertz
Corporation, Genmar Corporation (boat
manufacturer), National Media Corporation and
Annuity and Life Re (Holdings), Ltd.
EDWARD K. DUNN, JR. (65) Trustee Formerly, Chairman of the Board of Directors,
2 Hopkins Plaza, 8th Floor Mercantile Mortgage Corp; Vice Chairman of the
Suite 805 Board of Directors, President and Chief Operating
Baltimore, MD 21201 Officer, Mercantile - Safe Deposit & Trust Co.;
and President, Mercantile Bankshares.
JACK FIELDS (49) Trustee Chief Executive Officer, Twenty-First Century
434 New Jersey Avenue, S.E. Group, Inc. (governmental affairs company).
Washington, DC 20003 Formerly, Member of the U.S. House of
Representatives.
**CARL FRISCHLING (64) Trustee Partner, Kramer Levin Naftalis & Frankel LLP
919 Third Avenue (law firm).
New York, NY 10022
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* A trustee who is an "interested person" of A I M Advisors, Inc. and the Trust as defined in the 1940 Act.
** A trustee who is an "interested person" of the Trust as defined in the 1940 Act.
POSITIONS HELD
NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING 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, 50th Floor Operations, Hines Interests Limited Partnership
2800 Post Oak Blvd. (real estate development).
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 Secretary, A I M Advisors, Inc.; Senior Vice
and Secretary President, General Counsel and Secretary, A I M
Management Group Inc.; Director, Vice President
and General Counsel, Fund Management Company;
General Counsel and Vice President, A I M Fund
Services, Inc.; and Vice President, A I M Capital
Management, Inc., and A I M Distributors, Inc.
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.
DANA R. SUTTON (42) Vice President and Vice President and Fund Controller, A I M
Treasurer Advisors, Inc.; and Assistant Vice President and
Assistant Treasurer, Fund Management Company.
EDGAR M. LARSEN (60) Vice President Vice President, A I M Capital Management, Inc.
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The standing committees of the Board of Trustees are the Audit Committee, the Investments Committee and the Nominating and Compensation Committee.
The members of the Audit Committee are Messrs. Crockett, Daly, Dowden, 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, Dowden, Dunn, Fields, Frischling, Pennock and Sklar (Chairman) and Dr. Mathai-Davis. The Investment Committee is responsible for: (i) overseeing AIM's investment-related compliance systems and procedures to ensure their continued adequacy; and (ii) considering and acting, on an interim basis, between meetings of the full Board, on investment-related matters requiring Board consideration, including dividends and distributions, brokerage policies and pricing matters.
The members of the Nominating and Compensation Committee are
Messrs. Crockett (Chairman), Daly, Dowden, Dunn, Fields, Pennock and Sklar and
Dr. Mathai-Davis. The Nominating and Compensation Committee is responsible for:
(i) considering and nominating individuals to stand for election as independent
trustees as long as the Trust maintains a distribution plan pursuant to Rule
12b-1 under the 1940 Act; (ii) reviewing from time to time the compensation
payable to the independent trustees; and (iii) making recommendations to the
Board regarding matters related to compensation, including deferred compensation
plans and retirement plans for the independent trustees.
The Nominating and Compensation Committee will consider nominees recommended by a shareholder to serve as trustees, provided (i) that such person is a shareholder of record at the time he or she submits such names and is entitled to vote at the meeting of shareholders at which trustees will be elected, and (ii) that the Nominating and Compensation Committee or the Board, as applicable, shall make the final determination of persons to be nominated.
All of the Trust's trustees also serve as directors or trustees of some or all of the other investment companies managed or advised by AIM. All of the Trust's executive officers hold similar offices with some or all of the other investment companies managed or advised by AIM.
Remuneration of Trustees
Each trustee is reimbursed for expenses incurred in connection with each meeting of the Board of Trustees or any committee attended. 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:
RETIREMENT
AGGREGATE BENEFITS TOTAL
COMPENSATION ACCRUED COMPENSATION
FROM THE BY ALL AIM FROM ALL
TRUSTEE TRUST(1) FUNDS(2) AIM FUNDS(3)
----------------------- ------------- -------------- --------------
Charles T. Bauer(4) $ 0 $ 0 $ 0
Bruce L. Crockett $ 26,923 $ 60,951 $ 111,500
Owen Daly II $ 26,923 $ 97,195 $ 111,500
Albert R. Dowden(5) $ 0 $ 0 $ 13,435
Edward K. Dunn, Jr $ 26,923 $ 22,138 $ 111,500
Jack Fields $ 26,409 $ 23,019 $ 108,500
Carl Frischling(6) $ 26,923 $ 107,507 $ 111,500
Robert H. Graham $ 26,419 $ 0 $ 0
Prema Mathai-Davis $ 26,923 $ 22,606 $ 111,500
Lewis F. Pennock $ 26,923 $ 67,995 $ 111,500
Louis S. Sklar $ 26,288 $ 87,538 $ 111,000
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(1) The total amount of compensation deferred by all trustees of the Trust and the Trust's predecessor during the fiscal year ended October 31, 2000, including earnings was $213,131.
(2) During the fiscal year ended October 31, 2000, the total amount of expenses allocated to the Trust and the Trust's predecessor in respect of such retirement benefits was $210,415. Data reflects compensation for the calendar year ended December 31, 2000.
(3) Each trustee serves as director or trustee of at least 12 registered investment companies advised by AIM. Data reflects total compensation for the calendar year ended December 31, 2000.
(4) Mr. Bauer was a trustee and officer until September 30, 2000, when he retired.
(5) Mr. Dowden was elected to serve as a Trustee on December 14, 2000.
(6) During the fiscal year ended October 31, 2000, Aggressive Growth, Blue Chip, Capital Development, Charter, Constellation, Demographic Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth, Mid Cap and Weingarten, each paid $10,333, $12,798, $5,962, $17,752, $35,398, $5,640, $2,215, $3,949, $4,033, $3,749 and $22,699, respectively, in legal fees to Mr. Frischling's law firm, Kramer Levin Naftalis & Frankel LLP for services rendered. Mr. Frischling, a trustee of the Trust, is a partner in such firm.
AIM Funds Retirement Plan for Eligible Directors/Trustees
Under the terms of the AIM Funds Retirement Plan for Eligible Directors/Trustees (the "Plan"), each trustee (who is not an employee of any of the AIM Funds, AIM Management or any of their affiliates) may be entitled to certain benefits upon retirement from the Board of Trustees. Pursuant to the Plan, a trustee becomes eligible to retire and receive full benefits under the Plan when he or she has attained age 65 and has completed at least five years of continuous service with one or more of the regulated investment companies managed, administered or distributed by AIM or its affiliates (the "Applicable AIM Funds"). Each eligible trustee is entitled to receive an annual benefit from the Applicable AIM Funds commencing on the first day of the calendar quarter coincident with or following his or her date of retirement equal to a maximum of 75% of the annual retainer paid or accrued by the Applicable AIM Funds for such trustee during the twelve-month period immediately preceding the trustee's retirement (including amounts deferred under a separate agreement between the Applicable AIM Funds and the trustee) and based on the number of such trustee's years of service (not in excess of 10 years of service) completed with respect to any of the Applicable AIM Funds. Such benefit is payable to each eligible trustee in quarterly installments. If an eligible trustee dies after attaining the normal retirement date but before receipt of all benefits under the Plan, the trustee's surviving spouse (if any) shall receive a quarterly survivor's benefit equal to 50% of the amount payable to the deceased trustee for no more than ten years beginning the first day of the calendar quarter following the date of the trustee's death. Payments under the Plan are not secured or funded by any Applicable AIM Fund.
Set forth below is a table that shows the estimated annual benefits payable to an eligible trustee upon retirement assuming various years of service. The estimated credited years of service for Messrs. Crockett, Daly, Dowden, Dunn, Fields, Frischling, Pennock and Sklar and Dr. Mathai-Davis are 13, 13, 0, 2, 3, 23, 19, 11 and 2 years, respectively.
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT
Number of
Years of
Service With
the Applicable Estimated Annual
AIM Funds Benefits Upon Retirement
================== ========================
10 $75,000
9 $67,500
8 $60,000
7 $52,500
6 $45,000
5 $37,500
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Deferred Compensation Agreements
Messrs. Daly, Dunn, Fields, Frischling and Sklar and Dr. Mathai-Davis (the "Deferring Trustees"), have each executed a Deferred Compensation Agreement (collectively, the "Compensation Agreements"). Pursuant to the Compensation Agreements, the Deferring Trustees may elect to defer receipt of up to 100% of their compensation payable by the Trust, and such amounts are placed into a deferral account. Currently, the Deferring Trustees may select various AIM Funds in which all or part of their deferral accounts shall be deemed to be invested. Distributions from the Deferring Trustees' deferral accounts will be paid in cash, generally in equal quarterly installments over a period of five (5) or ten (10) years (depending on the Compensation Agreement) beginning on the date the Deferring Trustee's retirement benefits commence under the Plan. The Trust's Board of Trustees, in its sole discretion, may accelerate or extend the distribution of such deferral accounts after the Deferring Trustee's termination of service as a trustee of the Trust. If a Deferring Trustee dies prior to the distribution of amounts in his or her deferral account, the balance of the deferral account will be distributed to his or her designated beneficiary in a single lump sum payment as soon as practicable after such Deferring Trustee's death. The Compensation Agreements are not funded and, with respect to the payments of amounts held in the deferral accounts, the Deferring Trustees have the status of unsecured creditors of the Trust and of each other AIM Fund from which they are deferring compensation.
INVESTMENT ADVISORY AND OTHER SERVICES
AIM is a direct wholly owned subsidiary of AIM Management, a holding company that has been engaged in the financial services business since 1976. The address of AIM is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. AIM was organized in 1976, and, together with its subsidiaries, advises or manages over 130 investment portfolios encompassing a broad range of investment objectives. AIM Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire Square, London EC2M 4YR, United Kingdom. AMVESCAP PLC and its subsidiaries are an independent investment management group engaged in institutional investment management and retail mutual fund businesses in the United States, Europe and the Pacific Region. Certain of the trustees and officers of AIM are also executive officers of the Trust and their affiliations are shown under "Trustees and Officers."
AIM and the Trust have adopted a Code of Ethics which requires investment personnel and certain other employees (a) to pre-clear personal securities transactions subject to the Code of Ethics; (b) to file reports regarding such transactions; (c) to refrain from personally engaging in (i) short-term trading of a security, (ii) transactions involving a security within seven days of an AIM Fund transaction involving the same security (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) to 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 who are registered with the NASD 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 21, 2000 (the "Master Advisory Agreement") and a Master Administrative Services Agreement (the "Master Administrative Services Agreement") with AIM. In addition, AIM has entered into a Master Sub-Advisory Agreement (the "Master Sub-Advisory Agreement") with AIM Capital with respect to Charter, Weingarten and Constellation. A prior investment advisory agreement with substantially similar terms to the Master Advisory Agreement and a prior administrative services agreement with substantially similar terms to the Master Administrative Services Agreement were in effect prior to June 21, 2000.
Under the terms of the Master 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 Administrative Services Agreement, AIM has agreed to provide or arrange for the provision of certain accounting and other administrative services to the Funds, including the services of a principal financial officer of the Funds and related staff. As compensation to AIM for its services under the Master Administrative Service Agreements, the Funds pay AIM for expenses incurred by AIM or its subsidiaries in connection with such services.
Under the terms of the Master Sub-Advisory Agreement, AIM has appointed AIM Capital to provide certain investment advisory services for each of Charter, Constellation and Weingarten, subject to overall supervision by AIM and the Trust's Board of Trustees. Certain of the trustees and officers of AIM Capital are also executive officers of the Trust.
Under the terms of the Sub-Advisory Agreement dated June 21, 2000 (the "Sub-Advisory Agreement"), AIM has appointed H. S. Dent Advisors, Inc. to provide certain investment advisory services for Demographic Trends, subject to overall supervision by AIM and the Trust's Board of Trustees.
Both the Master Advisory Agreement and the Master Sub-Advisory Agreement provide that the Fund will pay or cause to be paid all expenses of the Fund not assumed by AIM or AIM Capital, including, without limitation: brokerage commissions, taxes, legal, auditing or governmental fees, the cost of preparing share certificates, custodian, transfer and shareholder service agent costs, expenses of issue, sale, redemption, and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to trustees and shareholder meetings, the cost of preparing and distributing reports and notices to shareholders, the fees and other expenses incurred by the Trust on behalf of the Fund in connection with membership in investment company organizations, the cost of printing copies of prospectuses and statements of additional information distributed to the Funds' shareholders.
The Master Advisory Agreement, the Master Sub-Advisory Agreement and Sub-Advisory Agreement will continue in effect from year to year only if such continuance is specifically approved at least annually by (i) the Trust's Board of Trustees or the vote of a "majority of the outstanding voting securities" of the Funds (as defined in the 1940 Act), and (ii) the affirmative vote of a majority of the trustees who are not parties to the agreements or "interested persons" of any such party (the "Non-Interested Trustees") by votes cast in person at a meeting called for such purpose. Each agreement provides that the Funds, AIM (in the case of the Master Advisory Agreement) or AIM Capital (in the case of the Master Sub-Advisory Agreement) may terminate such agreement on 60 days' written notice without penalty Each agreement terminates automatically in the event of its assignment.
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. Fee waivers or reductions set forth in the Master Advisory Agreement may not be terminated without shareholder approval.
AIM has voluntarily agreed, effective July 1, 2000, to waive advisory fees payable by Blue Chip, Charter, Constellation and Weingarten 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 schedules are as follows:
BLUE CHIP
NET ASSETS ANNUAL RATE
First $350 million 0.75%
Over $350 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%
CHARTER AND CONSTELLATION
NET ASSETS ANNUAL RATE
First $30 million 1.00%
Over $30 million to and including $150 million 0.75%
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%
WEINGARTEN
NET ASSETS ANNUAL RATE
First $30 million 1.00%
Over $30 million to and including $350 million 0.75%
Over $350 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%
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In addition, pursuant to a prior fee waiver arrangement, AIM waived through June 30, 2000 a portion of its advisory fees payable by Charter, Constellation and Weingarten at net asset levels higher than those currently incorporated in the advisory fee schedule. Accordingly, with respect to each of Charter and Constellation, AIM received a fee calculated at an annual rate of 1.0% of the first $30 million of such Fund's average daily net assets, plus 0.75% of such Fund's average daily net assets in excess of $30 million to and including $150 million, plus 0.625% of such 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. With respect to Weingarten, AIM received a fee calculated at an annual rate of 1.0% of the first $30 million of the Fund's average daily net assets, plus 0.75% of the Fund's average daily net assets in excess of $30 million to and including $350 million, plus 0.625% of the Fund's average daily net assets in excess of $350 million to and including $2 billion, plus 0.60% of the Fund's average daily net assets in
excess of $2 billion to and including $3 billion, plus 0.575% of the Fund's average daily net assets in excess of $3 billion to and including $4 billion, plus 0.55% of the Fund's average daily net assets in excess of $4 billion.
With respect to Aggressive Growth, AIM's fee is calculated at an 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. With respect to Capital Development, AIM is entitled to receive a fee calculated at an annual rate of 0.75% of the first $350 million of such Fund's average daily net assets, plus 0.625% of such Fund's average daily net assets in excess of $350 million. With respect to Demographic Trends, AIM is entitled to receive a fee calculated at an annual rate of 0.85% of the first $2 billion of average daily net assets plus 0.80% of the Fund's average daily net assets in excess of $2 billion. With respect to Emerging Growth, AIM is entitled to receive a fee calculated at an annual rate of 0.85% of the first $1 billion of average daily net assets plus 0.80% of the Fund's assets in excess of $1 billion. With respect to Large Cap Basic Value, AIM is entitled to receive a fee calculated at an annual rate of 0.60% of the first $1 billion of average daily net assets, plus 0.575% of the Fund's average daily net assets in excess of $1 billion to and including $2 billion of average daily net assets, plus 0.55% of the Fund's average daily net assets in excess of $2 billion. With respect to Large Cap Growth, AIM is entitled to receive a fee calculated at an annual rate of 0.75% of the first $1 billion of such Fund's average daily net assets, plus 0.70% of such Fund's average daily net assets in excess of $1 billion to and including $2 billion, plus 0.625% of such Fund's average daily net assets in excess of $2 billion. With respect to Mid Cap, AIM is entitled to receive a fee calculated at an annual rate of 0.80% of the first $1 billion of the Fund's average daily net assets, plus 0.75% of the Fund's average daily net assets in excess of $1 billion.
As compensation for its services, AIM pays 50% of the advisory fees it receives pursuant to the Master Advisory Agreement with respect to Charter, Constellation and Weingarten to AIM Capital.
As compensation for its services, AIM pays H. S. Dent Advisers, Inc. a fee, with respect to Demographic Trends, calculated at an annual rate of 0.13% of the first $1 billion of such Fund's average daily net assets, plus 0.10% of such Fund's average daily net assets in excess of $1 billion to and including $2 billion of the Fund's average daily net assets, plus 0.07% of the Fund's average daily net assets in excess of $2 billion.
Each Fund paid to AIM the following advisory fees net of any expense limitations (fee waivers) for the years ended October 31, 2000, 1999 and 1998:
2000 1999 1998
---- ---- ----
Aggressive Growth.......... $26,977,097 $17,085,022 $21,617,925
Blue Chip.................. 36,853,214 21,592,076 8,680,763
Capital Development........ 9,200,414 8,102,504 7,886,238
Charter.................... 54,658,390 39,884,618 31,058,588
Constellation.............. 122,489,954 87,350,901 86,555,468
Demographic Trends......... 10,757,633 646,554 N/A
Emerging Growth............ 908,443 N/A N/A
Large Cap Basic Value...... 0 0 N/A
Large Cap Growth........... 1,064,335 10,176 N/A
Mid Cap.................... 1,125,851 N/A N/A
Weingarten................. 70,073,547 50,710,809 40,657,216
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For the fiscal year ended October 31, 2000, October 31, 1999 and 1998, AIM waived advisory fees for each Fund as follows:
2000 1999 1998
---- ---- ----
Aggressive Growth......... $ 0 $ 0 $ 0
Blue Chip................. 70,387 0 0
Capital Development....... 0 0 0
Charter................... 1,484,073 1,130,089 762,337
Constellation............. 6,187,566 3,107,849 3,074,705
Demographic Trends........ 0 43,724 N/A
Emerging Growth........... 0 N/A N/A
Large Cap Basic Value..... 12,555 2,279 N/A
Large Cap Growth.......... 0 32,079 N/A
Mid Cap................... 0 N/A N/A
Weingarten................ 5,181,384 4,288,405 2,917,461
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AIM, in turn, paid the following sub-advisory fees to AIM Capital, as sub-advisor for Charter, Constellation and Weingarten, for the years ended October 31, 2000, 1999 and 1998:
2000 1999 1998
---- ---- ----
Charter........................... $17,788,305 $19,942,309 $15,529,294
Constellation..................... 40,459,660 43,675,451 43,277,734
Weingarten........................ 23,739,387 25,355,405 20,328,608
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AIM paid the following sub-advisory fees to H. S. Dent Advisers, Inc. for Demographic Trends for the year ended October 31, 2000 and the period June 7, 1999 through October 31, 1999 as follows:
2000 1999
---- ----
Demographic Trends.............. $2,531,208 $ 105,572
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The payments set forth above were made pursuant to a substantially similar advisory agreement between AIM and the Trust's predecessor.
In addition, if a Fund engages in securities lending, AIM will provide the Fund investment advisory services and related administrative services. The Master Investment Advisory Agreement describes the administrative services to be rendered by AIM if a Fund engages in securities lending activities, as well as the compensation AIM may receive for such administrative services. Services to be provided include: (a) overseeing participation in the securities lending program to ensure compliance with all applicable regulatory and investment guidelines; (b) assisting the securities lending agent or principal (the agent) in determining which specific securities are available for loan; (c) monitoring the agent to ensure that securities loans are effected in accordance with AIM's instructions and with procedures adopted by the Board; (d) preparing appropriate periodic reports for, and seeking appropriate approvals from, the Board with respect to securities lending activities; (e) responding to agent inquiries; and (f) performing such other duties as may be necessary.
AIM's compensation for advisory services rendered in connection with securities lending is included in the advisory fee schedule. As compensation for the related administrative services AIM will provide, a lending Fund will pay AIM a fee equal to 25% of the net monthly interest or fee income retained or paid to the Fund from such activities. AIM currently intends to waive such fee, and has agreed to seek Board approval prior to its receipt of all or a portion of such fee.
The Master Administrative Services Agreement provides that AIM may perform or arrange for the performance of certain accounting and other administrative services to each Fund. For such services, AIM is entitled to receive from each Fund reimbursement of its costs or such reasonable compensation as may be approved by the Trust's Board of Trustees. The Master Administrative Services Agreement will continue in effect from year to year only if such continuance is specifically approved at least annually by
(i) the Trust's Board of Trustees or the vote of a "majority of the outstanding voting securities" of the Funds (as defined in the 1940 Act), and (ii) the affirmative vote of a majority of the Non-Interested Trustees by votes cast in person at a meeting called for such purpose.
In addition, the Transfer Agency and Service agreement for the Fund provides that A I M Fund Services, Inc. ("AFS"), a registered transfer agent and wholly owned subsidiary of AIM, will perform certain shareholder services for the Fund for a fee per account serviced. The Transfer Agency and Service Agreement provides that AFS will receive a per account fee plus out-of-pocket expenses to process orders for purchases, redemptions and exchanges of shares, prepare and transmit payments for dividends and distributions declared by the Fund, maintain shareholder accounts and provide shareholders with information regarding the Fund and their accounts.
The Funds paid AIM the following amounts of administrative services costs for the years ended October 31, 2000, 1999 and 1998:
2000 1999 1998
---- ---- ----
Aggressive Growth........... $233,230 $126,956 $108,996
Blue Chip................... 280,996 153,309 85,043
Capital Development......... 147,339 111,632 85,252
Charter..................... 383,224 235,274 152,008
Constellation............... 731,392 431,120 295,926
Demographic Trends.......... 142,614 16,849 N/A
Emerging Growth............. 29,235 N/A N/A
Large Cap Basic Value....... 50,000 16,849 N/A
Large Cap Growth............ 50,000 29,197 N/A
Mid Cap..................... 50,000 N/A N/A
Weingarten.................. 473,764 281,500 179,633
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The payments set forth in the table above were made pursuant to a substantially similar administrative services agreement between AIM and the Trust's predecessor.
THE DISTRIBUTION PLANS
THE CLASS A AND C PLAN
. The Trust has adopted a Master Distribution Plan pursuant to Rule 12b-1 under the 1940 Act relating to the Class A and Class C shares of the Funds (the "Class A and C Plan"). The Class A and C Plan provides that the Class A shares pay 0.35% per annum of their daily average net assets in the case of Blue Chip, Capital Development, Demographic Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth and Mid Cap, 0.30% per annum of their average daily net assets in the case of Charter, Constellation and Weingarten and 0.25% per annum of the average net assets of Aggressive Growth 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. Under the Class A and C Plan, Class C shares of Aggressive Growth, Blue Chip, Capital Development, Charter, Constellation, Demographic Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth and Mid Cap, and Weingarten pay compensation to AIM Distributors at an annual rate of 1.00% of the average daily net assets attributable to 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 Class A and Class C shares of the 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 provide continuing personal shareholder services to their customers who purchase and own shares of the Fund, in amounts of up to 0.25% of the average daily net assets of the Fund attributable to the customers of such dealers or financial institutions 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 and payments to AIM Distributors would be characterized as an asset-based sales charge pursuant to the Class A and C Plan.
THE CLASS B PLAN
The Trust has also adopted a Master Distribution Plan pursuant to Rule 12b-1 under the 1940 Act relating to Class B shares of Aggressive Growth, Blue Chip, Capital Development, Charter, Constellation, Demographic Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth, Mid Cap and Weingarten (the "Class B Plan", and collectively with the Class A and C Plan, the "Plans"). Under the Class B Plan, Aggressive Growth, Blue Chip, Capital Development, Charter, Constellation, Demographic Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth, Mid Cap and Weingarten pay compensation to AIM Distributors at an annual rate of 1.00% of the average daily net assets attributable to Class B shares. Of such amount, the Funds pay a service fee of 0.25% of the average daily net assets attributable to Class B shares to selected dealers and other institutions which furnish continuing personal shareholder services to their customers who purchase and own Class B shares. 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 Fund's shares; assisting in the establishment and maintenance of customer accounts and records and in the processing of purchase and redemption transactions; investing dividends and any capital gains distributions automatically in the Fund's shares; and providing such other information and services as the Funds or the customer may reasonably request.
Under the Plans, in addition to the Shareholder Service Agreements authorizing payments to selected dealers, banks may enter into Shareholder Service Agreements authorizing payments under the Plans to be made to banks which provide services to their customers who have purchased shares. Services provided pursuant to Shareholder Service Agreements with banks may include some or all of the following: answering shareholder inquiries regarding the Funds and the 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 shares of the Funds; and such other administrative services as the Funds reasonably may request, to the extent permitted by applicable statute, rule or regulation. Similar agreements may be permitted under the Plans for institutions which provide recordkeeping for and administrative services to 401(k) plans.
The Trust may also enter into Variable Group Annuity Contractholder Service Agreements ("Variable Contract Agreements") on behalf of Aggressive Growth, Blue Chip, Capital Development, Charter, Constellation, Demographic Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth, Mid Cap and Weingarten 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.
Under a Shareholder Service Agreement, the Funds agree to pay periodically fees to selected dealers and other institutions who render the foregoing services to their customers. The fees payable under a Shareholder Service Agreement generally will be calculated at the end of each payment period for each business day of the Funds during such period at the annual rate of 0.25% of the average daily net asset value of the Funds' shares purchased or acquired through exchange. Fees calculated in this manner shall be paid only to those selected dealers or other institutions who are dealers or institutions of record at the close of business on the last business day of the applicable payment period for the account in which the Funds' shares are held.
The Plans are subject to any applicable limitations imposed from time to time by rules of the National Association of Securities Dealers, Inc.
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 fiscal year ended October 31, 2000, with respect to Class A shares, Aggressive Growth, Blue Chip, Capital Development, Charter, Constellation, Demographic Trends, Large Cap Basic Value, Large Cap Growth, Mid Cap and Weingarten paid AIM Distributors under the Class A and C Plan $10,092,087, $9,983,123, $2,578,744, $17,302,500, $56,629,759, $1,761,595, $5,181, $229,403, $239,790 and $29,398,785, respectively, or an amount equal to 0.25%, 0.35%, 0.35%, 0.30%, 0.30%, 0.35%, 0.35%, 0.35%, 0.35% and 0.30%, respectively, of the Fund's Class A shares average daily net assets. For the period March 31, 2000 (date operations commenced) through October 31, 2000, with respect to Class A shares, Emerging Growth paid AIM Distributors under the Class A and C Plan $198,509, or an amount equal to 0.35% of the Fund's Class A shares average daily net assets.
For the fiscal year ended October 31, 2000, with respect to Class B shares, Aggressive Growth, Blue Chip, Capital Development, Charter, Constellation, Demographic Trends, Large Cap Growth, Mid Cap and Weingarten paid AIM Distributors under the Class B Plan $1,809,368, $24,298,215, $5,913,557, $28,390,889, $10,309,561, $5,500,548, $552,163, $553,529 and $18,390,082, respectively, or an amount equal to 1.00%, 1.00%, 1.00%, 1.00%, 1.00%, 1.00%, 1.00%, 1.00% and 1.00%, respectively, of the Fund's Class B shares average daily net assets. For the period March 31, 2000 (date operations commenced) through October 31, 2000, with respect to Class B shares, Emerging Growth paid AIM Distributors under the Class B Plan $349,519, or an amount equal to 1.00% of the Fund's Class B shares average daily net assets. For the period August 1, 2000 (date sales commenced) through October 31, 2000, with respect to Class B shares, Large Cap Basic Value paid AIM Distributors under the Class B Plan $3,172, or an amount equal to 1.00% of the Fund's Class B shares average daily net assets.
For the fiscal year ended October 31, 2000, with respect to Class C shares, Aggressive Growth, Blue Chip, Capital Development, Charter, Constellation, Demographic Trends, Large Cap Growth, Mid Cap and Weingarten paid AIM Distributors under the Class A and C Plan $565,638, $5,556,340, $739,266, $2,875,637, $3,222,875, $2,122,364, $211,511, $168,671 and 2,310,903, respectively, or an amount equal to 1.00%, 1.00%, 1.00%, 1.00%, 1.00%, 1.00%, 1.00%, 1.00% and 1.00%, respectively, of the Fund's Class C shares average daily net assets. For the period March 31, 2000 (date operations commenced) through October 31, 2000, with respect to Class C shares, Emerging Growth paid AIM Distributors under the Class A and C Plan $152,068, or an amount equal to 1.00% of the Fund's Class C shares average daily net assets. For the period August 1, 2000 (date sales commenced) through October 31, 2000, with respect to Class C shares, Large Cap Basic Value paid AIM Distributors under the Class A and C Plan $1,135, or an amount equal to 1.00% of the Fund's Class C shares average daily net assets.
The payments set forth in the prior three paragraphs were made pursuant to substantially similar distribution plans adopted by the Trust's predecessor.
An estimate by category of actual fees paid by the following Funds under the Class A and C Plan during the year ended October 31, 2000, were allocated as follows:
CLASS A COMPENSATION COMPENSATION COMPENSATION
PRINTING TO TO TO
ADVERTISING AND MAILING SEMINARS UNDERWRITERS DEALERS SALES PERSONNEL
----------- ----------- -------- ------------ ------------ ---------------
Aggressive Growth $ 57,442 $ 6,372 $ 16,170 0 $10,012,103 0
Blue Chip 822,423 86,938 211,417 0 8,862,344 0
Capital Development 245,427 26,891 68,080 0 2,238,346 0
Charter 1,011,908 108,475 267,278 0 15,914,839 0
Constellation 3,376,793 368,322 932,752 0 51,951,892 0
Demographic Trends 143,155 15,672 40,102 0 1,562,666 0
Emerging Growth 10,893 1,466 4,653 0 181,497 0
Large Cap Basic Value 963 212 0 0 4,641 0
Large Cap Growth 17,904 2,112 4,601 0 204,787 0
Mid Cap 16,122 1,875 4,420 0 217,373 0
Weingarten 1,871,622 200,427 501,337 0 26,825,399 0
|
An estimate by category of actual fees paid by the following Funds under the Class B Plan during the year ended October 31, 2000 were allocated as follows:
CLASS B COMPENSATION COMPENSATION COMPENSATION
PRINTING TO TO TO
ADVERTISING AND MAILING SEMINARS UNDERWRITERS DEALERS SALES PERSONNEL
----------- ----------- -------- ------------ ------------ ---------------
Aggressive Growth $114,418 $13,311 $ 33,613 $ 1,357,026 $ 291,000 0
Blue Chip 897,451 94,320 222,520 18,223,661 4,860,263 0
Capital Development 61,570 6,617 16,602 4,435,168 1,393,600 0
Charter 729,900 77,989 194,877 21,293,167 6,094,956 0
Constellation 387,098 42,867 107,761 7,732,171 2,039,664 0
Demographic Trends 366,853 39,521 99,471 4,125,411 869,292 0
Emerging Growth 24,763 2,708 7,195 262,139 52,714 0
Large Cap Basic Value 0 0 0 2,379 793 0
Large Cap Growth 36,266 4,263 9,474 414,122 88,038 0
Mid Cap 28,489 3,246 8,655 415,147 97,992 0
Weingarten 556,153 59,890 150,230 13,792,562 3,831,247 0
|
An estimate by category of actual fees paid by the following Funds under the Class A and C Plan during the fiscal year ended October 31, 2000, were allocated as follows:
CLASS C COMPENSATION COMPENSATION COMPENSATION
PRINTING TO TO TO
ADVERTISING AND MAILING SEMINARS UNDERWRITERS DEALERS SALES PERSONNEL
----------- ----------- -------- ------------ ------------ ---------------
Aggressive Growth $ 46,471 $ 5,549 $13,487 $ 362,524 $ 137,607 0
Blue Chip 284,792 30,582 74,401 1,957,079 3,209,486 0
Capital Development 20,512 2,135 6,470 145,592 564,557 0
Charter 172,008 19,282 50,282 1,300,452 1,333,613 0
Constellation 138,248 14,598 43,670 1,020,347 2,006,012 0
Demographic Trends 182,912 20,294 52,440 1,387,667 479,051 0
Emerging Growth 9,793 1,066 2,961 58,427 79,821 0
Large Cap Basic Value 192 0 0 575 368 0
Large Cap Growth 16,581 1,901 4,224 125,144 63,661 0
Mid Cap 14,306 1,640 3,417 109,343 39,965 0
Weingarten 136,794 15,326 39,733 1,029,802 1,089,248 0
|
The Plans require AIM Distributors to provide the Board of Trustees at least quarterly with a written report of the amounts expended pursuant to the Plans and the purposes for which such expenditures were made. The Board of Trustees reviews these reports in connection with their decisions with respect to the Plans.
As required by Rule 12b-1, the Plans and related forms of Shareholder Service Agreements were approved by the Board of Trustees, including a majority of the trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust and who have no direct or indirect financial interest in the operation of the Plans or in any agreements related to the Plans ("Qualified Trustees"). In approving the Plans in accordance with the requirements of Rule 12b-1, the trustees considered various factors and determined that there is a reasonable likelihood that the Plans would benefit each class of the Fund and its respective shareholders.
The Plans do not obligate the Fund 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 Fund will not be obligated to pay more than that fee. If AIM Distributors' expenses are less than the fee it receives, AIM Distributors will retain the full amount of the fee.
Unless the Plans are terminated earlier in accordance with their terms, the Plans continue in effect 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 Qualified Trustees.
The Plans may be terminated by the vote of a majority of the Qualified Trustees, or, with respect to a particular class, by the vote of a majority of the outstanding voting securities of that class.
Any change in the Plans that would increase materially the distribution expenses paid by the applicable class requires shareholder approval; otherwise, it may be amended by the trustees, including a majority of the Qualified Trustees, by votes cast in person at a meeting called for the purpose of voting upon such amendment. As long as the Plans are in effect, the selection or nomination of the Qualified Trustees is committed to the discretion of the Qualified Trustees. In the event the Class A and C Plan is amended in a manner which the Board of Trustees determines would materially increase the charges paid by holders of Class A shares under the Class A and C Plan, the Class B shares of the Fund will no longer convert into Class A shares of the Fund 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 Fund 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 Fund 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 Blue Chip, Capital Development, Demographic Trends, Emerging
Growth, Large Cap Basic Value and Large Cap Growth's Class A shares, 0.30% of
average daily net assets of Charter, Constellation, Mid Cap and Weingarten's
Class A shares and up to 0.25% of average daily net assets of Aggressive
Growth's Class A shares as compared to 1.00% of such assets of Aggressive
Growth, Blue Chip, Capital Development, Charter, Constellation, Demographic
Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth, Mid Cap and
Weingarten's Class B shares; (ii) the Class B Plan obligates the Class B shares
to continue to make payments to AIM Distributors following termination of the
Class B shares Distribution Agreement with respect to Class B shares sold by or
attributable to the distribution efforts of AIM Distributors unless there has
been a complete termination of the Class B Plan (as defined in such Plan); and
(iii) the Class B Plan expressly authorizes AIM Distributors to assign, transfer
or pledge its rights to payments pursuant to the Class B Plan.
THE DISTRIBUTOR
The Trust has entered into distribution arrangements with AIM Distributors, P.O. Box 4739, Houston, Texas 77210-4739, a registered broker-dealer and a wholly owned subsidiary of AIM, to act as the distributor in the continuous offering of Class A, Class B and Class C shares of the Funds. Certain trustees and officers of the Trust are affiliated with AIM Distributors. The Trust has entered into a Master Distribution Agreement with AIM Distributors relating to the Class A shares and Class C shares of the Funds and a Master Distribution Agreement with AIM Distributors relating to the Class B shares of the Funds. Both such Master Distribution Agreements are hereinafter collectively, referred to as the "Distribution Agreements."
The Distribution Agreements provide AIM Distributors with the exclusive right to distribute shares of the Retail Classes 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 of the Funds 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 prospectuses and statements of additional information of the Funds relating to public offerings made by AIM Distributors pursuant to the Distribution Agreements (other than those prospectuses and statements of additional information distributed to existing shareholders of the Funds), and any promotional or sales literature used by AIM Distributors or furnished by AIM Distributors to dealers in connection with the public offering of the Funds' shares, including expenses of advertising in connection with such public offerings. AIM Distributors has not undertaken to sell any specified number of shares of any classes of the Funds.
AIM Distributors expects to pay sales commissions from its own resources to dealers and institutions who sell Class B shares of the Funds and Class C shares of the 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 anticipates that it will require a number of years to recoup from Class B Plan payments the sales commissions paid to dealers and institutions in connection with sales of Class B shares.
In the future, if multiple distributors serve Aggressive Growth, Blue Chip, Capital Development, Charter, Constellation, Demographic Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth, Mid Cap or Weingarten, each such distributor (or its assignee or transferee) would receive a share of the payments under the Class B Plan based on the portion of such Fund's Class B shares sold by or attributable to the distribution efforts of that distributor.
AIM Distributors may pay sales commissions to dealers and institutions who sell Class C shares 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 the Funds) or AIM Distributors may terminate the Distribution Agreements on sixty (60) days' written notice without penalty. The Distribution Agreements will terminate in the event of their assignment. In the event the Class B shares Distribution Agreement is terminated, AIM Distributors would continue to receive payments of asset-based distribution fees in respect of the outstanding Class B shares attributable to the distribution efforts of AIM Distributors; provided, however, that a complete termination of the Class B Plan (as defined in such Plan) would terminate all payments to AIM Distributors. Termination of the Class B Plan or Distribution Agreement does not effect the obligations of Class B shareholders to pay contingent deferred sales charges.
From time to time, AIM Distributors may transfer and sell its right to payments under the Distribution Agreement 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 or periods ended October 31, 2000, 1999, and 1998:
2000 1999 1998
-------------------------- --------------------------- ---------------------------
SALES AMOUNT SALES AMOUNT SALES AMOUNT
CHARGES RETAINED CHARGES RETAINED CHARGES RETAINED
----------- ----------- ----------- ----------- ----------- -----------
Aggressive Growth $13,013,259 $ 2,075,726 $ 4,551,806 $ 11,447 $ 4,551,806 $ 763,601
Blue Chip 18,764,141 2,876,209 17,947,219 2,766,794 9,984,437 1,557,995
Capital Development 1,986,868 309,839 2,418,486 386,856 10,092,451 1,536,318
Charter 21,686,299 3,447,012 13,015,260 2 030,454 12,198,981 1,892,699
Constellation 32,281,350 5,088,774 20,107,015 3,182,696 34,242,618 5,261,392
Demographic Trends* 13,202,030 2,007,746 3,822,764 551,702 N/A N/A
Emerging Growth* 2,135,371 336,338 N/A N/A N/A N/A
Large Cap Basic Value* 80,721 12,029 0 0 N/A N/A
Large Cap Growth* 3,837,030 577,198 80,087 12,562 N/A N/A
Mid Cap* 2,652,130 422,379 N/A N/A N/A N/A
Weingarten 23,882,434 3,854,495 13,839,324 2,209,013 10,455,825 1,654,675
|
The following chart reflects the contingent deferred sales charges paid by Class A, Class B and Class C shareholders for the fiscal years or periods ended October 31, 2000, 1999 and 1998:
2000 1999 1998
---- ---- ----
Aggressive Growth*................ $ 55,615 $ 45,944 $ 86,211
Blue Chip*........................ 197,230 177,813 61,498
Capital Development*.............. 22,923 120,769 108,532
Charter*.......................... 148,823 96,080 161,792
Constellation*.................... 411,140 605,519 510,316
Demographic Trends*............... 91,369 3,886 N/A
Emerging Growth*.................. 9,199 N/A N/A
Large Cap Basic Value............. 502 0 N/A
Large Cap Growth*................. 15,696 373 N/A
Mid Cap*.......................... 23,692 N/A N/A
Weingarten........................ 139,887 156,642 55,685
|
* Class A shares of Demographic Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth and Mid Cap commenced operations on June 7, 1999, March 31, 2000, June 30, 1999, March 1, 1999 and November 1, 1999, respectively.
Class B shares of Aggressive Growth, Constellation, Demographic Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth and Mid Cap commenced operations on March 1, 1999, November 3, 1997, June 7, 1999, March 31, 2000, August 1, 2000, April 5, 1999 and November 1, 1999, respectively.
Class C shares of Aggressive Growth, Blue Chip, Capital Development, Charter, Constellation, Demographic Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth, Mid Cap and Weingarten commenced operations on March 1, 1999, August 4, 1997, August 4, 1997, August 4, 1997, August 4, 1997, June 7, 1999, March 31, 2000, August 1, 2000, April 5, 1999, November 1, 1999 and August 4, 1997, respectively.
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 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 Large Cap Opportunities 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 Fund II, AIM Weingarten Fund and AIM Worldwide Spectrum 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
|
(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 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
|
CATEGORY III. Certain AIM Funds are currently sold with a sales charge ranging from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000. These AIM Funds are the Class A shares of each of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund.
Dealer
Concession
Investor's Sales Charge -----------
------------------------------ As a
As a As a Percentage
Percentage Percentage of the
of the Public of the Net Public
Amount of Investment in Offering Amount Offering
Single Transaction Price Invested Price
--------------------- ------------- ---------- -----------
Less than $ 100,000 1.00% 1.01% 0.75%
$100,000 but less than $ 250,000 0.75 0.76 0.50
$250,000 but less than $1,000,000 0.50 0.50 0.40
|
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, or instead of, amounts paid to dealers as a sales commission, 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. 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 or of average daily net assets of the AIM Fund attributable to that particular dealer. 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. Any such bonus or incentive programs will not change the price paid by investors for the purchase of the applicable AIM Fund's shares or the amount that any particular AIM Fund will receive as proceeds from such sales. Dealers may not use sales of the AIM Funds' shares to qualify for any incentives to the extent that such incentives may be prohibited by the laws of any state.
AIM Distributors may make payments to dealers and institutions who are dealers of record for purchases of $1 million or more of Class A shares (or shares which normally involve payment of initial sales charges), which are sold at net asset value and are subject to a contingent deferred sales charge, for all AIM Funds other than Class A shares of each of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next $1 million of such purchases, plus 0.50% of the next $17 million of such purchases, plus 0.25% of amounts in excess of $20 million of such purchases. AIM Distributors may make payments to dealers and institutions who are dealers of record for purchases of $1 million or more of Class A shares (or shares which normally involve payment of initial sales charges), and which are sold at net asset value and are not subject to a contingent deferred sales charge, in an amount up to 0.10% of such purchases of Class A shares of AIM Limited Maturity Treasury Fund, and in an amount up to 0.25% of such purchases of Class A shares of AIM Tax-Free Intermediate Fund.
AIM Distributors may pay sales commissions to dealers and institutions who sell Class B shares of the AIM Funds at the time of such sales. Payments with respect to Class B shares will equal 4.00% of the purchase price of the Class B shares sold by the dealer or institution, and will consist of a sales commission equal to 3.75% of the purchase price of the Class B shares sold plus an advance of the first year service fee of 0.25% with respect to such shares. The portion of the payments to AIM Distributors
under the Class B Plan which constitutes an asset-based sales charge (0.75%) is intended in part to permit AIM Distributors to recoup a portion of such sales commissions plus financing costs.
AIM Distributors may pay sales commissions to dealers and institutions who sell Class C shares of the AIM Funds at the time of such sales. Payments with respect to Class C shares will equal 1.00% of the purchase price of the Class C shares sold by the dealer or institution, and will consist of a sales commission of 0.75% of the purchase price of the Class C shares sold plus an advance of the first year service fee of 0.25% with respect to such shares. AIM Distributors will retain all payments received by it relating to Class C shares for the first year after they are purchased. The portion of the payments to AIM Distributors under the Class A and C Plan attributable to Class C shares which constitutes an asset-based sales charge (0.75%) is intended in part to permit AIM Distributors to recoup a portion of on-going sales commissions to dealers plus financing costs, if any. After the first full year, AIM Distributors will make such payments quarterly to dealers and institutions based on the average net asset value of Class C shares which are attributable to shareholders for whom the dealers and institutions are designated as dealers of record. These commissions are not paid on sales to investors exempt from the CDSC, including shareholders of record of AIM Advisor Funds, Inc. on April 30, 1995, who purchase additional shares in any of the Funds on or after May 1, 1995, and in circumstances where AIM Distributors grants an exemption on particular transactions.
Exchanges of AIM Cash Reserve Shares of AIM Money Market Fund for Class B shares or Class C shares are considered sales of such Class B shares or Class C shares for purposes of the sales charges and dealer concessions discussed above.
AIM Distributors may pay investment dealers or other financial service firms for share purchases (measured on an annual basis) of Class A Shares of all AIM Funds except AIM Limited Maturity Treasury Fund, AIM Tax-Free Intermediate Fund and AIM Tax-Exempt Cash Fund sold at net asset value to an employee benefit plan as follows: 1% of the first $2 million of such purchases, plus 0.80% of the next $1 million of such purchases, plus 0.50% of the next $17 million of such purchases, plus 0.25% of amounts in excess of $20 million of such purchases and up to 0.10% of the net asset value of any Class A shares of AIM Limited Maturity Treasury Fund sold at net asset value to an employee benefit plan in accordance with this paragraph.
REDUCTIONS IN INITIAL SALES CHARGES
Reductions in the initial sales charges shown in the sales charge tables (quantity discounts) apply to purchases of shares of the AIM Funds that are otherwise subject to an initial sales charge, provided that such purchases are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of AIM Tax-Exempt Cash Fund, AIM Cash Reserve Shares of AIM Money Market Fund and Class B and Class C shares of the AIM Funds will not be taken into account in determining whether a purchase qualifies for a reduction in initial sales charges.
The term "purchaser" means:
o an individual and his or her spouse and children, including any trust established exclusively for the benefit of any such person; or a pension, profit-sharing, or other benefit plan established exclusively for the benefit of any such person, such as an IRA, Roth IRA, a single-participant money-purchase/profit-sharing plan or an individual participant in a 403(b) Plan (unless such 403(b) plan qualifies as the purchaser as defined below);
o a 403(b) plan, the employer/sponsor of which is an organization described under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), if:
a. the employer/sponsor must submit contributions for all participating employees in a single contribution transmittal (i.e., the Funds will not accept contributions submitted with respect to individual participants);
b. each transmittal must be accompanied by a single check or wire transfer; and
c. all new participants must be added to the 403(b) plan by submitting an application on behalf of each new participant with the contribution transmittal;
o a trustee or fiduciary purchasing for a single trust, estate or single fiduciary account (including a pension, profit-sharing or other employee benefit trust created pursuant to a plan qualified under Section 401 of the Code) and 457 plans, although more than one beneficiary or participant is involved;
o a Simplified Employee Pension (SEP), Salary Reduction and other Elective Simplified Employee Pension account (SAR-SEP) or a Savings Incentive Match Plans for Employees IRA (SIMPLE IRA), where the employer has notified the distributor in writing that all of its related employee SEP, SAR-SEP or SIMPLE IRA accounts should be linked; or
o any other organized group of persons, whether incorporated or not, provided the organization has been in existence for at least six months and has some purpose other than the purchase at a discount of redeemable securities of a registered investment company.
Investors or dealers seeking to qualify orders for a reduced initial sales charge must identify such orders and, if necessary, support their qualification for the reduced charge. AIM Distributors reserves the right to determine whether any purchaser is entitled, by virtue of the foregoing definition, to the reduced sales charge. No person or entity may distribute shares of the AIM Funds without payment of the applicable sales charge other than to persons or entities who qualify for a reduction in the sales charge as provided herein.
1. LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced initial sales charges by completing the appropriate section of the account application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is also available to holders of the Connecticut General Guaranteed Account, established for tax qualified group annuities, for contracts purchased on or before June 30, 1992. The LOI confirms such purchaser's intention as to the total investment to be made in shares of the AIM Funds (except for (i) Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund, (ii) Class B and Class C shares of the AIM Funds and (iii) shares of AIM Floating Rate Fund) within the following 13 consecutive months. By marking the LOI section on the account application and by signing the account application, the purchaser indicates that he understands and agrees to the terms of the LOI and is bound by the provisions described below.
Each purchase of fund shares normally subject to an initial sales charge made during the 13-month period will be made at the public offering price applicable to a single transaction of the total dollar amount indicated by the LOI, as described under "Sales Charges and Dealer Concessions." It is the purchaser's responsibility at the time of purchase to specify the account numbers that should be considered in determining the appropriate sales charge. The offering price may be further reduced as described under "Rights of Accumulation" if the Transfer Agent is advised of all other accounts at the time of the investment. Shares acquired through reinvestment of dividends and capital gains distributions will not be applied to the LOI. At any time during the 13-month period after meeting the original obligation, a purchaser may revise his intended investment amount upward by submitting a written and signed request. Such a revision will not change the original expiration date. By signing an LOI, a purchaser is not making a binding commitment to purchase additional shares, but if purchases made within the 13-month period do not total the amount specified, the investor will pay the increased amount of sales charge as described below. Purchases made within 90 days before signing an LOI will be applied toward completion of the LOI. The LOI effective date will be the date of the first purchase within the 90-day period. The Transfer Agent will process necessary adjustments upon the expiration or completion date of the LOI. Purchases made more than 90 days before signing an LOI will be applied toward completion of the LOI based on the value of the shares purchased calculated at the public offering price on the effective date of the LOI.
To assure compliance with the provisions of the 1940 Act, out of the initial purchase (or subsequent purchases if necessary) the Transfer Agent will escrow in the form of shares an appropriate dollar amount (computed to the nearest full share). All dividends and any capital gain distributions on the escrowed shares will be credited to the purchaser. All shares purchased, including those escrowed, will be registered in the purchaser's name. If the total investment specified under this LOI is completed within the 13-month period, the escrowed shares will be promptly released. If the intended investment is not completed, the purchaser will pay the Transfer Agent the difference between the sales charge on the specified amount and the amount actually purchased. If the purchaser does not pay such difference within 20 days of the expiration date, he irrevocably constitutes and appoints the Transfer Agent as his attorney to surrender for redemption any or all shares, to make up such difference within 60 days of the expiration date.
If at any time before completing the LOI Program, the purchaser wishes to cancel the agreement, he must give written notice to AIM Distributors. If at any time before completing the LOI Program the purchaser requests the Transfer Agent to liquidate or transfer beneficial ownership of his total shares, a cancellation of the LOI will automatically be effected. If the total amount purchased is less than the amount specified in the LOI, the Transfer Agent will redeem an appropriate number of escrowed shares equal to the difference between the sales charge actually paid and the sales charge that would have been paid if the total purchases had been made at a single time.
2. RIGHTS OF ACCUMULATION. A "purchaser," as previously
defined, may also qualify for reduced initial sales charges based upon such
purchaser's existing investment in shares of any of the AIM Funds (except for
(i) Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of
AIM Money Market Fund and (ii) Class B and Class C shares of the AIM Funds and
(iii) shares of AIM Floating Rate Fund) at the time of the proposed purchase.
Rights of Accumulation are also available to holders of the Connecticut General
Guaranteed Account, established for tax-qualified group annuities, for contracts
purchased on or before June 30, 1992. To determine whether or not a reduced
initial sales charge applies to a proposed purchase, AIM Distributors takes into
account not only the money which is invested upon such proposed purchase, but
also the value of all shares of the AIM Funds (except for (i) Class A shares of
AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money Market Fund,
(ii) Class B and Class C shares of the AIM Funds and (iii) shares of AIM
Floating Rate Fund) owned by such purchaser, calculated at their then current
public offering price. If a purchaser so qualifies for a reduced sales charge,
the reduced sales charge applies to the total amount of money then being
invested by such purchaser and not just to the portion that exceeds the
breakpoint above which a reduced sales charge applies. For example, if a
purchaser already owns qualifying shares of any AIM Fund with a value of $20,000
and wishes to invest an additional $20,000 in a fund with a maximum initial
sales charge of 5.50%, the reduced initial sales charge of 5.25% will apply to
the full $20,000 purchase and not just to the $15,000 in excess of the $25,000
breakpoint. To qualify for obtaining the discount applicable to a particular
purchase, the purchaser or his dealer must furnish AFS with a list of the
account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at net asset value (without payment of an initial sales charge) may be made in connection with: (a) the reinvestment of dividends and distributions from a fund; (b) exchanges of shares of certain funds; (c) use of the reinstatement privilege; or (d) a merger, consolidation or acquisition of assets of a fund.
The following purchasers will not pay initial sales charges on purchases of Class A shares because there is a reduced sales effort involved in sales to these purchasers:
o AIM Management and its affiliates, or their clients;
o Any current or retired officer, director or employee (and members of their immediate family) of AIM Management, its affiliates or The AIM Family of Funds--Registered Trademark--, and any
foundation, trust or employee benefit plan established exclusively for the benefit of, or by, such persons;
o Any current or retired officer, director, or employee (and members of their immediate family), of CIGNA Corporation or its affiliates, or of First Data Investor Services Group; and any deferred compensation plan for trustees of investment companies sponsored by CIGNA Investments, Inc. or its affiliates;
o Sales representatives and employees (and members of their immediate family) of selling group members or financial institutions that have arrangements with such selling group members;
o Purchases through approved fee-based programs;
o Employee benefit plans designated as purchasers as defined above, and non-qualified plans offered in conjunction therewith, provided the initial investment in the plan(s) is at least $1 million; the sponsor signs a $1 million LOI; the employer-sponsored plan(s) has at least 100 eligible employees; or all plan transactions are executed through a single omnibus account per Fund and the financial institution or service organization has entered into the appropriate agreements with the distributor. Section 403(b) plans sponsored by public educational institutions are not eligible for a sales charge exception based on the aggregate investment made by the plan or the number of eligible employees. Purchases of AIM Small Cap Opportunities Fund by such plans are subject to initial sales charges;
o Shareholders of record or discretionary advised clients of any investment advisor holding shares of AIM Weingarten Fund or AIM Constellation Fund on September 8, 1986, or of AIM Charter Fund on November 17, 1986, who have continuously owned shares having a market value of at least $500 and who purchase additional shares of the same Fund;
o Shareholders of record of Advisor Class shares of AIM International Growth Fund or AIM Worldwide Growth Fund on February 12, 1999 who have continuously owned shares of the AIM Funds.
o Unitholders of G/SET series unit investment trusts investing proceeds from such trusts in shares of AIM Weingarten Fund or AIM Constellation Fund; provided, however, prior to the termination date of the trusts, a unitholder may invest proceeds from the redemption or repurchase of his units only when the investment in shares of AIM Weingarten Fund and AIM Constellation Fund is effected within 30 days of the redemption or repurchase;
o A shareholder of a fund that merges or consolidates with an AIM Fund or that sells its assets to an AIM Fund in exchange for shares of an AIM Fund;
o Shareholders of the GT Global funds as of April 30, 1987 who since that date continually have owned shares of one or more of these funds;
o Certain former AMA Investment Advisers' shareholders who became shareholders of the AIM Global Health Care Fund in October 1989, and who have continuously held shares in the GT Global funds since that time;
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;
o Qualified State Tuition Programs created and maintained in accordance with Section 529 of the U.S. Internal Revenue Code of 1986, as amended; or
o Participants in select brokerage programs for defined contribution plans and rollover IRAs who purchase shares through an electronic brokerage platform offered by entities with which AIM Distributors has entered into a written agreement.
As used above, immediate family includes an individual and his or her spouse, children, parents and parents of spouse.
CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS
Former GT Global funds Class A shares that are subject to a
contingent deferred sales charge and that were purchased before June 1, 1998 are
entitled to the following waivers from the contingent deferred sales charge
otherwise due upon redemption: (1) minimum required distributions made in
connection with an IRA, Keogh Plan or custodial account under Section 403(b) of
the Code or other retirement plan following attainment of age 70 1/2; (2) total
or partial redemptions resulting from a distribution following retirement in the
case of a tax-qualified employer-sponsored retirement plan; (3) when a
redemption results from a tax-free return of an excess contribution pursuant to
Section 408(d)(4) or (5) of the Code or from the death or disability of the
employee; (4) redemptions pursuant to a Fund's right to liquidate a
shareholder's account involuntarily; (5) redemptions pursuant to distributions
from a tax-qualified employer-sponsored retirement plan, which is invested in
the former GT Global funds, which are permitted to be made without penalty
pursuant to the Code, other than tax-free rollovers or transfers of assets, and
the proceeds of which are reinvested in the former GT Global funds; (6)
redemptions made in connection with participant-directed exchanges between
options in an employer-sponsored benefit plan; (7) redemptions made for the
purpose of providing cash to fund a loan to a participant in a tax-qualified
retirement plan; (8) redemptions made in connection with a distribution from any
retirement plan or account that is permitted in accordance with the provisions
of Section 72(t)(2) of the Code, and the regulations promulgated thereunder; (9)
redemptions made in connection with a distribution from any retirement plan or
account that involves the return of an excess deferral amount pursuant to
Section 401(k)(8) or Section 402(g)(2) of the Code; (10) redemptions made in
connection with a distribution from a qualified profit-sharing or stock bonus
plan described in Section 401(k) of the Code to a participant or beneficiary
under Section 401(k)(2)(B)(IV) of the Code upon hardship of the covered employee
(determined pursuant to Treasury Regulation Section 1.401(k)-1(d)(2)); and (11)
redemptions made by or for the benefit of certain states, counties or cities, or
any instrumentalities, departments or authorities thereof where such entities
are prohibited or limited by applicable law from paying a sales charge or
commission.
Former GT Global funds Class B shares purchased before June 1,
1998 are subject to the following waivers from the contingent deferred sales
charge otherwise due upon redemption: (1) total or partial redemptions resulting
from a distribution following retirement in the case of a tax-qualified
employer-sponsored retirement; (2) minimum required distributions made in
connection with an IRA, Keogh Plan or custodial account under Section 403(b) of
the Code or other retirement plan following attainment of age 70 1/2; (3)
redemptions pursuant to distributions from a tax-qualified employer-sponsored
retirement plan, which is invested in the former GT Global funds, which are
permitted to be made without penalty pursuant to the Code, other than tax-free
rollovers or transfers of assets, and the proceeds of which are reinvested in
the former GT Global funds; (4) redemptions made in connection with
participant-directed exchanges between options in an employer-sponsored benefit
plan; (5) redemptions made for the purpose of providing cash to fund a loan to a
participant in a tax-qualified retirement plan; (6) redemptions made in
connection with a distribution from any retirement plan or account that is
permitted in accordance with the provisions of Section 72(t)(2) of the Code, and
the regulations promulgated thereunder; (7) redemptions made in connection with
a distribution from a qualified profit-sharing or stock bonus plan described in
Section 401(k) of the Code to a participant or beneficiary under Section
401(k)(2)(B)(IV) of the Code upon hardship of the covered employee (determined
pursuant to Treasury Regulation Section 1.401(k)-1(d)(2)); and (8) redemptions
made by or for the benefit of certain states, counties or cities, or any
instrumentalities, departments or authorities thereof where such entities are
prohibited or limited by applicable law from paying a sales charge or
commission.
CDSCs will not apply to the following:
o Additional purchases of Class C shares of AIM Advisor Flex Fund, AIM Advisor International Value Fund and AIM Advisor Real Estate Fund by shareholders of record on April 30, 1995, of these Funds, except that shareholders whose broker-dealers maintain a single omnibus account with AFS on behalf of those shareholders, perform sub-accounting functions with respect to those shareholders, and are unable to segregate shareholders of record prior to April 30, 1995, from shareholders whose accounts were opened after that date will be subject to a CDSC on all purchases made after March 1, 1996;
o Redemptions following the death or post-purchase disability of (1) any registered shareholders on an account or (2) a settlor of a living trust, of shares held in the account at the time of death or initial determination of post-purchase disability;
o Certain distributions from individual retirement accounts, Section 403(b) retirement plans, Section 457 deferred compensation plans and Section 401 qualified plans, where redemptions result from (i) required minimum distributions to plan participants or beneficiaries who are age 70-1/2 or older, and only with respect to that portion of such distributions that does not exceed 12% annually of the participant's or beneficiary's account value in a particular AIM Fund; (ii) in kind transfers of assets where the participant or beneficiary notifies the distributor of the transfer no later than the time the transfer occurs; (iii) tax-free rollovers or transfers of assets to another plan of the type described above invested in Class B or Class C shares of one or more of the AIM Funds; (iv) tax-free returns of excess contributions or returns of excess deferral amounts; and (v) distributions on the death or disability (as defined in the Internal Revenue Code of 1986, as amended) of the participant or beneficiary;
o Amounts from a Systematic Withdrawal Plan of up to an annual amount of 12% of the account value on a per fund basis, at the time the withdrawal plan is established, provided the investor reinvests his dividends;
o Liquidation by the Fund when the account value falls below the minimum required account size of $500;
o Investment account(s) of AIM; and
o Class C shares where the investor's dealer of record notifies the distributor prior to the time of investment that the dealer waives the payment otherwise payable to him.
Upon the redemption of shares of funds in sales charge Categories I and II (see "Sales Charges and Dealer Concessions") purchased in amounts of $1 million or more, no CDSC will be applied in the following situations:
o Shares held more than 18 months;
o Redemptions from employee benefit plans designated as qualified purchasers, as defined above, where the redemptions are in connection with employee terminations or withdrawals, provided the total amount invested in the plan is at least $1,000,000; the sponsor signs a $1 million LOI; or the employer-sponsored plan has at least 100 eligible employees; provided, however, that 403(b) plans sponsored by public educational institutions shall qualify for the CDSC waiver on the basis of the value of each plan participant's aggregate investment in the AIM Funds, and not on the aggregate investment made by the plan or on the number of eligible employees;
o Private foundations or endowment funds;
o Redemption of shares by the investor where the investor's dealer waives the amounts otherwise payable to it by the distributor and notifies the distributor prior to the time of investment; and
o Shares acquired by exchange from Class A shares of funds in sales charge Categories I and II unless the shares acquired by exchange are redeemed within 18 months of the original purchase of the Class A shares.
HOW TO PURCHASE AND REDEEM SHARES
A complete description of the manner by which shares of the Funds may be purchased appears in each Prospectus under the caption "Purchasing Shares - How to Purchase Shares."
The sales charge normally deducted on purchases of Class A shares of the Funds is used to compensate AIM Distributors and participating dealers for their expenses incurred in connection with the distribution of such shares. Since there is little expense associated with unsolicited orders placed directly with AIM Distributors by persons, who because of their relationship with the Funds or with AIM and its affiliates, are familiar with the Funds, or whose programs for purchase involve little expense (e.g., because of the size of the transaction and shareholder records required), AIM Distributors believes that it is appropriate and in the Funds' best interests that such persons be permitted to purchase Class A shares of the Funds through AIM Distributors without payment of a sales charge. The persons who may purchase Class A shares of the Funds without a sales charge are 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 of the Fund next determined after such order is received. Such arrangement is subject to timely receipt by AFS of all required documents in good order. If such documents are not received within a reasonable time after the order is placed, the order is subject to cancellation. While there is no charge imposed by the Funds or by AIM Distributors (other than any applicable CDSC) when shares are redeemed or repurchased, dealers may charge a fair service fee for handling the transaction. 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 the Fund not reasonably practicable.
BACKUP WITHHOLDING
Accounts submitted without a correct, certified taxpayer identification number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8 (for non-resident aliens) or Form W-9 (certifying exempt status) accompanying the registration information will generally be subject to backup withholding.
Each AIM Fund, and other payers, must, according to IRS regulations, withhold 31% of redemption payments and reportable dividends (whether paid or accrued) in the case of any shareholder who fails to provide the Fund with a taxpayer identification number "TIN") and a certification that he is not subject to backup withholding.
An investor is subject to backup withholding if:
(1) the investor fails to furnish a correct TIN to the
Fund, or
(2) the IRS notifies the Fund that the investor furnished
an incorrect TIN, or
(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 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 Fund share is determined as of the close of the NYSE on such day. For purposes of determining net asset value per share, futures and options contract closing prices which are available fifteen (15) minutes after the close of the customary trading session of the NYSE will generally be used. The net asset values per share of the Retail Classes and the Institutional Class will differ because different expenses are attributable to each class. The income or loss and the expenses (except those listed below) of a Fund are allocated to each class on the basis of the net assets of the Fund allocable to each such class, calculated as of the close of business on the previous business day, as adjusted for the current day's shareholder activity of each class. Distribution and service fees and transfer agency fees (to the extent different rates are charged to different classes) are allocated only to the class to which such expenses relate. The net asset value per share of a class is determined by subtracting the liabilities (e.g., the expenses) of the Fund allocated to the class from the assets of the Fund allocated to the class and dividing the result by the total number of shares outstanding of such class. Determination of each Fund's net asset value per share is made in accordance with generally accepted accounting principles.
A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price on the exchange where the security is principally traded or, lacking any sales on a particular day, the security is valued at the closing bid price on that day, 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 on the basis of prices provided by independent pricing services. Each security reported on the NASDAQ National Market System is valued at the last sales price on the valuation date, or lacking a last sale, at the closing bid price on that day; option contracts are valued at
the mean between the closing bid and asked prices on the exchange where the contracts are principally traded; futures contracts are valued at final settlement price quotations from the primary exchange on which they are traded. Debt obligations (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by an independent pricing service may be determined without exclusive reliance on quoted prices and may reflect appropriate factors such as dividend rate, yield, type of issue, coupon rate and maturity date. Securities for which market quotations are not readily available or for which market quotations are not reflective of fair value are valued at fair value as determined in good faith by or under the supervision of the Trust's officers in a manner specifically authorized by the Board of Trustees of the Trust. Short-term obligations having sixty (60) days or less to maturity are valued at amortized cost, which approximates market value. (See also "Purchasing Shares--How to Purchase Shares," and "Redeeming Shares--How to Redeem Shares" and "Pricing of Shares" in each Prospectus.)
Generally, trading in foreign securities, as well as corporate bonds, U.S. Government securities and money market instruments, is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of a Fund's shares are determined as of such times. Foreign currency exchange rates are also generally determined prior to the close of the NYSE. Occasionally, events affecting the values of such securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE which will 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.
Fund securities primarily traded in foreign markets may be traded in such markets on days which are not business days of the Fund. Because the net asset value per share of each Fund is determined only on business days of the Fund, the net asset value per share of a Fund may be significantly affected on days when an investor can not exchange or redeem shares of the Fund.
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS
Income dividends and capital gains distributions are automatically reinvested in additional shares of the same class of each Fund unless the shareholder has requested in writing to receive such dividends and distributions in cash or that they be invested in shares of another AIM Fund, subject to the terms and conditions set forth in the Prospectus under the caption "Special Plans--Automatic Dividend Investment." If a shareholder's account does not have any shares in it on a dividend or capital gains distribution payment date, the dividend or distribution will be paid in cash whether or not the shareholder has elected to have such dividends or distributions reinvested.
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.
QUALIFICATION AS A REGULATED INVESTMENT COMPANY
Each Fund has elected to be taxed as a regulated investment company under Subchapter M of the Code. As a regulated investment company, each Fund is not subject to federal income tax on the portion of its net investment income (i.e., taxable interest, dividends and other taxable ordinary income, net of expenses) and capital gain net income (i.e., the excess of capital gains over capital losses) that it distributes to shareholders, provided that it distributes at least 90% of its investment company taxable income (i.e., net investment income and the excess of net short-term capital gain over net long-term
capital loss) for the taxable year (the "Distribution Requirement"), and satisfies certain other requirements of the Code that are described below. Distributions by a Fund made during the taxable year or, under specified circumstances, within twelve months after the close of the taxable year, will be considered distributions of income and gains of the taxable year and can therefore satisfy the Distribution Requirement.
Each Fund may use "equalization accounting" in determining the portion of its net investment income and capital gain net income that has been distributed. A Fund that elects to use equalization accounting will allocate a portion of its realized investment income and capital gains to redemptions of Fund shares and will reduce the amount 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 Internal Revenue Service has not published any guidance concerning the methods to be used in allocating investment income and capital gains to redemptions of shares. In the event that the Internal Revenue Service determines that a Fund is using an improper method of allocation and has underdistributed its net investment income and capital gain net income for any taxable year, such Fund may be liable for additional federal income tax.
In addition to satisfying the Distribution Requirement, a regulated investment company must derive at least 90% of its gross income from dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition of stock or securities or foreign currencies (to the extent such currency gains are directly related to the regulated investment company's principal business of investing in stock or securities) and other income (including, but not limited to, gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities or currencies (the "Income Requirement").
In addition to satisfying the requirements described above, each Fund must satisfy an asset diversification test in order to qualify as a regulated investment company. Under this test, at the close of each quarter of each Fund's taxable year, at least 50% of the value of the Fund's assets must consist of cash and cash items, U.S. Government securities, securities of other regulated investment companies, and securities of other issuers (as to which the companies, and securities of other issuers, the Fund has not invested more than 5% of the value of the Fund's total assets in securities of such issuer and as to which the Fund does not hold more than 10% of the outstanding voting securities of such issuer), and no more than 25% of the value of its total assets may be invested in the securities of any one issuer (other than U.S. Government securities and securities of other regulated investment companies), or in two or more issuers which the Fund controls and which are engaged in the same or similar trades or businesses.
If for any taxable year a Fund does not qualify as a regulated investment company, all of its taxable income (including its net capital gain) will be subject to tax at regular corporate rates without any deduction for distributions to shareholders, and such distributions will be taxable as ordinary dividends to the extent of such Fund's current and accumulated earnings and profits. Such distributions generally will be eligible for the dividends received deduction in the case of corporate shareholders.
DETERMINATION OF TAXABLE INCOME OF A REGULATED INVESTMENT COMPANY
In general, gain or loss recognized by a Fund on the disposition of an asset will be a capital gain or loss. However, gain recognized on the disposition of a debt obligation purchased by a Fund at a market discount (generally, at a price less than its principal amount) will be treated as ordinary income to the extent of the portion of the market discount which accrued during the period of time the Fund held the debt obligation unless the Fund made an election to accrue market discount into income. In addition, under the rules of Code Section 988, gain or loss recognized on the disposition of a debt obligation denominated in a foreign currency or an option with respect thereto (but only to the extent attributable to changes in foreign currency exchange rates), and gain or loss recognized on the disposition of a foreign currency forward contract or of foreign currency itself, will generally be treated as ordinary income or loss.
In general, for purposes of determining whether capital gain
or loss recognized by a Fund on the disposition of an asset is long-term or
short-term, the holding period of the asset may be affected if (a) the asset is
used to close a "short sale" (which includes for certain purposes the
acquisition of a put option) or is substantially identical to another asset so
used, (b) the asset is otherwise held by the Fund as part of a "straddle", or
(c) the asset is stock and the Fund grants certain call options with respect
thereto. In addition, a Fund may be required to defer the recognition of a loss
on the disposition of an asset held as part of a straddle to the extent of any
unrecognized gain on the offsetting position. Any gain recognized by a Fund on
the lapse of, or any gain or loss recognized by a Fund from a closing
transaction with respect to, an option written by the Fund will generally be
treated as a short-term capital gain or loss. In the case of covered options,
gain or loss may be long-term.
Other hedging transactions that may be engaged in by certain of the Funds (such as short sales "against the box") may be subject to special tax treatment as "constructive sales" under Section 1259 of the Code if a Fund holds certain "appreciated financial positions" (defined generally as any interest (including a futures or forward contract, short sale or option) with respect to stock, certain debt instruments, or partnership interests if there would be a gain were such interest sold, assigned, or otherwise terminated at its fair market value). Upon entering into a constructive sales transaction with respect to an appreciated financial position, a Fund will be deemed to have constructively sold such appreciated financial position and will recognize gain as if such position were sold, assigned, or otherwise terminated at its fair market value on the date of such constructive sale (and will take into account any gain for the taxable year which includes such date) unless the closed transaction exception applies.
Some of the forward foreign currency exchange contracts, options and futures contracts that certain of the Funds may enter into will be subject to special tax treatment as "Section 1256 contracts." Section 1256 contracts that a fund holds are treated as if they are sold for their fair market value on the last business day of the taxable year, regardless of whether a taxpayer's obligations (or rights) under such contracts have terminated (by delivery, exercise, entering into a closing transaction or otherwise) as of such date. Any gain or loss recognized as a consequence of the year-end deemed disposition of Section 1256 contracts is combined with any other gain or loss that was previously recognized upon the termination of Section 1256 contracts during that taxable year. The net amount of such gain or loss for the entire taxable year (including gain or loss arising as a consequence of the year-end deemed sale of such contracts) is deemed to be 60% long-term (taxable at a maximum rate of 20% for non-corporate shareholders) and 40% short-term gain or loss. However, in the case of Section 1256 contracts that are forward foreign currency exchange contracts, the net gain or loss is separately determined and (as discussed above) generally treated as ordinary income or loss.
Because application of the rules governing Section 1256 contracts and constructive sales may affect the character of gains or losses and/or accelerate the recognition of gains or losses from the affected investment positions, the amount which must be distributed to shareholders and which will be taxed to shareholders as ordinary income or long-term capital gain may be increased as compared to a fund that did not engage in transactions involving Section 1256 contracts or constructive sales.
EXCISE TAX ON REGULATED INVESTMENT COMPANIES
A 4% non-deductible excise tax is imposed on a regulated investment company that fails to distribute in each calendar year an amount equal to 98% of ordinary taxable income for the calendar year and 98% of capital gain net income for the one-year period ended on October 31 of such calendar year (or, at the election of a regulated investment company having a taxable year ending November 30 or December 31, for its taxable year (a "taxable year election")). The balance of such income must be distributed during the next calendar year. For the foregoing purposes, a regulated investment company is treated as having distributed any amount on which it is subject to income tax for any taxable year ending in such calendar year.
For purposes of the excise tax, a regulated investment company shall (a) reduce its capital gain net income (but not below its net capital gain) by the amount of any net ordinary loss for the calendar year, and (b) exclude foreign currency gains and losses incurred after October 31 of any year (or after the
end of its taxable year if it has made a taxable year election) in determining the amount of ordinary taxable income for the current calendar year (and, instead, include such gains and losses in determining ordinary taxable income for the succeeding calendar year).
Each Fund intends to make sufficient distributions or deemed distributions of its ordinary taxable income and capital gain net income prior to the end of each calendar year to avoid liability for the excise tax. However, in the event that the Internal Revenue Service determines that a Fund is using an improper method of allocation for purposes of equalization accounting (as discussed above), such Fund may be liable for excise tax. Moreover, investors should note that a Fund may in certain circumstances be required to liquidate portfolio investments to make sufficient distributions to avoid excise tax liability.
FUND DISTRIBUTIONS
Each Fund anticipates distributing substantially all of its investment company taxable income for each taxable year. Such distributions will be taxable to shareholders as ordinary income and treated as dividends for federal income tax purposes, but they will qualify for the 70% dividends received deduction for corporations only to the extent discussed below.
A Fund may either retain or distribute to shareholders its net capital gain for each taxable year. Each Fund currently intends to distribute any such amounts. If net capital gain is distributed and designated as a capital gain dividend, it will be taxable to shareholders as long-term capital gain, regardless of the length of time the shareholder has held his shares or whether such gain was recognized by the Fund prior to the date on which the shareholder acquired his shares. A shareholder of a Fund electing to use equalization accounting, however, is likely to be taxed on less gain recognized prior to the date the shareholder acquires his shares since such gain will in many cases have been allocated to shares of the Fund that have previously been redeemed. Conversely, if a Fund elects to retain its net capital gain, the Fund will be taxed thereon (except to the extent of any available capital loss carry forwards) at the 35% corporate tax rate. If a Fund elects to retain its net capital gain, it is expected that the Fund also will elect to have shareholders treated as if each received a distribution of its pro rata share of such gain, with the result that each shareholder will be required to report its pro rata share of such gain on its tax return as long-term capital gain, will receive a refundable tax credit for its share of tax paid by the Fund on the gain, and will increase the tax basis for its shares by an amount equal to the deemed distribution less the tax credit.
Legislation enacted in 1997 lowers the maximum capital gain tax rate from 20% to 18% with respect to certain assets (including readily tradable stock) which are held for five years and for which the holding period begins after December 31, 2000. In connection with this new legislation, a Fund may make an election to treat any readily tradable stock it holds on January 1, 2001, as being sold on January 2, 2001, at its closing market price on that date and reacquired on that date for the same amount. If a Fund makes this election, it will recognize any gain, but not loss, on the deemed sale, which may cause a Fund to increase the amount of distributions that the Fund would make for its taxable year that includes January 2, 2001. The Funds have not yet determined whether they will make this election with respect to any shares in their respective portfolios.
Ordinary income dividends paid by the Fund with respect to a taxable year will qualify for the 70% dividends received deduction generally available to corporations (other than corporations, such as "S" corporations, which are not eligible for the deduction because of their special characteristics) to the extent of the amount of qualifying dividends received by the Fund from domestic corporations for the taxable year. A dividend received by the Fund will not be treated as a qualifying dividend (a) if it has been received with respect to any share of stock that the Fund has held for less than 46 days (91 days in the case of certain preferred stock), excluding for this purpose under the rules of Code Section 246(c)(3)and(4) (i) any day more than 45 days (or 90 days in the case of certain preferred stock) after the date on which the stock becomes ex-dividend, and (ii) any period during which the Fund has an option to sell, is under a contractual obligation to sell, has made and not closed a short sale of, has granted certain options to buy or has otherwise diminished its risk of loss by holding other positions with respect to, such (or substantially identical) stock; (b) to the extent that the Fund is under an obligation (pursuant to a short
sale or otherwise) to make related payments with respect to positions in
substantially similar or related property; or (c) to the extent the stock on
which the dividend is paid is treated as debt-financed under the rules of Code
Section 246A. Moreover, the dividends received deduction for a corporate
shareholder may be disallowed or reduced (a) if the corporate shareholder fails
to satisfy the foregoing requirements with respect to its shares of the Fund, or
(b) by application of Code Section 246(b) which in general limits the dividends
received deduction to 70% of the shareholder's taxable income (determined
without regard to the dividends received deduction and certain other items).
Alternative minimum tax ("AMT") is imposed in addition to, but only to the extent it exceeds, the regular tax and is computed at a maximum rate of 28% for non-corporate taxpayers and 20% for corporate taxpayers on the excess of the taxpayer's alternative minimum taxable income ("AMTI") over an exemption amount. The corporate dividends received deduction is not itself an item of tax preference that must be added back to taxable income or is otherwise disallowed in determining a corporation's AMTI. However, corporate shareholders will generally be required to take the full amount of any dividend received from the Fund into account (without a dividend received deduction) in determining their adjusted current earnings, which are used in computing an additional corporate preference item (i.e., 75% of the excess of a corporate taxpayer's adjusted current earnings over its AMTI (determined without regard to this item and the AMTI net operating loss deduction)) that is includable in AMTI. For taxable years beginning after 1997, however, certain small corporations are wholly exempt from the AMT.
Investment income that may be received by certain of the Funds from sources within foreign countries may be subject to foreign taxes withheld at the source. The United States has entered into tax treaties with many foreign countries which entitle any such Funds to a reduced rate of, or exemption from, taxes on such income. It is impossible to determine the effective rate of foreign tax in advance since the amount of any such Fund's assets to be invested in various countries is not known.
Distributions by a Fund that do not constitute ordinary income dividends or capital gain dividends will be treated as a return of capital to the extent of (and in reduction of) the shareholder's tax basis in his shares; any excess will be treated as gain from the sale of his shares, as discussed below.
Distributions by a Fund will be treated in the manner described above regardless of whether such distributions are paid in cash or reinvested in additional shares of the Fund (or of another Fund). Shareholders receiving a distribution in the form of additional shares will be treated as receiving a distribution in an amount equal to the fair market value of the shares received, determined as of the reinvestment date.
In addition, if the net asset value at the time a shareholder purchases shares of a Fund reflects undistributed net investment income or recognized capital gain net income, or unrealized appreciation in the value of the assets of the Fund, distributions of such amounts will be taxable to the shareholder in the manner described above, although such distributions economically constitute a return of capital to the shareholder.
Ordinarily, shareholders are required to take distributions by a Fund into account in the year in which the distributions are made. However, dividends declared in October, November or December of any year and payable to shareholders of record on a specified date in such a month will be deemed to have been received by the shareholders (and made by the Fund) on December 31 of such calendar year if such dividends are actually paid in January of the following year. Shareholders will be advised annually as to the U.S. federal income tax consequences of distributions made (or deemed made) during the year in accordance with the guidance that has been provided by the IRS.
The Funds will be required in certain cases to withhold and remit to the U.S. Treasury 31% of ordinary income dividends and capital gain dividends, and the proceeds of redemption of shares, paid to any shareholder (a) who has provided either an incorrect tax identification number or no number at all, (b) who is subject to backup withholding by the IRS for failure to report the receipt of interest or dividend income properly, or (c) who has failed to certify to a Fund that it is not subject to backup withholding or that it is a corporation or other "exempt recipient."
SALE OR REDEMPTION OF SHARES
A shareholder will recognize gain or loss on the sale or redemption of shares of a Fund in an amount equal to the difference between the proceeds of the sale or redemption and the shareholder's adjusted tax basis in the shares. All or a portion of any loss so recognized may be disallowed if the shareholder purchases other shares of the Fund within thirty (30) days before or after the sale or redemption. In general, any gain or loss arising from (or treated as arising from) the sale or redemption of shares of a Fund will be considered capital gain or loss and will be long-term capital gain or loss if the shares were held for longer than one year. Currently, any long-term capital gain recognized by a non-corporate shareholder will be subject to tax at a maximum rate of 20%. However, any capital loss arising from the sale or redemption of shares held for six months or less will be treated as a long-term capital loss to the extent of the amount of capital gain dividends received on such shares. For this purpose, the special holding period rules of Code Section 246(c)(3) and (4) (discussed above in connection with the dividends received deduction for corporations) generally will apply in determining the holding period of shares. Long-term capital gains of non-corporate taxpayers are currently taxed at a maximum rate that in some cases may be 19.6% lower than the maximum rate applicable to ordinary income. Capital losses in any year are deductible only to the extent of capital gains plus, in the case of a non-corporate taxpayer, $3,000 of ordinary income.
If a shareholder (a) incurs a sales load in acquiring shares of a Fund, (b) disposes of such shares less than 91 days after they are acquired, and (c) subsequently acquires shares of the Fund or another Fund at a reduced sales load pursuant to a right to reinvest at such reduced sales load acquired in connection with the acquisition of the shares disposed of, then the sales load on the shares disposed of (to the extent of the reduction in the sales load on the shares subsequently acquired) shall not be taken into account in determining gain or loss on the shares disposed of, but shall be treated as incurred on the acquisition of the shares subsequently acquired.
REINSTATEMENT PRIVILEGE
For federal income tax purposes, exercise of your reinstatement privilege 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. Loss may be deferred if you reinstate by purchasing shares of the same fund within 30 days of your original redemption (i.e., the wash sale rules will apply).
FOREIGN SHAREHOLDERS
Taxation of a shareholder who, as to the United States, is a nonresident alien individual, foreign trust or estate, foreign corporation, or foreign partnership ("foreign shareholder"), depends on whether the income from a Fund is "effectively connected" with a U.S. trade or business carried on by such shareholder. If the income from a Fund is not effectively connected with a U.S. trade or business carried on by a foreign shareholder, dividends and return of capital distributions (other than distributions of long-term capital gain) will be subject to U.S. withholding tax at the rate of 30% (or lower treaty rate) upon the gross amount of the distribution. Such a foreign shareholder would generally be exempt from U.S. federal income tax on gains realized on the sale of shares of a Fund, capital gain dividends and amounts retained by a Fund that are designated as undistributed net capital gains.
If the income from a Fund is effectively connected with a U.S. trade or business carried on by a foreign shareholder, then ordinary income dividends, capital gain dividends and any gains realized upon the sale or redemption of shares of the Fund will be subject to U.S. federal income tax at the rates applicable to U.S. citizens or domestic corporations.
In the case of foreign non-corporate shareholders, a Fund may be required to withhold U.S. federal income tax at a rate of 31% on distributions that are otherwise exempt from withholding tax (or
taxable at a reduced treaty rate) unless such shareholders furnish the Fund with proper notification of their foreign status.
The tax consequences to a foreign shareholder entitled to claim the benefits of an applicable tax treaty may be different from those described herein. Foreign shareholders are urged to consult their own tax advisers with respect to the particular tax consequences to them of an investment in a Fund, including the applicability of foreign taxes.
EFFECT OF FUTURE LEGISLATION; LOCAL TAX CONSIDERATIONS
The foregoing general discussion of U.S. federal income tax consequences is based on the Code and the regulations issued thereunder as in effect on March 1, 2001. Future legislative or administrative changes or court decisions may significantly change the conclusions expressed herein, and any such changes or decisions may have a retroactive effect with respect to the transactions contemplated herein.
Rules of state and local taxation for ordinary income dividends and capital gain dividends from regulated investment companies often differ from the rules for U.S. federal income taxation described above. Shareholders are urged to consult their tax advisers as to the consequences of these and other state and local tax rules affecting investment in the Funds.
PASSIVE FOREIGN INVESTMENT COMPANIES
Consistent with its investment objective, a Fund may invest in the stock of "passive foreign investment companies" ("PFICs"). A PFIC is any foreign corporation (with certain exceptions) that, in general, meets either of the following tests: (1) at least 75% of its gross income is passive or (2) an average of at least 50% of its assets produce, or are held for the production of, passive income. Under certain circumstances, a Fund will be subject to federal income tax on a portion of any "excess distribution" received on, or of any gain from the disposition of, stock of a PFIC (collectively "PFIC income"), plus interest thereon, even if the Fund distributes the PFIC income as a taxable dividend to its shareholders. The balance of the PFIC income will be included in the Fund's investment company taxable income and, accordingly, will not be taxable to it to the extent it distributes that income to its shareholders.
If a Fund invests in a PFIC and elects to treat the PFIC as a "qualified electing fund" ("QEF"), then in lieu of the foregoing tax and interest obligation, the Fund would be required to include in income each year its pro rata share of the QEF's ordinary earnings and net capital gain which most likely would have to be distributed by the Fund to satisfy the Distribution Requirement and avoid imposition of the Excise Tax--even if those earnings and gain were not received by the Fund from the QEF. In most instances it will be very difficult, if not impossible, to make this election because of certain requirements thereof.
The Fund may elect to "mark to market" its stock in any PFIC. "Marking-to-market," in this context, means including in ordinary income each taxable year the excess, if any, of the fair market value of the stock over a Fund's adjusted basis therein as of the end of that year. Pursuant to the election, a Fund also will be allowed to deduct (as an ordinary, not capital, loss) the excess, if any, of its adjusted basis in PFIC stock over the fair market value thereof as of the taxable year-end, but only to the extent of any net mark-to-market gains with respect to that stock included in income by the Fund for prior taxable years. A Fund's adjusted basis in each PFIC's stock subject to the election will be adjusted to reflect the amounts of income included and deductions taken thereunder. Regulations proposed in 1992 provided a similar election with respect to the stock of certain PFICs.
SHAREHOLDER INFORMATION
This information supplements the discussion in each Fund's Prospectus under the title "Shareholder Information."
TIMING OF PURCHASE ORDERS. It is the responsibility of the dealer to ensure that all orders are transmitted on a timely basis to the Transfer Agent. Any loss resulting from the dealer's failure to submit an order within the prescribed time frame will be borne by that dealer. If a check used to purchase shares does not clear, or if any investment order must be canceled due to nonpayment, the investor will be responsible for any resulting loss to an AIM Fund or to AIM Distributors.
SHARE CERTIFICATES. Shareholders of the Funds do not have the right to demand or require the Trust to issue share certificates, although the Trust in its sole discretion may issue them.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer Agent and all dividends and distributions are reinvested in shares of the applicable AIM Fund by the Transfer Agent. To provide funds for payments made under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full and fractional shares at their net asset value in effect at the time of each such redemption.
Payments under a Systematic Withdrawal Plan constitute taxable events. Since such payments are funded by the redemption of shares, they may result in a return of capital and in capital gains or losses, rather than in ordinary income. Because sales charges are imposed on additional purchases of shares (other than Class B or Class C Shares of the AIM Funds and AIM Cash Reserve Shares of AIM Money Market Fund), it is disadvantageous to effect such purchases while a Systematic Withdrawal Plan is in effect.
Each AIM Fund bears its share of the cost of operating the Systematic Withdrawal Plan.
TERMS AND CONDITIONS OF EXCHANGES. Normally, shares of an AIM Fund to be acquired by exchange are purchased at their net asset value or applicable offering price, as the case may be, determined on the date that such request is received, but under unusual market conditions such purchases may be delayed for up to five business days if it is determined that a fund would be materially disadvantaged by an immediate transfer of the proceeds of the exchange. If a shareholder is exchanging into a fund paying daily dividends, and the release of the exchange proceeds is delayed for the foregoing five-day period, such shareholder will not begin to accrue dividends until the sixth business day after the exchange.
EXCHANGES BY TELEPHONE. AIM Distributors has made arrangements
with certain dealers and investment advisory firms to accept telephone
instructions to exchange shares between any of the AIM Funds. AIM Distributors
reserves the right to impose conditions on dealers or investment advisors who
make telephone exchanges of shares of the funds, including the condition that
any such dealer or investment advisor enter into an agreement (which contains
additional conditions with respect to exchanges of shares) with AIM
Distributors. To exchange shares by telephone, a shareholder, dealer or
investment advisor who has satisfied the foregoing conditions must call AFS at
(800) 959-4246. If a shareholder is unable to reach AFS by telephone, he may
also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to the close of
the customary trading session of the NYSE. The Transfer Agent and AIM
Distributors may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction.
By signing an account application form, an investor appoints the Transfer Agent as his true and lawful attorney-in-fact to surrender for redemption any and all unissued shares held by the Transfer Agent
in the designated account(s), or in any other account with any of the AIM Funds, present or future, which has the identical registration as the designated account(s), with full power of substitution in the premises. The Transfer Agent and AIM Distributors are thereby authorized and directed to accept and act upon any telephone redemptions of shares held in any of the account(s) listed, from any person who requests the redemption proceeds to be applied to purchase shares in any one or more of the AIM Funds, provided that such fund is available for sale and provided that the registration and mailing address of the shares to be purchased are identical to the registration of the shares being redeemed. An investor acknowledges by signing the form that he understands and agrees that the Transfer Agent and AIM Distributors may not be liable for any loss, expense or cost arising out of any telephone exchange requests effected in accordance with the authorization set forth in these instructions if they reasonably believe such request to be genuine, but may in certain cases be liable for losses due to unauthorized or fraudulent transactions. Procedures for verification of telephone transactions may include recordings of telephone transactions (maintained for six months), requests for confirmation of the shareholder's Social Security Number and current address, and mailings of confirmations promptly after the transactions. The Transfer Agent reserves the right to modify or terminate the telephone exchange privilege at any time without notice. An investor may elect not to have this privilege by marking the appropriate box on the application. Then any exchanges must be effected in writing by the investor.
REDEMPTIONS BY TELEPHONE. By signing an account application form, an investor appoints the Transfer Agent as his true and lawful attorney-in-fact to surrender for redemption any and all unissued shares held by the Transfer Agent in the designated account(s), present or future, with full power of substitution in the premises. The Transfer Agent and AIM Distributors are thereby authorized and directed to accept and act upon any telephone redemptions of shares held in any of the account(s) listed, from any person who requests the redemption. An investor acknowledges by signing the form that he understands and agrees that the Transfer Agent and AIM Distributors may not be liable for any loss, expense or cost arising out of any telephone redemption requests effected in accordance with the authorization set forth in these instructions if they reasonably believe such request to be genuine, but may in certain cases be liable for losses due to unauthorized or fraudulent transactions. Procedures for verification of telephone transactions may include recordings of telephone transactions (maintained for six months), requests for confirmation of the shareholder's Social Security Number and current address, and mailings of confirmations promptly after the transactions. The Transfer Agent reserves the right to cease to act as attorney-in-fact subject to this appointment, and AIM Distributors reserves the right to modify or terminate the telephone redemption privilege at any time without notice. An investor may elect not to have this privilege by marking the appropriate box on the application. Then any redemptions must be effected in writing by the investor.
SIGNATURE GUARANTEES. In addition to those circumstances listed in the "Shareholder Information" section of each Fund's prospectus, signature guarantees are required in the following situations: (1) requests to transfer the registration of shares to another owner; (2) telephone exchange and telephone redemption authorization forms; (3) changes in previously designated wiring or electronic funds transfer instructions; and (4) written redemptions or exchanges of shares previously reported as lost, whether or not the redemption amount is under $50,000 or the proceeds are to be sent to the address of record. AIM Funds may waive or modify any signature guarantee requirements at any time.
Acceptable guarantors include banks, broker-dealers, credit unions, national securities exchanges, savings associations and any other organization, provided that such institution or organization qualifies as an "eligible guarantor institution" as that term is defined in rules adopted by the SEC, and further provided that such guarantor institution is listed in one of the reference guides contained in the Transfer Agent's current Signature Guarantee Standards and Procedures, such as certain domestic banks, credit unions, securities dealers, or securities exchanges. The Transfer Agent will also accept signatures with either: (1) a signature guaranteed with a medallion stamp of the STAMP Program, or (2) a signature guaranteed with a medallion stamp of the NYSE Medallion Signature Program, provided that in either event, the amount of the transaction involved does not exceed the surety coverage amount indicated on the medallion. For information regarding whether a particular institution or organization qualifies as an "eligible guarantor institution," an investor should contact the Client Services Department of AFS.
TRANSACTIONS BY INTERNET. An investor may effect transactions in his account through the Internet by selecting the AIM Internet Connect option on his completed account application form or completing an AIM Internet Connect Authorization Form. By signing either form the investor acknowledges and agrees that the Transfer Agent and AIM Distributors will not be liable for any loss, expense or cost arising out of any internet transaction effected in accordance with the instructions set forth in the forms if they reasonably believe such request to be genuine. Procedures for verification of internet transactions include requests for confirmation of the shareholder's personal identification number and mailing of confirmations promptly after the transactions. The investor also acknowledges that (1) if he no longer wants the AIM Internet Contract option, he will notify the Transfer Agent in writing, and (2) the AIM Internet Connect option may be terminated at any time by the AIM Funds.
DIVIDENDS AND DISTRIBUTIONS. In determining the amount of capital gains, if any, available for distribution, net capital gains are offset against available net capital losses, if any, carried forward from previous fiscal periods.
For funds that do not declare a dividend daily, such dividends and distributions will be reinvested at the net asset value per share determined on the ex-dividend date. For funds that declare a dividend daily, such dividends and distributions will be reinvested at the net asset value per share determined on the payable date.
Dividends on Class B and Class C shares are expected to be lower than those for Class A shares or AIM Cash Reserve Shares because of higher distribution fees paid by Class B and Class C shares. Dividends on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the shareholder at any time by notice to the Transfer Agent and are effective as to any subsequent payment if such notice is received by the Transfer Agent prior to the record date of such payment. Any dividend and distribution election remains in effect until the Transfer Agent receives a revised written election by the shareholder.
Any dividend or distribution paid by a fund which does not declare dividends daily has the effect of reducing the net asset value per share on the ex-dividend date by the amount of the dividend or distribution. Therefore, a dividend or distribution declared shortly after a purchase of shares by an investor would represent, in substance, a return of capital to the shareholder with respect to such shares even though it would be subject to income taxes.
MISCELLANEOUS INFORMATION
CHARGES FOR CERTAIN ACCOUNT INFORMATION
The Transfer Agent may impose certain copying charges for requests for copies of shareholder account statements and other historical account information older than the current year and the immediately preceding year.
AUDIT REPORTS
The Board of Trustees will issue to shareholders semi-annually the Funds' financial statements. Financial statements, audited by independent auditors, will be issued annually. Due to an investment in another AIM Fund, which KPMG LLP represented to the AIM Fund was inadvertent, and new SEC rules regarding auditor independence, KPMG LLP resigned as independent public accountants for the Company. The Board of Trustees of the Company has selected Ernst & Young LLP, 1221 McKinney, Suite 2400, Houston, Texas 77010-2007, as the independent public accountants to audit the financial statements of the Funds.
LEGAL MATTERS
Certain legal matters for the Trust have been passed upon by Ballard Spahr Andrews & Ingersoll, LLP, 1735 Market Street, Philadelphia, Pennsylvania 19103.
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company (the "Custodian"), 225 Franklin Street, Boston, Massachusetts 02110, is custodian of all securities and cash of the Funds. The Custodian attends to the collection of principal and income, pays and collects all monies for securities bought and sold by the Funds and performs certain other ministerial duties. A I M Fund Services, Inc., a wholly owned subsidiary of AIM, P. O. Box 4739, Houston, Texas 77210-4739, acts as transfer and dividend disbursing agent for the Funds. These services do not include any supervisory function over management or provide any protection against any possible depreciation of assets. The Funds pay the Custodian and the Transfer Agent such compensation as may be agreed upon from time to time.
Chase Bank of Texas, N.A., 712 Main, Houston, Texas 77002, serves as Sub-Custodian for retail 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).
PRINCIPAL HOLDERS OF SECURITIES
AGGRESSIVE GROWTH
To the best knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding Class A, Class B and Class C shares of Aggressive Growth as of February 5, 2001, and the amount of the outstanding shares held of record and beneficially owned by such holders are set forth below:
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ----------- -------------
Retail Class A Shares
Merrill Lynch Pierce Fenner & Smith 11.96% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
The Manufacturers Life Insurance Co. 7.18% 0
c/o Manulife Financial USA
Attn: Rosie Chuck Srs. Acctg.
250 Bloor Street East, 7th Floor
Toronto, Ontario, Canada M4W 1E5
|
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ----------- ------------
Retail Class B Shares
Merrill Lynch Pierce Fenner & Smith 5.55% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class C Shares
Merrill Lynch Pierce Fenner & Smith 17.22% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
|
BLUE CHIP
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding Class A, Class B and Class C shares of Blue Chip as of February 5, 2001, and the amount of the outstanding shares held of record and beneficially owned by such holders are set forth below:
Retail Class A Shares Merrill Lynch Pierce Fenner & Smith 7.88% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Retail Class B Shares Merrill Lynch Pierce Fenner & Smith 10.41% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Retail Class C Shares Merrill Lynch Pierce Fenner & Smith 19.14% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 |
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ------------ ------------
Banc One Securities Corp. FBO 7.31% 0
The One Investment Solution
Attn: Wrap Processing OH1-1244
1111 Polaris Pkwy.
Columbus, OH 43271-1244
|
CAPITAL DEVELOPMENT
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding Class A, Class B and Class C shares of Capital Development as of February 5, 2001, and the amount of the outstanding shares held of record and beneficially owned by such holders are set forth below:
Retail Class A Shares Merrill Lynch Pierce Fenner & Smith 9.86% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Retail Class B Shares Merrill Lynch Pierce Fenner & Smith 13.52% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Retail Class C Shares Merrill Lynch Pierce Fenner & Smith 17.42% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Coastgear & Company 6.77% 0 State Street Bank & Trust Attn: Kevin Smith 125 Rosemont Avenue Westwood, MA 02090 |
CHARTER
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding Class A, Class B and Class C shares of Charter as of February 5, 2001, and the Institutional Class of Charter as of February 5, 2001, and the amount of the outstanding shares held of record and beneficially owned by such holders, are set forth below:
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ------------ ------------
Retail Class A Shares
Merrill Lynch Pierce Fenner & Smith 12.10% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Great-West Life and Annuity Insurance Co. 6.54% 0
401(k) Unit Valuations
Attn: Mutual Fund Trading 2T2
8515 E. Orchard
Englewood, CO 80111
Retail Class B Shares
Merrill Lynch Pierce Fenner & Smith 8.36% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class C Shares
Merrill Lynch Pierce Fenner & Smith 17.81% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Institutional Class
Wells Fargo Bank Minnesota, NA 29.35% 0
P.O. Box 1533
Minneapolis, MN 54480-0000
City National Bank 14.99% 0
Attn: Trust Operations/Mutual Funds
P.O. Box 60520
Los Angeles, CA 90060-0520
Ruth and Ted Bauer Family Foundation 9.96% 0
11 Greenway Plaza, Suite 2600
Houston, TX 77046-1173
|
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ------------ ------------
Town of Watertown, Trustee 5.46% 0
c/o Great West Life Recordkeeper
8515 E. Orchard Rd. 2T2
Englewood, CO 80111
|
CONSTELLATION
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding Class A, Class B and Class C shares of Constellation as of February 5, 2001, and of the Institutional Class of Constellation as of February 5, 2001, and the amount of the outstanding shares held of record and beneficially owned by such holders, are set forth below:
Retail Class A Shares Merrill Lynch Pierce Fenner & Smith 14.77% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Retail Class B Shares Merrill Lynch Pierce Fenner & Smith 7.31% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Retail Class C Shares Merrill Lynch Pierce Fenner & Smith 21.98% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Banc One Securities Corp. FBO 7.31% 0 The One Investment Solution Attn: Wrap Processing OH1-1244 1111 Polaris Pkwy. Columbus, OH 43271-1244 |
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ------------ ------------
Institutional Class
Nationwide Insurance Company - Ohio 57.62% 0
P.O. Box 182029
C/O IPO Portfolio Accounting
Columbus, Ohio 43218
Wells Fargo Bank West NA, Custodian FBO 11.46% 0
c/o Great West Recordkeeper
8515 E. Orchard Rd. 2T2
Englewood, CO 80111
Nationwide Insurance Company - DCVA 7.88%
c/o IPO Portfolio Accounting
P.O. Box 182029
Columbus, OH 43218-2029
State of Vermont Deferred Compensation Plan 6.57% 0
Attn: Planned Valuation Services
2 Tower Center
East Brunswick, NJ 08816
Board of TTEE's, NC Public Employee 6.42% 0
Deferred Com.
c/o Great-West Life
8515 E. Orchard Rd. 2T2
Englewood, CO 80111
Nationwide Insurance Company - GPVA II 6.36% 0
c/o IPO Portfolio Accounting
P.O. Box 182029
Columbus, OH 43218-2029
|
DEMOGRAPHIC TRENDS
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding Class A, Class B and Class C shares of Demographic Trends as of February 5, 2001, and the amount of the outstanding shares held of record and beneficially owned by such holders, are set forth below:
Retail Class A Shares Merrill Lynch Pierce Fenner & Smith 8.21% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 |
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ------------ ------------
Retail Class B Shares
Merrill Lynch Pierce Fenner & Smith 16.38% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class C Shares
Merrill Lynch Pierce Fenner & Smith 20.33% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
|
EMERGING GROWTH
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding Class A, Class B and Class C shares of Emerging Growth as of February 5, 2001, and the amount of the outstanding shares held of record and beneficially owned by such holders, are set forth below:
Retail Class A Shares Merrill Lynch Pierce Fenner & Smith 8.94% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Retail Class B Shares Merrill Lynch Pierce Fenner & Smith 8.78% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Retail Class C Shares Merrill Lynch Pierce Fenner & Smith 22.86% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 |
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ------------ ------------
|
LARGE CAP BASIC VALUE
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding Class A shares of Large Cap Basic Value as of February 5, 2001, and the amount of the outstanding shares held of record and beneficially owned by such holders, are set forth below:
Retail Class A Shares Merrill Lynch Pierce Fenner & Smith 8.72% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Jonathan C. Schoolar 0 8.68% 3722 Tartan Lane Houston, TX 77025 Retail Class B Shares Merrill Lynch Pierce Fenner & Smith 19.86% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Retail Class C Shares Merrill Lynch Pierce Fenner & Smith 11.72% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 |
LARGE CAP GROWTH
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding Class A, Class B and Class C shares of Large Cap Growth as of February 5, 2001, and the amount of the outstanding shares held of record and beneficially owned by such holders, are set forth below:
Retail Class A Shares Merrill Lynch Pierce Fenner & Smith 9.46% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 |
* The Funds have no knowledge as to whether all or any portion of the shares owned of record only are also owned beneficially.
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ------------ ------------
Retail Class B Shares
Merrill Lynch Pierce Fenner & Smith 10.23% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class C Shares
Merrill Lynch Pierce Fenner & Smith 16.24% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
|
MID CAP
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding Class A, Class B and Class C shares of Mid Cap as of February 5, 2001, and the amount of the outstanding shares held of record and beneficially owned by such holders, are set forth below:
Retail Class A Shares Merrill Lynch Pierce Fenner & Smith 7.75% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Retail Class B Shares Merrill Lynch Pierce Fenner & Smith 17.07% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Retail Class C Shares Merrill Lynch Pierce Fenner & Smith 20.53% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 |
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ------------ ------------
|
WEINGARTEN
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding Class A, Class B and Class C shares of Weingarten as of February 5, 2001, and the Institutional Class of Weingarten as of February 5, 2001, and the amount of the outstanding shares held of record and beneficially owned by such holders, are set forth below:
Retail Class A Shares Merrill Lynch Pierce Fenner & Smith 15.42% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Great-West Life and Annuity 5.17% 0 Insurance Co. 401(K) Unit Valuations Attn: Mutual Fund Trading 2T2 8515 E. Orchard Englewood, CO 80111 Retail Class B Shares Merrill Lynch Pierce Fenner & Smith 8.74% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Retail Class C Shares Merrill Lynch Pierce Fenner & Smith 19.53% 0 FBO The Sole Benefit of Customers Attn: Fund Administration 4800 Deer Lake Dr. East, 2nd Floor Jacksonville, FL 32246 Institutional Class Wells Fargo Bank West NA, Custodian FBO 63.25% 0 c/o Great West Recordkeeper 8515 E. Orchard Rd. 2T2 Englewood, CO 80111 |
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ------------ ------------
Peoples Two Ten Company 14.77% 0
c/o Summit Bank
Attn: Trust Operations, 7th Floor
P.O. Box 821
Hackensack, NJ 07602
AIM Foundation 5.49% 0
11 Greenway Plaza, Suite 2600
Houston, TX 77046
|
As of February 5, 2001, the trustees and officers of the Trust as a group owned beneficially less than 1% of the outstanding shares of each class of Aggressive Growth, Blue Chip, Capital Development, Charter, Constellation, Demographic Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth, Mid Cap and Weingarten.
OTHER INFORMATION
Each Prospectus and this Statement of Additional Information omit certain information contained in the Registration Statement which the Trust 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.
APPENDIX
DESCRIPTION OF COMMERCIAL PAPER RATINGS
STANDARD & POOR'S
Commercial paper rated by Standard & Poor's has the following characteristics: Liquidity ratios are adequate to meet cash requirements. Long-term senior debt is rated "A" or better. The issuer has access to at least two additional channels of borrowing. Basic earnings and cash flow have an upward trend with allowance made for unusual circumstances. Typically, the issuer's industry is well-established, and the issuer has a strong position within the industry. The reliability and quality of management are unquestioned. The relative strength or weakness of the above factors determines whether the issuer's Commercial Paper is rated A-1 or A-2. A-1 indicates the degree of safety regarding time of payment is very strong. A-2 indicates that the capacity for timely payment is strong, but that the relative degree of safety is not as overwhelming as for issues designated A-1.
MOODY'S
Prime-1 and Prime-2 are the two highest commercial paper
ratings assigned by Moody's Investors Service. Among the factors considered by
Moody's in assigning ratings are the following: (a) evaluation of the management
of the issuer; (b) economic evaluation of the issuer's industry or industries
and an appraisal of speculative-type risks which may be inherent in certain
areas; (c) evaluation of the issuer's products in relation to competition and
customer acceptance; (d) liquidity; (e) amount and quality of long-term debt;
(f) trend of earnings over a period of ten years; (g) financial strength of a
parent company and the relationships which exist with the issuer; and (h)
recognition by the management of obligations which may be present or may arise
as a result of public interest questions and preparations to meet such
obligations. Relative strength or weakness of the above factors determines
whether the issuer's commercial paper is rated Prime-1 or Prime-2.
DESCRIPTION OF CORPORATE BOND RATINGS
STANDARD & POOR'S
AAA -- Bonds rated AAA have the highest rating assigned by Standard & Poor's to a debt obligation. Capacity to pay interest and repay principal is extremely strong.
AA -- Bonds rated AA have a very strong capacity to pay interest and repay principal and differ from the highest rated issues only in small degree.
MOODY'S
Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt-edge." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group, they comprise what are generally known as "high-grade bonds." They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities.
FINANCIAL STATEMENTS
FS
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
AIM Equity Funds:
We have audited the accompanying statement of assets and liabilities of AIM Aggressive Growth Fund (a portfolio of AIM Equity Funds), including the schedule of investments, as of October 31, 2000, the related statement of operations for the year then ended, the statement of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AIM Aggressive Growth Fund as of October 31, 2000, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the five-year period then ended, in conformity with accounting principles generally accepted in the United States of America.
/s/ KPMG LLP December 6, 2000 Houston, Texas |
FS-1
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY
INTERESTS-97.79%
AIR FREIGHT-0.32%
Expeditors International of
Washington, Inc. 300,000 $ 15,562,500
===============================================================
BANKS (REGIONAL)-1.11%
Bank United Corp.-Class A 325,000 18,423,437
---------------------------------------------------------------
Southwest Bancorp. of Texas,
Inc.(a) 1,000,000 36,500,000
===============================================================
54,923,437
===============================================================
BIOTECHNOLOGY-1.14%
Aurora Biosciences Corp.(a) 200,000 12,187,500
---------------------------------------------------------------
Celera Genomics(a) 150,000 10,125,000
---------------------------------------------------------------
Techne Corp.(a) 300,000 33,825,000
===============================================================
56,137,500
===============================================================
BROADCASTING (TELEVISION, RADIO &
CABLE)-0.28%
Hispanic Broadcasting Corp.(a) 450,000 14,062,500
===============================================================
BUILDING MATERIALS-0.15%
Simpson Manufacturing Co., Inc.(a) 171,100 7,293,137
===============================================================
CHEMICALS (SPECIALTY)-0.70%
OM Group, Inc. 750,000 34,687,500
===============================================================
COMMUNICATIONS EQUIPMENT-7.49%
BreezeCom Ltd. (Israel)(a) 500,000 9,281,250
---------------------------------------------------------------
CommScope, Inc.(a) 759,000 19,212,187
---------------------------------------------------------------
Comverse Technology, Inc.(a) 500,000 55,875,000
---------------------------------------------------------------
Digital Lightwave, Inc.(a) 250,000 12,671,875
---------------------------------------------------------------
Dycom Industries, Inc.(a) 549,950 20,691,869
---------------------------------------------------------------
Finisar Corp.(a) 500,000 14,406,250
---------------------------------------------------------------
MasTec, Inc.(a) 450,000 13,021,875
---------------------------------------------------------------
Polycom, Inc.(a) 2,000,000 130,000,000
---------------------------------------------------------------
Proxim, Inc.(a) 750,000 45,468,750
---------------------------------------------------------------
REMEC, Inc.(a) 1,000,000 29,812,500
---------------------------------------------------------------
Tollgrade Communications, Inc.(a) 150,000 14,362,500
---------------------------------------------------------------
UTStarcom, Inc.(a) 250,000 5,000,000
===============================================================
369,804,056
===============================================================
COMPUTERS (HARDWARE)-1.80%
Concurrent Computer Corp.(a) 400,000 7,050,000
---------------------------------------------------------------
National Instruments Corp.(a) 1,750,000 81,703,125
===============================================================
88,753,125
===============================================================
COMPUTERS (NETWORKING)-2.71%
Avocent Corp.(a) 300,000 21,281,250
---------------------------------------------------------------
Emulex Corp.(a) 500,000 73,437,500
---------------------------------------------------------------
MRV Communications, Inc.(a) 425,000 16,787,500
---------------------------------------------------------------
SonicWALL, Inc.(a) 1,500,000 22,406,250
===============================================================
133,912,500
===============================================================
|
MARKET
SHARES VALUE
COMPUTERS (PERIPHERALS)-4.80%
Actel Corp.(a)(b) 1,500,000 $ 54,937,500
---------------------------------------------------------------
QLogic Corp.(a) 1,250,000 120,937,500
---------------------------------------------------------------
SanDisk Corp.(a) 500,000 26,867,187
---------------------------------------------------------------
Silicon Storage Technology,
Inc.(a) 1,500,000 34,125,000
===============================================================
236,867,187
===============================================================
COMPUTERS (SOFTWARE &
SERVICES)-8.09%
Aspen Technology, Inc.(a) 1,000,000 41,312,500
---------------------------------------------------------------
Business Objects S.A.-ADR
(France)(a) 300,000 23,639,062
---------------------------------------------------------------
Gemstar-TV Guide International,
Inc.(a) 150,000 10,284,375
---------------------------------------------------------------
Inforte Corp.(a) 600,000 18,375,000
---------------------------------------------------------------
Jack Henry & Associates 1,369,400 75,317,000
---------------------------------------------------------------
Macrovision Corp.(a) 500,000 36,437,500
---------------------------------------------------------------
Mercury Interactive Corp.(a) 200,000 22,200,000
---------------------------------------------------------------
Micromuse Inc.(a) 100,000 16,968,750
---------------------------------------------------------------
NetIQ Corp.(a) 141,195 12,160,419
---------------------------------------------------------------
Peregrine Systems, Inc.(a) 400,000 9,600,000
---------------------------------------------------------------
Rational Software Corp.(a) 400,000 23,875,000
---------------------------------------------------------------
SeaChange International, Inc.(a) 250,000 5,500,000
---------------------------------------------------------------
Secure Computing Corp.(a) 1,000,000 23,000,000
---------------------------------------------------------------
SERENA Software, Inc.(a) 500,000 25,437,500
---------------------------------------------------------------
Ulticom, Inc.(a) 300,000 14,325,000
---------------------------------------------------------------
Verity, Inc.(a) 750,000 17,625,000
---------------------------------------------------------------
WebTrends Corp.(a) 500,000 16,070,313
---------------------------------------------------------------
Zengine, Inc.(a) 609,026 7,460,569
===============================================================
399,587,988
===============================================================
ELECTRICAL EQUIPMENT-4.84%
Black Box Corp.(a) 550,000 36,231,250
---------------------------------------------------------------
Cree, Inc.(a) 250,000 24,812,500
---------------------------------------------------------------
Molex, Inc.-Class A 1,000,025 39,313,483
---------------------------------------------------------------
Plexus Corp.(a) 1,000,000 63,062,500
---------------------------------------------------------------
Sanmina Corp.(a) 400,000 45,725,000
---------------------------------------------------------------
Vishay Intertechnology, Inc.(a) 1,000,000 30,000,000
===============================================================
239,144,733
===============================================================
ELECTRONICS (COMPONENT DISTRIBUTORS)-3.49%
Power-One, Inc.(a) 2,000,000 141,875,000
---------------------------------------------------------------
Sawtek Inc.(a) 600,000 30,525,000
===============================================================
172,400,000
===============================================================
ELECTRONICS (DEFENSE)-1.41%
Aeroflex Inc.(a) 300,000 17,850,000
---------------------------------------------------------------
Anaren Microwave, Inc.(a) 500,000 52,000,000
===============================================================
69,850,000
===============================================================
ELECTRONICS
(INSTRUMENTATION)-3.63%
Alpha Industries, Inc.(a)(b) 3,000,000 119,625,000
---------------------------------------------------------------
PerkinElmer, Inc. 200,000 23,900,000
---------------------------------------------------------------
|
FS-2
MARKET
SHARES VALUE
ELECTRONICS (INSTRUMENTATION)-(CONTINUED)
Tektronix, Inc. 500,000 $ 35,625,000
===============================================================
179,150,000
===============================================================
ELECTRONICS
(SEMICONDUCTORS)-11.43%
Cirrus Logic, Inc.(a) 500,000 21,562,500
---------------------------------------------------------------
Dallas Semiconductor Corp. 1,500,000 59,437,500
---------------------------------------------------------------
GlobeSpan, Inc.(a) 150,000 11,540,625
---------------------------------------------------------------
Integrated Device Technology,
Inc.(a) 2,250,000 126,703,125
---------------------------------------------------------------
Intersil Holding Corp.(a) 750,000 35,953,125
---------------------------------------------------------------
Micrel, Inc.(a) 600,000 27,150,000
---------------------------------------------------------------
Microchip Technology Inc.(a) 4,000,000 126,500,000
---------------------------------------------------------------
Pixelworks, Inc.(a) 500,000 16,656,250
---------------------------------------------------------------
Semtech Corp.(a) 850,000 27,412,500
---------------------------------------------------------------
SIPEX Corp.(a) 1,000,000 39,375,000
---------------------------------------------------------------
TranSwitch Corp.(a) 600,000 34,650,000
---------------------------------------------------------------
Zoran Corp.(a)(b) 750,000 37,593,750
===============================================================
564,534,375
===============================================================
EQUIPMENT (SEMICONDUCTOR)-0.42%
Credence Systems Corp.(a) 350,000 6,562,500
---------------------------------------------------------------
EMCORE Corp.(a) 350,000 14,350,000
===============================================================
20,912,500
===============================================================
FINANCIAL (DIVERSIFIED)-0.96%
SEI Investments Co. 525,000 47,643,750
===============================================================
FOODS-0.70%
Hain Celestial Group, Inc.(a) 875,000 34,726,563
===============================================================
FOOTWEAR-0.26%
Vans, Inc.(a)(b) 1,000,000 12,937,500
===============================================================
HEALTH CARE (DRUGS-GENERIC &
OTHER)-0.95%
Alpharma Inc.-Class A 749,934 29,106,813
---------------------------------------------------------------
Medicis Pharmaceutical Corp.-Class
A(a) 243,000 17,890,875
===============================================================
46,997,688
===============================================================
HEALTH CARE (HOSPITAL
MANAGEMENT)-3.70%
Health Management Associates,
Inc.-Class A(a) 2,500,000 49,531,250
---------------------------------------------------------------
LifePoint Hospitals, Inc.(a) 1,000,000 38,750,000
---------------------------------------------------------------
Province Healthcare Co.(a)(b) 1,800,000 75,825,000
---------------------------------------------------------------
Triad Hospitals, Inc.(a) 675,000 18,731,250
===============================================================
182,837,500
===============================================================
HEALTH CARE (MANAGED CARE)-0.91%
First Health Group Corp.(a) 1,150,000 44,850,000
===============================================================
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-0.67%
Biosite Diagnostics Inc.(a) 314,100 6,910,200
---------------------------------------------------------------
Novoste Corp.(a) 250,000 6,312,500
---------------------------------------------------------------
Zoll Medical Corp.(a) 400,000 19,825,000
===============================================================
33,047,700
===============================================================
|
MARKET
SHARES VALUE
HEALTH CARE (SPECIALIZED SERVICES)-2.49%
HEALTHSOUTH Corp.(a) 3,000,000 $ 36,000,000
---------------------------------------------------------------
Laboratory Corp. of America
Holdings(a) 200,000 26,975,000
---------------------------------------------------------------
Lincare Holdings, Inc.(a) 600,000 25,237,500
---------------------------------------------------------------
Quest Diagnostics Inc.(a) 225,000 21,656,250
---------------------------------------------------------------
RehabCare Group, Inc.(a) 307,300 13,271,519
===============================================================
123,140,269
===============================================================
INSURANCE (PROPERTY-
CASUALTY)-0.25%
HCC Insurance Holdings, Inc. 650,000 12,390,625
===============================================================
INVESTMENT MANAGEMENT-0.68%
Affiliated Managers Group, Inc.(a) 300,000 18,037,500
---------------------------------------------------------------
Eaton Vance Corp. 316,100 15,745,731
===============================================================
33,783,231
===============================================================
MANUFACTURING (SPECIALIZED)-0.33%
Insituform Technologies,
Inc.-Class A(a) 450,000 16,059,375
===============================================================
METAL FABRICATORS-1.16%
Shaw Group Inc. (The)(a) 700,000 57,050,000
===============================================================
NATURAL GAS-0.51%
Kinder Morgan, Inc. 650,000 25,065,625
===============================================================
OFFICE EQUIPMENT & SUPPLIES-0.19%
MCSi, Inc.(a) 330,781 9,509,954
===============================================================
OIL & GAS (DRILLING &
EQUIPMENT)-5.33%
Cal Dive International, Inc.(a) 500,000 24,875,000
---------------------------------------------------------------
Cooper Cameron Corp.(a) 500,000 27,250,000
---------------------------------------------------------------
Core Laboratories N.V.
(Netherlands)(a) 900,000 19,406,250
---------------------------------------------------------------
Dril-Quip, Inc.(a) 300,000 9,900,000
---------------------------------------------------------------
Hanover Compressor Co.(a) 1,000,000 32,625,000
---------------------------------------------------------------
Marine Drilling Cos., Inc.(a) 1,250,000 29,843,750
---------------------------------------------------------------
Maverick Tube Corp.(a) 500,000 7,781,250
---------------------------------------------------------------
National-Oilwell, Inc.(a) 1,500,000 43,875,000
---------------------------------------------------------------
Patterson Energy, Inc.(a) 1,500,000 42,187,500
---------------------------------------------------------------
Pride International, Inc.(a) 1,000,000 25,312,500
===============================================================
263,056,250
===============================================================
OIL & GAS (EXPLORATION &
PRODUCTION)-0.69%
Evergreen Resources, Inc.(a) 275,100 7,565,250
---------------------------------------------------------------
Newfield Exploration Co.(a) 500,000 18,875,000
---------------------------------------------------------------
Stone Energy Corp.(a) 150,000 7,680,000
===============================================================
34,120,250
===============================================================
RESTAURANTS-1.07%
CEC Entertainment Inc.(a) 800,000 25,500,000
---------------------------------------------------------------
Sonic Corp.(a) 750,000 27,375,000
===============================================================
52,875,000
===============================================================
RETAIL (BUILDING SUPPLIES)-0.23%
Fastenal Co. 200,000 11,487,500
===============================================================
RETAIL (COMPUTERS &
ELECTRONICS)-1.71%
CDW Computer Centers, Inc.(a) 1,125,000 72,492,188
---------------------------------------------------------------
|
FS-3
MARKET
SHARES VALUE
RETAIL (COMPUTERS & ELECTRONICS)-(CONTINUED)
Tweeter Home Entertainment Group,
Inc.(a) 500,000 $ 12,031,250
===============================================================
84,523,438
===============================================================
RETAIL (DISCOUNTERS)-0.91%
Dollar Tree Stores, Inc.(a) 1,150,000 44,993,750
===============================================================
RETAIL (SPECIALTY)-1.42%
Genesco, Inc.(a) 1,000,000 17,750,000
---------------------------------------------------------------
Linens 'n Things, Inc.(a) 1,250,000 38,437,500
---------------------------------------------------------------
Venator Group, Inc.(a) 1,000,000 14,125,000
===============================================================
70,312,500
===============================================================
RETAIL (SPECIALTY-APPAREL)-4.25%
Abercrombie & Fitch Co.-Class A(a) 3,000,000 70,687,500
---------------------------------------------------------------
Children's Place Retail Stores,
Inc. (The)(a) 850,000 22,046,875
---------------------------------------------------------------
Men's Wearhouse, Inc. (The)(a) 2,000,000 58,500,000
---------------------------------------------------------------
Talbots, Inc. (The) 450,000 35,578,125
---------------------------------------------------------------
Too Inc.(a) 1,000,000 22,937,500
===============================================================
209,750,000
===============================================================
SERVICES (ADVERTISING/MARKETING)-0.81%
Forrester Research, Inc.(a) 323,200 13,271,400
---------------------------------------------------------------
TMP Worldwide, Inc.(a) 382,100 26,597,742
===============================================================
39,869,142
===============================================================
SERVICES (COMMERCIAL & CONSUMER)-1.99%
Computer Learning Centers, Inc.(a) 27,229 22,124
---------------------------------------------------------------
Copart, Inc.(a) 600,000 9,037,500
---------------------------------------------------------------
Corporate Executive Board Co.
(The)(a) 600,000 27,675,000
---------------------------------------------------------------
DeVry, Inc.(a) 500,000 18,468,750
---------------------------------------------------------------
Diamond Technology Partners
Inc.(a) 700,000 31,237,500
---------------------------------------------------------------
Iron Mountain Inc.(a) 350,000 11,834,375
===============================================================
98,275,249
===============================================================
SERVICES (COMPUTER SYSTEMS)-1.04%
SunGard Data Systems Inc.(a) 1,000,000 51,125,000
===============================================================
SERVICES (DATA PROCESSING)-2.20%
Concord EFS, Inc.(a) 2,000,000 82,625,000
---------------------------------------------------------------
Fiserv, Inc.(a) 500,000 26,218,750
===============================================================
108,843,750
===============================================================
|
MARKET
SHARES VALUE
SERVICES (EMPLOYMENT)-4.08%
Hall, Kinion & Associates,
Inc.(a)(b) 1,084,100 $ 28,660,894
---------------------------------------------------------------
Heidrick & Struggles
International, Inc.(a) 129,600 8,010,900
---------------------------------------------------------------
On Assignment, Inc.(a) 500,000 12,593,750
---------------------------------------------------------------
Robert Half International Inc.(a) 5,000,000 152,500,000
===============================================================
201,765,544
===============================================================
SERVICES (FACILITIES &
ENVIRONMENTAL)-1.06%
Tetra Tech, Inc.(a) 1,500,000 52,125,000
===============================================================
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-3.04%
AirGate PCS, Inc.(a) 500,000 19,437,500
---------------------------------------------------------------
Powertel, Inc.(a) 200,000 17,450,000
---------------------------------------------------------------
Powerwave Technologies, Inc.(a) 750,000 36,093,750
---------------------------------------------------------------
Research in Motion Ltd.
(Canada)(a) 395,000 39,500,000
---------------------------------------------------------------
Rural Cellular Corp.-Class A(a) 200,000 10,750,000
---------------------------------------------------------------
SBA Communications Corp.(a) 300,000 15,037,500
---------------------------------------------------------------
Western Wireless Corp.-Class A(a) 250,000 11,875,000
===============================================================
150,143,750
===============================================================
TEXTILES (APPAREL)-0.39%
Quicksilver, Inc.(a) 1,000,000 19,125,000
===============================================================
Total Common Stocks & Other
Equity Interests (Cost
$3,401,449,461) 4,830,013,941
===============================================================
MONEY MARKET FUNDS-1.83%
STIC Liquid Assets Portfolio(c) 45,134,072 45,134,072
---------------------------------------------------------------
STIC Prime Portfolio(c) 45,134,072 45,134,072
===============================================================
Total Money Market Funds (Cost
$90,268,144) 90,268,144
===============================================================
TOTAL INVESTMENTS-99.62% (Cost
$3,491,717,605) 4,920,282,085
===============================================================
OTHER ASSETS LESS
LIABILITIES-0.38% 18,833,387
===============================================================
NET ASSETS-100.00% $4,939,115,472
_______________________________________________________________
===============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a)Non-income producing security.
(b)Affiliated issuer in which the Fund's holdings of the 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 any issuer to have
control (as defined in the Investment Company Act of 1940) of that issuer.
The aggregate market value of affiliated issuers as of 10/31/00 was
$329,579,644 which represented 6.69% of the Fund's net assets.
(c)The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-4
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost
$3,491,717,605) $4,920,282,085
-------------------------------------------------------------
Receivables for:
Investments sold 26,398,865
-------------------------------------------------------------
Fund shares sold 19,888,653
-------------------------------------------------------------
Dividends 686,027
-------------------------------------------------------------
Collateral for securities loaned 231,645,571
-------------------------------------------------------------
Investment for deferred compensation plan 76,417
-------------------------------------------------------------
Other assets 6,714
=============================================================
Total assets $5,198,984,332
=============================================================
LIABILITIES:
Payables for:
Return of collateral for securities loaned 231,645,571
-------------------------------------------------------------
Investments purchased 19,804,590
-------------------------------------------------------------
Fund shares reacquired 3,550,419
-------------------------------------------------------------
Deferred compensation plan 76,417
-------------------------------------------------------------
Accrued advisory fees 2,528,091
-------------------------------------------------------------
Accrued administrative services fees 21,523
-------------------------------------------------------------
Accrued distribution fees 1,701,726
-------------------------------------------------------------
Accrued trustees' fees 1,229
-------------------------------------------------------------
Accrued transfer agent fees 537,457
-------------------------------------------------------------
Accrued operating expenses 1,837
=============================================================
Total liabilities 259,868,860
=============================================================
Net assets applicable to shares outstanding $4,939,115,472
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $4,444,514,780
_____________________________________________________________
=============================================================
Class B $ 374,009,533
_____________________________________________________________
=============================================================
Class C $ 120,591,159
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE:
Class A 241,443,891
_____________________________________________________________
=============================================================
Class B 20,638,914
_____________________________________________________________
=============================================================
Class C 6,657,301
_____________________________________________________________
=============================================================
Class A:
Net asset value and redemption price per
share $ 18.41
-------------------------------------------------------------
Offering price per share:
(Net asset value of $18.41 divided by
94.50%) $ 19.48
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 18.12
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 18.11
_____________________________________________________________
=============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends $ 2,389,451
-------------------------------------------------------------
Dividends from affiliated money market funds 8,301,930
-------------------------------------------------------------
Interest 5,725
-------------------------------------------------------------
Security lending income 643,001
=============================================================
Total investment income 11,340,107
=============================================================
EXPENSES:
Advisory fees 26,977,097
-------------------------------------------------------------
Administrative services fees 233,230
-------------------------------------------------------------
Custodian fees 232,821
-------------------------------------------------------------
Distribution fees -- Class A 10,092,087
-------------------------------------------------------------
Distribution fees -- Class B 1,809,368
-------------------------------------------------------------
Distribution fees -- Class C 565,638
-------------------------------------------------------------
Transfer agent fees -- Class A 4,978,765
-------------------------------------------------------------
Transfer agent fees -- Class B 340,897
-------------------------------------------------------------
Transfer agent fees -- Class C 106,570
-------------------------------------------------------------
Trustees' fees 18,547
-------------------------------------------------------------
Other 1,048,859
=============================================================
Total expenses 46,403,879
=============================================================
Less: Expenses paid indirectly (173,362)
=============================================================
Net expenses 46,230,517
=============================================================
Net investment income (loss) (34,890,410)
=============================================================
REALIZED AND UNREALIZED GAIN FROM INVESTMENT
SECURITIES:
Net realized gain from investment securities 978,195,173
=============================================================
Change in net unrealized appreciation of
investment securities 362,410,770
=============================================================
Net gain from investment securities 1,340,605,943
=============================================================
Net increase in net assets resulting from
operations $1,305,715,533
_____________________________________________________________
=============================================================
|
See Notes to Financial Statements.
FS-5
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
-------------- --------------
OPERATIONS:
Net investment income (loss) $ (34,890,410) $ (18,681,715)
----------------------------------------------------------------------------------------------
Net realized gain from investment securities 978,195,173 401,315,614
----------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities 362,410,770 514,158,866
==============================================================================================
Net increase in net assets resulting from operations 1,305,715,533 896,792,765
==============================================================================================
Distributions to shareholders from net realized gains:
Class A (320,367,821) (25,067,232)
----------------------------------------------------------------------------------------------
Class B (4,413,088) --
----------------------------------------------------------------------------------------------
Class C (1,287,521) --
----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 663,429,973 (697,955,629)
----------------------------------------------------------------------------------------------
Class B 343,326,602 22,307,605
----------------------------------------------------------------------------------------------
Class C 112,539,912 6,056,717
==============================================================================================
Net increase in net assets 2,098,943,590 202,134,226
==============================================================================================
NET ASSETS:
Beginning of year 2,840,171,882 2,638,037,656
==============================================================================================
End of year $4,939,115,472 $2,840,171,882
______________________________________________________________________________________________
==============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $2,607,070,149 $1,384,638,292
----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (174,108) (148,328)
----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment securities 903,654,950 389,528,207
----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 1,428,564,481 1,066,153,711
==============================================================================================
$4,939,115,472 $2,840,171,882
______________________________________________________________________________________________
==============================================================================================
|
See Notes to Financial Statements.
FS-6
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Aggressive Growth Fund (the "Fund") is a series portfolio of AIM Equity
Funds (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 eleven separate portfolios,
each having an unlimited number of shares of beneficial interest. Prior to June
17, 2000 the Fund was organized as a series portfolio of AIM Equity Funds, Inc.
At a meeting held on February 3, 2000, the Board of Directors of AIM Equity
Funds, Inc. approved an Agreement and Plan of Reorganization (the
"Reorganization") which reorganized the Fund as a series portfolio of the Trust.
Shareholders of the Fund approved the Reorganization at a meeting held on June
16, 2000. 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 accounting
principles generally accepted in the United States of America 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.
On October 31, 2000, undistributed net investment income was increased by
$34,864,630, undistributed net realized gains decreased by $138,000,000 and
paid in capital increased by $103,135,370 as a result of book/tax differences
due to utilization of a portion of the proceeds from redemptions as
distributions for federal income tax purposes and net operating loss
reclassifications. Net assets of the Fund were unaffected by the
reclassification discussed above.
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. Expenses -- Distribution expenses and certain transfer agency expenses directly attributable to a class of shares are charged
FS-7
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 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 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 year ended October 31, 2000, AIM was
paid $233,230 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 October 31, 2000, AFS was
paid $2,659,331 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 October 31, 2000,
the Class A, Class B and Class C shares paid AIM Distributors $10,092,087,
$1,809,368 and $565,638, respectively, as compensation under the Plans.
AIM Distributors received commissions of $2,075,726 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 2000,
AIM Distributors received $55,615 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 October 31, 2000, the Fund paid legal fees of $10,333
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 year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $58,779 and reductions in custodian fees of $114,583 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $173,362.
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 year ended October 31,
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 are 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 is 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 borrower did not increase the
collateral accordingly, and the borrower fails to return the securities.
At October 31, 2000, securities with an aggregate value of $227,103,501 were
on loan to brokers. The loans were secured by cash collateral of $231,645,571
received by the Fund. For the year ended October 31, 2000, the Fund received
fees of $643,001 for securities lending.
FS-8
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended October 31, 2000 was
$3,988,340,688 and $3,252,464,051, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $1,563,292,941 ---------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (134,915,538) ============================================================================ Net unrealized appreciation of investment securities $1,428,377,403 ____________________________________________________________________________ ============================================================================ Cost of investments for tax purposes is $3,491,904,682. |
NOTE 8-SHARE INFORMATION*
Changes in shares outstanding during the years ended October 31, 2000 and 1999 were as follows:
2000 1999
----------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ---------------
Sold:
Class A 204,998,037 $1,165,506,524 20,202,014 $ 945,046,848
-----------------------------------------------------------------------------------------------------------------------------
Class B** 21,294,813 379,822,496 515,321 25,493,142
-----------------------------------------------------------------------------------------------------------------------------
Class C** 6,866,314 122,159,297 137,866 6,796,692
=============================================================================================================================
Issued as reinvestment of dividends:
Class A 5,280,778 297,990,645 522,585 23,265,335
-----------------------------------------------------------------------------------------------------------------------------
Class B** 72,296 4,045,318 -- --
-----------------------------------------------------------------------------------------------------------------------------
Class C** 19,260 1,076,149 -- --
=============================================================================================================================
Reacquired:
Class A (19,341,399) (800,067,196) (35,925,286) (1,666,267,812)
-----------------------------------------------------------------------------------------------------------------------------
Class B** (1,179,153) (40,541,212) (64,363) (3,185,537)
-----------------------------------------------------------------------------------------------------------------------------
Class C** (351,490) (10,695,534) (14,649) (739,975)
=============================================================================================================================
217,659,456 $1,119,296,487 (14,626,512) $ (669,591,307)
_____________________________________________________________________________________________________________________________
=============================================================================================================================
|
* Shares have been restated to reflect a 4 for 1 stock split, effected in the form of a 300% stock dividend, on July 14, 2000. ** Class B shares and Class C shares commenced sales on March 1, 1999.
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A(a)
------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------------------------------
2000 1999 1998 1997 1996
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period $ 13.90 $ 10.04 $ 12.49 $ 11.23 $ 10.03
--------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.13) (0.09) (0.08) (0.06) (0.08)
--------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 11.08 4.05 (1.93) 1.90 1.52
================================================================================================================================
Total from investment operations 10.95 3.96 (2.01) 1.84 1.44
================================================================================================================================
Less distributions:
Distributions from net realized gains (6.44) (0.10) (0.44) (0.58) (0.24)
================================================================================================================================
Net asset value, end of period $ 18.41 $ 13.90 $ 10.04 $ 12.49 $ 11.23
________________________________________________________________________________________________________________________________
================================================================================================================================
Total return(b) 47.53% 39.73% (16.36)% 17.35% 14.77%
________________________________________________________________________________________________________________________________
================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $4,444,515 $2,808,451 $2,638,038 $3,864,257 $2,750,564
________________________________________________________________________________________________________________________________
================================================================================================================================
Ratio of expenses to average net assets 1.04%(c) 1.09% 1.06% 1.06% 1.11%
================================================================================================================================
Ratio of net investment income (loss) to average net assets (0.77)%(c) (0.69)% (0.64)% (0.65)% (0.76)%
________________________________________________________________________________________________________________________________
================================================================================================================================
Portfolio turnover rate 79% 75% 69% 73% 79%
________________________________________________________________________________________________________________________________
================================================================================================================================
|
(a) Per share information and shares have been restated to reflect a 4 for 1
stock split, effected in the form of a 300% stock dividend, on July 14,
2000.
(b) Does not include sales charges.
(c) Ratios are based on average daily net assets of $4,036,834,917.
FS-9
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B(a)
------------------------------
MARCH 1, 1999
(DATE SALES
YEAR ENDED COMMENCED)
OCTOBER 31, TO OCTOBER 31,
2000 1999
----------- --------------
Net asset value, beginning of period $ 13.81 $ 10.85
--------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.29) (0.07)
--------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 11.04 3.03
============================================================================================
Total from investment operations 10.75 2.96
============================================================================================
Less distributions:
Distributions from net realized gains (6.44) --
============================================================================================
Net asset value, end of period $ 18.12 $ 13.81
____________________________________________________________________________________________
============================================================================================
Total return(b) 46.29% 27.27%
____________________________________________________________________________________________
============================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $374,010 $24,914
____________________________________________________________________________________________
============================================================================================
Ratio of expenses to average net assets 1.86%(c) 2.08%(d)
============================================================================================
Ratio of net investment income (loss) to average net assets (1.59)%(c) (1.68)%(d)
____________________________________________________________________________________________
============================================================================================
Portfolio turnover rate 79% 75%
____________________________________________________________________________________________
============================================================================================
|
(a) Per share information and shares have been restated to reflect a 4 for 1
stock split, effected in the form of a 300% stock dividend, on July 14,
2000.
(b) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average daily net assets of $180,936,805.
(d) Annualized.
CLASS C(a)
------------------------------
MARCH 1, 1999
(DATE SALES
YEAR ENDED COMMENCED)
OCTOBER 31, TO OCTOBER 31,
2000 1999
----------- --------------
Net asset value, beginning of period $ 13.81 $ 10.85
--------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.29) (0.07)
--------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 11.03 3.03
============================================================================================
Total from investment operations 10.74 2.96
============================================================================================
Less distributions:
Distributions from net realized gains (6.44) --
============================================================================================
Net asset value, end of period $ 18.11 $ 13.81
____________________________________________________________________________________________
============================================================================================
Total return(b) 46.21% 27.27%
____________________________________________________________________________________________
============================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $120,591 $ 6,807
____________________________________________________________________________________________
============================================================================================
Ratio of expenses to average net assets 1.86%(c) 2.08%(d)
============================================================================================
Ratio of net investment income (loss) to average net assets (1.59)%(c) (1.68)%(d)
____________________________________________________________________________________________
============================================================================================
Portfolio turnover rate 79% 75%
____________________________________________________________________________________________
============================================================================================
|
(a) Per share information and shares have been restated to reflect a 4 for 1
stock split, effected in the form of a 300% stock dividend, on July 14,
2000.
(b) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average daily net assets of $56,563,818.
(d) Annualized.
FS-10
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
AIM Equity Funds:
We have audited the accompanying statements of assets and liabilities of AIM Blue Chip Fund (a portfolio of AIM Equity Funds), including the schedule of investments, as of October 31, 2000, the related statement of operations for the year then ended, the statement of changes in net assets for each of the years in the two-year period then ended and financial highlights for each of the periods in the four-year period then ended, the one month period ended October 31, 1996, and the year ended September 30, 1996. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AIM Blue Chip Fund as of October 31, 2000, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended and financial highlights for each of the years in the four-year period then ended, the one-month period ended October 31, 1996, and the year ended September 30, 1996 in conformity with accounting principles generally accepted in the United States of America.
/s/ KPMG LLP December 6, 2000 Houston, Texas |
FS-11
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY
INTERESTS-92.79%
AIRLINES-0.25%
Delta Air Lines, Inc. 350,000 $ 16,537,500
===============================================================
BANKS (MAJOR REGIONAL)-1.34%
Fifth Third Bancorp 825,000 42,384,375
---------------------------------------------------------------
State Street Corp. 375,000 46,777,500
===============================================================
89,161,875
===============================================================
BANKS (MONEY CENTER)-1.32%
Chase Manhattan Corp. (The) 1,925,000 87,587,500
===============================================================
BEVERAGES (NON-ALCOHOLIC)-0.41%
Coca-Cola Co. (The) 450,000 27,168,750
===============================================================
BIOTECHNOLOGY-1.64%
Amgen Inc.(a) 1,875,000 108,632,812
===============================================================
BROADCASTING (TELEVISION, RADIO &
CABLE)-1.40%
AT&T Corp.-Liberty Media
Corp.-Class A 3,000,000 54,000,000
---------------------------------------------------------------
Comcast Corp.-Class A(a) 950,000 38,712,500
===============================================================
92,712,500
===============================================================
CHEMICALS-0.83%
Air Products & Chemicals, Inc. 800,000 29,850,000
---------------------------------------------------------------
Du Pont (E.I.) de Nemours & Co. 550,000 24,956,250
===============================================================
54,806,250
===============================================================
COMMUNICATIONS EQUIPMENT-5.94%
ADC Telecommunications, Inc.(a) 1,150,000 24,581,250
---------------------------------------------------------------
Comverse Technology, Inc.(a) 470,000 52,522,500
---------------------------------------------------------------
JDS Uniphase Corp.(a) 1,200,000 97,650,000
---------------------------------------------------------------
Nokia Oyj-ADR (Finland) 1,500,000 64,125,000
---------------------------------------------------------------
Nortel Networks Corp. (Canada) 3,400,000 154,700,000
===============================================================
393,578,750
===============================================================
COMPUTERS (HARDWARE)-3.98%
Gateway, Inc.(a) 550,000 28,385,500
---------------------------------------------------------------
International Business Machines
Corp. 475,000 46,787,500
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 1,700,000 188,487,500
===============================================================
263,660,500
===============================================================
COMPUTERS (NETWORKING)-3.70%
Cisco Systems, Inc.(a) 4,550,000 245,131,250
===============================================================
COMPUTERS (PERIPHERALS)-2.95%
EMC Corp.(a) 2,200,000 195,937,500
===============================================================
COMPUTERS (SOFTWARE &
SERVICES)-7.75%
America Online, Inc.(a) 1,125,000 56,733,750
---------------------------------------------------------------
Microsoft Corp.(a) 2,000,000 137,750,000
---------------------------------------------------------------
|
MARKET
SHARES VALUE
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
Oracle Corp.(a) 4,200,000 $ 138,600,000
---------------------------------------------------------------
VERITAS Software Corp.(a) 1,100,000 155,117,187
---------------------------------------------------------------
Yahoo! Inc.(a) 435,000 25,501,875
===============================================================
513,702,812
===============================================================
ELECTRIC COMPANIES-0.72%
Duke Power Co. 362,500 31,333,594
---------------------------------------------------------------
Edison International 700,000 16,712,500
===============================================================
48,046,094
===============================================================
ELECTRICAL EQUIPMENT-6.62%
General Electric Co. 6,341,400 347,587,987
---------------------------------------------------------------
Sanmina Corp.(a) 800,000 91,450,000
===============================================================
439,037,987
===============================================================
ELECTRONICS
(SEMICONDUCTORS)-3.01%
Intel Corp. 1,250,000 56,250,000
---------------------------------------------------------------
PMC-Sierra, Inc. (Canada)(a) 185,000 31,357,500
---------------------------------------------------------------
Texas Instruments Inc. 700,000 34,343,750
---------------------------------------------------------------
Xilinx, Inc.(a) 1,075,000 77,870,312
===============================================================
199,821,562
===============================================================
ENTERTAINMENT-2.23%
Time Warner Inc. 1,050,000 79,705,500
---------------------------------------------------------------
Viacom Inc.-Class B(a) 1,200,000 68,250,000
===============================================================
147,955,500
===============================================================
EQUIPMENT (SEMICONDUCTOR)-0.60%
Applied Materials, Inc.(a) 750,000 39,843,750
===============================================================
FINANCIAL (DIVERSIFIED)-6.02%
American Express Co. 1,575,000 94,500,000
---------------------------------------------------------------
Citigroup Inc. 3,150,000 165,768,750
---------------------------------------------------------------
Fannie Mae 1,100,000 84,700,000
---------------------------------------------------------------
Freddie Mac 900,000 54,000,000
===============================================================
398,968,750
===============================================================
HEALTH CARE (DIVERSIFIED)-1.27%
American Home Products Corp. 675,000 42,862,500
---------------------------------------------------------------
Johnson & Johnson 450,000 41,456,250
===============================================================
84,318,750
===============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-9.16%
Allergan, Inc. 1,200,000 100,875,000
---------------------------------------------------------------
Merck & Co., Inc. 800,000 71,950,000
---------------------------------------------------------------
Pfizer Inc. 5,450,000 235,371,875
---------------------------------------------------------------
Pharmacia Corp. 2,025,000 111,375,000
---------------------------------------------------------------
|
FS-12
MARKET
SHARES VALUE
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-(CONTINUED)
Schering-Plough Corp. 1,700,000 $ 87,868,750
===============================================================
607,440,625
===============================================================
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-2.24%
Medtronic, Inc. 1,975,000 107,267,187
---------------------------------------------------------------
PE Corp-PE Biosystems Group 350,000 40,950,000
===============================================================
148,217,187
===============================================================
HOUSEHOLD PRODUCTS (NON-DURABLES)-0.66%
Colgate-Palmolive Co. 750,000 44,070,000
===============================================================
INSURANCE (MULTI-LINE)-2.66%
American International Group,
Inc. 1,800,000 176,400,000
===============================================================
INVESTMENT
BANKING/BROKERAGE-2.99%
Merrill Lynch & Co., Inc. 1,000,000 70,000,000
---------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 1,600,000 128,500,000
===============================================================
198,500,000
===============================================================
MANUFACTURING (DIVERSIFIED)-4.01%
Tyco International Ltd. (Bermuda) 3,700,000 209,743,750
---------------------------------------------------------------
United Technologies Corp. 800,000 55,850,000
===============================================================
265,593,750
===============================================================
NATURAL GAS-1.70%
El Paso Energy Corp. 650,000 40,746,875
---------------------------------------------------------------
Enron Corp. 875,000 71,804,688
===============================================================
112,551,563
===============================================================
OIL & GAS (DRILLING & EQUIPMENT)-1.15%
Halliburton Co. 875,000 32,429,688
---------------------------------------------------------------
Schlumberger Ltd. 575,000 43,771,875
===============================================================
76,201,563
===============================================================
OIL (INTERNATIONAL
INTEGRATED)-2.95%
Exxon Mobil Corp. 1,825,000 162,767,188
---------------------------------------------------------------
Royal Dutch Petroleum Co.-ADR-New
York Shares (Netherlands) 550,000 32,656,250
===============================================================
195,423,438
===============================================================
PAPER & FOREST PRODUCTS-0.29%
Bowater Inc. 350,000 18,943,750
===============================================================
POWER PRODUCERS
(INDEPENDENT)-0.42%
Calpine Corp.(a) 355,000 28,022,813
===============================================================
|
MARKET
SHARES VALUE
RAILROADS-0.28%
Canadian National Railway Co.
(Canada) 600,000 $ 18,900,000
===============================================================
RETAIL (BUILDING SUPPLIES)-1.62%
Home Depot, Inc. (The) 2,500,000 107,500,000
===============================================================
RETAIL (FOOD CHAINS)-1.18%
Safeway Inc.(a) 1,425,000 77,929,688
===============================================================
RETAIL (GENERAL
MERCHANDISE)-3.19%
Costco Wholesale Corp.(a) 1,300,000 47,612,500
---------------------------------------------------------------
Target Corp. 2,200,000 60,775,000
---------------------------------------------------------------
Wal-Mart Stores, Inc. 2,275,000 103,228,125
===============================================================
211,615,625
===============================================================
SERVICES
(ADVERTISING/MARKETING)-0.65%
Interpublic Group of Companies,
Inc. (The) 1,000,000 42,937,500
===============================================================
SERVICES (DATA PROCESSING)-1.71%
First Data Corp. 1,325,000 66,415,625
---------------------------------------------------------------
Fiserv, Inc.(a) 900,000 47,193,750
===============================================================
113,609,375
===============================================================
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-1.16%
Vodafone Airtouch PLC-ADR (United
Kingdom) 1,800,000 76,612,500
===============================================================
TELECOMMUNICATIONS (LONG
DISTANCE)-0.45%
WorldCom, Inc.(a) 1,250,000 29,687,500
===============================================================
TELEPHONE-2.34%
BellSouth Corp. 700,000 33,818,750
---------------------------------------------------------------
SBC Communications Inc. 2,100,000 121,143,750
===============================================================
154,962,500
===============================================================
Total Common Stocks & Other
Equity Interests (Cost
$4,395,745,182) 6,151,729,769
===============================================================
MONEY MARKET FUNDS-6.81%
STIC Liquid Assets Portfolio(b) 225,743,493 225,743,493
---------------------------------------------------------------
STIC Prime Portfolio(b) 225,743,493 225,743,493
===============================================================
Total Money Market Funds
(Cost $451,486,986) 451,486,986
===============================================================
TOTAL INVESTMENTS-99.60% (Cost
$4,847,232,168) 6,603,216,755
===============================================================
OTHER ASSETS LESS
LIABILITIES-0.40% 26,572,233
===============================================================
NET ASSETS-100.00% $6,629,788,988
_______________________________________________________________
===============================================================
|
Investment Abbreviation:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a)Non-income producing security.
(b)The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-13
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost
$4,847,232,168) $6,603,216,755
-------------------------------------------------------------
Receivables for:
Investments sold 35,680,271
-------------------------------------------------------------
Fund shares sold 29,699,243
-------------------------------------------------------------
Dividends and interest 3,794,604
-------------------------------------------------------------
Collateral for securities loaned 175,209,900
-------------------------------------------------------------
Investment for deferred compensation plan 43,677
=============================================================
Total assets 6,847,644,450
=============================================================
LIABILITIES:
Payables for:
Investments purchased 26,918,854
-------------------------------------------------------------
Collateral upon return of securities loaned 175,209,900
-------------------------------------------------------------
Fund shares reacquired 6,601,695
-------------------------------------------------------------
Deferred compensation plan 43,677
-------------------------------------------------------------
Accrued advisory fees 3,412,139
-------------------------------------------------------------
Accrued administrative services fees 25,814
-------------------------------------------------------------
Accrued distribution fees 4,231,844
-------------------------------------------------------------
Accrued trustees' fees 1,462
-------------------------------------------------------------
Accrued transfer agent fees 1,155,715
-------------------------------------------------------------
Accrued operating expenses 254,362
=============================================================
Total liabilities 217,855,462
_____________________________________________________________
=============================================================
Net assets applicable to shares outstanding $6,629,788,988
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $3,163,453,384
_____________________________________________________________
=============================================================
Class B $2,746,149,137
_____________________________________________________________
=============================================================
Class C $ 720,186,467
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE:
Class A 182,934,983
_____________________________________________________________
=============================================================
Class B 162,812,031
_____________________________________________________________
=============================================================
Class C 42,703,660
_____________________________________________________________
=============================================================
Class A:
Net asset value and redemption price per
share $ 17.29
-------------------------------------------------------------
Offering price per share:
(Net asset value of $17.29 divided by
94.50%) $ 18.30
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 16.87
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 16.86
_____________________________________________________________
=============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$313,610) $ 33,420,380
------------------------------------------------------------
Dividends from affiliated money market funds 17,441,323
------------------------------------------------------------
Interest 203,770
------------------------------------------------------------
Security lending income 73,892
============================================================
Total investment income 51,139,365
============================================================
EXPENSES:
Advisory fees 36,923,601
------------------------------------------------------------
Administrative services fees 280,996
------------------------------------------------------------
Custodian fees 370,411
------------------------------------------------------------
Distribution fees -- Class A 9,983,123
------------------------------------------------------------
Distribution fees -- Class B 24,298,215
------------------------------------------------------------
Distribution fees -- Class C 5,556,340
------------------------------------------------------------
Transfer agent fees -- Class A 4,370,413
------------------------------------------------------------
Transfer agent fees -- Class B 4,794,034
------------------------------------------------------------
Transfer agent fees -- Class C 1,096,265
------------------------------------------------------------
Trustees' fees 18,457
------------------------------------------------------------
Other 2,515,283
============================================================
Total expenses 90,207,138
============================================================
Less: Fees waived (70,387)
------------------------------------------------------------
Expenses paid indirectly (100,040)
============================================================
Net expenses 90,036,711
============================================================
Net investment income (loss) (38,897,346)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES, FOREIGN CURRENCIES,
FUTURES CONTRACTS AND OPTION CONTRACTS
Net realized gain (loss) from:
Investment securities (180,875,648)
------------------------------------------------------------
Foreign currencies (302,282)
------------------------------------------------------------
Futures contracts (959,165)
------------------------------------------------------------
Option contracts written (10,334,450)
============================================================
(192,471,545)
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 712,308,699
------------------------------------------------------------
Foreign currencies (11,728)
------------------------------------------------------------
Futures contracts (1,817,529)
------------------------------------------------------------
Option contracts written 3,165,156
============================================================
713,644,598
============================================================
Net gain from investment securities,
foreign currencies, futures contracts and
option contracts 521,173,053
============================================================
Net increase in net assets resulting from
operations $ 482,275,707
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-14
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
-------------- --------------
OPERATIONS:
Net investment income (loss) $ (38,897,346) $ (10,379,871)
----------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currencies, futures contracts and option
contracts (192,471,545) (35,834,384)
----------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies, futures contracts and
option contracts 713,644,598 756,524,720
==============================================================================================
Net increase in net assets resulting from operations 482,275,707 710,310,465
==============================================================================================
Distributions to shareholders from net investment income:
Class A -- (776,772)
----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A -- (3,128,249)
----------------------------------------------------------------------------------------------
Class B -- (2,256,383)
----------------------------------------------------------------------------------------------
Class C -- (293,473)
----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 608,764,340 830,315,460
----------------------------------------------------------------------------------------------
Class B 660,832,200 866,521,395
----------------------------------------------------------------------------------------------
Class C 337,243,562 220,917,321
==============================================================================================
Net increase in net assets 2,089,115,809 2,621,609,764
==============================================================================================
NET ASSETS:
Beginning of year 4,540,673,179 1,919,063,415
==============================================================================================
End of year $6,629,788,988 $4,540,673,179
______________________________________________________________________________________________
==============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $5,107,761,635 $3,540,120,284
----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (106,761) (97,169)
----------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies, futures contracts and
option contracts (233,836,669) (41,676,121)
----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies, futures contracts and option contracts 1,755,970,783 1,042,326,185
==============================================================================================
$6,629,788,988 $4,540,673,179
______________________________________________________________________________________________
==============================================================================================
|
See Notes to Financial Statements.
FS-15
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Blue Chip Fund (the "Fund") is a series portfolio of AIM Equity Funds (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 eleven separate portfolios, each
having an unlimited number of shares of beneficial interest. Prior to June 17,
2000, the Fund was organized as a series portfolio of AIM Equity Funds, Inc. At
a meeting held on February 3, 2000, the Board of Directors of AIM Equity Funds,
Inc. approved an Agreement and Plan of Reorganization (the "Reorganization")
which reorganized the Fund as a series portfolio of the Trust. Shareholders of
the Fund approved the Reorganization at a meeting held on June 16, 2000. 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 long-term growth of capital with a secondary
objective of current income.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.
On October 31, 2000, undistributed net investment income was increased by
$38,887,754, undistributed net realized gains increased by $310,997 and paid
in capital decreased by $39,198,751 as a result of differing book/tax
treatment of foreign currency transactions and net operating loss
reclassifications. Net assets of the Fund were unaffected by the
reclassification discussed above.
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.
The Fund has a capital loss carryforward of $224,125,606 as of October 31,
2000 which may be carried forward to offset
FS-16
future taxable gains, if any, which expires, if not previously utilized, in
the year 2008.
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 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. 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. 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.
I. 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 master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.75% of
the first $350 million of the Fund's average daily net assets, plus 0.625% of
the Fund's average daily net assets in excess of $350 million. 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. During the year ended October
31, 2000, AIM waived fees of $70,387.
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 October 31, 2000, AIM was
paid $280,996 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 October 31, 2000, AFS was
paid $5,597,222 for such services.
FS-17
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
0.35% 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 October 31, 2000,
the Class A, Class B and Class C shares paid AIM Distributors $9,983,123,
$24,298,215 and $5,556,340, respectively, as compensation under the Plans.
AIM Distributors received commissions of $2,876,209 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 2000,
AIM Distributors received $197,230 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 October 31, 2000, the Fund paid legal fees of $12,798
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 year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $78,129 and reductions in custodian fees of $21,911 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $100,040.
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 year ended October 31,
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 are 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 is 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 borrower did not increase the
collateral accordingly, and the borrower fails to return the securities.
At October 31, 2000, securities with an aggregate value of $170,706,450 were
on loan to brokers. The loans were secured by cash collateral of $175,209,900
received by the Fund. For the year ended October 31, 2000, the Fund received
fees of $73,892 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 year ended October 31, 2000 was
$2,695,331,056 and $1,214,890,041, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $1,874,199,000 ---------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (127,925,379) ========================================================== Net unrealized appreciation of investment securities $1,746,273,621 __________________________________________________________ ========================================================== Cost of investments for tax purposes is $4,856,943,134. |
NOTE 8-CALL OPTION CONTRACTS
Transactions in call options written during the year ended October 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ----------
Beginning of year 4,858 $5,063,081
----------------------------------------------------------
Closed (4,858) (5,063,081)
==========================================================
End of year -- $ --
__________________________________________________________
==========================================================
|
FS-18
NOTE 9-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 2000 and 1999 were as follows:
2000 1999
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- --------------
Sold:
Class A 148,715,420 $1,263,107,272 31,555,257 $1,348,329,456
----------------------------------------------------------------------------------------------------------------------------
Class B 129,401,524 992,150,930 24,939,694 1,053,306,393
----------------------------------------------------------------------------------------------------------------------------
Class C 37,286,271 429,625,653 6,902,119 292,602,692
----------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A -- -- 93,903 3,711,997
----------------------------------------------------------------------------------------------------------------------------
Class B -- -- 54,813 2,141,056
----------------------------------------------------------------------------------------------------------------------------
Class C -- -- 7,197 281,069
----------------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (15,253,996) (654,342,932) (12,216,671) (521,725,993)
----------------------------------------------------------------------------------------------------------------------------
Class B (8,016,409) (331,318,730) (4,443,246) (188,926,054)
----------------------------------------------------------------------------------------------------------------------------
Class C (2,250,850) (92,382,091) (1,692,129) (71,966,440)
============================================================================================================================
289,881,960 $1,606,840,102 45,200,937 $1,917,754,176
____________________________________________________________________________________________________________________________
============================================================================================================================
|
NOTE 10-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A(a)
-----------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, OCTOBER 1, 1996 TO YEAR ENDED
-------------------------------------------------- OCTOBER 31, SEPTEMBER 30,
2000 1999 1998(b) 1997(b) 1996 1996
---------- ---------- ---------- -------- ------------------ -------------
Net asset value, beginning of period $ 15.49 $ 12.05 $ 10.32 $ 8.69 $ 8.52 $ 7.94
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.05) 0.01 0.04 0.06 -- 0.11
---------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both
realized and unrealized) 1.85 3.47 1.92 2.31 0.17 1.54
=================================================================================================================================
Total from investment operations 1.80 3.48 1.96 2.37 0.17 1.65
=================================================================================================================================
Less distributions:
Dividends from net investment income -- (0.01) (0.02) (0.02) -- (0.07)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized
gains -- (0.03) (0.21) (0.72) -- (1.00)
=================================================================================================================================
Total distributions -- (0.04) (0.23) (0.74) -- (1.07)
=================================================================================================================================
Net asset value, end of period $ 17.29 $ 15.49 $ 12.05 $ 10.32 $ 8.69 $ 8.52
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(c) 11.60% 29.01% 19.36% 29.68% 2.04% 22.39%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $3,163,453 $2,299,551 $1,085,648 $498,178 $120,448 $106,415
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net
assets:
With fee waivers 1.19%(d) 1.19% 1.22% 1.31% 1.30%(e) 1.26%
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.19%(d) 1.19% 1.22% 1.32% 1.37%(e) 1.26%
=================================================================================================================================
Ratio of net investment income (loss)
to average net assets (0.31)%(d) 0.03% 0.33% 0.50% 0.12%(e) 0.53%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 22% 22% 27% 43% 10% 58%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Per share information and shares have been restated to reflect a 3 for 1
stock split, effected in the form of a 200% stock dividend, on September 8,
2000.
(b) Calculated using average shares outstanding.
(c) Does not include sales charges and is not annualized for periods less than
one year.
(d) Ratios are based on average daily net assets of $2,852,320,679.
(e) Annualized.
FS-19
NOTE 10-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B(a)
--------------------------------------------------------------------------
OCTOBER 1, 1996
YEAR ENDED OCTOBER 31, (DATE SALES COMMENCED)
------------------------------------------------ TO OCTOBER 31,
2000(b) 1999(b) 1998 1997(b) 1996
---------- ---------- -------- -------- ----------------------
Net asset value, beginning of period $ 15.22 $ 11.91 $ 10.25 $ 8.69 $ 8.52
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.17) (0.10) (0.04) (0.01) --
---------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and
unrealized) 1.82 3.44 1.91 2.30 0.17
=================================================================================================================================
Total from investment operations 1.65 3.34 1.87 2.29 0.17
=================================================================================================================================
Less distributions:
Dividends from net investment income -- -- -- (0.01) --
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (0.03) (0.21) (0.72) --
=================================================================================================================================
Total distributions -- (0.03) (0.21) (0.73) --
=================================================================================================================================
Net asset value, end of period $ 16.87 $ 15.22 $ 11.91 $ 10.25 $ 8.69
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(c) 10.87% 28.08% 18.52% 28.81% 2.00%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $2,746,149 $1,891,171 $745,862 $264,337 $8,101
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.88%(d) 1.91% 1.94% 2.10% 2.01%(e)
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.88%(d) 1.91% 1.94% 2.12% 2.08%(e)
=================================================================================================================================
Ratio of net investment income (loss) to average net
assets (1.00)%(d) (0.68)% (0.38)% (0.28)% (0.58)%(e)
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 22% 22% 27% 43% 10%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a)Per share information and shares have been restated to reflect a 3 for 1
stock split, effected in the form of a 200% stock dividend, on September 8,
2000.
(b)Calculated using average shares outstanding.
(c)Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(d)Ratios are based on average daily net assets of $2,429,821,489.
(e)Annualized.
CLASS C(a)
---------------------------------------------------------
AUGUST 4, 1997
YEAR ENDED OCTOBER 31, (DATE SALES COMMENCED)
------------------------------- TO OCTOBER 31,
2000(b) 1999(b) 1998(b) 1997(b)
-------- -------- ------- ----------------------
Net asset value, beginning of period $ 15.21 $ 11.91 $10.25 $10.57
-----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.17) (0.10) (0.04) --
-----------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 1.82 3.43 1.91 (0.32)
=======================================================================================================================
Total from investment operations 1.65 3.33 1.87 (0.32)
=======================================================================================================================
Less distributions:
Distributions from net realized gains -- (0.03) (0.21) --
=======================================================================================================================
Net asset value, end of period $ 16.86 $ 15.21 $11.91 $10.25
_______________________________________________________________________________________________________________________
=======================================================================================================================
Total return(c) 10.82% 28.09% 18.52% (3.06)%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $720,186 $349,951 $87,554 $3,947
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.88%(d) 1.90% 1.94% 2.10%(e)
-----------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.88%(d) 1.90% 1.94% 2.12%(e)
=======================================================================================================================
Ratio of net investment income (loss) to average net assets (1.00)%(d) (0.68)% (0.38)% (0.28)%(e)
_______________________________________________________________________________________________________________________
=======================================================================================================================
Portfolio turnover rate 22% 22% 27% 43%
_______________________________________________________________________________________________________________________
=======================================================================================================================
|
(a) Per share information and shares have been restated to reflect a 3 for 1
stock split, effected in the form of a 200% stock dividend, on September 8,
2000.
(b) Calculated using average shares outstanding.
(c) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(d) Ratios are based on average daily net assets of $555,634,002.
(e) Annualized.
FS-20
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
AIM Equity Funds:
We have audited the accompanying statement of assets and
liabilities of AIM Capital Development Fund (a series
portfolio of AIM Equity Funds), including the schedule of
investments, as of October 31, 2000, the related
statement of operations for the year then ended, the
statement of changes in net assets for each of the years
in the two-year period then ended, and financial
highlights for each of the periods in the four-year
period then ended and the period June 17, 1996 (date
operations commenced) through October 31, 1996. These
financial statements and financial highlights are the
responsibility of the Fund's management. Our
responsibility is to express an opinion on these
financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with auditing
standards generally accepted in the United States of
America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are
free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as
of October 31, 2000, by correspondence with the custodian
and brokers. An audit also includes assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall
financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of the AIM
Capital Development Fund as of October 31, 2000, the
results of its operations for the year then ended, the
changes in its net assets for each of the years in the
two-year period then ended, and the financial highlights
for each of the periods in the four-year period then
ended and the period June 17, 1996 (date operations
commenced) through October 31, 1996, in conformity with
accounting principles generally accepted in the United
States of America.
/s/ KPMG LLP December 6, 2000 Houston, Texas |
FS-21
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY
INTERESTS-93.30%
AGRICULTURAL PRODUCTS-1.12%
Monsanto Co.(a) 640,000 $ 16,320,000
===============================================================
BANKS (REGIONAL)-2.39%
North Fork Bancorp., Inc. 696,400 14,058,575
---------------------------------------------------------------
UCBH Holdings, Inc. 100,000 3,637,500
---------------------------------------------------------------
Zions Bancorp. 300,000 17,231,250
===============================================================
34,927,325
===============================================================
BEVERAGES (ALCOHOLIC)-0.41%
Constellation Brands, Inc.-Class
A(a) 121,800 5,937,750
===============================================================
BROADCASTING (TELEVISION, RADIO &
CABLE)-0.89%
Cox Radio, Inc.-Class A(a) 300,000 6,825,000
---------------------------------------------------------------
Entercom Communications Corp.(a) 100,000 3,918,750
---------------------------------------------------------------
Hispanic Broadcasting Corp.(a) 70,000 2,187,500
===============================================================
12,931,250
===============================================================
COMMUNICATIONS EQUIPMENT-2.05%
ADTRAN, Inc.(a) 89,600 3,404,800
---------------------------------------------------------------
Dycom Industries, Inc.(a) 157,700 5,933,462
---------------------------------------------------------------
Efficient Networks, Inc.(a) 187,500 7,866,211
---------------------------------------------------------------
Neon Communications, Inc.(a) 71,100 857,644
---------------------------------------------------------------
Scientific-Atlanta, Inc. 173,500 11,873,906
===============================================================
29,936,023
===============================================================
COMPUTERS (NETWORKING)-0.49%
Cabletron Systems, Inc.(a) 264,800 7,182,700
===============================================================
COMPUTERS (PERIPHERALS)-1.52%
QLogic Corp.(a) 152,200 14,725,350
---------------------------------------------------------------
SanDisk Corp.(a) 140,000 7,522,812
===============================================================
22,248,162
===============================================================
COMPUTERS (SOFTWARE &
SERVICES)-10.14%
Affiliated Computer Services,
Inc.-Class A(a) 230,000 12,808,125
---------------------------------------------------------------
Cadence Design Systems, Inc.(a) 523,400 13,444,837
---------------------------------------------------------------
Dendrite International, Inc.(a) 382,700 8,323,725
---------------------------------------------------------------
IntraNet Solutions, Inc.(a) 154,200 7,170,300
---------------------------------------------------------------
Intuit Inc.(a) 296,500 18,216,219
---------------------------------------------------------------
Mercury Interactive Corp.(a)(b) 149,000 16,539,000
---------------------------------------------------------------
New Era of Networks, Inc.(a) 200,000 3,112,500
---------------------------------------------------------------
Nucentrix Broadband Networks,
Inc.(a) 150,000 3,393,750
---------------------------------------------------------------
Peregrine Systems, Inc.(a) 468,100 11,234,400
---------------------------------------------------------------
Rational Software Corp.(a)(b) 204,700 12,218,031
---------------------------------------------------------------
Retek Inc.(a) 185,400 7,311,712
---------------------------------------------------------------
Secure Computing Corp.(a) 466,900 10,738,700
---------------------------------------------------------------
SERENA Software, Inc.(a) 200,000 10,175,000
---------------------------------------------------------------
Sybase, Inc.(a) 300,000 6,281,250
---------------------------------------------------------------
|
MARKET
SHARES VALUE
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
Titan Corp. (The)(a) 526,800 $ 7,045,950
===============================================================
148,013,499
===============================================================
CONSUMER FINANCE-2.87%
American Capital Strategies, Ltd. 527,600 11,640,175
---------------------------------------------------------------
AmeriCredit Corp.(a) 561,100 15,079,562
---------------------------------------------------------------
Capital One Financial Corp. 240,700 15,194,187
===============================================================
41,913,924
===============================================================
DISTRIBUTORS (FOOD & HEALTH)-0.33%
SUPERVALU INC. 316,100 4,860,037
===============================================================
ELECTRICAL EQUIPMENT-2.31%
American Power Conversion Corp.(a) 285,000 3,687,187
---------------------------------------------------------------
Cree, Inc.(a) 75,400 7,483,450
---------------------------------------------------------------
Sensormatic Electronics Corp.(a) 303,300 5,459,400
---------------------------------------------------------------
Veeco Instruments Inc.(a) 100,000 6,620,312
---------------------------------------------------------------
Viasystems Group, Inc.(a) 735,100 10,429,231
===============================================================
33,679,580
===============================================================
ELECTRONICS (COMPONENT
DISTRIBUTORS)-2.18%
Arrow Electronics, Inc.(a) 220,600 7,059,200
---------------------------------------------------------------
Power-One, Inc.(a)(b) 350,100 24,835,219
===============================================================
31,894,419
===============================================================
ELECTRONICS (DEFENSE)-0.71%
Aeroflex Inc.(a) 175,050 10,415,475
===============================================================
ELECTRONICS (INSTRUMENTATION)-3.38%
Alpha Industries, Inc.(a) 192,400 7,671,950
---------------------------------------------------------------
Methode Electronics, Inc.-Class A 384,500 14,466,812
---------------------------------------------------------------
Tektronix, Inc. 230,000 16,387,500
---------------------------------------------------------------
Varian Inc.(a) 350,000 10,784,375
===============================================================
49,310,637
===============================================================
ELECTRONICS (SEMICONDUCTORS)-3.50%
Celestica Inc. (Canada)(a) 212,700 15,287,812
---------------------------------------------------------------
Micrel, Inc.(a) 161,000 7,285,250
---------------------------------------------------------------
Microchip Technology Inc.(a) 393,975 12,459,459
---------------------------------------------------------------
QuickLogic Corp.(a) 308,100 2,734,387
---------------------------------------------------------------
Zoran Corp.(a) 265,400 13,303,175
===============================================================
51,070,083
===============================================================
ENGINEERING & CONSTRUCTION-0.37%
Quanta Services, Inc.(a) 175,200 5,442,150
===============================================================
EQUIPMENT (SEMICONDUCTOR)-0.16%
Varian Semiconductor Equipment
Associates, Inc.(a) 100,000 2,300,000
===============================================================
FINANCIAL (DIVERSIFIED)-3.82%
Allied Capital Corp. 417,200 8,604,750
---------------------------------------------------------------
|
FS-22
MARKET
SHARES VALUE
FINANCIAL (DIVERSIFIED)-(CONTINUED)
Ambac Financial Group, Inc. 175,600 $ 14,015,075
---------------------------------------------------------------
SEI Investments Co. 156,700 14,220,525
---------------------------------------------------------------
USA Education Inc. 340,000 18,997,500
===============================================================
55,837,850
===============================================================
GAMING, LOTTERY & PARIMUTUEL
COMPANIES-1.57%
Harrah's Entertainment, Inc.(a) 671,200 19,213,100
---------------------------------------------------------------
International Game Technology(a) 100,000 3,662,500
===============================================================
22,875,600
===============================================================
HEALTH CARE (DRUGS-GENERIC &
OTHER)-2.80%
Alpharma Inc.-Class A 215,300 8,356,331
---------------------------------------------------------------
Biovail Corp. (Canada)(a) 342,200 14,393,788
---------------------------------------------------------------
King Pharmaceuticals, Inc.(a) 404,212 18,113,750
===============================================================
40,863,869
===============================================================
HEALTH CARE (HOSPITAL
MANAGEMENT)-2.74%
Community Health Systems(a) 519,000 14,629,313
---------------------------------------------------------------
Health Management Associates,
Inc.-Class A(a) 500,000 9,906,250
---------------------------------------------------------------
LifePoint Hospitals, Inc.(a) 400,000 15,500,000
===============================================================
40,035,563
===============================================================
HEALTH CARE (MANAGED CARE)-2.89%
First Health Group Corp.(a) 481,400 18,774,600
---------------------------------------------------------------
Oxford Health Plans, Inc.(a) 425,600 14,364,000
---------------------------------------------------------------
Trigon Healthcare, Inc.(a) 126,800 9,089,975
===============================================================
42,228,575
===============================================================
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.01%
Edwards Lifesciences Corp.(a) 700,000 9,406,250
---------------------------------------------------------------
PolyMedica Corp.(a) 92,100 5,295,750
===============================================================
14,702,000
===============================================================
HEALTH CARE (SPECIALIZED
SERVICES)-2.41%
Laboratory Corp. of America
Holdings(a) 97,400 13,136,825
---------------------------------------------------------------
Lincare Holdings, Inc.(a) 524,400 22,057,575
===============================================================
35,194,400
===============================================================
INSURANCE (LIFE/HEALTH)-1.40%
Annuity and Life Re (Holdings),
Ltd. (Bermuda) 204,300 5,631,019
---------------------------------------------------------------
Clarica Life Insurance Co. (Canada) 337,900 8,008,892
---------------------------------------------------------------
Nationwide Financial Services,
Inc.-Class A 140,000 6,807,500
===============================================================
20,447,411
===============================================================
INSURANCE (MULTI-LINE)-0.90%
Ace, Ltd. (Bermuda) 335,700 13,176,225
===============================================================
INSURANCE (PROPERTY-CASUALTY)-1.15%
Radian Group Inc. 106,660 7,559,528
---------------------------------------------------------------
XL Capital Ltd.-Class A (Bermuda) 120,900 9,294,188
===============================================================
16,853,716
===============================================================
|
MARKET
SHARES VALUE
INSURANCE BROKERS-1.29%
Aon Corp. 454,300 $ 18,825,056
===============================================================
INVESTMENT MANAGEMENT-1.46%
Affiliated Managers Group, Inc.(a) 225,000 13,528,125
---------------------------------------------------------------
Stilwell Financial, Inc. 175,000 7,842,188
===============================================================
21,370,313
===============================================================
MACHINERY (DIVERSIFIED)-1.49%
APW Ltd.(a) 472,200 21,809,738
===============================================================
MANUFACTURING (SPECIALIZED)-1.66%
Flextronics International Ltd.
(Singapore)(a)(b) 359,544 13,662,672
---------------------------------------------------------------
Mettler-Toledo International
Inc.(a) 227,000 10,598,063
===============================================================
24,260,735
===============================================================
NATURAL GAS-2.45%
El Paso Energy Corp. 294,600 18,467,738
---------------------------------------------------------------
Kinder Morgan, Inc. 450,000 17,353,125
===============================================================
35,820,863
===============================================================
OIL & GAS (DRILLING &
EQUIPMENT)-4.65%
Baker Hughes Inc. 235,000 8,078,125
---------------------------------------------------------------
BJ Services Co.(a) 167,000 8,757,063
---------------------------------------------------------------
Cooper Cameron Corp.(a) 173,800 9,472,100
---------------------------------------------------------------
Global Marine, Inc.(a) 343,200 9,094,800
---------------------------------------------------------------
Grant Prideco, Inc.(a) 400,000 7,425,000
---------------------------------------------------------------
Key Energy Services, Inc.(a) 1,400,000 12,600,000
---------------------------------------------------------------
Pride International, Inc.(a) 495,900 12,552,469
===============================================================
67,979,557
===============================================================
OIL & GAS (EXPLORATION &
PRODUCTION)-1.91%
EOG Resources, Inc. 355,000 13,978,125
---------------------------------------------------------------
Ocean Energy, Inc.(a) 445,000 6,174,375
---------------------------------------------------------------
Spinnaker Exploration Co.(a) 253,900 7,680,475
===============================================================
27,832,975
===============================================================
OIL & GAS (REFINING &
MARKETING)-1.06%
Valero Energy Corp. 470,000 15,539,375
===============================================================
RAILROADS-1.06%
GATX Corp. 367,900 15,474,794
===============================================================
REAL ESTATE INVESTMENT TRUSTS-0.54%
Apartment Investment & Management
Co.-Class A 171,790 7,848,656
===============================================================
RESTAURANTS-0.66%
CEC Entertainment Inc.(a) 302,500 9,642,188
===============================================================
RETAIL (COMPUTERS &
ELECTRONICS)-0.57%
Tech Data Corp.(a) 200,000 8,325,000
===============================================================
RETAIL (DISCOUNTERS)-0.98%
Dollar Tree Stores, Inc.(a) 365,800 14,311,925
===============================================================
RETAIL (FOOD CHAINS)-0.85%
BJ's Wholesale Club, Inc.(a) 377,300 12,427,319
===============================================================
|
FS-23
MARKET
SHARES VALUE
RETAIL (SPECIALTY)-1.03%
Rent-A-Center, Inc.(a) 212,000 $ 6,187,750
---------------------------------------------------------------
Rent-Way, Inc.(a) 287,190 1,453,899
---------------------------------------------------------------
Venator Group, Inc.(a) 520,000 7,345,000
===============================================================
14,986,649
===============================================================
RETAIL (SPECIALTY-APPAREL)-1.47%
Abercrombie & Fitch Co.-Class A(a) 200,000 4,712,500
---------------------------------------------------------------
Intimate Brands, Inc. 462,000 11,030,250
---------------------------------------------------------------
Too Inc.(a) 250,000 5,734,375
===============================================================
21,477,125
===============================================================
SAVINGS & LOAN COMPANIES-0.04%
Local Financial Corp.(a) 50,000 531,250
===============================================================
SERVICES
(ADVERTISING/MARKETING)-0.64%
Lamar Advertising Co.(a) 195,000 9,360,000
===============================================================
SERVICES (COMMERCIAL &
CONSUMER)-2.52%
Copart, Inc.(a) 400,000 6,025,000
---------------------------------------------------------------
Edison Schools Inc.(a) 193,400 5,306,413
---------------------------------------------------------------
Iron Mountain Inc.(a) 250,000 8,453,125
---------------------------------------------------------------
TeleTech Holdings, Inc.(a) 612,400 16,994,100
===============================================================
36,778,638
===============================================================
SERVICES (COMPUTER SYSTEMS)-2.61%
Insight Enterprises, Inc.(a) 454,950 14,785,875
---------------------------------------------------------------
SunGard Data Systems Inc.(a) 455,000 23,261,875
===============================================================
38,047,750
===============================================================
SERVICES (DATA PROCESSING)-3.80%
BISYS Group, Inc. (The)(a) 380,600 17,935,775
---------------------------------------------------------------
Ceridian Corp.(a) 637,000 15,925,000
---------------------------------------------------------------
Concord EFS, Inc.(a) 388,100 16,033,381
---------------------------------------------------------------
Learning Tree International,
Inc.(a) 124,900 5,651,725
===============================================================
55,545,881
===============================================================
SERVICES (EMPLOYMENT)-1.55%
Heidrick & Struggles International,
Inc.(a) 197,000 12,177,063
---------------------------------------------------------------
Korn/Ferry International(a) 300,000 10,500,000
===============================================================
22,677,063
===============================================================
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-2.63%
Arch Wireless, Inc.(a) 1,368,200 4,104,600
---------------------------------------------------------------
Nextel Partners, Inc.-Class A(a) 199,700 4,892,650
---------------------------------------------------------------
o2wireless Solutions, Inc.(a) 277,000 3,220,125
---------------------------------------------------------------
Powerwave Technologies, Inc.(a) 218,200 10,500,875
---------------------------------------------------------------
Rural Cellular Corp.-Class A(a) 120,000 6,450,000
---------------------------------------------------------------
|
MARKET
SHARES VALUE
TELECOMMUNICATIONS
(CELLULAR/WIRELESS)-(CONTINUED)
Western Multiplex Corp.(a) 400,000 $ 5,650,000
---------------------------------------------------------------
Western Wireless Corp.-Class A(a) 75,900 3,605,250
===============================================================
38,423,500
===============================================================
TELECOMMUNICATIONS (LONG
DISTANCE)-0.00%
RateXchange Corp.-Wts., expiring
03/21/03 82,300 1
===============================================================
TELEPHONE-0.87%
Broadwing Inc.(a) 447,200 12,633,400
===============================================================
Total Common Stocks & Other
Equity Interests (Cost
$897,362,158) 1,362,527,974
===============================================================
|
NUMBER
OF EXERCISE EXPIRATION
CONTRACTS PRICE DATE
PUT OPTIONS
PURCHASED-0.30%
COMPUTERS (SOFTWARE &
SERVICES)-0.16%
Mercury Interactive
Corp. 1,490 $100 Jan-01 2,104,625
------------------------------------------------------------------------
Rational Software
Corp. 2,047 50 Nov-00 211,097
========================================================================
2,315,722
========================================================================
ELECTRONICS
(INSTRUMENTATION)-0.06%
Varian Inc. 900 40 Nov-00 866,250
========================================================================
MANUFACTURING
(SPECIALIZED)-0.08%
Flextronics
International Ltd.
(Singapore) 2,400 35 Nov-00 450,000
------------------------------------------------------------------------
Flextronics
International Ltd.
(Singapore) 1,194 40 Jan-01 746,250
========================================================================
1,196,250
========================================================================
Total Put Options
Purchased (Cost
$5,352,170) 4,378,222
========================================================================
|
SHARES
MONEY MARKET FUNDS-6.60%
STIC Liquid Assets Portfolio(c) 48,221,660 48,221,660
===============================================================
STIC Prime Portfolio(c) 48,221,660 48,221,660
===============================================================
Total Money Market Funds (Cost
$96,443,320) 96,443,320
===============================================================
TOTAL INVESTMENTS-100.20% (Cost
$999,157,648) 1,463,349,516
===============================================================
LIABILITIES LESS OTHER
ASSETS-(0.20%) (2,953,689)
===============================================================
NET ASSETS-100.00% $1,460,395,827
_______________________________________________________________
===============================================================
|
Investment Abbreviations:
Wts. - Warrants
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) A portion of this security is subject to call options written. See Note 8.
(c) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-24
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost
$999,157,648) $1,463,349,516
-------------------------------------------------------------
Receivables for:
Investments sold 12,822,398
-------------------------------------------------------------
Fund shares sold 1,835,663
-------------------------------------------------------------
Dividends 681,924
-------------------------------------------------------------
Collateral for securities loaned 90,404,170
-------------------------------------------------------------
Investment for deferred compensation plan 29,714
=============================================================
Total assets 1,569,123,385
=============================================================
LIABILITIES:
Payables for:
Investments purchased 10,111,110
-------------------------------------------------------------
Collateral upon return of securities loaned 90,404,170
-------------------------------------------------------------
Fund shares reacquired 1,163,951
-------------------------------------------------------------
Option contracts written (premiums received
$6,226,953) 4,704,806
-------------------------------------------------------------
Deferred compensation plan 29,714
-------------------------------------------------------------
Accrued advisory fees 777,872
-------------------------------------------------------------
Accrued administrative services fees 12,660
-------------------------------------------------------------
Accrued distribution fees 1,014,845
-------------------------------------------------------------
Accrued trustees' fees 1,244
-------------------------------------------------------------
Accrued transfer agent fees 402,588
-------------------------------------------------------------
Accrued operating expenses 104,598
=============================================================
Total liabilities 108,727,558
=============================================================
Net assets applicable to shares outstanding $1,460,395,827
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $ 759,837,738
_____________________________________________________________
=============================================================
Class B $ 617,576,166
_____________________________________________________________
=============================================================
Class C $ 82,981,923
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE:
Class A 34,867,277
_____________________________________________________________
=============================================================
Class B 29,186,463
_____________________________________________________________
=============================================================
Class C 3,923,807
_____________________________________________________________
=============================================================
Class A:
Net asset value and redemption price per
share $ 21.79
-------------------------------------------------------------
Offering price per share:
(Net asset value of $21.79 divided by
94.50%) $ 23.06
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 21.16
_____________________________________________________________
=============================================================
Class C:
Net asset value, and offering price per
share $ 21.15
_____________________________________________________________
=============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$20,670) $ 4,332,235
------------------------------------------------------------
Dividends from affiliated money market funds 4,827,968
------------------------------------------------------------
Interest 3,398
------------------------------------------------------------
Security lending income 357,145
============================================================
Total investment income 9,520,746
============================================================
EXPENSES:
Advisory fees 9,200,414
------------------------------------------------------------
Administrative services fees 147,339
------------------------------------------------------------
Custodian fees 154,836
------------------------------------------------------------
Distribution fees -- Class A 2,578,744
------------------------------------------------------------
Distribution fees -- Class B 5,913,557
------------------------------------------------------------
Distribution fees -- Class C 739,266
------------------------------------------------------------
Transfer agent fees -- Class A 1,503,546
------------------------------------------------------------
Transfer agent fees -- Class B 1,542,703
------------------------------------------------------------
Transfer agent fees -- Class C 192,856
------------------------------------------------------------
Trustees' fees 4,981
------------------------------------------------------------
Other 652,630
============================================================
Total expenses 22,630,872
============================================================
Less: Expenses paid indirectly (28,220)
============================================================
Net expenses 22,602,652
============================================================
Net investment income (loss) (13,081,906)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES, FOREIGN CURRENCIES,
FUTURES CONTRACTS AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 214,815,770
------------------------------------------------------------
Foreign currencies (445)
------------------------------------------------------------
Futures contracts (2,036,900)
------------------------------------------------------------
Option contracts written 304,347
============================================================
213,082,772
============================================================
Change in net unrealized appreciation of:
Investment securities 243,208,657
------------------------------------------------------------
Option contracts written 1,154,835
============================================================
244,363,492
============================================================
Net gain from investment securities, foreign
currencies, futures contracts and option
contracts 457,446,264
============================================================
Net increase in net assets resulting from
operations $444,364,358
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-25
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
-------------- --------------
OPERATIONS:
Net investment income (loss) $ (13,081,906) $ (12,672,297)
----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, futures contracts and option contracts 213,082,772 68,321,156
----------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies, futures contracts and
option contracts 244,363,492 143,019,774
==============================================================================================
Net increase in net assets resulting from operations 444,364,358 198,668,633
==============================================================================================
Share transactions-net:
Class A (58,539,325) (251,714,847)
----------------------------------------------------------------------------------------------
Class B (17,710,466) (119,088,321)
----------------------------------------------------------------------------------------------
Class C 7,427,062 (2,560,814)
==============================================================================================
Net increase (decrease) in net assets 375,541,629 (174,695,349)
==============================================================================================
NET ASSETS:
Beginning of year 1,084,854,198 1,259,549,547
==============================================================================================
End of year $1,460,395,827 $1,084,854,198
______________________________________________________________________________________________
==============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 813,799,595 $ 874,112,818
----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (49,180) 170,513
----------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies, futures contracts and
option contracts 180,931,398 (10,779,655)
----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies, futures contracts and option contracts 465,714,014 221,350,522
==============================================================================================
$1,460,395,827 $1,084,854,198
______________________________________________________________________________________________
==============================================================================================
|
See Notes to Financial Statements.
FS-26
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Capital Development Fund (the "Fund") is a series portfolio of AIM Equity
Funds (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 eleven separate portfolios,
each having an unlimited number of shares of beneficial interest. Prior to June
17, 2000, the Fund was organized as a series portfolio of AIM Equity Funds, Inc.
At a meeting held on February 3, 2000, the Board of Directors of AIM Equity
Funds, Inc. approved an Agreement and Plan of Reorganization (the
"Reorganization") which reorganized the Fund as a series portfolio of the Trust.
Shareholders of the Fund approved the Reorganization at a meeting held on June
16, 2000. 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 long-term growth of capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.
On October 31, 2000, undistributed net investment income was increased by
$12,862,213, undistributed net realized gains decreased by $21,371,719 and
paid in capital increased by $8,509,506 as a result of book/tax differences
due to utilization of a portion of the proceeds from redemptions as
distributions for federal income tax purposes, foreign currency transactions,
REIT distribution reclassifications and net operating loss reclassifications.
Net assets of the Fund were unaffected by the reclassification discussed
above.
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.
FS-27
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 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. 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. 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.
I. 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 master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.75% of
the first $350 million of the Fund's average daily net assets, plus 0.625% of
the Fund's average daily net assets in excess of $350 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 October 31, 2000, AIM was
paid $147,339 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 October 31, 2000, AFS was paid $1,917,746 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
0.35% 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
FS-28
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 October 31, 2000,
the Class A, Class B and Class C shares paid AIM Distributors $2,578,744,
$5,913,557 and $739,266, respectively, as compensation under the Plans.
AIM Distributors received commissions of $309,839 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 2000,
AIM Distributors received $22,923 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 October 31, 2000, the Fund paid legal fees of $5,962 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 year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $18,763 and reductions in custodian fees of $9,457 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $28,220.
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 year ended October 31,
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 are 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 is 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 borrower did not increase the
collateral accordingly, and the borrower fails to return the securities.
At October 31, 2000, securities with an aggregate value of $88,631,539 were on
loan to brokers. The loans were secured by cash collateral of $90,404,170. For
the year ended October 31, 2000, the Fund received fees of $357,145 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 year ended October 31, 2000 was
$1,326,658,551 and $1,468,801,604, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $490,082,113 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (34,271,003) ========================================================= Net unrealized appreciation of investment securities $455,811,110 _________________________________________________________ ========================================================= Cost of investments for tax purposes is $1,007,538,406. |
NOTE 8-CALL OPTION CONTRACTS
Transactions in call options written during the year ended October 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ------------
Beginning of year 4,982 $ 1,725,877
----------------------------------------------------------
Written 25,261 20,607,437
----------------------------------------------------------
Closed (21,192) (15,804,255)
----------------------------------------------------------
Expired (1,088) (302,106)
==========================================================
End of year 7,963 $ 6,226,953
__________________________________________________________
==========================================================
|
Open call option contracts written at October 31, 2000 were as follows:
NUMBER OCTOBER 31, UNREALIZED
CONTRACT STRIKE OF PREMIUMS 2000 MARKET APPRECIATION
ISSUE MONTH PRICE CONTRACTS RECEIVED VALUE (DEPRECIATION)
----- -------- ------ --------- ---------- ------------ --------------
Flextronics
International Ltd. Nov-00 $ 43 2,400 $ 367,788 $ 240,000 $ 127,788
-------------------------------------------------------------------------------------------------
Mercury Interactive
Corp. Jan-01 120 1,490 3,011,189 2,644,750 366,439
-------------------------------------------------------------------------------------------------
Power-One, Inc. Nov-00 75 2,026 2,215,904 911,700 1,304,204
-------------------------------------------------------------------------------------------------
Rational Software
Corp. Nov-00 60 2,047 632,072 908,356 (276,284)
=================================================================================================
7,963 $6,226,953 $4,704,806 $1,522,147
_________________________________________________________________________________________________
=================================================================================================
|
FS-29
NOTE 9-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 2000 and 1999 were as follows:
2000 1999
--------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ----------- -------------
Sold:
Class A 5,210,489 $ 111,276,526 25,404,762 $ 358,048,933
-------------------------------------------------------------------------------------------------------------------------
Class B 3,984,927 81,378,727 7,763,785 107,015,784
-------------------------------------------------------------------------------------------------------------------------
Class C 1,124,727 23,107,989 2,461,885 34,429,174
=========================================================================================================================
Reacquired:
Class A (8,381,526) (169,815,851) (43,024,621) (609,763,780)
-------------------------------------------------------------------------------------------------------------------------
Class B (5,105,919) (99,089,193) (16,362,323) (226,104,105)
-------------------------------------------------------------------------------------------------------------------------
Class C (816,459) (15,680,927) (2,650,984) (36,989,988)
=========================================================================================================================
(3,983,761) $ (68,822,729) (26,407,496) $(373,363,982)
_________________________________________________________________________________________________________________________
=========================================================================================================================
|
NOTE 10-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
---------------------------------------------------------------------
JUNE 17, 1996
(DATE OPERATIONS
COMMENCED) TO
YEAR ENDED OCTOBER 31, OCTOBER 31,
---------------------------------------------------- ----------------
2000 1999 1998 1997 1996
------------ ---------- ------------ ------------ ----------------
Net asset value, beginning of period $ 15.24 $ 12.89 $ 14.57 $ 11.09 $ 10.00
-----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.13) (0.10)(a) (0.06)(a) (0.10)(a) (0.01)(a)
-----------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 6.68 2.45 (1.62) 3.58 1.10
===================================================================================================================================
Total from investment operations 6.55 2.35 (1.68) 3.48 1.09
===================================================================================================================================
Net asset value, end of period $ 21.79 $ 15.24 $ 12.89 $ 14.57 $ 11.09
___________________________________________________________________________________________________________________________________
===================================================================================================================================
Total return(b) 42.98% 18.23% (11.53)% 31.38% 10.90%
___________________________________________________________________________________________________________________________________
===================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $759,838 $579,514 $717,263 $577,685 $251,253
___________________________________________________________________________________________________________________________________
===================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.28%(c) 1.38% 1.28% 1.33% 1.35%(d)
-----------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.28%(c) 1.38% 1.28% 1.38% 1.60%(d)
===================================================================================================================================
Ratio of net investment income (loss) to average net assets (0.60)%(c) (0.70)% (0.40)% (0.83)% (0.29)%(d)
___________________________________________________________________________________________________________________________________
===================================================================================================================================
Portfolio turnover rate 101% 117% 78% 41% 13%
___________________________________________________________________________________________________________________________________
===================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charges and is not annualized for periods less than
one year.
(c) Ratios are based on average daily net assets of $736,784,011.
(d) Annualized.
FS-30
NOTE 10-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
---------------------------------------------------------------------
OCTOBER 1, 1996
(DATE SALES
COMMENCED) TO
YEAR ENDED OCTOBER 31, OCTOBER 31,
------------------------------------------------- ---------------
2000 1999(a) 1998(a) 1997(a) 1996(a)
-------- -------- --------- --------- ---------------
Net asset value, beginning of period $ 14.90 $ 12.70 $ 14.46 $ 11.08 $ 11.26
-----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.26) (0.20) (0.16) (0.20) (0.01)
-----------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 6.52 2.40 (1.60) 3.58 (0.17)
===================================================================================================================================
Total from investment operations 6.26 2.20 (1.76) 3.38 (0.18)
===================================================================================================================================
Net asset value, end of period $ 21.16 $ 14.90 $ 12.70 $ 14.46 $ 11.08
___________________________________________________________________________________________________________________________________
===================================================================================================================================
Total return(b) 42.01% 17.32% (12.17)% 30.51% (1.60)%
___________________________________________________________________________________________________________________________________
===================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $617,576 $451,508 $493,993 $297,623 $22,435
___________________________________________________________________________________________________________________________________
===================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.99%(c) 2.12% 2.02% 2.09% 1.89%(d)
-----------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.99%(c) 2.12% 2.02% 2.14% 2.28%(d)
===================================================================================================================================
Ratio of net investment income (loss) to average net assets (1.30)%(c) (1.44)% (1.14)% (1.59)% (0.83)%(d)
___________________________________________________________________________________________________________________________________
===================================================================================================================================
Portfolio turnover rate 101% 117% 78% 41% 13%
___________________________________________________________________________________________________________________________________
===================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average daily net assets of $591,355,710.
(d) Annualized.
CLASS C
-----------------------------------------------
AUGUST 4, 1997
(DATE SALES
COMMENCED)
YEAR ENDED OCTOBER 31, TO OCTOBER 31,
---------------------------------------- ---------------
2000 1999(a) 1998 1997(a)
------- ------- ------- ---------------
Net asset value, beginning of period $ 14.89 $ 12.69 $ 14.45 $ 13.48
--------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.25) (0.20) (0.16) (0.06)
--------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 6.51 2.40 (1.60) 1.03
================================================================================================================================
Total from investment operations 6.26 2.20 (1.76) 0.97
================================================================================================================================
Net asset value, end of period $ 21.15 $ 14.89 $ 12.69 $ 14.45
________________________________________________________________________________________________________________________________
================================================================================================================================
Total return(b) 42.04% 17.34% (12.18)% 7.20%
________________________________________________________________________________________________________________________________
================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $82,982 $53,832 $48,293 $12,195
________________________________________________________________________________________________________________________________
================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.99%(c) 2.12% 2.02% 2.14%(d)
--------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.99%(c) 2.12% 2.02% 2.19%(d)
================================================================================================================================
Ratio of net investment income (loss) to average net assets (1.30)%(c) (1.44)% (1.14)% (1.69)%(d)
________________________________________________________________________________________________________________________________
================================================================================================================================
Portfolio turnover rate 101% 117% 78% 41%
________________________________________________________________________________________________________________________________
================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average daily net assets of $73,926,561.
(d) Annualized.
FS-31
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
AIM Equity Funds:
We have audited the accompanying statement of assets and liabilities of the AIM Charter Fund (a portfolio of AIM Equity Funds), including the schedule of investments, as of October 31, 2000, the related statement of operations for the year then ended, the statement of changes in net assets for each of the years in the two-year period then ended and the financial highlights for each of the periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AIM Charter Fund as of October 31, 2000, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended and the financial highlights for each of the periods in the five-year period then ended, in conformity with accounting principles generally accepted in the United States of America.
/s/ KPMG LLP December 6, 2000 Houston, Texas |
FS-32
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
DOMESTIC STOCKS & OTHER EQUITY
INTERESTS-78.41%
BANKS (MONEY CENTER)-4.89%
Chase Manhattan Corp. (The) 10,000,000 $ 455,000,000
===============================================================
BIOTECHNOLOGY-0.81%
Amgen Inc.(a) 1,300,000 75,318,750
===============================================================
BROADCASTING (TELEVISION, RADIO &
CABLE)-2.38%
AT&T Corp.-Liberty Media
Corp.-Class A 5,500,000 99,000,000
---------------------------------------------------------------
Comcast Corp.-Class A(a) 3,000,000 122,250,000
===============================================================
221,250,000
===============================================================
CHEMICALS (DIVERSIFIED)-0.52%
Pharmacia Corp.-$2.60 Conv. Pfd.
ACES(b) 1,000,000 48,187,500
===============================================================
COMMUNICATIONS EQUIPMENT-1.71%
Comverse Technology, Inc.(a) 700,000 78,225,000
---------------------------------------------------------------
JDS Uniphase Corp.(a) 1,000,000 81,375,000
===============================================================
159,600,000
===============================================================
COMPUTERS (HARDWARE)-3.13%
Gateway, Inc.(a) 1,350,000 69,673,500
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 2,000,000 221,750,000
===============================================================
291,423,500
===============================================================
COMPUTERS (NETWORKING)-3.47%
Cisco Systems, Inc.(a) 6,000,000 323,250,000
===============================================================
COMPUTERS (PERIPHERALS)-1.91%
EMC Corp.(a) 2,000,000 178,125,000
===============================================================
COMPUTERS (SOFTWARE &
SERVICES)-7.63%
Ariba, Inc.(a) 800,000 101,100,000
---------------------------------------------------------------
Microsoft Corp.(a) 600,000 41,325,000
---------------------------------------------------------------
Oracle Corp.(a) 6,000,000 198,000,000
---------------------------------------------------------------
VERITAS Software Corp.(a) 2,178,800 307,244,844
---------------------------------------------------------------
Vitria Technology, Inc.(a) 2,325,000 62,484,375
===============================================================
710,154,219
===============================================================
ELECTRICAL EQUIPMENT-5.06%
General Electric Co. 7,500,000 411,093,750
---------------------------------------------------------------
Solectron Corp.(a) 1,350,000 59,400,000
===============================================================
470,493,750
===============================================================
ELECTRONICS
(SEMICONDUCTORS)-2.06%
Analog Devices, Inc.(a) 1,500,000 97,500,000
---------------------------------------------------------------
Linear Technology Corp. 700,000 45,193,750
---------------------------------------------------------------
|
MARKET
SHARES VALUE
ELECTRONICS (SEMICONDUCTORS)-(CONTINUED)
Texas Instruments Inc. 1,000,000 $ 49,062,500
===============================================================
191,756,250
===============================================================
ENTERTAINMENT-1.83%
Time Warner Inc. 2,250,000 170,797,500
===============================================================
EQUIPMENT (SEMICONDUCTOR)-0.46%
Applied Materials, Inc.(a) 800,000 42,500,000
===============================================================
FINANCIAL (DIVERSIFIED)-6.01%
American Express Co. 4,500,000 270,000,000
---------------------------------------------------------------
Citigroup Inc. 5,500,000 289,437,500
===============================================================
559,437,500
===============================================================
HEALTH CARE (DIVERSIFIED)-1.36%
American Home Products Corp. 2,000,000 127,000,000
===============================================================
HEALTH CARE (DRUGS-GENERIC &
OTHER)-1.07%
Genentech, Inc.(a) 1,204,000 99,330,000
===============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-6.34%
Allergan, Inc. 1,250,000 105,078,125
---------------------------------------------------------------
Pfizer Inc. 9,000,000 388,687,500
---------------------------------------------------------------
Pharmacia Corp. 1,750,000 96,250,000
===============================================================
590,015,625
===============================================================
HEALTH CARE (HOSPITAL
MANAGEMENT)-0.74%
Health Management Associates,
Inc.-Class A(a) 3,500,000 69,343,750
===============================================================
HEALTH CARE (MANAGED CARE)-1.18%
UnitedHealth Group Inc. 1,000,000 109,375,000
===============================================================
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.02%
Medtronic, Inc. 1,000,000 54,312,500
---------------------------------------------------------------
PE Corp-PE Biosystems Group 350,000 40,950,000
===============================================================
95,262,500
===============================================================
INSURANCE (MULTI-LINE)-3.16%
American International Group,
Inc. 3,000,000 294,000,000
===============================================================
INSURANCE BROKERS-0.84%
Marsh & McLennan Cos., Inc. 600,000 78,450,000
===============================================================
INVESTMENT
BANKING/BROKERAGE-6.59%
Goldman Sachs Group, Inc. (The) 1,000,000 99,812,500
---------------------------------------------------------------
Merrill Lynch & Co., Inc. 2,000,000 140,000,000
---------------------------------------------------------------
|
FS-33
MARKET
SHARES VALUE
INVESTMENT BANKING/BROKERAGE-(CONTINUED)
Morgan Stanley Dean Witter & Co. 4,000,000 $ 321,250,000
---------------------------------------------------------------
Schwab (Charles) Corp. (The) 1,500,000 52,687,500
===============================================================
613,750,000
===============================================================
INVESTMENT MANAGEMENT-0.72%
Stilwell Financial, Inc. 1,500,000 67,218,750
===============================================================
MANUFACTURING (DIVERSIFIED)-0.58%
Honeywell International Inc. 1,000,000 53,812,500
===============================================================
NATURAL GAS-1.00%
Dynegy Inc.-Class A 2,000,000 92,625,000
===============================================================
OIL & GAS (DRILLING &
EQUIPMENT)-3.01%
Diamond Offshore Drilling, Inc. 500,000 17,281,250
---------------------------------------------------------------
R&B Falcon Corp.(a) 2,000,000 50,000,000
---------------------------------------------------------------
Schlumberger Ltd. 1,750,000 133,218,750
---------------------------------------------------------------
Transocean Sedco Forex Inc. 1,500,000 79,500,000
===============================================================
280,000,000
===============================================================
OIL (INTERNATIONAL
INTEGRATED)-1.68%
Exxon Mobil Corp. 1,750,000 156,078,125
===============================================================
POWER PRODUCERS
(INDEPENDENT)-0.47%
Calpine Corp.(a) 550,000 43,415,625
===============================================================
RETAIL (BUILDING SUPPLIES)-0.46%
Home Depot, Inc. (The) 1,000,000 43,000,000
===============================================================
RETAIL (DEPARTMENT STORES)-0.67%
Kohl's Corp.(a) 1,150,000 62,315,625
===============================================================
RETAIL (DRUG STORES)-0.98%
Walgreen Co. 2,000,000 91,250,000
===============================================================
RETAIL (GENERAL MERCHANDISE)-3.26%
Target Corp. 11,000,000 303,875,000
===============================================================
SERVICES (COMMERCIAL &
CONSUMER)-0.32%
Cendant Corp.-$3.75 Conv. PRIDES 1,000,000 29,375,000
===============================================================
SERVICES (DATA PROCESSING)-0.34%
Ceridian Corp.(a) 1,250,000 31,250,000
===============================================================
TELECOMMUNICATIONS
(CELLULAR/WIRELESS)-0.75%
Phone.com, Inc.(a) 750,000 69,421,875
===============================================================
Total Domestic Stocks & Other
Equity Interests (Cost
$4,995,515,075) 7,297,458,344
===============================================================
|
MARKET
SHARES VALUE
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-11.78%
BERMUDA-5.48%
Tyco International Ltd.
(Manufacturing-Diversified) 9,000,000 $ 510,187,500
===============================================================
CANADA-5.18%
Celestica Inc.
(Electronics-Semiconductors)(a) 3,000,000 215,625,000
---------------------------------------------------------------
Nortel Networks Corp.
(Communications Equipment) 4,000,000 182,000,000
---------------------------------------------------------------
PMC-Sierra, Inc.
(Electronics-Semiconductors)(a) 500,000 84,750,000
===============================================================
482,375,000
===============================================================
FINLAND-0.58%
Nokia Oyj-ADR (Communications
Equipment) 1,250,000 53,437,500
===============================================================
UNITED KINGDOM-0.54%
Shire Pharmaceuticals Group
PLC-ADR (Health
Care-Drugs-Generic & Other)(a) 800,000 50,300,000
===============================================================
Total Foreign Stocks & Other
Equity Interests (Cost
$806,019,092) 1,096,300,000
===============================================================
|
PRINCIPAL
AMOUNT
CONVERTIBLE NOTES-4.95%
COMMUNICATIONS EQUIPMENT-1.95%
Juniper Networks, Inc., Unsec.
Conv. Notes, 4.75%, 03/15/07 $80,000,000 $ 111,600,000
---------------------------------------------------------------
Redback Networks Inc., Conv.
Notes, 5.00%, 04/01/07
(Acquired 04/13/00-07/14/00;
Cost $66,966,675)(c) 80,000,000 69,500,000
===============================================================
181,100,000
===============================================================
COMPUTERS (HARDWARE)-0.40%
Candescent Technologies Corp.,
Conv. Notes, 8.00%, 05/01/03
(Acquired 04/17/98-08/31/00;
Cost $36,693,750)(c) 40,800,000 28,968,000
---------------------------------------------------------------
Candescent Technologies Corp.,
Sr. Conv. Gtd. Sub. Debs.,
8.00%, 05/01/03 (Acquired
03/07/00; Cost $9,360,000)(c) 11,700,000 8,307,000
===============================================================
37,275,000
===============================================================
COMPUTERS (SOFTWARE & SERVICES)-1.99%
VERITAS Software Corp., Conv.
Unsec. Notes, 5.25%, 11/01/04 12,500,000 185,671,875
===============================================================
ELECTRONICS (SEMICONDUCTORS)-0.61%
TranSwitch Corp., Conv. Unsec.
Unsub. Notes, 4.50%, 09/12/05
(Acquired 09/06/00-09/22/00;
Cost $51,641,510)(c) 50,000,000 57,125,000
===============================================================
Total Convertible Notes (Cost
$265,048,751) 461,171,875
===============================================================
|
FS-34
MARKET
SHARES VALUE
MONEY MARKET FUNDS-4.31%
STIC Liquid Assets Portfolio(d) 200,389,105 $ 200,389,105
---------------------------------------------------------------
STIC Prime Portfolio(d) 200,389,105 200,389,105
===============================================================
Total Money Market Funds
(Cost $400,778,210) 400,778,210
===============================================================
TOTAL INVESTMENTS-99.45% (Cost
$6,467,361,128) 9,255,708,429
===============================================================
OTHER ASSETS LESS
LIABILITIES-0.55% 50,876,880
===============================================================
NET ASSETS-100.00% $9,306,585,309
_______________________________________________________________
===============================================================
|
Investment Abbreviations:
ACES - Adjustable Conversion-Rate Equity Security
ADR - American Depositary Receipt
Conv. - Convertible
Gtd. - Guaranteed
Pfd. - Preferred
PRIDES - Preferred Redeemable Increased Dividend Security
Sr. - Senior
Unsec. - Unsecured
Unsub. - Unsubordinated
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Affiliated issuer in which the Fund's holdings of the 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 market value as of 10/31/00 represented 0.52% of the Fund's net assets.
(c) 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 aggregate market value at 10/31/00 was $163,900,000
which represented 1.76% of the Fund's net assets.
(d) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-35
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost
$6,467,361,128) $9,255,708,429
-------------------------------------------------------------
Receivables for:
Investments sold 125,862,482
-------------------------------------------------------------
Fund shares sold 20,439,092
-------------------------------------------------------------
Dividends and interest 6,895,834
-------------------------------------------------------------
Collateral for securities loaned 223,052,700
-------------------------------------------------------------
Investment for deferred compensation plan 111,896
-------------------------------------------------------------
Other assets 167,162
=============================================================
Total assets 9,632,237,595
=============================================================
LIABILITIES:
Payables for:
Investments purchased 83,099,731
-------------------------------------------------------------
Collateral upon return of securities loaned 223,052,700
-------------------------------------------------------------
Fund shares reacquired 8,160,666
-------------------------------------------------------------
Deferred compensation plan 111,896
-------------------------------------------------------------
Accrued advisory fees 4,699,610
-------------------------------------------------------------
Accrued administrative services fees 33,945
-------------------------------------------------------------
Accrued distribution fees 5,099,913
-------------------------------------------------------------
Accrued trustees' fees 2,320
-------------------------------------------------------------
Accrued transfer agent fees 1,239,008
-------------------------------------------------------------
Accrued operating expenses 152,497
=============================================================
Total liabilities 325,652,286
=============================================================
Net assets applicable to shares outstanding $9,306,585,309
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $5,801,868,972
_____________________________________________________________
=============================================================
Class B $3,088,610,539
_____________________________________________________________
=============================================================
Class C $ 412,871,584
_____________________________________________________________
=============================================================
Institutional Class $ 3,234,214
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER SHARE:
Class A 321,076,686
_____________________________________________________________
=============================================================
Class B 174,315,501
_____________________________________________________________
=============================================================
Class C 23,239,560
_____________________________________________________________
=============================================================
Institutional Class 176,469
_____________________________________________________________
=============================================================
Class A:
Net asset value and redemption price per
share $ 18.07
-------------------------------------------------------------
Offering price per share:
(Net asset value of $18.07 divided by
94.50%) $ 19.12
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 17.72
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 17.77
_____________________________________________________________
=============================================================
Institutional Class:
Net asset value, offering and redemption
price per share $ 18.33
_____________________________________________________________
=============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$260,470) $ 44,621,886
------------------------------------------------------------
Dividends from affiliated money market funds 19,976,756
------------------------------------------------------------
Interest 12,038,522
------------------------------------------------------------
Security lending income 57,484
============================================================
Total investment income 76,694,648
============================================================
EXPENSES:
Advisory fees 56,142,463
------------------------------------------------------------
Administrative services fee 383,224
------------------------------------------------------------
Custodian fees 436,940
------------------------------------------------------------
Distribution fees -- Class A 17,302,500
------------------------------------------------------------
Distribution fees -- Class B 28,390,889
------------------------------------------------------------
Distribution fees -- Class C 2,875,637
------------------------------------------------------------
Transfer agent fees -- Class A 6,483,464
------------------------------------------------------------
Transfer agent fees -- Class B 4,193,264
------------------------------------------------------------
Transfer agent fees -- Class C 424,724
------------------------------------------------------------
Transfer agent fees -- Institutional Class 6,987
------------------------------------------------------------
Trustees' fees 32,886
------------------------------------------------------------
Other 2,491,474
============================================================
Total expenses 119,164,452
============================================================
Less: Fees waived (1,484,073)
------------------------------------------------------------
Expenses paid indirectly (142,391)
============================================================
Net expenses 117,537,988
============================================================
Net investment income (loss) (40,843,340)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 479,025,042
------------------------------------------------------------
Foreign currencies (19)
------------------------------------------------------------
Option contracts written (7,070,524)
============================================================
471,954,499
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 506,772,676
------------------------------------------------------------
Foreign currencies (57,630)
------------------------------------------------------------
Option contracts written 174,690
============================================================
506,889,736
============================================================
Net gain on investment securities, foreign
currencies and option contracts 978,844,235
============================================================
Net increase in net assets resulting from
operations $938,000,895
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-36
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
-------------- --------------
OPERATIONS:
Net investment income (loss) $ (40,843,340) $ (7,207,717)
----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and option contracts 471,954,499 657,364,994
----------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies and option contracts 506,889,736 1,116,552,041
==============================================================================================
Net increase in net assets resulting from operations 938,000,895 1,766,709,318
==============================================================================================
Distributions to shareholders from net investment income:
Class A -- (9,134,542)
----------------------------------------------------------------------------------------------
Institutional Class -- (216,682)
----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (388,576,691) (149,620,112)
----------------------------------------------------------------------------------------------
Class B (178,887,093) (57,712,333)
----------------------------------------------------------------------------------------------
Class C (12,095,934) (1,614,093)
----------------------------------------------------------------------------------------------
Institutional Class (5,231,737) (1,761,967)
----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 584,181,510 151,495,357
----------------------------------------------------------------------------------------------
Class B 797,259,785 370,892,559
----------------------------------------------------------------------------------------------
Class C 277,016,670 84,930,162
----------------------------------------------------------------------------------------------
Institutional Class (65,767,394) 9,431,197
==============================================================================================
Net increase in net assets 1,945,900,011 2,163,398,864
==============================================================================================
NET ASSETS:
Beginning of year 7,360,685,298 5,197,286,434
==============================================================================================
End of year $9,306,585,309 $7,360,685,298
______________________________________________________________________________________________
==============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $6,086,848,912 $4,466,453,244
----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (265,564) (217,108)
----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and option contracts 431,720,148 613,057,085
----------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities, foreign currencies and option contracts 2,788,281,813 2,281,392,077
==============================================================================================
$9,306,585,309 $7,360,685,298
______________________________________________________________________________________________
==============================================================================================
|
See Notes to Financial Statements.
FS-37
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Charter Fund (the "Fund") is a series portfolio of AIM Equity Funds (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 eleven separate portfolios, each
having an unlimited number of shares of beneficial interest. Prior to June 17,
2000 the Fund was organized as a series portfolio of AIM Equity Funds, Inc. At a
meeting held on February 3, 2000, the Board of Directors of AIM Equity Funds,
Inc. approved an Agreement and Plan of Reorganization (the "Reorganization")
which reorganized the Fund as a series portfolio of the Trust. Shareholders of
the Fund approved the Reorganization at a meeting held on June 16, 2000. The
Fund currently offers four different classes of shares: Class A shares, Class B
shares, Class C shares and the Institutional Class. 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. Institutional Class shares are sold without a
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 growth of capital with a secondary objective
of current income.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 -- Securities, including restricted securities, are
valued according to the following policy. 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.
On October 31, 2000, undistributed net investment income was increased by
$40,794,884, undistributed net realized gains decreased by $68,499,981 and
paid in capital increased by $27,705,097 as a result of differences due to
utilization of a portion of the proceeds from redemptions as distributions
for federal income tax purposes and net operating loss reclassifications. Net
assets of the Fund were unaffected by the reclassification discussed above.
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.
FS-38
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 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. 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. Bond Premiums -- It has been the policy of the Fund not to amortize market
premiums on bonds for financial reporting purposes. In November 2000, a
revised AICPA Audit and Accounting Guide, Audits of Investment Companies, was
issued and is effective for fiscal years beginning after December 15, 2000.
The revised Guide will require the Fund to amortize premium and discount on
all fixed-income securities. Upon initial adoption, the Fund will be required
to adjust the cost of its fixed-income securities by the cumulative amount of
amortization that would have been recognized had amortization been in effect
from the purchase date of each holding. Adopting this accounting principle
will not effect the Fund's net asset value, but will change the
classification of certain amounts between interest income and realized and
unrealized gain/loss in the Statement of Operations. The Fund expects that
the impact of the adoption of this principle will not be material to the
financial statements.
I. 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 master investment agreement, the
Fund pays an advisory fee to AIM at the annual rate of 1.0% of the first $30
million of the Fund's average daily net assets, plus 0.75% of the Fund's average
daily net assets in excess of $30 million to and including $150 million, 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% 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. During the year
ended October 31, 2000, AIM waived fees of $1,484,073. Under the terms of a
master sub-advisory agreement between AIM and A I M Capital Management, Inc.
("AIM Capital"), AIM pays AIM Capital 50% of the amount paid by the Fund to AIM.
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 October 31, 2000, AIM was
paid $383,224 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 October 31, 2000, AFS was
paid $5,656,971 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, Class C and the Institutional Class 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
FS-39
"Plans"). The Fund, pursuant to the Plans, pays AIM Distributors compensation at
the annual rate of 0.30% 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. During the year ended October 31, 2000, the Class A, Class B and Class
C shares paid AIM Distributors $17,302,500, $28,390,889 and $2,875,637,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $3,447,012 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 2000,
AIM Distributors received $148,823 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 October 31, 2000, the Fund paid legal fees of $17,752
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 year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $120,163 and reductions in custodian fees of $22,228 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $142,391.
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 year ended October 31,
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 are 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 is 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 October 31, 2000, securities with an aggregate value of $217,561,694 were
on loan to brokers. The loans were secured by cash collateral of $223,052,700.
For the year ended October 31, 2000, the Fund received fees of $57,484 for
securities lending. For the year ended October 31, 2000, the Fund received fees
of $57,484 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 year ended October 31, 2000 was
$7,614,658,355 and $6,854,206,652, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $2,929,797,242 ---------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (168,568,503) ========================================================== Net unrealized appreciation of investment securities $2,761,228,739 __________________________________________________________ ========================================================== Cost of investments for tax purposes is $6,494,479,690. |
NOTE 8-CALL OPTION CONTRACTS
Transactions in call options written during the year ended October 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
-------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ------------
Beginning of year 22,500 $ 27,510,348
-----------------------------------------------------------------------------------------
Written 32,000 15,761,611
-----------------------------------------------------------------------------------------
Closed (27,181) (27,941,081)
-----------------------------------------------------------------------------------------
Exercised (10,500) (6,227,291)
-----------------------------------------------------------------------------------------
Expired (16,819) (9,103,587)
=========================================================================================
End of year -- $ --
_________________________________________________________________________________________
=========================================================================================
|
FS-40
NOTE 9-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 2000 and 1999 were as follows:
2000 1999
----------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- -------------
Sold:
Class A 57,178,653 $1,066,455,209 51,272,783 $ 809,088,837
---------------------------------------------------------------------------------------------------------------------------
Class B 53,229,017 974,381,372 36,310,602 576,056,633
---------------------------------------------------------------------------------------------------------------------------
Class C 16,418,781 302,161,441 6,968,661 111,866,437
---------------------------------------------------------------------------------------------------------------------------
Institutional Class 579,610 10,786,891 828,138 13,421,969
===========================================================================================================================
Issued as reinvestment of dividends:
Class A 21,344,032 366,468,078 10,532,077 149,384,623
---------------------------------------------------------------------------------------------------------------------------
Class B 9,983,505 169,088,645 3,894,826 54,866,091
---------------------------------------------------------------------------------------------------------------------------
Class C 672,773 11,427,814 107,859 1,525,822
---------------------------------------------------------------------------------------------------------------------------
Institutional Class 294,477 5,109,184 134,608 1,929,704
===========================================================================================================================
Reacquired:
Class A (45,774,876) (848,741,777) (51,731,503) (806,978,103)
---------------------------------------------------------------------------------------------------------------------------
Class B (18,927,570) (346,210,232) (16,551,587) (260,030,165)
---------------------------------------------------------------------------------------------------------------------------
Class C (1,991,214) (36,572,585) (1,788,368) (28,462,097)
---------------------------------------------------------------------------------------------------------------------------
Institutional Class (4,553,078) (81,663,469) (372,429) (5,920,476)
===========================================================================================================================
88,454,110 $1,592,690,571 39,605,667 $ 616,749,275
___________________________________________________________________________________________________________________________
===========================================================================================================================
|
NOTE 10-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
2000(a) 1999 1998 1997 1996
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period $ 17.16 $ 13.32 $ 13.41 $ 11.19 $ 10.63
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) 0.02 0.12 0.10 0.19
---------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 2.30 4.39 1.23 2.91 1.43
=================================================================================================================================
Total from investment operations 2.26 4.41 1.35 3.01 1.62
=================================================================================================================================
Less distributions:
Dividends from net investment income -- (0.03) (0.10) (0.12) (0.16)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (1.35) (0.54) (1.34) (0.67) (0.90)
=================================================================================================================================
Total distributions (1.35) (0.57) (1.44) (0.79) (1.06)
=================================================================================================================================
Net asset value, end of period $ 18.07 $ 17.16 $ 13.32 $ 13.41 $ 11.19
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(b) 13.60% 34.05% 11.20% 28.57% 16.70%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $5,801,869 $4,948,666 $3,706,938 $3,466,912 $2,647,208
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.06%(c) 1.05% 1.08% 1.09% 1.12%
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.08%(c) 1.07% 1.10% 1.10% 1.12%
=================================================================================================================================
Ratio of net investment income (loss) to average net assets (0.20)%(c) 0.11% 0.95% 0.79% 1.81%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 80% 107% 154% 170% 164%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges.
(c) Ratios are based on average daily net assets of $5,767,499,930.
FS-41
NOTE 10-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
----------------------------------------------------------------
YEAR ENDED OCTOBER 31,
2000(a) 1999 1998 1997 1996
---------- ---------- ---------- ---------- --------
Net asset value, beginning of period $ 16.97 $ 13.24 $ 13.37 $ 11.18 $ 10.62
--------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.17) (0.10) 0.02 0.01 0.10
--------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 2.27 4.37 1.22 2.89 1.45
================================================================================================================================
Total from investment operations 2.10 4.27 1.24 2.90 1.55
================================================================================================================================
Less distributions:
Dividends from net investment income -- -- (0.03) (0.04) (0.09)
--------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (1.35) (0.54) (1.34) (0.67) (0.90)
================================================================================================================================
Total distributions (1.35) (0.54) (1.37) (0.71) (0.99)
================================================================================================================================
Net asset value, end of period $ 17.72 $ 16.97 $ 13.24 $ 13.37 $ 11.18
________________________________________________________________________________________________________________________________
================================================================================================================================
Total return(b) 12.76% 33.06% 10.33% 27.54% 15.90%
________________________________________________________________________________________________________________________________
================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $3,088,611 $2,206,752 $1,408,687 $1,056,094 $515,672
________________________________________________________________________________________________________________________________
================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.80%(c) 1.80% 1.84% 1.85% 1.94%
--------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.82%(c) 1.82% 1.86% 1.86% 1.94%
================================================================================================================================
Ratio of net investment income (loss) to average net assets (0.94)%(c) (0.64)% 0.19% 0.03% 0.99%
________________________________________________________________________________________________________________________________
================================================================================================================================
Portfolio turnover rate 80% 107% 154% 170% 164%
________________________________________________________________________________________________________________________________
================================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges.
(c) Ratios are based on average daily net assets of $2,839,088,899.
CLASS C
----------------------------------------------------------
AUGUST 4, 1997
YEAR ENDED OCTOBER 31, (DATE SALES COMMENCED)
2000(a) 1999 1998 TO OCTOBER 31, 1997
-------- -------- -------- ----------------------
Net asset value, beginning of period $ 17.01 $ 13.27 $ 13.39 $13.86
------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.17) (0.09) 0.02 --
------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 2.28 4.37 1.23 (0.45)
========================================================================================================================
Total from investment operations 2.11 4.28 1.25 (0.45)
========================================================================================================================
Less distributions:
Dividends from net investment income -- -- (0.03) --
------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (1.35) (0.54) (1.34) (0.02)
========================================================================================================================
Total distributions (1.35) (0.54) (1.37) (0.02)
========================================================================================================================
Net asset value, end of period $ 17.77 $ 17.01 $ 13.27 $13.39
________________________________________________________________________________________________________________________
========================================================================================================================
Total return(b) 12.78% 33.06% 10.39% (3.24)%
========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $412,872 $138,467 $37,846 $5,669
________________________________________________________________________________________________________________________
========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.80%(c) 1.80% 1.84% 1.82%(d)
------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.82%(c) 1.82% 1.86% 1.83%(d)
========================================================================================================================
Ratio of net investment income (loss) to average net assets (0.94)%(c) (0.64)% 0.19% 0.06%(d)
________________________________________________________________________________________________________________________
========================================================================================================================
Portfolio turnover rate 80% 107% 154% 170%
________________________________________________________________________________________________________________________
========================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average daily net assets of $287,563,743.
(d) Annualized.
FS-42
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
AIM Equity Funds:
We have audited the accompanying statement of assets and liabilities of the AIM Constellation Fund (a portfolio of AIM Equity Funds), including the schedule of investments, as of October 31, 2000, 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 periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AIM Constellation Fund as of October 31, 2000, and 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 periods in the five-year period then ended, in conformity with accounting principles generally accepted in the United States of America.
/s/ KPMG LLP December 6, 2000 Houston, Texas |
FS-43
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY
INTERESTS-91.25%
BANKS (MAJOR REGIONAL)-1.56%
Northern Trust Corp. 2,250,000 $ 192,093,750
---------------------------------------------------------------
State Street Corp. 1,125,000 140,332,500
===============================================================
332,426,250
===============================================================
BANKS (MONEY CENTER)-0.64%
Chase Manhattan Corp. (The) 3,000,000 136,500,000
===============================================================
BIOTECHNOLOGY-0.31%
Amgen Inc.(a) 1,137,800 65,921,287
===============================================================
BROADCASTING (TELEVISION, RADIO
& CABLE)-3.45%
Comcast Corp.-Class A(a) 2,500,000 101,875,000
---------------------------------------------------------------
General Motors Corp.-Class H(a) 9,050,000 293,220,000
---------------------------------------------------------------
Hispanic Broadcasting Corp.(a) 5,750,000 179,687,500
---------------------------------------------------------------
Univision Communications
Inc.-Class A(a) 3,329,600 127,357,200
---------------------------------------------------------------
Westwood One, Inc.(a) 1,706,300 32,313,143
===============================================================
734,452,843
===============================================================
COMMUNICATIONS EQUIPMENT-10.98%
ADC Telecommunications, Inc.(a) 13,250,000 283,218,750
---------------------------------------------------------------
Alcatel S.A.-ADR (France) 5,250,000 327,468,750
---------------------------------------------------------------
CIENA Corp.(a) 1,125,800 118,349,725
---------------------------------------------------------------
Comverse Technology, Inc.(a) 4,000,000 447,000,000
---------------------------------------------------------------
Corning Inc. 8,250,000 631,125,000
---------------------------------------------------------------
JDS Uniphase Corp.(a) 5,500,000 447,562,500
---------------------------------------------------------------
Scientific-Atlanta, Inc. 1,250,000 85,546,875
===============================================================
2,340,271,600
===============================================================
COMPUTERS (HARDWARE)-2.69%
Palm, Inc.(a) 4,500,000 241,031,250
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 3,000,000 332,625,000
===============================================================
573,656,250
===============================================================
COMPUTERS (NETWORKING)-3.53%
Cisco Systems, Inc.(a) 7,000,000 377,125,000
---------------------------------------------------------------
Juniper Networks, Inc.(a) 1,250,000 243,750,000
---------------------------------------------------------------
VeriSign, Inc.(a) 1,000,000 132,000,000
===============================================================
752,875,000
===============================================================
COMPUTERS (PERIPHERALS)-2.77%
Brocade Communications Systems,
Inc.(a) 1,425,000 324,009,375
---------------------------------------------------------------
EMC Corp.(a) 3,000,000 267,187,500
===============================================================
591,196,875
===============================================================
|
MARKET
SHARES VALUE
COMPUTERS (SOFTWARE &
SERVICES)-13.64%
Ariba, Inc.(a) 2,200,000 $ 278,025,000
---------------------------------------------------------------
BEA Systems, Inc.(a) 2,200,000 157,850,000
---------------------------------------------------------------
Business Objects S.A.-ADR
(France)(a) 1,000,000 78,796,875
---------------------------------------------------------------
Check Point Software
Technologies Ltd. (Israel)(a) 3,581,300 567,188,387
---------------------------------------------------------------
Gemstar-TV Guide International,
Inc.(a) 1,000,000 68,562,500
---------------------------------------------------------------
i2 Technologies, Inc.(a) 1,400,000 238,000,000
---------------------------------------------------------------
InfoSpace, Inc.(a) 4,025,000 81,003,125
---------------------------------------------------------------
Intuit Inc.(a) 2,000,000 122,875,000
---------------------------------------------------------------
Oracle Corp.(a) 5,147,200 169,857,600
---------------------------------------------------------------
Portal Software, Inc.(a) 2,500,000 87,968,750
---------------------------------------------------------------
Rational Software Corp.(a) 2,283,700 136,308,452
---------------------------------------------------------------
Siebel Systems, Inc.(a) 2,039,800 214,051,512
---------------------------------------------------------------
VERITAS Software Corp.(a) 5,000,000 705,078,125
===============================================================
2,905,565,326
===============================================================
CONSUMER FINANCE-1.48%
Capital One Financial Corp. 2,000,000 126,250,000
---------------------------------------------------------------
Providian Financial Corp. 1,825,000 189,800,000
===============================================================
316,050,000
===============================================================
ELECTRICAL EQUIPMENT-1.32%
American Power Conversion
Corp.(a) 4,099,100 53,032,106
---------------------------------------------------------------
Sanmina Corp.(a) 2,000,000 228,625,000
===============================================================
281,657,106
===============================================================
ELECTRONICS
(INSTRUMENTATION)-0.17%
Newport Corp. 322,000 36,773,406
===============================================================
ELECTRONICS
(SEMICONDUCTORS)-9.06%
Altera Corp.(a) 3,000,000 122,812,500
---------------------------------------------------------------
Analog Devices, Inc.(a) 5,138,700 334,015,500
---------------------------------------------------------------
Celestica Inc. (Canada)(a) 3,728,000 267,950,000
---------------------------------------------------------------
Integrated Device Technology,
Inc.(a) 1,386,400 78,071,650
---------------------------------------------------------------
Linear Technology Corp. 2,000,000 129,125,000
---------------------------------------------------------------
Maxim Integrated Products,
Inc.(a) 2,000,000 132,625,000
---------------------------------------------------------------
Microchip Technology Inc.(a) 3,000,168 94,880,313
---------------------------------------------------------------
PMC-Sierra, Inc. (Canada)(a) 2,000,000 339,000,000
---------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 3,575,000 250,026,563
---------------------------------------------------------------
Xilinx, Inc.(a) 2,500,000 181,093,750
===============================================================
1,929,600,276
===============================================================
EQUIPMENT (SEMICONDUCTOR)-0.36%
KLA-Tencor Corp.(a) 2,250,000 76,078,125
===============================================================
|
FS-44
MARKET
SHARES VALUE
FINANCIAL (DIVERSIFIED)-2.73%
American Express Co. 2,500,000 $ 150,000,000
---------------------------------------------------------------
Freddie Mac 988,200 59,292,000
---------------------------------------------------------------
J.P. Morgan & Co., Inc. 2,250,000 372,375,000
===============================================================
581,667,000
===============================================================
HEALTH CARE (DRUGS-GENERIC &
OTHER)-1.19%
Forest Laboratories, Inc.(a) 1,000,000 132,500,000
---------------------------------------------------------------
Medicis Pharmaceutical
Corp.-Class A(a)(b) 1,654,100 121,783,113
===============================================================
254,283,113
===============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-1.01%
Pfizer Inc. 5,000,000 215,937,500
===============================================================
HEALTH CARE (HOSPITAL
MANAGEMENT)-1.69%
HCA-Healthcare Corp. (The) 3,000,000 119,812,500
---------------------------------------------------------------
Health Management Associates,
Inc.- Class A(a) 8,143,900 161,351,019
---------------------------------------------------------------
Tenet Healthcare Corp.(a) 2,000,000 78,625,000
===============================================================
359,788,519
===============================================================
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-2.92%
Biomet, Inc. 2,962,050 107,189,184
---------------------------------------------------------------
Medtronic, Inc. 3,000,000 162,937,500
---------------------------------------------------------------
PE Corp-PE Biosystems Group 3,000,000 351,000,000
===============================================================
621,126,684
===============================================================
INSURANCE (LIFE/HEALTH)-1.06%
AFLAC, Inc. 3,103,100 226,720,244
===============================================================
INSURANCE (MULTI-LINE)-0.57%
Ace, Ltd. (Bermuda) 3,100,000 121,675,000
===============================================================
INSURANCE BROKERS-0.40%
Aon Corp. 2,046,400 84,797,700
===============================================================
INVESTMENT
BANKING/BROKERAGE-4.86%
Goldman Sachs Group, Inc. (The) 3,400,000 339,362,500
---------------------------------------------------------------
Merrill Lynch & Co., Inc. 2,200,000 154,000,000
---------------------------------------------------------------
Morgan Stanley Dean Witter &
Co. 3,900,000 313,218,750
---------------------------------------------------------------
Schwab (Charles) Corp. (The) 6,500,000 228,312,500
===============================================================
1,034,893,750
===============================================================
INVESTMENT MANAGEMENT-0.92%
Federated Investors, Inc.-Class B 538,800 15,692,550
---------------------------------------------------------------
Stilwell Financial, Inc. 4,000,000 179,250,000
===============================================================
194,942,550
===============================================================
LEISURE TIME (PRODUCTS)-1.19%
Harley-Davidson, Inc. 5,250,000 252,984,375
===============================================================
|
MARKET
SHARES VALUE
MANUFACTURING
(DIVERSIFIED)-0.59%
Danaher Corp. 2,000,000 $ 126,250,000
===============================================================
MANUFACTURING
(SPECIALIZED)-0.32%
Millipore Corp. 1,286,900 67,562,250
===============================================================
NATURAL GAS-0.54%
Enron Corp. 1,400,000 114,887,500
===============================================================
OIL & GAS (DRILLING &
EQUIPMENT)-5.37%
BJ Services Co.(a) 1,000,000 52,437,500
---------------------------------------------------------------
Cooper Cameron Corp.(a) 2,206,200 120,237,900
---------------------------------------------------------------
ENSCO International Inc. 3,500,000 116,375,000
---------------------------------------------------------------
Grant Prideco, Inc.(a) 3,983,300 73,940,006
---------------------------------------------------------------
Nabors Industries, Inc.(a) 4,232,700 215,444,430
---------------------------------------------------------------
R&B Falcon Corp.(a) 2,674,900 66,872,500
---------------------------------------------------------------
Rowan Cos., Inc.(a) 3,622,700 91,246,756
---------------------------------------------------------------
Smith International, Inc.(a) 2,070,600 145,977,300
---------------------------------------------------------------
Transocean Sedco Forex Inc. 3,500,000 185,500,000
---------------------------------------------------------------
Weatherford International,
Inc.(a) 2,100,000 76,650,000
===============================================================
1,144,681,392
===============================================================
OIL & GAS (EXPLORATION &
PRODUCTION)-0.72%
Anadarko Petroleum Corp. 1,250,000 80,062,500
---------------------------------------------------------------
Kerr-McGee Corp. 1,115,000 72,823,438
===============================================================
152,885,938
===============================================================
RESTAURANTS-0.49%
Brinker International, Inc.(a) 2,639,400 103,596,450
===============================================================
RETAIL (BUILDING
SUPPLIES)-0.86%
Lowe's Cos., Inc. 4,000,000 182,750,000
===============================================================
RETAIL (COMPUTERS &
ELECTRONICS)-1.46%
Best Buy Co., Inc.(a) 1,553,900 77,986,356
---------------------------------------------------------------
CDW Computer Centers, Inc.(a) 1,500,000 96,656,250
---------------------------------------------------------------
RadioShack Corp. 2,294,400 136,803,600
===============================================================
311,446,206
===============================================================
RETAIL (DEPARTMENT
STORES)-1.02%
Kohl's Corp.(a) 4,000,000 216,750,000
===============================================================
RETAIL (DISCOUNTERS)-0.50%
Dollar Tree Stores, Inc.(a) 2,715,900 106,259,588
===============================================================
RETAIL (SPECIALTY)-1.61%
Bed Bath & Beyond Inc.(a) 10,000,000 258,125,000
---------------------------------------------------------------
Tiffany & Co. 2,000,000 85,375,000
===============================================================
343,500,000
===============================================================
RETAIL
(SPECIALTY-APPAREL)-1.14%
Intimate Brands, Inc. 3,000,000 71,625,000
---------------------------------------------------------------
|
FS-45
MARKET
SHARES VALUE
RETAIL (SPECIALTY-APPAREL)-(CONTINUED)
Men's Wearhouse, Inc.
(The)(a)(b) 2,487,800 $ 72,768,150
---------------------------------------------------------------
Talbots, Inc. (The) 1,250,000 98,828,125
===============================================================
243,221,275
===============================================================
SERVICES (ADVERTISING/
MARKETING)-2.10%
Lamar Advertising Co.(a)(b) 4,500,000 216,000,000
---------------------------------------------------------------
Omnicom Group Inc. 2,500,000 230,625,000
===============================================================
446,625,000
===============================================================
SERVICES (COMPUTER
SYSTEMS)-0.72%
SunGard Data Systems Inc.(a) 3,000,000 153,375,000
===============================================================
SERVICES (DATA
PROCESSING)-1.78%
Ceridian Corp.(a) 1,000,000 25,000,000
---------------------------------------------------------------
Fiserv, Inc.(a) 5,000,000 262,187,500
---------------------------------------------------------------
Paychex, Inc. 1,641,200 93,035,525
===============================================================
380,223,025
===============================================================
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-1.29%
Crown Castle International
Corp.(a) 3,500,000 106,093,750
---------------------------------------------------------------
Phone.com, Inc.(a) 1,825,000 168,926,563
===============================================================
275,020,313
===============================================================
|
MARKET
SHARES VALUE
TELEPHONE-0.24%
Qwest Communications
International Inc.(a) 1,050,000 $ 51,056,250
===============================================================
Total Common Stocks & Other
Equity Interests (Cost
$11,788,064,742) 19,441,930,966
===============================================================
|
PRINCIPAL
AMOUNT
CONVERTIBLE CORPORATE
BONDS-0.59%
ELECTRONICS
(SEMICONDUCTORS)-0.59%
Celestica Inc. (Canada), Conv.
Yankee Bonds, 3.19%, 08/01/20
(Cost $122,154,597)(c) $244,200,000 125,152,500
===============================================================
|
SHARES
MONEY MARKET FUNDS-7.38%
STIC Liquid Assets Portfolio(d) 786,842,293 786,842,293
---------------------------------------------------------------
STIC Prime Portfolio(d) 786,842,293 786,842,293
===============================================================
Total Money Market Funds
(Cost $1,573,684,586) 1,573,684,586
===============================================================
TOTAL INVESTMENTS-99.22% (Cost
$13,483,903,925) 21,140,768,053
===============================================================
OTHER ASSETS LESS
LIABILITIES-0.78% 166,373,812
===============================================================
NET ASSETS-100.00% $21,307,141,865
_______________________________________________________________
===============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Conv. - Convertible
Notes to Schedule of Investments:
(a)Non-income producing security.
(b)Affiliated issuer in which the Fund's holdings of the 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 market value as of 10/31/00 was $410,551,263, which represented 1.93% of
the Fund's net assets.
(c)Zero coupon bond issued at a discount. The interest rate shown represents the
rate of original issue discount.
(d)The money market fund and the fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-46
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost
$13,483,903,925) $21,140,768,053
-------------------------------------------------------------
Receivables for:
Collateral for securities loaned 1,751,204,824
-------------------------------------------------------------
Investments sold 195,686,141
-------------------------------------------------------------
Fund shares sold 102,466,015
-------------------------------------------------------------
Dividends 7,238,899
-------------------------------------------------------------
Investment for deferred compensation plan 240,744
-------------------------------------------------------------
Other assets 1,264,576
-------------------------------------------------------------
Total assets 23,198,869,252
=============================================================
LIABILITIES:
Payables for:
Investments purchased 90,980,392
-------------------------------------------------------------
Collateral upon return of securities
loaned 1,751,204,824
-------------------------------------------------------------
Fund shares reacquired 21,690,805
-------------------------------------------------------------
Deferred compensation plan 240,744
-------------------------------------------------------------
Accrued advisory fees 10,344,044
-------------------------------------------------------------
Accrued administrative services fees 65,764
-------------------------------------------------------------
Accrued distribution fees 8,412,780
-------------------------------------------------------------
Accrued trustees' fees 6,051
-------------------------------------------------------------
Accrued transfer agent fees 7,115,992
-------------------------------------------------------------
Accrued operating expenses 1,665,991
=============================================================
Total liabilities 1,891,727,387
=============================================================
Net assets applicable to shares outstanding $21,307,141,865
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $19,268,977,253
_____________________________________________________________
=============================================================
Class B $ 1,315,523,852
_____________________________________________________________
=============================================================
Class C $ 434,544,168
_____________________________________________________________
=============================================================
Institutional Class $ 288,096,592
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE:
Class A 442,936,863
_____________________________________________________________
=============================================================
Class B 31,116,870
_____________________________________________________________
=============================================================
Class C 10,281,339
_____________________________________________________________
=============================================================
Institutional Class 6,324,588
_____________________________________________________________
=============================================================
Class A:
Net asset value and redemption price per
share $ 43.50
-------------------------------------------------------------
Offering price per share:
(Net asset value of $43.50 divided by
94.50%) $ 46.03
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 42.28
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 42.27
_____________________________________________________________
=============================================================
Institutional Class:
Net asset value, offering and redemption
price per share $ 45.55
_____________________________________________________________
=============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$435,333) $ 34,073,020
-------------------------------------------------------------
Dividends from affiliated money market funds 57,256,376
-------------------------------------------------------------
Interest 3,750,253
-------------------------------------------------------------
Security lending income 497,347
=============================================================
Total investment income 95,576,996
=============================================================
EXPENSES:
Advisory fees 128,677,520
-------------------------------------------------------------
Administrative services fees 731,392
-------------------------------------------------------------
Custodian fees 966,983
-------------------------------------------------------------
Distribution fees -- Class A 56,629,759
-------------------------------------------------------------
Distribution fees -- Class B 10,309,561
-------------------------------------------------------------
Distribution fees -- Class C 3,222,875
-------------------------------------------------------------
Transfer agent fees -- Class A 27,560,458
-------------------------------------------------------------
Transfer agent fees -- Class B 2,176,576
-------------------------------------------------------------
Transfer agent fees -- Class C 680,420
-------------------------------------------------------------
Transfer agent fees -- Institutional Class 47,441
-------------------------------------------------------------
Trustees' fees 59,789
-------------------------------------------------------------
Other 5,694,169
-------------------------------------------------------------
Total expenses 236,756,943
=============================================================
Less: Fees waived (6,187,566)
-------------------------------------------------------------
Expenses paid indirectly (428,909)
=============================================================
Net expenses 230,140,468
=============================================================
Net investment income (loss) (134,563,472)
=============================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES, FOREIGN SECURITIES,
AND OPTION CONTRACTS
Net realized gain from:
Investment securities 3,909,425,835
-------------------------------------------------------------
Option contracts written 87,874,405
=============================================================
3,997,300,240
=============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 1,648,464,708
-------------------------------------------------------------
Foreign currencies (1,500)
-------------------------------------------------------------
Option contracts written 1,248,599
=============================================================
1,649,711,807
=============================================================
Net gain on investment securities, foreign
currencies, and option contracts 5,647,012,047
=============================================================
Net increase in net assets resulting from
operations $5,512,448,575
_____________________________________________________________
=============================================================
|
See Notes to Financial Statements.
FS-47
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
--------------- ---------------
OPERATIONS:
Net investment income (loss) $ (134,563,472) $ (76,875,258)
------------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, and option contracts 3,997,300,240 1,644,017,203
------------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies, and option contracts 1,649,711,807 2,669,133,759
================================================================================================
Net increase in net assets resulting from operations 5,512,448,575 4,236,275,704
================================================================================================
Distributions to shareholders from net realized gains:
Class A (1,341,534,330) (337,206,115)
------------------------------------------------------------------------------------------------
Class B (59,304,397) (8,290,207)
------------------------------------------------------------------------------------------------
Class C (16,589,886) (2,229,567)
------------------------------------------------------------------------------------------------
Institutional Class (23,400,833) (5,075,580)
------------------------------------------------------------------------------------------------
Share transactions-net:
Class A 1,156,513,412 (1,783,881,252)
------------------------------------------------------------------------------------------------
Class B 575,351,569 205,093,817
------------------------------------------------------------------------------------------------
Class C 231,744,660 55,508,352
------------------------------------------------------------------------------------------------
Institutional Class (16,568,699) (4,793,973)
================================================================================================
Net increase in net assets 6,018,660,071 2,355,401,179
================================================================================================
NET ASSETS:
Beginning of year 15,288,481,794 12,933,080,615
------------------------------------------------------------------------------------------------
End of year $21,307,141,865 $15,288,481,794
________________________________________________________________________________________________
================================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $10,009,800,678 $ 7,663,956,851
------------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (652,603) (551,737)
------------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies, and option contracts 3,641,131,584 1,617,926,281
------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies, and option contracts 7,656,862,206 6,007,150,399
================================================================================================
$21,307,141,865 $15,288,481,794
________________________________________________________________________________________________
================================================================================================
|
See Notes to Financial Statements.
FS-48
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Constellation Fund (the "Fund") is a series portfolio of AIM Equity Funds
(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 eleven separate portfolios,
each having an unlimited number of shares of beneficial interest. Prior to June
17, 2000, the Fund was organized as a series portfolio of AIM Equity Funds, Inc.
At a meeting held on February 3, 2000, the Board of Directors of AIM Equity
Funds, Inc. approved an Agreement and Plan of Reorganization (the
"Reorganization") which reorganized the Fund as a series portfolio of the Trust.
Shareholders of the Fund approved the Reorganization at a meeting held on June
16, 2000. The Fund currently offers four different classes of shares: Class A
shares, Class B shares, Class C shares and the Institutional Class. 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. Institutional Class shares are
sold without a 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 growth of capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.
On October 31, 2000, undistributed net investment income was increased by
$134,462,606, undistributed net realized gains decreased by $533,265,491 and
paid in capital increased by $398,802,885 as a result of differing book/tax
differences due to utilization of a portion of the proceeds from redemptions
as distributions for federal income tax purposes and net operating loss
reclassifications. Net assets of the Fund were unaffected by the
reclassification discussed above.
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. 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
FS-49
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.
F. 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.
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 master investment agreement, the
Fund pays an advisory fee to AIM at the annual rate of 1.0% of the first $30
million of the Fund's average daily net assets, plus 0.75% of the Fund's average
daily net assets in excess of $30 million to and including $150 million, 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% 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. During the year
ended October 31, 2000, AIM waived fees of $6,187,566. Under the terms of a
master sub-advisory agreement between AIM and A I M Capital Management, Inc.
("AIM Capital"), AIM pays AIM Capital 50% of the amount paid by the Fund to AIM.
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 October 31, 2000, AIM was
paid $731,392 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 October 31, 2000, AFS was
paid $12,000,634 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, Class C and the Institutional Class 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 0.30% 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. During the year ended October 31, 2000, the Class A, Class B and Class
C shares paid AIM Distributors $56,629,759, $10,309,561 and $3,222,875,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $5,088,774 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 2000,
AIM Distributors received $411,140 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 October 31, 2000, the Fund paid legal fees of $35,398
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.
FS-50
NOTE 3-INDIRECT EXPENSES
For the year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $279,535 and reductions in custodian fees of $149,374 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $428,909.
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 year ended October 31,
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 are 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 is 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 borrower did not increase the
collateral accordingly, and the borrower fails to return the securities.
At October 31, 2000, securities with an aggregate value of $1,709,326,329 were
on loan to brokers. The loans were secured by cash collateral of $1,751,204,824.
For the year ended October 31, 2000, the Fund received fees of $497,347 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 year ended October 31, 2000 was
$17,152,741,955 and $17,749,731,694, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $8,003,057,896 ---------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (355,852,740) ========================================================== Net unrealized appreciation of investment securities $7,647,205,156 __________________________________________________________ ========================================================== Cost of investments for tax purposes is $13,493,562,897. |
NOTE 8-CALL OPTION CONTRACTS
Transactions in call options written during the year ended October 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
-------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- -------------
Beginning of year 22,091 $ 3,848,894
-----------------------------------------------------------
Written 386,055 173,074,240
-----------------------------------------------------------
Closed (327,716) (147,865,412)
-----------------------------------------------------------
Exercised (78,989) (28,781,664)
-----------------------------------------------------------
Expired (1,441) (276,058)
===========================================================
End of year -- $ --
___________________________________________________________
===========================================================
|
FS-51
NOTE 9-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 2000 and 1999 were as follows:
2000 1999
---------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ------------ ---------------
Sold:
Class A 86,430,817 $3,725,450,424 98,564,141 $ 2,981,238,092
---------------------------------------------------------------------------------------------------------------------------
Class B 16,075,085 679,865,751 10,942,571 332,728,027
---------------------------------------------------------------------------------------------------------------------------
Class C 6,309,791 266,777,259 5,133,893 156,450,704
---------------------------------------------------------------------------------------------------------------------------
Institutional Class 3,694,065 165,186,338 1,596,295 51,100,608
===========================================================================================================================
Issued as reinvestment of dividends:
Class A 34,136,740 1,274,304,836 11,320,463 318,895,308
---------------------------------------------------------------------------------------------------------------------------
Class B 1,560,370 57,000,776 286,888 7,992,642
---------------------------------------------------------------------------------------------------------------------------
Class C 430,722 15,725,642 75,962 2,115,494
---------------------------------------------------------------------------------------------------------------------------
Institutional Class 593,714 23,119,167 170,003 4,957,282
===========================================================================================================================
Reacquired:
Class A (90,168,284) (3,843,241,848) (167,354,090) (5,084,014,652)
---------------------------------------------------------------------------------------------------------------------------
Class B (3,863,116) (161,514,958) (4,443,036) (135,626,852)
---------------------------------------------------------------------------------------------------------------------------
Class C (1,210,375) (50,758,241) (3,390,263) (103,057,846)
---------------------------------------------------------------------------------------------------------------------------
Institutional Class (4,750,277) (204,874,204) (1,915,980) (60,851,863)
===========================================================================================================================
49,239,252 $1,947,040,942 (49,013,153) $(1,528,073,056)
___________________________________________________________________________________________________________________________
===========================================================================================================================
|
NOTE 10-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
-----------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------------------
2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 34.65 $ 26.37 $ 29.23 $ 25.48 $ 23.69
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.26) (0.17) (0.14) (0.11) (0.06)
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 12.39 9.18 (0.62) 4.75 2.60
=================================================================================================================================
Total from investment operations 12.13 9.01 (0.76) 4.64 2.54
=================================================================================================================================
Less distributions:
Distributions from net realized gains (3.28) (0.73) (2.10) (0.89) (0.75)
=================================================================================================================================
Net asset value, end of period $ 43.50 $ 34.65 $ 26.37 $ 29.23 $ 25.48
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Total return(a) 36.56% 34.81% (2.30)% 18.86% 11.26%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $19,268,977 $14,292,905 $12,391,844 $14,319,441 $11,255,506
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.11%(b) 1.10% 1.10% 1.11% 1.14%
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.08%(b) 1.12% 1.12% 1.13% 1.16%
=================================================================================================================================
Ratio of net investment income (loss) to average net
assets (0.61)%(b) (0.50)% (0.47)% (0.40)% (0.27)%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
Portfolio turnover rate 88% 62% 76% 67% 58%
_________________________________________________________________________________________________________________________________
=================================================================================================================================
|
(a)Does not include sales charges.
(b)Ratios are based on average daily net assets of $18,876,586,178.
FS-52
NOTE 10-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
------------------------------------------------
YEAR ENDED OCTOBER 31, NOVEMBER 3, 1997
---------------------- (DATE SALES COMMENCED)
2000(a) 1999 TO OCTOBER 31, 1998(a)
---------- -------- ----------------------
Net asset value, beginning of period $ 34.00 $ 26.11 $ 30.04
--------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.58) (0.42) (0.37)
--------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 12.14 9.04 (1.46)
==============================================================================================================
Total from investment operations 11.56 8.62 (1.83)
==============================================================================================================
Less distributions:
Distributions from net realized gains (3.28) (0.73) (2.10)
==============================================================================================================
Net asset value, end of period $ 42.28 $ 34.00 $ 26.11
______________________________________________________________________________________________________________
==============================================================================================================
Total return(b) 35.51% 33.64% (5.86)%
______________________________________________________________________________________________________________
==============================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,315,524 $589,718 $275,676
______________________________________________________________________________________________________________
==============================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.88%(c) 1.98% 1.98%(d)
--------------------------------------------------------------------------------------------------------------
Without fee waivers 1.85%(c) 2.00% 2.00%(d)
==============================================================================================================
Ratio of net investment income (loss) to average net assets (1.38)%(c) (1.38)% (1.36)%(d)
______________________________________________________________________________________________________________
==============================================================================================================
Portfolio turnover rate 88% 62% 76%
______________________________________________________________________________________________________________
==============================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charge and is not annualized for
periods less than one year.
(c)Ratios are based on average daily net assets of $1,030,956,088.
(d)Annualized.
CLASS C
---------------------------------------------------------
YEAR ENDED OCTOBER 31, AUGUST 4, 1997
------------------------------- (DATE SALES COMMENCED)
2000(a) 1999 1998(a) TO OCTOBER 31, 1997
-------- -------- ------- ----------------------
Net asset value, beginning of period $ 33.99 $ 26.10 $ 29.18 $ 30.32
-----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.59) (0.42) (0.37) (0.04)
-----------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 12.15 9.04 (0.61) (1.10)
=======================================================================================================================
Total from investment operations 11.56 8.62 (0.98) (1.14)
=======================================================================================================================
Less distributions:
Distributions from net realized gains (3.28) (0.73) (2.10) --
=======================================================================================================================
Net asset value, end of period $ 42.27 $ 33.99 $ 26.10 $ 29.18
_______________________________________________________________________________________________________________________
=======================================================================================================================
Total return(b) 35.52% 33.65% (3.12)% (3.76)%
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $434,544 $161,490 $76,522 $21,508
_______________________________________________________________________________________________________________________
=======================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.88%(c) 1.98% 1.97% 1.84%(d)
-----------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.85%(c) 2.00% 1.99% 1.86%(d)
=======================================================================================================================
Ratio of net investment income (loss) to average net assets (1.38)%(c) (1.38)% (1.35)% (1.12)%(d)
_______________________________________________________________________________________________________________________
=======================================================================================================================
Portfolio turnover rate 88% 62% 76% 67%
_______________________________________________________________________________________________________________________
=======================================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charge and is not annualized for
periods less than one year.
(c)Ratios are based on average daily net assets of $322,287,527.
(d)Annualized.
FS-53
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
AIM Equity Funds:
We have audited the accompanying statement of assets and liabilities of AIM Dent Demographics Trends Fund (a portfolio of AIM Equity Funds), including the schedule of investments, as of October 31, 2000, the related statement of operations for the year then ended, the statement of changes in net assets, and financial highlights for the one-year period then ended and the period June 7, 1999 (date operations commenced) through October 31, 1999. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AIM Dent Demographics Trends Fund as of October 31, 2000, the results of its operations for the year then ended, the changes in its net assets and the financial highlights for the one-year period then ended and the period June 7, 1999 (date operations commenced) through October 31, 1999 in conformity with accounting principles generally accepted in the United States of America.
/s/ KPMG LLP December 6, 2000 Houston, Texas |
FS-54
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY
INTERESTS-95.01%
BANKS (MONEY CENTER)-3.30%
Chase Manhattan Corp. (The) 1,250,000 $ 56,875,000
===============================================================
BANKS (REGIONAL)-1.37%
Dah Sing Financial Group (Hong
Kong) 2,550,000 10,953,327
---------------------------------------------------------------
Silicon Valley Bancshares(a) 275,000 12,718,750
===============================================================
23,672,077
===============================================================
BIOTECHNOLOGY-3.27%
Amgen Inc.(a) 450,000 26,071,875
---------------------------------------------------------------
Celgene Corp.(a) 150,000 9,656,250
---------------------------------------------------------------
Millennium Pharmaceuticals,
Inc.(a) 100,000 7,256,250
---------------------------------------------------------------
Protein Design Labs, Inc.(a) 100,000 13,507,812
===============================================================
56,492,187
===============================================================
BROADCASTING (TELEVISION, RADIO &
CABLE)-1.29%
AT&T Corp.-Liberty Media
Corp.-Class A 750,000 13,500,000
---------------------------------------------------------------
Cox Communications, Inc.-Class
A(a) 200,000 8,812,500
===============================================================
22,312,500
===============================================================
COMMUNICATIONS EQUIPMENT-6.10%
Comverse Technology, Inc.(a) 300,000 33,525,000
---------------------------------------------------------------
Nortel Networks Corp. (Canada) 750,000 34,125,000
---------------------------------------------------------------
Redback Networks Inc.(a) 250,000 26,609,375
---------------------------------------------------------------
UTStarcom, Inc.(a) 550,000 11,000,000
===============================================================
105,259,375
===============================================================
COMPUTERS (HARDWARE)-2.74%
McDATA Corp.-Class B(a) 50,000 4,167,969
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 275,000 30,490,625
---------------------------------------------------------------
Sycamore Networks, Inc.(a) 200,000 12,650,000
===============================================================
47,308,594
===============================================================
COMPUTERS (NETWORKING)-5.26%
Cisco Systems, Inc.(a) 1,050,000 56,568,750
---------------------------------------------------------------
Juniper Networks, Inc.(a) 175,000 34,125,000
===============================================================
90,693,750
===============================================================
COMPUTERS (PERIPHERALS)-5.20%
Brocade Communications Systems,
Inc.(a) 230,000 52,296,250
---------------------------------------------------------------
EMC Corp.(a) 420,000 37,406,250
===============================================================
89,702,500
===============================================================
COMPUTERS (SOFTWARE &
SERVICES)-14.43%
Ariba, Inc.(a) 175,000 22,115,625
---------------------------------------------------------------
BEA Systems, Inc.(a) 170,000 12,197,500
---------------------------------------------------------------
|
MARKET
SHARES VALUE
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
i2 Technologies, Inc.(a) 115,000 $ 19,550,000
---------------------------------------------------------------
Oracle Corp.(a) 800,000 26,400,000
---------------------------------------------------------------
Rational Software Corp.(a) 350,000 20,890,625
---------------------------------------------------------------
Siebel Systems, Inc.(a) 280,000 29,382,500
---------------------------------------------------------------
Software.com, Inc.(a) 100,000 14,900,000
---------------------------------------------------------------
VERITAS Software Corp.(a) 610,000 86,019,531
---------------------------------------------------------------
Vitria Technology, Inc.(a) 650,000 17,468,750
===============================================================
248,924,531
===============================================================
ELECTRONICS
(INSTRUMENTATION)-1.26%
Waters Corp.(a) 300,000 21,768,750
===============================================================
ELECTRONICS
(SEMICONDUCTORS)-10.21%
Analog Devices, Inc.(a) 250,000 16,250,000
---------------------------------------------------------------
Celestica Inc. (Canada)(a) 500,000 35,937,500
---------------------------------------------------------------
Cirrus Logic, Inc.(a) 325,000 14,015,625
---------------------------------------------------------------
Integrated Device Technology,
Inc.(a) 250,000 14,078,125
---------------------------------------------------------------
Intersil Holding Corp.(a) 400,000 19,175,000
---------------------------------------------------------------
PMC-Sierra, Inc. (Canada)(a) 100,000 16,950,000
---------------------------------------------------------------
SDL, Inc.(a) 130,000 33,702,500
---------------------------------------------------------------
TranSwitch Corp.(a) 450,000 25,987,500
===============================================================
176,096,250
===============================================================
ENTERTAINMENT-1.87%
Time Warner Inc. 425,000 32,261,750
===============================================================
EQUIPMENT (SEMICONDUCTOR)-0.97%
Broadcom Corp.-Class A(a) 75,000 16,678,125
===============================================================
FINANCIAL (DIVERSIFIED)-4.21%
American Express Co. 465,000 27,900,000
---------------------------------------------------------------
Citigroup Inc. 850,000 44,731,250
===============================================================
72,631,250
===============================================================
HEALTH CARE (DRUGS-GENERIC &
OTHER)-2.94%
Andrx Group(a) 44,600 3,211,200
---------------------------------------------------------------
Genentech, Inc.(a) 310,000 25,575,000
---------------------------------------------------------------
Shire Pharmaceuticals Group
PLC-ADR (United Kingdom)(a) 350,000 22,006,250
===============================================================
50,792,450
===============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-6.41%
Allergan, Inc. 225,000 18,914,063
---------------------------------------------------------------
Pfizer Inc. 1,550,000 66,940,625
---------------------------------------------------------------
Pharmacia Corp. 450,000 24,750,000
===============================================================
110,604,688
===============================================================
|
FS-55
MARKET
SHARES VALUE
HEALTH CARE (HOSPITAL
MANAGEMENT)-0.92%
Health Management Associates,
Inc.-Class A(a) 800,000 $ 15,850,000
===============================================================
HEALTH CARE (MANAGED CARE)-2.17%
First Health Group Corp.(a) 400,000 15,600,000
---------------------------------------------------------------
UnitedHealth Group Inc. 200,000 21,875,000
===============================================================
37,475,000
===============================================================
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-3.49%
Medtronic, Inc. 245,000 13,306,563
---------------------------------------------------------------
Novoste Corp.(a) 350,000 8,837,500
---------------------------------------------------------------
PE Corp-PE Biosystems Group 325,000 38,025,000
===============================================================
60,169,063
===============================================================
HEALTH CARE (SPECIALIZED
SERVICES)-0.70%
HEALTHSOUTH Corp.(a) 1,000,000 12,000,000
===============================================================
INSURANCE (MULTI-LINE)-2.39%
American International Group, Inc. 420,000 41,160,000
===============================================================
INSURANCE BROKERS-0.83%
Marsh & McLennan Cos., Inc. 110,000 14,382,500
===============================================================
INVESTMENT BANKING/BROKERAGE-8.42%
Goldman Sachs Group, Inc. (The) 250,000 24,953,125
---------------------------------------------------------------
Merrill Lynch & Co., Inc. 420,000 29,400,000
---------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 640,000 51,400,000
---------------------------------------------------------------
Schwab (Charles) Corp. (The) 1,125,000 39,515,625
===============================================================
145,268,750
===============================================================
INVESTMENT MANAGEMENT-0.78%
Stilwell Financial, Inc. 300,000 13,443,750
===============================================================
|
MARKET
SHARES VALUE
LEISURE TIME (PRODUCTS)-0.70%
Harley-Davidson, Inc. 250,000 $ 12,046,875
===============================================================
RETAIL (COMPUTERS &
ELECTRONICS)-0.42%
Tweeter Home Entertainment Group,
Inc.(a) 300,000 7,218,750
===============================================================
RETAIL (DEPARTMENT STORES)-0.55%
Kohl's Corp.(a) 175,000 9,482,813
===============================================================
RETAIL (SPECIALTY-APPAREL)-1.09%
Abercrombie & Fitch Co.-Class A(a) 800,000 18,850,000
===============================================================
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-1.15%
China Mobile Ltd. (Hong Kong)(a) 1,600,000 10,257,725
---------------------------------------------------------------
Powerwave Technologies, Inc.(a) 200,000 9,625,000
===============================================================
19,882,725
===============================================================
TELECOMMUNICATIONS (LONG
DISTANCE)-0.57%
Corvis Corp.(a) 150,000 9,843,750
===============================================================
Total Common Stocks & Other
Equity Interests (Cost
$1,355,898,674) 1,639,147,753
===============================================================
MONEY MARKET FUNDS-5.35%
STIC Liquid Assets Portfolio(b) 46,162,850 46,162,850
---------------------------------------------------------------
STIC Prime Portfolio(b) 46,162,850 46,162,850
===============================================================
Total Money Market Funds (Cost
$92,325,700) 92,325,700
===============================================================
TOTAL INVESTMENTS-100.36% (Cost
$1,448,224,374) 1,731,473,453
===============================================================
LIABILITIES LESS OTHER
ASSETS-(0.36%) (6,243,447)
===============================================================
NET ASSETS-100.00% $1,725,230,006
_______________________________________________________________
===============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-56
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost
$1,448,224,374) $1,731,473,453
-------------------------------------------------------------
Receivables for:
Investments sold 14,794,899
-------------------------------------------------------------
Fund shares sold 10,015,779
-------------------------------------------------------------
Dividends 498,644
-------------------------------------------------------------
Investment for deferred compensation plan 9,953
=============================================================
Total assets 1,756,792,728
=============================================================
LIABILITIES:
Payables for:
Investments purchased 23,819,751
-------------------------------------------------------------
Fund shares reacquired 4,571,397
-------------------------------------------------------------
Deferred compensation plan 9,953
-------------------------------------------------------------
Accrued advisory fees 1,243,824
-------------------------------------------------------------
Accrued administrative services fees 13,071
-------------------------------------------------------------
Accrued distribution fees 1,212,499
-------------------------------------------------------------
Accrued trustees' fees 799
-------------------------------------------------------------
Accrued transfer agent fees 368,066
-------------------------------------------------------------
Accrued operating expenses 323,362
=============================================================
Total liabilities 31,562,722
=============================================================
Net assets applicable to shares outstanding $1,725,230,006
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $ 666,929,456
_____________________________________________________________
=============================================================
Class B $ 748,479,874
_____________________________________________________________
=============================================================
Class C $ 309,820,676
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE:
Class A 43,308,538
_____________________________________________________________
=============================================================
Class B 49,033,199
_____________________________________________________________
=============================================================
Class C 20,300,537
_____________________________________________________________
=============================================================
Class A:
Net asset value and redemption price per
share $ 15.40
-------------------------------------------------------------
Offering price per share:
(Net asset value of $15.40 divided by
94.50%) $ 16.30
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 15.26
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 15.26
_____________________________________________________________
=============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$40,978) $ 3,432,943
------------------------------------------------------------
Dividends from affiliated money market funds 3,694,098
------------------------------------------------------------
Interest 27,335
============================================================
Total investment income 7,154,376
============================================================
EXPENSES:
Advisory fees 10,757,633
------------------------------------------------------------
Administrative services fees 142,614
------------------------------------------------------------
Custodian fees 153,696
------------------------------------------------------------
Distribution fees -- Class A 1,761,595
------------------------------------------------------------
Distribution fees -- Class B 5,500,548
------------------------------------------------------------
Distribution fees -- Class C 2,122,364
------------------------------------------------------------
Transfer agent fees -- Class A 1,009,494
------------------------------------------------------------
Transfer agent fees -- Class B 1,226,657
------------------------------------------------------------
Transfer agent fees -- Class C 473,301
------------------------------------------------------------
Trustees' fees 8,433
------------------------------------------------------------
Other 909,443
============================================================
Total expenses 24,065,778
============================================================
Less: Expenses paid indirectly (24,736)
============================================================
Net expenses 24,041,042
============================================================
Net investment income (loss) (16,886,666)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN
CURRENCIES:
Net realized gain (loss) from:
Investment securities (152,006,074)
------------------------------------------------------------
Foreign currencies 31,086
============================================================
(151,974,988)
============================================================
Change in net unrealized appreciation of
investment securities 243,388,002
============================================================
Net gain from investment securities and
foreign currencies 91,413,014
============================================================
Net increase in net assets resulting from
operations $ 74,526,348
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-57
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
-------------- ------------
OPERATIONS:
Net investment income (loss) $ (16,886,666) $ (1,112,143)
--------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities and
foreign currencies (151,974,988) (3,389,798)
--------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities and foreign currencies 243,388,002 39,861,077
============================================================================================
Net increase in net assets resulting from operations 74,526,348 35,359,136
============================================================================================
Share transactions-net:
Class A 467,782,934 148,625,216
--------------------------------------------------------------------------------------------
Class B 537,342,137 161,925,702
--------------------------------------------------------------------------------------------
Class C 252,670,086 46,998,447
============================================================================================
Net increase in net assets 1,332,321,505 392,908,501
============================================================================================
NET ASSETS:
Beginning of year 392,908,501 --
============================================================================================
End of year $1,725,230,006 $392,908,501
____________________________________________________________________________________________
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $1,597,415,192 $356,470,945
--------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (38,438) (33,769)
--------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and foreign currencies (155,395,827) (3,389,752)
--------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 283,249,079 39,861,077
============================================================================================
$1,725,230,006 $392,908,501
____________________________________________________________________________________________
============================================================================================
|
See Notes to Financial Statements.
FS-58
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Dent Demographic Trends Fund (the "Fund") is a series portfolio of AIM
Equity Funds (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 eleven separate
portfolios, each having an unlimited number of shares of beneficial interest.
Prior to June 17, 2000 the Fund was organized as a series portfolio of AIM
Equity Funds, Inc. At a meeting held on February 3, 2000, the Board of Directors
of AIM Equity Funds, Inc. approved an Agreement and Plan of Reorganization (the
"Reorganization") which reorganized the Fund as a series portfolio of the Trust.
Shareholders of the Fund approved the Reorganization at a meeting held on June
16 , 2000. 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 long-term growth of capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.
On October 31, 2000, undistributed net investment income was increased by
$16,881,997, undistributed net realized gains decreased by $31,087 and paid
in capital decreased by $16,850,910 as a result of differing book/tax
treatment of foreign currency transactions and net operating loss
reclassifications. Net assets of the Fund were unaffected by the
reclassification discussed above.
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.
The Fund has a capital loss carryforward of $147,966,009 as of October 31,
2000 which may be carried forward to offset future taxable gains, if any,
which expires, if not previously utilized, in the year 2008.
FS-59
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 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. 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"). H.S. Dent Advisors, Inc. ("H.S. Dent") is the Fund's
subadvisor. Under the terms of the master investment advisory agreement, the
Fund pays an advisory fee to AIM at the annual rate of 0.85% of the first $2
billion of the Fund's average daily net assets, plus 0.80% of the Fund's average
daily net assets exceeding $2 billion. Under the terms of a subadvisory
agreement between AIM and H.S. Dent, AIM pays H.S. Dent at the annual rate of
0.13% of the first $1 billion of the Fund's average daily net assets, plus 0.10%
of the next $1 billion of the Fund's average daily net assets, plus 0.07% of the
Fund's average daily net assets exceeding $2 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 October 31, 2000, AIM was
paid $142,614 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 October 31, 2000, AFS was
paid $1,416,730 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
0.35% 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 October 31, 2000,
the Class A, Class B and Class C shares paid AIM Distributors $1,761,595,
$5,500,548 and $2,122,364, respectively, as compensation under the Plans.
AIM Distributors received commissions of $2,007,746 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 2000,
AIM Distributors received $91,369 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 October 31, 2000, the Fund paid legal fees of $5,640 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 year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $17,188 and reductions in custodian fees of $7,548 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $24,736.
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 year ended October 31,
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-60
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 October 31, 2000 was
$2,250,742,114 and $1,070,740,762, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $331,644,263 -------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (55,825,002) ========================================================================== Net unrealized appreciation of investment securities $275,819,261 __________________________________________________________________________ ========================================================================== Cost of investments for tax purposes is $1,455,654,192. |
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the year ended October 31, 2000 and the period June 7, 1999 (date operations commenced) through October 31, 1999 were as follows:
2000 1999
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- -------------- ---------- ------------
Sold:
Class A 34,788,634 $ 547,265,482 14,146,708 $155,933,583
------------------------------------------------------------------------------------------------------------------------
Class B 37,284,984 583,389,114 14,828,511 163,946,584
------------------------------------------------------------------------------------------------------------------------
Class C 17,532,275 276,260,624 4,372,731 48,262,483
========================================================================================================================
Reacquired:
Class A (4,975,363) (79,482,548) (651,441) (7,308,367)
------------------------------------------------------------------------------------------------------------------------
Class B (2,900,834) (46,046,977) (179,461) (2,020,882)
------------------------------------------------------------------------------------------------------------------------
Class C (1,492,566) (23,590,538) (111,903) (1,264,036)
========================================================================================================================
80,237,130 $1,257,795,157 32,405,145 $357,549,365
________________________________________________________________________________________________________________________
========================================================================================================================
|
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
------------------------------------
JUNE 7, 1999
(DATE OPERATIONS
YEAR ENDED COMMENCED) TO
OCTOBER 31, 2000 OCTOBER 31, 1999
---------------- ----------------
Net asset value, beginning of period $ 12.14 $ 10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.11) (0.03)
--------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 3.37 2.17
==================================================================================================
Total from investment operations 3.26 2.14
==================================================================================================
Net asset value, end of period $ 15.40 $ 12.14
__________________________________________________________________________________________________
==================================================================================================
Total return(a) 26.85% 21.40%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $666,929 $163,872
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets 1.50%(b) 1.60%(c)(d)
==================================================================================================
Ratio of net investment income (loss) to average net assets (0.93)%(b) (1.00)%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 90% 29%
__________________________________________________________________________________________________
==================================================================================================
|
(a) Does not deduct sales charges and is not annualized for periods less than
one year.
(b) Ratios are based on average daily net assets of $503,312,753.
(c) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements was
1.65% (annualized).
(d) Annualized.
FS-61
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
------------------------------------
JUNE 7, 1999
(DATE OPERATIONS
YEAR ENDED COMMENCED) TO
OCTOBER 31, 2000 OCTOBER 31, 1999
---------------- ----------------
Net asset value, beginning of period $ 12.11 $ 10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.18) (0.04)
--------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 3.33 2.15
==================================================================================================
Total from investment operations 3.15 2.11
==================================================================================================
Net asset value, end of period $ 15.26 $ 12.11
__________________________________________________________________________________________________
==================================================================================================
Total return(a) 26.01% 21.10%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $748,480 $177,430
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets 2.17%(b) 2.24%(c)(d)
==================================================================================================
Ratio of net investment income (loss) to average net assets (1.60)%(b) (1.64)%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 90% 29%
__________________________________________________________________________________________________
==================================================================================================
|
(a) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(b) Ratios are based on average daily net assets of $550,054,811.
(c) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements was
2.29% (annualized).
(d) Annualized.
CLASS C
------------------------------------
JUNE 7, 1999
(DATE OPERATIONS
YEAR ENDED COMMENCED) TO
OCTOBER 31, 2000 OCTOBER 31, 1999
---------------- ----------------
Net asset value, beginning of period $ 12.11 $ 10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.17) (0.04)
--------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 3.32 2.15
==================================================================================================
Total from investment operations 3.15 2.11
==================================================================================================
Net asset value, end of period $ 15.26 $ 12.11
__________________________________________________________________________________________________
==================================================================================================
Total return(a) 26.01% 21.10%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $309,821 $51,605
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets 2.17%(b) 2.24%(c)(d)
==================================================================================================
Ratio of net investment income (loss) to average net assets (1.60)%(b) (1.64)%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 90% 29%
__________________________________________________________________________________________________
==================================================================================================
|
(a) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(b) Ratios are based on average daily net assets of $212,236,361.
(c) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements was
2.29% (annualized).
(d) Annualized.
FS-62
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
AIM Equity Funds:
We have audited the accompanying statement of assets and
liabilities of AIM Emerging Growth Fund (a portfolio of
AIM Equity Funds), including the schedule of investments,
as of October 31, 2000, the related statement of
operations, the statement of changes in net assets, and
financial highlights for the period March 31, 2000 (date
operations commenced) through October 31, 2000. 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 audit.
We conducted our audit in accordance with auditing
standards generally accepted in the United States of
America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are
free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as
of October 31, 2000, by correspondence with the custodian
and brokers. An audit also includes assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall
financial statement presentation. We believe that our
audit provides 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
Emerging Growth Fund as of October 31, 2000, the results
of its operations, the changes in its net assets and the
financial highlights for the period March 31, 2000 (date
operations commenced) through October 31, 2000 in
conformity with accounting principles generally accepted
in the United States of America.
/s/ KPMG LLP December 6, 2000 Houston, Texas |
FS-63
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY
INTERESTS-82.84%
BIOTECHNOLOGY-0.81%
Invitrogen Corp.(a) 30,000 $ 2,281,875
==============================================================
COMMUNICATIONS EQUIPMENT-11.38%
Acterna Corp.(a) 210,000 3,360,000
--------------------------------------------------------------
ADC Telecommunications, Inc.(a) 185,000 3,954,375
--------------------------------------------------------------
Avanex Corp.(a) 10,000 1,015,625
--------------------------------------------------------------
Avici Systems Inc.(a) 40,000 1,735,000
--------------------------------------------------------------
BreezeCom Ltd. (Israel)(a) 55,000 1,020,937
--------------------------------------------------------------
CommScope, Inc.(a) 140,000 3,543,750
--------------------------------------------------------------
Exfo Electro-Optical Engineering
Inc. (Canada)(a) 13,700 522,312
--------------------------------------------------------------
JDS Uniphase Corp.(a) 55,000 4,475,625
--------------------------------------------------------------
Proxim, Inc.(a) 55,000 3,334,375
--------------------------------------------------------------
REMEC, Inc. (a) 110,000 3,279,375
--------------------------------------------------------------
Sunrise Telecom Inc.(a) 100,000 2,487,500
--------------------------------------------------------------
UTStarcom, Inc.(a) 175,000 3,500,000
==============================================================
32,228,874
==============================================================
COMPUTERS (HARDWARE)-0.66%
National Instruments Corp.(a) 40,000 1,867,500
==============================================================
COMPUTERS (NETWORKING)-8.90%
Emulex Corp.(a) 10,000 1,468,750
--------------------------------------------------------------
Extreme Networks, Inc.(a) 125,000 10,367,187
--------------------------------------------------------------
Foundry Networks, Inc.(a) 60,000 3,986,250
--------------------------------------------------------------
Juniper Networks, Inc.(a) 17,500 3,412,500
--------------------------------------------------------------
MRV Communications, Inc.(a) 65,000 2,567,500
--------------------------------------------------------------
SonicWALL, Inc.(a) 120,000 1,792,500
--------------------------------------------------------------
Tellium, Inc.-Series E Conv. Pfd.
(Acquired 09/19/00; Cost
$1,604,370)(a)(b) 53,479 1,604,370
==============================================================
25,199,057
==============================================================
COMPUTERS (PERIPHERALS)-3.33%
Brocade Communications Systems,
Inc.(a) 5,000 1,136,875
--------------------------------------------------------------
QLogic Corp.(a) 40,000 3,870,000
--------------------------------------------------------------
SanDisk Corp.(a) 82,500 4,433,086
==============================================================
9,439,961
==============================================================
COMPUTERS (SOFTWARE &
SERVICES)-6.04%
BEA Systems, Inc.(a) 25,000 1,793,750
--------------------------------------------------------------
Check Point Software Technologies
Ltd. (Israel)(a) 20,000 3,167,500
--------------------------------------------------------------
Interwoven, Inc.(a) 15,000 1,511,250
--------------------------------------------------------------
Macromedia, Inc.(a) 35,000 2,697,187
--------------------------------------------------------------
Macrovision Corp.(a) 30,000 2,186,250
--------------------------------------------------------------
RADVision Ltd. (Israel)(a) 100,000 2,212,500
--------------------------------------------------------------
|
MARKET
SHARES VALUE
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
Ulticom, Inc.(a) 15,000 $ 716,250
--------------------------------------------------------------
VERITAS Software Corp.(a) 20,000 2,820,312
==============================================================
17,104,999
==============================================================
ELECTRICAL EQUIPMENT-4.49%
Cree, Inc.(a) 17,500 1,736,875
--------------------------------------------------------------
Merix Corp.(a) 70,000 3,269,219
--------------------------------------------------------------
TTM Technologies, Inc.(a) 120,000 2,400,000
--------------------------------------------------------------
Veeco Instruments Inc.(a) 40,000 2,648,125
--------------------------------------------------------------
Viasystems Group, Inc.(a) 187,900 2,665,831
==============================================================
12,720,050
==============================================================
ELECTRONICS (DEFENSE)-0.55%
Anaren Microwave, Inc.(a) 15,000 1,560,000
==============================================================
ELECTRONICS (INSTRUMENTATION)-5.75%
Alpha Industries, Inc.(a) 145,000 5,781,875
--------------------------------------------------------------
Newport Corp. 15,000 1,713,047
--------------------------------------------------------------
Photon Dynamics, Inc.(a) 125,000 4,500,000
--------------------------------------------------------------
Tektronix, Inc. 60,000 4,275,000
==============================================================
16,269,922
==============================================================
ELECTRONICS (SEMICONDUCTORS)-18.92%
Applied Micro Circuits Corp.(a) 45,000 3,439,687
--------------------------------------------------------------
C-Cube Microsystems Inc.(a) 125,000 2,437,500
--------------------------------------------------------------
Elantec Semiconductor, Inc.(a) 25,000 2,781,250
--------------------------------------------------------------
GlobeSpan, Inc.(a) 30,000 2,308,125
--------------------------------------------------------------
Integrated Device Technology,
Inc.(a) 110,000 6,194,375
--------------------------------------------------------------
Microchip Technology Inc.(a) 202,500 6,404,063
--------------------------------------------------------------
MIPS Technologies, Inc.-Class A(a) 100,000 4,012,500
--------------------------------------------------------------
Oak Technology, Inc.(a) 60,000 1,683,750
--------------------------------------------------------------
PMC-Sierra, Inc. (Canada)(a) 7,500 1,271,250
--------------------------------------------------------------
SDL, Inc.(a) 13,500 3,499,875
--------------------------------------------------------------
Semtech Corp.(a) 100,000 3,225,000
--------------------------------------------------------------
TranSwitch Corp.(a) 80,000 4,620,000
--------------------------------------------------------------
Virage Logic Corp.(a) 100,000 1,000,000
--------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 60,000 4,196,250
--------------------------------------------------------------
Zoran Corp.(a) 130,000 6,516,250
==============================================================
53,589,875
==============================================================
HEALTH CARE (DRUGS-GENERIC & OTHER)-5.23%
Alpharma Inc.-Class A 120,000 4,657,500
--------------------------------------------------------------
Barr Laboratories, Inc.(a) 42,500 2,682,813
--------------------------------------------------------------
Medicis Pharmaceutical Corp.-Class
A(a) 40,000 2,945,000
--------------------------------------------------------------
Pain Therapeutics, Inc.(a) 65,000 1,393,438
--------------------------------------------------------------
|
FS-64
MARKET
SHARES VALUE
HEALTH CARE (DRUGS-GENERIC & OTHER)-(CONTINUED)
Shire Pharmaceuticals Group PLC-ADR
(United Kingdom)(a) 50,000 $ 3,143,750
==============================================================
14,822,501
==============================================================
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-4.14%
Akorn, Inc.(a) 125,000 578,125
--------------------------------------------------------------
ATS Medical, Inc.(a) 150,000 2,746,875
--------------------------------------------------------------
ICU Medical, Inc.(a) 85,000 2,125,000
--------------------------------------------------------------
Syncor International Corp.(a) 100,000 2,568,750
--------------------------------------------------------------
Zoll Medical Corp.(a) 75,000 3,717,188
==============================================================
11,735,938
==============================================================
HEALTH CARE (SPECIALIZED
SERVICES)-1.09%
Accredo Health, Inc.(a) 35,000 1,513,750
--------------------------------------------------------------
Aksys, Ltd.(a) 99,800 1,559,375
==============================================================
3,073,125
==============================================================
OIL & GAS (DRILLING &
EQUIPMENT)-2.03%
Grant Prideco, Inc.(a) 175,000 3,248,438
--------------------------------------------------------------
Patterson Energy, Inc.(a) 50,000 1,406,250
--------------------------------------------------------------
UTI Energy Corp.(a) 55,000 1,103,438
==============================================================
5,758,126
==============================================================
RETAIL (COMPUTERS &
ELECTRONICS)-1.95%
CDW Computer Centers, Inc.(a) 57,500 3,705,156
==============================================================
Tweeter Home Entertainment Group,
Inc.(a) 75,000 1,804,688
==============================================================
5,509,844
==============================================================
|
MARKET
SHARES VALUE
RETAIL (SPECIALTY)-2.44%
Linens 'n Things, Inc.(a) 225,000 $ 6,918,750
==============================================================
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-5.13%
AirGate PCS, Inc.(a) 75,000 2,915,625
--------------------------------------------------------------
Alamosa PCS Holdings, Inc.(a) 100,000 1,518,750
--------------------------------------------------------------
Powerwave Technologies, Inc.(a) 45,000 2,165,625
--------------------------------------------------------------
Research in Motion Ltd. (Canada)(a) 25,000 2,500,000
--------------------------------------------------------------
Rural Cellular Corp.-Class A(a) 30,000 1,612,500
--------------------------------------------------------------
Western Wireless Corp.-Class A(a) 80,000 3,800,000
==============================================================
14,512,500
==============================================================
Total Common Stocks & Other
Equity Interests (Cost
$243,627,510) 234,592,897
==============================================================
MONEY MARKET FUNDS-6.93%
STIC Liquid Assets Portfolio(c) 9,815,930 9,815,930
--------------------------------------------------------------
STIC Prime Portfolio(c) 9,815,930 9,815,930
==============================================================
Total Money Market Funds (Cost
$19,631,860) 19,631,860
==============================================================
TOTAL INVESTMENTS-89.77% (Cost
$263,259,370) 254,224,757
==============================================================
OTHER ASSETS LESS
LIABILITIES-10.23% 28,976,824
==============================================================
NET ASSETS-100.00% $283,201,581
______________________________________________________________
==============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Conv. - Convertible
Pfd. - Preferred
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 market value at 10/31/00 represented 0.57% of the
Fund's net assets.
(c) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-65
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost
$263,259,370) $254,224,757
------------------------------------------------------------
Receivables for:
Investments sold 25,849,781
------------------------------------------------------------
Fund shares sold 9,576,139
------------------------------------------------------------
Dividends 104,650
------------------------------------------------------------
Investment for deferred compensation plan 2,540
------------------------------------------------------------
Other assets 107,352
============================================================
Total assets 289,865,219
============================================================
LIABILITIES:
Payables for:
Investments purchased 5,587,130
------------------------------------------------------------
Fund shares reacquired 649,470
------------------------------------------------------------
Deferred compensation plan 2,540
------------------------------------------------------------
Accrued advisory fees 229,816
------------------------------------------------------------
Accrued administrative services fees 4,235
------------------------------------------------------------
Accrued distribution fees 186,912
------------------------------------------------------------
Accrued transfer agent fees 2,520
------------------------------------------------------------
Accrued operating expenses 1,015
============================================================
Total liabilities 6,663,638
============================================================
Net assets applicable to shares outstanding $283,201,581
____________________________________________________________
============================================================
NET ASSETS:
Class A $147,101,308
____________________________________________________________
============================================================
Class B $ 94,739,630
____________________________________________________________
============================================================
Class C $ 41,360,643
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE:
Class A 14,011,084
____________________________________________________________
============================================================
Class B 9,052,023
____________________________________________________________
============================================================
Class C 3,954,091
____________________________________________________________
============================================================
Class A:
Net asset value and redemption price per
share $ 10.50
------------------------------------------------------------
Offering price per share:
(Net asset value of $10.50 divided by
94.50%) $ 11.11
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 10.47
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 10.46
____________________________________________________________
============================================================
|
STATEMENT OF OPERATIONS
For the period March 31, 2000 (date operations commenced) through October 31, 2000
INVESTMENT INCOME:
Dividends $ 13,625
------------------------------------------------------------
Dividends from affiliated money market funds 640,391
------------------------------------------------------------
Interest 27,557
============================================================
Total investment income 681,573
============================================================
EXPENSES:
Advisory fees 908,443
------------------------------------------------------------
Administrative services fees 29,235
------------------------------------------------------------
Custodian fees 21,328
------------------------------------------------------------
Distribution fees -- Class A 198,509
------------------------------------------------------------
Distribution fees -- Class B 349,519
------------------------------------------------------------
Distribution fees -- Class C 152,068
------------------------------------------------------------
Transfer agent fees -- Class A 94,652
------------------------------------------------------------
Transfer agent fees -- Class B 72,249
------------------------------------------------------------
Transfer agent fees -- Class C 31,434
------------------------------------------------------------
Trustees' fees 4,083
------------------------------------------------------------
Registration and filing fees 252,000
------------------------------------------------------------
Other 33,531
============================================================
Total expenses 2,147,051
============================================================
Less: Expenses paid indirectly (6,005)
============================================================
Net expenses 2,141,046
============================================================
Net investment income (loss) (1,459,473)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES:
Net realized gain from:
Investment securities 10,994,086
------------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities (9,034,614)
============================================================
Net gain from investment securities 1,959,472
============================================================
Net increase in net assets resulting from
operations $ 499,999
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-66
STATEMENT OF CHANGES IN NET ASSETS
For the period March 31, 2000 (date operations commenced) through October 31, 2000
2000
------------
OPERATIONS:
Net investment income (loss) $ (1,459,473)
--------------------------------------------------------------------------
Net realized gain from investment securities 10,994,086
--------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities (9,034,614)
==========================================================================
Net increase in net assets resulting from operations 499,999
==========================================================================
Share transactions-net:
Class A 145,911,913
--------------------------------------------------------------------------
Class B 95,639,839
--------------------------------------------------------------------------
Class C 41,149,830
==========================================================================
Net increase in net assets 283,201,581
==========================================================================
NET ASSETS:
Beginning of year --
==========================================================================
End of year $283,201,581
__________________________________________________________________________
==========================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $283,472,289
--------------------------------------------------------------------------
Undistributed net investment income (loss) (138,021)
--------------------------------------------------------------------------
Undistributed net realized gain from investment securities 8,901,927
--------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities (9,034,614)
==========================================================================
$283,201,581
__________________________________________________________________________
==========================================================================
|
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Emerging Growth Fund (the "Fund") is a series portfolio of AIM Equity Funds
(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 eleven separate portfolios,
each having an unlimited number of shares of beneficial interest. The Fund
commenced operations on March 31, 2000. Prior to June 17, 2000 the Fund was
organized as a series portfolio of AIM Equity Funds, Inc. At a meeting held on
February 3, 2000, the Board of Directors of AIM Equity Funds, Inc. approved an
Agreement and Plan of Reorganization (the "Reorganization") which reorganized
the Fund as a series portfolio of the Trust. 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 long-term growth
of capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 -- Securities, including restricted
securities, are valued according to the following policy. 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
FS-67
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.
On October 31, 2000, undistributed net investment income was increased by
$1,321,452, undistributed net realized gains decreased by $2,092,159 and paid
in capital increased by $770,707 as a result of book/tax differences due to
utilization of a portion of the proceeds from redemptions as distributions
for federal income tax purposes, stock issuance cost reclassifications and
net operating loss reclassifications. Net assets of the Fund were unaffected
by the reclassification discussed above.
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. 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 master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.85% of
the first $1 billion of the Fund's average daily net assets plus 0.80% of the
Fund's average daily net assets over $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. During the period March 31, 2000 (date
operations commenced) through October 31, 2000, AIM was paid $29,235 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. During the period March 31, 2000 (date
operations commenced) through October 31, 2000, AFS was paid $127,769 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 Company has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.35% 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. During the period March 31, 2000
(date operations commenced) through October 31, 2000, the Class A, Class B and
Class C shares paid AIM Distributors $198,509, $349,519 and $152,068,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $336,338 from sales of the Class A
shares of the Fund during the period March 31, 2000 (date operations commenced)
through October 31, 2000. Such commissions are not an expense of the Fund. They
are deducted from, and are not included in, the proceeds from sales of Class A
shares. During the period March 31, 2000 (date operations commenced) through
October 31, 2000, AIM Distributors received $9,199 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 period March 31, 2000 (date operations commenced) through October
31, 2000, the Fund paid legal fees of $2,215 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 period March 31, 2000 (date operations commenced) through October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $1,506 and reductions in custodian fees of $4,499 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $6,005.
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.
FS-68
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 period March 31, 2000 (date operations commenced) through October 31, 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 period March 31, 2000 (date operations commenced) through October 31, 2000 was $408,985,049 and $176,351,624, respectively.
The amount of unrealized appreciation (depreciation) of investment securities, for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $ 22,689,393 -------------------------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (35,332,021) ========================================================================== Net unrealized appreciation (depreciation) of investment securities $(12,642,628) __________________________________________________________________________ ========================================================================== Cost of investments for tax purposes is $266,867,384. |
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the period March 31, 2000 (date operations commenced) through October 31, 2000 were as follows:
OCTOBER 31,
2000
--------------------------
SHARES AMOUNT
---------- ------------
Sold:
Class A 18,240,329 $192,061,883
----------------------------------------------------------------------------------------
Class B 9,701,917 102,240,743
----------------------------------------------------------------------------------------
Class C 4,148,798 43,170,645
========================================================================================
Reacquired:
Class A (4,229,245) (46,149,970)
----------------------------------------------------------------------------------------
Class B (649,894) (6,600,904)
----------------------------------------------------------------------------------------
Class C (194,707) (2,020,815)
========================================================================================
27,017,198 $282,701,582
________________________________________________________________________________________
========================================================================================
|
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A CLASS B CLASS C
---------------- ---------------- ----------------
MARCH 31, 2000 MARCH 31, 2000 MARCH 31, 2000
(DATE OPERATIONS (DATE OPERATIONS (DATE OPERATIONS
COMMENCED) TO COMMENCED) TO COMMENCED) TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 2000 2000
---------------- ---------------- ----------------
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00
--------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.07) (0.07)
--------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 0.54 0.54 0.53
====================================================================================================================
Total from investment operations 0.50 0.47 0.46
====================================================================================================================
Net asset value, end of period $ 10.50 $ 10.47 $ 10.46
____________________________________________________________________________________________________________________
====================================================================================================================
Total return(a) 5.00% 4.70% 4.60%
____________________________________________________________________________________________________________________
====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $147,101 $ 94,740 $ 41,361
____________________________________________________________________________________________________________________
====================================================================================================================
Ratio of expenses to average net assets 1.68%(b) 2.37%(b) 2.37%(b)
====================================================================================================================
Ratio of net investment income (loss) to average net assets (1.04)%(b) (1.73)%(b) (1.73)%(b)
____________________________________________________________________________________________________________________
====================================================================================================================
Portfolio turnover rate 111% 111% 111%
____________________________________________________________________________________________________________________
====================================================================================================================
|
(a) Does not include sales charges or contingent deferred sales charges and is
not annualized for periods less than one year.
(b) Ratios are annualized and based on average daily net assets of $96,550,776,
$59,499,434 and $25,886,903 for Class A, Class B and Class C, respectively.
FS-69
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
AIM Equity Funds:
We have audited the accompanying statement of assets and liabilities of AIM Large Cap Basic Value Fund (a portfolio of AIM Equity Funds), including the schedule of investments, as of October 31, 2000, the related statement of operations for the year ended, the statement of changes in net assets, and financial highlights for the one-year period then ended and the period June 30, 1999 (date operations commenced) through October 31, 1999. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AIM Large Cap Basic Value Fund as of October 31, 2000, the results of its operations for the year ended, the changes in its net assets and the financial highlights for the one-year period then ended and the period June 30, 1999 (date operations commenced) through October 31, 1999 in conformity with accounting principles generally accepted in the United States of America.
/s/ KPMG LLP December 6, 2000 Houston, Texas |
FS-70
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY
INTERESTS-90.62%
AUTOMOBILES-1.50%
General Motors Corp. 2,400 $ 149,100
==============================================================
BANKS (MAJOR REGIONAL)-1.76%
FleetBoston Financial Corp. 4,600 174,800
==============================================================
BANKS (MONEY CENTER)-4.82%
Bank of America Corp. 4,300 206,669
--------------------------------------------------------------
Chase Manhattan Corp. (The) 6,000 273,000
==============================================================
479,669
==============================================================
CHEMICALS-1.52%
Air Products & Chemicals, Inc. 4,050 151,116
==============================================================
COMPUTERS (HARDWARE)-2.11%
Compaq Computer Corp. 6,900 209,829
==============================================================
COMPUTERS (SOFTWARE & SERVICES)-2.63%
Computer Associates International,
Inc. 8,200 261,375
==============================================================
DISTRIBUTORS (FOOD & HEALTH)-1.63%
McKesson HBOC, Inc. 5,800 162,762
==============================================================
ELECTRIC COMPANIES-2.90%
Edison International 4,300 102,662
--------------------------------------------------------------
PG&E Corp. 5,900 158,931
--------------------------------------------------------------
Southern Energy, Inc.(a) 1,000 27,250
==============================================================
288,843
==============================================================
ELECTRICAL EQUIPMENT-1.39%
Koninklijke (Royal) Philips
Electronics N.V.-ADR (Netherlands) 3,470 138,583
==============================================================
FINANCIAL (DIVERSIFIED)-8.72%
Associates First Capital Corp.-Class
A 4,900 181,912
--------------------------------------------------------------
Citigroup Inc. 2,033 106,987
--------------------------------------------------------------
Freddie Mac 5,900 354,000
--------------------------------------------------------------
MGIC Investment Corp. 3,300 224,812
==============================================================
867,711
==============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-2.08%
Pharmacia Corp. 3,757 206,635
==============================================================
HEALTH CARE (HOSPITAL
MANAGEMENT)-4.66%
HCA-Healthcare Corp. (The) 8,100 323,494
--------------------------------------------------------------
Health Management Associates,
Inc.-Class A(a) 7,100 140,669
==============================================================
464,163
==============================================================
HEALTH CARE (MANAGED CARE)-2.31%
UnitedHealth Group Inc. 2,100 229,687
==============================================================
|
MARKET
SHARES VALUE
INSURANCE (LIFE/HEALTH)-2.19%
UnumProvident Corp. 7,700 $ 217,525
==============================================================
INSURANCE (MULTI-LINE)-1.92%
American International Group, Inc. 1,947 190,806
==============================================================
INSURANCE (PROPERTY & CASUALTY)-0.93%
XL Capital Ltd.-Class A (Bermuda) 1,200 92,250
==============================================================
INSURANCE BROKERS-4.97%
Aon Corp. 8,300 343,931
--------------------------------------------------------------
Marsh & McLennan Cos., Inc. 1,150 150,362
==============================================================
494,293
==============================================================
LEISURE TIME (PRODUCTS)-1.47%
Mattel, Inc. 11,300 146,194
==============================================================
MANUFACTURING (DIVERSIFIED)-5.83%
Honeywell International Inc. 3,600 193,725
--------------------------------------------------------------
Illinois Tool Works Inc. 3,700 205,581
--------------------------------------------------------------
Tyco International Ltd. (Bermuda) 3,200 181,400
==============================================================
580,706
==============================================================
NATURAL GAS-1.26%
Dynegy Inc.-Class A 2,700 125,044
==============================================================
OIL & GAS (DRILLING &
EQUIPMENT)-5.00%
ENSCO International Inc. 3,200 106,400
--------------------------------------------------------------
Schlumberger Ltd. 1,800 137,025
--------------------------------------------------------------
Transocean Sedco Forex Inc. 2,877 152,481
--------------------------------------------------------------
Weatherford International, Inc.(a) 2,800 102,200
==============================================================
498,106
==============================================================
OIL (INTERNATIONAL INTEGRATED)-1.74%
Exxon Mobil Corp. 1,946 173,559
==============================================================
PAPER & FOREST PRODUCTS-1.29%
International Paper Co. 3,500 128,187
==============================================================
PHOTOGRAPHY/IMAGING-1.58%
Eastman Kodak Co. 3,500 157,063
==============================================================
RETAIL (FOOD CHAINS)-3.51%
Kroger Co. (The)(a) 15,500 349,719
==============================================================
RETAIL (GENERAL MERCHANDISE)-2.36%
Target Corp. 8,500 234,813
==============================================================
RETAIL (SPECIALTY-APPAREL)-0.47%
Gap, Inc. (The) 1,800 46,463
==============================================================
SERVICES (COMMERCIAL &
CONSUMER)-2.19%
H&R Block, Inc. 6,100 217,694
==============================================================
|
FS-71
MARKET
SHARES VALUE
SERVICES (COMPUTER SYSTEMS)-3.58%
Electronic Data Systems Corp. 4,000 $ 187,750
--------------------------------------------------------------
SunGard Data Systems Inc.(a) 3,300 168,713
==============================================================
356,463
==============================================================
SERVICES (DATA PROCESSING)-2.67%
First Data Corp. 5,300 265,663
==============================================================
TELECOMMUNICATIONS (LONG
DISTANCE)-2.21%
AT&T Corp. 9,500 220,281
==============================================================
TELEPHONE-3.71%
SBC Communications Inc. 5,200 299,975
--------------------------------------------------------------
Verizon Communications 1,200 69,375
==============================================================
369,350
==============================================================
WASTE MANAGEMENT-3.71%
Waste Management, Inc. 18,450 369,000
==============================================================
Total Common Stocks & Other
Equity Interests (Cost
$8,330,962) 9,017,452
==============================================================
|
PRINCIPAL MARKET
AMOUNT VALUE
U.S. GOVERNMENT AGENCY
SECURITIES-11.63%
FEDERAL HOME LOAN MORTGAGE CORP.
("FHLMC")
Discount Notes, 6.45%, 11/01/00 (Cost
$1,157,000)(b) 1,157,000 $ 1,157,000
==============================================================
TOTAL INVESTMENTS-102.25%
(Cost $9,487,962) 10,174,452
==============================================================
LIABILITIES LESS OTHER ASSETS-(2.25%) (223,905)
==============================================================
NET ASSETS-100.00% $ 9,950,547
______________________________________________________________
==============================================================
|
Investment Abbreviation:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) The Interest rate shown represents the rate of discount paid or received at
the time of purchase by the Fund.
See Notes to Financial Statements.
FS-72
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost $9,487,962) $10,174,452
------------------------------------------------------------
Cash 1,178
------------------------------------------------------------
Receivables for:
Investments sold 26,209
------------------------------------------------------------
Fund shares sold 314,812
------------------------------------------------------------
Dividends 7,114
------------------------------------------------------------
Investment for deferred compensation plan 6,329
------------------------------------------------------------
Due from advisor 10,855
------------------------------------------------------------
Other assets 14,371
============================================================
Total assets 10,555,320
============================================================
LIABILITIES:
Payables for:
Investments purchased 527,099
------------------------------------------------------------
Fund shares reacquired 35,034
------------------------------------------------------------
Deferred compensation plan 6,329
------------------------------------------------------------
Accrued administrative services fees 4,235
------------------------------------------------------------
Accrued distribution fees 3,874
------------------------------------------------------------
Accrued trustees' fees 546
------------------------------------------------------------
Accrued transfer agent fees 561
------------------------------------------------------------
Accrued operating expenses 27,095
============================================================
Total liabilities 604,773
============================================================
Net assets applicable to shares outstanding $ 9,950,547
____________________________________________________________
============================================================
NET ASSETS:
Class A $ 5,888,058
____________________________________________________________
============================================================
Class B $ 2,814,613
____________________________________________________________
============================================================
Class C $ 1,247,876
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER SHARE:
Class A 488,797
____________________________________________________________
============================================================
Class B 234,142
____________________________________________________________
============================================================
Class C 103,826
____________________________________________________________
============================================================
Class A:
Net asset value and redemption price per
share $ 12.05
------------------------------------------------------------
Offering price per share:
(Net asset value of $12.05 divided by
94.50%) $ 12.75
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 12.02
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 12.02
____________________________________________________________
============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$52) $ 25,653
-----------------------------------------------------------
Interest 13,471
===========================================================
Total investment income 39,124
===========================================================
EXPENSES:
Advisory fees 12,555
-----------------------------------------------------------
Administrative services fee 50,000
-----------------------------------------------------------
Custodian fees 10,073
-----------------------------------------------------------
Distribution fees -- Class A 5,816
-----------------------------------------------------------
Distribution fees -- Class B 3,172
-----------------------------------------------------------
Distribution fees -- Class C 1,135
-----------------------------------------------------------
Transfer agent fees -- Class A 2,111
-----------------------------------------------------------
Transfer agent fees -- Class B 292
-----------------------------------------------------------
Transfer agent fees -- Class C 104
-----------------------------------------------------------
Trustees' fees 7,251
-----------------------------------------------------------
Registration and filing fees 28,222
-----------------------------------------------------------
Printing 14,474
-----------------------------------------------------------
Professional fees 35,552
-----------------------------------------------------------
Other 3,897
===========================================================
Total expenses 174,654
===========================================================
Less: Fees waived and expenses reimbursed (145,517)
-----------------------------------------------------------
Expenses paid indirectly (64)
===========================================================
Net expenses 29,073
===========================================================
Net investment income 10,051
===========================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES AND FUTURES CONTRACTS:
Net realized gain (loss) from:
Investment securities 454
-----------------------------------------------------------
Futures contracts (429)
===========================================================
25
===========================================================
Change in net unrealized appreciation of
investment securities 771,563
===========================================================
Net gain from investment securities and futures
contracts 771,588
===========================================================
Net increase in net assets resulting from
operations $ 781,639
___________________________________________________________
===========================================================
|
See Notes to Financial Statements.
FS-73
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
---------- ----------
OPERATIONS:
Net investment income $ 10,051 $ 3,308
--------------------------------------------------------------------------------------
Net realized gain from investment securities and futures
contracts 25 8,496
--------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities and futures contracts 771,563 (85,073)
======================================================================================
Net increase (decrease) in net assets resulting from
operations 781,639 (73,269)
======================================================================================
Distributions to shareholders from net investment income:
Class A (19,234) --
--------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (12,288) --
--------------------------------------------------------------------------------------
Share transactions-net:
Class A 4,188,609 1,226,376
--------------------------------------------------------------------------------------
Class B 2,671,623 --
--------------------------------------------------------------------------------------
Class C 1,187,091 --
======================================================================================
Net increase in net assets 8,797,440 1,153,107
======================================================================================
NET ASSETS:
Beginning of year 1,153,107 --
======================================================================================
End of year $9,950,547 $1,153,107
______________________________________________________________________________________
======================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $9,238,062 $1,222,360
--------------------------------------------------------------------------------------
Undistributed net investment income 29,765 7,324
--------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and futures contracts (3,770) 8,496
--------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities and futures contracts 686,490 (85,073)
======================================================================================
$9,950,547 $1,153,107
______________________________________________________________________________________
======================================================================================
|
See Notes to Financial Statements.
FS-74
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Large Cap Basic Value Fund (the "Fund") is a series portfolio of AIM Equity
Funds (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 eleven separate portfolios,
each having an unlimited number of shares of beneficial interest. Prior to June
17, 2000 the Fund was organized as a series portfolio of AIM Equity Funds, Inc.
At a meeting held on February 3, 2000, the Board of Directors of AIM Equity
Funds, Inc. approved an Agreement and Plan of Reorganization (the
"Reorganization") which reorganized the Fund as a series portfolio of the Trust.
Shareholders of the Fund approved the Reorganization at a meeting held on June
16, 2000. 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 long-term growth of capital with a
secondary objective of current income.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.
On October 31, 2000, undistributed net investment income was increased by
$31,624, undistributed net realized gains decreased by $3 and paid in capital
decreased by $31,621 as a nondeductible organizational expense
reclassifications. Net assets of the Fund were unaffected by the
reclassification discussed above.
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
FS-75
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. F. 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 master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.60% of
the first $1 billion of the Fund's average daily net assets, plus 0.575% over $1
billion to and including $2 billion of the Fund's average daily net assets and
0.55% of the Fund's average daily net assets over $2 billion. During the year
ended October 31, 2000, AIM waived fees of $12,555 and reimbursed expenses of
$132,962.
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 October 31, 2000, AIM was
paid $50,000 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 October 31, 2000, AFS was
paid $1,108 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
0.35% 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 October 31, 2000,
the Class A, Class B and Class C shares paid AIM Distributors $5,816, $3,172 and
$1,135, respectively, as compensation under the Plans.
AIM Distributors received commissions of $12,029 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 2000,
AIM Distributors received $502 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 October 31, 2000, the Fund paid legal fees of $3,949 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 year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $24 and reductions in custodian fees of $40 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $64.
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 year ended October 31,
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 year ended October 31, 2000 was
$8,436,977 and $1,232,827, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $ 775,069 -------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (137,872) ======================================================== Net unrealized appreciation of investment securities $ 637,197 ________________________________________________________ ======================================================== Cost of investments for tax purposes is $9,537,255. |
FS-76
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the year ended October 31, 2000 and the period June 30, 1999 (date operations commenced) through October 31, 1999 were as follows:
2000 1999
--------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
------- ---------- ------- ----------
Sold:
Class A 406,940 $4,618,456 125,927 $1,256,078
------------------------------------------------------------------------------------------------------------
Class B 238,116 2,718,547 -- --
------------------------------------------------------------------------------------------------------------
Class C 104,697 1,197,020 -- --
============================================================================================================
Issued as reinvestment of dividends:
Class A 3,346 31,522 -- --
============================================================================================================
Reacquired:
Class A (44,224) (461,369) (3,192) (29,702)
------------------------------------------------------------------------------------------------------------
Class B (3,974) (46,924) -- --
------------------------------------------------------------------------------------------------------------
Class C (871) (9,929) -- --
============================================================================================================
704,030 $8,047,323 122,735 $1,226,376
____________________________________________________________________________________________________________
============================================================================================================
|
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
-------------------------------
JUNE 30, 1999
(DATE OPERATIONS
YEAR ENDED COMMENCED) TO
OCTOBER 31, OCTOBER 31,
2000(a) 1999
----------- ----------------
Net asset value, beginning of period $ 9.40 $10.00
-----------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.07 0.03
-----------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 2.88 (0.63)
===============================================================================================
Total from investment operations 2.95 (0.60)
===============================================================================================
Less distributions:
Dividends from net investment income (0.18) --
-----------------------------------------------------------------------------------------------
Distributions from net realized gains (0.12) --
===============================================================================================
Total distributions (0.30) --
===============================================================================================
Net asset value, end of period $12.05 $ 9.40
_______________________________________________________________________________________________
===============================================================================================
Total return(b) 32.21% (6.00)%
_______________________________________________________________________________________________
===============================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $5,888 $1,153
_______________________________________________________________________________________________
===============================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.25%(c) 1.25%(d)
-----------------------------------------------------------------------------------------------
Without fee waivers 8.21%(c) 10.02%(d)
===============================================================================================
Ratio of net investment income to average net assets 0.62%(c) 0.87%(d)
_______________________________________________________________________________________________
===============================================================================================
Portfolio turnover rate 57% 10%
_______________________________________________________________________________________________
===============================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charges and is not annualized for periods less than
one year.
(c) Ratios are based on average daily net assets of $1,661,756.
(d) Annualized.
FS-77
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
--------------
AUGUST 1, 2000
(DATE SALES
COMMENCED) TO
OCTOBER 31,
2000
--------------
Net asset value, beginning of period $10.85
------------------------------------------------------------------------------
Income from investment operations:
Net investment income --
------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 1.17
==============================================================================
Total from investment operations 1.17
==============================================================================
Net asset value, end of period $12.02
______________________________________________________________________________
==============================================================================
Total return(a) 10.78%
______________________________________________________________________________
==============================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $2,815
______________________________________________________________________________
==============================================================================
Ratio of expenses to average net assets:
With fee waivers 1.93%(b)
------------------------------------------------------------------------------
Without fee waivers 8.89%(b)
==============================================================================
Ratio of net investment loss to average net assets (0.06)%(b)
______________________________________________________________________________
==============================================================================
Portfolio turnover rate 57%
______________________________________________________________________________
==============================================================================
|
(a) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(b) Ratios are annualized and based on average daily net assets of $1,262,046.
CLASS C
--------------
AUGUST 1, 2000
(DATE SALES
COMMENCED) TO
OCTOBER 31,
2000
--------------
Net asset value, beginning of period $10.85
------------------------------------------------------------------------------
Income from investment operations:
Net investment income --
==============================================================================
Net gains on securities (both realized and unrealized) 1.17
==============================================================================
Total from investment operations 1.17
==============================================================================
Net asset value, end of period $12.02
______________________________________________________________________________
==============================================================================
Total return(a) 10.78%
______________________________________________________________________________
==============================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,248
______________________________________________________________________________
==============================================================================
Ratio of expenses to average net assets:
With fee waivers 1.93%(b)
------------------------------------------------------------------------------
Without fee waivers 8.89%(b)
==============================================================================
Ratio of net investment loss to average net assets (0.06)%(b)
______________________________________________________________________________
==============================================================================
Portfolio turnover rate 57%
______________________________________________________________________________
==============================================================================
|
(a) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(b) Ratios are annualized and based on average daily net assets of $451,456.
FS-78
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
AIM Equity Funds:
We have audited the accompanying statement of assets and liabilities of AIM Large Cap Growth Fund (a portfolio of AIM Equity Funds), including the schedule of investments, as of October 31, 2000, the related statement of operations for the year then ended, the statement of changes in net assets, and financial highlights for the one-year period then ended and the period March 1, 1999 (date operations commenced) through October 31, 1999. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AIM Large Cap Growth Fund as of October 31, 2000, the results of its operations for the year then ended, the changes in its net assets and the financial highlights for the one-year period then ended and the period March 1, 1999 (date operations commenced) through October 31, 1999 in conformity with accounting principles generally accepted in the United States of America.
/s/ KPMG LLP December 6, 2000 Houston, Texas |
FS-79
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY
INTERESTS-85.88%
BIOTECHNOLOGY-1.47%
Amgen Inc.(a) 131,000 $ 7,589,812
==============================================================
COMMUNICATIONS EQUIPMENT-2.51%
Comverse Technology, Inc.(a) 70,000 7,822,500
--------------------------------------------------------------
Redback Networks Inc.(a) 48,000 5,109,000
==============================================================
12,931,500
==============================================================
COMPUTERS (HARDWARE)-5.70%
McDATA Corp.-Class B(a) 45,000 3,751,172
--------------------------------------------------------------
Sun Microsystems, Inc.(a) 231,000 25,612,125
==============================================================
29,363,297
==============================================================
COMPUTERS (NETWORKING)-6.88%
Cisco Systems, Inc.(a) 511,000 27,530,125
--------------------------------------------------------------
Juniper Networks, Inc.(a) 29,000 5,655,000
--------------------------------------------------------------
VeriSign, Inc.(a) 17,000 2,244,000
==============================================================
35,429,125
==============================================================
COMPUTERS (PERIPHERALS)-9.65%
Brocade Communications Systems,
Inc.(a) 97,000 22,055,375
--------------------------------------------------------------
EMC Corp.(a) 257,000 22,889,062
--------------------------------------------------------------
Network Appliance, Inc.(a) 40,000 4,760,000
==============================================================
49,704,437
==============================================================
COMPUTERS (SOFTWARE &
SERVICES)-18.48%
Ariba, Inc.(a) 65,000 8,214,375
--------------------------------------------------------------
BEA Systems, Inc.(a) 92,000 6,601,000
--------------------------------------------------------------
CacheFlow Inc.(a) 33,000 3,564,000
--------------------------------------------------------------
Check Point Software Technologies
Ltd. (Israel)(a) 150,000 23,756,250
--------------------------------------------------------------
i2 Technologies, Inc.(a) 47,000 7,990,000
--------------------------------------------------------------
Intuit Inc.(a) 75,000 4,607,812
--------------------------------------------------------------
Oracle Corp.(a) 235,000 7,755,000
--------------------------------------------------------------
Siebel Systems, Inc.(a) 150,000 15,740,625
--------------------------------------------------------------
VERITAS Software Corp.(a) 120,000 16,921,875
==============================================================
95,150,937
==============================================================
ELECTRICAL EQUIPMENT-6.42%
General Electric Co. 603,000 33,051,937
==============================================================
ELECTRONICS (INSTRUMENTATION)-1.76%
Waters Corp.(a) 125,000 9,070,313
==============================================================
ELECTRONICS (SEMICONDUCTORS)-3.53%
Applied Micro Circuits Corp.(a) 40,000 3,057,500
--------------------------------------------------------------
|
MARKET
SHARES VALUE
ELECTRONICS (SEMICONDUCTORS)-(CONTINUED)
PMC-Sierra, Inc. (Canada)(a) 60,000 $10,170,000
--------------------------------------------------------------
SDL, Inc.(a) 19,000 4,925,750
==============================================================
18,153,250
==============================================================
EQUIPMENT (SEMICONDUCTOR)-1.30%
Broadcom Corp.-Class A(a) 30,000 6,671,250
==============================================================
FINANCIAL (DIVERSIFIED)-2.10%
American Express Co. 180,000 10,800,000
==============================================================
HEALTH CARE (DRUGS-GENERIC &
OTHER)-3.16%
Forest Laboratories, Inc.(a) 58,000 7,685,000
--------------------------------------------------------------
Genentech, Inc.(a) 104,000 8,580,000
==============================================================
16,265,000
==============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-6.11%
Allergan, Inc. 50,000 4,203,125
--------------------------------------------------------------
Pfizer Inc. 497,000 21,464,188
--------------------------------------------------------------
Pharmacia Corp. 105,000 5,775,000
==============================================================
31,442,313
==============================================================
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-2.64%
Medtronic, Inc. 56,000 3,041,500
--------------------------------------------------------------
PE Corp-PE Biosystems Group 90,000 10,530,000
==============================================================
13,571,500
==============================================================
HEALTH CARE (SPECIALIZED
SERVICES)-0.72%
Alza Corp.(a) 46,000 3,723,125
==============================================================
INSURANCE (MULTI-LINE)-2.00%
American International Group, Inc. 105,000 10,290,000
==============================================================
INVESTMENTS-2.80%
Nasdaq 100 Shares(a) 176,000 14,410,000
==============================================================
LEISURE TIME (PRODUCTS)-1.26%
Harley-Davidson, Inc. 135,000 6,505,313
==============================================================
NATURAL GAS-5.08%
Dynegy Inc.-Class A 228,000 10,559,250
--------------------------------------------------------------
Enron Corp. 190,000 15,591,875
==============================================================
26,151,125
==============================================================
POWER PRODUCERS (INDEPENDENT)-0.80%
Calpine Corp.(a) 52,000 4,104,750
==============================================================
|
FS-80
MARKET
SHARES VALUE
SERVICES
(ADVERTISING/MARKETING)-1.51%
Omnicom Group Inc. 33,000 $ 3,044,250
--------------------------------------------------------------
TMP Worldwide, Inc.(a) 67,800 4,719,516
==============================================================
7,763,766
==============================================================
Total Common Stocks & Other
Equity Interests (Cost
$417,739,684) 442,142,750
==============================================================
|
PRINCIPAL
AMOUNT
U.S. TREASURY SECURITIES-0.49%
U.S. TREASURY BILLS-0.49%
6.38%, 12/21/00 (Cost
$2,542,910)(b) $2,565,000(c) 2,543,095
==============================================================
|
MARKET
SHARES VALUE
MONEY MARKET FUNDS-14.84%
STIC Liquid Assets Portfolio(d) 38,210,031 $ 38,210,031
--------------------------------------------------------------
STIC Prime Portfolio(d) 38,210,031 38,210,031
==============================================================
Total Money Market Funds (Cost
$76,420,062) 76,420,062
==============================================================
TOTAL INVESTMENTS-101.21% (Cost
$496,702,656) 521,105,907
==============================================================
LIABILITIES LESS OTHER
ASSETS-(1.21%) (6,233,856)
==============================================================
NET ASSETS-100.00% $514,872,051
______________________________________________________________
==============================================================
|
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the fund.
(c) The principal balance was pledged as collateral to cover margin
requirements for open futures contracts. See Note 8.
(d) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-81
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost
$496,702,656) $521,105,907
---------------------------------------------------------
Receivables for:
Investments sold 10,229,685
---------------------------------------------------------
Variation margin 1,156,250
---------------------------------------------------------
Fund shares sold 15,371,029
---------------------------------------------------------
Dividends 255,616
---------------------------------------------------------
Investment for deferred compensation plan 9,558
=========================================================
Total assets $548,128,045
=========================================================
LIABILITIES:
Payables for:
Investments purchased 31,918,601
---------------------------------------------------------
Fund shares reacquired 516,366
---------------------------------------------------------
Deferred compensation plan 9,558
---------------------------------------------------------
Accrued advisory fees 303,714
---------------------------------------------------------
Accrued distribution fees 290,055
---------------------------------------------------------
Accrued trustees' fees 573
---------------------------------------------------------
Accrued transfer agent fees 86,150
---------------------------------------------------------
Accrued operating expenses 130,977
=========================================================
Total liabilities 33,255,994
=========================================================
Net assets applicable to shares outstanding $514,872,051
_________________________________________________________
=========================================================
NET ASSETS:
Class A $225,255,390
_________________________________________________________
=========================================================
Class B $210,224,186
_________________________________________________________
=========================================================
Class C $ 79,392,475
_________________________________________________________
=========================================================
SHARES OUTSTANDING, $0.001 PAR VALUE
PER SHARE:
Class A 12,699,894
_________________________________________________________
=========================================================
Class B 11,982,641
_________________________________________________________
=========================================================
Class C 4,523,532
_________________________________________________________
=========================================================
Class A:
Net asset value and redemption price per
share $ 17.74
---------------------------------------------------------
Offering price per share:
(Net asset value of $17.74 divided by
94.50%) $ 18.77
_________________________________________________________
=========================================================
Class B:
Net asset value and offering price per
share $ 17.54
_________________________________________________________
=========================================================
Class C:
Net asset value and offering price per
share $ 17.55
_________________________________________________________
=========================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax
of $2,750) $ 219,266
---------------------------------------------------------
Dividends from affiliated money market
funds 842,386
---------------------------------------------------------
Interest 13,583
=========================================================
Total investment income 1,075,235
=========================================================
EXPENSES:
Advisory fees 1,064,335
---------------------------------------------------------
Administrative services fees 50,000
---------------------------------------------------------
Custodian fees 43,331
---------------------------------------------------------
Distribution fees -- Class A 229,403
---------------------------------------------------------
Distribution fees -- Class B 552,163
---------------------------------------------------------
Distribution fees -- Class C 211,511
---------------------------------------------------------
Transfer agent fees -- Class A 130,548
---------------------------------------------------------
Transfer agent fees -- Class B 116,994
---------------------------------------------------------
Transfer agent fees -- Class C 44,816
---------------------------------------------------------
Registration and filing fees 218,854
---------------------------------------------------------
Trustees' fees 6,916
---------------------------------------------------------
Other 72,635
=========================================================
Total expenses 2,741,506
=========================================================
Less: Expenses paid indirectly (4,636)
=========================================================
Net expenses 2,736,870
=========================================================
Net investment income (loss) (1,661,635)
=========================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES, FOREIGN
CURRENCIES, FOREIGN CURRENCY CONTRACTS
AND FUTURES CONTRACTS:
Net realized gain (loss) from:
Investment securities (30,798,251)
---------------------------------------------------------
Foreign currencies (5,413)
---------------------------------------------------------
Foreign currency contracts (918)
---------------------------------------------------------
Futures contracts 59,596
=========================================================
(30,744,986)
=========================================================
Change in net unrealized appreciation of:
Investment securities 22,954,589
---------------------------------------------------------
Futures contracts 300,687
=========================================================
23,255,276
=========================================================
Net gain (loss) on investment securities,
foreign currencies, foreign currency
contracts and futures contracts (7,489,710)
=========================================================
Net increase (decrease) in net assets
resulting from operations $ (9,151,345)
_________________________________________________________
=========================================================
|
See Notes to Financial Statements.
FS-82
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and the period March 1, 1999 (date operations commenced) to October 31, 1999
2000 1999
------------ -----------
OPERATIONS:
Net investment income (loss) $ (1,661,635) $ (46,810)
-----------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currencies, foreign currency contracts and
futures contracts (30,744,986) (429,952)
-----------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies, foreign currency
contracts and futures contracts 23,255,276 1,454,137
=========================================================================================
Net increase (decrease) in net assets resulting from
operations (9,151,345) 977,375
=========================================================================================
Share transactions-net:
Class A 219,794,733 7,163,788
-----------------------------------------------------------------------------------------
Class B 210,225,885 4,882,266
-----------------------------------------------------------------------------------------
Class C 80,133,352 845,997
=========================================================================================
Net increase in net assets 501,002,625 13,869,426
=========================================================================================
NET ASSETS:
Beginning of year 13,869,426 --
=========================================================================================
End of year $514,872,051 $13,869,426
_________________________________________________________________________________________
=========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $521,366,964 $12,880,971
-----------------------------------------------------------------------------------------
Undistributed net investment income (loss) (35,719) (35,730)
-----------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies, foreign currency
contracts and futures contracts (31,168,607) (429,952)
-----------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies, foreign currency contracts and futures
contracts 24,709,413 1,454,137
=========================================================================================
$514,872,051 $13,869,426
_________________________________________________________________________________________
=========================================================================================
|
See Notes to Financial Statements.
FS-83
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Large Cap Growth Fund (the "Fund") is a series portfolio of AIM Equity Funds
(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 eleven separate portfolios,
each having an unlimited number of shares of beneficial interest. Prior to June
17, 2000, the Fund was organized as a series portfolio of AIM Equity Funds, Inc.
At a meeting held on February 3, 2000, the Board of Directors of AIM Equity
Funds, Inc. approved an Agreement and Plan of Reorganization (the
"Reorganization") which reorganized the Fund as a series portfolio of the Trust.
Shareholders of the Fund approved the Reorganization at a meeting held on June
16, 2000. 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 long-term growth of capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.
On October 31, 2000, undistributed net investment income was increased by
$1,661,646, undistributed net realized gains increased by $6,331 and paid in
capital decreased by $1,667,977 as a result of differing book/tax treatment
of foreign currency transactions and net operating loss reclassifications.
Net assets of the Fund were unaffected by the reclassification discussed
above.
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.
The Fund has a capital loss carryforward of $27,562,758 as of October 31,
2000 which may be carried forward to offset
FS-84
future taxable gains, if any, which expires, if not previously utilized, in
the year 2008.
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. 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.
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 master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.75% of
the first $1 billion of the Fund's average daily net assets, plus 0.70% over $1
billion to and including $2 billion of the Fund's average daily net assets and
0.625% of the Fund's average daily net assets over $2 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 October 31, 2000, AIM was
paid $50,000 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 October 31, 2000, AFS was
paid $138,829 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
0.35% 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 October 31, 2000,
the Class A, Class B and Class C shares paid AIM Distributors $229,403, $552,163
and $211,511, respectively, as compensation under the Plans.
AIM Distributors received commissions of $577,198 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 2000,
AIM Distributors received $15,696 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 October 31, 2000, the Fund paid legal fees of $4,033 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 year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $1,835 and reductions in custodian fees of $2,801 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $4,636.
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 year ended October 31,
2000, the Fund did not borrow under the line of credit agreement. The
FS-85
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 are 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 is 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 borrower did not increase the collateral accordingly, and the borrower fails to return the securities. During the year ended October 31, 2000, there were no securities on loan.
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended October 31, 2000 was
$590,766,678 and $154,809,273, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $ 34,411,900 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (13,308,335) ========================================================= Net unrealized appreciation of investment securities $ 21,103,565 _________________________________________________________ ========================================================= Cost of investments for tax purposes is $500,002,342. |
NOTE 8-FUTURES CONTRACTS
On October 31, 2000, $2,565,000 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:
NO. OF MONTH/ MARKET APPRECIATION
CONTRACT CONTRACTS COMMITMENT VALUE (DEPRECIATION)
--------------------- --------- ---------- ----------- --------------
Nasdaq 100 Index 45 Dec. 00 $14,850,000 $ 730,000
----------------------------------------------------------------------------
S&P 500 Index 40 Dec. 00 14,402,000 (423,838)
============================================================================
$29,252,000 $ 306,162
____________________________________________________________________________
============================================================================
|
NOTE 9-SHARE INFORMATION
Changes in shares outstanding during the year ended October 31, 2000 and the period March 1, 1999 (date operations commenced) through October 31, 1999 were as follows:
2000 1999
------------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ --------- -----------
Sold:
Class A 13,372,376 $243,408,072 788,751 $ 8,217,840
--------------------------------------------------------------------------
Class B 12,077,582 219,734,204 577,653 6,130,128
--------------------------------------------------------------------------
Class C 4,575,100 82,410,277 85,761 907,295
==========================================================================
Reacquired:
Class A (1,361,845) (23,613,339) (99,388) (1,054,052)
--------------------------------------------------------------------------
Class B (555,702) (9,508,319) (116,892) (1,247,862)
--------------------------------------------------------------------------
Class C (131,632) (2,276,925) (5,697) (61,298)
==========================================================================
27,975,879 $510,153,970 1,230,188 $12,892,051
__________________________________________________________________________
==========================================================================
|
NOTE 10-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
-------------------------------
MARCH 1, 1999
(DATE OPERATIONS
YEAR ENDED COMMENCED) TO
OCTOBER 31, OCTOBER 31,
2000 1999
----------- ----------------
Net asset value, beginning of period $ 11.29 $10.00
---------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.15)(a) (0.04)
---------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 6.60 1.33
=============================================================================================
Total from investment operations 6.45 1.29
=============================================================================================
Net asset value, end of period $ 17.74 $11.29
_____________________________________________________________________________________________
=============================================================================================
Total return(b) 57.13% 13.70%
_____________________________________________________________________________________________
=============================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $225,255 $7,785
_____________________________________________________________________________________________
=============================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.58%(c) 1.53%(d)
---------------------------------------------------------------------------------------------
Without fee waivers 1.58%(c) 3.63%(d)
=============================================================================================
Ratio of net investment income (loss) to average net assets (0.82)%(c) (0.59)%(d)
_____________________________________________________________________________________________
=============================================================================================
Portfolio turnover rate 113% 21%
_____________________________________________________________________________________________
=============================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charges and is not annualized for periods less than
one year.
(c) Ratios are based on average daily net assets of $65,543,904.
(d) Annualized.
FS-86
NOTE 10-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS B
----------------------------
APRIL 5, 1999
(DATE SALES
YEAR ENDED COMMENCED) TO
OCTOBER 31, OCTOBER 31,
2000 1999
----------- -------------
Net asset value, beginning of period $ 11.25 $11.02
------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.27)(a) (0.08)(a)
------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 6.56 0.31
==========================================================================================
Total from investment operations 6.29 0.23
==========================================================================================
Net asset value, end of period $ 17.54 $11.25
__________________________________________________________________________________________
==========================================================================================
Total return(b) 55.91% 2.09%
__________________________________________________________________________________________
==========================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $210,224 $5,183
__________________________________________________________________________________________
==========================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.24%(c) 2.23%(d)
------------------------------------------------------------------------------------------
Without fee waivers 2.24%(c) 4.33%(d)
==========================================================================================
Ratio of net investment loss to average net assets (1.48)%(c) (1.29)%(d)
__________________________________________________________________________________________
==========================================================================================
Portfolio turnover rate 113% 21%
__________________________________________________________________________________________
==========================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average daily net assets of $55,216,289.
(d) Annualized.
CLASS C
----------------------------
APRIL 5, 1999
(DATE SALES
YEAR ENDED COMMENCED) TO
OCTOBER 31, OCTOBER 31,
2000 1999
----------- -------------
Net asset value, beginning of period $ 11.25 $11.02
------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.27)(a) (0.08)(a)
------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 6.57 0.31
==========================================================================================
Total from investment operations 6.30 0.23
==========================================================================================
Net asset value, end of period $ 17.55 $11.25
__________________________________________________________________________________________
==========================================================================================
Total return(b) 56.00% 2.09%
__________________________________________________________________________________________
==========================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $79,392 $ 901
__________________________________________________________________________________________
==========================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.24%(c) 2.23%(d)
------------------------------------------------------------------------------------------
Without fee waivers 2.24%(c) 4.33%(d)
==========================================================================================
Ratio of net investment loss to average net assets (1.48)%(c) (1.29)%(d)
__________________________________________________________________________________________
==========================================================================================
Portfolio turnover rate 113% 21%
__________________________________________________________________________________________
==========================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average daily net assets of $21,151,120.
(d) Annualized.
FS-87
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
AIM Equity Funds:
We have audited the accompanying statement of assets and liabilities of AIM Mid Cap Growth Fund (a portfolio of AIM Equity Funds), including the schedule of investments, as of October 31, 2000, the related statement of operations, the statement of changes in net assets, and financial highlights for the period November 1, 1999 (date operations commenced) through October 31, 2000. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 Mid Cap Growth Fund as of October 31, 2000, the results of its operations, the changes in its net assets and the financial highlights for the period November 1, 1999 (date operations commenced) through October 31, 2000 in conformity with generally accepted accounting principles in the United States of America.
/s/ KPMG LLP December 6, 2000 Houston, Texas |
FS-88
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY
INTERESTS-92.63%
BIOTECHNOLOGY-2.83%
Affymetrix, Inc.(a) 43,000 $ 2,381,125
--------------------------------------------------------------
Celera Genomics(a) 37,100 2,504,250
--------------------------------------------------------------
Millennium Pharmaceuticals, Inc.(a) 29,800 2,162,362
==============================================================
7,047,737
==============================================================
BROADCASTING (TELEVISION, RADIO & CABLE)-3.72%
Hispanic Broadcasting Corp.(a) 106,100 3,315,625
--------------------------------------------------------------
Pegasus Communications Corp.(a) 73,800 2,624,512
--------------------------------------------------------------
Univision Communications Inc.-Class
A(a) 74,400 2,845,800
--------------------------------------------------------------
Westwood One, Inc.(a) 24,200 458,287
==============================================================
9,244,224
==============================================================
COMMUNICATIONS EQUIPMENT-6.74%
Acterna Corp.(a) 74,300 1,188,800
--------------------------------------------------------------
ADC Telecommunications, Inc.(a) 80,100 1,712,137
--------------------------------------------------------------
Andrew Corp.(a) 122,600 3,225,912
--------------------------------------------------------------
Comverse Technology, Inc.(a) 56,100 6,269,175
--------------------------------------------------------------
Polycom, Inc.(a) 49,700 3,230,500
--------------------------------------------------------------
Tollgrade Communications, Inc.(a) 11,800 1,129,850
==============================================================
16,756,374
==============================================================
COMPUTERS (PERIPHERALS)-1.58%
SanDisk Corp.(a) 73,082 3,927,016
==============================================================
COMPUTERS (SOFTWARE & SERVICES)-13.82%
Advanced Fibre Communications, Inc.(a) 74,300 2,419,394
--------------------------------------------------------------
Check Point Software Technologies
Ltd. (Israel)(a) 27,500 4,355,312
--------------------------------------------------------------
HomeStore.com, Inc.(a) 64,400 2,189,600
--------------------------------------------------------------
Interwoven, Inc.(a) 32,300 3,254,225
--------------------------------------------------------------
Macrovision Corp.(a) 53,400 3,891,525
--------------------------------------------------------------
Mercury Interactive Corp.(a) 39,500 4,384,500
--------------------------------------------------------------
Orbotech, Ltd. (Israel)(a) 45,425 2,404,686
--------------------------------------------------------------
Portal Software, Inc.(a) 56,400 1,984,575
--------------------------------------------------------------
Quest Software, Inc.(a) 64,300 2,809,106
--------------------------------------------------------------
Rational Software Corp.(a) 76,600 4,572,062
--------------------------------------------------------------
webMethods, Inc.(a) 9,700 862,087
--------------------------------------------------------------
Websense, Inc.(a) 69,500 1,251,000
==============================================================
34,378,072
==============================================================
CONSUMER FINANCE-1.13%
Capital One Financial Corp. 44,600 2,815,375
==============================================================
ELECTRICAL EQUIPMENT-3.63%
Cree, Inc.(a) 22,300 2,213,275
--------------------------------------------------------------
|
MARKET
SHARES VALUE
ELECTRICAL EQUIPMENT-(CONTINUED)
Sanmina Corp.(a) 41,900 $ 4,789,694
--------------------------------------------------------------
Veeco Instruments Inc.(a) 30,700 2,032,436
==============================================================
9,035,405
==============================================================
ELECTRONICS (INSTRUMENTATION)-5.20%
Methode Electronics, Inc.-Class A 118,400 4,454,800
--------------------------------------------------------------
Newport Corp. 40,900 4,670,908
--------------------------------------------------------------
PerkinElmer, Inc. 31,900 3,812,050
==============================================================
12,937,758
==============================================================
ELECTRONICS (SEMICONDUCTORS)-7.86%
Elantec Semiconductor, Inc.(a) 16,600 1,846,750
--------------------------------------------------------------
Exar Corp.(a) 73,700 3,293,469
--------------------------------------------------------------
Integrated Device Technology, Inc.(a) 29,300 1,649,956
--------------------------------------------------------------
Microchip Technology Inc.(a) 71,825 2,271,466
--------------------------------------------------------------
MIPS Technologies, Inc.-Class A(a) 54,700 2,194,837
--------------------------------------------------------------
Semtech Corp.(a) 70,400 2,270,400
--------------------------------------------------------------
TranSwitch Corp.(a) 34,600 1,998,150
--------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 57,500 4,021,406
==============================================================
19,546,434
==============================================================
FINANCIAL (DIVERSIFIED)-1.46%
SEI Investments Co. 39,900 3,620,925
==============================================================
HEALTH CARE (DRUGS-GENERIC & OTHER)-3.24%
Forest Laboratories, Inc.(a) 15,400 2,040,500
--------------------------------------------------------------
Medicis Pharmaceutical Corp.-Class A(a) 81,900 6,029,887
==============================================================
8,070,387
==============================================================
HEALTH CARE (HOSPITAL MANAGEMENT)-2.20%
Health Management Associates,
Inc.-Class A(a) 276,400 5,476,175
==============================================================
HEALTH CARE (MANAGED CARE)-0.74%
Caremark Rx, Inc.(a) 148,000 1,850,000
==============================================================
HEALTH CARE (SPECIALIZED SERVICES)-0.63%
Laboratory Corp. of America Holdings(a) 11,700 1,578,038
==============================================================
INSURANCE (MULTI-LINE)-1.50%
ACE Ltd. (Bermuda) 95,000 3,728,750
==============================================================
INSURANCE BROKERS-0.70%
Aon Corp. 42,200 1,748,663
==============================================================
INVESTMENT BANKING/BROKERAGE-2.61%
Edwards (A.G.), Inc. 29,000 1,471,750
--------------------------------------------------------------
Legg Mason, Inc. 39,600 2,056,725
--------------------------------------------------------------
|
FS-89
MARKET
SHARES VALUE
INVESTMENT BANKING/BROKERAGE-(CONTINUED)
Lehman Brothers Holdings Inc. 46,100 $ 2,973,450
==============================================================
6,501,925
==============================================================
INVESTMENT MANAGEMENT-1.00%
Federated Investors, Inc.-Class B 10,600 308,725
--------------------------------------------------------------
Stilwell Financial, Inc. 48,500 2,173,406
==============================================================
2,482,131
==============================================================
LEISURE TIME (PRODUCTS)-1.50%
Harley-Davidson, Inc. 77,300 3,724,894
==============================================================
MANUFACTURING (SPECIALIZED)-0.56%
Millipore Corp. 26,600 1,396,500
==============================================================
OIL & GAS (DRILLING & EQUIPMENT)-9.55%
BJ Services Co.(a) 15,900 833,756
--------------------------------------------------------------
Cal Dive International, Inc.(a) 14,900 741,275
--------------------------------------------------------------
Chiles Offshore, Inc.(a) 64,700 1,035,200
--------------------------------------------------------------
Cooper Cameron Corp.(a) 28,500 1,553,250
--------------------------------------------------------------
ENSCO International Inc. 57,800 1,921,850
--------------------------------------------------------------
Grant Prideco, Inc.(a) 103,700 1,924,931
--------------------------------------------------------------
Nabors Industries, Inc.(a) 56,200 2,860,580
--------------------------------------------------------------
National-Oilwell, Inc.(a) 83,700 2,448,225
--------------------------------------------------------------
Patterson Energy, Inc.(a) 83,700 2,354,063
--------------------------------------------------------------
Rowan Cos., Inc.(a) 70,000 1,763,125
--------------------------------------------------------------
Smith International, Inc.(a) 28,300 1,995,150
--------------------------------------------------------------
Transocean Sedco Forex Inc. 44,300 2,347,900
--------------------------------------------------------------
Weatherford International, Inc.(a) 54,200 1,978,300
==============================================================
23,757,605
==============================================================
OIL & GAS (EXPLORATION & PRODUCTION)-3.38%
Anadarko Petroleum Corp. 41,700 2,670,885
--------------------------------------------------------------
Kerr-McGee Corp. 60,600 3,957,938
--------------------------------------------------------------
Spinnaker Exploration Co.(a) 58,900 1,781,725
==============================================================
8,410,548
==============================================================
RETAIL (DISCOUNTERS)-1.12%
Dollar Tree Stores, Inc.(a) 70,900 2,773,963
==============================================================
RETAIL (SPECIALTY)-4.74%
Bed Bath & Beyond Inc.(a) 224,600 5,797,488
--------------------------------------------------------------
|
MARKET
SHARES VALUE
RETAIL (SPECIALTY)-(CONTINUED)
Linens 'n Things, Inc.(a) 91,200 $ 2,804,400
--------------------------------------------------------------
Tiffany & Co. 74,500 3,180,219
==============================================================
11,782,107
==============================================================
RETAIL (SPECIALTY-APPAREL)-4.30%
American Eagle Outfitters, Inc.(a) 63,700 2,193,669
--------------------------------------------------------------
AnnTaylor Stores Corp.(a) 50,300 1,509,000
--------------------------------------------------------------
Intimate Brands, Inc. 112,100 2,676,388
--------------------------------------------------------------
Men's Wearhouse, Inc. (The)(a) 48,300 1,412,775
--------------------------------------------------------------
Talbots, Inc. (The) 36,900 2,917,406
==============================================================
10,709,238
==============================================================
SERVICES (ADVERTISING/MARKETING)-1.40%
Lamar Advertising Co.(a) 72,700 3,489,600
==============================================================
SERVICES (DATA PROCESSING)-1.05%
Fiserv, Inc.(a) 49,600 2,600,900
==============================================================
SHIPPING-1.50%
Frontline Ltd. (Norway)(a) 152,000 2,506,602
--------------------------------------------------------------
Teekay Shipping Corp. (Bahamas) 33,000 1,233,375
==============================================================
3,739,977
==============================================================
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-2.94%
Crown Castle International Corp.(a) 91,200 2,764,500
--------------------------------------------------------------
Research in Motion Ltd. (Canada)(a) 45,500 4,550,000
==============================================================
7,314,500
==============================================================
Total Common Stocks & Other
Equity Interests (Cost
$215,395,998) 230,445,221
==============================================================
MONEY MARKET FUNDS-10.36%
STIC Liquid Assets Portfolio(b) 12,887,538 12,887,538
--------------------------------------------------------------
STIC Prime Portfolio(b) 12,887,538 12,887,538
==============================================================
Total Money Market Funds (Cost
$25,775,076) 25,775,076
==============================================================
TOTAL INVESTMENTS-102.99%
(Cost $241,171,074) 256,220,297
==============================================================
LIABILITIES LESS OTHER
ASSETS-(2.99%) (7,445,155)
==============================================================
NET ASSETS-100.00% $248,775,142
______________________________________________________________
==============================================================
|
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-90
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost
$241,171,074) $256,220,297
------------------------------------------------------------
Receivables for:
Investments sold 3,421,580
------------------------------------------------------------
Fund shares sold 3,338,842
------------------------------------------------------------
Dividends 131,546
------------------------------------------------------------
Investment for deferred compensation plan 5,077
------------------------------------------------------------
Other assets 49,056
============================================================
Total assets $263,166,398
============================================================
LIABILITIES:
Payables for:
Investments purchased 13,555,939
------------------------------------------------------------
Fund shares reacquired 341,220
------------------------------------------------------------
Deferred compensation plan 5,077
------------------------------------------------------------
Accrued advisory fees 164,772
------------------------------------------------------------
Accrued administrative services fees 4,235
------------------------------------------------------------
Accrued distribution fees 159,344
------------------------------------------------------------
Accrued transfer agent fees 57,706
------------------------------------------------------------
Accrued operating expenses 102,963
============================================================
Total liabilities 14,391,256
============================================================
Net assets applicable to shares outstanding $248,775,142
____________________________________________________________
============================================================
NET ASSETS:
Class A $114,912,741
____________________________________________________________
============================================================
Class B $103,893,459
____________________________________________________________
============================================================
Class C $ 29,968,942
____________________________________________________________
============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE:
Class A 7,993,049
____________________________________________________________
============================================================
Class B 7,288,903
____________________________________________________________
============================================================
Class C 2,101,630
____________________________________________________________
============================================================
Class A:
Net asset value and redemption price per
share $ 14.38
------------------------------------------------------------
Offering price per share:
(Net asset value of $14.38 divided by
94.50%) $ 15.22
____________________________________________________________
============================================================
Class B:
Net asset value and offering price per share $ 14.25
____________________________________________________________
============================================================
Class C:
Net asset value and offering price per share $ 14.26
____________________________________________________________
============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends from Affiliated Money Market Funds $ 873,331
------------------------------------------------------------
Dividends 223,199
------------------------------------------------------------
Interest 124,739
============================================================
Total investment income 1,221,269
============================================================
EXPENSES:
Advisory fees 1,125,851
------------------------------------------------------------
Administrative services fee 50,000
------------------------------------------------------------
Custodian fees 53,463
------------------------------------------------------------
Distribution fees -- Class A 239,790
------------------------------------------------------------
Distribution fees -- Class B 553,529
------------------------------------------------------------
Distribution fees -- Class C 168,671
------------------------------------------------------------
Transfer agent fees -- Class A 155,561
------------------------------------------------------------
Transfer agent fees -- Class B 148,329
------------------------------------------------------------
Transfer agent fees -- Class C 45,199
------------------------------------------------------------
Trustees' fees 7,132
------------------------------------------------------------
Registration and filing fees 151,123
------------------------------------------------------------
Other 91,594
============================================================
Total expenses 2,790,242
============================================================
Less: Expenses paid indirectly (5,334)
============================================================
Net expenses 2,784,908
============================================================
Net investment income (loss) (1,563,639)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities (25,894,692)
------------------------------------------------------------
Foreign currencies 3,938
------------------------------------------------------------
Option contracts written 385,827
============================================================
(25,504,927)
============================================================
Net unrealized appreciation of:
Investment securities 15,049,224
============================================================
Net gain (loss) from investment securities,
foreign currencies and option contracts (10,455,703)
============================================================
Net increase (decrease) in net assets
resulting from operations $(12,019,342)
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
FS-91
STATEMENT OF CHANGES IN NET ASSETS
For the year ended October 31, 2000
2000
------------
OPERATIONS:
Net investment income (loss) $ (1,563,639)
--------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currencies and option contracts (25,504,927)
--------------------------------------------------------------------------
Net unrealized appreciation of investment securities 15,049,224
==========================================================================
Net increase (decrease) in net assets resulting from
operations (12,019,342)
==========================================================================
Share transactions-net:
Class A 119,193,513
--------------------------------------------------------------------------
Class B 110,167,503
--------------------------------------------------------------------------
Class C 31,433,468
==========================================================================
Net increase in net assets 248,775,142
==========================================================================
NET ASSETS:
Beginning of year --
==========================================================================
End of year $248,775,142
__________________________________________________________________________
==========================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $259,252,997
--------------------------------------------------------------------------
Undistributed net investment income (loss) (18,214)
--------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies and option contracts (25,508,865)
--------------------------------------------------------------------------
Unrealized appreciation of investment securities 15,049,224
==========================================================================
$248,775,142
__________________________________________________________________________
==========================================================================
|
See Notes to Financial Statements.
FS-92
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Mid Cap Growth Fund (the "Fund") is a series portfolio of AIM Equity Funds
(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 eleven separate portfolios,
each having an unlimited number of shares of beneficial interest. Prior to June
17, 2000 the Fund was organized as a series portfolio of AIM Equity Funds, Inc.
At a meeting held on February 3, 2000, the Board of Directors of AIM Equity
Funds, Inc. approved an Agreement and Plan of Reorganization (the
"Reorganization") which reorganized the Fund as a series portfolio of the Trust.
Shareholders of the Fund approved the Reorganization at a meeting held on June
16 , 2000. 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 long-term growth of capital.
The Fund commenced operations November 1, 1999.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 -- Securities, including restricted securities, are
valued according to the following policy. 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.
On October 31, 2000, undistributed net investment income was increased by
$1,545,425, undistributed net realized gains were decreased by $3,938 and
paid-in capital was decreased by $1,541,487 as a result of differences due to
stock issuance cost reclassifications, foreign currency transactions and net
operating loss reclassifications. Net assets of the Fund were unaffected by
the reclassification discussed above.
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.
FS-93
The fund has a capital loss carryforward of $23,619,065 which may be
carried forward to offset future taxable gains, if any, which expires, if not
previously utilized, in the year 2008.
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 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. 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 master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.80% of
the first $1 billion of the Fund's average daily net assets plus 0.75% of the
Fund's average daily net assets over $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 October 31, 2000, AIM was
paid $50,000 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 October 31, 2000, AFS was
paid $189,746 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
0.35% 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 October 31, 2000,
the Class A, Class B and Class C shares paid AIM Distributors $239,790, $553,529
and $168,671, respectively, as compensation under the Plans.
FS-94
AIM Distributors received commissions of $422,379 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 2000,
AIM Distributors received $23,692 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 October 31, 2000, the Fund paid legal fees of $3,749 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 year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $1,932 and reductions in custodian fees of $3,402 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $5,334.
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 year ended October 31,
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 year ended October 31, 2000 was
$473,814,109 and $232,544,249, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $ 29,186,413 --------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (15,584,380) ========================================================= Net unrealized appreciation of investment securities $ 13,602,033 _________________________________________________________ ========================================================= Cost of investments for tax purposes is $242,618,265. |
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the year ended October 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ---------
Beginning of year -- $ --
---------------------------------------------------------
Written 685 557,589
---------------------------------------------------------
Closed (685) (557,589)
=========================================================
End of year -- $ --
_________________________________________________________
=========================================================
|
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the year ended October 31, 2000 were as follows:
OCTOBER 31, 2000
--------------------------
SHARES AMOUNT
---------- ------------
Sold:
Class A 9,973,512 $148,793,995
----------------------------------------------------------------------------------------
Class B 7,790,721 117,866,319
----------------------------------------------------------------------------------------
Class C 2,332,138 34,964,988
========================================================================================
Reacquired:
Class A (1,980,463) (29,600,482)
----------------------------------------------------------------------------------------
Class B (501,818) (7,698,816)
----------------------------------------------------------------------------------------
Class C (230,508) (3,531,520)
========================================================================================
17,383,582 $260,794,484
________________________________________________________________________________________
========================================================================================
|
FS-95
NOTE 9-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A CLASS B CLASS C
---------------- ---------------- ----------------
NOVEMBER 1, 1999 NOVEMBER 1, 1999 NOVEMBER 1, 1999
(DATE OPERATIONS (DATE OPERATIONS (DATE OPERATIONS
COMMENCED) TO COMMENCED) TO COMMENCED) TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000(a) 2000(a) 2000(a)
---------------- ---------------- ----------------
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00
--------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.12) (0.22) (0.22)
--------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 4.50 4.47 4.48
====================================================================================================================
Total from investment operations 4.38 4.25 4.26
====================================================================================================================
Net asset value, end of period $ 14.38 $ 14.25 $ 14.26
____________________________________________________________________________________________________________________
====================================================================================================================
Total return(b) 43.80% 42.50% 42.60%
____________________________________________________________________________________________________________________
====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $114,913 $103,893 $29,969
____________________________________________________________________________________________________________________
====================================================================================================================
Ratio of expenses to average net assets 1.63%(c) 2.32%(c) 2.32%(c)
====================================================================================================================
Ratio of net investment income (loss) to average net assets (0.76)%(c) (1.45)%(c) (1.45)%(c)
____________________________________________________________________________________________________________________
====================================================================================================================
Portfolio turnover rate 183% 183% 183%
____________________________________________________________________________________________________________________
====================================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Does not include sales charges or contingent deferred sales charges.
(c) Ratios are based on average daily net assets of $68,511,425, $55,352,933 and
$16,867,070 for Class A, Class B and Class C, respectively.
FS-96
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
AIM Equity Funds:
We have audited the accompanying statement of assets and liabilities of AIM Weingarten Fund (a portfolio of AIM Equity Funds), including the schedule of investments, as of October 31, 2000, the related statement of operations for the year then ended, the statement of changes in net assets for each of the years in the two-year period then ended, and financial highlights for each of the periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AIM Weingarten Fund as of October 31, 2000, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the periods in the five-year period then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ KPMG LLP December 6, 2000 Houston, Texas |
FS-97
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-80.49%
BIOTECHNOLOGY-0.40%
Amgen Inc.(a) 772,600 $ 44,762,512
===============================================================
BROADCASTING (TELEVISION, RADIO
& CABLE)-2.68%
AT&T Corp.-Liberty Media
Corp.-Class A 5,000,000 90,000,000
---------------------------------------------------------------
Infinity Broadcasting
Corp.-Class A(a) 6,327,400 210,386,050
===============================================================
300,386,050
===============================================================
COMMUNICATIONS EQUIPMENT-9.09%
ADC Telecommunications, Inc.(a) 3,698,300 79,051,162
---------------------------------------------------------------
Comverse Technology, Inc.(a) 2,300,000 257,025,000
---------------------------------------------------------------
Corning Inc. 3,100,000 237,150,000
---------------------------------------------------------------
JDS Uniphase Corp.(a) 3,975,000 323,465,625
---------------------------------------------------------------
Redback Networks Inc.(a) 475,000 50,557,812
---------------------------------------------------------------
Scientific-Atlanta, Inc. 1,030,300 70,511,156
===============================================================
1,017,760,755
===============================================================
COMPUTERS (HARDWARE)-4.78%
Palm, Inc.(a) 1,375,000 73,648,438
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 4,163,000 461,572,625
===============================================================
535,221,063
===============================================================
COMPUTERS (NETWORKING)-3.19%
Cisco Systems, Inc.(a) 2,200,000 118,525,000
---------------------------------------------------------------
Extreme Networks, Inc.(a) 800,000 66,350,000
---------------------------------------------------------------
Juniper Networks, Inc.(a) 625,000 121,875,000
---------------------------------------------------------------
VeriSign, Inc.(a) 384,100 50,701,200
===============================================================
357,451,200
===============================================================
COMPUTERS (PERIPHERALS)-5.96%
Brocade Communications Systems,
Inc.(a) 700,000 159,162,500
---------------------------------------------------------------
EMC Corp.(a) 3,346,300 298,029,844
---------------------------------------------------------------
Network Appliance, Inc.(a) 774,500 92,165,500
---------------------------------------------------------------
QLogic Corp.(a) 1,215,700 117,618,975
===============================================================
666,976,819
===============================================================
COMPUTERS (SOFTWARE &
SERVICES)-11.11%
Adobe Systems Inc. 1,220,000 92,796,250
---------------------------------------------------------------
America Online, Inc.(a) 1,500,000 75,645,000
---------------------------------------------------------------
Ariba, Inc.(a) 900,000 113,737,500
---------------------------------------------------------------
BEA Systems, Inc.(a) 1,050,000 75,337,500
---------------------------------------------------------------
Intuit Inc.(a) 1,800,000 110,587,500
---------------------------------------------------------------
Mercury Interactive Corp.(a) 800,000 88,800,000
---------------------------------------------------------------
Oracle Corp.(a) 3,400,000 112,200,000
---------------------------------------------------------------
Rational Software Corp.(a) 2,750,000 164,140,625
---------------------------------------------------------------
Siebel Systems, Inc.(a) 1,300,000 136,418,750
---------------------------------------------------------------
|
MARKET
SHARES VALUE
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
VERITAS Software Corp.(a) 1,946,600 $ 274,501,016
===============================================================
1,244,164,141
===============================================================
CONSUMER FINANCE-0.48%
Capital One Financial Corp. 850,000 53,656,250
===============================================================
ELECTRICAL EQUIPMENT-4.93%
General Electric Co. 8,000,000 438,500,000
---------------------------------------------------------------
Sanmina Corp.(a) 871,900 99,669,069
---------------------------------------------------------------
Symbol Technologies, Inc. 309,000 14,040,188
===============================================================
552,209,257
===============================================================
ELECTRONICS
(SEMICONDUCTORS)-8.20%
Analog Devices, Inc.(a) 3,650,000 237,250,000
---------------------------------------------------------------
Applied Micro Circuits Corp.(a) 1,200,000 91,725,000
---------------------------------------------------------------
Cypress Semiconductor Corp.(a) 1,650,000 61,771,875
---------------------------------------------------------------
Integrated Device Technology,
Inc.(a) 1,400,000 78,837,500
---------------------------------------------------------------
Linear Technology Corp. 2,000,000 129,125,000
---------------------------------------------------------------
TranSwitch Corp.(a) 948,500 54,775,875
---------------------------------------------------------------
Xilinx, Inc.(a) 3,648,800 264,309,950
===============================================================
917,795,200
===============================================================
ENTERTAINMENT-1.25%
Time Warner Inc. 1,850,000 140,433,500
===============================================================
EQUIPMENT (SEMICONDUCTOR)-1.00%
Broadcom Corp.-Class A(a) 505,000 112,299,375
===============================================================
FINANCIAL (DIVERSIFIED)-6.21%
American Express Co. 5,549,900 332,994,000
---------------------------------------------------------------
Citigroup Inc. 6,891,766 362,679,186
===============================================================
695,673,186
===============================================================
HEALTH CARE (DIVERSIFIED)-1.28%
IVAX Corp.(a) 3,289,000 143,071,500
===============================================================
HEALTH CARE (DRUGS-GENERIC &
OTHER)-1.99%
Forest Laboratories, Inc.(a) 620,000 82,150,000
---------------------------------------------------------------
Genentech, Inc.(a) 1,700,000 140,250,000
===============================================================
222,400,000
===============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-3.38%
Allergan, Inc. 1,100,000 92,468,750
---------------------------------------------------------------
Pfizer Inc. 6,620,000 285,901,250
===============================================================
378,370,000
===============================================================
HEALTH CARE (MANAGED CARE)-1.08%
UnitedHealth Group Inc. 1,100,000 120,312,500
===============================================================
|
FS-98
MARKET
SHARES VALUE
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.09%
PE Corp-PE Biosystems Group 1,045,700 $ 122,346,900
===============================================================
INVESTMENT
BANKING/BROKERAGE-3.61%
Merrill Lynch & Co., Inc. 3,482,200 243,754,000
---------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 2,000,000 160,625,000
===============================================================
404,379,000
===============================================================
LEISURE TIME (PRODUCTS)-0.86%
Harley-Davidson, Inc. 2,000,000 96,375,000
===============================================================
MANUFACTURING
(DIVERSIFIED)-1.03%
United Technologies Corp. 1,650,000 115,190,625
===============================================================
NATURAL GAS-2.18%
Dynegy Inc.-Class A 2,600,000 120,412,500
---------------------------------------------------------------
Enron Corp. 1,500,000 123,093,750
===============================================================
243,506,250
===============================================================
POWER PRODUCERS
(INDEPENDENT)-2.01%
AES Corp. (The)(a) 1,675,000 94,637,500
---------------------------------------------------------------
Calpine Corp.(a) 1,650,000 130,246,875
===============================================================
224,884,375
===============================================================
RETAIL (FOOD CHAINS)-1.15%
Safeway Inc.(a) 2,350,000 128,515,625
===============================================================
RETAIL (SPECIALTY)-0.73%
Bed Bath & Beyond Inc.(a) 3,165,700 81,714,631
===============================================================
SERVICES (ADVERTISING/MARKETING)-0.55%
TMP Worldwide, Inc.(a) 881,900 61,388,508
===============================================================
SERVICES (DATA PROCESSING)-0.02%
DST Systems, Inc.(a) 41,400 2,551,275
===============================================================
TELECOMMUNICATIONS
(CELLULAR/WIRELESS)-0.25%
Powerwave Technologies, Inc.(a) 581,000 27,960,625
===============================================================
Total Domestic Common Stocks
(Cost $6,723,018,207) 9,011,756,122
===============================================================
|
MARKET
SHARES VALUE
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-10.66%
BERMUDA-1.75%
Tyco International Ltd.
(Manufacturing-Diversified) 3,458,800 $ 196,070,725
===============================================================
CANADA-3.91%
Nortel Networks Corp.
(Communications Equipment) 6,200,000 282,100,000
---------------------------------------------------------------
PMC-Sierra, Inc.
(Electronics-Semiconductors)(a) 920,000 155,940,000
===============================================================
438,040,000
===============================================================
FRANCE-1.12%
Alcatel S.A.-ADR (Communications
Equipment) 2,000,000 124,750,000
===============================================================
HONG KONG-1.26%
China Mobile Ltd.
(Telecommunications-
Cellular/Wireless)(a) 22,000,100 141,044,364
===============================================================
ISRAEL-2.62%
Check Point Software
Technologies Ltd.
(Computers-Software &
Services)(a) 1,600,000 253,400,000
---------------------------------------------------------------
Teva Pharmaceutical Industries
Ltd.-ADR (Health
Care-Drugs-Generic & Other) 675,000 39,909,375
===============================================================
293,309,375
===============================================================
Total Foreign Stocks & Other
Equity Interests (Cost
$849,041,022) 1,193,214,464
===============================================================
MONEY MARKET FUNDS-8.15%
STIC Liquid Assets Portfolio(b) 456,311,366 456,311,366
---------------------------------------------------------------
STIC Prime Portfolio(b) 456,311,366 456,311,366
===============================================================
Total Money Market Funds
(Cost $912,622,732) 912,622,732
===============================================================
TOTAL INVESTMENTS-99.30%
(Cost $8,484,681,961) 11,117,593,318
===============================================================
OTHER ASSETS LESS
LIABILITIES-0.70% 78,926,373
===============================================================
NET ASSETS-100.00% $11,196,519,691
_______________________________________________________________
===============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a)Non-income producing security.
(b)The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
FS-99
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost
$8,484,681,961) $11,117,593,318
-------------------------------------------------------------
Foreign currencies, at market value (cost
$94,552,636) 93,958,307
-------------------------------------------------------------
Receivables for:
Collateral for securities loaned 481,391,900
-------------------------------------------------------------
Investments sold 28,386,536
-------------------------------------------------------------
Fund shares sold 15,376,420
-------------------------------------------------------------
Foreign currency 125,025
-------------------------------------------------------------
Dividends 8,112,276
-------------------------------------------------------------
Securities loaned 44,950
-------------------------------------------------------------
Investment for deferred compensation plan 170,032
-------------------------------------------------------------
Other assets 1,163,815
=============================================================
Total assets 11,746,322,579
=============================================================
LIABILITIES:
Payables for:
Investments purchased 40,692,751
-------------------------------------------------------------
Collateral upon return of securities
loaned 481,391,900
-------------------------------------------------------------
Fund shares reacquired 14,036,122
-------------------------------------------------------------
Deferred compensation plan 170,032
-------------------------------------------------------------
Accrued advisory fees 5,798,989
-------------------------------------------------------------
Accrued administrative services fees 39,955
-------------------------------------------------------------
Accrued distribution fees 5,403,062
-------------------------------------------------------------
Accrued transfer agent fees 1,489,451
-------------------------------------------------------------
Accrued operating expenses 780,626
=============================================================
Total liabilities 549,802,888
=============================================================
Net assets applicable to shares outstanding $11,196,519,691
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $ 8,948,781,148
_____________________________________________________________
=============================================================
Class B $ 1,927,513,800
_____________________________________________________________
=============================================================
Class C $ 301,590,236
_____________________________________________________________
=============================================================
Institutional Class $ 18,634,507
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE:
Class A 317,745,991
_____________________________________________________________
=============================================================
Class B 71,856,609
_____________________________________________________________
=============================================================
Class C 11,234,005
_____________________________________________________________
=============================================================
Institutional Class 642,588
_____________________________________________________________
=============================================================
Class A:
Net asset value and redemption price per
share $ 28.16
-------------------------------------------------------------
Offering price per share:
(Net asset value of $28.16 divided by
94.50%) $ 29.80
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 26.82
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 26.85
_____________________________________________________________
=============================================================
Institutional Class
Net asset value, offering and redemption
price per share $ 29.00
_____________________________________________________________
=============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$790,408) $ 24,643,007
-------------------------------------------------------------
Dividends from affiliated money market funds 44,169,714
-------------------------------------------------------------
Interest 34,190
-------------------------------------------------------------
Security lending income 151,601
=============================================================
Total investment income 68,998,512
=============================================================
EXPENSES:
Advisory fees 75,254,931
-------------------------------------------------------------
Administrative services fees 473,764
-------------------------------------------------------------
Custodian fees 694,359
-------------------------------------------------------------
Distribution fees -- Class A 29,398,785
-------------------------------------------------------------
Distribution fees -- Class B 18,390,082
-------------------------------------------------------------
Distribution fees -- Class C 2,310,903
-------------------------------------------------------------
Transfer agent fees -- Class A 10,695,312
-------------------------------------------------------------
Transfer agent fees -- Class B 2,939,757
-------------------------------------------------------------
Transfer agent fees -- Class C 369,411
-------------------------------------------------------------
Transfer agent fees -- Institutional Class 13,407
-------------------------------------------------------------
Trustees' fees 50,685
-------------------------------------------------------------
Other 2,394,852
=============================================================
Total expenses 142,986,248
=============================================================
Less: Fees waived (5,181,384)
-------------------------------------------------------------
Expenses paid indirectly (207,062)
=============================================================
Net expenses 137,597,802
=============================================================
Net investment income (loss) (68,599,290)
=============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES,
FUTURES CONTRACTS AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 1,645,775,410
-------------------------------------------------------------
Foreign currencies 4,466,343
-------------------------------------------------------------
Futures contracts 9,049,301
-------------------------------------------------------------
Option contracts written (152,474,766)
=============================================================
1,506,816,288
=============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (540,721,720)
-------------------------------------------------------------
Foreign currencies (672,021)
-------------------------------------------------------------
Foreign currency contracts 125,025
-------------------------------------------------------------
Option contracts written 20,384,517
=============================================================
(520,884,199)
=============================================================
Net gain from investment securities, foreign
currencies, futures contracts and option
contracts 985,932,089
=============================================================
Net increase in net assets resulting from
operations $ 917,332,799
_____________________________________________________________
=============================================================
|
See Notes to Financial Statements.
FS-100
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
--------------- --------------
OPERATIONS:
Net investment income (loss) $ (68,599,290) $ (41,231,383)
-----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, futures contracts and option contracts 1,506,816,288 1,252,613,276
-----------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities, foreign currencies, futures
contracts and option contracts (520,884,199) 1,427,968,629
===============================================================================================
Net increase in net assets resulting from operations 917,332,799 2,639,350,522
===============================================================================================
Distributions to shareholders from net investment income:
Class A -- (3,691,627)
-----------------------------------------------------------------------------------------------
Institutional Class -- (343,112)
-----------------------------------------------------------------------------------------------
Distributions in excess of net investment income:
Class A -- (377,640)
-----------------------------------------------------------------------------------------------
Institutional Class -- (5,008)
-----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (912,274,100) (404,965,108)
-----------------------------------------------------------------------------------------------
Class B (156,090,644) (49,731,739)
-----------------------------------------------------------------------------------------------
Class C (13,701,366) (1,700,816)
-----------------------------------------------------------------------------------------------
Institutional Class (12,672,994) (4,837,664)
-----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 927,796,775 95,538,920
-----------------------------------------------------------------------------------------------
Class B 724,966,056 347,953,526
-----------------------------------------------------------------------------------------------
Class C 221,312,749 70,937,422
-----------------------------------------------------------------------------------------------
Institutional Class (100,840,055) 16,644,022
===============================================================================================
Net increase in net assets 1,595,829,220 2,704,771,698
===============================================================================================
NET ASSETS:
Beginning of year 9,600,690,471 6,895,918,773
===============================================================================================
End of year $11,196,519,691 $9,600,690,471
_______________________________________________________________________________________________
===============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 7,150,137,050 $5,279,351,381
-----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (388,227) (317,554)
-----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies, futures contracts and
option contracts 1,414,418,150 1,168,419,727
-----------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities, foreign currencies, futures contracts and
option contracts 2,632,352,718 3,153,236,917
===============================================================================================
$11,196,519,691 $9,600,690,471
_______________________________________________________________________________________________
===============================================================================================
|
See Notes to Financial Statements.
FS-101
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Weingarten Fund (the "Fund") is a series portfolio of AIM Equity Funds (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 eleven separate portfolios, each
having an unlimited number of shares of beneficial interest. Prior to June 17,
2000 the Fund was organized as a series portfolio of AIM Equity Funds, Inc. At a
meeting held on February 3, 2000, the Board of Directors of AIM Equity Funds,
Inc. approved an Agreement and Plan of Reorganization (the "Reorganization")
which reorganized the Fund as a series portfolio of the Trust. Shareholders of
the Fund approved the Reorganization at a meeting held on June 16, 2000. The
Fund currently offers four different classes of shares: Class A shares, Class B
shares, Class C shares and the Institutional Class. 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. Institutional Class shares are sold without a
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 provide growth of capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 -- Securities, including restricted securities, are
valued according to the following policy. 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.
On October 31, 2000, undistributed net investment income was increased by
$68,528,617, undistributed net realized gains decreased by $166,078,761 and
paid-in capital increased by $97,550,144 as a result of differences due to
utilization of a portion of the proceeds from redemptions as distributions
for federal income tax purposes, foreign currency transactions and net
operating loss reclassifications. Net assets of the Fund were unaffected by
the reclassification discussed above.
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
otherwise taxable income (including net realized capital gains) which is
distributed to
FS-102
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 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. 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. 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.
I. 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 master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 1.0% of
the first $30 million of the Fund's average daily net assets, plus 0.75% of the
Fund's average daily net assets in excess of $30 million to and including $350
million, plus 0.625% of the Fund's average daily net assets in excess of $350
million. 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. During the year ended October 31, 2000, AIM waived fees of $5,181,384.
Under the terms of a master sub-advisory agreement between AIM and A I M Capital
Management, Inc. ("AIM Capital"), AIM pays AIM Capital 50% of the amount paid by
the Fund to AIM.
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 October 31, 2000, AIM was
paid $473,764 for such services.
FS-103
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 October 31, 2000, AFS was
paid $7,135,544 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, Class C and the Institutional Class 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 0.30% 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. During the year ended October 31, 2000, the Class A, Class B and Class
C shares paid AIM Distributors $29,398,785, $18,390,082 and $2,310,903,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $3,854,495 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 2000,
AIM Distributors received $139,887 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 October 31, 2000, the Fund paid legal fees of $22,699
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 year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $162,324 and reductions in custodian fees of $44,738 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $207,062.
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 year ended October 31,
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 are 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 is 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 borrower did not increase the
collateral accordingly and failed to return the securities.
At October 31, 2000, securities with an aggregate value of $469,288,729 were
on loan to brokers. The loans were secured by cash collateral of $481,391,900
received by the Fund. For the year ended October 31, 2000, the Fund received
fees of $151,601 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 year ended October 31, 2000 was
$16,186,039,935 and $16,154,880,126, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $2,903,247,458 ---------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (277,218,090) ========================================================== Net unrealized appreciation of investment securities $2,626,029,368 __________________________________________________________ ========================================================== Cost of investments for tax purposes is $8,491,563,950. |
FS-104
NOTE 8-CALL OPTION CONTRACTS
Transactions in call options written during the year ended October 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
--------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- -------------
Beginning of year 91,902 $ 116,996,621
----------------------------------------------------------------------------------------
Closed (85,877) (111,818,048)
----------------------------------------------------------------------------------------
Exercised (6,025) (5,178,573)
========================================================================================
End of year -- $ --
________________________________________________________________________________________
========================================================================================
|
NOTE 9-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 2000 and 1999 were as follows:
2000 1999
------------------------------ ------------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ----------- ---------------
Sold:
Class A 38,693,394 $ 1,218,409,892 38,697,927 $ 994,480,979
-----------------------------------------------------------------------------------------------------------------------------
Class B 26,508,143 797,286,477 17,982,789 456,125,945
-----------------------------------------------------------------------------------------------------------------------------
Class C 8,102,015 244,073,425 3,622,407 92,753,207
-----------------------------------------------------------------------------------------------------------------------------
Institutional Class 1,045,908 33,206,382 826,477 21,885,030
=============================================================================================================================
Issued as reinvestment of dividends:
Class A 29,963,538 854,837,292 16,540,521 383,078,048
-----------------------------------------------------------------------------------------------------------------------------
Class B 5,414,678 148,085,997 2,102,927 47,274,883
-----------------------------------------------------------------------------------------------------------------------------
Class C 480,423 13,149,166 71,213 1,602,275
-----------------------------------------------------------------------------------------------------------------------------
Institutional Class 428,931 12,554,823 217,868 5,146,039
=============================================================================================================================
Reacquired:
Class A (36,659,424) (1,145,450,409) (50,133,647) (1,282,020,107)
-----------------------------------------------------------------------------------------------------------------------------
Class B (7,393,719) (220,406,418) (6,174,366) (155,447,302)
-----------------------------------------------------------------------------------------------------------------------------
Class C (1,209,352) (35,909,842) (926,007) (23,418,060)
-----------------------------------------------------------------------------------------------------------------------------
Institutional Class (4,771,038) (146,601,260) (391,478) (10,387,047)
=============================================================================================================================
60,603,497 $ 1,773,235,525 22,436,631 $ 531,073,890
_____________________________________________________________________________________________________________________________
=============================================================================================================================
|
FS-105
NOTE 10-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
CLASS A
------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------------------------------
2000(a) 1999 1998 1997 1996
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period $ 28.31 $ 21.72 $ 22.72 $ 20.19 $ 20.33
--------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.14) (0.10) 0.02 0.01 0.06
--------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 3.18 8.16 2.38 4.82 2.51
================================================================================================================================
Total from investment operations 3.04 8.06 2.40 4.83 2.57
================================================================================================================================
Less distributions:
Dividends from net investment income -- (0.01) -- (0.06) --
--------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (3.19) (1.46) (3.40) (2.24) (2.71)
================================================================================================================================
Total distributions (3.19) (1.47) (3.40) (2.30) (2.71)
================================================================================================================================
Net asset value, end of period $ 28.16 $ 28.31 $ 21.72 $ 22.72 $ 20.19
________________________________________________________________________________________________________________________________
================================================================================================================================
Total return(b) 10.61% 38.62% 12.34% 26.83% 14.81%
________________________________________________________________________________________________________________________________
================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $8,948,781 $8,089,739 $6,094,178 $5,810,582 $4,977,493
________________________________________________________________________________________________________________________________
================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.03%(c) 1.03% 1.04% 1.07% 1.12%
--------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.07%(c) 1.08% 1.09% 1.11% 1.15%
================================================================================================================================
Ratio of net investment income (loss) to average net assets (0.45)%(c) (0.38)% 0.07% 0.07% 0.33%
________________________________________________________________________________________________________________________________
================================================================================================================================
Portfolio turnover rate 145% 124% 125% 128% 159%
________________________________________________________________________________________________________________________________
================================================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Does not include sales charges.
(c)Ratios are based on average daily net assets of $9,799,594,989.
CLASS B
------------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------------------------
2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
---------- ---------- -------- -------- --------
Net asset value, beginning of period $ 27.29 $ 21.12 $ 22.34 $ 19.98 $ 20.28
--------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.36) (0.30) (0.15) (0.15) (0.05)
--------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 3.08 7.93 2.33 4.75 2.46
==========================================================================================================================
Total from investment operations 2.72 7.63 2.18 4.60 2.41
==========================================================================================================================
Less distributions from net realized gains (3.19) (1.46) (3.40) (2.24) (2.71)
==========================================================================================================================
Net asset value, end of period $ 26.82 $ 27.29 $ 21.12 $ 22.34 $ 19.98
__________________________________________________________________________________________________________________________
==========================================================================================================================
Total return(b) 9.76% 37.59% 11.45% 25.78% 13.95%
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,927,514 $1,291,456 $705,750 $486,105 $267,459
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.78%(c) 1.82% 1.83% 1.87% 1.95%
--------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.82%(c) 1.87% 1.87% 1.91% 1.98%
==========================================================================================================================
Ratio of net investment income (loss) to average net assets (1.20)%(c) (1.17)% (0.72)% (0.73)% (0.50)%
__________________________________________________________________________________________________________________________
==========================================================================================================================
Portfolio turnover rate 145% 124% 125% 128% 159%
__________________________________________________________________________________________________________________________
==========================================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charges.
(c)Ratios are based on average daily net assets of $1,839,008,229.
FS-106
NOTE 10-FINANCIAL HIGHLIGHTS (CONTINUED)
CLASS C
-------------------------------------------------
AUGUST 4, 1997
(DATE SALES
YEAR ENDED OCTOBER 31, COMMENCED)
------------------------------- TO OCTOBER 31,
2000(a) 1999(a) 1998(a) 1997(a)
-------- -------- ------- --------------
Net asset value, beginning of period $ 27.30 $ 21.14 $22.34 $22.83
---------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.36) (0.30) (0.15) (0.04)
---------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 3.10 7.92 2.35 (0.45)
===============================================================================================================
Total from investment operations 2.74 7.62 2.20 (0.49)
===============================================================================================================
Less distributions from net realized gains (3.19) (1.46) (3.40) --
===============================================================================================================
Net asset value, end of period $ 26.85 $ 27.30 $21.14 $22.34
_______________________________________________________________________________________________________________
===============================================================================================================
Total return(b) 9.83% 37.50% 11.54% (2.15)%
_______________________________________________________________________________________________________________
===============================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $301,590 $105,420 $23,107 $2,326
_______________________________________________________________________________________________________________
===============================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.78%(c) 1.82% 1.83% 1.84%(d)
---------------------------------------------------------------------------------------------------------------
Without fee waivers 1.82%(c) 1.87% 1.87% 1.88%(d)
===============================================================================================================
Ratio of net investment income (loss) to average net assets (1.20)%(c) (1.17)% (0.72)% (0.70)%(d)
_______________________________________________________________________________________________________________
===============================================================================================================
Portfolio turnover rate 145% 124% 125% 128%
_______________________________________________________________________________________________________________
===============================================================================================================
|
(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(c)Ratios are based on average daily net assets of $231,090,344.
(d)Annualized.
FS-107
AIM CHARTER FUND
AIM CONSTELLATION FUND
AIM WEINGARTEN FUND
Institutional Classes
AIM--Registered Trademark--
PROSPECTUS
MARCH 1, 2001
AIM Charter Fund seeks to provide
growth of capital with a secondary
objective of current income.
AIM Constellation Fund seeks to
provide growth of capital.
AIM Weingarten Fund seeks to provide
growth of capital.
This prospectus contains important
information about the funds. Please
read it before investing and keep it
for future reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
An investment in the fund:
- is not FDIC insured;
- may lose value; and
- is not guaranteed by a bank.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark-- --Registered Trademark--
|
----------------------------------------------
|
INVESTMENT OBJECTIVES AND STRATEGIES 1 - - - - - - - - - - - - - - - - - - - - - - - - AIM Charter Fund 1 AIM Constellation Fund 1 AIM Weingarten Fund 1 - - - - - - - - - - - - - - - - - - - - - - - - PRINCIPAL RISKS OF INVESTING IN THE FUNDS 1 - - - - - - - - - - - - - - - - - - - - - - - - PERFORMANCE INFORMATION 2 - - - - - - - - - - - - - - - - - - - - - - - - Annual Total Returns 2 Performance Table 3 FEE TABLE AND EXPENSE EXAMPLE 4 - - - - - - - - - - - - - - - - - - - - - - - - Fee Table 4 Expense Example 4 FUND MANAGEMENT 5 - - - - - - - - - - - - - - - - - - - - - - - - The Advisors 5 Advisor Compensation 5 Portfolio Managers 5 OTHER INFORMATION 6 - - - - - - - - - - - - - - - - - - - - - - - - Dividends and Distributions 6 Suitability for Investors 6 FINANCIAL HIGHLIGHTS 7 - - - - - - - - - - - - - - - - - - - - - - - - SHAREHOLDER INFORMATION A-1 - - - - - - - - - - - - - - - - - - - - - - - - Purchasing Shares A-1 Redeeming Shares A-1 Pricing of Shares A-2 Taxes A-2 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.
AIM CHARTER FUND (CHARTER)
The fund's primary investment objective is growth of capital with a secondary objective of current income. The investment objectives of the fund may be changed by the Board of Trustees without shareholder approval.
The fund seeks to meet its objectives by investing at least 65% of its total assets in securities of established companies that have long-term above-average growth in earnings and dividends, and growth companies that the portfolio managers believe have the potential for above-average growth in earnings and dividends. The portfolio managers consider whether to sell a particular security when they believe the security no longer has that potential.
The fund may engage in active and frequent trading of portfolio securities to achieve its investment objectives. If the fund does trade in this way, it may incur increased transaction costs and brokerage commissions, both of which can lower the actual return on your investment. Active trading may also increase short-term capital gains and losses, which may affect the taxes you have to pay.
AIM CONSTELLATION FUND (CONSTELLATION)
The fund's investment objective is 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 by investing principally in common stocks of companies the portfolio managers believe 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 consider whether to sell a particular security when it no longer meets these criteria. The fund will invest without regard to market capitalization.
AIM WEINGARTEN FUND (WEINGARTEN)
The fund's investment objective is to provide growth of capital. The investment objective of the fund may be changed by the Board of Trustees without shareholder approval.
The fund will invest primarily in common stocks of seasoned and better-capitalized companies. The portfolio managers focus on companies that have experienced above-average growth in earnings and have excellent prospects for future growth. The portfolio managers consider whether to sell a particular security when any of those factors materially changes.
The fund may engage in active and frequent trading of portfolio securities to achieve its investment objectives. If the fund does trade in this way, it may incur increased transaction costs and brokerage commissions, both of which can lower the actual return on your investment. Active trading may also increase short-term capital gains and losses, which may affect the taxes you have to pay.
ALL FUNDS
Each fund may also invest up to 20% of its total assets in foreign securities. Any percentage limitations with respect to assets of a fund are applied at the time of purchase.
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, shares of affiliated money market funds, bonds or other debt securities. As a result, a fund may not achieve its investment objective.
There is a risk that you could lose all or a portion of your investment in the funds and that the income you may receive from your investment in Charter may vary. The value of your investment in a 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 smaller companies, whose prices may go up and down more than equity securities of larger, more-established companies. Also, since equity securities of smaller companies may not be traded as often as equity securities of larger, more-established companies, it may be difficult or impossible for a fund to sell securities at a desirable price.
The values of the convertible securities in which the funds 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.
Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, the relative lack of information about these companies, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
An investment in the funds is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The bar charts and tables shown below provide an indication of the risks of investing in each of the funds. A fund's past performance is not necessarily an indication of its future performance.
The following bar charts show changes in the performance of each fund's Institutional Class shares from year to year.
CHARTER--INSTITUTIONAL CLASS
[GRAPH]
ANNUAL
YEAR ENDED TOTAL
DECEMBER 31 RETURNS
----------- -------
1992 1.48%
1993 9.81%
1994 -3.84%
1995 36.13%
1996 20.29%
1997 25.18%
1998 27.40%
1999 34.37%
2000 -14.37%
|
CONSTELLATION--INSTITUTIONAL CLASS
[GRAPH]
ANNUAL
YEAR ENDED TOTAL
DECEMBER 31 RETURNS
----------- -------
1993 17.65%
1994 1.80%
1995 36.16%
1996 16.83%
1997 13.45%
1998 19.41%
1999 45.07%
2000 -9.98%
|
WEINGARTEN--INSTITUTIONAL CLASS
[GRAPH]
ANNUAL
YEAR ENDED TOTAL
DECEMBER 31 RETURNS
----------- -------
1992 -1.07%
1993 1.91%
1994 0.13%
1995 35.43%
1996 18.24%
1997 26.48%
1998 33.58%
1999 35.23%
2000 -19.98%
|
During the periods shown in the bar charts, the highest quarterly returns and the lowest quarterly returns were as follows:
HIGHEST QUARTERLY RETURN LOWEST QUARTERLY RETURN
FUND (QUARTER ENDED) (QUARTER ENDED)
-------------------------------------------------------------------------------------------------------
Charter--Institutional Class 26.29% (12/31/98) -16.30% (12/31/00)
Constellation--Institutional Class 36.71% (12/31/99) -22.11% (12/31/00)
Weingarten--Institutional Class 28.14% (12/31/98) -22.53% (12/31/00)
-------------------------------------------------------------------------------------------------------
|
PERFORMANCE TABLE
The following performance table compares each fund's performance to that of a broad-based securities market index.
AVERAGE ANNUAL TOTAL RETURNS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (for the periods ended SINCE INCEPTION December 31, 2000) 1 YEAR 5 YEARS INCEPTION DATE ------------------------------------------------------------------------------------------------------------- Charter--Institutional Class -14.37% 17.16% 14.71% 07/30/91 S&P 500(1) -9.10 18.33 16.39(2) 07/31/91(2) Constellation--Institutional Class -9.98 15.63 17.55 04/08/92 S&P 500(1) -9.10 18.33 16.92(2) 03/31/92(2) Weingarten--Institutional Class -19.98 16.67 14.42 10/08/91 S&P 500(1) -9.10 18.33 16.63(2) 09/30/91(2) ------------------------------------------------------------------------------------------------------------- |
(1) The Standard & Poor's 500 Index is an unmanaged index of common stocks frequently used as a general measure of U.S. stock market performance.
(2) The average annual total return given is since the date closest to the inception date of the Institutional Class of the fund.
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold Institutional Class shares of the funds:
SHAREHOLDER FEES - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (fees paid directly from your investment) CHARTER CONSTELLATION WEINGARTEN --------------------------------------------------------------- Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) None None None Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less) None None None --------------------------------------------------------------- |
ANNUAL FUND OPERATING EXPENSES - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (expenses that are deducted from fund assets) CHARTER CONSTELLATION WEINGARTEN --------------------------------------------------------------- Management Fees 0.63% 0.63% 0.63% Distribution and/or Service (12b-1) Fees None None None Other Expenses 0.05 0.05 0.05 Total Annual Fund Operating Expenses(1) 0.68 0.68 0.68 --------------------------------------------------------------- |
(1) The investment advisor has agreed, effective July 1, 2000, to waive a portion of the management fee on assets in excess of $5 billion. Total Annual Fund Operating Expenses restated for this agreement are 0.67%, 0.64% and 0.66% for Charter, Constellation and Weingarten, respectively. Termination of this agreement requires approval by the Board of Trustees.
You should also consider the effect of any account fees charged by the financial institution managing your account.
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in the funds with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in a fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund's gross operating expenses remain the same. To the extent fees are waived, the expenses will be lower. Although your actual returns and costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------------
Charter $69 $218 $379 $847
Constellation 69 218 379 847
Weingarten 69 218 379 847
----------------------------------------------------
|
THE ADVISORS
A I M Advisors, Inc. (the advisor) serves as each fund's investment advisor. A I M Capital Management, Inc. (the subadvisor), a wholly owned subsidiary of the advisor, is each fund's subadvisor and is responsible for its day-to-day management. Both the advisor and the subadvisor are located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisors supervise all aspects of the funds' operations and provide investment advisory services to the funds, including obtaining and evaluating economic, statistical and financial information to formulate and implement investment programs for the funds.
The advisor has acted as an investment advisor since its organization in 1976, and the subadvisor has acted as an investment advisor since 1986. Today, the advisor, together with its subsidiaries, advises or manages over 130 investment portfolios, including the funds, encompassing a broad range of investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended October 31, 2000, the advisor received compensation of 0.61%, 0.60% and 0.59%, respectively, of Charter's, Constellation's and Weingarten's average daily net assets.
PORTFOLIO MANAGERS
The advisors use a team approach to investment management. The individual members of the team who are primarily responsible for the day-to-day management of each fund's portfolio are
CHARTER
- Monika H. Degan, Portfolio Manager, who has been responsible for the fund since 2000 and has been associated with the advisor and/or its affiliates since 1995.
- Lanny H. Sachnowitz, Senior Portfolio Manager, who has been responsible for the fund since 1991 and has been associated with the advisor and/or its affiliates since 1987.
CONSTELLATION
- David P. Barnard, Senior Portfolio Manager, who has been responsible for the fund since 1990 and has been associated with the advisor and/or its affiliates since 1982.
- Ryan E. Crane, Portfolio Manager, who has been responsible for the fund since 2000 and has been associated with the advisor and/or its affiliates since 1994.
- Robert M. Kippes, Senior Portfolio Manager, who has been responsible for the fund since 1993 and has been associated with the advisor and/or its affiliates since 1989.
- Jay K. Rushin, Portfolio Manager, who has been responsible for the fund since 2000 and has been associated with the advisor and/or its affiliates since 1998. From 1996 to 1998, he was an associate equity analyst with Prudential Securities.
- Kenneth A. Zschappel, Senior Portfolio Manager, who has been responsible for the fund since 1996 and has been associated with the advisor and/or its affiliates since 1990.
WEINGARTEN
- David P. Barnard, Senior Portfolio Manager, who has been responsible for the fund since 1986 and has been associated with the advisor and/or its affiliates since 1982.
- Monika H. Degan, Portfolio Manager, who has been responsible for the fund since 1998 and has been associated with the advisor and/or its affiliates since 1995.
- Jonathan C. Schoolar, Senior Portfolio Manager, who has been responsible for the fund since 1987 and has been associated with the advisor and/or its affiliates since 1986.
DIVIDENDS AND DISTRIBUTIONS
Each of the funds expects that its distributions, if any, will consist primarily of capital gains.
DIVIDENDS
The funds generally declare and pay dividends, if any, annually.
CAPITAL GAINS DISTRIBUTIONS
The funds generally distribute long-term and short-term capital gains, if any, annually.
SUITABILITY FOR INVESTORS
The Institutional Classes of the funds are intended for use by institutions, particularly banks, acting for themselves or in a fiduciary or similar capacity. Shares of the Institutional Classes of the funds are available for collective and common trust funds of banks, banks investing for their own account and banks investing for the account of a public entity (e.g., Taft-Hartley funds, states, cities, or government agencies) that does not pay commissions or distribution fees. Prospective investors should determine if an investment in a fund is consistent with the objectives of an account and with applicable state and federal laws and regulations.
The Institutional Classes of the funds are designed to be convenient and economical vehicles in which institutions can invest in a portfolio of equity securities. An investment in the funds may relieve the institution of many of the investment and administrative burdens encountered when investing in equity securities directly. These include: selection and diversification of portfolio investments; surveying the market for the best price at which to buy and sell; valuation of portfolio securities; receipt, delivery and safekeeping of securities; and portfolio recordkeeping. It is anticipated that most investors will perform their own subaccounting.
The financial highlights tables are intended to help you understand each fund's financial performance. Certain information reflects financial results for a single fund share.
The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in each fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with each fund's financial statements, is included in the fund's annual report, which is available upon request.
CHARTER -- INSTITUTIONAL CLASS
-----------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------
2000 1999 1998 1997 1996
------ ------- ------- ------- -------
Net asset value, beginning of period $17.33 $ 13.42 $ 13.48 $ 11.24 $ 10.66
-------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.52 0.09 0.18 0.16 0.24
-------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 1.83 4.43 1.24 2.91 1.44
=========================================================================================================================
Total from investment operations 2.35 4.52 1.42 3.07 1.68
=========================================================================================================================
Less distributions:
Dividends from net investment income -- (0.07) (0.14) (0.16) (0.20)
-------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (1.35) (0.54) (1.34) (0.67) (0.90)
=========================================================================================================================
Total distributions (1.35) (0.61) (1.48) (0.83) (1.10)
=========================================================================================================================
Net asset value, end of period $18.33 $ 17.33 $ 13.42 $ 13.48 $ 11.24
_________________________________________________________________________________________________________________________
=========================================================================================================================
Total return 14.02% 34.61% 11.69% 29.05% 17.29%
_________________________________________________________________________________________________________________________
=========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $3,234 $66,801 $43,815 $40,191 $29,591
_________________________________________________________________________________________________________________________
=========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 0.66%(a) 0.65% 0.66% 0.67% 0.69%
-------------------------------------------------------------------------------------------------------------------------
Without fee waivers 0.68%(a) 0.67% 0.67% 0.68% 0.70%
=========================================================================================================================
Ratio of net investment income to average net assets 0.20%(a) 0.51% 1.37% 1.21% 2.24%
_________________________________________________________________________________________________________________________
=========================================================================================================================
Portfolio turnover rate 80% 107% 154% 170% 164%
_________________________________________________________________________________________________________________________
=========================================================================================================================
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(a) Ratios are based on average net assets of $46,641,532.
CONSTELLATION -- INSTITUTIONAL CLASS
-----------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
Net asset value, beginning of period $ 36.01 $ 27.25 $ 30.00 $ 26.01 $ 24.05
-------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.09) (0.01) -- 0.02 0.04
-------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 12.91 9.50 (0.65) 4.86 2.67
=========================================================================================================================
Total from investment operations 12.82 9.49 (0.65) 4.88 2.71
=========================================================================================================================
Less distributions:
Distributions from net realized gains (3.28) (0.73) (2.10) (0.89) (0.75)
=========================================================================================================================
Net asset value, end of period $ 45.55 $ 36.01 $ 27.25 $ 30.00 $ 26.01
_________________________________________________________________________________________________________________________
=========================================================================================================================
Total return 37.14% 35.46% (1.85)% 19.42% 11.81%
_________________________________________________________________________________________________________________________
=========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $288,097 $244,369 $189,039 $188,109 $293,035
_________________________________________________________________________________________________________________________
=========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 0.65%(a) 0.64% 0.63% 0.65% 0.66%
-------------------------------------------------------------------------------------------------------------------------
Without fee waivers 0.68%(a) 0.66% 0.65% 0.67% 0.67%
=========================================================================================================================
Ratio of net investment income (loss) to average net assets (0.18)%(a) (0.04)% (0.01)% 0.06% 0.21%
_________________________________________________________________________________________________________________________
=========================================================================================================================
Portfolio turnover rate 88% 62% 76% 67% 58%
_________________________________________________________________________________________________________________________
=========================================================================================================================
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(a)Ratios are based on average daily net assets of $316,573,355.
WEINGARTEN -- INSTITUTIONAL CLASS
------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------------------
2000(a) 1999 1998 1997 1996
------- -------- ------- ------- -------
Net asset value, beginning of period $28.96 $ 22.18 $ 23.05 $ 20.46 $ 20.48
--------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.06) 0.02 0.10 0.08 0.17
--------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 3.29 8.32 2.43 4.90 2.52
====================================================================================================================
Total from investment operations 3.23 8.34 2.53 4.98 2.69
====================================================================================================================
Less distributions:
Dividends from net investment income -- (0.10) -- (0.15) --
--------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (3.19) (1.46) (3.40) (2.24) (2.71)
====================================================================================================================
Total distributions (3.19) (1.56) (3.40) (2.39) (2.71)
====================================================================================================================
Net asset value, end of period $29.00 $ 28.96 $ 22.18 $ 23.05 $ 20.46
____________________________________________________________________________________________________________________
====================================================================================================================
Total return 11.07% 39.20% 12.79% 27.37% 15.34%
____________________________________________________________________________________________________________________
====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $18,634 $114,076 $72,884 $62,124 $60,483
____________________________________________________________________________________________________________________
====================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 0.64%(b) 0.63% 0.62% 0.64% 0.65%
--------------------------------------------------------------------------------------------------------------------
Without fee waivers 0.68%(b) 0.68% 0.67% 0.68% 0.68%
====================================================================================================================
Ratio of net investment income (loss) to average net assets (0.04)%(b) 0.02% 0.49% 0.50% 0.80%
____________________________________________________________________________________________________________________
====================================================================================================================
Portfolio turnover rate 145% 124% 125% 128% 159%
____________________________________________________________________________________________________________________
====================================================================================================================
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(a) Calculated using average shares outstanding.
(b) Ratios are based on average daily net assets of $89,095,334.
PURCHASING SHARES
The minimum initial investment in any of the funds is $100,000. No minimum amount is required for subsequent investments in a fund nor are minimum balances required.
Shares of the Institutional Class of each fund are sold on a continuing basis at their respective net asset values. Although no sales charge is imposed in connection with the purchase of shares, banks or other financial institutions may charge a recordkeeping, account maintenance or other fee to their customers, and beneficial holders of shares of the funds should consult with such institutions to obtain a schedule of such fees. Institutions may be requested to maintain separate master accounts in each fund for shares held by the institution (a) for its own account, for the account of other institutions and for accounts for which the institution acts as a fiduciary; and (b) for accounts for which the institution acts in some other capacity. An institution's master accounts and subaccounts with a fund may be aggregated for the purpose of the minimum investment requirement. Prior to the initial purchase of shares, an account application must be completed and sent to A I M Fund Services, Inc. (transfer agent) at P.O. Box 0843, Houston, Texas 77001-0843. An account application may be obtained from the transfer agent.
Purchase orders will be accepted for execution on the day the order is placed, provided that the order is properly submitted and received by the transfer agent during the hours of the customary trading session of the New York Stock Exchange (NYSE) on the day the order is placed and such orders will be confirmed at the net asset value determined as of the close of the customary trading session of the NYSE that day or such earlier closing time (trade date). Subsequent purchases of shares of the funds may also be made via AIM LINK--Registered Trademark-- Remote, a personal computer application software product.
Payments for shares purchased must be in the form of federal funds or other funds immediately available to the funds and must be made on the "settlement date," which shall be the next business day of the funds following the trade date. Federal Reserve wires should be sent as early as possible on the settlement date in order to facilitate crediting to the shareholder's account. Any funds received in respect of an order which is not accepted by a fund and any funds received for which an order has not been received will be returned to the sending institution. An order to purchase shares must specify which fund is being purchased, otherwise any funds received will be returned to the sending institution.
REDEEMING SHARES
TIMING OF REDEMPTIONS
You can redeem shares during the hours of the customary trading session of the NYSE. A 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.
You may redeem any or all of your shares at the net asset value next determined after receipt of a redemption request in proper form by the applicable fund. There is no charge for redemption. Redemption requests with respect to shares for which certificates have not been issued are normally made by calling the transfer agent.
You may request a redemption by calling the transfer agent at (800) 659-1005, or by using AIM LINK--Registered Trademark-- Remote. 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. Such reasonable procedures may include recordings of telephone transactions maintained for a reasonable period of time.
TIMING AND METHOD OF PAYMENT
If a redemption request is received during the hours of the customary trading session of the NYSE, the redemption will be effected at the net asset value determined as of the close of the customary trading session of the NYSE that day or such earlier closing time (the redemption date).
Payment for redeemed shares is normally made by Federal Reserve wire to the commercial bank account designated in your Account Application. You may also request that payment be made by check. The proceeds of a redemption request will be wired on the next business day following the redemption date.
Payment for shares redeemed by mail and payment for telephone redemptions in amounts of less than $1,000 may, at the option of a fund, be made by check mailed within seven days after receipt of the redemption request in proper form. A fund may make payment for telephone redemptions in excess of $1,000 by check when it is considered to be in the fund's best interest to do so.
REDEMPTIONS BY THE FUNDS
If a fund determines that you have not provided a correct Social Security or other tax ID number on your account application, the fund may, at its discretion, redeem your account and distribute the proceeds to you.
EACH OF THE FUNDS AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME TO:
- REJECT OR CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER;
- MODIFY ANY TERMS OR CONDITIONS OF PURCHASE OF SHARES OF ANY FUND; OR
- WITHDRAW ALL OR ANY PART OF THE OFFERING MADE BY THIS PROSPECTUS.
PRICING OF SHARES
The price of each of the funds' shares is the fund's net asset value per share. The funds value portfolio securities for which market quotations are readily available at market value. The funds value short-term investments maturing within 60 days at amortized cost, which approximates market value.
The 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 or as of the closing time of the NYSE if the NYSE closes early on a particular day, events occur that materially affect the value of the security, the 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 funds. The effect of using fair value pricing is that a 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 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 fund's shares may change on days when you will not be able to purchase or redeem shares.
Each fund determines the net asset value of its shares as of the close of the customary trading session of the NYSE on each day the NYSE is open for business NYSE or as of the closing time of the NYSE if the NYSE closes early on a particular day. The funds price purchase and redemption orders at the net asset value calculated after the transfer agent receives an order in good form.
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. Every year, information showing the amount of dividends and distributions you received from each fund during the prior year will be sent to you.
Any long-term or short-term capital gains realized from redemptions of fund shares will be subject to federal income tax.
The foreign, state and local tax consequences of investing in fund shares may differ materially from the federal income tax consequences described above. You should consult your tax advisor before investing.
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 funds 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 each fund's investments. Each fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year.
BY MAIL: A I M Fund Services, Inc.
P.O. Box 0843
Houston, TX 77001-0843
BY TELEPHONE: (800) 659-1005
ON THE INTERNET: You can send us a
request by e-mail or download
prospectuses, annual or
semiannual reports via
our website:
http://www.aimfunds.com
|
You also can review and obtain copies of a 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.
SEC 1940 Act file number: 811-1424 -------------------------------------------------------------- [AIM LOGO APPEARS HERE] www.aimfunds.com INVEST WITH DISCIPLINE --Registered Trademark-- --Registered Trademark-- |
STATEMENT OF
ADDITIONAL INFORMATION
|
INSTITUTIONAL CLASSES OF
AIM CHARTER FUND
AIM CONSTELLATION FUND
AIM WEINGARTEN FUND
(SERIES PORTFOLIOS OF
AIM EQUITY FUNDS)
11 GREENWAY PLAZA
SUITE 100
HOUSTON, TX 77046-1173
(713) 626-1919
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS
AND IT SHOULD BE READ IN CONJUNCTION WITH
A PROSPECTUS OF THE ABOVE-NAMED FUNDS,
A COPY OF WHICH MAY BE OBTAINED FREE OF CHARGE
FROM AUTHORIZED DEALERS OR BY WRITING
FUND MANAGEMENT COMPANY
11 GREENWAY PLAZA, SUITE 100
HOUSTON, TX 77046-1173
OR BY CALLING (800) 659-1005.
STATEMENT OF ADDITIONAL INFORMATION DATED MARCH 21, 2001
RELATING TO THE PROSPECTUS DATED MARCH 21, 2001
TABLE OF CONTENTS
Page
INTRODUCTION......................................................................1
GENERAL INFORMATION ABOUT THE TRUST...............................................1
The Trust and Its Shares.................................................1
PERFORMANCE.......................................................................3
Total Return Calculations................................................4
Yield Quotations.........................................................4
Historical Portfolio Results.............................................5
PORTFOLIO TRANSACTIONS AND BROKERAGE..............................................5
General Brokerage Policy.................................................5
Allocation of Portfolio Transactions.....................................6
Allocation of IPO Securities Transactions................................6
Section 28(e) Standards..................................................7
Transactions with Regular Brokers........................................8
Brokerage Commissions Paid...............................................8
Portfolio Turnover.......................................................8
INVESTMENT STRATEGIES AND RISKS...................................................9
Real Estate Investment Trusts ("REITs").................................11
Foreign Securities......................................................11
Foreign Exchange Transactions...........................................13
Illiquid Securities.....................................................13
Rule 144A Securities....................................................13
Repurchase Agreements...................................................14
Reverse Repurchase Agreements...........................................14
Special Situations......................................................14
Short Sales.............................................................14
Margin Transactions.....................................................15
Warrants................................................................15
Securities Issued on a When-Issued or Delayed Delivery Basis............15
Lending of Portfolio Securities.........................................16
Interfund Loans.........................................................16
Equity-Linked Derivatives...............................................16
Borrowing...............................................................16
Investment in Unseasoned Issuers........................................17
Investment in Other Investment Companies................................17
Temporary Defensive Investments.........................................17
Swaps, Caps, Floors and Collars.........................................17
OPTIONS, FUTURES AND CURRENCY STRATEGIES.........................................18
Introduction............................................................18
General Risks of Options, Futures and Currency Strategies...............18
Cover...................................................................19
Writing Call Options....................................................19
Writing Put Options.....................................................20
Purchasing Put Options..................................................20
Purchasing Call Options.................................................20
Over-The-Counter Options................................................21
Index Options...........................................................21
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Limitations on Options..................................................21
Interest Rate, Currency and Stock Index Futures Contracts...............22
Options on Futures Contracts............................................23
Forward Contracts.......................................................23
Limitations on Use of Futures, Options on Futures and Certain Options
on Currencies...........................................................23
INVESTMENT RESTRICTIONS..........................................................23
Fundamental Restrictions................................................24
Non-Fundamental Restrictions............................................25
MANAGEMENT.......................................................................26
Trustees and Officers...................................................26
Remuneration of Trustees.......................................28
AIM Funds Retirement Plan for Eligible Directors/
Trustees.......................................................29
Deferred Compensation Agreements...............................30
INVESTMENT ADVISORY AND OTHER SERVICES...........................................31
THE DISTRIBUTOR..................................................................35
HOW TO PURCHASE AND REDEEM SHARES................................................35
NET ASSET VALUE DETERMINATION....................................................36
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS.........................................37
Reinvestment of Dividends and Distributions.............................37
Tax Matters.............................................................37
Qualification as a Regulated Investment Company.........................37
Determination of Taxable Income of a Regulated Investment Company.......38
Excise Tax on Regulated Investment Companies............................39
Fund Distributions......................................................39
Sale or Redemption of Shares............................................41
Foreign Shareholders....................................................41
Effect of Future Legislation; Local Tax Considerations..................42
Passive Foreign Investment Companies....................................42
SHAREHOLDER INFORMATION..........................................................42
MISCELLANEOUS INFORMATION........................................................43
Charges for Certain Account Information.................................43
Audit Reports...........................................................43
Legal Matters...........................................................44
Custodian and Transfer Agent............................................44
Principal Holders of Securities.........................................44
Other Information.......................................................54
APPENDIX.........................................................................A-1
FINANCIAL STATEMENTS.............................................................FS
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INTRODUCTION
AIM Equity Funds (the "Trust") is a series mutual fund. The rules and regulations of the United States Securities and Exchange Commission (the "SEC") require all mutual funds to furnish prospective investors certain information concerning the activities of the fund being considered for investment. This information is included in a Prospectus dated March 21, 2001 (the "Prospectus"), which relates to the Institutional Classes of the following portfolios of the Trust: AIM Charter Fund ("Charter"), AIM Constellation Fund ("Constellation") and AIM Weingarten Fund ("Weingarten") (individually a "Fund" and collectively, the "Funds"). Additional copies of the Prospectus and 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) 659-1005. Investors must receive a Prospectus before they invest.
This Statement of Additional Information is intended to furnish prospective investors with additional information concerning the Funds. Some of the information required to be in this Statement of Additional Information is also included in the Prospectus; and, in order to avoid repetition, reference will be made to sections of the Prospectus. Additionally, the Prospectus and this Statement of Additional Information omit certain information contained in the Trust's Registration Statement filed with the SEC. Copies of the Registration Statement, including items omitted from the Prospectus and this Statement of Additional Information, may be obtained from the SEC by paying the charges described under its rules and regulations.
GENERAL INFORMATION ABOUT THE TRUST
THE TRUST AND ITS SHARES
The Trust currently is organized as a Delaware business trust under an Agreement and Declaration of Trust, dated December 6, 1999, as amended (the "Trust Agreement"). The Trust was previously organized as AIM Equity Funds, Inc. ("AEF"), a Maryland corporation. Pursuant to an Agreement and Plan of Reorganization, the AEF Funds (defined below) were reorganized on June 21, 2000 as portfolios of the Trust, which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end series management investment company.
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. The Trust currently consists of eleven separate portfolios: AIM
Aggressive Growth Fund ("Aggressive Growth"), AIM Blue Chip Fund ("Blue Chip"),
AIM Capital Development Fund ("Capital Development"), Charter, Constellation,
AIM Dent Demographic Trends Fund ("Demographic Trends"), AIM Emerging Growth
Fund ("Emerging Growth"), AIM Large Cap Basic Value Fund ("Large Cap Basic
Value"), AIM Large Cap Growth Fund ("Large Cap Growth"), AIM Mid Cap Growth Fund
("Mid Cap") and Weingarten (each an "AEF Fund" and collectively, the "AEF
Funds"). Charter, Weingarten and Constellation each have four separate classes:
Class A, Class B and Class C and an Institutional Class. Aggressive Growth, Blue
Chip, Capital Development, Demographic Trends, Emerging Growth, Large Cap Basic
Value, Large Cap Growth and Mid Cap each have three classes of shares: Class A,
Class B and Class C shares. Class A shares (sold with a front-end sales charge)
and Class B and Class C shares (each sold with a contingent deferred sales
charge) of the AEF Funds are also referred to as the Retail Classes. Prior to
October 15, 1993, Aggressive Growth was a portfolio of AIM Funds Group ("AFG"),
a Massachusetts business trust. Pursuant to an Agreement and Plan of
Reorganization between AFG and AEF, Aggressive Growth was redomesticated as a
portfolio of AEF. Blue Chip acquired the investment portfolio of Baird Blue Chip
Fund, Inc. (the "BBC Fund"), a registered management investment company, on June
3, 1996, in a corporate reorganization. Capital Development acquired
substantially all of the assets of Baird Capital Development Fund, Inc., a
registered management investment company, on August 12, 1996 in a corporate
reorganization.
Pursuant to the Agreement and Plan of Reorganization, the Funds succeeded to the assets and assumed the liabilities of the series portfolios with corresponding names (the "Predecessor Funds") of AEF. All historical financial and other information contained in this Statement of Additional Information for periods
prior to June 21, 2000 relating to the AEF Funds (or a class thereof) is that of the Predecessor Funds (or the corresponding class thereof).
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."
This Statement of Additional Information relates solely to the Institutional Classes of the Funds.
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 class represents interests in the same portfolio of investments but, as further described in the Prospectuses, each such class is subject to differing sales charges and expenses, which differences will result in differing net asset values and dividends and distributions. Upon any liquidation of the Trust, shareholders of each class are entitled to share pro rata in the net assets belonging to the applicable Fund allocable to such class available for distribution after satisfaction of outstanding liabilities of the Fund allocable to such class.
The Trust is not required to hold annual or regular meetings of shareholders. Meetings of shareholders of a Fund will be held from time to time to consider matters requiring a vote of such shareholders in accordance with the requirements of the 1940 Act, state law or the provisions of the Trust Agreement. It is not expected that shareholder meetings will be held annually.
Shares of the Retail Class and the Institutional Class of each Fund have equal rights and privileges. Each share of a particular class is entitled to one vote, to participate equally in dividends and distributions declared by the Trust's Board of Trustees with respect to the class of such Fund and, upon liquidation of the Fund, to participate proportionately in the net assets of the Fund allocable to such class remaining after satisfaction of outstanding liabilities of the Fund allocable to such class. Fund shares are fully paid, non-assessable and fully transferable when issued and have no preemptive rights and have such conversion and exchange rights as set forth in the Prospectus and this Statement of Additional Information. Fractional shares have proportionately the same rights, including voting rights, as are provided for a full share.
Except as specifically noted above, shareholders of each Fund are entitled to one vote per share (with proportionate voting for fractional shares), irrespective of the relative net asset value of the different classes of shares, where applicable, of a Fund. However, on matters affecting one portfolio of the Trust or one class of shares, a separate vote of shareholders of that portfolio or class is required. Shareholders of a portfolio or class are not entitled to vote on any matter which does not affect that portfolio or class but which requires a separate vote of another portfolio or class. An example of a matter which would be voted on separately by shareholders of a portfolio is the approval of an advisory agreement, and an example of a matter which would be voted on separately by shareholders of a class of shares is approval of a distribution plan.
Shareholders of the Funds do not have cumulative voting rights, and therefore the holders of more than 50% of the outstanding shares of all Funds voting together for election of trustees may elect all of the members of the Board of Trustees of the Trust. In such event, the remaining holders cannot elect any trustees of the Trust.
The Trust Agreement provides that the trustees of the Trust shall hold office during the existence of the Trust, except as follows: (a) any trustee may resign or retire; (b) any trustee may be removed by a vote of at least two-thirds of the outstanding shares of the Trust, or at any time by written instrument signed by at least two-thirds of the trustees and specifying when such removal becomes effective; or (c) any trustee who has died or become incapacitated and is unable to serve may be retired by a written instrument signed by a majority of the trustees and specifying the date of his or her retirement.
Under Delaware law, shareholders of a Delaware business trust shall be entitled to the same limitations or liability extended to shareholders of private for-profit corporations, however, there is a remote possibility that shareholders could, under certain circumstances, be held liable for the obligations of the Trust to the extent the courts of another state which does not recognize such limited liability were to apply the laws of such state to a controversy involving such obligations. However, the Trust Agreement disclaims shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by the Trust or the trustees to all parties, and each party thereto must expressly waive all rights of action directly against shareholders of the Trust. The Trust Agreement provides for indemnification out of the property of a Fund for all losses and expenses of any shareholder of such Fund held liable on account of being or having been a shareholder. Thus, the risk of a shareholder incurring financial loss due to shareholder liability is limited to circumstances in which a Fund would be unable to meet its obligations and wherein the complaining party was held not to be bound by the disclaimer.
The Trust Agreement further provides that the trustees and officers will not be liable for any act, omission or obligation of the Trust or any trustee or officer. However, nothing in the Trust Agreement protects a trustee or officer against any liability to the Trust or to the shareholders to which a trustee or officer would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office with the Trust. The Trust Agreement provides for indemnification by the Trust of the trustees, officers, employees and agents of the Trust, if it is determined that such person acted in good faith, and reasonably believed: (1) in the case of conduct in his or her official capacity for the Trust, that his or her conduct was in the Trust's best interests, (2) in all other cases, that his or her conduct was at least not opposed to the Trust's best interests and (3) in a criminal proceeding, that he or she had no reason to believe that his or her conduct was unlawful. The Trust Agreement also authorizes the purchase of liability insurance on behalf of trustees and officers.
PERFORMANCE
Each Fund's performance may be quoted in advertising in terms of yield or total return.
The total return shows the overall change in value of a Fund's Institutional Class, including changes in share price and assuming all the Fund's dividends and capital gain distributions are reinvested and that all expenses are deducted. A cumulative total return reflects the performance of a Fund's Institutional Class over a stated period of time. An average annual total return reflects the hypothetical annually compounded return that would have produced the same cumulative total return if the performance of a Fund's Institutional Class had been constant over the entire period. BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN A 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 gain or loss.
A fund may participate in the initial public offering ("IPO") market, and a significant portion of the fund's returns may be attributable to its investment in IPOs. Investment in IPOs could have a magnified impact on a fund with a small asset base. There is no guarantee that as a fund's assets grow, it will continue to experience substantially similar performance by investing in IPOs.
Yield is computed in accordance with the standardized formula 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 is a function of the type and quality of a Fund's investments, the Fund's maturity and the Fund's operating expense ratio.
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 the Institutional Class 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.
Additional performance information is contained in the Trust's Annual Report to Shareholders, which is available upon request without charge.
TOTAL RETURN CALCULATIONS
Total returns quoted in advertising reflect all aspects of the applicable Fund's return, including the effect of reinvesting dividends and capital gain distributions, and any change in such Fund's net asset value per share over the period. Average annual returns are calculated by determining the growth or decline in value of a hypothetical investment in a particular Fund over a stated period, and then calculating the annually compounded percentage rate that would have produced the same result if the rate of growth or decline in value had been constant over the period. While average annual returns are a convenient means of comparing investment alternatives, investors should realize that a Fund's performance is not constant over time, but changes from year to year, and that average annual returns do not represent the actual year-to-year performance of such Fund.
In addition to average annual returns, the Institutional Class of each Fund may quote unaveraged or cumulative total returns reflecting the simple change in value of an investment over a stated period. Average annual and cumulative total returns may be quoted as a percentage or as a dollar amount, and may be calculated for a single investment, a series of investments, and/or a series of redemptions, over any time period. Total returns may be broken down into their components of income and capital (including capital gains and changes in share price) in order to illustrate the relationship of these factors and their contributions to total return. Total returns, yields, and other performance information may be quoted numerically or in a table, graph or similar illustration.
YIELD QUOTATIONS
The standard formula for calculating yield is as follows:
YIELD = 2[((a-b)/(c x d) + 1) -1]
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 = expense 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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HISTORICAL PORTFOLIO RESULTS
The average annual return of the Institutional Class of Charter was 16.70% for the fiscal year ended October 31, 2000. The cumulative return of the Institutional Class of Charter was 317.72% for the period of July 30, 1991 (date operations commenced) through October 31, 2000. The average annual return of the Institutional Class of Constellation was 20.43% for the fiscal year ended October 31, 2000. The cumulative return of the Institutional Class of Constellation was 391.24% for the period of April 8, 1992 (date operations commenced) through October 31, 2000. The average annual return of the Institutional Class of Weingarten was 11.03% for the fiscal year ended October 31, 2000. The cumulative return of the Institutional Class of Weingarten was 307.27% for the period of October 8, 1991 (date operations commenced) through October 31, 2000.
The performance data listed above is not necessarily indicative of the future performance of any of the Funds.
Each Fund's performance may be compared in advertising to the performance of other mutual funds in general, or of particular types of mutual funds, especially those with similar objectives. Such performance data may be prepared by Lipper Analytical Services, Inc. and other independent services which monitor the performance of mutual funds. The Funds may also advertise mutual fund performance rankings which have been assigned to each respective Fund by such monitoring services.
Each Fund's performance may also be compared in advertising and other materials to the performance of comparative benchmarks such as the Consumer Price Index ("CPI"), the Russell--Registered Trademark-- indices, the Standard & Poor's 500 Stock Index, and fixed-price investments such as bank certificates of deposit and/or savings accounts.
The CPI, published by the U.S. Bureau of Labor Statistics, is a statistical measure of changes, over time, in the prices of goods and services. Standard & Poor's 500 Stock Index is a group of unmanaged securities widely regarded by investors as representative of the stock market in general. Comparisons assume the reinvestment of dividends. Fixed price investments, such as bank certificates of deposits and savings accounts, are generally backed by federal agencies for up to $100,000.
Each Fund's advertising may from time to time include discussions of general economic conditions and interest rates. In addition, each Fund's long-term performance may be described in advertising in relation to historical, political and/or economic events. Each Fund's advertising may also include references to the use of the Fund as part of an individual's overall retirement investment program.
From time to time, Fund sales literature and/or advertisements may disclose (i) top holdings included in the Fund's portfolio, (ii) certain selling group members, and/or (iii) certain institutional shareholders.
From time to time, the Funds' sales literature and/or advertisements may discuss generic topics pertaining to the mutual fund industry. These topics include, but are not limited to, literature addressing general information about mutual funds, variable annuities, dollar-cost averaging, stocks, bonds, money markets, certificates of deposit, retirement, retirement plans, asset allocation, tax-free investing, college planning and inflation.
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. ("AIM Capital") (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 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 Board of Directors/Trustees of the various AIM Funds, including the Trust. These inter-fund transactions do not generate brokerage commissions but may result in custodial fees or taxes or other related expenses.
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 or 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 or 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 or 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 participates 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 Board of 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 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 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 October 31, 2000, Charter, Constellation and Weingarten held an amount of common stock issued by Merrill Lynch & Co., Inc., a regular broker/dealer of the Trust, having a market value of $140,000,000, $154,000,000 and $243,754,000, respectively, and common stock issued by Morgan Stanley Dean Witter & Co. having a market value of $321,250,000, $313,218,750 and $160,625,000, respectively. As of October 31, 2000, Charter and Constellation held an amount of common stock issued by The Goldman Sachs Group, Inc. having a market value of $99,812,500 and $339,362,500, respectively, and common stock issued by The Charles Schwab Corp. having a market value of $52,687,500 and $228,312,500, respectively.
BROKERAGE COMMISSIONS PAID
For the fiscal years ended October 31, 2000, 1999 and 1998, Charter paid brokerage commissions of $10,479,914, $11,856,781 and $15,567,811, respectively. For the fiscal year ended October 31, 2000, AIM allocated certain of Charter's brokerage transactions to certain broker-dealers that provided AIM with certain research, statistical and other information. Such transactions amounted to $1,220,051,212 and the related brokerage commissions were $1,192,746.
For the fiscal years ended October 31, 2000, 1999 and 1998, Constellation paid brokerage commissions of $25,382,535, $20,108,956 and $25,285,665, respectively. For the fiscal year ended October 31, 2000, AIM allocated certain of Constellation's brokerage transactions to certain broker-dealers that provided AIM with certain research, statistical and other information. Such transactions amounted to $2,594,574,536 and the related brokerage commissions were $2,253,103.
For the fiscal years ended October 31, 2000, 1999, and 1998, Weingarten paid brokerage commissions of $21,922,844, $20,226,511 and $19,810,852, respectively. For the fiscal year ended October 31, 2000, AIM allocated certain of Weingarten's brokerage transactions to certain broker-dealers that provided AIM with certain research, statistical and other information. Such transactions amounted to $2,804,620,891 and the related brokerage commissions were $2,451,428.
PORTFOLIO TURNOVER
The portfolio turnover rate of each Fund is shown under "Financial Highlights" in the Prospectus. Higher portfolio turnover increases transaction costs to the Fund.
INVESTMENT STRATEGIES AND RISKS
Information concerning each Fund's non-fundamental investment objective(s) is set forth in the Prospectus under the heading "Investment Objectives 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 Prospectus under the heading "Investment Objectives and Strategies" and "Principal Risks of Investing in the Funds."
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 (Charter only) 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.
The primary investment objective of Charter is growth of capital with a secondary objective of current income. Although the amount of Charter's current income will vary from time to time, it is anticipated that the current income realized by Charter will generally be greater than that realized by mutual funds whose sole objective is growth of capital.
The investment objective of Constellation is growth of capital. Constellation aggressively seeks to increase shareholders' capital by investing principally in common stocks of companies the portfolio managers believe are likely to benefit from new or innovative products, services or processes that should enhance such companies' prospects for future growth in earnings. As a result of this policy, the market prices of many of the securities purchased and held by the Fund may fluctuate widely. Any income received from securities held by the Fund will be incidental, and an investor should not consider a purchase of shares of the Fund as equivalent to a complete investment program.
Constellation and Weingarten's portfolio is primarily comprised of securities of two basic categories of companies: (a) "core" companies, which Fund management considers to have experienced above-average and consistent long-term growth in earnings and to have excellent prospects for outstanding future growth, and (b) "earnings acceleration" companies which Fund management believes are currently enjoying a dramatic increase in profits.
The investment objective of Weingarten is to seek growth of capital. The Fund will invest in common stocks of seasoned and better capitalized companies. Current income will not be an important criterion of investment selection, and any such income should be considered incidental. It is anticipated that common stocks will be the principal form of investment by the Fund.
Each of the Funds may invest, for cash management, temporary or defensive purposes, all or substantially all of their assets in investment grade (high quality) corporate bonds, shares of affiliated money market funds, commercial paper, or U.S. Government obligations. In addition, all or a portion of each Fund's assets may be held, from time to time, in cash, repurchase agreements, shares of affiliated money market funds, bonds or other short-term debt securities when such positions are deemed advisable in light of economic or market conditions. For a description of the various rating categories of corporate bonds and
commercial paper in which the Funds may invest, see the Appendix to this Statement of Additional Information.
COMMON STOCKS -- The Funds will invest in common stocks. Common stocks represent the residual ownership interest in the issuer and are entitled to the income and increase in the value of the assets and business of the entity after all of its obligations and preferred stocks are satisfied. Common stocks generally have voting rights. Common stocks fluctuate in price in response to many factors including historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.
PREFERRED STOCKS -- The Funds may invest in preferred stocks. Preferred stock has a preference over common stock in liquidation (and generally dividends as well) but is subordinated to the liabilities of the issuer in all respects. As a general rule the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer's board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions.
CONVERTIBLE SECURITIES -- The Funds may invest in convertible securities. A convertible security is a bond, debenture, note, preferred stock or other security that may be converted into or exchanged for a prescribed amount of common stock or other equity security of the same or a different issuer within a particular period of time at a specified price or formula. A convertible security entitles the holder to receive interest paid or accrued on debt or the dividend paid on preferred stock until the convertible security matures or is redeemed, converted or exchanged. Before conversion, convertible securities have characteristics similar to non-convertible income securities in that they ordinarily provide a stable stream of income with generally higher yields than those of common stocks of the same or similar issuers. Convertible securities rank senior to common stock in a corporation's capital structure but are usually subordinated to comparable nonconvertible securities. Convertible securities may be subject to redemption at the option of the issuer at a price established in the convertible security's governing instrument. Although each Fund will only purchase convertible securities that AIM considers to have adequate protection parameters, including an adequate capacity to pay interest and repay principal in a timely manner, it invests without regard to corporate bond ratings.
CORPORATE DEBT SECURITIES -- The Funds may invest in corporate debt securities. Corporations issue debt securities of various types, including bonds and debentures (which are long-term), notes (which may be short- or long-term), bankers acceptances (indirectly secured borrowings to facilitate commercial transactions) and commercial paper (short-term unsecured notes). These securities typically provide for periodic payments of interest, at a rate which may be fixed or adjustable, with payment of principal upon maturity and are generally not secured by assets of the issuer or otherwise guaranteed. The values of fixed rate income securities tend to vary inversely with changes in interest rates, with longer-term securities generally being more volatile than shorter-term securities. Corporate securities frequently are subject to call provisions that entitle the issuer to repurchase such securities at a predetermined price prior to their stated maturity. In the event that a security is called during a period of declining interest rates, the Fund may be required to reinvest the proceeds in securities having a lower yield. In addition, in the event that a security was purchased at a premium over the call price, a Fund will experience a capital loss if the security is called. Adjustable rate corporate debt securities may have interest rate caps and floors.
Securities rated in the four highest long-term rating categories by Standard and Poor's Ratings Services ("S&P") and Moody's Investors Service ("Moody's") are considered to be "investment grade." S&P's fourth highest long-term rating category is "BBB", with BBB- being the lowest investment grade rating. Moody's fourth highest long-term rating category is "Baa", with Baa3 being the lowest investment grade rating. Publications of S&P indicate that it assigns securities to the "BBB" rating category when such securities are
"regarded as having an adequate capacity to pay interest and repay principal.
Such securities normally exhibit adequate protection parameters, but adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay," whereas securities rated AAA by S&P are regarded as
having "capacity to pay interest and repay principal [that] is extremely
strong." Publications of Moody's indicate that it assigns securities to the "Baa
rating category when such securities 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," whereas securities rated Aaa by
Moody's "are judged to be of the best quality" and "carry the smallest degree of
investment risk."
U.S. GOVERNMENT SECURITIES -- The Funds may invest in securities issued or guaranteed by the United States government or its agencies or instrumentalities. These include Treasury securities (bills, notes, bonds and other debt securities) which differ only in their interest rates, maturities and times of issuance. U.S. Government agency and instrumentality securities include securities which are supported by the full faith and credit of the U.S., securities that are supported by the right of the agency to borrow from the U.S. Treasury, securities that are supported by the discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality and securities that are supported only by the credit of such agencies. While the U.S. Government may provide financial support to such U.S. government-sponsored agencies or instrumentalities, no assurance can be given that it always will do so. The U.S. government, its agencies and instrumentalities do not guarantee the market value of their securities. The values of such securities fluctuate inversely to interest rates.
REAL ESTATE INVESTMENT TRUSTS ("REITS")
To the extent consistent with their respective investment objectives and policies, the Funds may invest in equity and/or debt securities issued by REITs. Such investments will not exceed 25% of the total assets of any of the Funds.
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 condition, adverse change in the climate for real estate, environmental liability risks, increases in property taxes and operating expense, changes in zoning laws, casualty or condemnation losses, limitations on rents, changes in neighborhood values, the appeal of properties to tenants, and increases in interest rates.
In addition to the risks described above, equity REITs may be affected by any changes in the value of the underlying property owned by the trusts, while mortgage REITs may be affected by the quality of any credit extended. Equity and mortgage REITs are dependent upon management skill, are not diversified, and are therefore subject to the risk of financing single or a limited number of projects. Such trusts are also subject to heavy cash flow dependency, defaults by borrowers, self-liquidation, and the possibility of failing to 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.
FOREIGN SECURITIES
To the extent consistent with their respective investment objectives, each of the Funds may invest in foreign securities. Each of Charter, Constellation and Weingarten may invest up to 20% of its total assets in foreign securities. For purposes of computing such limitation American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs") and other securities representing underlying securities of foreign
issuers are treated as foreign securities. These securities may not necessarily be denominated in the same currency as the securities into which they may be converted. ADRs are receipts typically issued by a United States bank or trust company which evidence ownership of underlying securities issued by a foreign corporation. EDRs are receipts issued in Europe which evidence a similar ownership arrangement. Generally, ADRs, in registered form, are designed for use in the United States securities markets, and EDRs, in bearer form, are designed for use in European securities markets. ADRs and EDRs may be listed on stock exchanges, or traded in OTC markets in the United States or Europe, as the case may be. ADRs, like other securities traded in the United States, will be subject to negotiated commission rates.
To the extent a Fund invests in securities denominated in foreign currencies, each Fund bears the risk 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. These securities will be marketable equity securities (including common and preferred stock, depositary receipts for stock and fixed income or equity securities exchangeable for or convertible into stock) of foreign companies which generally are listed on a recognized foreign securities exchange or traded in a foreign over-the-counter market. Each of the Funds may also invest in foreign securities listed on recognized U.S. securities exchanges or traded in the U.S. over-the-counter market. Such foreign securities may be issued by foreign companies located in developing countries in various regions of the world. A "developing country" is a country in the initial stages of its industrial cycle. As compared to investment in the securities markets of developed countries, investment in the securities markets of developing countries involves exposure to markets 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.
Investments by a Fund in foreign securities, whether denominated in U.S. currencies 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 as set forth below.
Currency Risk. The value of each Fund's 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.
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 the Fund.
Political and Economic Risk. The economies of many of the countries in which the Funds may invest are not 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 each Fund's investments.
Regulatory Risk. Foreign companies are not registered with the SEC 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 Funds' 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.
FOREIGN EXCHANGE TRANSACTIONS
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 or sales of foreign currency, purchases of futures contracts with respect to foreign currency (and options thereon), 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 Fund may purchase and sell options on futures contracts or forward contracts which are denominated in a particular foreign currency to hedge the risk of fluctuations in the value of another currency. The Funds' dealings in foreign exchange may involve 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 Fund will not speculate in foreign exchange, nor commit a larger percentage of its total assets to foreign exchange hedges than the percentage of its total assets that 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
None of the Funds will invest more than 15% of their net assets in illiquid securities, including repurchase agreements with maturities in excess of seven days.
RULE 144A SECURITIES
The Funds may purchase privately placed securities that are eligible for purchase and sale pursuant to Rule 144A under the Securities Act of 1933 (the "1933 Act"). This Rule permits certain qualified institutional buyers, such as a Fund, to trade in securities that have not been 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 a Fund's restriction of investing no more than 15% of its 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, the Fund's holdings of illiquid securities will be reviewed to determine what, if any, action is required to assure that the Fund does not invest more than 15% of its assets in illiquid securities. Investing in Rule 144A securities could have the effect of increasing the amount of the Fund's investments in illiquid securities if qualified institutional buyers are unwilling to purchase such securities.
REPURCHASE AGREEMENTS
The Funds may each enter into repurchase agreements. A repurchase
agreement is an instrument under which a Fund acquires ownership of a debt
security and the seller (usually a broker or bank) agrees, at the time of the
sale, to repurchase the obligation at a mutually agreed upon time and price,
thereby determining the yield during the Fund's holding period. In the event of
bankruptcy or other default of a seller of a repurchase agreement, the Fund may
experience both delays in liquidating the underlying securities and losses,
including: (a) a possible decline in the value of the underlying security during
the period in which the Fund seeks to enforce its rights thereto; (b) a possible
subnormal level of income and lack of access to income during this period; and
(c) expenses of enforcing its rights. A repurchase agreement is collateralized
by the security acquired by the Fund and its value is marked to market daily in
order to minimize the Fund's risk. Repurchase agreements usually are for short
periods, such as one or two days, but may be entered into for longer periods of
time. Repurchase agreements are not included in each Fund's restrictions on
lending. Repurchase agreements are considered to be loans by each Fund under the
1940 Act.
Charter may enter into repurchase agreements (at any time, up to 50% of its net assets), using only U.S. Government securities, for the sole purpose of increasing its yield on idle cash.
REVERSE REPURCHASE AGREEMENTS
Consistent with Charter's policy on borrowings, Charter may invest in reverse repurchase agreements with banks, which involve the sale of securities held by the Fund, with an agreement that the Fund will repurchase the securities at an agreed upon price and date. The 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, the Fund will segregate liquid securities having a dollar value equal to the repurchase price. Reverse repurchase agreements are considered borrowings by the Fund under the 1940 Act.
SPECIAL SITUATIONS
Although Constellation does not currently intend to do so, it may
invest in "special situations." A special situation arises when, in the opinion
of the Fund's management, the securities of a particular company will, within a
reasonably estimable period of time, be accorded market recognition at an
appreciated value solely by reason of a development applicable to that company,
and regardless of general business conditions or movements of the market as a
whole. Developments creating special situations might include, among others:
liquidations, reorganizations, recapitalizations, mergers, material litigation,
technical breakthroughs, and new management or management policies. Although
large and well-known companies may be involved, special situations more often
involve comparatively small or unseasoned companies. Investments in unseasoned
companies and special situations often involve much greater risk than is
inherent in ordinary investment securities.
SHORT SALES
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, 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
Neither Charter nor Weingarten 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.
WARRANTS
The Funds may, from time to time, invest in warrants. Warrants are, in effect, longer-term call options. They give the holder the right to purchase a given number of shares of a particular company at specified prices within certain periods of time. The purchaser of a warrant expects that the market price of the security will exceed the purchase price of the warrant plus the exercise price of the warrant, thus giving him a profit. Of course, since the market price may never exceed the exercise price before the expiration date of the warrant, the purchaser of the warrant risks the loss of the entire purchase price of the warrant. Warrants generally trade in the open market and may be sold rather than exercised. Warrants are sometimes sold in unit form with other securities of an issuer. Units of warrants and common stock may be employed in financing young, unseasoned companies. The purchase price of a warrant varies with the exercise price of a warrant, the current market value of the underlying security, the life of the warrant and various other investment factors.
SECURITIES ISSUED ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS
Each Fund may purchase securities on a "when-issued" basis, that is, 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). Each Fund also may purchase or sell securities on a delayed delivery basis. The payment obligation and the interest rate that will be received on the delayed delivery securities are fixed at the time the buyer enters into the commitment. A Fund will only make commitments to purchase when-issued or delayed delivery 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.
Investment in securities on a when-issued or delayed delivery basis may increase a Fund's exposure to market fluctuation and may increase the possibility that the Fund will incur short-term gains subject to federal taxation or short-term losses if the Fund must engage in portfolio transactions in order to honor a when-issued or delayed delivery commitment. In a delayed delivery transaction, 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 will segregate liquid assets in an amount equal to the when-issued commitment. If the market value of such segregated assets declines, additional cash or securities will be segregated on a daily basis so that the market value of the segregated assets will equal the amount of the Fund's when-issued commitments. To the extent cash and securities 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.
LENDING OF PORTFOLIO SECURITIES
Consistent with applicable regulatory requirements, the Funds may lend their portfolio securities (principally to broker-dealers) to the extent of one-third of their respective total assets. Such loans would be callable at any time and would be continuously secured by collateral equal to no less than the market value, determined daily, of the loaned securities. Such collateral will be cash, letters of credit, or debt securities issued or guaranteed by the U.S. Government or any of its agencies. The Funds would continue to receive the income on loaned securities and would, at the same time, earn interest on the loan collateral or on the investment of the loan collateral if it were cash. Any cash collateral pursuant to these loans would be invested in short-term money market instruments or affiliated money market funds. Where voting or consent rights with respect to loaned securities pass to the borrower, the Funds will follow the policy of calling the loan, in whole or in part as may be appropriate, to permit the exercise of such voting or consent rights if the matters involved are expected to have a material effect on the Funds' investment in the loaned securities. Lending securities entails a risk of loss to the Funds if and to the extent that the market value of the securities loaned were to increase and the lender did not increase the collateral accordingly.
INTERFUND LOANS
Each Fund may lend up to 33 1/3% of its total assets to another AIM Fund, on such terms and conditions as the SEC may require in an exemptive order. An application for exemptive relief has been filed with the SEC on behalf of the Funds and others. Each Fund may also borrow from another AIM Fund to satisfy redemption requests or to cover unanticipated cash shortfalls due to a delay in the delivery of cash to the Fund's custodian or improper delivery instructions by a broker effectuating a transaction.
EQUITY-LINKED DERIVATIVES
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."
BORROWING
In additional to the ability to borrow money for temporary or emergency purposes, Constellation may, but has no current intention to, borrow money from banks to purchase or carry securities. Constellation may borrow amounts to purchase or carry securities only if, immediately after such borrowing, the value of its assets, including the amount borrowed, less its liabilities, is equal to at least 300% of the amount borrowed, plus all outstanding borrowings. Any investment gains made by Constellation with the borrowed monies in excess of interest paid by the Fund will cause the net asset value of the Fund's shares to rise faster than would otherwise be the case. On the other hand, if the investment performance of the additional securities purchased with the proceeds of such borrowings fails to cover the interest paid on the money borrowed by
the Fund, the net asset value of the Fund will decrease faster than would otherwise be the case. This speculative factor is knows as "leveraging."
INVESTMENT IN UNSEASONED ISSUERS
Charter 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.
INVESTMENT IN OTHER INVESTMENT COMPANIES
Each of the Funds may invest in other investment companies to the extent permitted by the 1940 Act, and rules and regulations thereunder, and if applicable, exemptive orders granted by the SEC. The following restrictions apply to investments in other investment companies other than Affiliated Money Market Funds (defined below): (i) a Fund may not purchase more than 3% of the total outstanding voting stock of another investment company; (ii) a Fund may not invest more than 5% of its total assets in securities issued by another investment company; and (iii) a Fund may not invest more than 10% of its total assets in securities issued by other investment companies other than Affiliated Money Market Funds. With respect to a Fund's purchase of shares of another investment company, including Affiliated Money Market Funds, the Fund will indirectly bear its proportionate share of the advisory fees and other operating expenses of such investment company. The Funds have obtained an exemptive order from the SEC allowing them to invest uninvested cash balances and cash collateral received in connection with securities lending in money market funds that have AIM or an affiliate of AIM as an investment advisor (the "Affiliated Money Market Funds"), provided that, with respect to uninvested cash balances, investments in Affiliated Money Market Funds do not exceed 25% of the total assets of the investing Fund.
TEMPORARY DEFENSIVE INVESTMENTS
In anticipation of or in response to adverse market conditions, for cash management purposes, or for defensive purposes, each of the Funds may temporarily hold all or a portion of its assets in cash, money market instruments, bonds, or other debt securities. Each of the Funds may also invest up to 25% of its total assets in Affiliated Money Market Funds for these purposes. For a description of the various rating categories of corporate bonds and commercial paper in which the Funds may invest, see the Appendix to this Statement of Additional Information.
SWAPS, CAPS, FLOORS AND COLLARS
Consistent with its investment objective a Fund may enter into interest rate, currency and index swaps and may purchase or sell related caps, floors and collars and other derivative instruments. The Fund expects to enter into these transactions primarily to preserve a return or spread on a particular investment or portion of its portfolio, to protect against currency fluctuations, as a technique for managing the portfolio's duration (i.e., the price sensitivity to changes in interest rates) or to protect against any increase in the price of securities the Fund anticipates purchasing at a later date. The Fund intends to use these transactions as hedges and will not sell interest rate caps, floors or collars if it does not own securities or other instruments providing an income stream roughly equivalent to what the Fund may be obligated to pay.
Interest rate swaps involve the exchange by the Fund with another party of their respective commitments to pay or receive interest (for example, an exchange of floating rate payments for fixed rate payments) with respect to a notional amount of principal. A currency swap is an agreement to exchange cash flows on a notional amount based on changes in the values of the reference indices.
The purchase of a cap entitles the purchaser to receive payments on a notional principal amount from the party selling the cap to the extent that a specified index exceeds a predetermined interest rate. The purchase of an interest rate floor entitles the purchaser to receive payments on a notional principal amount
from the party selling the floor to the extent that a specified index falls below a predetermined interest rate or amount. A collar is a combination of a cap and a floor that preserves a certain return within a predetermined range of interest rates or values.
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 RISKS 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 terminates 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 price 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 Futures 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
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.
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.
FUNDAMENTAL RESTRICTIONS
(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.
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 have this flexibility, the Board of Trustees has adopted non-fundamental restrictions for each of the Funds relating to certain of these restrictions which the advisor must follow in managing the Funds. Any changes to these non-fundamental restrictions, which are set forth below, require the approval of the Board of Trustees.
NON-FUNDAMENTAL RESTRICTIONS
The following restrictions apply to each of the Funds. They may be changed for any Fund without approval of that Fund's voting securities. Any investment restriction that involves a maximum or minimum percentage of securities or assets (other than with respect to borrowing) shall not be considered to be violated unless an excess over or a deficiency under the percentage occurs immediately after, and is caused by, an acquisition or disposition of securities or utilization of assets by the Fund.
(1) In complying with the fundamental restriction regarding issuer diversification, the Fund will not, with respect to 75% of its total assets, 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. Other than Constellation, 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. Other than Constellation, the Fund may not purchase additional securities when any borrowings from banks exceed 5% of the Fund's total assets.
(3) In complying with the fundamental restriction regarding industry concentration, the Fund may invest up to 25% of its total assets in the securities of issuers whose principal business activities are in the same industry.
(4) In complying with the fundamental restriction with regard to making loans, the Fund may lend up to 33 1/3% of its total assets and may lend money to another AIM Advised Fund, on such terms and conditions as the SEC may require in an exemptive order.
(5) Notwithstanding the fundamental restriction with regard to investing all assets in an open-end fund, the Fund may not invest all of its assets in the securities of a single open-end management investment company with the same fundamental investment objectives, policies and restrictions as the Fund.
The following non-fundamental policy applies only to Constellation:
The amount the Fund may borrow will also be limited by the applicable margin limitations imposed by the Federal Reserve Board. If at any time the value of Constellations' assets should fail to meet the 300% asset coverage requirement, the Fund will, within three days, reduce its borrowings to the extent necessary. The Fund may be required to eliminate partially or totally its outstanding borrowings at times when it may not be desirable for it to do so. Any investment gains made by Fund with the borrowed monies in excess of interest paid by the Fund will cause the net asset value of the Fund's shares to rise faster than would otherwise be the case. On the other hand, if the investment performance of the additional securities purchased with the proceeds of such borrowings fails to cover the interest paid on the money borrowed by Constellation, the net asset value of the Fund will decrease faster than would otherwise be the case. This speculative factor is known as "leveraging."
MANAGEMENT
The overall management of the business and affairs of the Funds and the Trust is vested with the Trust's Board of Trustees. The Board of Trustees approves all significant agreements between the Trust, on behalf of the Funds, and persons or companies furnishing services to the Funds. The day-to-day operations of each Fund are delegated to the officers of the Trust and to AIM, subject always to the objectives, restrictions and policies of the applicable Fund and to the general supervision of the Trust's Board of Trustees. Certain trustees and officers of the Trust are affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the parent corporation of AIM.
TRUSTEES AND OFFICERS
The trustees and officers of the Trust and their principal occupations during the last five years are set forth below. Unless otherwise indicated, the address of each trustee and officer is 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173.
Positions Held
Name, Address and Age with Registrant Principal Occupation During Past 5 Years
--------------------- --------------- ----------------------------------------
*ROBERT H. GRAHAM (54) Trustee, Chairman Chairman Director, President and Chief Executive Officer, A I M
and President 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 Vice Chairman, AMVESCAP PLC.
BRUCE L. CROCKETT (56) Trustee Director, ACE Limited (insurance company). Formerly,
906 Frome Lane Director, President and Chief Executive Officer, COMSAT
McLean, VA 22102 Corporation; and Chairman, Board of Governors of
INTELSAT (international communications company).
OWEN DALY II (76) Trustee Formerly, Director, Cortland Trust, Inc. (investment
Six Blythewood Road company), CF & I Steel Corp., Monumental Life Insurance
Baltimore, MD 21210 Company and Monumental General Insurance Company; and
Chairman of the Board of Equitable Bancorporation.
ALBERT R. DOWDEN (59) Trustee Chairman of the Board of Directors, Cortland Trust,
1815 Central Park Drive Inc. (investment company) and DHJ Media, Inc.; and
P.O. Box 774000-PMB #222 Director, Magellan Insurance Company. Formerly,
Steamboat Springs, CO 80477 Director, President and Chief Executive Officer, Volvo
Group North America, Inc.; Senior Vice President, AB
Volvo; and Director, The Hertz Corporation, Genmar
Corporation (boat manufacturer), National Media
Corporation and Annuity and Life Re (Holdings), Ltd.
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Positions Held
Name, Address and Age with Registrant Principal Occupation During Past 5 Years
--------------------- --------------- ----------------------------------------
EDWARD K. DUNN, JR. (65) Trustee Formerly, Chairman of the Board of Directors,
2 Hopkins Plaza, 8th Floor Mercantile Mortgage Corp; Vice Chairman of the Board of
Suite 805 Directors, President and Chief Operating Officer,
Baltimore, MD 21201 Mercantile - Safe Deposit & Trust Co.; and President,
Mercantile Bankshares.
JACK FIELDS (49) Trustee Chief Executive Officer, Twenty-First Century Group,
434 New Jersey Avenue, S.E. Inc. (governmental affairs company). Formerly, Member
Washington, DC 20003 of the U.S. House of Representatives.
**CARL FRISCHLING (64) Trustee Partner, Kramer Levin Naftalis & Frankel LLP (law firm).
919 Third Avenue
New York, NY 10022
PREMA MATHAI-DAVIS (50) Trustee Formerly, Chief Executive Officer, YWCA of the U.S.A.
370 East 76th Street
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 Operations,
The Williams Tower, 50th Floor Hines Interests Limited Partnership (real
2800 Post Oak Blvd. estate development).
Houston, TX 77056
GARY T. CRUM (53) Senior Vice Director and President, A I M Capital Management, Inc.;
President 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 and
President Secretary, A I M Advisors, Inc.; Senior Vice President,
and Secretary General Counsel and Secretary, A I M Management Group
Inc.; Director, Vice President and General Counsel,
Fund Management Company; General Counsel and Vice
President, A I M Fund Services, Inc.; and Vice
President, A I M Capital Management, Inc., and A I M
Distributors, Inc.
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.
DANA R. SUTTON (42) Vice President and Vice President and Fund Controller, A I M Advisors,
Treasurer Inc.; and Assistant Vice President and Assistant
Treasurer, Fund Management Company.
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Positions Held
Name, Address and Age with Registrant Principal Occupation During Past 5 Years
--------------------- --------------- ----------------------------------------
EDGAR M. LARSEN (60) Vice President Vice President, A I M
Capital Management, Inc.
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The standing committees of the Board of Trustees are the Audit Committee, the Investments Committee and the Nominating and Compensation Committee.
The members of the Audit Committee are Messrs. Crockett, Daly, Dowden, 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, Dowden, Dunn, Fields, Frischling, Pennock and Sklar (Chairman) and Dr. Mathai-Davis. The Investment Committee is responsible for: (i) overseeing AIM's investment-related compliance systems and procedures to ensure their continued adequacy, and (ii) considering and acting, on an interim basis, between meetings of the full Board, on investment-related matters requiring Board consideration, including dividends and distributions, brokerage policies and pricing matters.
The members of the Nominating and Compensation Committee are Messrs. Crockett (Chairman), Daly, Dowden, Dunn, Fields, Pennock and Sklar and Dr. Mathai-Davis. The Nominating and Compensation Committee is responsible for: (i) considering and nominating individuals to stand for election as independent trustees as long as the Trust maintains a distribution plan pursuant to Rule 12b-1 under the 1940 Act; (ii) reviewing from time to time the compensation payable to the independent trustees; and (iii) making recommendations to the Board regarding matters related to compensation, including deferred compensation plans and retirement plans for the independent trustees.
The Nominating and Compensation Committee will consider nominees recommended by a shareholder to serve as trustees, provided (i) that such person is a shareholder of record at the time he or she submits such names and is entitled to vote at the meeting of shareholders at which trustees will be elected, and (ii) that the Nominating and Compensation Committee or the Board, as applicable, shall make the final determination of persons to be nominated.
All of the Trust's trustees also serve as directors or trustees of some or all of the other investment companies managed or advised by AIM. All of the Trust's executive officers hold similar offices with some or all of the other investment companies managed or advised by AIM.
Remuneration of Trustees
Each trustee is reimbursed for expenses incurred in connection with each meeting of the Board of Trustees or any committee attended. 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:
RETIREMENT TOTAL
AGGREGATE COMPENSATION BENEFITS COMPENSATION
FROM THE ACCRUED FROM ALL
TRUSTEE TRUST(1) BY ALL AIM FUNDS(2) AIM FUNDS(3)
------- ----------------------- ------------------- ------------
Charles T. Bauer(4) $ 0 $ 0 $ 0
Bruce L. Crockett $ 26,923 $ 60,951 $ 111,500
Owen Daly II. $ 26,923 $ 97,195 $ 111,500
Albert R. Dowden(5) $ 0 $ 0 $ 13,435
Edward K. Dunn, Jr. $ 26,923 $ 22,138 $ 111,500
Jack Fields $ 26,409 $ 23,019 $ 108,500
Carl Frischling(6) $ 26,923 $ 107,507 $ 111,500
Robert H. Graham $ 0 $ 0 $ 0
Prema Mathai-Davis $ 26,419 $ 22,606 $ 111,500
Lewis F. Pennock $ 26,923 $ 67,995 $ 111,500
Louis S. Sklar $ 26,288 $ 87,538 $ 111,000
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(1) The total amount of compensation deferred by all trustees of the Trust and the Trust's predecessor during the fiscal year ended October 31, 2000, including earnings, was $213,131.
(2) During the fiscal year ended October 31, 2000, the total amount of expenses allocated to the Trust and the Trust's predecessor in respect of such retirement benefits was $210,415. Data reflects compensation for the calendar year ended December 31, 2000.
(3) Each trustee serves as director or trustee of at least 12 registered investment companies advised by AIM. Data reflects total compensation for the calendar year ended December 31, 2000.
(4) Mr. Bauer was a trustee and officer until September 30, 2000, when he retired.
(5) Mr. Dowden was elected to serve as a Trustee on December 14, 2000.
(6) During the fiscal year ended October 31, 2000, Charter, Constellation and Weingarten, each paid $17,752, $35,398 and $22,699, respectively, on legal fees to Mr. Frischling's law firm, Kramer Levin Naftalis and Frankel LLP for services rendered. Mr. Frischling, a trustee of the Trust, is a partner in such firm.
AIM Funds Retirement Plan for Eligible Directors/Trustees
Under the terms of the AIM Funds Retirement Plan for Eligible Directors/Trustees (the "Plan"), each trustee (who is not an employee of any of the AIM Funds, AIM Management or any of their affiliates) may be entitled to certain benefits upon retirement from the Board of Trustees. Pursuant to the Plan, a trustee
becomes eligible to retire and receive full benefits under the Plan when he or she has attained age 65 and has completed at least five years of continuous service with one or more of the regulated investment companies managed, administered or distributed by AIM or its affiliates (the "Applicable AIM Funds"). Each eligible trustee is entitled to receive an annual benefit from the Applicable AIM Funds commencing on the first day of the calendar quarter coincident with or following his or her date of retirement equal to a maximum 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, Dowden, Dunn, Fields, Frischling, Pennock, Robinson and Sklar and Dr. Mathai-Davis are 13, 13, 0, 2, 3, 23, 19, 11, and 2 years, respectively.
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT
Number of
Years of
Service With
the Applicable Estimated Annual
AIM Funds Benefit Upon Retirement
-------------- -----------------------
10 $75,000
9 $67,500
8 $60,000
7 $52,500
6 $45,000
5 $37,500
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Deferred Compensation Agreements
Messrs. Daly, Dunn, Fields, Frischling and Sklar and Dr. Mathai-Davis
(the "Deferring Trustees") have each executed a Deferred Compensation Agreement
(collectively, the "Compensation Agreements"). Pursuant to the Compensation
Agreements, the Deferring Trustees may elect to defer receipt of up to 100% of
their compensation payable by the Trust, and such amounts are placed into a
deferral account. Currently, the Deferring Trustees may select various AIM Funds
in which all or part of their deferral accounts shall be deemed to be invested.
Distributions from the Deferring Trustees' deferral accounts will be paid in
cash, generally in equal quarterly installments over a period of five (5) or ten
(10) years (depending on the Compensation Agreement) beginning on the date the
Deferring Trustee's retirement benefits commence under the Plan. The Trust's
Board of Trustees, in its sole discretion, may accelerate or extend the
distribution of such deferral accounts after the Deferring Trustee's termination
of service as a trustee of the Trust. If a Deferring Trustee dies prior to the
distribution of amounts in his or her deferral account, the
balance of the deferral account will be distributed to his or her designated beneficiary in a single lump sum payment as soon as practicable after such Deferring Trustee's death. The Compensation Agreements are not funded and, with respect to the payments of amounts held in the deferral accounts, the Deferring Trustees have the status of unsecured creditors of the Trust and of each other AIM Fund from which they are deferring compensation.
INVESTMENT ADVISORY AND OTHER SERVICES
AIM is a direct wholly owned subsidiary of AIM Management, a holding company that has been engaged in the financial services business since 1976. The address of AIM is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. AIM was organized in 1976, and, together with its subsidiaries, advises or manages over 130 investment portfolios encompassing a broad range of investment objectives. AIM Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire Square, London EC2M 4YR, United Kingdom. AMVESCAP PLC and its subsidiaries are an independent investment management group engaged in institutional investment management and retail mutual fund businesses in the United States, Europe and the Pacific Region. Certain of the trustees and officers of AIM are also executive officers of the Trust and their affiliations are shown under "Trustees and Officers".
AIM and the Trust have adopted a Code of Ethics which requires investment personnel and certain other employees (a) to pre-clear all personal securities transactions subject to the Code of Ethics; (b) to file reports regarding such transactions; (c) to refrain from personally engaging in (i) short-term trading of a security, (ii) transactions involving a security within seven days of an AIM Fund transaction involving the same security (subject to a de minimis exception), and (iii) transactions involving securities being considered for investment by an AIM Fund (subject to a de minimis exception); and (d) to 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 who are registered with the NASD 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 21, 2000 (the "Master Advisory Agreement") and a Master Administrative Services Agreement (the "Master Administrative Services Agreement") with AIM. In addition, AIM has entered into a Master Sub-Advisory Agreement (the "Master Sub-Advisory Agreement") with AIM Capital with respect to Charter, Weingarten and Constellation. A prior investment advisory agreement with substantially similar terms to the Master Advisory Agreement and a prior administrative services agreement with substantially similar terms to the Master Administrative Services Agreement were in effect prior to June 21, 2000.
Under the terms of the Master 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; provided, however that AIM may be liable for certain breaches of duty under the 1940 Act.
Pursuant to the Master Administrative Services Agreement, AIM has agreed to provide or arrange for the provision of certain accounting and other administrative services to the Funds, including the services of a principal financial officer of the Funds and related staff. As compensation to AIM for its services under the Master Administrative Service Agreements, the Funds reimburse AIM for expenses incurred by AIM or its subsidiaries in connection with such services.
Under the terms of the Master Sub-Advisory Agreement, AIM has appointed AIM Capital to provide certain investment advisory services for each of the Funds, subject to overall supervision by AIM and the
Trust's Board of Trustees. Certain of the trustees and officers of AIM Capital are also executive officers of the Trust.
Both the Master Advisory Agreement and the Master Sub-Advisory Agreement provide that the Fund will pay or cause to be paid all expenses of the Fund not assumed by AIM or AIM Capital, including, without limitation: brokerage commissions, taxes, legal, auditing or governmental fees, the cost of preparing share certificates, custodian, transfer and shareholder service agent costs, expenses of issue, sale, redemption, and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to trustees and shareholder meetings, the cost of preparing and distributing reports and notices to shareholders, the fees and other expenses incurred by the Trust on behalf of the Fund in connection with membership in investment company organizations, the cost of printing copies of prospectuses and statements of additional information distributed to the Funds' shareholders and all other charges and costs of the Funds' operations unless otherwise explicitly provided.
The Master Advisory Agreement and the Master Sub-Advisory Agreement will continue in effect from year to year only if such continuance is specifically approved at least annually by (i) the Trust's Board of Trustees or the vote of a "majority of the outstanding voting securities" of the Funds (as defined in the 1940 Act), and (ii) the affirmative vote of a majority of the trustees who are not parties to the agreements or "interested persons" of any such party (the "Non-Interested Trustees") by votes cast in person at a meeting called for such purpose. Each agreement provides that the Funds, AIM (in the case of the Master Advisory Agreement) or AIM Capital (in the case of the Master Sub-Advisory Agreement) may terminate such agreement on 60 days' written notice without penalty. Each agreement terminates automatically in the event of its assignment.
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 period 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. Fee waivers or reductions set forth in the Master Advisory Agreement may not be terminated without shareholder approval.
AIM has voluntarily agreed, effective July 1, 2000, to waive advisory fees payable by Charter, Constellation and Weingarten 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 schedules are as follows:
CHARTER AND CONSTELLATION
NET ASSETS ANNUAL RATE ---------- ----------- First $30 million 1.00% Over $30 million to and including $150 million 0.75% 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% |
WEINGARTEN
NET ASSETS ANNUAL RATE ---------- ----------- First $30 million 1.00% Over $30 million to and including $350 million 0.75% Over $350 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 Charter, Constellation and Weingarten at net asset levels higher than those currently incorporated in the advisory fee schedule. Accordingly, with respect to each of Charter and Constellation, AIM received a fee calculated at an annual rate of 1.0% of the first $30 million of such Fund's average daily net assets, plus 0.75% of such Fund's average daily net assets in excess of $30 million to and including $150 million, plus 0.625% of such 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. With respect to Weingarten, AIM received a fee calculated at an annual rate of 1.0% of the first $30 million of the Fund's average daily net assets, plus 0.75% of the Fund's average daily net assets in excess of $30 million to and including $350 million, plus 0.625% of the Fund's average daily net assets in excess of $350 million to and including $2 billion, plus 0.60% of the Fund's average daily net assets in excess of $2 billion to and including $3 billion, plus 0.575% of the Fund's average daily net assets in excess of $3 billion to and including $4 billion, plus 0.55% of the Fund's average daily net assets in excess of $4 billion. As compensation for its services, AIM pays 50% of the advisory fees it receives pursuant to the Master Advisory Agreement with respect to Charter, Constellation and Weingarten to AIM Capital.
Each Fund paid to AIM the following advisory fees net of any expense limitations (fee waivers) for the years ended October 31, 2000, 1999 and 1998:
2000 1999 1998
---- ---- ----
Charter............ $54,658,390 $39,884,618 $31,058,588
Constellation...... 122,489,954 87,350,901 86,555,468
Weingarten......... 70,073,547 50,710,809 40,657,216
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For the fiscal year ended October 31, 2000, 1999 and 1998, AIM waived advisory fees for each Fund as follows:
2000 1999 1998
---- ---- ----
Charter............ $1,484,073 $1,130,089 $ 762,337
Constellation...... 6,187,566 3,107,849 3,074,705
Weingarten......... 5,181,384 4,288,405 2,917,461
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AIM, in turn, paid the following sub-advisory fees to AIM Capital, as sub-advisor for Charter, Constellation and Weingarten, for the years ended October 31, 2000, 1999 and 1998:
2000 1999 1998
---- ---- ----
Charter............. $17,788,305 $19,942,309 $15,529,294
Constellation....... 40,459,660 43,675,451 43,277,734
Weingarten.......... 23,739,387 25,355,405 20,328,608
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The payments set forth above were made pursuant to a substantially similar advisory agreement between AIM and the Trust's predecessor.
In addition, if a Fund engages in securities lending, AIM will provide
the Fund investment advisory services and related administrative services. The
Master Investment Advisory Agreement describes the administrative services to be
rendered by AIM if a Fund engages in securities lending activities, as well as
the compensation AIM may receive for such administrative services. Services to
be provided include: (a) overseeing participation in the securities lending
program to ensure compliance with all applicable regulatory and investment
guidelines; (b) assisting the securities lending agent or principal (the agent)
in determining which specific securities are available for loan; (c) monitoring
the agent to ensure that securities loans are effected in accordance with AIM's
instructions and with procedures adopted by the Board; (d) preparing appropriate
periodic reports for, and seeking appropriate approvals from, the Board with
respect to securities lending activities; (e) responding to agent inquiries; and
(f) performing such other duties as may be necessary.
AIM's compensation for advisory services rendered in connection with securities lending is included in the advisory fee schedule. As compensation for the related administrative services AIM will provide, a lending Fund will pay AIM a fee equal to 25% of the net monthly interest or fee income retained or paid to the Fund from such activities. AIM currently intends to waive such fee, and has agreed to seek Board approval prior to its receipt of all or a portion of such fee.
The Master Administrative Services Agreement provides that AIM may perform or arrange for the performance of certain accounting and other administrative services to each Fund. For such services, AIM is entitled to receive from each Fund reimbursement of its costs or such reasonable compensation as may be approved by the Trust's Board of Trustees. The Master Administrative Services Agreement will continue in effect from year to year only if such continuance is specifically approved at least annually by (i) the Trust's Board of Trustees or the vote of a "majority of the outstanding voting securities" of the Funds (as defined in the 1940 Act), and (ii) the affirmative vote of a majority of the Non-Interested Trustees by votes cast in person at a meeting called for such purpose.
In addition, the Transfer Agency and Service agreement for the Funds provides that A I M Fund Services, Inc. ("AFS"), a registered transfer agent and wholly-owned subsidiary of AIM, will perform certain shareholder services for the Funds for a fee per account serviced. The Transfer Agency and Service Agreement provides that AFS will receive a per account fee plus out-of-pocket expenses to process orders for purchases, redemptions and exchanges of shares, prepare and transmit payments for dividends and distributions declared by the Fund, maintain shareholder accounts and provide shareholders with information regarding the Fund and their accounts.
The Funds paid AIM the following amounts of administrative services costs for the years ended October 31, 2000, 1999, and 1998:
2000 1999 1998
---- ---- ----
Charter................ $383,224 $235,274 $ 152,008
Constellation.......... 731,392 431,120 295,926
Weingarten............. 473,764 281,500 179,633
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The payments set forth in the table above were made pursuant to a substantially similar administrative services agreement between AIM and the Trust's predecessor.
THE DISTRIBUTOR
The Trust, on behalf of the Institutional Class of each Fund, has entered into a Master Distribution Agreement with AIM Distributors, a registered broker-dealer and a wholly owned subsidiary of AIM to act as the exclusive distributor of the Institutional Classes of the Funds' shares. 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 Agreement provides that AIM Distributors has the exclusive right to distribute the Institutional Classes of shares of the Funds either directly or through other broker-dealers. The Distribution Agreement also provides that AIM Distributors will pay promotional expenses, including the incremental costs of printing prospectuses and statements of additional information, annual reports and other periodic reports for distribution to persons who are not shareholders of the Institutional Classes of the Funds and the costs of preparing and distributing any other supplemental sales literature. AIM Distributors has not undertaken to sell any specified number of shares of the Institutional Classes of the Funds. AIM Distributors does not receive any fees from the Trust on behalf of the Institutional Classes pursuant to the Distribution Agreement.
AIM Distributors may, from time to time, at its expense, pay a bonus or other consideration or incentive to dealers or banks who sell a minimum dollar amount of the shares of the Institutional Class of a Fund during a specific period of time. In some instances, these incentives may be offered only to certain dealers or institutions who have sold or may sell significant amounts of shares. The total amount of such additional bonus payments or other consideration shall not exceed 0.10% of the net asset value of the shares sold of such Institutional Class. Any such bonus or incentive programs will not change the price paid by investors for the purchase of shares or the amount received as proceeds from such sales. Dealers or institutions may not use the sale of shares of the Institutional Class of a Fund to qualify for any incentives to the extent that such incentives may be prohibited by the laws of any jurisdiction.
The Distribution Agreement will continue from year to year only if such continuation is specifically approved at least annually by (i) the Trust's Board of Trustees or the vote of a "majority of the outstanding voting securities" of the Funds (as defined in the 1940 Act) and (ii) the affirmative vote of a majority of the Non-Interested Trustees by votes cast in person at a meeting called for such purpose. The Trust, on behalf of a Fund, or AIM Distributors may terminate the Distribution Agreement on sixty days' written notice without penalty. The Distribution Agreement will terminate automatically in the event of its "assignment," as defined in the 1940 Act.
HOW TO PURCHASE AND REDEEM SHARES
A complete description of the manner by which shares of the Funds may be purchased appears in the Prospectus under the caption "Purchasing Shares."
Information concerning redemption of the Funds' shares is set forth in the Prospectus under the caption "Redeeming Shares." Shares of the Funds may be redeemed directly through AIM Distributors. The Funds intend to redeem all shares of the Funds in cash. In addition to the Funds' obligation to redeem shares, AIM Distributors may also repurchase shares as an accommodation to shareholders. A repurchase is effected at the net asset value of the Fund next determined after such order is received. Such arrangement is subject to timely receipt by AFS of all required documents in good order. If such documents are not received within a reasonable time after the order is placed, the order is subject to cancellation. While there is no charge imposed by the Funds or by AIM Distributors when shares are redeemed or repurchased, financial institutions may charge a fair service fee for handling the transaction.
The right of redemption may be suspended or the date of payment postponed when (a) trading on the New York Stock Exchange ("NYSE") is restricted, as determined by applicable rules and regulations of the SEC, (b) the NYSE is closed for other than customary weekend and holiday closings, (c) the SEC has by order permitted such suspension, or (d) an emergency as determined by the SEC exists making disposition of portfolio securities or the valuation of the net assets of the Fund not reasonably practicable.
NET ASSET VALUE DETERMINATION
The net asset value of a share of each Fund is 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 Fund share is determined as of the close of the NYSE on such day. For purposes of determining net asset value per share, futures and options contract closing prices which are available fifteen (15) minutes after the close of the customary trading session of the NYSE will generally be used. The net asset values per share of the Retail Classes and the Institutional Classes will differ because different expenses are attributable to each class. The income or loss and the expenses (except those listed below) of a Fund are allocated to each class on the basis of the net assets of the Fund allocable to each such class, calculated as of the close of business on the previous business day, as adjusted for the current day's shareholder activity of each class. Distribution and service fees and transfer agency fees (to the extent different rates are charged to different classes) are allocated only to the class to which such expenses relate. The net asset value per share of a class is determined by subtracting the liabilities (e.g., the expenses) of the Fund allocated to the class from the assets of the Fund allocated to the class and dividing the result by the total number of shares outstanding of such class. Determination of each Fund's net asset value per share is made in accordance with generally accepted accounting principles.
A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price on the exchange where the security is principally traded or, lacking any sales on a particular day, the security is valued at the closing bid price on that day, 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 on the basis of prices provided by independent pricing services. Each security reported on the NASDAQ National Market System is valued at the last sales price on the valuation date, or lacking a last sale, at the closing bid price on that day; option contracts are valued at the mean between the closing bid and asked prices on the exchange where the contracts are principally traded; futures contracts are valued at final settlement price quotations from the primary exchange on which they are traded. Debt obligations (including convertible bonds) are valued on the basis of prices provided by an independent pricing service. Prices provided by an independent pricing service may be determined without exclusive reliance on quoted prices and may reflect appropriate factors such as dividend rate, yield, type of issue, coupon rate and maturity date. Securities for which market quotations are not readily available or for which market quotations are not reflective of fair value are valued at fair value as determined in good faith by or under the supervision of the Trust's officers in a manner specifically authorized by the Board of Trustees of the Trust. Short-term obligations having sixty (60) days or less to maturity are valued at amortized cost, which approximates market value. (See also "Purchasing Shares," "Redeeming Shares" and "Pricing of Shares" in the Prospectus.)
Generally, trading in foreign securities, as well as corporate bonds, U.S. Government securities and money market instruments, is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of a Fund's shares are determined as of such times. Foreign currency exchange rates are also generally determined prior to the close of the NYSE. Occasionally, events affecting the values of such securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE which will 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.
Fund securities primarily traded in foreign markets may be traded in such markets on days which are not business days of the Fund. Because the net asset value per share of each Fund is determined only on business days of the Fund, the net asset value per share of a Fund may be significantly affected on days when an investor can not exchange or redeem shares of the Fund.
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS
Income dividends and capital gains distributions are automatically reinvested in additional shares of the same class of each Fund unless the shareholder has requested in writing to receive such dividends and distributions in cash or that they be invested in Institutional Class shares of another Fund, subject to the terms and conditions set forth in the Prospectus. If a shareholder's account does not have any shares in it on a dividend or capital gains distribution payment date, the dividend or distribution will be paid in cash whether or not the shareholder has elected to have such dividends or distributions reinvested.
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.
QUALIFICATION AS A REGULATED INVESTMENT COMPANY
Each Fund has elected to be taxed as a regulated investment company under Subchapter M of the Code. As a regulated investment company, each Fund is not subject to federal income tax on the portion of its net investment income (i.e., taxable interest, dividends and other taxable ordinary income, net of expenses) and capital gain net income (i.e., the excess of capital gains over capital losses) that it distributes to shareholders, provided that it distributes at least 90% of its investment company taxable income (i.e., net investment income and the excess of net short-term capital gain over net long-term capital loss) for the taxable year (the "Distribution Requirement"), and satisfies certain other requirements of the Code that are described below. Distributions by a Fund made during the taxable year or, under specified circumstances, within twelve months after the close of the taxable year, will be considered distributions of income and gains of the taxable year and can therefore satisfy the Distribution Requirement.
Each Fund may use "equalization accounting" in determining the portion of its net investment income and capital gain net income that has been distributed. A Fund that elects to use equalization accounting will allocate a portion of its realized investment income and capital gains to redemptions of Fund shares and will reduce the amount 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 Internal Revenue Service has not published any guidance concerning the methods to be used in allocating investment income and capital gains to redemptions of shares. In the event that the Internal Revenue Service determines that a Fund is using an improper method of allocation and has under-distributed its net investment income and capital gain net income for any taxable year, such Fund may be liable for additional federal income tax.
In addition to satisfying the Distribution Requirement, a regulated investment company must derive at least 90% of its gross income from dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition of stock or securities or foreign currencies (to the extent such currency gains are directly related to the regulated investment company's principal business of investing in stock or securities) and other income (including, but not limited to, gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities or currencies (the "Income Requirement").
In addition to satisfying the requirements described above, each Fund must satisfy an asset diversification test in order to qualify as a regulated investment company. Under this test, at the close of each quarter of each Fund's taxable year, at least 50% of the value of the Fund's assets must consist of cash and cash items, U.S. Government securities, securities of other regulated investment companies, and securities of other issuers (as to which the companies, and securities of other issuers, the Fund has not invested more than 5% of the value of the Fund's total assets in securities of such issuer and as to which the Fund does not
hold more than 10% of the outstanding voting securities of such issuer), and no more than 25% of the value of its total assets may be invested in the securities of any one issuer (other than U.S. Government securities and securities of other regulated investment companies), or in two or more issuers which the Fund controls and which are engaged in the same or similar trades or businesses.
If for any taxable year a Fund does not qualify as a regulated investment company, all of its taxable income (including its net capital gain) will be subject to tax at regular corporate rates without any deduction for distributions to shareholders, and such distributions will be taxable as ordinary dividends to the extent of such Fund's current and accumulated earnings and profits. Such distributions generally will be eligible for the dividends received deduction in the case of corporate shareholders.
DETERMINATION OF TAXABLE INCOME OF A REGULATED INVESTMENT COMPANY
In general, gain or loss recognized by a Fund on the disposition of an asset will be a capital gain or loss. However, gain recognized on the disposition of a debt obligation purchased by a Fund at a market discount (generally, at a price less than its principal amount) will be treated as ordinary income to the extent of the portion of the market discount which accrued during the period of time the Fund held the debt obligation unless the Fund made an election to accrue market discount into income. In addition, under the rules of Code Section 988, gain or loss recognized on the disposition of a debt obligation denominated in a foreign currency or an option with respect thereto (but only to the extent attributable to changes in foreign currency exchange rates), and gain or loss recognized on the disposition of a foreign currency forward contract or of foreign currency itself, will generally be treated as ordinary income or loss.
In general, for purposes of determining whether capital gain or loss recognized by a Fund on the disposition of an asset is long-term or short-term, the holding period of the asset may be affected if (a) the asset is used to close a "short sale" (which includes for certain purposes the acquisition of a put option) or is substantially identical to another asset so used, (b) the asset is otherwise held by the Fund as part of a "straddle", or (c) the asset is stock and the Fund grants certain call options with respect thereto. In addition, a Fund may be required to defer the recognition of a loss on the disposition of an asset held as part of a straddle to the extent of any unrecognized gain on the offsetting position. Any gain recognized by a Fund on the lapse of, or any gain or loss recognized by a Fund from a closing transaction with respect to, an option written by the Fund will generally be treated as a short-term capital gain or loss. In the case of covered options, gain or loss may be long-term.
Other hedging transactions that may be engaged in by certain of the Funds (such as short sales "against the box") may be subject to special tax treatment as "constructive sales" under Section 1259 of the Code if a Fund holds certain "appreciated financial positions" (defined generally as any interest (including a futures or forward contract, short sale or option) with respect to stock, certain debt instruments, or partnership interests if there would be a gain were such interest sold, assigned, or otherwise terminated at its fair market value). Upon entering into a constructive sales transaction with respect to an appreciated financial position, a Fund will be deemed to have constructively sold such appreciated financial position and will recognize gain as if such position were sold, assigned, or otherwise terminated at its fair market value on the date of such constructive sale (and will take into account any gain for the taxable year which includes such date) unless the closed transaction exception applies.
Some of the forward foreign currency exchange contracts, options and
futures contracts that certain of the Funds may enter into will be subject to
special tax treatment as "Section 1256 contracts." Section 1256 contracts that a
fund holds are treated as if they are sold for their fair market value on the
last business day of the taxable year, regardless of whether a taxpayer's
obligations (or rights) under such contracts have terminated (by delivery,
exercise, entering into a closing transaction or otherwise) as of such date. Any
gain or loss recognized as a consequence of the year-end deemed disposition of
Section 1256 contracts is combined with any other gain or loss that was
previously recognized upon the termination of Section 1256 contracts during that
taxable year. The net amount of such gain or loss for the entire taxable year
(including gain or loss arising as a consequence of the year-end deemed sale of
such contracts) is deemed to be 60% long-term (taxable at a maximum rate of 20%
for non-corporate shareholders) and 40% short-term gain or loss. However, in the
case of Section 1256 contracts that are forward foreign currency exchange
contracts
the net gain or loss is separately determined and (as discussed above) generally treated as ordinary income or loss.
Because application of the rules governing Section 1256 contracts and constructive sales may affect the character of gains or losses and/or accelerate the recognition of gains or losses from the affected investment positions, the amount which must be distributed to shareholders and which will be taxed to shareholders as ordinary income or long-term capital gain may be increased as compared to a fund that did not engage in transactions involving Section 1256 contracts or constructive sales.
EXCISE TAX ON REGULATED INVESTMENT COMPANIES
A 4% non-deductible excise tax is imposed on a regulated investment company that fails to distribute in each calendar year an amount equal to 98% of ordinary taxable income for the calendar year and 98% of capital gain net income for the one-year period ended on October 31 of such calendar year (or, at the election of a regulated investment company having a taxable year ending November 30 or December 31, for its taxable year (a "taxable year election")). The balance of such income must be distributed during the next calendar year. For the foregoing purposes, a regulated investment company is treated as having distributed any amount on which it is subject to income tax for any taxable year ending in such calendar year.
For purposes of the excise tax, a regulated investment company shall
(a) reduce its capital gain net income (but not below its net capital gain) by
the amount of any net ordinary loss for the calendar year, and (b) exclude
foreign currency gains and losses incurred after October 31 of any year (or
after the end of its taxable year if it has made a taxable year election) in
determining the amount of ordinary taxable income for the current calendar year
(and, instead, include such gains and losses in determining ordinary taxable
income for the succeeding calendar year).
Each Fund intends to make sufficient distributions or deemed distributions of its ordinary taxable income and capital gain net income prior to the end of each calendar year to avoid liability for the excise tax. However, in the event that the Internal Revenue Service determines that a Fund is using an improper method of allocation for purposes of equalization accounting (as discussed above), such Fund may be liable for excise tax. Moreover, investors should note that a Fund may in certain circumstances be required to liquidate portfolio investments to make sufficient distributions to avoid excise tax liability.
FUND DISTRIBUTIONS
Each Fund anticipates distributing substantially all of its investment company taxable income for each taxable year. Such distributions will be taxable to shareholders as ordinary income and treated as dividends for federal income tax purposes, but they will qualify for the 70% dividends received deduction for corporations only to the extent discussed below.
A Fund may either retain or distribute to shareholders its net capital gain for each taxable year. Each Fund currently intends to distribute any such amounts. If net capital gain is distributed and designated as a capital gain dividend, it will be taxable to shareholders as long-term capital gain regardless of the length of time the shareholder has held his shares or whether such gain was recognized by the Fund prior to the date on which the shareholder acquired his shares. A shareholder of a Fund electing to use equalization accounting, however, is likely to be taxed on less gain recognized prior to the date the shareholder acquires his shares since such gain will in many cases have been allocated to shares of the Fund that have previously been redeemed. Conversely, if a Fund elects to retain its net capital gain, the Fund will be taxed thereon (except to the extent of any available capital loss carry forwards) at the 35% corporate tax rate. If a Fund elects to retain its net capital gain, it is expected that the Fund also will elect to have shareholders treated as if each received a distribution of its pro rata share of such gain, with the result that each shareholder will be required to report its pro rata share of such gain on its tax return as long-term capital gain, will receive a refundable tax credit for its share of tax paid by the Fund on the gain, and will increase the tax basis for its shares by an amount equal to the deemed distribution less the tax credit.
Legislation enacted in 1997 lowers the maximum capital gain tax rate from 20% to 18% with respect to certain assets (including readily tradable stock) which are held for five years and for which the holding period begins after December 31, 2000. In connection with this new legislation, a Fund may make an election to treat any readily tradable stock it holds on January 1, 2001 as being sold on January 2, 2001 at its closing market price on that date and reacquired on that date for the same amount. If a Fund makes this election, it will recognize any gain, but not loss, on the deemed sale, which may cause a Fund to increase the amount of distributions that the Fund would make for its taxable year that includes January 2, 2001. The Funds have not yet determined whether they will make this election with respect to any shares in their respective portfolios.
Ordinary income dividends paid by the Fund with respect to a taxable
year will qualify for the 70% dividends received deduction generally available
to corporations (other than corporations, such as "S" corporations, which are
not eligible for the deduction because of their special characteristics) to the
extent of the amount of qualifying dividends received by the Fund from domestic
corporations for the taxable year. A dividend received by the Fund will not be
treated as a qualifying dividend (a) if it has been received with respect to any
share of stock that the Fund has held for less than 46 days (91 days in the case
of certain preferred stock), excluding for this purpose under the rules of Code
Section 246(c)(3)and(4) (i) any day more than 45 days (or 90 days in the case of
certain preferred stock) after the date on which the stock becomes ex-dividend,
and (ii) any period during which the Fund has an option to sell, is under a
contractual obligation to sell, has made and not closed a short sale of, has
granted certain options to buy or has otherwise diminished its risk of loss by
holding other positions with respect to, such (or substantially identical)
stock; (b) to the extent that the Fund is under an obligation (pursuant to a
short sale or otherwise) to make related payments with respect to positions in
substantially similar or related property; or (c) to the extent the stock on
which the dividend is paid is treated as debt-financed under the rules of Code
Section 246A. Moreover, the dividends received deduction for a corporate
shareholder may be disallowed or reduced (a) if the corporate shareholder fails
to satisfy the foregoing requirements with respect to its shares of the Fund, or
(b) by application of Code Section 246(b) which in general limits the dividends
received deduction to 70% of the shareholder's taxable income (determined
without regard to the dividends received deduction and certain other items).
Alternative minimum tax ("AMT") is imposed in addition to, but only to the extent it exceeds, the regular tax and is computed at a maximum rate of 28% for non-corporate taxpayers and 20% for corporate taxpayers on the excess of the taxpayer's alternative minimum taxable income ("AMTI") over an exemption amount. The corporate dividends received deduction is not itself an item of tax preference that must be added back to taxable income or is otherwise disallowed in determining a corporation's AMTI. However, corporate shareholders will generally be required to take the full amount of any dividend received from the Fund into account (without a dividend received deduction) in determining their adjusted current earnings, which are used in computing an additional corporate preference item (i.e., 75% of the excess of a corporate taxpayer's adjusted current earnings over its AMTI (determined without regard to this item and the AMTI net operating loss deduction)) that is includable in AMTI. For taxable years beginning after 1997, however, certain small corporations are wholly exempt from the AMT.
Investment income that may be received by certain of the Funds from sources within foreign countries may be subject to foreign taxes withheld at the source. The United States has entered into tax treaties with many foreign countries which entitle any such Funds to a reduced rate of, or exemption from, taxes on such income. It is impossible to determine the effective rate of foreign tax in advance since the amount of any such Fund's assets to be invested in various countries is not known.
Distributions by a Fund that do not constitute ordinary income dividends or capital gain dividends will be treated as a return of capital to the extent of (and in reduction of) the shareholder's tax basis in his shares; any excess will be treated as gain from the sale of his shares, as discussed below.
Distributions by a Fund will be treated in the manner described above regardless of whether such distributions are paid in cash or reinvested in additional shares of the Fund (or of another Fund). Shareholders receiving a distribution in the form of additional shares will be treated as receiving a distribution in an amount equal to the fair market value of the shares received, determined as of the reinvestment date.
In addition, if the net asset value at the time a shareholder purchases shares of a Fund reflects undistributed net investment income or recognized capital gain net income, or unrealized appreciation in the value of the assets of the Fund, distributions of such amounts will be taxable to the shareholder in the manner described above, although such distributions economically constitute a return of capital to the shareholder.
Ordinarily, shareholders are required to take distributions by a Fund into account in the year in which the distributions are made. However, dividends declared in October, November or December of any year and payable to shareholders of record on a specified date in such a month will be deemed to have been received by the shareholders (and made by the Fund) on December 31 of such calendar year if such dividends are actually paid in January of the following year. Shareholders will be advised annually as to the U.S. federal income tax consequences of distributions made (or deemed made) during the year in accordance with the guidance that has been provided by the IRS.
The Funds will be required in certain cases to withhold and remit to the U.S. Treasury 31% of ordinary income dividends and capital gain dividends, and the proceeds of redemption of shares, paid to any shareholder (a) who has provided either an incorrect tax identification number or no number at all, (b) who is subject to backup withholding by the IRS for failure to report the receipt of interest or dividend income properly, or (c) who has failed to certify to a Fund that it is not subject to backup withholding or that it is a corporation or other "exempt recipient."
SALE OR REDEMPTION OF SHARES
A shareholder will recognize gain or loss on the sale or redemption of
shares of a Fund in an amount equal to the difference between the proceeds of
the sale or redemption and the shareholder's adjusted tax basis in the shares.
All or a portion of any loss so recognized may be disallowed if the shareholder
purchases other shares of the Fund within thirty (30) days before or after the
sale or redemption. In general, any gain or loss arising from (or treated as
arising from) the sale or redemption of shares of a Fund will be considered
capital gain or loss and will be long-term capital gain or loss if the shares
were held for longer than one year. Currently, any long-term capital gain
recognized by a non-corporate shareholder will be subject to tax at a maximum
rate of 20%. However, any capital loss arising from the sale or redemption of
shares held for six months or less will be treated as a long-term capital loss
to the extent of the amount of capital gain dividends received on such shares.
For this purpose, the special holding period rules of Code Section 246(c)(3) and
(4) (discussed above in connection with the dividends received deduction for
corporations) generally will apply in determining the holding period of shares.
Long-term capital gains of non-corporate taxpayers are currently taxed at a
maximum rate that in some cases may be 19.6% lower than the maximum rate
applicable to ordinary income. Capital losses in any year are deductible only to
the extent of capital gains plus, in the case of a non-corporate taxpayer,
$3,000 of ordinary income.
FOREIGN SHAREHOLDERS
Taxation of a shareholder who, as to the United States, is a nonresident alien individual, foreign trust or estate, foreign corporation, or foreign partnership ("foreign shareholder"), depends on whether the income from a Fund is "effectively connected" with a U.S. trade or business carried on by such shareholder. If the income from a Fund is not effectively connected with a U.S. trade or business carried on by a foreign shareholder, dividends and return of capital distributions (other than distributions of long-term capital gain) will be subject to U.S. withholding tax at the rate of 30% (or lower treaty rate) upon the gross amount of the distribution. Such a foreign shareholder would generally be exempt from U.S. federal income tax on gains realized on the sale of shares of a Fund, capital gain dividends and amounts retained by a Fund that are designated as undistributed net capital gains.
If the income from a Fund is effectively connected with a U.S. trade or business carried on by a foreign shareholder, then ordinary income dividends, capital gain dividends and any gains realized upon the sale or redemption of shares of the Fund will be subject to U.S. federal income tax at the rates applicable to U.S. citizens or domestic corporations.
In the case of foreign non-corporate shareholders, a Fund may be required to withhold U.S. federal income tax at a rate of 31% on distributions that are otherwise exempt from withholding tax (or taxable at a reduced treaty rate) unless such shareholders furnish the Fund with proper notification of their foreign status.
The tax consequences to a foreign shareholder entitled to claim the benefits of an applicable tax treaty may be different from those described herein. Foreign shareholders are urged to consult their own tax advisers with respect to the particular tax consequences to them of an investment in a Fund, including the applicability of foreign taxes.
EFFECT OF FUTURE LEGISLATION; LOCAL TAX CONSIDERATIONS
The foregoing general discussion of U.S. federal income tax consequences is based on the Code and the regulations issued thereunder as in effect on March 1, 2001. Future legislative or administrative changes or court decisions may significantly change the conclusions expressed herein, and any such changes or decisions may have a retroactive effect with respect to the transactions contemplated herein.
Rules of state and local taxation for ordinary income dividends and capital gain dividends from regulated investment companies often differ from the rules for U.S. federal income taxation described above. Shareholders are urged to consult their tax advisers as to the consequences of these and other state and local tax rules affecting investment in the Funds.
PASSIVE FOREIGN INVESTMENT COMPANIES
Consistent with its investment objective a Fund may invest in the stock of "passive foreign investment companies" ("PFICs"). A PFIC is any foreign corporation (with certain exceptions) that, in general, meets either of the following tests: (1) at least 75% of its gross income is passive or (2) an average of at least 50% of its assets produce, or are held for the production of, passive income. Under certain circumstances, a Fund will be subject to federal income tax on a portion of any "excess distribution" received on, or of any gain from the disposition of, stock of a PFIC (collectively "PFIC income"), plus interest thereon, even if the Fund distributes the PFIC income as a taxable dividend to its shareholders. The balance of the PFIC income will be included in the Fund's investment company taxable income and, accordingly, will not be taxable to it to the extent it distributes that income to its shareholders.
If a Fund invests in a PFIC and elects to treat the PFIC as a "qualified electing fund" ("QEF"), then in lieu of the foregoing tax and interest obligation, the Fund would be required to include in income each year its pro rata share of the QEF's ordinary earnings and net capital gain which most likely would have to be distributed by the Fund to satisfy the Distribution Requirement and avoid imposition of the Excise Tax--even if those earnings and gain were not received by the Fund from the QEF. In most instances it will be very difficult, if not impossible, to make this election because of certain requirements thereof.
The Fund may elect to "mark to market" its stock in any PFIC. "Marking-to-market," in this context, means including in ordinary income each taxable year the excess, if any, of the fair market value of the stock over a Fund's adjusted basis therein as of the end of that year. Pursuant to the election, a Fund also will be allowed to deduct (as an ordinary, not capital, loss) the excess, if any, of its adjusted basis in PFIC stock over the fair market value thereof as of the taxable year-end, but only to the extent of any net mark-to-market gains with respect to that stock included in income by the Fund for prior taxable years. A Fund's adjusted basis in each PFIC's stock subject to the election will be adjusted to reflect the amounts of income included and deductions taken thereunder. Regulations proposed in 1992 provided a similar election with respect to the stock of certain PFICs.
SHAREHOLDER INFORMATION
This information supplements the discussion in the Funds' Prospectus under the title "Shareholder Information."
SHARE CERTIFICATES. Shareholders of the Funds do not have the right to demand or require the Trust to issue share certificates, although the Trust in its sole discretion may issue them.
REDEMPTIONS BY TELEPHONE. By signing an account application form, an investor appoints the Transfer Agent as his true and lawful attorney-in-fact to surrender for redemption any and all unissued shares held by the Transfer Agent in the designated account(s), present or future, with full power of substitution in the premises. The Transfer Agent and AIM Distributors are thereby authorized and directed to accept and act upon any telephone redemptions of shares held in any of the account(s) listed, from any person who requests the redemption. An investor acknowledges by signing the form that he understands and agrees that the Transfer Agent and AIM Distributors may not be liable for any loss, expense or cost arising out of any telephone redemption requests effected in accordance with the authorization set forth in these instructions if they reasonably believe such request to be genuine, but may in certain cases be liable for losses due to unauthorized or fraudulent transactions. Procedures for verification of telephone transactions may include recordings of telephone transactions (maintained for six months), requests for confirmation of the shareholder's Taxpayer Identification Number or Social Security Number and current address, and mailings of confirmations promptly after the transactions. The Transfer Agent reserves the right to cease to act as attorney-in-fact subject to this appointment, and AIM Distributors reserves the right to modify or terminate the telephone redemption privilege at any time without notice. An investor may elect not to have this privilege by marking the appropriate box on the application. Then any redemptions must be effected in writing by the investor.
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.
Dividends and distributions will be reinvested at the net asset value per share determined on the ex-dividend date.
Changes in the form of dividend and distribution payments may be made by the shareholder at any time by notice to the Transfer Agent and are effective as to any subsequent payment if such notice is received by the Transfer Agent prior to the record date of such payment. Any dividend and distribution election remains in effect until the Transfer Agent receives a revised written election by the shareholder.
Any dividend or distribution paid by a Fund 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
The Transfer Agent may impose certain copying charges for requests 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. Due to an investment in another AIM Fund, which KPMG LLP represented to the AIM Fund was inadvertent, and new SEC rules regarding auditor independence, KPMG LLP resigned as independent public accountants for the Trust. The Board of Trustees of the Trust has selected Ernst & Young LLP, 1221 McKinney, Suite 2400, Houston, Texas 77010-2007, as the independent public accountants to audit the financial statements of the Funds.
LEGAL MATTERS
Certain legal matters for the Trust have been passed upon by Ballard Spahr Andrews & Ingersoll, LLP, 1735 Market Street, Philadelphia, Pennsylvania 19103.
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company (the "Custodian"), 225 Franklin Street, Boston, Massachusetts 02110, is custodian of all securities and cash of the Funds. The Custodian attends to the collection of principal and income, pays and collects all monies for securities bought and sold by the Funds and performs certain other ministerial duties. A I M Fund Services, Inc., a wholly owned subsidiary of AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as transfer and dividend disbursing agent for the Funds. These services do not include any supervisory function over management or provide any protection against any possible depreciation of assets. The Funds pay the Custodian and the Transfer Agent such compensation as may be agreed upon from time to time.
PRINCIPAL HOLDERS OF SECURITIES
AGGRESSIVE GROWTH
To the best knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding Class A, Class B and Class C shares of Aggressive Growth as of February 5, 2001, and the amount of the outstanding shares held of record and beneficially owned by such holders are set forth below:
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ----------- ------------
Retail Class A Shares
Merrill Lynch Pierce Fenner & Smith 11.96% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
The Manufacturers Life Insurance Co. 7.18% 0
c/o Manulife Financial USA
Attn: Rosie Chuck Srs. Acctg.
250 Bloor Street East, 7th Floor
Toronto, Ontario, Canada M4W 1E5
Retail Class B Shares
Merrill Lynch Pierce Fenner & Smith 5.55% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
|
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ----------- ------------
Retail Class C Shares
Merrill Lynch Pierce Fenner & Smith 17.22% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
BLUE CHIP
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more
of the outstanding Class A, Class B and Class C shares of Blue Chip as of February 5, 2001, and the amount
of the outstanding shares held of record and beneficially owned by such holders are set forth below:
Retail Class A Shares
Merrill Lynch Pierce Fenner & Smith 7.88% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class B Shares
Merrill Lynch Pierce Fenner & Smith 10.41% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class C Shares
Merrill Lynch Pierce Fenner & Smith 19.14% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Banc One Securities Corp. FBO 7.31% 0
The One Investment Solution
Attn: Wrap Processing OH1-1244
1111 Polaris Pkwy.
Columbus, OH 43271-1244
|
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ----------- ------------
CAPITAL DEVELOPMENT
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more
of the outstanding Class A, Class B and Class C shares of Capital Development as of February 5, 2001,
and the amount of the outstanding shares held of record and beneficially owned by such holders are set
forth below:
Retail Class A Shares
Merrill Lynch Pierce Fenner & Smith 9.86% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class B Shares
Merrill Lynch Pierce Fenner & Smith 13.52% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class C Shares
Merrill Lynch Pierce Fenner & Smith 17.42% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Coastgear & Company 6.77% 0
State Street Bank & Trust
Attn: Kevin Smith
125 Rosemont Avenue
Westwood, MA 02090
CHARTER
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more
of the outstanding Class A, Class B and Class C shares of Charter as of February 5, 2001, and the
Institutional Class of Charter as of February 5, 2001, and the amount of the outstanding shares held of
record and beneficially owned by such holders, are set forth below:
|
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ----------- ------------
Retail Class A Shares
Merrill Lynch Pierce Fenner & Smith 12.10% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Great-West Life and Annuity Insurance Co. 6.54% 0
401(k) Unit Valuations
Attn: Mutual Fund Trading 2T2
8515 E. Orchard
Englewood, CO 80111
Retail Class B Shares
Merrill Lynch Pierce Fenner & Smith 8.36% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class C Shares
Merrill Lynch Pierce Fenner & Smith 17.81% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Institutional Class
Wells Fargo Bank Minnesota, NA 29.35% 0
P.O. Box 1533
Minneapolis, MN 54480-0000
City National Bank 14.99% 0
Attn: Trust Operations/Mutual Funds
P.O. Box 60520
Los Angeles, CA 90060-0520
Ruth and Ted Bauer Family Foundation 9.96% 0
11 Greenway Plaza, Suite 2600
Houston, TX 77046-1173
Town of Watertown, Trustee 5.46% 0
c/o Great West Life Recordkeeper
8515 E. Orchard Rd. 2T2
Englewood, CO 80111
|
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ----------- ------------
CONSTELLATION
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or
more of the outstanding Class A, Class B and Class C shares of Constellation as of February 5, 2001,
and of the Institutional Class of Constellation as of February 5, 2001, and the amount of the
outstanding shares held of record and beneficially owned by such holders, are set forth below:
Retail Class A Shares
Merrill Lynch Pierce Fenner & Smith 14.77% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class B Shares
Merrill Lynch Pierce Fenner & Smith 7.31% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class C Shares
Merrill Lynch Pierce Fenner & Smith 21.98% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Banc One Securities Corp. FBO 7.31% 0
The One Investment Solution
Attn: Wrap Processing OH1-1244
1111 Polaris Pkwy.
Columbus, OH 43271-1244
Institutional Class
Nationwide Insurance Company - Ohio 57.62% 0
P.O. Box 182029
C/O IPO Portfolio Accounting
Columbus, Ohio 43218
Wells Fargo Bank West NA, Custodian FBO 11.46% 0
c/o Great West Recordkeeper
8515 E. Orchard Rd. 2T2
Englewood, CO 80111
|
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ----------- ------------
Nationwide Insurance Company - DCVA 7.88% 0
c/o IPO Portfolio Accounting
P.O. Box 182029
Columbus, OH 43218-2029
State of Vermont Deferred Compensation Plan 6.57% 0
Attn: Planned Valuation Services
2 Tower Center
East Brunswick, NJ 08816
Board of TTEE's, NC Public Employee 6.42% 0
Deferred Com.
c/o Great-West Life
8515 E. Orchard Rd. 2T2
Englewood, CO 80111
Nationwide Insurance Company - GPVA II 6.36% 0
c/o IPO Portfolio Accounting
P.O. Box 182029
Columbus, OH 43218-2029
DEMOGRAPHIC TRENDS
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or
more of the outstanding Class A, Class B and Class C shares of Demographic Trends as of February 5,
2001, and the amount of the outstanding shares held of record and beneficially owned by such
holders, are set forth below:
Retail Class A Shares
Merrill Lynch Pierce Fenner & Smith 8.21% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class B Shares
Merrill Lynch Pierce Fenner & Smith 16.38% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
|
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ----------- ------------
Retail Class C Shares
Merrill Lynch Pierce Fenner & Smith 20.33% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
EMERGING GROWTH
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or
more of the outstanding Class A, Class B and Class C shares of Emerging Growth as of February 5,
2001, and the amount of the outstanding shares held of record and beneficially owned by such
holders, are set forth below:
Retail Class A Shares
Merrill Lynch Pierce Fenner & Smith 8.94% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class B Shares
Merrill Lynch Pierce Fenner & Smith 8.78% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class C Shares
Merrill Lynch Pierce Fenner & Smith 22.86% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
|
LARGE CAP BASIC VALUE
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding Class A shares of Large Cap Basic Value as of February 5, 2001, and the amount of the outstanding shares held of record and beneficially owned by such holders, are set forth below:
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ----------- ------------
Retail Class A Shares
Merrill Lynch Pierce Fenner & Smith 8.72% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Jonathan C. Schoolar 0 8.68%
3722 Tartan Lane
Houston, TX 77025
Retail Class B Shares
Merrill Lynch Pierce Fenner & Smith 19.86% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class C Shares
Merrill Lynch Pierce Fenner & Smith 11.72% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
LARGE CAP GROWTH
To the best of the knowledge of the Trust, the names and addresses of
the holders of 5% or more of the outstanding Class A, Class B and Class C shares
of Large Cap Growth as of February 5, 2001, and the amount of the outstanding
shares held of record and beneficially owned by such holders, are set forth
below:
Retail Class A Shares
Merrill Lynch Pierce Fenner & Smith 9.46% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
|
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ----------- ------------
Retail Class B Shares
Merrill Lynch Pierce Fenner & Smith 10.23% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class C Shares
Merrill Lynch Pierce Fenner & Smith 16.24% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
MID CAP
To the best of the knowledge of the Trust, the names and addresses of
the holders of 5% or more of the outstanding Class A, Class B and Class C shares
of Mid Cap as of February 5, 2001, and the amount of the outstanding shares held
of record and beneficially owned by such holders, are set forth below:
Retail Class A Shares
Merrill Lynch Pierce Fenner & Smith 7.75% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class B Shares
Merrill Lynch Pierce Fenner & Smith 17.07% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class C Shares
Merrill Lynch Pierce Fenner & Smith 20.53% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
|
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ----------- ------------
WEINGARTEN
To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or
more of the outstanding Class A, Class B and Class C shares of Weingarten as of February 5, 2001,
and the Institutional Class of Weingarten as of February 5, 2001, and the amount of the outstanding
shares held of record and beneficially owned by such holders, are set forth below:
Retail Class A Shares
Merrill Lynch Pierce Fenner & Smith 15.42% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Great-West Life and Annuity 5.17% 0
Insurance Co.
401(K) Unit Valuations
Attn: Mutual Fund Trading 2T2
8515 E. Orchard
Englewood, CO 80111
Retail Class B Shares
Merrill Lynch Pierce Fenner & Smith 8.74% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Retail Class C Shares
Merrill Lynch Pierce Fenner & Smith 19.53% 0
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246
Institutional Class
Wells Fargo Bank West NA, Custodian FBO 63.25% 0
c/o Great West Recordkeeper
8515 E. Orchard Rd. 2T2
Englewood, CO 80111
|
Percent Percent Owned
Name and Address Owned of of Record and
of Record Owner Record only* Beneficially
--------------- ----------- ------------
Peoples Two Ten Company 14.77% 0
c/o Summit Bank
Attn: Trust Operations, 7th Floor
P.O. Box 821
Hackensack, NJ 07602
AIM Foundation 5.49% 0
11 Greenway Plaza, Suite 2600
Houston, TX 77046
|
As of February 5, 2001, the trustees and officers of the Trust as a group owned beneficially less than 1% of the outstanding shares of each class of Aggressive Growth, Blue Chip, Capital Development, Charter, Constellation, Demographic Trends, Emerging Growth, Large Cap Basic Value, Large Cap Growth, Mid Cap and Weingarten.
OTHER INFORMATION
The Prospectus and this Statement of Additional Information omit certain information contained in the Registration Statement which the Trust 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.
APPENDIX
DESCRIPTION OF COMMERCIAL PAPER RATINGS
Standard & Poor's
Commercial paper rated by Standard & Poor's has the following characteristics: Liquidity ratios are adequate to meet cash requirements. Long-term senior debt is rated "A" or better. The issuer has access to at least two additional channels of borrowing. Basic earnings and cash flow have an upward trend with allowance made for unusual circumstances. Typically, the issuer's industry is well-established, and the issuer has a strong position within the industry. The reliability and quality of management are unquestioned. The relative strength or weakness of the above factors determines whether the issuer's Commercial Paper is rated A-1 or A-2. A-1 indicates the degree of safety regarding time of payment is very strong. A-2 indicates that the capacity for timely payment is strong, but that the relative degree of safety is not as overwhelming as for issues designated A-1.
Moody's
Prime-1 and Prime-2 are the two highest commercial paper ratings assigned by Moody's Investors Service. Among the factors considered by Moody's in assigning ratings are the following: (a) evaluation of the management of the issuer; (b) economic evaluation of the issuer's industry or industries and an appraisal of speculative-type risks which may be inherent in certain areas; (c) evaluation of the issuer's products in relation to competition and customer acceptance; (d) liquidity; (e) amount and quality of long-term debt; (f) trend of earnings over a period of ten years; (g) financial strength of a parent company and the relationships which exist with the issuer; and (h) recognition by the management of obligations which may be present or may arise as a result of public interest questions and preparations to meet such obligations. Relative strength or weakness of the above factors determines whether the issuer's commercial paper is rated Prime-1 or Prime-2.
DESCRIPTION OF CORPORATE BOND RATINGS
Standard & Poor's
AAA - Bonds rated AAA have the highest rating assigned by Standard & Poor's to a debt obligation. Capacity to pay interest and repay principal is extremely strong.
AA - Bonds rated AA have a very strong capacity to pay interest and repay principal and differ from the highest rated issues only in small degree.
Moody's
Aaa - Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt-edge." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group, they comprise what are generally known as "high-grade bonds." They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities.
FINANCIAL STATEMENTS
FS
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
AIM Equity Funds:
We have audited the accompanying statement of assets and liabilities of the AIM Charter Fund (a portfolio of AIM Equity Funds), including the schedule of investments, as of October 31, 2000, the related statement of operations for the year then ended, the statement of changes in net assets for each of the years in the two-year period then ended and the financial highlights for each of the periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AIM Charter Fund as of October 31, 2000, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended and the financial highlights for each of the periods in the five-year period then ended, in conformity with accounting principles generally accepted in the United States of America.
/s/ KPMG LLP December 6, 2000 Houston, Texas |
AIM CHARTER FUND
FS-1
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
DOMESTIC STOCKS & OTHER EQUITY INTERESTS-78.41%
BANKS (MONEY CENTER)-4.89%
Chase Manhattan Corp. (The) 10,000,000 $ 455,000,000
===============================================================
BIOTECHNOLOGY-0.81%
Amgen Inc.(a) 1,300,000 75,318,750
===============================================================
BROADCASTING (TELEVISION, RADIO &
CABLE)-2.38%
AT&T Corp.-Liberty Media
Corp.-Class A 5,500,000 99,000,000
---------------------------------------------------------------
Comcast Corp.-Class A(a) 3,000,000 122,250,000
===============================================================
221,250,000
===============================================================
CHEMICALS (DIVERSIFIED)-0.52%
Pharmacia Corp.-$2.60 Conv. Pfd.
ACES(b) 1,000,000 48,187,500
===============================================================
COMMUNICATIONS EQUIPMENT-1.71%
Comverse Technology, Inc.(a) 700,000 78,225,000
---------------------------------------------------------------
JDS Uniphase Corp.(a) 1,000,000 81,375,000
===============================================================
159,600,000
===============================================================
COMPUTERS (HARDWARE)-3.13%
Gateway, Inc.(a) 1,350,000 69,673,500
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 2,000,000 221,750,000
===============================================================
291,423,500
===============================================================
COMPUTERS (NETWORKING)-3.47%
Cisco Systems, Inc.(a) 6,000,000 323,250,000
===============================================================
COMPUTERS (PERIPHERALS)-1.91%
EMC Corp.(a) 2,000,000 178,125,000
===============================================================
COMPUTERS (SOFTWARE & SERVICES)-7.63%
Ariba, Inc.(a) 800,000 101,100,000
---------------------------------------------------------------
Microsoft Corp.(a) 600,000 41,325,000
---------------------------------------------------------------
Oracle Corp.(a) 6,000,000 198,000,000
---------------------------------------------------------------
VERITAS Software Corp.(a) 2,178,800 307,244,844
---------------------------------------------------------------
Vitria Technology, Inc.(a) 2,325,000 62,484,375
===============================================================
710,154,219
===============================================================
ELECTRICAL EQUIPMENT-5.06%
General Electric Co. 7,500,000 411,093,750
---------------------------------------------------------------
Solectron Corp.(a) 1,350,000 59,400,000
===============================================================
470,493,750
===============================================================
ELECTRONICS (SEMICONDUCTORS)-2.06%
Analog Devices, Inc.(a) 1,500,000 97,500,000
---------------------------------------------------------------
Linear Technology Corp. 700,000 45,193,750
---------------------------------------------------------------
|
MARKET
SHARES VALUE
ELECTRONICS (SEMICONDUCTORS)-(CONTINUED)
Texas Instruments Inc. 1,000,000 $ 49,062,500
===============================================================
191,756,250
===============================================================
ENTERTAINMENT-1.83%
Time Warner Inc. 2,250,000 170,797,500
===============================================================
EQUIPMENT (SEMICONDUCTOR)-0.46%
Applied Materials, Inc.(a) 800,000 42,500,000
===============================================================
FINANCIAL (DIVERSIFIED)-6.01%
American Express Co. 4,500,000 270,000,000
---------------------------------------------------------------
Citigroup Inc. 5,500,000 289,437,500
===============================================================
559,437,500
===============================================================
HEALTH CARE (DIVERSIFIED)-1.36%
American Home Products Corp. 2,000,000 127,000,000
===============================================================
HEALTH CARE (DRUGS-GENERIC & OTHER)-1.07%
Genentech, Inc.(a) 1,204,000 99,330,000
===============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-6.34%
Allergan, Inc. 1,250,000 105,078,125
---------------------------------------------------------------
Pfizer Inc. 9,000,000 388,687,500
---------------------------------------------------------------
Pharmacia Corp. 1,750,000 96,250,000
===============================================================
590,015,625
===============================================================
HEALTH CARE (HOSPITAL MANAGEMENT)-0.74%
Health Management Associates,
Inc.-Class A(a) 3,500,000 69,343,750
===============================================================
HEALTH CARE (MANAGED CARE)-1.18%
UnitedHealth Group Inc. 1,000,000 109,375,000
===============================================================
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.02%
Medtronic, Inc. 1,000,000 54,312,500
---------------------------------------------------------------
PE Corp-PE Biosystems Group 350,000 40,950,000
===============================================================
95,262,500
===============================================================
INSURANCE (MULTI-LINE)-3.16%
American International Group, Inc. 3,000,000 294,000,000
===============================================================
INSURANCE BROKERS-0.84%
Marsh & McLennan Cos., Inc. 600,000 78,450,000
===============================================================
INVESTMENT BANKING/BROKERAGE-6.59%
Goldman Sachs Group, Inc. (The) 1,000,000 99,812,500
---------------------------------------------------------------
Merrill Lynch & Co., Inc. 2,000,000 140,000,000
---------------------------------------------------------------
|
AIM CHARTER FUND
FS-2
MARKET
SHARES VALUE
INVESTMENT BANKING/BROKERAGE-(CONTINUED)
Morgan Stanley Dean Witter & Co. 4,000,000 $ 321,250,000
---------------------------------------------------------------
Schwab (Charles) Corp. (The) 1,500,000 52,687,500
===============================================================
613,750,000
===============================================================
INVESTMENT MANAGEMENT-0.72%
Stilwell Financial, Inc. 1,500,000 67,218,750
===============================================================
MANUFACTURING (DIVERSIFIED)-0.58%
Honeywell International Inc. 1,000,000 53,812,500
===============================================================
NATURAL GAS-1.00%
Dynegy Inc.-Class A 2,000,000 92,625,000
===============================================================
OIL & GAS (DRILLING & EQUIPMENT)-3.01%
Diamond Offshore Drilling, Inc. 500,000 17,281,250
---------------------------------------------------------------
R&B Falcon Corp.(a) 2,000,000 50,000,000
---------------------------------------------------------------
Schlumberger Ltd. 1,750,000 133,218,750
---------------------------------------------------------------
Transocean Sedco Forex Inc. 1,500,000 79,500,000
===============================================================
280,000,000
===============================================================
OIL (INTERNATIONAL INTEGRATED)-1.68%
Exxon Mobil Corp. 1,750,000 156,078,125
===============================================================
POWER PRODUCERS (INDEPENDENT)-0.47%
Calpine Corp.(a) 550,000 43,415,625
===============================================================
RETAIL (BUILDING SUPPLIES)-0.46%
Home Depot, Inc. (The) 1,000,000 43,000,000
===============================================================
RETAIL (DEPARTMENT STORES)-0.67%
Kohl's Corp.(a) 1,150,000 62,315,625
===============================================================
RETAIL (DRUG STORES)-0.98%
Walgreen Co. 2,000,000 91,250,000
===============================================================
RETAIL (GENERAL MERCHANDISE)-3.26%
Target Corp. 11,000,000 303,875,000
===============================================================
SERVICES (COMMERCIAL & CONSUMER)-0.32%
Cendant Corp.-$3.75 Conv. PRIDES 1,000,000 29,375,000
===============================================================
SERVICES (DATA PROCESSING)-0.34%
Ceridian Corp.(a) 1,250,000 31,250,000
===============================================================
TELECOMMUNICATIONS
(CELLULAR/WIRELESS)-0.75%
Phone.com, Inc.(a) 750,000 69,421,875
===============================================================
Total Domestic Stocks & Other
Equity Interests (Cost
$4,995,515,075) 7,297,458,344
===============================================================
|
MARKET
SHARES VALUE
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-11.78%
BERMUDA-5.48%
Tyco International Ltd.
(Manufacturing-Diversified) 9,000,000 $ 510,187,500
===============================================================
CANADA-5.18%
Celestica Inc.
(Electronics-Semiconductors)(a) 3,000,000 215,625,000
---------------------------------------------------------------
Nortel Networks Corp.
(Communications Equipment) 4,000,000 182,000,000
---------------------------------------------------------------
PMC-Sierra, Inc.
(Electronics-Semiconductors)(a) 500,000 84,750,000
===============================================================
482,375,000
===============================================================
FINLAND-0.58%
Nokia Oyj-ADR (Communications
Equipment) 1,250,000 53,437,500
===============================================================
UNITED KINGDOM-0.54%
Shire Pharmaceuticals Group
PLC-ADR (Health
Care-Drugs-Generic & Other)(a) 800,000 50,300,000
===============================================================
Total Foreign Stocks & Other
Equity Interests (Cost
$806,019,092) 1,096,300,000
===============================================================
|
PRINCIPAL
AMOUNT
CONVERTIBLE NOTES-4.95%
COMMUNICATIONS EQUIPMENT-1.95%
Juniper Networks, Inc., Unsec.
Conv. Notes, 4.75%, 03/15/07 $80,000,000 $ 111,600,000
---------------------------------------------------------------
Redback Networks Inc., Conv.
Notes, 5.00%, 04/01/07
(Acquired 04/13/00-07/14/00;
Cost $66,966,675)(c) 80,000,000 69,500,000
===============================================================
181,100,000
===============================================================
COMPUTERS (HARDWARE)-0.40%
Candescent Technologies Corp.,
Conv. Notes, 8.00%, 05/01/03
(Acquired 04/17/98-08/31/00;
Cost $36,693,750)(c) 40,800,000 28,968,000
---------------------------------------------------------------
Candescent Technologies Corp.,
Sr. Conv. Gtd. Sub. Debs.,
8.00%, 05/01/03 (Acquired
03/07/00; Cost $9,360,000)(c) 11,700,000 8,307,000
===============================================================
37,275,000
===============================================================
COMPUTERS (SOFTWARE & SERVICES)-1.99%
VERITAS Software Corp., Conv.
Unsec. Notes, 5.25%, 11/01/04 12,500,000 185,671,875
===============================================================
ELECTRONICS (SEMICONDUCTORS)-0.61%
TranSwitch Corp., Conv. Unsec.
Unsub. Notes, 4.50%, 09/12/05
(Acquired 09/06/00-09/22/00;
Cost $51,641,510)(c) 50,000,000 57,125,000
===============================================================
Total Convertible Notes (Cost
$265,048,751) 461,171,875
===============================================================
|
AIM CHARTER FUND
FS-3
MARKET
SHARES VALUE
MONEY MARKET FUNDS-4.31%
STIC Liquid Assets Portfolio(d) 200,389,105 $ 200,389,105
---------------------------------------------------------------
STIC Prime Portfolio(d) 200,389,105 200,389,105
===============================================================
Total Money Market Funds
(Cost $400,778,210) 400,778,210
===============================================================
TOTAL INVESTMENTS-99.45% (Cost
$6,467,361,128) 9,255,708,429
===============================================================
OTHER ASSETS LESS
LIABILITIES-0.55% 50,876,880
===============================================================
NET ASSETS-100.00% $9,306,585,309
_______________________________________________________________
===============================================================
|
Investment Abbreviations:
ACES - Adjustable Conversion-Rate Equity Security ADR - American Depositary Receipt Conv. - Convertible Gtd. - Guaranteed Pfd. - Preferred PRIDES - Preferred Redeemable Increased Dividend Security Sr. - Senior |
Unsec. - Unsecured
Unsub. - Unsubordinated
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Affiliated issuer in which the Fund's holdings of the 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 market value as of 10/31/00 represented 0.52% of the Fund's net assets.
(c) 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 aggregate market value at 10/31/00 was $163,900,000
which represented 1.76% of the Fund's net assets.
(d) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
AIM CHARTER FUND
FS-4
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost
$6,467,361,128) $9,255,708,429
-------------------------------------------------------------
Receivables for:
Investments sold 125,862,482
-------------------------------------------------------------
Fund shares sold 20,439,092
-------------------------------------------------------------
Dividends and interest 6,895,834
-------------------------------------------------------------
Collateral for securities loaned 223,052,700
-------------------------------------------------------------
Investment for deferred compensation plan 111,896
-------------------------------------------------------------
Other assets 167,162
=============================================================
Total assets 9,632,237,595
=============================================================
LIABILITIES:
Payables for:
Investments purchased 83,099,731
-------------------------------------------------------------
Collateral upon return of securities loaned 223,052,700
-------------------------------------------------------------
Fund shares reacquired 8,160,666
-------------------------------------------------------------
Deferred compensation plan 111,896
-------------------------------------------------------------
Accrued advisory fees 4,699,610
-------------------------------------------------------------
Accrued administrative services fees 33,945
-------------------------------------------------------------
Accrued distribution fees 5,099,913
-------------------------------------------------------------
Accrued trustees' fees 2,320
-------------------------------------------------------------
Accrued transfer agent fees 1,239,008
-------------------------------------------------------------
Accrued operating expenses 152,497
=============================================================
Total liabilities 325,652,286
=============================================================
Net assets applicable to shares outstanding $9,306,585,309
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $5,801,868,972
_____________________________________________________________
=============================================================
Class B $3,088,610,539
_____________________________________________________________
=============================================================
Class C $ 412,871,584
_____________________________________________________________
=============================================================
Institutional Class $ 3,234,214
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE:
Class A 321,076,686
_____________________________________________________________
=============================================================
Class B 174,315,501
_____________________________________________________________
=============================================================
Class C 23,239,560
_____________________________________________________________
=============================================================
Institutional Class 176,469
_____________________________________________________________
=============================================================
Class A:
Net asset value and redemption price per
share $ 18.07
-------------------------------------------------------------
Offering price per share:
(Net asset value of $18.07 divided by
94.50%) $ 19.12
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 17.72
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 17.77
_____________________________________________________________
=============================================================
Institutional Class:
Net asset value, offering and redemption
price per share $ 18.33
_____________________________________________________________
=============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$260,470) $ 44,621,886
------------------------------------------------------------
Dividends from affiliated money market funds 19,976,756
------------------------------------------------------------
Interest 12,038,522
------------------------------------------------------------
Security lending income 57,484
============================================================
Total investment income 76,694,648
============================================================
EXPENSES:
Advisory fees 56,142,463
------------------------------------------------------------
Administrative services fee 383,224
------------------------------------------------------------
Custodian fees 436,940
------------------------------------------------------------
Distribution fees -- Class A 17,302,500
------------------------------------------------------------
Distribution fees -- Class B 28,390,889
------------------------------------------------------------
Distribution fees -- Class C 2,875,637
------------------------------------------------------------
Transfer agent fees -- Class A 6,483,464
------------------------------------------------------------
Transfer agent fees -- Class B 4,193,264
------------------------------------------------------------
Transfer agent fees -- Class C 424,724
------------------------------------------------------------
Transfer agent fees -- Institutional Class 6,987
------------------------------------------------------------
Trustees' fees 32,886
------------------------------------------------------------
Other 2,491,474
============================================================
Total expenses 119,164,452
============================================================
Less: Fees waived (1,484,073)
------------------------------------------------------------
Expenses paid indirectly (142,391)
============================================================
Net expenses 117,537,988
============================================================
Net investment income (loss) (40,843,340)
============================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 479,025,042
------------------------------------------------------------
Foreign currencies (19)
------------------------------------------------------------
Option contracts written (7,070,524)
============================================================
471,954,499
============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 506,772,676
------------------------------------------------------------
Foreign currencies (57,630)
------------------------------------------------------------
Option contracts written 174,690
============================================================
506,889,736
============================================================
Net gain on investment securities, foreign
currencies and option contracts 978,844,235
============================================================
Net increase in net assets resulting from
operations $938,000,895
____________________________________________________________
============================================================
|
See Notes to Financial Statements.
AIM CHARTER FUND
FS-5
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
-------------- --------------
OPERATIONS:
Net investment income (loss) $ (40,843,340) $ (7,207,717)
----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and option contracts 471,954,499 657,364,994
----------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies and option contracts 506,889,736 1,116,552,041
==============================================================================================
Net increase in net assets resulting from operations 938,000,895 1,766,709,318
==============================================================================================
Distributions to shareholders from net investment income:
Class A -- (9,134,542)
----------------------------------------------------------------------------------------------
Institutional Class -- (216,682)
----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (388,576,691) (149,620,112)
----------------------------------------------------------------------------------------------
Class B (178,887,093) (57,712,333)
----------------------------------------------------------------------------------------------
Class C (12,095,934) (1,614,093)
----------------------------------------------------------------------------------------------
Institutional Class (5,231,737) (1,761,967)
----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 584,181,510 151,495,357
----------------------------------------------------------------------------------------------
Class B 797,259,785 370,892,559
----------------------------------------------------------------------------------------------
Class C 277,016,670 84,930,162
----------------------------------------------------------------------------------------------
Institutional Class (65,767,394) 9,431,197
==============================================================================================
Net increase in net assets 1,945,900,011 2,163,398,864
==============================================================================================
NET ASSETS:
Beginning of year 7,360,685,298 5,197,286,434
==============================================================================================
End of year $9,306,585,309 $7,360,685,298
______________________________________________________________________________________________
==============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $6,086,848,912 $4,466,453,244
----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (265,564) (217,108)
----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and option contracts 431,720,148 613,057,085
----------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities, foreign currencies and option contracts 2,788,281,813 2,281,392,077
==============================================================================================
$9,306,585,309 $7,360,685,298
______________________________________________________________________________________________
==============================================================================================
|
See Notes to Financial Statements.
AIM CHARTER FUND
FS-6
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Charter Fund (the "Fund") is a series portfolio of AIM Equity Funds (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 eleven separate portfolios, each
having an unlimited number of shares of beneficial interest. Prior to June 17,
2000 the Fund was organized as a series portfolio of AIM Equity Funds, Inc. At a
meeting held on February 3, 2000, the Board of Directors of AIM Equity Funds,
Inc. approved an Agreement and Plan of Reorganization (the "Reorganization")
which reorganized the Fund as a series portfolio of the Trust. Shareholders of
the Fund approved the Reorganization at a meeting held on June 16, 2000. The
Fund currently offers four different classes of shares: Class A shares, Class B
shares, Class C shares and the Institutional Class. 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. Institutional Class shares are sold without a
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 growth of capital with a secondary objective
of current income.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 -- Securities, including restricted securities, are
valued according to the following policy. 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.
On October 31, 2000, undistributed net investment income was increased by
$40,794,884, undistributed net realized gains decreased by $68,499,981 and
paid in capital increased by $27,705,097 as a result of differences due to
utilization of a portion of the proceeds from redemptions as distributions
for federal income tax purposes and net operating loss reclassifications. Net
assets of the Fund were unaffected by the reclassification discussed above.
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
AIM CHARTER FUND
FS-7
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 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. 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. Bond Premiums -- It has been the policy of the Fund not to amortize market
premiums on bonds for financial reporting purposes. In November 2000, a
revised AICPA Audit and Accounting Guide, Audits of Investment Companies, was
issued and is effective for fiscal years beginning after December 15, 2000.
The revised Guide will require the Fund to amortize premium and discount on
all fixed-income securities. Upon initial adoption, the Fund will be required
to adjust the cost of its fixed-income securities by the cumulative amount of
amortization that would have been recognized had amortization been in effect
from the purchase date of each holding. Adopting this accounting principle
will not effect the Fund's net asset value, but will change the
classification of certain amounts between interest income and realized and
unrealized gain/loss in the Statement of Operations. The Fund expects that
the impact of the adoption of this principle will not be material to the
financial statements.
I. 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 master investment agreement, the
Fund pays an advisory fee to AIM at the annual rate of 1.0% of the first $30
million of the Fund's average daily net assets, plus 0.75% of the Fund's average
daily net assets in excess of $30 million to and including $150 million, 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% 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. During the year
ended October 31, 2000, AIM waived fees of $1,484,073. Under the terms of a
master sub-advisory agreement between AIM and A I M Capital Management, Inc.
("AIM Capital"), AIM pays AIM Capital 50% of the amount paid by the Fund to AIM.
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 October 31, 2000, AIM was
paid $383,224 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 October 31, 2000, AFS was
paid $5,656,971 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, Class C and the Institutional Class 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 0.30% 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
AIM CHARTER FUND
FS-8
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. During the year ended October 31,
2000, the Class A, Class B and Class C shares paid AIM Distributors $17,302,500,
$28,390,889 and $2,875,637, respectively, as compensation under the Plans.
AIM Distributors received commissions of $3,447,012 from sales of the Class
A shares of the Fund during the year ended October 31, 2000. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. During the year ended October 31,
2000, AIM Distributors received $148,823 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 October 31, 2000, the Fund paid legal fees of $17,752
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 year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $120,163 and reductions in custodian fees of $22,228 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $142,391.
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 year ended October 31,
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 are 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 is 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 October 31, 2000, securities with an aggregate value of $217,561,694 were
on loan to brokers. The loans were secured by cash collateral of $223,052,700.
For the year ended October 31, 2000, the Fund received fees of $57,484 for
securities lending. For the year ended October 31, 2000, the Fund received fees
of $57,484 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 year ended October 31, 2000 was
$7,614,658,355 and $6,854,206,652, respectively.
The amount of unrealized appreciation (depreciation) of investment
securities, for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $2,929,797,242 ---------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (168,568,503) ========================================================== Net unrealized appreciation of investment securities $2,761,228,739 __________________________________________________________ ========================================================== |
Cost of investments for tax purposes is $6,494,479,690.
NOTE 8-CALL OPTION CONTRACTS
Transactions in call options written during the year ended October 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
-------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ------------
Beginning of year 22,500 $ 27,510,348
-----------------------------------------------------------------------------------------
Written 32,000 15,761,611
-----------------------------------------------------------------------------------------
Closed (27,181) (27,941,081)
-----------------------------------------------------------------------------------------
Exercised (10,500) (6,227,291)
-----------------------------------------------------------------------------------------
Expired (16,819) (9,103,587)
=========================================================================================
End of year -- $ --
_________________________________________________________________________________________
=========================================================================================
|
AIM CHARTER FUND
FS-9
NOTE 9-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 2000 and 1999 were as follows:
2000 1999
----------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- -------------
Sold:
Class A 57,178,653 $1,066,455,209 51,272,783 $ 809,088,837
---------------------------------------------------------------------------------------------------------------------------
Class B 53,229,017 974,381,372 36,310,602 576,056,633
---------------------------------------------------------------------------------------------------------------------------
Class C 16,418,781 302,161,441 6,968,661 111,866,437
---------------------------------------------------------------------------------------------------------------------------
Institutional Class 579,610 10,786,891 828,138 13,421,969
===========================================================================================================================
Issued as reinvestment of dividends:
Class A 21,344,032 366,468,078 10,532,077 149,384,623
---------------------------------------------------------------------------------------------------------------------------
Class B 9,983,505 169,088,645 3,894,826 54,866,091
---------------------------------------------------------------------------------------------------------------------------
Class C 672,773 11,427,814 107,859 1,525,822
---------------------------------------------------------------------------------------------------------------------------
Institutional Class 294,477 5,109,184 134,608 1,929,704
===========================================================================================================================
Reacquired:
Class A (45,774,876) (848,741,777) (51,731,503) (806,978,103)
---------------------------------------------------------------------------------------------------------------------------
Class B (18,927,570) (346,210,232) (16,551,587) (260,030,165)
---------------------------------------------------------------------------------------------------------------------------
Class C (1,991,214) (36,572,585) (1,788,368) (28,462,097)
---------------------------------------------------------------------------------------------------------------------------
Institutional Class (4,553,078) (81,663,469) (372,429) (5,920,476)
===========================================================================================================================
88,454,110 $1,592,690,571 39,605,667 $ 616,749,275
___________________________________________________________________________________________________________________________
===========================================================================================================================
|
NOTE 10-FINANCIAL HIGHLIGHTS
INSTITUTIONAL CLASS
--------------------------------------------------
YEAR ENDED OCTOBER 31,
2000 1999 1998 1997 1996
------ ------- ------- ------- -------
Net asset value, beginning of period $17.33 $ 13.42 $ 13.48 $ 11.24 $ 10.66
----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.52 0.09 0.18 0.16 0.24
----------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 1.83 4.43 1.24 2.91 1.44
================================================================================================================
Total from investment operations 2.35 4.52 1.42 3.07 1.68
================================================================================================================
Less distributions:
Dividends from net investment income -- (0.07) (0.14) (0.16) (0.20)
----------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (1.35) (0.54) (1.34) (0.67) (0.90)
================================================================================================================
Total distributions (1.35) (0.61) (1.48) (0.83) (1.10)
================================================================================================================
Net asset value, end of period $18.33 $ 17.33 $ 13.42 $ 13.48 $ 11.24
________________________________________________________________________________________________________________
================================================================================================================
Total return 14.02% 34.61% 11.69% 29.05% 17.29%
________________________________________________________________________________________________________________
================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $3,234 $66,801 $43,815 $40,191 $29,591
________________________________________________________________________________________________________________
================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 0.66%(a) 0.65% 0.66% 0.67% 0.69%
----------------------------------------------------------------------------------------------------------------
Without fee waivers 0.68%(a) 0.67% 0.67% 0.68% 0.70%
================================================================================================================
Ratio of net investment income to average net assets 0.20%(a) 0.51% 1.37% 1.21% 2.24%
________________________________________________________________________________________________________________
================================================================================================================
Portfolio turnover rate 80% 107% 154% 170% 164%
________________________________________________________________________________________________________________
================================================================================================================
|
(a) Ratios are based on average net assets of $46,641,532.
AIM CHARTER FUND
FS-10
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
AIM Equity Funds:
We have audited the accompanying statement of assets and liabilities of the AIM Constellation Fund (a portfolio of AIM Equity Funds), including the schedule of investments, as of October 31, 2000, 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 periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AIM Constellation Fund as of October 31, 2000, and 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 periods in the five-year period then ended, in conformity with accounting principles generally accepted in the United States of America.
/s/ KPMG LLP December 6, 2000 Houston, Texas |
AIM CONSTELLATION FUND
FS-11
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
COMMON STOCKS & OTHER EQUITY INTERESTS-91.25%
BANKS (MAJOR REGIONAL)-1.56%
Northern Trust Corp. 2,250,000 $ 192,093,750
---------------------------------------------------------------
State Street Corp. 1,125,000 140,332,500
===============================================================
332,426,250
===============================================================
BANKS (MONEY CENTER)-0.64%
Chase Manhattan Corp. (The) 3,000,000 136,500,000
===============================================================
BIOTECHNOLOGY-0.31%
Amgen Inc.(a) 1,137,800 65,921,287
===============================================================
BROADCASTING (TELEVISION, RADIO
& CABLE)-3.45%
Comcast Corp.-Class A(a) 2,500,000 101,875,000
---------------------------------------------------------------
General Motors Corp.-Class H(a) 9,050,000 293,220,000
---------------------------------------------------------------
Hispanic Broadcasting Corp.(a) 5,750,000 179,687,500
---------------------------------------------------------------
Univision Communications
Inc.-Class A(a) 3,329,600 127,357,200
---------------------------------------------------------------
Westwood One, Inc.(a) 1,706,300 32,313,143
===============================================================
734,452,843
===============================================================
COMMUNICATIONS EQUIPMENT-10.98%
ADC Telecommunications, Inc.(a) 13,250,000 283,218,750
---------------------------------------------------------------
Alcatel S.A.-ADR (France) 5,250,000 327,468,750
---------------------------------------------------------------
CIENA Corp.(a) 1,125,800 118,349,725
---------------------------------------------------------------
Comverse Technology, Inc.(a) 4,000,000 447,000,000
---------------------------------------------------------------
Corning Inc. 8,250,000 631,125,000
---------------------------------------------------------------
JDS Uniphase Corp.(a) 5,500,000 447,562,500
---------------------------------------------------------------
Scientific-Atlanta, Inc. 1,250,000 85,546,875
===============================================================
2,340,271,600
===============================================================
COMPUTERS (HARDWARE)-2.69%
Palm, Inc.(a) 4,500,000 241,031,250
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 3,000,000 332,625,000
===============================================================
573,656,250
===============================================================
COMPUTERS (NETWORKING)-3.53%
Cisco Systems, Inc.(a) 7,000,000 377,125,000
---------------------------------------------------------------
Juniper Networks, Inc.(a) 1,250,000 243,750,000
---------------------------------------------------------------
VeriSign, Inc.(a) 1,000,000 132,000,000
===============================================================
752,875,000
===============================================================
COMPUTERS (PERIPHERALS)-2.77%
Brocade Communications Systems,
Inc.(a) 1,425,000 324,009,375
---------------------------------------------------------------
EMC Corp.(a) 3,000,000 267,187,500
===============================================================
591,196,875
===============================================================
|
MARKET
SHARES VALUE
COMPUTERS (SOFTWARE & SERVICES)-13.64%
Ariba, Inc.(a) 2,200,000 $ 278,025,000
---------------------------------------------------------------
BEA Systems, Inc.(a) 2,200,000 157,850,000
---------------------------------------------------------------
Business Objects S.A.-ADR
(France)(a) 1,000,000 78,796,875
---------------------------------------------------------------
Check Point Software
Technologies Ltd. (Israel)(a) 3,581,300 567,188,387
---------------------------------------------------------------
Gemstar-TV Guide International,
Inc.(a) 1,000,000 68,562,500
---------------------------------------------------------------
i2 Technologies, Inc.(a) 1,400,000 238,000,000
---------------------------------------------------------------
InfoSpace, Inc.(a) 4,025,000 81,003,125
---------------------------------------------------------------
Intuit Inc.(a) 2,000,000 122,875,000
---------------------------------------------------------------
Oracle Corp.(a) 5,147,200 169,857,600
---------------------------------------------------------------
Portal Software, Inc.(a) 2,500,000 87,968,750
---------------------------------------------------------------
Rational Software Corp.(a) 2,283,700 136,308,452
---------------------------------------------------------------
Siebel Systems, Inc.(a) 2,039,800 214,051,512
---------------------------------------------------------------
VERITAS Software Corp.(a) 5,000,000 705,078,125
===============================================================
2,905,565,326
===============================================================
CONSUMER FINANCE-1.48%
Capital One Financial Corp. 2,000,000 126,250,000
---------------------------------------------------------------
Providian Financial Corp. 1,825,000 189,800,000
===============================================================
316,050,000
===============================================================
ELECTRICAL EQUIPMENT-1.32%
American Power Conversion
Corp.(a) 4,099,100 53,032,106
---------------------------------------------------------------
Sanmina Corp.(a) 2,000,000 228,625,000
===============================================================
281,657,106
===============================================================
ELECTRONICS (INSTRUMENTATION)-0.17%
Newport Corp. 322,000 36,773,406
===============================================================
ELECTRONICS (SEMICONDUCTORS)-9.06%
Altera Corp.(a) 3,000,000 122,812,500
---------------------------------------------------------------
Analog Devices, Inc.(a) 5,138,700 334,015,500
---------------------------------------------------------------
Celestica Inc. (Canada)(a) 3,728,000 267,950,000
---------------------------------------------------------------
Integrated Device Technology,
Inc.(a) 1,386,400 78,071,650
---------------------------------------------------------------
Linear Technology Corp. 2,000,000 129,125,000
---------------------------------------------------------------
Maxim Integrated Products,
Inc.(a) 2,000,000 132,625,000
---------------------------------------------------------------
Microchip Technology Inc.(a) 3,000,168 94,880,313
---------------------------------------------------------------
PMC-Sierra, Inc. (Canada)(a) 2,000,000 339,000,000
---------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 3,575,000 250,026,563
---------------------------------------------------------------
Xilinx, Inc.(a) 2,500,000 181,093,750
===============================================================
1,929,600,276
===============================================================
EQUIPMENT (SEMICONDUCTOR)-0.36%
KLA-Tencor Corp.(a) 2,250,000 76,078,125
===============================================================
|
AIM CONSTELLATION FUND
FS-12
MARKET
SHARES VALUE
FINANCIAL (DIVERSIFIED)-2.73%
American Express Co. 2,500,000 $ 150,000,000
---------------------------------------------------------------
Freddie Mac 988,200 59,292,000
---------------------------------------------------------------
J.P. Morgan & Co., Inc. 2,250,000 372,375,000
===============================================================
581,667,000
===============================================================
HEALTH CARE (DRUGS-GENERIC & OTHER)-1.19%
Forest Laboratories, Inc.(a) 1,000,000 132,500,000
---------------------------------------------------------------
Medicis Pharmaceutical
Corp.-Class A(a)(b) 1,654,100 121,783,113
===============================================================
254,283,113
===============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-1.01%
Pfizer Inc. 5,000,000 215,937,500
===============================================================
HEALTH CARE (HOSPITAL MANAGEMENT)-1.69%
HCA-Healthcare Corp. (The) 3,000,000 119,812,500
---------------------------------------------------------------
Health Management Associates,
Inc.-Class A(a) 8,143,900 161,351,019
---------------------------------------------------------------
Tenet Healthcare Corp.(a) 2,000,000 78,625,000
===============================================================
359,788,519
===============================================================
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-2.92%
Biomet, Inc. 2,962,050 107,189,184
---------------------------------------------------------------
Medtronic, Inc. 3,000,000 162,937,500
---------------------------------------------------------------
PE Corp-PE Biosystems Group 3,000,000 351,000,000
===============================================================
621,126,684
===============================================================
INSURANCE (LIFE/HEALTH)-1.06%
AFLAC, Inc. 3,103,100 226,720,244
===============================================================
INSURANCE (MULTI-LINE)-0.57%
Ace, Ltd. (Bermuda) 3,100,000 121,675,000
===============================================================
INSURANCE BROKERS-0.40%
Aon Corp. 2,046,400 84,797,700
===============================================================
INVESTMENT BANKING/BROKERAGE-4.86%
Goldman Sachs Group, Inc. (The) 3,400,000 339,362,500
---------------------------------------------------------------
Merrill Lynch & Co., Inc. 2,200,000 154,000,000
---------------------------------------------------------------
Morgan Stanley Dean Witter &
Co. 3,900,000 313,218,750
---------------------------------------------------------------
Schwab (Charles) Corp. (The) 6,500,000 228,312,500
===============================================================
1,034,893,750
===============================================================
INVESTMENT MANAGEMENT-0.92%
Federated Investors, Inc.-Class B 538,800 15,692,550
---------------------------------------------------------------
Stilwell Financial, Inc. 4,000,000 179,250,000
===============================================================
194,942,550
===============================================================
LEISURE TIME (PRODUCTS)-1.19%
Harley-Davidson, Inc. 5,250,000 252,984,375
===============================================================
|
MARKET
SHARES VALUE
MANUFACTURING (DIVERSIFIED)-0.59%
Danaher Corp. 2,000,000 $ 126,250,000
===============================================================
MANUFACTURING (SPECIALIZED)-0.32%
Millipore Corp. 1,286,900 67,562,250
===============================================================
NATURAL GAS-0.54%
Enron Corp. 1,400,000 114,887,500
===============================================================
OIL & GAS (DRILLING & EQUIPMENT)-5.37%
BJ Services Co.(a) 1,000,000 52,437,500
---------------------------------------------------------------
Cooper Cameron Corp.(a) 2,206,200 120,237,900
---------------------------------------------------------------
ENSCO International Inc. 3,500,000 116,375,000
---------------------------------------------------------------
Grant Prideco, Inc.(a) 3,983,300 73,940,006
---------------------------------------------------------------
Nabors Industries, Inc.(a) 4,232,700 215,444,430
---------------------------------------------------------------
R&B Falcon Corp.(a) 2,674,900 66,872,500
---------------------------------------------------------------
Rowan Cos., Inc.(a) 3,622,700 91,246,756
---------------------------------------------------------------
Smith International, Inc.(a) 2,070,600 145,977,300
---------------------------------------------------------------
Transocean Sedco Forex Inc. 3,500,000 185,500,000
---------------------------------------------------------------
Weatherford International, Inc.(a) 2,100,000 76,650,000
===============================================================
1,144,681,392
===============================================================
OIL & GAS (EXPLORATION &
PRODUCTION)-0.72%
Anadarko Petroleum Corp. 1,250,000 80,062,500
---------------------------------------------------------------
Kerr-McGee Corp. 1,115,000 72,823,438
===============================================================
152,885,938
===============================================================
RESTAURANTS-0.49%
Brinker International, Inc.(a) 2,639,400 103,596,450
===============================================================
RETAIL (BUILDING SUPPLIES)-0.86%
Lowe's Cos., Inc. 4,000,000 182,750,000
===============================================================
RETAIL (COMPUTERS & ELECTRONICS)-1.46%
Best Buy Co., Inc.(a) 1,553,900 77,986,356
---------------------------------------------------------------
CDW Computer Centers, Inc.(a) 1,500,000 96,656,250
---------------------------------------------------------------
RadioShack Corp. 2,294,400 136,803,600
===============================================================
311,446,206
===============================================================
RETAIL (DEPARTMENT STORES)-1.02%
Kohl's Corp.(a) 4,000,000 216,750,000
===============================================================
RETAIL (DISCOUNTERS)-0.50%
Dollar Tree Stores, Inc.(a) 2,715,900 106,259,588
===============================================================
RETAIL (SPECIALTY)-1.61%
Bed Bath & Beyond Inc.(a) 10,000,000 258,125,000
---------------------------------------------------------------
Tiffany & Co. 2,000,000 85,375,000
===============================================================
343,500,000
===============================================================
RETAIL (SPECIALTY-APPAREL)-1.14%
Intimate Brands, Inc. 3,000,000 71,625,000
---------------------------------------------------------------
|
AIM CONSTELLATION FUND
FS-13
MARKET
SHARES VALUE
RETAIL (SPECIALTY-APPAREL)-(CONTINUED)
Men's Wearhouse, Inc.
(The)(a)(b) 2,487,800 $ 72,768,150
---------------------------------------------------------------
Talbots, Inc. (The) 1,250,000 98,828,125
===============================================================
243,221,275
===============================================================
SERVICES (ADVERTISING/MARKETING)-2.10%
Lamar Advertising Co.(a)(b) 4,500,000 216,000,000
---------------------------------------------------------------
Omnicom Group Inc. 2,500,000 230,625,000
===============================================================
446,625,000
===============================================================
SERVICES (COMPUTER SYSTEMS)-0.72%
SunGard Data Systems Inc.(a) 3,000,000 153,375,000
===============================================================
SERVICES (DATA PROCESSING)-1.78%
Ceridian Corp.(a) 1,000,000 25,000,000
---------------------------------------------------------------
Fiserv, Inc.(a) 5,000,000 262,187,500
---------------------------------------------------------------
Paychex, Inc. 1,641,200 93,035,525
===============================================================
380,223,025
===============================================================
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-1.29%
Crown Castle International
Corp.(a) 3,500,000 106,093,750
---------------------------------------------------------------
Phone.com, Inc.(a) 1,825,000 168,926,563
===============================================================
275,020,313
===============================================================
|
MARKET
SHARES VALUE
TELEPHONE-0.24%
Qwest Communications
International Inc.(a) 1,050,000 $ 51,056,250
===============================================================
Total Common Stocks & Other
Equity Interests (Cost
$11,788,064,742) 19,441,930,966
===============================================================
|
PRINCIPAL
AMOUNT
CONVERTIBLE CORPORATE BONDS-0.59%
ELECTRONICS (SEMICONDUCTORS)-0.59%
Celestica Inc. (Canada), Conv.
Yankee Bonds, 3.19%, 08/01/20
(Cost $122,154,597)(c) $244,200,000 125,152,500
===============================================================
|
SHARES
MONEY MARKET FUNDS-7.38%
STIC Liquid Assets Portfolio(d) 786,842,293 786,842,293
---------------------------------------------------------------
STIC Prime Portfolio(d) 786,842,293 786,842,293
===============================================================
Total Money Market Funds
(Cost $1,573,684,586) 1,573,684,586
===============================================================
TOTAL INVESTMENTS-99.22% (Cost
$13,483,903,925) 21,140,768,053
===============================================================
OTHER ASSETS LESS
LIABILITIES-0.78% 166,373,812
===============================================================
NET ASSETS-100.00% $21,307,141,865
_______________________________________________________________
===============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Conv. - Convertible
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Affiliated issuer in which the Fund's holdings of the 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 market value as of 10/31/00 was $410,551,263, which represented 1.93% of
the Fund's net assets.
(c) Zero coupon bond issued at a discount. The interest rate shown represents
the rate of original issue discount.
(d) The money market fund and the fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
AIM CONSTELLATION FUND
FS-14
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost
$13,483,903,925) $21,140,768,053
-------------------------------------------------------------
Receivables for:
Collateral for securities loaned 1,751,204,824
-------------------------------------------------------------
Investments sold 195,686,141
-------------------------------------------------------------
Fund shares sold 102,466,015
-------------------------------------------------------------
Dividends 7,238,899
-------------------------------------------------------------
Investment for deferred compensation plan 240,744
-------------------------------------------------------------
Other assets 1,264,576
-------------------------------------------------------------
Total assets 23,198,869,252
=============================================================
LIABILITIES:
Payables for:
Investments purchased 90,980,392
-------------------------------------------------------------
Collateral upon return of securities
loaned 1,751,204,824
-------------------------------------------------------------
Fund shares reacquired 21,690,805
-------------------------------------------------------------
Deferred compensation plan 240,744
-------------------------------------------------------------
Accrued advisory fees 10,344,044
-------------------------------------------------------------
Accrued administrative services fees 65,764
-------------------------------------------------------------
Accrued distribution fees 8,412,780
-------------------------------------------------------------
Accrued trustees' fees 6,051
-------------------------------------------------------------
Accrued transfer agent fees 7,115,992
-------------------------------------------------------------
Accrued operating expenses 1,665,991
=============================================================
Total liabilities 1,891,727,387
=============================================================
Net assets applicable to shares outstanding $21,307,141,865
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $19,268,977,253
_____________________________________________________________
=============================================================
Class B $ 1,315,523,852
_____________________________________________________________
=============================================================
Class C $ 434,544,168
_____________________________________________________________
=============================================================
Institutional Class $ 288,096,592
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE:
Class A 442,936,863
_____________________________________________________________
=============================================================
Class B 31,116,870
_____________________________________________________________
=============================================================
Class C 10,281,339
_____________________________________________________________
=============================================================
Institutional Class 6,324,588
_____________________________________________________________
=============================================================
Class A:
Net asset value and redemption price per
share $ 43.50
-------------------------------------------------------------
Offering price per share:
(Net asset value of $43.50 divided by
94.50%) $ 46.03
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 42.28
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 42.27
_____________________________________________________________
=============================================================
Institutional Class:
Net asset value, offering and redemption
price per share $ 45.55
_____________________________________________________________
=============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$435,333) $ 34,073,020
-------------------------------------------------------------
Dividends from affiliated money market funds 57,256,376
-------------------------------------------------------------
Interest 3,750,253
-------------------------------------------------------------
Security lending income 497,347
=============================================================
Total investment income 95,576,996
=============================================================
EXPENSES:
Advisory fees 128,677,520
-------------------------------------------------------------
Administrative services fees 731,392
-------------------------------------------------------------
Custodian fees 966,983
-------------------------------------------------------------
Distribution fees -- Class A 56,629,759
-------------------------------------------------------------
Distribution fees -- Class B 10,309,561
-------------------------------------------------------------
Distribution fees -- Class C 3,222,875
-------------------------------------------------------------
Transfer agent fees -- Class A 27,560,458
-------------------------------------------------------------
Transfer agent fees -- Class B 2,176,576
-------------------------------------------------------------
Transfer agent fees -- Class C 680,420
-------------------------------------------------------------
Transfer agent fees -- Institutional Class 47,441
-------------------------------------------------------------
Trustees' fees 59,789
-------------------------------------------------------------
Other 5,694,169
-------------------------------------------------------------
Total expenses 236,756,943
=============================================================
Less: Fees waived (6,187,566)
-------------------------------------------------------------
Expenses paid indirectly (428,909)
=============================================================
Net expenses 230,140,468
=============================================================
Net investment income (loss) (134,563,472)
=============================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES, FOREIGN SECURITIES,
AND OPTION CONTRACTS
Net realized gain from:
Investment securities 3,909,425,835
-------------------------------------------------------------
Option contracts written 87,874,405
=============================================================
3,997,300,240
=============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities 1,648,464,708
-------------------------------------------------------------
Foreign currencies (1,500)
-------------------------------------------------------------
Option contracts written 1,248,599
=============================================================
1,649,711,807
=============================================================
Net gain on investment securities, foreign
currencies, and option contracts 5,647,012,047
=============================================================
Net increase in net assets resulting from
operations $5,512,448,575
_____________________________________________________________
=============================================================
|
See Notes to Financial Statements.
AIM CONSTELLATION FUND
FS-15
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
--------------- ---------------
OPERATIONS:
Net investment income (loss) $ (134,563,472) $ (76,875,258)
------------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, and option contracts 3,997,300,240 1,644,017,203
------------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies, and option contracts 1,649,711,807 2,669,133,759
================================================================================================
Net increase in net assets resulting from operations 5,512,448,575 4,236,275,704
================================================================================================
Distributions to shareholders from net realized gains:
Class A (1,341,534,330) (337,206,115)
------------------------------------------------------------------------------------------------
Class B (59,304,397) (8,290,207)
------------------------------------------------------------------------------------------------
Class C (16,589,886) (2,229,567)
------------------------------------------------------------------------------------------------
Institutional Class (23,400,833) (5,075,580)
------------------------------------------------------------------------------------------------
Share transactions-net:
Class A 1,156,513,412 (1,783,881,252)
------------------------------------------------------------------------------------------------
Class B 575,351,569 205,093,817
------------------------------------------------------------------------------------------------
Class C 231,744,660 55,508,352
------------------------------------------------------------------------------------------------
Institutional Class (16,568,699) (4,793,973)
================================================================================================
Net increase in net assets 6,018,660,071 2,355,401,179
================================================================================================
NET ASSETS:
Beginning of year 15,288,481,794 12,933,080,615
------------------------------------------------------------------------------------------------
End of year $21,307,141,865 $15,288,481,794
________________________________________________________________________________________________
================================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $10,009,800,678 $ 7,663,956,851
------------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (652,603) (551,737)
------------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies, and option contracts 3,641,131,584 1,617,926,281
------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies, and option contracts 7,656,862,206 6,007,150,399
================================================================================================
$21,307,141,865 $15,288,481,794
________________________________________________________________________________________________
================================================================================================
|
See Notes to Financial Statements.
AIM CONSTELLATION FUND
FS-16
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Constellation Fund (the "Fund") is a series portfolio of AIM Equity Funds
(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 eleven separate portfolios,
each having an unlimited number of shares of beneficial interest. Prior to June
17, 2000, the Fund was organized as a series portfolio of AIM Equity Funds, Inc.
At a meeting held on February 3, 2000, the Board of Directors of AIM Equity
Funds, Inc. approved an Agreement and Plan of Reorganization (the
"Reorganization") which reorganized the Fund as a series portfolio of the Trust.
Shareholders of the Fund approved the Reorganization at a meeting held on June
16, 2000. The Fund currently offers four different classes of shares: Class A
shares, Class B shares, Class C shares and the Institutional Class. 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. Institutional Class shares are
sold without a 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 growth of capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.
On October 31, 2000, undistributed net investment income was increased by
$134,462,606, undistributed net realized gains decreased by $533,265,491 and
paid in capital increased by $398,802,885 as a result of differing book/tax
differences due to utilization of a portion of the proceeds from redemptions
as distributions for federal income tax purposes and net operating loss
reclassifications. Net assets of the Fund were unaffected by the
reclassification discussed above.
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. 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
AIM CONSTELLATION FUND
FS-17
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.
F. 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.
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 master investment agreement, the
Fund pays an advisory fee to AIM at the annual rate of 1.0% of the first $30
million of the Fund's average daily net assets, plus 0.75% of the Fund's average
daily net assets in excess of $30 million to and including $150 million, 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% 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. During the year
ended October 31, 2000, AIM waived fees of $6,187,566. Under the terms of a
master sub-advisory agreement between AIM and A I M Capital Management, Inc.
("AIM Capital"), AIM pays AIM Capital 50% of the amount paid by the Fund to AIM.
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 October 31, 2000, AIM was
paid $731,392 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 October 31, 2000, AFS was
paid $12,000,634 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, Class C and the Institutional Class 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 0.30% 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. During the year ended October 31, 2000, the Class A, Class B and Class
C shares paid AIM Distributors $56,629,759, $10,309,561 and $3,222,875,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $5,088,774 from sales of the Class
A shares of the Fund during the year ended October 31, 2000. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. During the year ended October 31,
2000, AIM Distributors received $411,140 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 October 31, 2000, the Fund paid legal fees of $35,398
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.
AIM CONSTELLATION FUND
FS-18
NOTE 3-INDIRECT EXPENSES
For the year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $279,535 and reductions in custodian fees of $149,374 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $428,909.
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 year ended October 31,
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 are 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 is 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 borrower did not increase the
collateral accordingly, and the borrower fails to return the securities.
At October 31, 2000, securities with an aggregate value of $1,709,326,329 were
on loan to brokers. The loans were secured by cash collateral of $1,751,204,824.
For the year ended October 31, 2000, the Fund received fees of $497,347 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 year ended October 31, 2000 was
$17,152,741,955 and $17,749,731,694, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $8,003,057,896 ---------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (355,852,740) ========================================================== Net unrealized appreciation of investment securities $7,647,205,156 __________________________________________________________ ========================================================== Cost of investments for tax purposes is $13,493,562,897. |
NOTE 8-CALL OPTION CONTRACTS
Transactions in call options written during the year ended October 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
-------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- -------------
Beginning of year 22,091 $ 3,848,894
-----------------------------------------------------------
Written 386,055 173,074,240
-----------------------------------------------------------
Closed (327,716) (147,865,412)
-----------------------------------------------------------
Exercised (78,989) (28,781,664)
-----------------------------------------------------------
Expired (1,441) (276,058)
===========================================================
End of year -- $ --
___________________________________________________________
===========================================================
|
AIM CONSTELLATION FUND
FS-19
NOTE 9-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 2000 and 1999 were as follows:
2000 1999
---------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ------------ ---------------
Sold:
Class A 86,430,817 $3,725,450,424 98,564,141 $ 2,981,238,092
---------------------------------------------------------------------------------------------------------------------------
Class B 16,075,085 679,865,751 10,942,571 332,728,027
---------------------------------------------------------------------------------------------------------------------------
Class C 6,309,791 266,777,259 5,133,893 156,450,704
---------------------------------------------------------------------------------------------------------------------------
Institutional Class 3,694,065 165,186,338 1,596,295 51,100,608
===========================================================================================================================
Issued as reinvestment of dividends:
Class A 34,136,740 1,274,304,836 11,320,463 318,895,308
---------------------------------------------------------------------------------------------------------------------------
Class B 1,560,370 57,000,776 286,888 7,992,642
---------------------------------------------------------------------------------------------------------------------------
Class C 430,722 15,725,642 75,962 2,115,494
---------------------------------------------------------------------------------------------------------------------------
Institutional Class 593,714 23,119,167 170,003 4,957,282
===========================================================================================================================
Reacquired:
Class A (90,168,284) (3,843,241,848) (167,354,090) (5,084,014,652)
---------------------------------------------------------------------------------------------------------------------------
Class B (3,863,116) (161,514,958) (4,443,036) (135,626,852)
---------------------------------------------------------------------------------------------------------------------------
Class C (1,210,375) (50,758,241) (3,390,263) (103,057,846)
---------------------------------------------------------------------------------------------------------------------------
Institutional Class (4,750,277) (204,874,204) (1,915,980) (60,851,863)
===========================================================================================================================
49,239,252 $1,947,040,942 (49,013,153) $(1,528,073,056)
___________________________________________________________________________________________________________________________
===========================================================================================================================
|
NOTE 10-FINANCIAL HIGHLIGHTS
INSTITUTIONAL CLASS
--------------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
Net asset value, beginning of period $ 36.01 $ 27.25 $ 30.00 $ 26.01 $ 24.05
----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.09) (0.01) -- 0.02 0.04
----------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 12.91 9.50 (0.65) 4.86 2.67
======================================================================================================================
Total from investment operations 12.82 9.49 (0.65) 4.88 2.71
======================================================================================================================
Less distributions:
Distributions from net realized gains (3.28) (0.73) (2.10) (0.89) (0.75)
======================================================================================================================
Net asset value, end of period $ 45.55 $ 36.01 $ 27.25 $ 30.00 $ 26.01
______________________________________________________________________________________________________________________
======================================================================================================================
Total return 37.14% 35.46% (1.85)% 19.42% 11.81%
______________________________________________________________________________________________________________________
======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $288,097 $244,369 $189,039 $188,109 $293,035
______________________________________________________________________________________________________________________
======================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 0.65%(a) 0.64% 0.63% 0.65% 0.66%
----------------------------------------------------------------------------------------------------------------------
Without fee waivers 0.68%(a) 0.66% 0.65% 0.67% 0.67%
======================================================================================================================
Ratio of net investment income (loss) to average net assets (0.18)%(a) (0.04)% (0.01)% 0.06% 0.21%
______________________________________________________________________________________________________________________
======================================================================================================================
Portfolio turnover rate 88% 62% 76% 67% 58%
______________________________________________________________________________________________________________________
======================================================================================================================
|
(a) Ratios are based on average daily net assets of $316,573,355.
AIM CONSTELLATION FUND
FS-20
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
AIM Equity Funds:
We have audited the accompanying statement of assets and liabilities of AIM Weingarten Fund (a portfolio of AIM Equity Funds), including the schedule of investments, as of October 31, 2000, the related statement of operations for the year then ended, the statement of changes in net assets for each of the years in the two-year period then ended, and financial highlights for each of the periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AIM Weingarten Fund as of October 31, 2000, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the periods in the five-year period then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ KPMG LLP December 6, 2000 Houston, Texas |
AIM WEINGARTEN FUND
FS-21
SCHEDULE OF INVESTMENTS
October 31, 2000
MARKET
SHARES VALUE
DOMESTIC COMMON STOCKS-80.49%
BIOTECHNOLOGY-0.40%
Amgen Inc.(a) 772,600 $ 44,762,512
===============================================================
BROADCASTING (TELEVISION, RADIO
& CABLE)-2.68%
AT&T Corp.-Liberty Media
Corp.-Class A 5,000,000 90,000,000
---------------------------------------------------------------
Infinity Broadcasting
Corp.-Class A(a) 6,327,400 210,386,050
===============================================================
300,386,050
===============================================================
COMMUNICATIONS EQUIPMENT-9.09%
ADC Telecommunications, Inc.(a) 3,698,300 79,051,162
---------------------------------------------------------------
Comverse Technology, Inc.(a) 2,300,000 257,025,000
---------------------------------------------------------------
Corning Inc. 3,100,000 237,150,000
---------------------------------------------------------------
JDS Uniphase Corp.(a) 3,975,000 323,465,625
---------------------------------------------------------------
Redback Networks Inc.(a) 475,000 50,557,812
---------------------------------------------------------------
Scientific-Atlanta, Inc. 1,030,300 70,511,156
===============================================================
1,017,760,755
===============================================================
COMPUTERS (HARDWARE)-4.78%
Palm, Inc.(a) 1,375,000 73,648,438
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 4,163,000 461,572,625
===============================================================
535,221,063
===============================================================
COMPUTERS (NETWORKING)-3.19%
Cisco Systems, Inc.(a) 2,200,000 118,525,000
---------------------------------------------------------------
Extreme Networks, Inc.(a) 800,000 66,350,000
---------------------------------------------------------------
Juniper Networks, Inc.(a) 625,000 121,875,000
---------------------------------------------------------------
VeriSign, Inc.(a) 384,100 50,701,200
===============================================================
357,451,200
===============================================================
COMPUTERS (PERIPHERALS)-5.96%
Brocade Communications Systems,
Inc.(a) 700,000 159,162,500
---------------------------------------------------------------
EMC Corp.(a) 3,346,300 298,029,844
---------------------------------------------------------------
Network Appliance, Inc.(a) 774,500 92,165,500
---------------------------------------------------------------
QLogic Corp.(a) 1,215,700 117,618,975
===============================================================
666,976,819
===============================================================
COMPUTERS (SOFTWARE &
SERVICES)-11.11%
Adobe Systems Inc. 1,220,000 92,796,250
---------------------------------------------------------------
America Online, Inc.(a) 1,500,000 75,645,000
---------------------------------------------------------------
Ariba, Inc.(a) 900,000 113,737,500
---------------------------------------------------------------
BEA Systems, Inc.(a) 1,050,000 75,337,500
---------------------------------------------------------------
Intuit Inc.(a) 1,800,000 110,587,500
---------------------------------------------------------------
Mercury Interactive Corp.(a) 800,000 88,800,000
---------------------------------------------------------------
Oracle Corp.(a) 3,400,000 112,200,000
---------------------------------------------------------------
Rational Software Corp.(a) 2,750,000 164,140,625
---------------------------------------------------------------
Siebel Systems, Inc.(a) 1,300,000 136,418,750
---------------------------------------------------------------
|
MARKET
SHARES VALUE
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
VERITAS Software Corp.(a) 1,946,600 $ 274,501,016
===============================================================
1,244,164,141
===============================================================
CONSUMER FINANCE-0.48%
Capital One Financial Corp. 850,000 53,656,250
===============================================================
ELECTRICAL EQUIPMENT-4.93%
General Electric Co. 8,000,000 438,500,000
---------------------------------------------------------------
Sanmina Corp.(a) 871,900 99,669,069
---------------------------------------------------------------
Symbol Technologies, Inc. 309,000 14,040,188
===============================================================
552,209,257
===============================================================
ELECTRONICS
(SEMICONDUCTORS)-8.20%
Analog Devices, Inc.(a) 3,650,000 237,250,000
---------------------------------------------------------------
Applied Micro Circuits Corp.(a) 1,200,000 91,725,000
---------------------------------------------------------------
Cypress Semiconductor Corp.(a) 1,650,000 61,771,875
---------------------------------------------------------------
Integrated Device Technology,
Inc.(a) 1,400,000 78,837,500
---------------------------------------------------------------
Linear Technology Corp. 2,000,000 129,125,000
---------------------------------------------------------------
TranSwitch Corp.(a) 948,500 54,775,875
---------------------------------------------------------------
Xilinx, Inc.(a) 3,648,800 264,309,950
===============================================================
917,795,200
===============================================================
ENTERTAINMENT-1.25%
Time Warner Inc. 1,850,000 140,433,500
===============================================================
EQUIPMENT (SEMICONDUCTOR)-1.00%
Broadcom Corp.-Class A(a) 505,000 112,299,375
===============================================================
FINANCIAL (DIVERSIFIED)-6.21%
American Express Co. 5,549,900 332,994,000
---------------------------------------------------------------
Citigroup Inc. 6,891,766 362,679,186
===============================================================
695,673,186
===============================================================
HEALTH CARE (DIVERSIFIED)-1.28%
IVAX Corp.(a) 3,289,000 143,071,500
===============================================================
HEALTH CARE (DRUGS-GENERIC &
OTHER)-1.99%
Forest Laboratories, Inc.(a) 620,000 82,150,000
---------------------------------------------------------------
Genentech, Inc.(a) 1,700,000 140,250,000
===============================================================
222,400,000
===============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-3.38%
Allergan, Inc. 1,100,000 92,468,750
---------------------------------------------------------------
Pfizer Inc. 6,620,000 285,901,250
===============================================================
378,370,000
===============================================================
HEALTH CARE (MANAGED CARE)-1.08%
UnitedHealth Group Inc. 1,100,000 120,312,500
===============================================================
|
AIM WEINGARTEN FUND
FS-22
MARKET
SHARES VALUE
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.09%
PE Corp-PE Biosystems Group 1,045,700 $ 122,346,900
===============================================================
INVESTMENT
BANKING/BROKERAGE-3.61%
Merrill Lynch & Co., Inc. 3,482,200 243,754,000
---------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 2,000,000 160,625,000
===============================================================
404,379,000
===============================================================
LEISURE TIME (PRODUCTS)-0.86%
Harley-Davidson, Inc. 2,000,000 96,375,000
===============================================================
MANUFACTURING
(DIVERSIFIED)-1.03%
United Technologies Corp. 1,650,000 115,190,625
===============================================================
NATURAL GAS-2.18%
Dynegy Inc.-Class A 2,600,000 120,412,500
---------------------------------------------------------------
Enron Corp. 1,500,000 123,093,750
===============================================================
243,506,250
===============================================================
POWER PRODUCERS
(INDEPENDENT)-2.01%
AES Corp. (The)(a) 1,675,000 94,637,500
---------------------------------------------------------------
Calpine Corp.(a) 1,650,000 130,246,875
===============================================================
224,884,375
===============================================================
RETAIL (FOOD CHAINS)-1.15%
Safeway Inc.(a) 2,350,000 128,515,625
===============================================================
RETAIL (SPECIALTY)-0.73%
Bed Bath & Beyond Inc.(a) 3,165,700 81,714,631
===============================================================
SERVICES (ADVERTISING/MARKETING)-0.55%
TMP Worldwide, Inc.(a) 881,900 61,388,508
===============================================================
SERVICES (DATA PROCESSING)-0.02%
DST Systems, Inc.(a) 41,400 2,551,275
===============================================================
TELECOMMUNICATIONS
(CELLULAR/WIRELESS)-0.25%
Powerwave Technologies, Inc.(a) 581,000 27,960,625
===============================================================
Total Domestic Common Stocks
(Cost $6,723,018,207) 9,011,756,122
===============================================================
|
MARKET
SHARES VALUE
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-10.66%
BERMUDA-1.75%
Tyco International Ltd.
(Manufacturing-Diversified) 3,458,800 $ 196,070,725
===============================================================
CANADA-3.91%
Nortel Networks Corp.
(Communications Equipment) 6,200,000 282,100,000
---------------------------------------------------------------
PMC-Sierra, Inc.
(Electronics-Semiconductors)(a) 920,000 155,940,000
===============================================================
438,040,000
===============================================================
FRANCE-1.12%
Alcatel S.A.-ADR (Communications
Equipment) 2,000,000 124,750,000
===============================================================
HONG KONG-1.26%
China Mobile Ltd.
(Telecommunications-
Cellular/Wireless)(a) 22,000,100 141,044,364
===============================================================
ISRAEL-2.62%
Check Point Software
Technologies Ltd.
(Computers-Software &
Services)(a) 1,600,000 253,400,000
---------------------------------------------------------------
Teva Pharmaceutical Industries
Ltd.-ADR (Health
Care-Drugs-Generic & Other) 675,000 39,909,375
===============================================================
293,309,375
===============================================================
Total Foreign Stocks & Other
Equity Interests (Cost
$849,041,022) 1,193,214,464
===============================================================
MONEY MARKET FUNDS-8.15%
STIC Liquid Assets Portfolio(b) 456,311,366 456,311,366
---------------------------------------------------------------
STIC Prime Portfolio(b) 456,311,366 456,311,366
===============================================================
Total Money Market Funds
(Cost $912,622,732) 912,622,732
===============================================================
TOTAL INVESTMENTS-99.30%
(Cost $8,484,681,961) 11,117,593,318
===============================================================
OTHER ASSETS LESS
LIABILITIES-0.70% 78,926,373
===============================================================
NET ASSETS-100.00% $11,196,519,691
_______________________________________________________________
===============================================================
|
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
AIM WEINGARTEN FUND
FS-23
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments, at market value (cost
$8,484,681,961) $11,117,593,318
-------------------------------------------------------------
Foreign currencies, at market value (cost
$94,552,636) 93,958,307
-------------------------------------------------------------
Receivables for:
Collateral for securities loaned 481,391,900
-------------------------------------------------------------
Investments sold 28,386,536
-------------------------------------------------------------
Fund shares sold 15,376,420
-------------------------------------------------------------
Foreign currency 125,025
-------------------------------------------------------------
Dividends 8,112,276
-------------------------------------------------------------
Securities loaned 44,950
-------------------------------------------------------------
Investment for deferred compensation plan 170,032
-------------------------------------------------------------
Other assets 1,163,815
=============================================================
Total assets 11,746,322,579
=============================================================
LIABILITIES:
Payables for:
Investments purchased 40,692,751
-------------------------------------------------------------
Collateral upon return of securities
loaned 481,391,900
-------------------------------------------------------------
Fund shares reacquired 14,036,122
-------------------------------------------------------------
Deferred compensation plan 170,032
-------------------------------------------------------------
Accrued advisory fees 5,798,989
-------------------------------------------------------------
Accrued administrative services fees 39,955
-------------------------------------------------------------
Accrued distribution fees 5,403,062
-------------------------------------------------------------
Accrued transfer agent fees 1,489,451
-------------------------------------------------------------
Accrued operating expenses 780,626
=============================================================
Total liabilities 549,802,888
=============================================================
Net assets applicable to shares outstanding $11,196,519,691
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $ 8,948,781,148
_____________________________________________________________
=============================================================
Class B $ 1,927,513,800
_____________________________________________________________
=============================================================
Class C $ 301,590,236
_____________________________________________________________
=============================================================
Institutional Class $ 18,634,507
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE:
Class A 317,745,991
_____________________________________________________________
=============================================================
Class B 71,856,609
_____________________________________________________________
=============================================================
Class C 11,234,005
_____________________________________________________________
=============================================================
Institutional Class 642,588
_____________________________________________________________
=============================================================
Class A:
Net asset value and redemption price per
share $ 28.16
-------------------------------------------------------------
Offering price per share:
(Net asset value of $28.16 divided by
94.50%) $ 29.80
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 26.82
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 26.85
_____________________________________________________________
=============================================================
Institutional Class
Net asset value, offering and redemption
price per share $ 29.00
_____________________________________________________________
=============================================================
|
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$790,408) $ 24,643,007
-------------------------------------------------------------
Dividends from affiliated money market funds 44,169,714
-------------------------------------------------------------
Interest 34,190
-------------------------------------------------------------
Security lending income 151,601
=============================================================
Total investment income 68,998,512
=============================================================
EXPENSES:
Advisory fees 75,254,931
-------------------------------------------------------------
Administrative services fees 473,764
-------------------------------------------------------------
Custodian fees 694,359
-------------------------------------------------------------
Distribution fees -- Class A 29,398,785
-------------------------------------------------------------
Distribution fees -- Class B 18,390,082
-------------------------------------------------------------
Distribution fees -- Class C 2,310,903
-------------------------------------------------------------
Transfer agent fees -- Class A 10,695,312
-------------------------------------------------------------
Transfer agent fees -- Class B 2,939,757
-------------------------------------------------------------
Transfer agent fees -- Class C 369,411
-------------------------------------------------------------
Transfer agent fees -- Institutional Class 13,407
-------------------------------------------------------------
Trustees' fees 50,685
-------------------------------------------------------------
Other 2,394,852
=============================================================
Total expenses 142,986,248
=============================================================
Less: Fees waived (5,181,384)
-------------------------------------------------------------
Expenses paid indirectly (207,062)
=============================================================
Net expenses 137,597,802
=============================================================
Net investment income (loss) (68,599,290)
=============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES,
FUTURES CONTRACTS AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 1,645,775,410
-------------------------------------------------------------
Foreign currencies 4,466,343
-------------------------------------------------------------
Futures contracts 9,049,301
-------------------------------------------------------------
Option contracts written (152,474,766)
=============================================================
1,506,816,288
=============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (540,721,720)
-------------------------------------------------------------
Foreign currencies (672,021)
-------------------------------------------------------------
Foreign currency contracts 125,025
-------------------------------------------------------------
Option contracts written 20,384,517
=============================================================
(520,884,199)
=============================================================
Net gain from investment securities, foreign
currencies, futures contracts and option
contracts 985,932,089
=============================================================
Net increase in net assets resulting from
operations $ 917,332,799
_____________________________________________________________
=============================================================
|
See Notes to Financial Statements.
AIM WEINGARTEN FUND
FS-24
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
2000 1999
--------------- --------------
OPERATIONS:
Net investment income (loss) $ (68,599,290) $ (41,231,383)
-----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, futures contracts and option contracts 1,506,816,288 1,252,613,276
-----------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities, foreign currencies, futures
contracts and option contracts (520,884,199) 1,427,968,629
===============================================================================================
Net increase in net assets resulting from operations 917,332,799 2,639,350,522
===============================================================================================
Distributions to shareholders from net investment income:
Class A -- (3,691,627)
-----------------------------------------------------------------------------------------------
Institutional Class -- (343,112)
-----------------------------------------------------------------------------------------------
Distributions in excess of net investment income:
Class A -- (377,640)
-----------------------------------------------------------------------------------------------
Institutional Class -- (5,008)
-----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (912,274,100) (404,965,108)
-----------------------------------------------------------------------------------------------
Class B (156,090,644) (49,731,739)
-----------------------------------------------------------------------------------------------
Class C (13,701,366) (1,700,816)
-----------------------------------------------------------------------------------------------
Institutional Class (12,672,994) (4,837,664)
-----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 927,796,775 95,538,920
-----------------------------------------------------------------------------------------------
Class B 724,966,056 347,953,526
-----------------------------------------------------------------------------------------------
Class C 221,312,749 70,937,422
-----------------------------------------------------------------------------------------------
Institutional Class (100,840,055) 16,644,022
===============================================================================================
Net increase in net assets 1,595,829,220 2,704,771,698
===============================================================================================
NET ASSETS:
Beginning of year 9,600,690,471 6,895,918,773
===============================================================================================
End of year $11,196,519,691 $9,600,690,471
_______________________________________________________________________________________________
===============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 7,150,137,050 $5,279,351,381
-----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (388,227) (317,554)
-----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies, futures contracts and
option contracts 1,414,418,150 1,168,419,727
-----------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities, foreign currencies, futures contracts and
option contracts 2,632,352,718 3,153,236,917
===============================================================================================
$11,196,519,691 $9,600,690,471
_______________________________________________________________________________________________
===============================================================================================
|
See Notes to Financial Statements.
AIM WEINGARTEN FUND
FS-25
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Weingarten Fund (the "Fund") is a series portfolio of AIM Equity Funds (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 eleven separate portfolios, each
having an unlimited number of shares of beneficial interest. Prior to June 17,
2000 the Fund was organized as a series portfolio of AIM Equity Funds, Inc. At a
meeting held on February 3, 2000, the Board of Directors of AIM Equity Funds,
Inc. approved an Agreement and Plan of Reorganization (the "Reorganization")
which reorganized the Fund as a series portfolio of the Trust. Shareholders of
the Fund approved the Reorganization at a meeting held on June 16, 2000. The
Fund currently offers four different classes of shares: Class A shares, Class B
shares, Class C shares and the Institutional Class. 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. Institutional Class shares are sold without a
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 provide growth of capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 -- Securities, including restricted securities, are
valued according to the following policy. 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.
On October 31, 2000, undistributed net investment income was increased by
$68,528,617, undistributed net realized gains decreased by $166,078,761 and
paid-in capital increased by $97,550,144 as a result of differences due to
utilization of a portion of the proceeds from redemptions as distributions
for federal income tax purposes, foreign currency transactions and net
operating loss reclassifications. Net assets of the Fund were unaffected by
the reclassification discussed above.
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.
AIM WEINGARTEN FUND
FS-26
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 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. 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. 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.
I. 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 master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 1.0% of
the first $30 million of the Fund's average daily net assets, plus 0.75% of the
Fund's average daily net assets in excess of $30 million to and including $350
million, plus 0.625% of the Fund's average daily net assets in excess of $350
million. 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. During the year ended October 31, 2000, AIM waived fees of $5,181,384.
Under the terms of a master sub-advisory agreement between AIM and A I M Capital
Management, Inc. ("AIM Capital"), AIM pays AIM Capital 50% of the amount paid by
the Fund to AIM.
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 October 31, 2000, AIM was
paid $473,764 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 October 31, 2000, AFS was
paid $7,135,544 for such services.
AIM WEINGARTEN FUND
FS-27
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, Class C and the Institutional Class 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 0.30% 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. During the year ended October 31, 2000, the Class A, Class B and Class
C shares paid AIM Distributors $29,398,785, $18,390,082 and $2,310,903,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $3,854,495 from sales of the Class A
shares of the Fund during the year ended October 31, 2000. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended October 31, 2000,
AIM Distributors received $139,887 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 October 31, 2000, the Fund paid legal fees of $22,699
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 year ended October 31, 2000, the Fund received reductions in transfer agency fees from AFS (an affiliate of AIM) of $162,324 and reductions in custodian fees of $44,738 under expense offset arrangements which resulted in a reduction of the Fund's total expenses of $207,062.
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 year ended October 31,
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 are 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 is 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 borrower did not increase the
collateral accordingly and failed to return the securities.
At October 31, 2000, securities with an aggregate value of $469,288,729 were
on loan to brokers. The loans were secured by cash collateral of $481,391,900
received by the Fund. For the year ended October 31, 2000, the Fund received
fees of $151,601 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 year ended October 31, 2000 was
$16,186,039,935 and $16,154,880,126, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
Aggregate unrealized appreciation of investment securities $2,903,247,458 ---------------------------------------------------------- Aggregate unrealized (depreciation) of investment securities (277,218,090) ========================================================== Net unrealized appreciation of investment securities $2,626,029,368 __________________________________________________________ ========================================================== Cost of investments for tax purposes is $8,491,563,950. |
AIM WEINGARTEN FUND
FS-28
NOTE 8-CALL OPTION CONTRACTS
Transactions in call options written during the year ended October 31, 2000 are summarized as follows:
CALL OPTION CONTRACTS
--------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- -------------
Beginning of year 91,902 $ 116,996,621
----------------------------------------------------------------------------------------
Closed (85,877) (111,818,048)
----------------------------------------------------------------------------------------
Exercised (6,025) (5,178,573)
========================================================================================
End of year -- $ --
________________________________________________________________________________________
========================================================================================
|
NOTE 9-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 2000 and 1999 were as follows:
2000 1999
------------------------------ ------------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ----------- ---------------
Sold:
Class A 38,693,394 $ 1,218,409,892 38,697,927 $ 994,480,979
-----------------------------------------------------------------------------------------------------------------------------
Class B 26,508,143 797,286,477 17,982,789 456,125,945
-----------------------------------------------------------------------------------------------------------------------------
Class C 8,102,015 244,073,425 3,622,407 92,753,207
-----------------------------------------------------------------------------------------------------------------------------
Institutional Class 1,045,908 33,206,382 826,477 21,885,030
=============================================================================================================================
Issued as reinvestment of dividends:
Class A 29,963,538 854,837,292 16,540,521 383,078,048
-----------------------------------------------------------------------------------------------------------------------------
Class B 5,414,678 148,085,997 2,102,927 47,274,883
-----------------------------------------------------------------------------------------------------------------------------
Class C 480,423 13,149,166 71,213 1,602,275
-----------------------------------------------------------------------------------------------------------------------------
Institutional Class 428,931 12,554,823 217,868 5,146,039
=============================================================================================================================
Reacquired:
Class A (36,659,424) (1,145,450,409) (50,133,647) (1,282,020,107)
-----------------------------------------------------------------------------------------------------------------------------
Class B (7,393,719) (220,406,418) (6,174,366) (155,447,302)
-----------------------------------------------------------------------------------------------------------------------------
Class C (1,209,352) (35,909,842) (926,007) (23,418,060)
-----------------------------------------------------------------------------------------------------------------------------
Institutional Class (4,771,038) (146,601,260) (391,478) (10,387,047)
=============================================================================================================================
60,603,497 $ 1,773,235,525 22,436,631 $ 531,073,890
_____________________________________________________________________________________________________________________________
=============================================================================================================================
|
AIM WEINGARTEN FUND
FS-29
NOTE 10-FINANCIAL HIGHLIGHTS
INSTITUTIONAL CLASS
-------------------------------------------------
YEAR ENDED OCTOBER 31,
-------------------------------------------------
2000(a) 1999 1998 1997 1996
------- -------- ------- ------- -------
Net asset value, beginning of period $28.96 $ 22.18 $ 23.05 $ 20.46 $ 20.48
---------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.06) 0.02 0.10 0.08 0.17
---------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 3.29 8.32 2.43 4.90 2.52
===============================================================================================================
Total from investment operations 3.23 8.34 2.53 4.98 2.69
===============================================================================================================
Less distributions:
Dividends from net investment income -- (0.10) -- (0.15) --
---------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (3.19) (1.46) (3.40) (2.24) (2.71)
===============================================================================================================
Total distributions (3.19) (1.56) (3.40) (2.39) (2.71)
===============================================================================================================
Net asset value, end of period $29.00 $ 28.96 $ 22.18 $ 23.05 $ 20.46
_______________________________________________________________________________________________________________
===============================================================================================================
Total return 11.07% 39.20% 12.79% 27.37% 15.34%
_______________________________________________________________________________________________________________
===============================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $18,634 $114,076 $72,884 $62,124 $60,483
_______________________________________________________________________________________________________________
===============================================================================================================
Ratio of expenses to average net assets:
With fee waivers 0.64%(b) 0.63% 0.62% 0.64% 0.65%
---------------------------------------------------------------------------------------------------------------
Without fee waivers 0.68%(b) 0.68% 0.67% 0.68% 0.68%
===============================================================================================================
Ratio of net investment income (loss) to average net assets (0.04)%(b) 0.02% 0.49% 0.50% 0.80%
_______________________________________________________________________________________________________________
===============================================================================================================
Portfolio turnover rate 145% 124% 125% 128% 159%
_______________________________________________________________________________________________________________
===============================================================================================================
|
(a) Calculated using average shares outstanding.
(b) Ratios are based on average daily net assets of $89,095,334.
AIM WEINGARTEN FUND
FS-30
PART C: OTHER INFORMATION
Item 23 Exhibits
a (1) - (a) Articles of Incorporation of Registrant, as filed with the
State of Maryland on May 20, 1988, were filed as an Exhibit to
Post-Effective Amendment No. 34 on June 13, 1988, and were
filed electronically as an Exhibit to Post-Effective Amendment
No. 47 on December 29, 1995.
- (b) Articles Supplementary, as filed with the State of
Maryland on March 27, 1991, were filed as an Exhibit to
Post-Effective Amendment No. 40 on February 26, 1992, and were
filed electronically as an Exhibit to Post-Effective Amendment
No. 47 on December 29, 1995.
- (c) Articles Supplementary, as filed with the State of
Maryland on December 23, 1991, were filed as an Exhibit to
Post-Effective Amendment No. 40 on February 26, 1992, and were
filed electronically as an Exhibit to Post-Effective Amendment
No. 47 on December 29, 1995.
- (d) Articles Supplementary, as filed with the State of
Maryland on October 8, 1993, were filed as an Exhibit to
Post-Effective Amendment No. 43 on February 28, 1994, and were
filed electronically as an Exhibit to Post-Effective Amendment
No. 47 on December 29, 1995.
- (e) Articles of Amendment, as filed with the State of Maryland
on June 5, 1995, were filed electronically as an Exhibit to
Post-Effective Amendment No. 47 on December 29, 1995.
- (f) Articles Supplementary, as filed with the State of
Maryland on June 5, 1995, were filed electronically as an
Exhibit to Post-Effective Amendment No. 47 on December 29,
1995.
- (g) Articles Supplementary, as filed with the State of
Maryland on December 19, 1995, were filed electronically as an
Exhibit to Post-Effective Amendment No. 47 on December 29,
1995.
- (h) Articles Supplementary, as filed with the State of
Maryland on June 26, 1996, were filed electronically as an
Exhibit to Post-Effective Amendment No. 50 on July 24, 1996.
- (i) Articles Supplementary, as filed with the State of
Maryland on June 24, 1997, were filed electronically as an
Exhibit to Post-Effective Amendment No. 53 on October 9, 1997.
- (j) Articles Supplementary, as filed with the State of
Maryland on October 1, 1997, were filed electronically as an
Exhibit to Post-Effective Amendment No. 53 on October 9, 1997.
- (k) Articles Supplementary, as filed with the State of
Maryland on November 24, 1998, were filed electronically as an
Exhibit to Post-Effective Amendment No. 55 on December 11,
1998.
- (l) Articles Supplementary, as filed with the State of
Maryland on December 11, 1998, were filed electronically as an
Exhibit to Post-Effective Amendment No. 56 on February 23,
1999.
- (m) Articles Supplementary, as filed with the State of
Maryland on March 15, 1999 were filed electronically as an
Exhibit to Post-Effective Amendment No. 57 on March 24, 1999.
- (n) Articles of Amendment, as filed with the State of Maryland
on July 13, 1999, were filed as an Exhibit to Post-Effective
Amendment No. 62 on January 6, 2000.
- (o) Articles Supplementary, as filed with the State of
Maryland on July 13, 1999, were filed as an Exhibit to
Post-Effective Amendment No. 62 on January 6, 2000.
C-1
|
- (p) Articles Supplementary, as filed with the State of
Maryland on December 29, 1999, were filed as Exhibits to
Post-Effective Amendment No. 63 on January 7, 2000.
- (q) Articles Supplementary, as filed with the State of
Maryland on December 29, 1999, were filed an Exhibits to
Post-Effective Amendment No. 63 on January 7, 2000.
(2) - (a) Agreement and Declaration of Trust of Registrant, dated
December 6, 1999, was filed electronically as an Exhibit to
Post-Effective Amendment No. 64 on March 27, 2000, and is
hereby incorporated by reference.
- (b) Amendment No. 1, dated May 10, 2000, to Agreement and
Declaration of Trust of Registrant, dated December 6, 1999,
was filed electronically as an Exhibit to Post-Effective
Amendment No. 65 on May 25, 2000, and is hereby incorporated
by reference.
- (c) Amendment No. 2, dated December 13, 2000, to Agreement and
Declaration of Trust of Registrant, dated December 6, 1999, is
filed herewith electronically.
b (1) - By-Laws of Registrant were filed as an Exhibit to
Post-Effective Amendment No. 34 on June 13, 1988.
(2) - (a) Amended and Restated By-Laws of Registrant were filed as
an Exhibit to Post-Effective Amendment No. 37 on February 28,
1990.
- (b) First Amendment, dated April 22, 1991, to Amended and
Restated By-Laws was filed as an Exhibit to Post-Effective
Amendment No. 40 on February 26, 1992.
- (c) Second Amendment, dated September 28, 1994, to Amended and
Restated By-Laws was filed as an Exhibit to Post-Effective
Amendment No. 44 on February 24, 1995.
(3) - (a) Amended and Restated Bylaws, dated effective December 11,
1996, were filed electronically as an Exhibit to
Post-Effective Amendment No. 51 on January 15, 1997.
- (b) First Amendment, dated June 9, 1999, to Amended and
Restated By-Laws was filed as an Exhibit to Post-Effective
Amendment No. 62 on January 6, 2000.
(4) - (a) By-Laws of Registrant, dated effective December 6, 1999,
were filed electronically as an Exhibit to Post-Effective
Amendment No. 64 on March 27, 2000, and is hereby incorporated
by reference.
- (b) Amendment No. 1, dated June 14, 2000, to Bylaws of
Registrant, dated effective December 6, 1999, is filed
herewith electronically.
c - Instruments Defining Rights of Security Holders - None.
d (1) - Investment Advisory Agreement, dated September 30, 1988,
between Registrant and A I M Advisors, Inc., was filed as an
Exhibit to Post-Effective Amendment No. 38 on February 28,
1991.
(2) - Investment Advisory Agreement, dated August 6, 1993, between
Registrant's AIM Aggressive Growth Fund and A I M Advisors,
Inc., was filed as an Exhibit to Post-Effective Amendment No.
43 on February 28, 1994.
(3) - (a) Master Investment Advisory Agreement, dated October 18,
1993, between Registrant and A I M Advisors, Inc., was filed
as an Exhibit to Post-Effective Amendment No. 43 on
|
February 28, 1994, and was filed electronically as an Exhibit to Post-Effective Amendment No. 47 on December 29, 1995.
- (b) Amendment No. 1, dated November 14, 1994, to the Master Investment Advisory Agreement, dated October 18, 1993, between Registrant and A I M Advisors, Inc., was filed as an Exhibit to Post-Effective Amendment No. 44 on February 24, 1995, and was filed electronically as an Exhibit to Post-Effective Amendment No. 47 on December 29, 1995.
- (c) Amendment No. 2, dated March 12, 1996, to the Master Investment Advisory Agreement, dated October 18, 1993, between Registrant and A I M Advisors, Inc., was filed electronically as an Exhibit to Post-Effective Amendment No. 49 on May 31, 1996.
(4) - (a) 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.
53 on October 9, 1997.
- (b) Amendment No. 1, dated as of March 1, 1999, 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.
56 on February 23, 1999.
- (c) Amendment No. 2, dated May 12, 1999, to the Master
Investment Advisory Agreement between Registrant and A I M
Advisors, Inc. was filed electronically as an Exhibit to
Post-Effective Amendment No. 60 on July 15, 1999.
- (d) Amendment No. 3, dated July 15, 1999, to the Master
Investment Advisory Agreement between Registrant and A I M
Advisors, Inc. was filed as an Exhibit to Post-Effective
Amendment No. 62 on January 6, 2000.
- (e) Amendment No. 4, dated September 28, 1999, to the Master
Investment Advisory Agreement between Registrant and A I M
Advisors, Inc. was filed as an Exhibit to Post-Effective
Amendment No. 62 on January 6, 2000.
(5) Master Investment Advisory Agreement, dated March 30, 2000,
between Registrant and A I M Advisors, Inc. is filed herewith
electronically.
(6) - Master Investment Advisory Agreement, dated June 21, 2000,
between Registrant and A I M Advisors, Inc. is filed herewith
electroncially.
(7) - (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. 55 on December 11, 1998, 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.
55 on December 11, 1998, 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.
57 on March 24, 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. 57 on March 24, 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. 57 on March 24, 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. 57 on March 24, 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 as an Exhibit to Post-Effective Amendment No. 62 on January 6, 2000, 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 as an Exhibit to Post-Effective Amendment No. 62 on January 6, 2000, and is hereby incorporated by reference.
(8) - Sub-Advisory Agreement, dated September 30, 1988, between
Registrant, A I M Advisors, Inc. and A I M Capital Management,
Inc., was filed as an Exhibit to Post-Effective Amendment No.
38 on February 28, 1991.
(9) - Master Sub-Advisory Agreement, dated October 18, 1993, between
Registrant, A I M Advisors, Inc. and A I M Capital Management,
Inc., was filed as an Exhibit to Post-Effective Amendment No.
43 on February 28, 1994, and was filed electronically as an
Exhibit to Post-Effective Amendment No. 51 on January 15,
1997.
(10) - Master Sub-Advisory Agreement, dated February 28, 1997,
between A I M Advisors, Inc. and A I M Capital Management,
Inc. was filed electronically as an Exhibit to Post-Effective
Amendment No. 53 on October 9, 1997.
(11) - Master Sub-Advisory Agreement, dated June 21, 2000, between
A I M Advisors, Inc. and A I M Capital Management, Inc. is
filed herewith electronically.
(12) - Sub-Advisory Agreement, dated May 12, 1999, between A I M
Advisors, Inc. and H. S. Dent Advisors, Inc. was filed
electronically as an Exhibit to Post-Effective Amendment No.
60 on July 15, 1999.
(13) Sub-Advisory Agreement, dated June 21, 2000, between A I M
Advisors, Inc. and H.S. Dent Advisors, Inc. is filed herewith
electroncially.
e (1) - Distribution Agreement, dated May 24, 1988, between Registrant
and A I M Distributors, Inc., was filed as an Exhibit to
Post-Effective Amendment No. 38 on February 28, 1991.
|
(2) - Distribution Agreement, dated March 15, 1991, between
Registrant and Fund Management Company, was filed as an
Exhibit to Post-Effective Amendment No. 39 on March 1, 1991.
(3) - Distribution Agreement, dated August 6, 1993, between
Registrant's AIM Aggressive Growth Fund and A I M
Distributors, Inc., was filed as an Exhibit to Post-Effective
Amendment No. 43 on February 28, 1994.
(4) - Master Distribution Agreement, dated October 18, 1993, between
Registrant and Fund Management Company, was filed as an
Exhibit to Post-Effective Amendment No. 43 on February 28,
1994.
(5) - (a) Master Distribution Agreement, dated October 18, 1993,
between Registrant (on behalf of the portfolio's Class A
shares) and A I M Distributors, Inc., was filed as an Exhibit
to Post-Effective Amendment No. 43 on February 28, 1994, and
was filed electronically as an Exhibit to Post-Effective
Amendment No. 47 on December 29, 1995.
- (b) Amendment No. 1, dated December 4, 1995, to Master
Distribution Agreement, dated October 18, 1993, between
Registrant (on behalf of the portfolio's Class A shares) and
A I M Distributors, Inc., was filed electronically as an
Exhibit to Post-Effective Amendment No. 49 on May 31, 1996.
(6) - (a) Master Distribution Agreement, dated June 14, 1995,
between Registrant (on behalf of the portfolio's Class B
shares) and A I M Distributors, Inc., was filed electronically
as an Exhibit to Post-Effective Amendment No. 47 on December
29, 1995.
- (b) Amendment No. 1, dated June 11, 1996, to Master
Distribution Agreement, dated June 14, 1995, between
Registrant (on behalf of the portfolio's Class B shares) and
A I M Distributors, Inc., was filed electronically as an
Exhibit to Post-Effective Amendment No. 50 on July 24, 1996,
and was filed electronically as an Exhibit to Post-Effective
Amendment No. 53 on October 9, 1997.
(7) - Master Distribution Agreement, dated February 28, 1997,
between Registrant and Fund Management Company was filed
electronically as an Exhibit to Post-Effective Amendment No.
53 on October 9, 1997.
(8) - Master Distribution Agreement, dated February 28, 1997,
between Registrant (on behalf of Registrant's Class A shares)
and A I M Distributors, Inc. was filed electronically as an
Exhibit to Post-Effective Amendment No. 53 on October 9, 1997.
(9) - (a) Master Distribution Agreement, dated August 4, 1997,
between Registrant (on behalf of the portfolio's Class A and
Class C shares) and A I M Distributors, Inc. was filed
electronically as an Exhibit to Post-Effective Amendment No.
53 on October 9, 1997.
- (b) Amendment No. 1, dated as of March 1, 1999, to the Master
Distribution Agreement dated August 4, 1997, between
Registrant (on behalf of Registrant's Class A and Class C
shares) and A I M Distributors, Inc. was filed electronically
as an Exhibit to Post-Effective Amendment No. 56 on February
23, 1999.
- (c) Amendment No. 2, dated as of March 1, 1999, to the Master
Distribution Agreement dated August 4, 1997, between
Registrant (on behalf of Registrant's Class A and Class C
shares) and A I M Distributors, Inc. was filed electronically
as an Exhibit to Post-Effective Amendment No. 56 on February
23, 1999.
- (d) Amendment No. 3, dated May 12, 1999, to the Master
Distribution Agreement, dated August 4, 1997, between
Registrant (on behalf of Registrant's Class A and C shares)
and
|
A I M Distributors, Inc. was filed electronically as an
Exhibit to Post-Effective Amendment No. 60 on July 15, 1999.
- (e) Amendment No. 4, dated July 15, 1999, to the Master
Distribution Agreement, dated August 4, 1997, between
Registrant (on behalf of Registrant's Class A and Class C
shares) and A I M Distributors, Inc. was filed as an Exhibit
to Post-Effective Amendment No. 62 on January 6, 2000.
- (f) Amendment No. 5, dated September 28, 1999, to the Master
Distribution Agreement, dated August 4, 1997, between
Registrant (on behalf of Registrant's Class A and Class C
shares) and A I M Distributors, Inc. was filed as an Exhibit
to Post-Effective Amendment No. 62 on January 6, 2000.
- (g) Amendment No. 6, dated March 30, 2000, to the Master
Distribution Agreement between Registrant and A I M
Distributors, Inc. is filed herewith electronically.
(10) - Master Distribution Agreement, dated June 21, 2000, between
Registrant (on behalf of Registrant's Class A and Class C
shares) and A I M Distributors, Inc. is filed herewith
electronically.
(11) - (a) First Amended and Restated Master Distribution Agreement,
dated July 1, 2000 between Registrant (on behalf of
Registrant's Class A and Class C shares) and A I M
Distributors, Inc. is filed herewith electronically.
(b) Amendment No. 1, dated November 28, 2000, to the First
Amended and Restated Master Distribution Agreement, dated July
1, 2000, between Registrant (on behalf of Registrant's Class A
and Class C shares) and AIM Distributors, Inc. is filed
herewith electronically.
(12) - (a) Master Distribution Agreement, dated February 28, 1997,
between Registrant (on behalf of Registrant's Class B shares)
and A I M Distributors, Inc. was filed electronically as an
Exhibit to Post-Effective Amendment No. 53 on October 9, 1997.
- (b) Amendment No. 1 to the Master Distribution Agreement,
dated February 28, 1997, between Registrant (on behalf of the
Class B shares of AIM Constellation Fund) and A I M
Distributors, Inc. was filed electronically as an Exhibit to
Post-Effective Amendment No. 54 on February 27, 1998.
- (c) Amendment No. 2, dated as of March 1, 1999, to the Master
Distribution Agreement, dated February 28, 1997, between
Registrant (on behalf of Registrant's Class B shares) and
A I M Distributors, Inc. was filed electronically as an
Exhibit to Post-Effective Amendment No. 56 on February 23,
1999.
- (d) Amendment No. 3, dated as of March 1, 1999, to the Master
Distribution Agreement, dated February 28, 1997, between
Registrant (on behalf of Registrant's Class B shares) and
A I M Distributors, Inc. was filed electronically as an
Exhibit to Post-Effective Amendment No. 56 on February 23,
1999.
- (e) Amendment No. 4, dated May 12, 1999, to the Master
Distribution Agreement, dated February 28, 1997, between
Registrant (on behalf of Registrant's Class B shares) and
A I M Distributors, Inc. was filed electronically as an
Exhibit to Post-Effective Amendment No. 60 on July 15, 1999.
- (f) Amendment No. 5, dated July 15, 1999, to the Master
Distribution Agreement, dated February 28, 1997, between
Registrant (on behalf of Registrant's Class B shares) and
|
A I M Distributors, Inc. was filed as an Exhibit to
Post-Effective Amendment No. 62 on January 6, 2000.
- (g) Amendment No. 6, dated September 28, 1999, to the Master
Distribution Agreement, dated February 28, 1997, between
Registrant (on behalf of Registrant's Class B shares) and
A I M Distributors, Inc. was filed as an Exhibit to
Post-Effective Amendment No. 62 on January 6, 2000.
- (h) Amendment No. 7, dated March 30, 2000, to the Master
Distribution Agreement between Registrant (on behalf of
Registrant's Class B shares) and A I M Distributors, Inc. is
filed herewith electronically.
(13) - Master Distribution Agreement, dated June 21, 2000, between
Registrant (on behalf of Registrant's Class B shares) and
A I M Distributors, Inc. is filed herewith electronically.
(14) First Amended and Restated Master Distribution Agreement,
dated December 31, 2000, between Registrant (on behalf of
Registrant's Class B shares) and A I M Distributors, Inc. is
filed herewith electronically.
(15) - 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. 55 on December 11,
1998, and is hereby incorporated by reference.
(16) - Form of Selected Dealer Agreement between A I M Distributors,
Inc. and selected dealers is filed herewith electronically.
(17) - 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. 55 on December 11,
1998, and is hereby incorporated by reference.
f (1) - Form of Deferred Compensation Agreement for Registrant's
Non-Affiliated Directors was filed as an Exhibit to
Post-Effective Amendment No. 44 on February 24, 1995.
(2) - Form of Deferred Compensation Agreement for Registrant's
Non-Affiliated Directors, as approved December 5, 1995, was
filed electronically as an Exhibit to Post-Effective Amendment
No. 47 on December 29, 1995.
(3) - Form of Deferred Compensation Agreement for Registrant's
Non-Affiliated Directors as approved March 12, 1997, was filed
electronically as an Exhibit to Post-Effective Amendment No.
54 on February 27, 1998.
(4) - Form of Director Deferred Compensation Agreement for
Registrant's Non-Affiliated Directors, as amended March 7,
2000, is filed herewith electronically.
(5) - Retirement Plan for Registrant's Non-Affiliated Directors was
filed as an Exhibit to Post-Effective Amendment No. 44 on
February 24, 1995.
(6) - Retirement Plan for Registrant's Non-Affiliated Directors,
effective as of March 8, 1994, as restated September 18, 1995,
was filed electronically as an Exhibit to Post-Effective
Amendment No. 47 on December 29, 1995.
(7) - AIM Funds Retirement Plan for Eligible Directors/Trustees, as
restated March 7, 2000, is filed herewith electronically.
|
g (1) - (a) Custodian Contract, dated October 1, 1992, between
Registrant and State Street Bank and Trust Company, was filed
as an Exhibit to Post-Effective Amendment No. 41 on February
26, 1993, and was filed electronically as an Exhibit to
Post-Effective Amendment No. 47 on December 29, 1995.
- (b) Amendment No. 1, dated October 15, 1993, to the Custodian
Contract, dated October 1, 1992, between Registrant and State
Street Bank and Trust Company, was filed electronically as an
Exhibit to Post-Effective Amendment No. 47 on December 29,
1995.
- (c) Amendment No. 2, dated September 19, 1995, to the
Custodian Contract, dated October 1, 1992, between Registrant
and State Street Bank and Trust Company, was filed
electronically as an Exhibit to Post-Effective Amendment No.
47 on December 29, 1995.
- (d) Amendment No. 3, dated December 4, 1995, to the Custodian
Contract, dated October 1, 1992, between Registrant and State
Street Bank and Trust Company, was filed electronically as an
Exhibit to Post-Effective Amendment No. 49 on May 31, 1996.
- (e) Amendment No. 4, dated September 28, 1996, to the
Custodian Contract dated October 1, 1992, between Registrant
and State Street Bank and Trust Company was filed
electronically as an Exhibit to Post-Effective Amendment No.
57 on March 24, 1999.
- (f) Amendment, dated September 9, 1998, to the Custodian
Contract, dated October 1, 1992, between Registrant and State
Street Bank and Trust Company was filed electronically as an
Exhibit to Post-Effective Amendment No. 55 on December 11,
1998.
(2) - (a) Master Custodian Contract, dated May 1, 2000, between
Registrant and State Street Bank and Trust Company is filed
herewith electronically.
(b) Amendment, dated May 1, 2000 to 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, between
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. 44 on
February 24, 1995, and is hereby incorporated by reference.
- (b) Amendment No. 1, dated October 2, 1998, to Subcustodian
Agreement between Registrant, Chase Bank of Texas, N.A.
(formerly Texas Commerce Bank), State Street and Trust Company
and A I M Fund Services, Inc. was filed as an Exhibit to
Post-Effective Amendment No. 62 on January 6, 2000, and is
hereby incorporated by reference.
h (1) - Transfer Agency Agreement, dated May 15, 1989, between
Registrant and TAC Shareholder Services, Inc., was filed as an
Exhibit to Post-Effective Amendment No. 37 on February 28,
1990.
(2) - Transfer Agency and Service Agreement, dated July 6, 1992,
between State Street Bank and Trust Company and Registrant,
with respect to the Institutional Classes, was filed as an
Exhibit to Post-Effective Amendment No. 41 on February 26,
1993.
(3) - (a) Transfer Agency and Registrar Agreement, dated May 15,
1992, as amended May 15, 1992, between The Shareholder
Services Group, Inc. and Registrant, with respect to the
Retail Classes, was filed as an Exhibit to Post-Effective
Amendment No. 41 on February 26, 1993.
|
- (b) Amendment No. 2, dated October 15, 1993, to the Transfer
Agency and Registrar Agreement, dated May 15, 1992, as
amended, between Registrant and The Shareholder Services
Group, Inc., was filed as an Exhibit to Post-Effective
Amendment No. 44 on February 24, 1995.
- (c) Amendment No. 3, dated April 1, 1994, to the Transfer
Agency and Registrar Agreement, dated May 15, 1992, as
amended, between Registrant and The Shareholder Services
Group, Inc., was filed as an Exhibit to Post-Effective
Amendment No. 44 on February 24, 1995.
(4) - (a) Transfer Agency and Service Agreement, dated July 1, 1995,
between Registrant and A I M Institutional Fund Services,
Inc., was filed electronically as an Exhibit to Post-Effective
Amendment No. 47 on December 29, 1995.
- (b) Amendment No. 1, dated July 1, 1996, to the Transfer
Agency and Service Agreement dated July 1, 1995, between
Registrant and A I M Institutional Fund Services, Inc. was
filed electronically as an Exhibit to Post-Effective Amendment
No. 53 on October 9, 1997.
- (c) Amendment No. 2, dated July 1, 1997, to the Transfer
Agency and Service Agreement dated July 1, 1995, between
Registrant and A I M Institutional Fund Services, Inc. was
filed electronically as an Exhibit to Post-Effective Amendment
No. 53 on October 9, 1997.
(5) - (a) Transfer Agency and Service Agreement, dated November 1,
1994, between Registrant and A I M Fund Services, Inc., was
filed as an Exhibit to Post-Effective Amendment No. 44 on
February 24, 1995.
- (b) Amendment No. 1, dated August 4, 1997, to the Transfer
Agency and Service Agreement dated November 1, 1994, between
Registrant and A I M Fund Services, Inc. was filed
electronically as an Exhibit to Post-Effective Amendment No.
53 on October 9, 1997.
(6) - (a) Amended and Restated Transfer Agency and Service
Agreement, dated as of December 29, 1997, between Registrant
and A I M Fund Services, Inc. was filed electronically as an
Exhibit to Post-Effective Amendment No. 54 on February 27,
1998.
- (b) Amendment No. 1, dated January 1, 1999, to the Amended and
Restated Transfer Agency and Services Agreement between
Registrant and A I M Fund Services, Inc. was filed as an
Exhibit to Post-Effective Amendment No. 62 on January 6, 2000.
- (c) Amendment No. 2, dated July 1, 1999, to the Amended and
Restated Transfer Agency and Services Agreement between
Registrant and A I M Fund Services, Inc. was filed as an
Exhibit to Post-Effective Amendment No. 62 on January 6, 2000.
(7) - (a) Transfer Agency and Service Agreement, dated June 21,
2000, between Registrant and A I M Fund Services, Inc. is
filed herewith electronically.
(b) Amendment No. 1, dated July 1, 2000, to the Transfer
Agency and Service Agreement dated June 21, 2000, between
Registrant and A I M Fund Services, Inc. is filed herewith
electronically.
(8) - Shareholder Sub-Accounting Services Agreement between
Registrant, First Data Investor Services Group (formerly The
Shareholder Services Group, Inc.), Financial Data Services
Inc. and Merrill Lynch, Pierce, Fenner & Smith Inc., dated
July 1, 1990, was filed as an Exhibit to Post-Effective
Amendment No. 40 on February 26, 1992, and is hereby
incorporated by reference.
|
(9) - (a) Remote Access and Related Services Agreement, dated
December 23, 1994, between Registrant and First Data Investor
Services Group, Inc. (formerly The Shareholder Services Group,
Inc.), was filed as an Exhibit to Post-Effective Amendment No.
44 on February 24, 1995, and was filed electronically as an
Exhibit to Post-Effective Amendment No. 47 on December 29,
1995, and is hereby incorporated by reference.
- (b) Amendment No. 1, dated October 4, 1995, to the Remote
Access and Related Services Agreement dated December 23, 1994,
between Registrant and First Data Investor Services Group,
Inc. was filed electronically as an Exhibit to Post-Effective
Amendment No. 47 on December 29, 1995, and is hereby
incorporated by reference.
- (c) Addendum No. 2, dated October 12, 1995, to the Remote
Access and Related Services Agreement, dated December 23,
1994, between Registrant and First Data Investor Services
Group, Inc. was filed electronically as an Exhibit to
Post-Effective Amendment No. 47 on December 29, 1995, and is
hereby incorporated by reference.
- (d) Amendment No. 3, dated February 1, 1997, to the Remote
Access and Related Services Agreement, dated December 23,
1994, between Registrant and First Data Investor Services
Group, Inc. was filed electronically as an Exhibit to
Post-Effective Amendment No. 53 on October 9, 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. 55 on December 11, 1998, 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. 55 on December 11, 1998, 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. 54 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 as an Exhibit to Post-Effective
Amendment No. 62 on January 6, 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 Services Group, Inc.
is filed herewith electronically.
(10) - Preferred Registered Technology Escrow Agreement, dated
September 10, 1997, between Registrant and First Data Investor
Services Group, Inc. was filed electronically as an Exhibit to
Post-Effective Amendment No. 54 on February 27, 1998, and is
hereby incorporated by reference.
(11) - Articles of Merger, dated September 30, 1988, was filed as an
Exhibit to Post-Effective Amendment No. 35 on September 30,
1988.
(12) - Agreement and Plan of Merger, dated September 30, 1988, was
filed as an Exhibit to Post-Effective Amendment No. 35 on
September 30, 1988.
|
(13) - (a) Agreement and Plan of Reorganization between Registrant
and Baird Capital Development Fund, Inc., dated December 20,
1995, was filed electronically as an Appendix to Part A of
Registrant's AIM Capital Development Fund registration
statement on Form N-14 on December 29, 1995.
- (b) Amendment, dated May 23, 1996, to Agreement and Plan of
Reorganization between Registrant and Baird Capital
Development Fund, Inc., dated December 20, 1995, was filed
electronically as an Exhibit to Post-Effective Amendment No.
49 on May 31, 1996.
(14) - Agreement and Plan of Reorganization between Registrant and
Baird Blue Chip Fund, Inc., dated December 20, 1995, was filed
electronically as an Appendix to Part A of Registrant's AIM
Blue Chip Fund registration statement on Form N-14 on December
29, 1995.
(15) - Administrative Services Agreement, dated June 11, 1989,
between Registrant and A I M Advisors, Inc., was filed as an
Exhibit to Post-Effective Amendment No. 37 on February 28,
1990.
(16) - Administrative Services Agreement, dated August 6, 1993,
between Registrant's AIM Aggressive Growth Fund and A I M
Advisors, Inc., was filed as an Exhibit to Post-Effective
Amendment No. 43 on February 28, 1994.
(17) - Administrative Services Agreement, dated September 16, 1994,
between A I M Advisors, Inc. and A I M Institutional Fund
Services, Inc., on behalf of the Institutional Classes, was
filed as an Exhibit to Post-Effective Amendment No. 44 on
February 24, 1995.
(18) - (a) Administrative Services Agreement, dated October 18, 1993,
between A I M Advisors, Inc. and A I M Fund Services, Inc., on
behalf of the Retail Classes, was filed as an Exhibit to
Post-Effective Amendment No. 43 on February 28, 1994, and was
filed electronically as an Exhibit to Post-Effective Amendment
No. 47 on December 29, 1995.
- (b) Amendment No. 1, dated May 11, 1994, to the Administrative
Services Agreement dated October 18, 1993, between A I M
Advisors, Inc. and A I M Fund Services, Inc., was filed as an
Exhibit to Post-Effective Amendment No. 44 on February 24,
1995, and was filed electronically as an Exhibit to
Post-Effective Amendment No. 47 on December 29, 1995.
- (c) Amendment No. 2, dated July 1, 1994, to the Administrative
Services Agreement, dated October 18, 1993, between A I M
Advisors, Inc. and A I M Fund Services, Inc., was filed as an
Exhibit to Post-Effective Amendment No. 44 on February 24,
1995 and was filed electronically as an Exhibit to
Post-Effective Amendment No. 47 on December 29, 1995.
- (d) Amendment No. 3, dated September 16, 1994, to the
Administrative Services Agreement, dated October 18, 1993,
between A I M Advisors, Inc. and A I M Fund Services, Inc.,
was filed as an Exhibit to Post-Effective Amendment No. 44 on
February 24, 1995, and was filed electronically as an Exhibit
to Post-Effective Amendment No. 47 on December 29, 1995.
- (e) Amendment No. 4, dated November 1, 1994, to the
Administrative Services Agreement, dated October 18, 1993,
between A I M Advisors, Inc. and A I M Fund Services, Inc.,
was filed electronically as an Exhibit to Post-Effective
Amendment No. 47 on December 29, 1995.
(19) - (a) Master Administrative Services Agreement, dated October
18, 1993, between Registrant and A I M Advisors, Inc., was
filed as an Exhibit to Post-Effective Amendment No. 43 on
February 28, 1994, and was filed electronically as an Exhibit
to Post-Effective Amendment No. 47 on December 29, 1995.
|
- (b) Amendment No. 1, dated December 4, 1995, to the Master Administrative Services Agreement, dated October 18, 1993, between Registrant and A I M Advisors, Inc., was filed electronically as an Exhibit to Post-Effective Amendment No. 49 on May 31, 1996.
- (c) Amendment No. 2, dated June 11, 1996, to the Master Administrative Services Agreement dated October 18, 1993, between Registrant and A I M Advisors, Inc., was filed electronically as an Exhibit to Post-Effective Amendment No. 50 on July 24, 1996.
(20) - (a) 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. 53 on October 9, 1997.
- (b) Amendment No. 1, dated as of March 1, 1999, 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.
56 on February 23, 1999.
- (c) Amendment No. 2 , dated May 12, 1999, 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.
60 on July 15, 1999.
- (d) Amendment No. 3 to the Master Administrative Services
Agreement, dated February 28, 1997, between Registrant and
A I M Advisors, Inc. was filed as an Exhibit to Post-Effective
Amendment No. 62 on January 6, 2000.
- (e) Amendment No. 4, to the Master Administrative Services
Agreement, dated February 28, 1997, between Registrant and
A I M Advisors, Inc. was filed as an Exhibit to Post-Effective
Amendment No. 62 on January 6, 2000.
(21) - Master Administrative Services Agreement, dated March 30,
2000, between Registrant and A I M Advisors, Inc. is filed
herewith electronically.
(22) - Master Administrative Services Agreement, dated June 21, 2000,
between Registrant and A I M Advisors, Inc. is filed herewith
electronically.
(23) - (a) Memorandum of Agreement, dated March 1, 1999, between
Registrant, on behalf of AIM Charter Fund, AIM Constellation
Fund and AIM Weingarten Fund, and A I M Advisors, Inc. was
filed electronically as an Exhibit to Post-Effective Amendment
No. 60 on July 15, 1999.
- (b) Memorandum of Agreement, dated June 7, 1999, between
Registrant, on behalf of AIM Large Cap Basic Value Fund, and
A I M Advisors, Inc. was filed as an Exhibit to Post-Effective
Amendment No. 62 on January 6, 2000.
- (c) Memorandum of Agreement, dated January 6, 2000, between
Registrant, on behalf of AIM Large Cap Growth Fund, and A I M
Advisors, Inc. is filed herewith electronically.
- (d) Memorandum of Agreement, dated June 21, 2000,
between Registrant, on behalf of all Funds, and A I M
Advisors, Inc. is filed herewith electronically.
- (e) Memorandum of Agreement, dated July 1, 2000, between
Registrant, on behalf of AIM Large Cap Growth Fund and AIM
Large Cap Basic Value Fund, and A I M Advisors, Inc. is filed
herewith electronically.
|
(24) - Agreement and Plan of Reorganization, dated December 30, 1999,
between AIM Equity Funds, Inc., a Maryland Corporation, and
AIM Equity Funds, a Delaware business trust was filed
electronically as an Exhibit to Post-Effective Amendment No.
64 on March 27, 2000, and is hereby incorporated by reference.
i (1) - Opinion of Ballard Spahr Andrews & Ingersoll was filed as an
Exhibit to Registrant's Rule 24f-2 Notice for the fiscal year
ending October 31, 1996 on December 20, 1996.
(2) - Opinion of Ballard Spahr Andrews & Ingersoll was filed as an
Exhibit to Registrant's Rule 24f-2 Notice for the fiscal year
ending September 30, 1996 on November 27, 1996 (for AIM Blue
Chip Fund).
(3) - Opinion and Consent of Ballard Spahr Andrews & Ingersoll, LLP
was filed as an Exhibit to Post-Effective Amendment No. 64 on
March 27, 2000, and is hereby incorporated by reference.
(4) - Consent of Ballard Spahr Andrews & Ingersoll, LLP is filed
herewith electronically.
j (1) - Consent of KPMG LLP is filed herewith electronically.
k - Financial Statements - None.
l (1) - Agreement Concerning Initial Capitalization of Registrant's
AIM Large Cap Growth Fund, dated February 26, 1999, was filed
electronically as an Exhibit to Post-Effective Amendment No.
56 on February 23, 1999, and is hereby incorporated by
reference.
(2) - Agreement Concerning Initial Capitalization of Registrant's
AIM Dent Demographic Trends Fund, dated June 4, 1999, was
filed electronically as an Exhibit to Post-Effective Amendment
No. 60 on July 15, 1999, and is hereby incorporated by
reference.
(3) - Agreement Concerning Initial Capitalization of Registrant's
AIM Large Cap Basic Value Fund, dated June 29, 1999, was filed
electronically as an Exhibit to Post-Effective Amendment No.
60 on July 15, 1999, and is hereby incorporated by reference.
(4) - Agreement Concerning Initial Capitalization of Registrant's
AIM Mid Cap Growth Fund, dated November 1, 1999, was filed as
an Exhibit to Post-Effective Amendment No. 62 on January 6,
2000, and is hereby incorporated by reference.
(5) - Agreement Concerning Initial Capitalization of Registrant's
AIM Emerging Growth Fund is filed herewith electronically.
m (1) - Registrant's Amended Distribution Plans for the Retail
Classes, dated September 5, 1991, were filed as an Exhibit to
Post-Effective Amendment No. 40 on February 26, 1992.
(2) - Registrant's Amended Distribution Plan for AIM Aggressive
Growth Fund, dated August 6, 1993, was filed as an Exhibit to
Post-Effective Amendment No. 43 on February 28, 1994.
(3) - Registrant's Master Distribution Plan for the Retail Classes
and AIM Aggressive Growth Fund, dated September 27, 1993, was
filed as an Exhibit to Post-Effective Amendment No. 43 on
February 28, 1994.
(4) - Registrant's Amended Master Distribution Plan for the Retail
Classes and AIM Aggressive Growth Fund, dated September 27,
1993, as amended March 8, 1994, was filed as an Exhibit to
Post-Effective Amendment No. 44 on February 24, 1995.
|
(5) - (a) Registrant's Amended Master Distribution Plan for the
Retail Classes, dated September 27, 1993, as amended March 8,
1994 and September 10, 1994, was filed as an Exhibit to
Post-Effective Amendment No. 44 on February 24, 1995, and was
filed electronically as an Exhibit to Post-Effective Amendment
No. 47 on December 29, 1995.
- (b) Amendment No. 1, dated December 4, 1995, to the Amended
Master Distribution Plan for the Retail Classes, dated
September 27, 1993, as amended, was filed electronically as an
Exhibit to Post-Effective Amendment No. 49 on May 31, 1996.
(6) - Registrant's Amended and Restated Master Distribution Plan
for the Class A shares, effective as of June 15, 1995
(effective as of December 4, 1995, with respect to the AIM
Blue Chip Fund and AIM Capital Development Fund), was filed
electronically as an Exhibit to Post-Effective Amendment No.
49 on May 31, 1996.
(7) - Registrant's Second Amended and Restated Master Distribution
Plan, dated June 30, 1997, for the Class A shares was filed
electronically as an Exhibit to Post-Effective Amendment No.
53 on October 9, 1997.
(8) - Registrant's Third Amended and Restated Master Distribution
Plan, dated August 4, 1997, for the Class A and Class C shares
was filed electronically as an Exhibit to Post-Effective
Amendment No. 53 on October 9, 1997.
(9) - (a) Registrant's Master Distribution Plan for the Class B
shares of AIM Charter Fund and AIM Weingarten Fund, dated June
14, 1995, was filed electronically as an Exhibit to
Post-Effective Amendment No. 47 on December 29, 1995.
- (b) Amendment No. 1, dated June 11, 1996, to Registrant's
Master Distribution Plan for the Class B shares of AIM Charter
Fund, AIM Weingarten Fund, AIM Blue Chip Fund and AIM Capital
Development Fund, dated June 14, 1995, was filed
electronically as an Exhibit to Post-Effective Amendment No.
50 on July 24, 1996.
(10) - (a) Registrant's Amended and Restated Master Distribution
Plan, dated June 30, 1997, for the Class B shares was filed
electronically as an Exhibit to Post-Effective Amendment No.
53 on October 9, 1997.
- (b) Amendment No. 1 to Registrant's Amended and Restated
Master Distribution Plan for the Class B shares of AIM
Constellation Fund was filed electronically as an Exhibit to
Post-Effective Amendment No. 54 on February 27, 1998.
- (c) Amendment No. 2, dated as of March 1, 1999, to
Registrant's Amended and Restated Master Distribution Plan for
the Class B shares of AIM Large Cap Growth Fund was filed
electronically as an Exhibit to Post-Effective Amendment No.
56 on February 23, 1999.
- (d) Amendment No. 3, dated as of March 1, 1999, to
Registrant's Amended and Restated Master Distribution Plan for
the Class B shares of AIM Aggressive Growth Fund was filed
electronically as an Exhibit to Post-Effective Amendment No.
56 on February 23, 1999.
- (e) Amendment No. 4, dated May 12, 1999, to Registrant's
Amended and Restated Master Distribution Plan for the Class B
shares of AIM Dent Demographic Trends Fund and AIM Growth and
Income Fund was filed electronically as an Exhibit to
Post-Effective Amendment No. 60 on July 15, 1999.
|
- (f) Amendment No. 5, dated July 15, 1999, to Registrant's
Amended and Restated Master Distribution Plan for the Class B
shares of AIM Large Cap Basic Value Fund was filed as an
Exhibit to Post-Effective Amendment No. 62 on January 6, 2000.
- (g) Amendment No. 6, dated September 28, 1999, to Registrant's
Amended and Restated Master Distribution Plan for the Class B
shares of AIM Mid Cap Growth Fund was filed as an Exhibit to
Post-Effective Amendment No. 62 on January 6, 2000.
- (h) Amendment No. 7, dated March 30, 2000, to Registrant's
Amended and Restated Master Distribution Plan for the Class B
shares of AIM Emerging Growth Fund is filed herewith
electronically.
(11) - Master Distribution Plan, dated June 21, 2000, for the Class B
shares is filed herewith electronically.
(12) - First Amended and Restated Master Distribution Plan, dated
December 31, 2000, for the Class B shares is filed herewith
electronically.
(13) - (a) Registrant's Fourth Amended and Restated Master
Distribution Plan, dated as of June 30, 1998, for the Class A
and Class C shares was filed electronically as an Exhibit to
Post-Effective Amendment No. 55 on December 11, 1998.
- (b) Amendment No. 1, dated as of March 1, 1999, to
Registrant's Fourth Amended and Restated Master Distribution
Plan for the Class A and Class C shares was filed
electronically as an Exhibit to Post-Effective Amendment No.
56 on February 23, 1999.
- (c) Amendment No. 2, dated as of March 1, 1999, to
Registrant's Fourth Amended and Restated Master Distribution
Plan for the Class A and Class C shares was filed
electronically as an Exhibit to Post-Effective Amendment No.
56 on February 23, 1999.
- (d) Amendment No. 3, dated May 12, 1999, to Registrant's
Fourth Amended and Restated Master Distribution Plan for the
Class A and Class C shares was filed electronically as an
Exhibit to Post-Effective Amendment No. 60 on July 15, 1999.
- (e) Amendment No. 4, dated July 15, 1999, to Registrant's
Fourth Amended and Restated Master Distribution Plan for the
Class A and Class C shares of AIM Large Cap Basic Value Fund
was filed as an Exhibit to Post-Effective Amendment No. 62 on
January 6, 2000.
- (f) Amendment No. 5, dated September 28, 1999, to Registrant's
Fourth Amended and Restated Master Distribution Plan for the
Class A and Class C shares was filed as an Exhibit to
Post-Effective Amendment No. 62 on January 6, 2000.
- (g) Amendment No. 6, dated March 30, 2000, to Registrant's
Fourth Amended and Restated Master Distribution Plan for the
Class A and Class C shares of AIM Emerging Growth Fund is
filed herewith electronically.
(14) - Master Distribution Plan, dated as of June 21, 2000, for the
Class A and Class C shares is filed herewith electronically.
(15) - First Amended and Restated Master Distribution Plan, dated as
of July 1, 2000, for the Class A and Class C shares is filed
herewith electronically.
(16) - Form of Shareholder Service Agreement to be used in connection
with Registrant's Master Distribution Plan was filed
electronically as an Exhibit to Post-Effective Amendment No.
60 on July 15, 1999, and is hereby incorporated by reference.
|
(17) - Form of Bank Shareholder Service Agreement to be used in
connection with Registrant's Master Distribution Plan was
filed electronically as an Exhibit to Post-Effective Amendment
No. 60 on July 15, 1999, and is hereby incorporated by
reference.
(18) - Form of Variable Group Annuity Contract Holder Service
Agreement to be used in connection with Registrant's Master
Distribution Plan was filed electronically as an Exhibit to
Post-Effective Amendment No. 60 on July 15, 1999, and is
hereby incorporated by reference.
(19) - Form of Agency Pricing Agreement to be used in connection with
Registrant's Master Distribution Plan was filed electronically
as an Exhibit to Post-Effective Amendment No. 60 on July 15,
1999, and is hereby incorporated by reference.
(20) - Forms of Service Agreement for Bank Trust Departments and for
Brokers for Bank Trust Departments was filed electronically as
an Exhibit to Post-Effective Amendment No. 60 on July 15,
1999, and is hereby incorporated by reference.
(21) - Form of Shareholder Service Agreement for shares of the AIM
Mutual Funds is filed herewith electronically.
n (1) - Multiple Class Plan (Rule 18f-3) was filed electronically as
an Exhibit to Post-Effective Amendment No. 46 on June 6, 1995.
(2) - (a) Amended Multiple Class Plan (Rule 18f-3), as amended
December 4, 1995, was filed electronically as an Exhibit to
Post-Effective Amendment No. 47 on December 29, 1995.
- (b) Amendment No. 1, dated June 11, 1996, to the Multiple
Class Plan (Rule 18f-3), dated December 4, 1995 was filed
electronically as an Exhibit to Post-Effective Amendment No.
50 on July 24, 1996.
(3) - Multiple Class Plan (Rule 18f-3) (effective September 27,
1996) was filed as an Exhibit to Post-Effective Amendment No.
51 on January 15, 1997.
(4) - Amended and Restated Multiple Class Plan (Rule 18f-3)
(effective July 1, 1997) was filed electronically as an
Exhibit to Post-Effective Amendment No. 53 on October 9, 1997.
(5) - Second Amended and Restated Multiple Class Plan (Rule 18f-3)
(effective September 1, 1997) was filed electronically as an
Exhibit to Post-Effective Amendment No. 53 on October 9, 1997.
(6) - Third Amended and Restated Multiple Class Plan (Rule 18f-3)
(effective August 5, 1999) was filed electronically as an
Exhibit to Post-Effective Amendment No. 62 on January 6, 2000,
and is hereby incorporated by reference.
o - Reserved
p (1) - (a) The A I M Management Group Code of Ethics, adopted May 1,
1981, as last amended August 17, 1999, relating to A I M
Management Group Inc. and A I M Advisors, Inc. were filed as
an Exhibit to Post-Effective Amendment No. 62 on January 6,
2000, and are hereby incorporated by reference.
- (b) The A I M Management Group Code of Ethics, adopted May 1,
1981, as last amended February 24, 2000, 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.
65 on May 25, 2000, and is hereby incorporated by reference.
|
(2) - (a) Code of Ethics of the Registrant, effective as of January
1, 1989, was filed as an Exhibit to Post-Effective Amendment
No. 62 on January 6, 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, arrangement or statute under which any director, officer, underwriter or affiliated person of the Registrant is insured or indemnified against any liability incurred in their official capacity, other than insurance provided by any director, officer, affiliated person, or underwriter for their own protection.
The Registrant's Agreement and Declaration of Trust, dated December 6, 1999, provides, among other things (i) that trustees and officers of the Registrant, when acting as such, shall not be personally liable for any act, omission or obligation of the Registrant or any trustee or officer (except for liabilities to the Registrant or its shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard to duty); (ii) for the indemnification by the Registrant of the trustees, officers, employees and agents of the Registrant to the fullest extent permitted by the Delaware Business Trust Act and Bylaws and other applicable law; (iii) that shareholders of the Registrant shall not be personally liable for the debts, liabilities, obligations or expenses of the Registrant or any portfolio or class; and (iv) for the indemnification by the Registrant, out of the assets belonging to the applicable portfolio, of shareholders and former shareholders of the Registrant in case they are held personally liable solely by reason of being or having been shareholders of the Registrant or any portfolio or class and not because of their acts or omissions or for some other reason.
Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 1940 Act and is, therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such trustees, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1940 Act and will be governed by the final adjudication of such issue. Insurance coverage is provided under a joint Mutual Fund & Investment Advisory Professional and Directors & Officers Liability Policy, issued by ICI Mutual Insurance Company, with a $35,000,000 limit of liability.
Item 26. Business and Other Connections of Investment Advisor
Describe any other business, profession, vocation or employment of a substantial nature that each investment advisor and each director, officer or partner of the advisor, is or has been, engaged within the last two fiscal years, for his or her own account or in the capacity of director, officer, employee, partner, or trustee.
The only employment of a substantial nature of the Advisor's directors and officers is with the Advisor and its affiliated companies. Reference is also made to the caption "Fund Management-The Advisor" of 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 Funds Group
AIM Floating Rate Fund
AIM Growth Series
AIM International Funds, Inc.
AIM Investment Funds
AIM Investment Securities Funds
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 table for each director, officer or partner of each principal underwriter named in response to Item 20:
Name and Principal Position and Offices with Positions and Offices Business Address* Underwriter with Registrant ------------------ -------------------------- --------------------- Michael J. Cemo President & Director None Gary T. Crum Director Senior Vice President Robert H. Graham Senior Vice President & Director Chairman, President & Trustee W. Gary Littlepage Senior Vice President & Director None James L. Salners Executive Vice President None Marilyn M. Miller Senior Vice President None Gene L. Needles Senior Vice President None 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 |
Name and Principal Position and Offices with Positions and Offices
Business Address* Underwriter with Registrant
------------------ -------------------------- ---------------------
Mary A. Corcoran Vice President None
Melville B. Cox Vice President & Chief Compliance Vice President
Officer
Glenda A. Dayton Vice President None
Sidney M. Dilgren Vice President None
Tony D. Green Vice President None
Dawn M. Hawley Vice President & Treasurer None
Ofelia M. Mayo Vice President, General Counsel Assistant Secretary
& Assistant Secretary
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
Gary K. Wendler Vice President None
Norman W. Woodson Vice President None
Kathleen J. Pflueger Secretary Assistant Secretary
Luke P. Beausoleil Assistant Vice President None
Sheila R. Brown Assistant Vice President None
Scott E. Burman Assistant Vice President None
David E. Hessel Assistant Vice President, Assistant None
Treasurer & Controller
Simon R. Hoyle Assistant Vice President None
Kathryn A. Jordan 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
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 Custodian, State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110,
and the Registrant's Transfer Agent and Dividend Paying Agent, A I M Fund Services, Inc., P. O. Box 4739, Houston, Texas 77210-4739.
Item 29. Management Services
Provide a summary of the substantive provisions of any management-related service contract not discussed in Part A or B, disclosing the parties to the contract and the total amount paid and by whom for the Registrant's last three fiscal years.
None.
Item 30. Undertakings
In initial registration statements filed under the Securities Act, provide an undertaking to file an amendment to the registration statement with certified financial statements showing the initial capital received before accepting subscriptions from more than 25 persons if the Registrant intends to raise its initial capital under section 14(a)(3) [15 U.S.C. 80a-14(a)(3)].
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Houston, Texas on the 23rd day of February, 2001.
REGISTRANT: AIM EQUITY FUNDS
By: /s/ ROBERT H. GRAHAM
-------------------------------------
Robert H. Graham, President
|
Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated:
SIGNATURES TITLE DATE
---------- ----- ----
/s/ ROBERT H. GRAHAM Chairman, Trustee & President February 23, 2001
------------------------------------------ (Principal Executive Officer)
(Robert H. Graham
/s/ BRUCE L. CROCKETT Trustee February 23, 2001
------------------------------------------
(Bruce L. Crockett)
/s/ OWEN DALY II Trustee February 23, 2001
------------------------------------------
(Owen Daly II)
/s/ ALBERT R. DOWDEN Trustee February 23, 2001
------------------------------------------
(Albert R. Dowden)
/s/ EDWARD K. DUNN, JR. Trustee February 23, 2001
------------------------------------------
(Edward K. Dunn, Jr.)
/s/ JACK FIELDS Trustee February 23, 2001
------------------------------------------
(Jack Fields)
/s/ CARL FRISCHLING Trustee February 23, 2001
------------------------------------------
(Carl Frischling)
/s/ PREMA MATHAI-DAVIS Trustee February 23, 2001
------------------------------------------
(Prema Mathai-Davis)
/s/ LEWIS F. PENNOCK Trustee February 23, 2001
------------------------------------------
(Lewis F. Pennock)
/s/ LOUIS S. SKLAR Trustee February 23, 2001
------------------------------------------
(Louis S. Sklar)
Vice President &
/s/ DANA R. SUTTON Treasurer (Principal Financial February 23, 2001
------------------------------------------ and Accounting Officer)
(Dana R. Sutton)
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INDEX TO EXHIBITS
AIM EQUITY FUNDS
Exhibit
Number Description
------- -----------
a(2)(c) Amendment No. 2, dated December 13, 2000, to Agreement and
Declaration of Trust of Registrant, dated December 6, 1999
b(4)(b) Amendment No. 1, dated June 14, 2000, to Bylaws of Registrant, dated
effective December 6, 1999
d(5) Master Investment Advisory Agreement, dated March 30, 2000,
between Registrant and A I M Advisors, Inc.
d(6) Master Investment Advisory Agreement, dated June 21, 2000, between
Registrant and A I M Advisors, Inc.
d(11) Master Sub-Advisory Agreement, dated June 21, 2000, between A I M
Advisors, Inc. and A I M Capital Management, Inc.
d(13) Sub-Advisory Agreement, dated June 21, 2000, between A I M Advisors,
Inc. and H.S. Dent Advisors, Inc.
e(9)(g) Amendment No. 6, dated March 30, 2000, to the Master Distribution
Agreement between Registrant and A I M Distributors, Inc.
e(10) Master Distribution Agreement, dated June 21, 2000, between
Registrant (on behalf of Registrant's Class A and Class C shares)
and A I M Distributors, Inc.
e(11)(a) First Amended and Restated Master Distribution Agreement, dated July
1, 2000 between Registrant (on behalf of Registrant's Class A and
Class C shares) and A I M Distributors, Inc.
e(11)(b) Amendment No. 1, dated November 28, 2000, to the First Amended and
Restated Master Distribution Agreement, dated July 1, 2000, between
Registrant (on behalf of Registrant's Class A and Class C shares)
and AIM Distributors, Inc.
e(12)(h) Amendment No. 7, dated March 30, 2000, to the Master Distribution
Agreement between Registrant (on behalf of Registrant's Class B
shares) and A I M Distributors, Inc.
e(13) Master Distribution Agreement, dated June 21, 2000, between
Registrant (on behalf of Registrant's Class B shares) and A I M
Distributors, Inc.
e(14) First Amended and Restated Master Distribution Agreement, dated
December 31, 2000 (on behalf of Registrant's Class B shares) and
A I M Distributors, Inc.
e(16) Form of Selected Dealer Agreement between A I M Distributors, Inc.
and selected dealers
f(4) Form of Director Deferred Compensation Agreement for Registrant's
Non-Affiliated Directors, as amended March 7, 2000
f(7) AIM Funds Retirement Plan for Eligible Directors/Trustees, as
restated March 7, 2000
|
g(2)(a) Master Custodian Contract, dated May 1, 2000, between Registrant and
State Street Bank and Trust Company
g(2)(b) Amendment, dated May 1, 2000 to Custodian Contract, dated May 1,
2000, between Registrant and State Street Bank and Trust Company
h(7)(a) Transfer Agency and Service Agreement, dated June 21, 2000, between
Registrant and A I M Fund Services, Inc.
h(7)(b) Amendment No. 1, dated July 1, 2000, to the Transfer Agency and
Service Agreement dated June 21, 2000, between Registrant and A I M
Fund Services, Inc.
h(9)(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 Services Group, Inc.
h(21) Master Administrative Services Agreement, dated March 30, 2000,
between Registrant and A I M Advisors, Inc.
h(22) Master Administrative Services Agreement, dated June 21, 2000,
between Registrant and A I M Advisors, Inc.
h(23)(c) Memorandum of Agreement, dated January 6, 2000, between
Registrant, on behalf of AIM Large Cap Growth Fund, and A I M
Advisors, Inc.
h(23)(d) Memorandum of Agreement, dated June 21, 2000, between Registrant, on
behalf of all Funds, and A I M Advisors, Inc.
h(23)(e) Memorandum of Agreement, dated July 1, 2000, between Registrant,
on behalf of AIM Large Cap Growth Fund and AIM Large Cap Basic
Value Fund, and A I M Advisors, Inc.
i(4) Consent of Ballard Spahr Andrews & Ingersoll, LLP
j(1) Consent of KPMG LLP
l(5) Agreement Concerning Initial Capitalization of Registrant's AIM
Emerging Growth Fund
m(10)(h) Amendment No. 7, dated March 30, 2000, to Registrant's Amended and
Restated Master Distribution Plan for the Class B shares of AIM
Emerging Growth Fund
m(11) Master Distribution Plan, dated June 21, 2000, for the Class B
shares
m(12) First Amended and Restated Master Distribution Plan, dated December
31, 2000, for Class B shares
m(13)(g) Amendment No. 6, dated March 30, 2000, to Registrant's Fourth
Amended and Restated Master Distribution Plan for the Class A and
Class C shares of AIM Emerging Growth Fund
m(14) Master Distribution Plan, dated as of June 21, 2000, for the Class A
and Class C shares
m(15) First Amended and Restated Master Distribution Plan, dated as of
July 1, 2000, for the Class A and Class C shares
m(21) Form of Shareholder Service Agreement for shares of the AIM Mutual
Funds
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)(c)
AMENDMENT NO. 2
TO
AGREEMENT AND DECLARATION OF TRUST
OF
AIM EQUITY FUNDS
This Amendment No. 2 to the Agreement and Declaration of Trust of AIM Equity Funds (this "Amendment") amends, effective as of December 13, 2000, the Agreement and Declaration of Trust of AIM Equity Funds dated as of December 6, 1999, as amended (the "Agreement").
Under Section 9.7 of the Agreement, this Amendment may be executed by a duly authorized officer of the Trust.
NOW, THEREFORE, the Agreement is hereby amended as follows:
1. Unless defined herein, each capitalized term used in this Amendment shall have the meaning given it in the Agreement.
2. Section 1.2(g) is hereby amended and restated in its entirety to read as follows:
"(g) "Class Expenses" means expenses incurred by a particular Class in connection with a shareholder services arrangement or a distribution plan that is specific to such Class or any other differing share of expenses or differing fees, in each case pursuant to a plan adopted by the Trust pursuant to Rule 18f-3 under the 1940 Act, as such plan or Rule may be amended from time to time."
3. The second sentence of Section 2.3(b) is hereby amended and restated in its entirety to read as follows:
"Each Class so established and designated shall represent a Proportionate Interest (as defined in Section 2.5(d)) in the net assets belonging to that Portfolio and shall have identical voting, dividend, liquidation, and other rights and be subject to the same terms and conditions, except that (1) Class Expenses allocated to a Class for which such expenses were incurred shall be borne solely by that Class, (2) other expenses, costs, charges, and reserves allocated to a Class in accordance with Section 2.5(e) may be borne solely by that Class, provided that the allocation of such other expenses, costs, charges, and reserves is not specifically required to be set forth in a plan adopted by the Trust pursuant to Rule 18f-3 under the Act, (3) dividends declared and payable to a Class pursuant to Section 7.1 shall reflect the items separately allocated thereto pursuant to the preceding clauses, (4) each Class may have separate rights to convert to another Class, exchange rights, and similar rights, each as determined by the Trustees, and (5) subject to Section 2.6(c), each Class may have exclusive voting rights with respect to matters affecting only that Class."
4. Section 2.6(c) is hereby amended and restated in its entirety to read as follows:
"(c) If (1) the Class A Shareholders of a Portfolio approve any increase in expenses allocated to the Class A Shares of that Portfolio in connection with (A) a Plan of Distribution adopted pursuant to Rule 12b-1 under the 1940 Act, (B) a non-Rule 12b-1 shareholder services plan or (C) any other plan or arrangement whereby Classes of that Portfolio pay a different share of other expenses, not including advisory or custodial fees or other expenses related to the management of the Trust's assets, then (2) the Class B Shares of that Portfolio will stop converting to the Class A Shares unless the Class B Shareholders of that Portfolio, voting separately, approve the increase in expenses. The Trustees shall have sole discretion in determining whether such increase in expenses is submitted to a vote of the Class B Shareholders. Should such increase in expenses not be submitted to a vote of the Class B Shareholders or, if submitted, should the Class B Shareholders fail to approve such increase in expenses, the Trustees shall take such action as is necessary to: (1) create a new class of that Portfolio (the "New Class A Shares") which shall be identical in all material respects to the Class A Shares of that Portfolio as they existed prior to the implementation of the increase in expenses; and (2) ensure that the existing Class B Shares of that Portfolio will be exchanged or converted into New Class A Shares no later than the date such Class B Shares were scheduled to convert to Class A Shares. If deemed advisable by the Trustees to implement the foregoing, and at the sole discretion of the Trustees, such action may include the exchange of all Class B Shares of that Portfolio for a new class of that Portfolio (the "New Class B Shares"), identical in all material respects to the Class B Shares of that Portfolio except that the New Class B Shares will automatically convert into the New Class A Shares. Such exchanges or conversions shall be effected in a manner that the Trustees reasonably believe will not be subject to federal taxation."
5. Section 2.8 is hereby amended by deleting the clause ", except as provided herein or by applicable law," from the second sentence of Section 2.8.
6. Section 4.7 is hereby amended and restated in its entirety to read as follows:
"Section 4.7. Independent Trustee. A Trustee who is an "Independent Trustee," as that term is defined in the Delaware Act, shall be deemed to be an Independent Trustee when making any determinations or taking any action as a Trustee."
7. All references in the Agreement to "this Agreement" shall mean the Agreement as amended by this Amendment.
8. Except as specifically amended by this Amendment, the Agreement 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 December 13, 2000.
/s/ ROBERT H. GRAHAM ----------------------------------- Name: Robert H. Graham Title: President |
EXHIBIT b(4)(b)
AMENDMENT NO. 1
TO
BYLAWS OF AIM EQUITY FUNDS
(A DELAWARE BUSINESS TRUST)
ADOPTED EFFECTIVE JUNE 14, 2000
This Amendment No. 1 to the Bylaws of AIM Equity Funds amends the Bylaws initially adopted effective December 6, 1999 (the "Bylaws").
1. Article IV, Section 8 is hereby restated in its entirety to read as follows:
"Section 8. Quorum. The holders of one-third of the Outstanding Shares entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the Shareholders for the transaction of business except as otherwise provided by applicable law or by the Agreement. Notwithstanding the preceding sentence, with respect to any matter which by applicable law or by the Agreement requires the separate approval of one or more Classes or Portfolios, the holders of one-third of the Outstanding Shares of each such Class or Portfolio (or of such Classes or Portfolios voting together as a single class) entitled to vote on the matter shall constitute a quorum. If, however, such quorum shall not be present or represented at any meeting of the Shareholders, the vote of the holders of a majority of Shares cast shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting, at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified."
2. A new Article IV, Section 14 is hereby added to the Bylaws to read in full as follows:
"Section 14. Record Date. The Board of Trustees may set a record date for the purpose of making any proper determination with respect to Shareholders, including, but not limited to, which Shareholders are entitled to notice of a meeting or to vote at a meeting. The record date may not be prior to the close of business on the day the record date is fixed and shall be not more than 90 days before the date on which the action requiring the determination will be taken."
3. A new Article IV, Section 15 is hereby added to the Bylaws to read in full as follows:
"Section 15. Adjournments. A meeting of Shareholders convened on the date for which it was called may be adjourned from time to time without further notice to Shareholders to a date not more than 120 days after the original record date. A meeting of Shareholders may not be adjourned for more than 120 days after the original record date for such meeting without giving the Shareholders notice of the adjournment and the new meeting date."
EXHIBIT d(5)
AIM EQUITY FUNDS, INC.
MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 30th day of March, 2000, by and between AIM Equity Funds, Inc., a Maryland corporation (the "Company") with respect to its series of shares shown on the Appendix A attached hereto, as the same may be amended from time to time, and A I M Advisors, Inc., a Delaware corporation (the "Advisor").
RECITALS
WHEREAS, the Company is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end, diversified management investment company;
WHEREAS, the Advisor is registered under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), as an investment advisor and engages in the business of acting as an investment advisor;
WHEREAS, the Company's Charter (the "Charter") authorizes the Board of Directors of the Company (the "Board of Directors") to create separate series of shares of common stock of the Company, and as of the date of this Agreement, the Board of Directors has created eleven separate series portfolios (such portfolios and any other portfolios hereafter added to the Company being referred to collectively herein as the "Funds"); and
WHEREAS, the Company and the Advisor desire to enter into an agreement to provide for investment advisory services to the Funds upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1. Advisory Services. The Advisor shall act as investment advisor for the Funds and shall, in such capacity, supervise all aspects of the Funds' operations, including the investment and reinvestment of cash, securities or other properties comprising the Funds' assets, subject at all times to the policies and control of the Board of Directors. The Advisor shall give the Company and the Funds the benefit of its best judgment, efforts and facilities in rendering its services as investment advisor.
2. Investment Analysis and Implementation. In carrying out its obligations under Section 1 hereof, the Advisor shall:
(a) supervise all aspects of the operations of the Funds;
(b) obtain and evaluate pertinent information about significant developments and economic, statistical and financial data, domestic, foreign or otherwise, whether affecting the economy generally or the Funds, and whether concerning the individual issuers whose securities are included in the assets of the Funds or the activities in which such issuers engage, or with respect to securities which the Advisor considers desirable for inclusion in the Funds' assets;
(c) determine which issuers and securities shall be represented in the Funds' investment portfolios and regularly report thereon to the Board of Directors;
(d) formulate and implement continuing programs for the purchases and sales of the securities of such issuers and regularly report thereon to the Board of Directors; and
(e) take, on behalf of the Company and the Funds, all actions which appear to the Company and the Funds necessary to carry into effect such purchase and sale programs and supervisory functions as aforesaid, including but not limited to the placing of orders for the purchase and sale of securities for the Funds.
3. Securities Lending Duties and Fees. The Advisor agrees to provide the following services in connection with the securities lending activities of each Fund: (a) oversee participation in the securities lending program to ensure compliance with all applicable regulatory and investment guidelines; (b) assist the securities lending agent or principal (the "Agent") in determining which specific securities are available for loan; (c) monitor the Agent to ensure that securities loans are effected in accordance with the Advisor's instructions and with procedures adopted by the Board of Directors; (d) prepare appropriate periodic reports for, and seek appropriate approvals from, the Board of Directors with respect to securities lending activities; (e) respond to Agent inquiries; and (f) perform such other duties as necessary.
As compensation for such services provided by the Advisor in connection with securities lending activities of each Fund, a lending Fund shall pay the Advisor a fee equal to 25% of the net monthly interest or fee income retained or paid to the Fund from such activities.
4. Delegation of Responsibilities. The Advisor is authorized to delegate any or all of its rights, duties and obligations under this Agreement to one or more sub-advisors, and may enter into agreements with sub-advisors, and may replace any such sub-advisors from time to time in its discretion, in accordance with the 1940 Act, the Advisers Act, and rules and regulations thereunder, as such statutes, rules and regulations are amended from time to time or are interpreted from time to time by the staff of the Securities and Exchange Commission ("SEC"), and if applicable, exemptive orders or similar relief granted by the SEC and upon receipt of approval of such sub-advisors by the Board of Directors and by shareholders (unless any such approval is not required by such statutes, rules, regulations, interpretations, orders or similar relief).
5. Independent Contractors. The Advisor and any sub-advisors shall for all purposes herein be deemed to be independent contractors and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Company in any way or otherwise be deemed to be an agent of the Company.
6. Control by Board of Directors. Any investment program undertaken by the Advisor pursuant to this Agreement, as well as any other activities undertaken by the Advisor on behalf of the Funds, shall at all times be subject to any directives of the Board of Directors.
7. Compliance with Applicable Requirements. In carrying out its obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and the Advisers Act and any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the Company, as the same may be amended from time to time under the Securities Act of 1933 and the 1940 Act;
(c) the provisions of the Charter, as the same may be amended from time to time;
(d) the provisions of the by-laws of the Company, as the same may be amended from time to time; and
(e) any other applicable provisions of state, federal or foreign law.
8. Broker-Dealer Relationships. The Advisor is responsible for decisions to buy and sell securities for the Funds, broker-dealer selection, and negotiation of brokerage commission rates.
(a) The Advisor's primary consideration in effecting a security transaction will be to obtain the best execution.
(b) In selecting a broker-dealer to execute each particular
transaction, the Advisor will take the following into consideration:
the best net price available; the reliability, integrity and financial
condition of the broker-dealer; the size of and the difficulty in
executing the order; and the value of the expected contribution of the
broker-dealer to the investment performance of the Funds on a
continuing basis. Accordingly, the price to the Funds in any
transaction may be less favorable than that available from another
broker-dealer if the difference is reasonably justified by other
aspects of the fund execution services offered.
(c) Subject to such policies as the Board of Directors may from time to time determine, the Advisor shall not be deemed to have acted unlawfully or to have breached any duty created by this Agreement or otherwise solely by reason of its having caused the Funds to pay a broker or dealer that provides brokerage and research services to the Advisor an amount of commission for effecting a fund investment transaction in excess of the amount of commission another broker or dealer would have charged for effecting that transaction, if the Advisor determines in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer, viewed in terms of either that particular transaction or the Advisor's overall responsibilities with respect to a particular Fund, other Funds of the Company, and to other clients of the Advisor as to which the Advisor exercises investment discretion. The Advisor is further authorized to allocate the orders placed by it on behalf of the Funds to such brokers and dealers who also provide research or statistical material, or other services to the Funds, to the Advisor, or to any sub-advisor. Such allocation shall be in such amounts and proportions as the Advisor shall determine and the Advisor will report on said allocations regularly to the Board of Directors indicating the brokers to whom such allocations have been made and the basis therefor.
(d) With respect to one or more Funds, to the extent the Advisor does not delegate trading responsibility to one or more sub-advisors, in making decisions
regarding broker-dealer relationships, the Advisor may take into consideration the recommendations of any sub-advisor appointed to provide investment research or advisory services in connection with the Funds, and may take into consideration any research services provided to such sub-advisor by broker-dealers.
(e) Subject to the other provisions of this Section 8, the 1940 Act, the Securities Exchange Act of 1934, and rules and regulations thereunder, as such statutes, rules and regulations are amended from time to time or are interpreted from time to time by the staff of the SEC, any exemptive orders issued by the SEC, and any other applicable provisions of law, the Advisor may select brokers or dealers with which it or the Funds are affiliated.
9. Compensation. The compensation that each Fund shall pay the Advisor is set forth in Appendix B attached hereto.
10. Expenses of the Funds. All of the ordinary business expenses incurred in the operations of the Funds and the offering of their shares shall be borne by the Funds unless specifically provided otherwise in this Agreement. These expenses borne by the Funds include but are not limited to brokerage commissions, taxes, legal, accounting, auditing, or governmental fees, the cost of preparing share certificates, custodian, transfer and shareholder service agent costs, expenses of issue, sale, redemption and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to directors and shareholder meetings, the cost of preparing and distributing reports and notices to shareholders, the fees and other expenses incurred by the Company on behalf of the Funds in connection with membership in investment company organizations and the cost of printing copies of prospectuses and statements of additional information distributed to the Funds' shareholders.
11. Services to Other Companies or Accounts. The Company understands that the Advisor now acts, will continue to act and may act in the future as investment manager or advisor to fiduciary and other managed accounts, and as investment manager or advisor to other investment companies, including any offshore entities, or accounts, and the Company has no objection to the Advisor so acting, provided that whenever the Company and one or more other investment companies or accounts managed or advised by the Advisor have available funds for investment, investments suitable and appropriate for each will be allocated in accordance with a formula believed to be equitable to each company and account. The Company recognizes that in some cases this procedure may adversely affect the size of the positions obtainable and the prices realized for the Funds.
12. Non-Exclusivity. The Company understands that the persons employed by the Advisor to assist in the performance of the Advisor's duties under this Agreement will not devote their full time to such service and nothing contained in this Agreement shall be deemed to limit or restrict the right of the Advisor or any affiliate of the Advisor to engage in and devote time and attention to other businesses or to render services of whatever kind or nature. The Company further understands and agrees that officers or directors of the Advisor may serve as officers or directors of the Company, and that officers or directors of the Company may serve as officers or directors of the Advisor to the extent permitted by law; and that the officers and directors of the Advisor are not prohibited from engaging in any other business activity or from rendering services to any other person, or from serving as partners, officers, directors or trustees of any other firm or trust, including other investment advisory companies.
13. Effective Date, Term and Approval. This Agreement shall become effective with respect to a Fund, if approved by the shareholders of such Fund, on the Effective Date for such Fund, as set forth in Appendix A attached hereto. If so approved, this Agreement shall thereafter continue in force and effect until June 30, 2001, and may be continued from year to year thereafter, provided that the continuation of the Agreement is specifically approved at least annually:
(a) (i) by the Board of Directors or (ii) by the vote of "a majority of the outstanding voting securities" of such Fund (as defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the directors who are not parties to this Agreement or "interested persons" (as defined in the 1940 Act) of a party to this Agreement (other than as Company directors), by votes cast in person at a meeting specifically called for such purpose.
14. Termination. This Agreement may be terminated as to the Company or
as to any one or more of the Funds at any time, without the payment of any
penalty, by vote of the Board of Directors or by vote of a majority of the
outstanding voting securities of the applicable Fund, or by the Advisor, on
sixty (60) days' written notice to the other party. The notice provided for
herein may be waived by the party entitled to receipt thereof. This Agreement
shall automatically terminate in the event of its assignment, the term
"assignment" for purposes of this paragraph having the meaning defined in
Section 2(a)(4) of the 1940 Act.
15. Amendment. No amendment of this Agreement shall be effective unless it is in writing and signed by the party against which enforcement of the amendment is sought.
16. Liability of Advisor and Fund. In the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of the Advisor or any of its officers, directors or employees, the Advisor shall not be subject to liability to the Company or to the Funds or to any shareholder of the Funds for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security. Any liability of the Advisor to one Fund shall not automatically impart liability on the part of the Advisor to any other Fund. No Fund shall be liable for the obligations of any other Fund.
17. Liability of Shareholders. Notice is hereby given that, as provided by applicable law, the obligations of or arising out of this Agreement are not binding upon any of the shareholders of the 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 shareholders of private corporations for profit.
18. Notices. Any notices under this Agreement shall be in writing, addressed and delivered, telecopied or mailed postage paid, to the other party entitled to receipt thereof at such address as such party may designate for the receipt of such notice. Until further notice to the other party, it is agreed that the address of the Company and that of the Advisor shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.
19. Questions of Interpretation. Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act or the Advisers Act shall be resolved by reference to such term or provision of the 1940 Act or the Advisers Act and to interpretations thereof, if any, by the United States Courts or in the absence of any controlling decision of any such court, by rules, regulations or orders of the SEC issued pursuant to said Acts. In addition, where the effect of a requirement of the 1940 Act or the Advisers Act reflected in any provision of the Agreement is revised by rule, regulation or order of the SEC, such provision shall be deemed to incorporate the effect of such rule, regulation or order. Subject to the foregoing, this Agreement shall be governed by and construed in accordance with the laws (without reference to conflicts of law provisions) of the State of Texas.
20. License Agreement. The Company shall have the non-exclusive right to use the name "AIM" to designate any current or future series of shares only so long as A I M Advisors, Inc. serves as investment manager or advisor to the Company with respect to such series of shares.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by their respective officers on the day and year first written above.
AIM EQUITY FUNDS, INC.
(a Maryland corporation)
Attest:
/s/ LISA A. MOSS By: /s/ ROBERT H. GRAHAM
------------------------------- -------------------------------
Assistant Secretary President
(SEAL)
Attest: A I M ADVISORS, INC.
/s/ LISA A. MOSS By: /s/ ROBERT H. GRAHAM
------------------------------- -------------------------------
Assistant Secretary President
|
(SEAL)
APPENDIX A
FUNDS AND EFFECTIVE DATES
NAME OF FUND EFFECTIVE DATE OF ADVISORY AGREEMENT ------------ ------------------------------------ AIM Emerging Growth Fund March 30, 2000 |
APPENDIX B
COMPENSATION TO THE ADVISOR
The Company 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 EMERGING GROWTH FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $1 billion.................................................. 0.85% Over $1 billion................................................... 0.80% |
EXHIBIT d(6)
AIM EQUITY FUNDS
MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 21st day of June, 2000, by and between AIM Equity Funds, a Delaware business trust (the "Trust") with respect to its series of shares shown on the Appendix A attached hereto, as the same may be amended from time to time, and A I M Advisors, Inc., a Delaware corporation (the "Advisor").
RECITALS
WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end, diversified management investment company;
WHEREAS, the Advisor is registered under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), as an investment advisor and engages in the business of acting as an investment advisor;
WHEREAS, the Trust's Agreement and Declaration of Trust (the "Declaration of Trust") authorizes the Board of Trustees of the Trust (the "Board of Trustees") to create separate series of shares of beneficial interest of the Trust, and as of the date of this Agreement, the Board of Trustees has created eleven separate series portfolios (such portfolios and any other portfolios hereafter added to the Trust being referred to collectively herein as the "Funds"); and
WHEREAS, the Trust and the Advisor desire to enter into an agreement to provide for investment advisory services to the Funds upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1. Advisory Services. The Advisor shall act as investment advisor for the Funds and shall, in such capacity, supervise all aspects of the Funds' operations, including the investment and reinvestment of cash, securities or other properties comprising the Funds' assets, subject at all times to the policies and control of the Board of Trustees. The Advisor shall give the Trust and the Funds the benefit of its best judgment, efforts and facilities in rendering its services as investment advisor.
2. Investment Analysis and Implementation. In carrying out its obligations under Section 1 hereof, the Advisor shall:
(a) supervise all aspects of the operations of the Funds;
(b) obtain and evaluate pertinent information about significant developments and economic, statistical and financial data, domestic, foreign or otherwise, whether affecting the economy generally or the Funds, and whether concerning the individual issuers whose securities are included in the assets of the Funds or the activities in which such issuers engage, or with respect to securities which the Advisor considers desirable for inclusion in the Funds' assets;
(c) determine which issuers and securities shall be represented in the Funds' investment portfolios and regularly report thereon to the Board of Trustees;
(d) formulate and implement continuing programs for the purchases and sales of the securities of such issuers and regularly report thereon to the Board of Trustees; and
(e) take, on behalf of the Trust and the Funds, all actions which appear to the Trust and the Funds necessary to carry into effect such purchase and sale programs and supervisory functions as aforesaid, including but not limited to the placing of orders for the purchase and sale of securities for the Funds.
3. Securities Lending Duties and Fees. The Advisor agrees to provide the following services in connection with the securities lending activities of each Fund: (a) oversee participation in the securities lending program to ensure compliance with all applicable regulatory and investment guidelines; (b) assist the securities lending agent or principal (the "Agent") in determining which specific securities are available for loan; (c) monitor the Agent to ensure that securities loans are effected in accordance with the Advisor's instructions and with procedures adopted by the Board of Trustees; (d) prepare appropriate periodic reports for, and seek appropriate approvals from, the Board of Trustees with respect to securities lending activities; (e) respond to Agent inquiries; and (f) perform such other duties as necessary.
As compensation for such services provided by the Advisor in connection with securities lending activities of each Fund, a lending Fund shall pay the Advisor a fee equal to 25% of the net monthly interest or fee income retained or paid to the Fund from such activities.
4. Delegation of Responsibilities. The Advisor is authorized to delegate any or all of its rights, duties and obligations under this Agreement to one or more sub-advisors, and may enter into agreements with sub-advisors, and may replace any such sub-advisors from time to time in its discretion, in accordance with the 1940 Act, the Advisers Act, and rules and regulations thereunder, as such statutes, rules and regulations are amended from time to time or are interpreted from time to time by the staff of the Securities and Exchange Commission ("SEC"), and if applicable, exemptive orders or similar relief granted by the SEC and upon receipt of approval of such sub-advisors by the Board of Trustees and by shareholders (unless any such approval is not required by such statutes, rules, regulations, interpretations, orders or similar relief).
5. Independent Contractors. The Advisor and any sub-advisors shall for all purposes herein be deemed to be independent contractors and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Trust in any way or otherwise be deemed to be an agent of the Trust.
6. Control by Board of Trustees. Any investment program undertaken by the Advisor pursuant to this Agreement, as well as any other activities undertaken by the Advisor on behalf of the Funds, shall at all times be subject to any directives of the Board of Trustees.
7. Compliance with Applicable Requirements. In carrying out its obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and the Advisers Act and any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the Trust, as the same may be amended from time to time under the Securities Act of 1933 and the 1940 Act;
(c) the provisions of the Declaration of Trust, as the same may be amended from time to time;
(d) the provisions of the by-laws of the Trust, as the same may be amended from time to time; and
(e) any other applicable provisions of state, federal or foreign law.
8. Broker-Dealer Relationships. The Advisor is responsible for decisions to buy and sell securities for the Funds, broker-dealer selection, and negotiation of brokerage commission rates.
(a) The Advisor's primary consideration in effecting a security transaction will be to obtain the best execution.
(b) In selecting a broker-dealer to execute each particular
transaction, the Advisor will take the following into consideration:
the best net price available; the reliability, integrity and financial
condition of the broker-dealer; the size of and the difficulty in
executing the order; and the value of the expected contribution of the
broker-dealer to the investment performance of the Funds on a
continuing basis. Accordingly, the price to the Funds in any
transaction may be less favorable than that available from another
broker-dealer if the difference is reasonably justified by other
aspects of the fund execution services offered.
(c) Subject to such policies as the Board of Trustees may from time to time determine, the Advisor shall not be deemed to have acted unlawfully or to have breached any duty created by this Agreement or otherwise solely by reason of its having caused the Funds to pay a broker or dealer that provides brokerage and research services to the Advisor an amount of commission for effecting a fund investment transaction in excess of the amount of commission another broker or dealer would have charged for effecting that transaction, if the Advisor determines in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer, viewed in terms of either that particular transaction or the Advisor's overall responsibilities with respect to a particular Fund, other Funds of the Trust, and to other clients of the Advisor as to which the Advisor exercises investment discretion. The Advisor is further authorized to allocate the orders placed by it on behalf of the Funds to such brokers and dealers who also provide research or statistical material, or other services to the Funds, to the Advisor, or to any sub-advisor. Such allocation shall be in such amounts and proportions as the Advisor shall determine and the Advisor will report on said allocations regularly to the Board of Trustees indicating the brokers to whom such allocations have been made and the basis therefor.
(d) With respect to one or more Funds, to the extent the Advisor does not delegate trading responsibility to one or more sub-advisors, in making decisions regarding broker-dealer relationships, the Advisor may take into consideration the recommendations of any sub-advisor appointed to provide investment research or advisory services in connection with the Funds, and may take into consideration any research services provided to such sub-advisor by broker-dealers.
(e) Subject to the other provisions of this Section 8, the 1940 Act, the Securities Exchange Act of 1934, and rules and regulations thereunder, as such statutes, rules and regulations are amended from time to time or are interpreted from time to time by the staff of the SEC, any exemptive orders issued by the SEC, and any other applicable provisions of law, the Advisor may select brokers or dealers with which it or the Funds are affiliated.
9. Compensation. The compensation that each Fund shall pay the Advisor is set forth in Appendix B attached hereto.
10. Expenses of the Funds. All of the ordinary business expenses incurred in the operations of the Funds and the offering of their shares shall be borne by the Funds unless specifically provided otherwise in this Agreement. These expenses borne by the Funds include but are not limited to brokerage commissions, taxes, legal, accounting, auditing, or governmental fees, the cost of preparing share certificates, custodian, transfer and shareholder service agent costs, expenses of issue, sale, redemption and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to trustees and shareholder meetings, the cost of preparing and distributing reports and notices to shareholders, the fees and other expenses incurred by the Trust on behalf of the Funds in connection with membership in investment company organizations and the cost of printing copies of prospectuses and statements of additional information distributed to the Funds' shareholders.
11. Services to Other Companies or Accounts. The Trust understands that the Advisor now acts, will continue to act and may act in the future as investment manager or advisor to fiduciary and other managed accounts, and as investment manager or advisor to other investment companies, including any offshore entities, or accounts, and the Trust has no objection to the Advisor so acting, provided that whenever the Trust and one or more other investment companies or accounts managed or advised by the Advisor have available funds for investment, investments suitable and appropriate for each will be allocated in accordance with a formula believed to be equitable to each company and account. The Trust recognizes that in some cases this procedure may adversely affect the size of the positions obtainable and the prices realized for the Funds.
12. Non-Exclusivity. The Trust understands that the persons employed by the Advisor to assist in the performance of the Advisor's duties under this Agreement will not devote their full time to such service and nothing contained in this Agreement shall be deemed to limit or restrict the right of the Advisor or any affiliate of the Advisor to engage in and devote time and attention to other businesses or to render services of whatever kind or nature. The Trust further understands and agrees that officers or directors of the Advisor may serve as officers or trustees of the Trust, and that officers or trustees of the Trust may serve as officers or directors of the Advisor to the extent permitted by law; and that the officers and directors of the Advisor are not prohibited from engaging in any other business activity or from rendering services to any other person, or from serving as partners, officers, directors or trustees of any other firm or trust, including other investment advisory companies.
13. Effective Date, Term and Approval. This Agreement shall become effective with respect to a Fund, if approved by the shareholders of such Fund, on the Effective Date for such Fund, as set forth in Appendix A attached hereto. If so approved, this Agreement shall thereafter continue in force and effect until June 30, 2001, and may be continued from year to year thereafter, provided that the continuation of the Agreement is specifically approved at least annually:
(a) (i) by the Board of Trustees or (ii) by the vote of "a majority of the outstanding voting securities" of such Fund (as defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the trustees who are not parties to this Agreement or "interested persons" (as defined in the 1940 Act) of a party to this Agreement (other than as trustees of the Trust), by votes cast in person at a meeting specifically called for such purpose.
14. Termination. This Agreement may be terminated as to the Trust or as to any one or more of the Funds at any time, without the payment of any penalty, by vote of the Board of Trustees or by vote of a majority of the outstanding voting securities of the applicable Fund, or by the Advisor, on sixty (60) days' written notice to the other party. The notice provided for herein may be waived by the party entitled to receipt thereof. This Agreement shall automatically terminate in the event of its assignment, the term "assignment" for purposes of this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act.
15. Amendment. No amendment of this Agreement shall be effective unless it is in writing and signed by the party against which enforcement of the amendment is sought.
16. Liability of Advisor and Fund. In the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of the Advisor or any of its officers, directors or employees, the Advisor shall not be subject to liability to the Trust or to the Funds or to any shareholder of the Funds for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security. Any liability of the Advisor to one Fund shall not automatically impart liability on the part of the Advisor to any other Fund. No Fund shall be liable for the obligations of any other Fund.
17. Liability of Shareholders. Notice is hereby given that, as provided by applicable law, the obligations of or arising out of this Agreement are not binding upon any of the shareholders of the Trust individually but are binding only upon the assets and property of the Trust and that the shareholders shall be entitled, to the fullest extent permitted by applicable law, to the same limitation on personal liability as shareholders of private corporations for profit.
18. Notices. Any notices under this Agreement shall be in writing, addressed and delivered, telecopied or mailed postage paid, to the other party entitled to receipt thereof at such address as such party may designate for the receipt of such notice. Until further notice to the other party, it is agreed that the address of the Trust and that of the Advisor shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.
19. Questions of Interpretation. Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the 1940 Act or the Advisers Act shall be resolved by reference to such term or provision of the 1940 Act or the Advisers Act and to interpretations thereof, if any, by the United States Courts or in the absence of any controlling decision of any such court, by rules, regulations or orders of the SEC issued pursuant to said Acts. In addition, where the effect of a requirement of the 1940 Act or the Advisers Act reflected in any provision of the Agreement is revised by rule, regulation or order of the SEC, such provision shall be deemed to incorporate the effect of such rule, regulation or order. Subject to the foregoing, this Agreement shall be
governed by and construed in accordance with the laws (without reference to conflicts of law provisions) of the State of Texas.
20. License Agreement. The Trust shall have the non-exclusive right to use the name "AIM" to designate any current or future series of shares only so long as A I M Advisors, Inc. serves as investment manager or advisor to the Trust with respect to such series of shares.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by their respective officers on the day and year first written above.
AIM EQUITY FUNDS
(a Delaware business trust)
Attest:
/s/ LISA A. MOSS By: /s/ ROBERT H. GRAHAM
------------------------------- -------------------------------
Assistant Secretary President
(SEAL)
Attest: A I M ADVISORS, INC.
/s/ LISA A. MOSS By: /s/ ROBERT H. GRAHAM
------------------------------- -------------------------------
Assistant Secretary President
|
(SEAL)
APPENDIX A
FUNDS AND EFFECTIVE DATES
NAME OF FUND EFFECTIVE DATE OF ADVISORY AGREEMENT ------------ ------------------------------------ AIM Aggressive Growth Fund June 1, 2000 AIM Blue Chip Fund June 1, 2000 AIM Capital Development Fund June 1, 2000 AIM Charter Fund June 1, 2000 AIM Constellation Fund June 1, 2000 AIM Dent Demographic Trends Fund June 1, 2000 AIM Emerging Growth Fund June 1, 2000 AIM Large Cap Basic Value Fund June 1, 2000 AIM Large Cap Growth Fund June 1, 2000 AIM Mid Cap Growth Fund June 1, 2000 AIM Weingarten Fund June 1, 2000 |
APPENDIX B
COMPENSATION TO THE ADVISOR
The Trust shall pay the Advisor, out of the assets of a Fund, as full compensation for all services rendered, an advisory fee for such Fund set forth below. Such fee shall be calculated by applying the following annual rates to the average daily net assets of such Fund for the calendar year computed in the manner used for the determination of the net asset value of shares of such Fund.
AIM AGGRESSIVE GROWTH FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $150 million................................................ 0.80% Over $150 million................................................. 0.625% |
AIM BLUE CHIP FUND
AIM CAPITAL DEVELOPMENT FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $350 million................................................ 0.75% Over $350 million................................................. 0.625% |
AIM CHARTER FUND
AIM CONSTELLATION FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $30 million................................................. 1.00% Over $30 million to and including $150 million.................... 0.75% Over $150 million................................................. 0.625% |
AIM DENT DEMOGRAPHIC TRENDS FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $2 billion.................................................. 0.85% Over $2 billion................................................... 0.80% |
AIM EMERGING GROWTH FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $1 billion.................................................. 0.85% Over $1 billion................................................... 0.80% |
AIM LARGE CAP BASIC VALUE FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $1 billion.................................................. 0.60% Over $1 billion to and including $2 billion....................... 0.575% Over $2 billion................................................... 0.55% |
AIM LARGE CAP GROWTH FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $1 billion.................................................. 0.75% Over $1 billion to and including $2 billion....................... 0.70% Over $2 billion................................................... 0.625% |
AIM MID CAP GROWTH FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $1 billion.................................................. 0.80% Over $1 billion................................................... 0.75% |
AIM WEINGARTEN FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $ 30 million................................................ 1.00% Over $30 million to and including $350 million.................... 0.75% Over $350 million................................................. 0.625% |
EXHIBIT d(11)
AIM EQUITY FUNDS
(AIM CHARTER FUND)
(AIM CONSTELLATION FUND)
(AIM WEINGARTEN FUND)
MASTER SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made as of this 21st day of June, 2000, by and between A I M Advisors, Inc., a Delaware corporation (the "Advisor") and A I M Capital Management, Inc., a Texas corporation (the "Sub-Advisor").
RECITALS
WHEREAS, AIM Equity Funds (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act") as an open-end, diversified management investment company;
WHEREAS, the Advisor is registered under the Investment Advisers Act of 1940 (the "Advisers Act"), as amended, as an investment advisor and engages in the business of acting as an investment advisor;
WHEREAS, the Sub-Advisor is registered under the Advisers Act, as amended, as an investment advisor and engages in the business of acting as an investment advisor;
WHEREAS, the Agreement and Declaration of Trust authorizes the Board of Trustees of the Trust to create separate series of shares of beneficial interest of the Trust, and as of the date of this Agreement, the Trust's Board of Trustees has created eleven separate series portfolios (such portfolios, together with any other portfolios hereafter added to the Trust being referred to collectively herein as the "Portfolios").
WHEREAS, the Advisor has entered into a Master Investment Advisory Agreement of even date herewith with the Trust (the "Investment Advisory Agreement"), pursuant to which the Advisor shall act as investment advisor with respect to the Portfolios; and
WHEREAS, pursuant to Section 3 ("Delegation of Responsibilities") of the Investment Advisory Agreement, the Advisor wishes to retain the Sub-Advisor for purposes of rendering advisory services to the Advisor in connection with the AIM Constellation Fund, AIM Weingarten Fund, and AIM Charter Fund (the "Funds"), upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt whereof is hereby acknowledged, the parties hereto agree as follows:
1. Appointment of Sub-Advisor. The Advisor hereby appoints the Sub-Advisor to render investment research and advisory services to the Advisor with respect to the Funds, under the supervision of the Advisor and subject to the approval and direction of the Trust's Board of Trustees, and the Sub-Advisor hereby accepts such appointment, all subject to the terms and conditions contained herein.
2. Investment Analysis. The duties of the Sub-Advisor shall include:
(a) obtaining and evaluating pertinent information about significant developments and economic, statistical and financial data, domestic, foreign or otherwise, whether affecting the economy generally or the Funds, and whether concerning the individual issuers whose securities are included in the Funds or the activities in which such issuers engage, or with respect to securities which the Sub-Advisor considers desirable for inclusion in the Funds' investment portfolios;
(b) determining which issuers and securities shall be represented in the Funds' investment portfolios and regularly reporting thereon to the Advisor and, at the request of the Advisor, to the Trust's Board of Trustees; and
(c) formulating and implementing continuing programs for the purchases and sales of the securities of such issuers and regularly reporting thereon to the Advisor and, at the request of the Advisor, to the Trust's Board of Trustees.
3. Control by Board of Trustees. Any investment program undertaken by the Sub-Advisor pursuant to this Agreement, as well as any other activities undertaken by the Sub-Advisor with respect to the Funds, shall at all times be subject to any directives of the Board of Trustees of the Trust.
4. Compliance with Applicable Requirements. In carrying out its obligations under this Agreement, the Sub-Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and the Advisers Act and any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the Trust, as the same may be amended from time to time, under the Securities Act of 1933 and the 1940 Act;
(c) the provisions of the Agreement and Declaration of Trust of the Trust, as the same may be amended from time to time;
(d) the provisions of the by-laws of the Trust, as the same may be amended from time to time; and
(e) any other applicable provisions of state or federal law.
5. Compensation. The Advisor shall pay to the Sub-Advisor, as compensation for services rendered hereunder to a Fund, an annual fee, payable monthly, equal to 50% of the fee received by the Advisor from the Trust with respect to such Fund pursuant to the Investment Advisory Agreement.
6. Expenses of the Funds. All of the ordinary business expenses incurred in the operations of the Funds and the offering of its shares shall be borne by the Funds unless specifically provided otherwise in this Agreement. These expenses borne by the Funds include but are not limited to brokerage commissions, taxes, legal, auditing, or governmental fees, the cost of preparing share certificates, custodian, transfer and shareholder service agent costs,
expenses of issue, sale, redemption and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to directors and shareholder meetings, the cost of preparing and distributing reports and notices to shareholders, the fees and other expenses incurred by the Trust on behalf of the Funds in connection with membership in investment company organizations and the cost of printing copies of the prospectuses and statements of additional information distributed to the Funds' shareholders.
7. Non-Exclusivity. The services of the Sub-Advisor to the Advisor with respect to the Trust and the Funds are not deemed to be exclusive, and the Sub-Advisor shall be free to render investment advisory and administrative or other services to others (including other investment companies) and to engage in other activities. It is understood and agreed that officers and directors of the Sub-Advisor may serve as officers or directors/trustees of the Advisor or of the Trust, and that officers or directors/trustees of the Advisor or of the Trust may serve as officers or directors of the Sub-Advisor to the extent permitted by law; and that the officers and directors of the Sub-Advisor are not prohibited from engaging in any other business activity or from rendering services to any other person, or from serving as partners, officers, directors or trustees of any other firm or trust, including other investment advisory companies.
8. Term and Approval. This Agreement shall become effective with respect to a Fund if approved by the shareholders of such Fund, and if so approved, this Agreement shall thereafter continue in force and effect until June 30, 2001, and may be continued from year to year thereafter, provided that the continuation of the Agreement is specifically approved at least annually:
(a) (i) by the Trust's Board of Trustees or (ii) by the vote of "a majority of the outstanding voting securities" of such Fund (as defined under Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the trustees who are not parties to this Agreement or "interested persons" (as defined in the 1940 Act) of a party to this Agreement (other than as trustees of the Trust), by votes cast in person at a meeting specifically called for such purpose.
9. Termination. This Agreement may be terminated as to any Fund at any time, without the payment of any penalty, by vote of the Trust's Board of Trustees or by vote of a majority of such Fund's outstanding voting securities, or by the Advisor, or by the Sub-Advisor on sixty (60) days' written notice to the other party and to the Trust. The notice provided for herein may be waived by either party. This Agreement shall automatically terminate in the event of its assignment, the term "assignment" for purposes of this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act.
10. Liability of Sub-Advisor and Indemnification. In the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of the Sub-Advisor or any of its officers, directors or employees, the Sub-Advisor shall not be subject to liability to the Advisor for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security.
11. Notices. Any notices under this Agreement shall be in writing, addressed and delivered or mailed postage paid to such address as may be designated for the receipt of such
notice, with a copy to the Trust. Until further notice, it is agreed that the address of the Trust, that of the Advisor and that of the Sub-Advisor shall be Eleven Greenway Plaza, Suite 100, Houston, Texas 77046.
12. Questions of Interpretation. Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the 1940 Act or the Advisers Act shall be resolved by reference to such term or provision of the 1940 Act or the Advisers Act and to interpretations thereof, if any, by the United States Courts or in the absence of any controlling decision of any such court, by rules, regulations or orders of the Securities and Exchange Commission issued pursuant to said Acts. In addition, where the effect of a requirement of the 1940 Act or the Advisers Act reflected in any provision of this Agreement is revised by rule, regulation or order of the Securities and Exchange Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by their respective duly authorized officers as of the day and year first written above.
A I M ADVISORS, INC.
Attest:
/s/ LISA A. MOSS By: /s/ ROBERT H. GRAHAM
------------------------------- -------------------------------
Assistant Secretary President
(SEAL)
Attest: A I M CAPITAL MANAGEMENT, INC.
/s/ LISA A. MOSS By: /s/ GARY T. CRUM
------------------------------- -------------------------------
Assistant Secretary President
|
(SEAL)
EXHIBIT d(13)
AIM DENT DEMOGRAPHIC TRENDS FUND
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into this 21st day of June 2000, by and between A I M Advisors, Inc., a Delaware corporation (the "Adviser"), and H.S. Dent Advisors, Inc., a Delaware corporation (the "Sub-Adviser").
RECITALS
WHEREAS, AIM Dent Demographic Trends Fund (the "Fund") is a series of AIM Equity Funds (the "Trust"), a Delaware business trust registered under the Investment Company Act of 1940, as amended (the "1940 Act") as an open-end, diversified management investment company;
WHEREAS, the Adviser is registered under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), as an investment adviser and engages in the business of acting as an investment adviser;
WHEREAS, the Sub-Adviser has applied for registration under the Advisers Act as an investment adviser to enable it to engage in the business of acting as an investment adviser;
WHEREAS, the Adviser expects to enter into an investment advisory agreement with the Fund (the "Investment Advisory Agreement") pursuant to which the Adviser will act as investment adviser with respect to the Fund; and
WHEREAS, the Adviser wishes to retain the Sub-Adviser for purposes of rendering advisory services to the Adviser in connection with the Fund upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt whereof is hereby acknowledged, the parties hereto agree as follows:
1. Appointment of Sub-Adviser. The Adviser hereby appoints the Sub-Adviser to render investment research and advisory services to the Adviser with respect to the Fund under the supervision of the Adviser, and the Sub-Adviser hereby accepts such appointment, all subject to the terms and conditions contained herein. The Sub-Adviser shall use its best judgment, efforts and facilities in rendering its services as investment adviser.
2. Advisory Services. The duties of the Sub-Adviser shall be limited to the following:
(a) Rendering investment research and advisory services to the Adviser with respect to the Fund, under the supervision of the Adviser and subject to the approval and direction of the Board of Trustees of the Fund;
(b) Analyzing and recommending appropriate industry and sector allocations and weightings for the Fund's investment portfolio, in accordance with the philosophies of Harry S. Dent, Jr. ("Mr. Dent") concerning industry and sector allocations based on demographic principles. The duties of the Sub-Adviser shall
not include selection of specific securities within the recommended industry or sectors for purchase or sale.
(c) Providing, on a monthly basis, recommendations of the appropriate industry and sector allocations and weightings for the Fund. The Sub-Adviser, at its sole and absolute discretion, may elect to make such recommendations more frequently based on market conditions. The Sub-Adviser shall make Mr. Dent available for discussions with respect to industry and sector allocations and weightings of the Fund upon reasonable request by the Adviser.
(d) Providing written materials concerning industry and sector allocations and weightings for the Fund to the Board of Trustees of the Trust upon request by the Board of Trustees.
(e) Making Mr. Dent available to speak at promotional meetings on 25 days selected by mutual agreement of the Adviser and Sub-Adviser. Mr. Dent may agree, at his sole discretion, to appear at more than one meeting on any day upon request by the Adviser.
(f) Making Mr. Dent available, upon request by the Adviser and subject to Mr. Dent's availability, for telephone conference calls intended to educate persons involved in distribution of the Fund's shares on the investment principles of the Fund and for other educational and promotional activities not requiring travel.
3. Control by Board of Trustees. Any investment program recommended by the Sub-Adviser pursuant to this Agreement, as well as any other activities undertaken by the Sub-Adviser with respect to the Fund, shall at all times be subject to any directives of the Board of Trustees of the Fund.
4. Compliance with Applicable Requirements. Prior to performing any services under this Agreement the Sub-Adviser shall have become a registered investment adviser under the Advisers Act. In carrying out its obligations under this Agreement, the Sub-Adviser shall at all times conform to:
(a) all applicable provisions of the 1940 Act and Advisers Act and any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the Fund, as the same may be amended from time to time, under the Securities Act of 1933 and the 1940 Act;
(c) the provisions of the corporate charter and by-laws of the Fund, as the same may be amended from time to time; and
(d) any other applicable provisions of state and federal law.
5. Compensation. The Adviser shall pay the Sub-Adviser, as compensation for services rendered hereunder, an amount per annum based upon the net asset value of the Fund as follows:
Assets Basis Points
------------ ------
Up to $1 billion 13
From $1 billion to $2 billion 10
Over $2 billion 7
|
The Adviser will begin payment of such fees when the net asset value of the Fund has reached $50 million, and the fee will be paid on a monthly basis thereafter.
6. Expenses of the Fund. All of the ordinary business expenses incurred in the operations of the Fund and the offering of its shares shall be borne by the Fund unless specifically provided otherwise in this Agreement. These expenses borne by the Fund include but are not limited to brokerage commissions, taxes, legal, auditing, governmental fees, the cost of preparing share certificates, custodian, transfer and shareholder service agent costs, expenses of issue, sale, redemption and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to directors and shareholder meetings, the cost of preparing and distributing reports and notices to shareholders, the fees and other expenses incurred by the Fund in connection with membership in investment company organizations and the cost of printing copies of prospectuses and statements of additional information distributed to the Fund's shareholders.
7. Exclusivity. Sub-Adviser shall not render investment advice or similar services directly or indirectly to any investment company that offers or has offered its shares for sale in a public offering, other than (i) the Fund and other investment companies that are advised or distributed by A I M Management Group Inc. or its affiliates and (ii) unit investment trusts identified on Exhibit A to this Agreement. It is understood and agreed that Exhibit A may be amended from time to time by mutual agreement of the Adviser and Sub-Adviser and that officers or directors of the Sub-Adviser are not prohibited from engaging in any other business activity or from rendering any other services to any other person, or from serving as partners, officers, directors or trustees of any other firm or trust, including other investment advisory companies so long as such activity or service is unrelated to the rendering of investment advice to investment companies that offer or have offered their shares for sale in a public offering.
8. Trading Practices. The Adviser and Sub-Adviser each agree to comply with the requirement of Rule 17j-1 under the 1940 Act and that they shall not engage in any conduct or practice prohibited by said Rule.
9. Term and Approval. This Agreement shall become effective if approved by the shareholders of the Fund, and if so approved, this Agreement shall thereafter continue in force and effect for two (2) years and may be continued from year to year thereafter, provided that the continuation of the Agreement is specifically approved at least annually by the Fund's Board of Trustees.
10. Termination.
(a) This Agreement shall automatically terminate in the event of its assignment, the term "assignment" for purposes of this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act.
(b) This Agreement may be terminated as follows:
(i) At any time, without the payment of any penalty, by the vote of the Fund's Board of Trustees or by vote of a majority of the Fund's outstanding voting securities.
(ii) The Sub-Adviser may terminate this Agreement if the Fund does not commence a public offering of its shares on or before September 30, 1999.
(iii) By either party in the event that certain Servicemark License Agreement of even date herewith between Harry S. Dent, Jr. and A I M Management Group Inc. is terminated or expires.
(iv) By either party upon the occurrence of a material breach of the terms of the Agreement by the other party that remains uncured for a period of 30 days after notice thereof is given by the terminating party.
(c) The party electing to terminate the Agreement under paragraph 10(b) must provide 60 days' prior written notice to the other party and to the Fund of such election. The notice provided for herein may be waived by either party.
11. Liability of Sub-Adviser. In the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of the Sub-Adviser or any of its officers, directors or employees, the Sub-Adviser shall not be subject to liability to the Adviser for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security.
12. Notices. Any notices under this Agreement shall be in writing, addressed and delivered or mailed postage paid to such address as may be designated for the receipt of such notice, with a copy to the Fund. Until further notice, it is agreed that the address of the Fund and that of the Adviser shall be Eleven Greenway Plaza, Suite 100, Houston, Texas 77046 and that of the Sub-Adviser shall be H.S. Dent Advisors, Inc., P. O. Box 914, Moss Beach, CA 94038.
13. Questions of Interpretation; Applicable Law. Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the 1940 Act or the Advisers Act shall be resolved by reference to such term or provision of the 1940 Act or the Advisers Act and to interpretations thereof, if any, by the United Stated Courts or in the absence of any controlling decision of any such court, by rules, regulations, or orders of the Securities and Exchange Commission issued pursuant to said Acts. In addition, where the effect of a requirement of the 1940 Act or the Advisers Act reflected in any provision of the Agreement is revised by rule, regulation or order of the Securities and Exchange Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order.
14. Dispute Resolution. All claims, disputes and other matters in question between the parties to this Agreement, arising out of or relating to this Agreement or the breach thereof, shall be decided by arbitration in accordance with the rules of the American Arbitration Association then in effect unless the parties mutually agree otherwise.
(a) Any such claim, dispute or other matter shall be submitted to one arbitrator designated by Licensor, provided that if Licensee objects to Licensor's arbitrator, each of Licensor and Licensee will designate an arbitrator who will jointly designate a third arbitrator and the matter shall be submitted to all three arbitrators for decision; otherwise one arbitrator shall be used. This agreement to arbitrate shall be specifically enforceable under the prevailing arbitration law.
(b) Notice of the demand for arbitration shall be filed in writing with the other party to this Agreement and with the American Arbitration Association. The demand shall be made within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall the demand for arbitration be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations.
(c) The award rendered by the arbitrators shall be final, and judgement may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. The prevailing party in any arbitration under this Agreement shall be awarded its reasonable attorney's fees and costs associated with the arbitration.
(d) The location for settlement for any and all claims, controversies or disputes arising out of or relating to this Agreement or any breach thereof when decided by arbitration shall be in Houston, Texas.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by their respective officers on the day and year first written above.
A I M Advisors, Inc.
Attest:
/s/ LISA A. MOSS By: /s/ ROBERT H. GRAHAM
------------------------------- -------------------------------
Assistant Secretary President
(SEAL)
H.S. Dent Advisors, Inc.
Attest:
/s/ DONNA R. WINDELL By: /s/ [ILLEGIBLE]
------------------------------- -------------------------------
Assistant Secretary President
|
(SEAL)
EXHIBIT A
PERMITTED INVESTMENT COMPANY ADVISORY CLIENTS
Name of Company Sponsor
--------------- -------
Roaring 2000's Unit Investment Trusts Van Kampen Funds, Inc.
|
EXHIBIT e(9)(g)
AMENDMENT NO. 6
MASTER DISTRIBUTION AGREEMENT
The Master Distribution Agreement (the "Agreement"), dated August 4, 1997, by and between AIM Equity Funds, Inc., a Maryland corporation, and A I M Distributors, Inc., a Delaware corporation, 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 DISTRIBUTION AGREEMENT
OF
AIM EQUITY FUNDS, INC.
CLASS A SHARES
AIM Aggressive Growth 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 Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund
CLASS C SHARES
AIM Aggressive Growth 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 Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund"
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: March 30, 2000
AIM EQUITY FUNDS, INC.
Attest: /s/ LISA A. MOSS By: /s/ ROBERT H. GRAHAM
---------------------------- -------------------------------
Assistant Secretary President
(SEAL)
A I M DISTRIBUTORS, INC.
Attest: /s/ LISA A. MOSS By: /s/ MICHAEL J. CEMO
---------------------------- -------------------------------
Assistant Secretary President
|
(SEAL)
EXHIBIT e(10)
MASTER DISTRIBUTION AGREEMENT
BETWEEN
AIM EQUITY FUNDS
(CLASS A SHARES AND CLASS C SHARES)
AND
A I M DISTRIBUTORS, INC.
THIS AGREEMENT is made this 21st day of June, 2000, by and between AIM EQUITY FUNDS, a Delaware business trust (the "Trust"), and A I M DISTRIBUTORS, INC., a Delaware corporation (the "Distributor").
WITNESSETH:
In consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt whereof is hereby acknowledged, the parties hereto agree as follows:
FIRST: The Trust hereby appoints the Distributor as its exclusive agent for the sale of shares set forth in Appendix A attached hereto (collectively, the "Funds" and each separately a "Fund"), and any applicable classes thereof, to the public directly and through investment dealers and financial institutions in the United States and throughout the world in accordance with the terms of the Trust's current prospectus applicable to the Funds.
SECOND: The Trust shall not sell any shares of a Fund except through the Distributor and under the terms and conditions set forth in paragraph FOURTH below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Trust may issue shares of a Fund to any other investment company or personal holding company, or to the shareholders thereof, in exchange for all or a majority of the shares or assets of any such company; and
(B) the Trust may issue shares of a Fund at their net asset value in connection with certain classes of transactions or to certain categories of persons, in accordance with Rule 22d-1 under the Investment Company Act of 1940, as amended (the "1940 Act"), provided that any such category is specified in the then current prospectus of the Funds.
THIRD: The Distributor hereby accepts appointment as exclusive agent for the sale of the shares of the Funds and agrees that it will use its best efforts to sell such shares; provided, however, that:
(A) the Distributor may, and when requested by the Trust on behalf of each Fund shall, suspend its efforts to effectuate such sales at any time when, in the opinion of the Distributor or of the Trust, no sales should be made because of market or other economic considerations or abnormal circumstances of any kind; and
(B) the Trust may withdraw the offering of the shares of a Fund (i) at any time with the consent of the Distributor, or (ii) without such consent when so required by the provisions of any statute or of any order, rule or regulation of any governmental body having jurisdiction. It is mutually understood and agreed that the Distributor does not undertake to sell any specific amount of the shares of a Fund. The Trust shall have the right to specify minimum amounts for initial and subsequent orders for the purchase of Fund shares.
FOURTH:
(A) The public offering price of the Class A shares of a Fund (the "offering price") shall be the net asset value per share plus a sales charge, if any. Net asset value per share shall be determined in accordance with the provisions of the then current prospectus and statement of additional information of the Funds. The sales charge shall be established by the Distributor, may reflect scheduled variations in, or the elimination of, sales charges on sales of a Fund's 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 Funds. The Distributor shall apply any scheduled variation in, or elimination of, the selling commission uniformly to all offerees in the class specified.
The public offering price of the Class C shares shall be the net asset value per share of the applicable Class C shares. Net asset value per share shall be determined in accordance with the provisions of the then current prospectus and statement of additional information of the applicable Fund. 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 Fund. 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 Funds' current prospectus(es). The Distributor and the Trust shall apply any then applicable scheduled variation in or waiver of contingent deferred sales charges uniformly to all shareholders and/or all transactions belonging to a specified class.
(B) The Funds shall allow directly to investment dealers and other financial institutions through whom Class A shares of each Fund are sold such portion of the sales charge as may be payable to them and specified by the Distributor up to but not exceeding the amount of the total sales charge. The difference between any commissions so payable 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 Fund to the Distributor or by a Fund or the Distributor to investment dealers, financial institutions and 401(k) plan service providers where such payments are made under a distribution plan adopted by the Trust on behalf of each Fund pursuant to Rule 12b-1 under the 1940 Act.
FIFTH: The Distributor shall act as agent of the Trust on behalf of each Fund in connection with the sale and repurchase of shares of a Fund. Except with respect to such sales and repurchases, the Distributor shall act as principal in all matters relating to the promotion or the sale of shares of the Funds and shall enter into all of its own engagements, agreements and contracts as principal on its own account. The Distributor shall enter into agreements with investment dealers and financial institutions selected by the Distributor, authorizing such investment dealers and financial institutions to offer and sell shares of each Fund to the public upon the terms and conditions set forth therein, which shall not be inconsistent with the provisions of this Agreement.
Each agreement shall provide that the investment dealer and financial institution shall act as a principal, and not as an agent, of the Trust on behalf of the Funds.
SIXTH: The Funds shall bear:
(A) the expenses of qualification of shares of a Fund for sale in connection with such public offerings in such states as shall be selected by the Distributor, and of continuing the qualification therein until the Distributor notifies the Trust that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the final proof and distributing the Funds' prospectuses and statements of additional information (including supplements thereto) relating to public offerings made by the Distributor pursuant to this Agreement (which shall not include those prospectuses and statements of additional information, and supplements thereto, to be distributed to shareholders of each Fund), and any other promotional or sales literature used by the Distributor or furnished by the Distributor to dealers in connection with such public offerings, and expenses of advertising in connection with such public offerings.
(B) The Distributor may be reimbursed for all or a portion of such expenses, or may receive reasonable compensation for distribution related services, to the extent permitted by a distribution plan adopted by the Trust on behalf of the Funds pursuant to Rule 12b-1 under the 1940 Act.
EIGHTH: The Distributor will accept orders for the purchase of shares of each Fund only to the extent of purchase orders actually received and not in excess of such orders, and it will not avail itself of any opportunity of making a profit by expediting or withholding orders. It is mutually understood and agreed that the Trust may reject purchase orders where, in the judgment of the Trust, such rejection is in the best interest of the Trust.
NINTH: The Trust, on behalf of the Funds, and the Distributor shall each comply with all applicable provisions of the 1940 Act, the Securities Act of 1933 and of all other federal and state laws, rules and regulations governing the issuance and sale of shares of each Fund.
TENTH:
(A) In the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of the Distributor, the Trust on behalf of the Funds agrees to indemnify the Distributor against any and all claims, demands, liabilities and expenses which the Distributor may incur under the Securities Act of 1933, or common law or otherwise, arising out of or based upon any alleged untrue statement of a material fact contained in any registration statement or prospectus of the Funds, or any omission to state a material fact therein, the omission of which makes any statement contained therein misleading, unless such statement or omission was made in reliance upon, and in conformity with, information furnished to the Trust or Fund in connection therewith by or on behalf of the Distributor. The Distributor agrees to indemnify the Trust and the Funds against any and all claims, demands, liabilities and expenses which the Trust or the Funds may incur arising out of or based upon any act or deed of the Distributor or its sales representatives which has not been authorized by the Trust or the Funds in its prospectus or in this Agreement.
(B) The Distributor agrees to indemnify the Trust and the Funds against any and all claims, demands, liabilities and expenses which the Trust or the Funds may incur under the Securities Act of 1933, or common law or otherwise, arising out of or based upon any alleged untrue statement of a material fact contained in any registration statement or prospectus of the Funds, or any omission to state a material fact therein if such statement or omission was made in reliance upon, and in conformity with, information furnished to the Trust or the Funds in connection therewith by or on behalf of the Distributor.
(C) Notwithstanding any other provision of this Agreement, the Distributor shall not be liable for any errors of the Funds' transfer agent(s), or for any failure of any such transfer agent to perform its duties.
ELEVENTH: Nothing herein contained shall require the Trust to take any action contrary to any provision of its Articles of Incorporation, or to any applicable statute or regulation.
TWELFTH: This Agreement shall become effective as of the date hereof, shall continue in force and effect until June 30, 2001, and shall continue in force and effect from year to year thereafter, provided, that such continuance is specifically approved at least annually (a)(i) by the Board of Trustees of the Trust or (ii) by the vote of a majority of the Funds' outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act), and (b) by vote of a majority of the trustees of the Trust who are not parties to this Agreement or "interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of any party to this Agreement cast in person at a meeting called for such purpose.
THIRTEENTH:
(A) This Agreement may be terminated at any time, without the payment of any penalty, by vote of the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities of each Fund, or by the Distributor, on sixty (60) days' written notice to the other party.
(B) This Agreement shall automatically terminate in the event of its assignment, the term "assignment" having the meaning set forth in Section 2(a)(4) of the 1940 Act.
FOURTEENTH: Any notice under this Agreement shall be in writing, addressed and delivered, or mailed postage prepaid, to the other party at such address as the other party may designate for the receipt of notices. Until further notice to the other party, it is agreed that the addresses of both the Trust and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate on the day and year first above written.
AIM EQUITY FUNDS
By: /s/ ROBERT H. GRAHAM
-------------------------------
Name: Robert H. Graham
Title: President
Attest:
/s/ LISA A. MOSS
-------------------------------
Name: Lisa A. Moss
Title: Assistant Secretary
|
A I M DISTRIBUTORS, INC.
By: /s/ MARILYN M. MILLER
-------------------------------
Name: Marilyn M. Miller
Title: Senior Vice President
Attest:
/s/ LISA A. MOSS
-------------------------------
Name: Lisa A. Moss
Title: Assistant Secretary
|
"APPENDIX A
TO
MASTER DISTRIBUTION AGREEMENT
OF
AIM EQUITY FUNDS
CLASS A SHARES
AIM Aggressive Growth 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 Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund
CLASS C SHARES
AIM Aggressive Growth 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 Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund"
EXHIBIT e(11)(a)
FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
BETWEEN
AIM EQUITY FUNDS
(CLASS A SHARES AND CLASS C SHARES)
AND
A I M DISTRIBUTORS, INC.
THIS AGREEMENT is made this 1st day of July, 2000, by and between AIM EQUITY FUNDS, a Delaware business trust (the "Trust"), and A I M DISTRIBUTORS, INC., a Delaware corporation (the "Distributor").
WITNESSETH:
In consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt whereof is hereby acknowledged, the parties hereto agree as follows:
FIRST: The Trust hereby appoints the Distributor as its exclusive agent for the sale of shares set forth in Appendix A attached hereto (collectively, the "Funds" and each separately a "Fund"), and any applicable classes thereof, to the public directly and through investment dealers and financial institutions in the United States and throughout the world in accordance with the terms of the Trust's current prospectus applicable to the Funds.
SECOND: The Trust shall not sell any shares of a Fund except through the Distributor and under the terms and conditions set forth in paragraph FOURTH below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Trust may issue shares of a Fund to any other investment company or personal holding company, or to the shareholders thereof, in exchange for all or a majority of the shares or assets of any such company; and
(B) the Trust may issue shares of a Fund at their net asset value in connection with certain classes of transactions or to certain categories of persons, in accordance with Rule 22d-1 under the Investment Company Act of 1940, as amended (the "1940 Act"), provided that any such category is specified in the then current prospectus of the Funds.
THIRD: The Distributor hereby accepts appointment as exclusive agent for the sale of the shares of the Funds and agrees that it will use its best efforts to sell such shares; provided, however, that:
(A) the Distributor may, and when requested by the Trust on behalf of each Fund shall, suspend its efforts to effectuate such sales at any time when, in the opinion of the Distributor or of the Trust, no sales should be made because of market or other economic considerations or abnormal circumstances of any kind; and
(B) the Trust may withdraw the offering of the shares of a Fund (i) at any time with the consent of the Distributor, or (ii) without such consent when so required by the provisions of any statute or of any order, rule or regulation of any governmental body having jurisdiction. It is mutually understood and agreed that the Distributor does not undertake to sell any specific amount of the
shares of a Fund. The Trust shall have the right to specify minimum amounts for initial and subsequent orders for the purchase of Fund shares.
FOURTH:
(A) The public offering price of the Class A shares of a Fund (the "offering price") shall be the net asset value per share plus a sales charge, if any. Net asset value per share shall be determined in accordance with the provisions of the then current prospectus and statement of additional information of the Funds. The sales charge shall be established by the Distributor, may reflect scheduled variations in, or the elimination of, sales charges on sales of a Fund's 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 Funds. The Distributor shall apply any scheduled variation in, or elimination of, the selling commission uniformly to all offerees in the class specified.
The public offering price of the Class C shares shall be the net asset value per share of the applicable Class C shares. Net asset value per share shall be determined in accordance with the provisions of the then current prospectus and statement of additional information of the applicable Fund. 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 Fund. 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 Funds' current prospectus(es). The Distributor and the Trust shall apply any then applicable scheduled variation in or waiver of contingent deferred sales charges uniformly to all shareholders and/or all transactions belonging to a specified class.
(B) The Funds shall allow directly to investment dealers and other financial institutions through whom Class A shares of each Fund are sold such portion of the sales charge as may be payable to them and specified by the Distributor up to but not exceeding the amount of the total sales charge. The difference between any commissions so payable 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 Fund to the Distributor or by a Fund or the Distributor to investment dealers, financial institutions and 401(k) plan service providers where such payments are made under a distribution plan adopted by the Trust on behalf of each Fund pursuant to Rule 12b-1 under the 1940 Act.
FIFTH: The Distributor shall act as agent of the Trust on behalf of each Fund in connection with the sale and repurchase of shares of a Fund. Except with respect to such sales and repurchases, the Distributor shall act as principal in all matters relating to the promotion or the sale of shares of the Funds and shall enter into all of its own engagements, agreements and contracts as principal on its own account. The Distributor shall enter into agreements with investment dealers and financial institutions selected by the Distributor, authorizing such investment dealers and
financial institutions to offer and sell shares of each Fund to the public upon the terms and conditions set forth therein, which shall not be inconsistent with the provisions of this Agreement. Each agreement shall provide that the investment dealer and financial institution shall act as a principal, and not as an agent, of the Trust on behalf of the Funds.
SIXTH: The Funds shall bear:
(A) the expenses of qualification of shares of a Fund for sale in connection with such public offerings in such states as shall be selected by the Distributor, and of continuing the qualification therein until the Distributor notifies the Trust that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the final proof and distributing the Funds' prospectuses and statements of additional information (including supplements thereto) relating to public offerings made by the Distributor pursuant to this Agreement (which shall not include those prospectuses and statements of additional information, and supplements thereto, to be distributed to shareholders of each Fund), and any other promotional or sales literature used by the Distributor or furnished by the Distributor to dealers in connection with such public offerings, and expenses of advertising in connection with such public offerings.
(B) The Distributor shall be reimbursed for all or a portion of such expenses, and shall receive reasonable compensation for distribution related services, to the extent permitted by a distribution plan adopted by the Trust on behalf of the Funds 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 each Fund only to the extent of purchase orders actually received and not in excess of such orders, and it will not avail itself of any opportunity of making a profit by expediting or withholding orders. It is mutually understood and agreed that the Trust may reject purchase orders where, in the judgment of the Trust, such rejection is in the best interest of the Trust.
NINTH: The Trust, on behalf of the Funds, and the Distributor shall each comply with all applicable provisions of the 1940 Act, the Securities Act of 1933 and of all other federal and state laws, rules and regulations governing the issuance and sale of shares of each Fund.
TENTH:
(A) In the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of the Distributor, the Trust on behalf of the Funds agrees to indemnify the Distributor against any and all claims, demands, liabilities and expenses which the Distributor may incur under the Securities Act of 1933, or common law or otherwise, arising out of or based upon any alleged untrue statement of a material fact contained in any registration statement or prospectus of the Funds, or any omission to state a material fact therein, the omission of which makes any statement contained therein misleading, unless such statement or omission was made in reliance upon, and in conformity with, information furnished to the Trust or Fund in connection therewith by or on behalf of the Distributor. The Distributor agrees to indemnify the Trust and the Funds against any and all claims, demands, liabilities and expenses
which the Trust or the Funds may incur arising out of or based upon any act or deed of the Distributor or its sales representatives which has not been authorized by the Trust or the Funds in its prospectus or in this Agreement.
(B) The Distributor agrees to indemnify the Trust and the Funds against any and all claims, demands, liabilities and expenses which the Trust or the Funds may incur under the Securities Act of 1933, or common law or otherwise, arising out of or based upon any alleged untrue statement of a material fact contained in any registration statement or prospectus of the Funds, or any omission to state a material fact therein if such statement or omission was made in reliance upon, and in conformity with, information furnished to the Trust or the Funds in connection therewith by or on behalf of the Distributor.
(C) Notwithstanding any other provision of this Agreement, the Distributor shall not be liable for any errors of the Funds' transfer agent(s), or for any failure of any such transfer agent to perform its duties.
ELEVENTH: Nothing herein contained shall require the Trust to take any action contrary to any provision of its Articles of Incorporation, or to any applicable statute or regulation.
TWELFTH: This Agreement shall become effective as of the date hereof, shall continue in force and effect until June 30, 2001, and shall continue in force and effect from year to year thereafter, provided, that such continuance is specifically approved at least annually (a)(i) by the Board of Trustees of the Trust or (ii) by the vote of a majority of the Funds' outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act), and (b) by vote of a majority of the trustees of the Trust who are not parties to this Agreement or "interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of any party to this Agreement cast in person at a meeting called for such purpose.
THIRTEENTH:
(A) This Agreement may be terminated at any time, without the payment of any penalty, by vote of the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities of each Fund, or by the Distributor, on sixty (60) days' written notice to the other party.
(B) This Agreement shall automatically terminate in the event of its assignment, the term "assignment" having the meaning set forth in Section 2(a)(4) of the 1940 Act.
FOURTEENTH: Any notice under this Agreement shall be in writing, addressed and delivered, or mailed postage prepaid, to the other party at such address as the other party may designate for the receipt of notices. Until further notice to the other party, it is agreed that the addresses of both the Trust and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate on the day and year first above written.
AIM EQUITY FUNDS
By: /s/ ROBERT H. GRAHAM
-------------------------------
Name: Robert H. Graham
Title: President
Attest:
/s/ LISA A. MOSS
-------------------------------
Name: Lisa A. Moss
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
FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
OF
AIM EQUITY FUNDS
CLASS A SHARES
AIM Aggressive Growth 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 Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund
CLASS C SHARES
AIM Aggressive Growth 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 Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund
EXHIBIT e(11)(b)
AMENDMENT NO. 1
TO THE FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
BETWEEN
AIM EQUITY FUNDS
(CLASS A SHARES AND CLASS C SHARES)
AND
A I M DISTRIBUTORS, INC.
The First Amended and Restated Master Distribution Agreement (the "Agreement"), dated July 1, 2000, by and between AIM Equity Funds, a Delaware business trust, and A I M Distributors, Inc., a Delaware corporation, is hereby amended as follows:
1. The following paragraph is added at the end of Section FOURTH: (A):
"The public offering price of the Institutional Class shares of the Trust shall be the net asset value per share. Net asset value per share shall be determined in accordance with the provisions of the then current Institutional Class shares' prospectus and statement of additional information."
2. Section FOURTH: (C) to the Agreement is hereby deleted in its entirety and replaced with the following:
"(C) No provision of this Agreement shall be deemed to prohibit any payments by a Fund to the Distributor or by a Fund or the Distributor to investment dealers, financial institutions and 401(k) plan service provides where such payments are made under a distribution plan adopted by the Trust on behalf of the applicable shares of each Fund pursuant to Rule 12b-1 under the 1940 Act."
3. Section SEVENTH: (B) to the Agreement is hereby deleted in its entirety and replaced with the following:
"(B) The Distributor shall be reimbursed for all or a portion of such expenses, and shall receive reasonable compensation for distribution related services, to the extent permitted by a distribution plan adopted by the Trust on behalf of the applicable shares of the Funds 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."
4. Appendix A to the Agreement is hereby deleted in its entirety and replaced with the following:
"APPENDIX A
TO
FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
OF
AIM EQUITY FUNDS
CLASS A SHARES
AIM Aggressive Growth 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 Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund
CLASS C SHARES
AIM Aggressive Growth 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 Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund
INSTITUTIONAL CLASS SHARES
AIM Charter Fund
AIM Constellation Fund
AIM Weingarten Fund"
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: November 28, 2000
AIM EQUITY FUNDS
Attest: /s/ OFELIA M. MAYO By: /s/ ROBERT H. GRAHAM
------------------------------- -------------------------------
Assistant Secretary President
|
A I M DISTRIBUTORS, INC.
Attest: /s/ OFELIA M. MAYO By: /s/ MICHAEL J. CEMO
------------------------------ -------------------------------
Assistant Secretary President
|
EXHIBIT e(12)(h)
AMENDMENT NO. 7
MASTER DISTRIBUTION AGREEMENT
The Master Distribution Agreement (the "Agreement"), dated February 28, 1997, by and between AIM Equity Funds, Inc., a Maryland corporation, and A I M Distributors, Inc., a Delaware corporation, is hereby amended as follows:
Schedule A of the Agreement is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
CLASS B SHARES
AIM Aggressive Growth 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 Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund"
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Date: March 30, 2000
AIM EQUITY FUNDS, INC.
Attest: /s/ LISA A. MOSS By: /s/ ROBERT H. GRAHAM
---------------------------- -------------------------------
Assistant Secretary President
(SEAL)
A I M DISTRIBUTORS, INC.
Attest: /s/ LISA A. MOSS By: /s/ MICHAEL J. CEMO
---------------------------- -------------------------------
Assistant Secretary President
|
(SEAL)
EXHIBIT e(13)
MASTER DISTRIBUTION AGREEMENT
BETWEEN
AIM EQUITY FUNDS
(CLASS B SHARES)
AND
A I M DISTRIBUTORS, INC.
THIS AGREEMENT made as of this 21st day of June, 2000, by and between AIM Equity Funds, a Delaware business trust (the "Trust"), with respect to each of the Class B shares (the "Shares") of each series of shares of beneficial interest set forth on Schedule A to this agreement (the "Portfolios"), and A I M DISTRIBUTORS, INC., a Delaware corporation (the "Distributor").
WITNESSETH:
In consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt whereof is hereby acknowledged, the parties hereto agree as follows:
FIRST: The Trust hereby appoints the Distributor as its exclusive agent for the sale of the Shares to the public directly and through investment dealers in the United States and throughout the world. If subsequent to the termination of the Distributor's services to the Trust pursuant to this Agreement, the Trust retains the services of another distributor, the distribution agreement with such distributor shall contain provisions comparable to Clauses FOURTH and SEVENTH hereof and Exhibit A hereto, and without limiting the generality of the foregoing, will require such distributor to maintain and make available to the Distributor records regarding sales, redemptions and reinvestments of Shares necessary to implement the terms of Clauses FOURTH, SEVENTH and EIGHTH hereof.
SECOND: The Trust shall not sell any Shares except through the Distributor and under the terms and conditions set forth in paragraph FOURTH below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Trust may issue Shares to any other investment company or personal holding company, or to the shareholders thereof, in exchange for all or a majority of the shares or assets of any such company;
(B) the Trust may issue Shares at their net asset value in connection with certain classes of transactions or to certain classes of persons, in accordance with Rule 22d-1 under the Investment Company Act of 1940, as amended (the "1940 Act"), provided that any such class is specified in the then current prospectus of the applicable Shares; and
(C) the Trust shall have the right to specify minimum amounts for initial and subsequent orders for the purchase of Shares.
THIRD: The Distributor hereby accepts appointment as exclusive agent for the sale of the Shares and agrees that it will use its best efforts to sell such Shares; provided, however, that:
(A) the Distributor may, and when requested by the Trust on behalf of the Shares shall, suspend its efforts to effectuate such sales at any time when, in the opinion of the Distributor or of the Trust, no sales should be made because of market or other economic considerations or abnormal circumstances of any kind;
(B) the Trust may withdraw the offering of the Shares (i) at any time with the consent of the Distributor, or (ii) without such consent when so required by the provisions of any statute or of any order, rule or regulation of any governmental body having jurisdiction; and
(C) the Distributor, as agent, does not undertake to sell any specific amount of the Shares.
FOURTH:
(A) The public offering price of the Shares shall be the net asset value per share of the applicable Shares. Net asset value per share shall be determined in accordance with the provisions of the then current prospectus and statement of additional information of the applicable Portfolio. The Distributor may establish a schedule of contingent deferred sales charges to be imposed at the time of redemption of the Shares, and such schedule shall be disclosed in the current prospectus of each Portfolio. Such schedule of contingent deferred sales charges may reflect variations in or waivers of such charges on redemptions of Shares, either generally to the public or to any specified class of shareholders and/or in connection with any specified class of transactions, in accordance with applicable rules and regulations and exemptive relief granted by the Securities and Exchange Commission, and as set forth in the Portfolios' current prospectus(es). The Distributor and the Company shall apply any then applicable scheduled variation in or waiver of contingent deferred sales charges uniformly to all shareholders and/or all transactions belonging to a specified class.
(B) The Distributor may pay to investment dealers and other financial institutions through whom Shares are sold, such sales commission as the Distributor may specify from time to time. Payment of any such sales commissions shall be the sole obligation of the Distributor.
(C) No provision of this Agreement shall be deemed to prohibit any payments by the Trust to the Distributor or by the Company or the Distributor to investment dealers, financial institutions and 401(k) plan service providers where such payments are made under a distribution plan adopted by the Trust pursuant to Rule 12b-1 under the 1940 Act.
(D) The Trust shall redeem the Shares from shareholders in accordance with the terms set forth from time to time in the current prospectus and statement of additional information of each Portfolio. The price to be paid to a shareholder to redeem the Shares shall be equal to the net asset value of the Shares being redeemed ("gross redemption proceeds"), less any applicable contingent deferred sales charge, calculated pursuant to the then applicable schedule of contingent deferred sales charges ("net redemption proceeds"). The Distributor shall be entitled to receive the amount of the contingent deferred sales charge that has been subtracted from gross redemption proceeds (the "CDSC"), provided that the Shares being redeemed were (i) issued by a Portfolio during the term of this Agreement and any predecessor Agreement between the Trust and the Distributor or (ii) issued by a Portfolio during or after the term of this Agreement or any predecessor Agreement between the Trust and the Distributor in one or a series of free exchanges of Shares for class B shares of another portfolio, which can be traced to Shares or class B shares of another portfolio initially issued by a Portfolio or such other portfolio during the term of this Agreement, any
predecessor Agreement or any other distribution agreement with the Distributor with respect to such other portfolio (the "Distributor's Earned CDSC"). The Trust shall pay or cause the Trust's transfer agent to pay the Distributor's Earned CDSC to the Distributor on the date net redemption proceeds are payable to the redeeming shareholder.
(E) The Distributor shall maintain adequate books and records to identify Shares (i) issued by a Portfolio during the term of this Agreement and any predecessor Agreement between the Trust and the Distributor or (ii) issued by a Portfolio during or after the term of this Agreement or any predecessor Agreement between the Trust and the Distributor in one or a series of free exchanges of Shares for class B shares of another portfolio, which can be traced to Shares or class B shares of another portfolio initially issued by a Portfolio or such other portfolio during the term of this Agreement, any predecessor Agreement or any other distribution agreement with the Distributor with respect to such other portfolio and shall calculate the Distributor's Earned CDSC, if any, with respect to such Shares, upon their redemption. The Trust shall be entitled to rely on Distributor's books, records and calculations with respect to Distributor's Earned CDSC.
FIFTH: The Distributor shall act as an agent of the Trust in connection with the sale and redemption of Shares. Except with respect to such sales and redemptions, the Distributor shall act as principal in all matters relating to the promotion of the sale of Shares and shall enter into all of its own engagements, agreements and contracts as principal on its own account. The Distributor shall enter into agreements with investment dealers and financial institutions selected by the Distributor, authorizing such investment dealers and financial institutions to offer and sell the Shares to the public upon the terms and conditions set forth therein, which shall not be inconsistent with the provisions of this Agreement. Each agreement shall provide that the investment dealer or financial institution shall act as a principal, and not as an agent, of the Trust.
SIXTH: The Shares shall bear:
(A) the expenses of qualification of Shares for sale in connection with such public offerings in such states as shall be selected by the Distributor, and of continuing the qualification therein until the Distributor notifies the Trust that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the final proof and distributing the prospectuses and statements of additional information for the Shares (including supplements thereto) relating to public offerings made by the Trust pursuant to such prospectuses (which shall not include those prospectuses and statements of additional information, and supplements thereto, to be distributed to existing shareholders of the Shares), and any other promotional or sales literature used by the Distributor or furnished by the Distributor to dealers in connection with such public offerings, and expenses of advertising in connection with such public offerings.
(B) Subject to the limitations, if any, of applicable law including the NASD Conduct Rules (formerly, the NASD Rules of Fair Practice) regarding asset-based sales charges, the Company shall pay to the Distributor as a reimbursement for all or a portion of such expenses, or as reasonable compensation for distribution of the Shares, an asset-based sales charge in an amount equal to 0.75% per annum of the average daily net asset value of the Shares of each Portfolio from time to time (the "Distributor's 12b-1 Share"), such sales charge to be payable pursuant to the
distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The Distributor's 12b-1 Share shall be a percentage, which shall be recomputed periodically (but not less than monthly) in accordance with Exhibit A to this Agreement. The Distributor's 12b-1 Share shall accrue daily and be paid to the Distributor as soon as practicable after the end of each calendar month within which it accrues but in any event within 10 business days after the end of each such calendar month (unless the Distributor shall specify a later date in written instructions to the Trust) provided, however, that any notices and calculation required by Section EIGHTH: (B) and (C) have been received by the Trust.
(C) The Distributor shall maintain adequate books and records to permit calculations periodically (but not less than monthly) of, and shall calculate on a monthly basis, the Distributor's 12b-1 Share to be paid to the Distributor. The Trust shall be entitled to rely on Distributor's books, records and calculations relating to Distributor's 12b-1 Share.
EIGHTH:
(A) The Distributor may, from time to time, assign, transfer or pledge ("Transfer") to one or more designees (each an "Assignee"), its rights to all or a designated portion of (i) the Distributor's 12b-1 Share (but not the Distributor's duties and obligations pursuant hereto or pursuant to the Plan), and (ii) the Distributor's Earned CDSC, free and clear of any offsets or claims the Trust may have against the Distributor. Each such Assignee's ownership interest in a Transfer of a designated portion of a Distributor's 12b-1 Share and a Distributor's Earned CDSC is hereinafter referred to as an "Assignee's 12b-1 Portion" and an "Assignee's CDSC Portion," respectively. A Transfer pursuant to this Section EIGHTH: (A) shall not reduce or extinguish any claim of the Company against the Distributor.
(B) The Distributor shall promptly notify the Trust in writing of each Transfer pursuant to Section EIGHTH: (A) by providing the Trust with the name and address of each such Assignee.
(C) The Distributor may direct the Trust to pay directly to an Assignee
such Assignee's 12b-1 Portion and Assignee's CDSC Portion. In such event,
Distributor shall provide the Trust with a monthly calculation of (i) the
Distributor's Earned CDSC and Distributor's 12b-1 Share and (ii) each Assignee's
12b-1 Portion and Assignee's CDSC Portion, if any, for such month (the "Monthly
Calculation"). The Monthly Calculation shall be provided to the Trust by the
Distributor promptly after the close of each month or such other time as agreed
to by the Trust and the Distributor which allows timely payment of the
Distributor's 12b-1 Share and Distributor's Earned CDSC and/or the Assignee's
12b-1 Portion and Assignee's CDSC Portion. The Trust shall not be liable for any
interest on such payments occasioned by delayed delivery of the Monthly
Calculation by the Distributor. In such event following receipt from the
Distributor of (i) notice of Transfer referred to in Section EIGHTH: (B) and
(ii) each Monthly Calculation, the Trust shall make all payments directly to the
Assignee or Assignees in accordance with the information provided in such notice
and Monthly Calculation, on the same terms and conditions as if such payments
were to be paid directly to the Distributor. The Trust shall be entitled to rely
on Distributor's notices, and Monthly Calculations in respect of amounts to be
paid pursuant to this Section EIGHTH: (B).
(D) Alternatively, in connection with a Transfer the Distributor may direct the Trust to pay all of such Distributor's 12b-1 Share and Distributor's Earned CDSC from time to time to a depository or collection agent designated by any Assignee, which depository or collection agent may be delegated the duty of dividing such Distributor's 12b-1 Share and Distributor's Earned CDSC between the Assignee's 12b-1 Portion and Assignee's CDSC Portion and the balance of the Distributor's 12b-1 Share (such balance, when distributed to the Distributor by the depository or
collection agent, the "Distributor's 12b-1 Portion") and of the Distributor's Earned CDSC (such balance, when distributed to the Distributor by the depository or collection agent, the "Distributor's Earned CDSC Portion"), in which case only the Distributor's 12b-1 Portion and Distributor's Earned CDSC Portion may be subject to offsets or claims the Trust may have against the Distributor.
(E) The Trust shall not amend the Plan to reduce the amount payable to the Distributor or any Assignee under Section SEVENTH: (B) hereof with respect to the Shares for any Shares which have been issued prior to the date of such amendment.
NINTH: The Distributor will accept orders for the purchase of Shares only to the extent of purchase orders actually received and not in excess of such orders, and it will not avail itself of any opportunity of making a profit by expediting or withholding orders.
TENTH:
(A) Pursuant to the Plan and this Agreement, the Distributor, as agent, shall enter into Shareholder Service Agreements with investment dealers, financial institutions and certain 401(K) plan service providers (collectively "Service Providers") selected by the Distributor for the provision of certain continuing personal services to customers of such Service Providers who have purchased Shares. Such agreements shall authorize Service Providers to provide continuing personal shareholder services to their customers upon the terms and conditions set forth therein, which shall not be inconsistent with the provisions of this Agreement. Each Shareholder Service Agreement shall provide that the Service Provider shall act as principal, and not as an agent of the Trust.
(B) Shareholder Service Agreements may provide that the Service Providers may receive a service fee in the amount of .25% of the average daily net assets of the Shares held by customers of such Service Providers provided that such Service Providers furnish continuing personal shareholder services to their customers in respect of such Shares. The continuing personal services to be rendered by Service Providers under the Shareholder Service Agreements may include, but shall not be limited to, some or all of the following: distributing sales literature; answering routine customer inquiries concerning the Trust; assisting customers in changing dividend elections, options, account designations and addresses, and in enrolling in any of several special investment plans offered in connection with the purchase of Shares; assisting in the establishment and maintenance of or establishing and maintaining customer accounts and records and the processing of purchase and redemption transactions; performing subaccounting; investing dividends and any capital gains distributions automatically in the Trust's shares; providing periodic statements showing a customer's account balance and the integration of such statements with those of other transactions and balances in the customer's account serviced by the Service Provider; forwarding applicable prospectus, proxy statements, reports and notices to customers who hold Shares and providing such other information and services as the Trust or the customers may reasonably request.
(C) The Distributor may advance service fees payable to Service Providers pursuant to the Plan or any other distribution plan adopted by the Trust with respect to Shares of one or more of the Portfolios pursuant to Rule 12b-1 under the 1940 Act; and thereafter the Distributor may be reimbursed for such advances through retention of service fee payments during the period for which the service fees were advanced.
ELEVENTH: The Trust and the Distributor shall each comply with all applicable provisions of the 1940 Act, the Securities Act of 1933, as amended, and of all other federal and state laws, rules and regulations governing the issuance and sale of the Shares.
TWELFTH:
(A) In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Trust shall indemnify the Distributor against any and all
claims, demands, liabilities and expenses which the Distributor may incur under
the Securities Act of 1933, or common law or otherwise, arising out of or based
upon any alleged untrue statement of a material fact contained in any
registration statement or prospectus of the Shares, or any omission to state a
material fact therein, the omission of which makes any statement contained
therein misleading, unless such statement or omission was made in reliance upon,
and in conformity with, information furnished to the Trust in connection
therewith by or on behalf of the Distributor. The Distributor shall indemnify
the Trust and the Shares against any and all claims, demands, liabilities and
expenses which the Trust or the Shares may incur arising out of or based upon
(i) any act or deed of the Distributor or its sales representatives which has
not been authorized by the Trust in its prospectus or in this Agreement and (ii)
the Trust's reliance on the Distributor's books, records, calculations and
notices in Sections FOURTH: (E), SEVENTH: (C), EIGHTH: (B), EIGHTH: (C) and
EIGHTH: (D).
(B) The Distributor shall indemnify the Trust and the Shares against any and all claims, demands, liabilities and expenses which the Trust or the Shares may incur under the Securities Act of 1933, as amended, or common law or otherwise, arising out of or based upon any alleged untrue statement of a material fact contained in any registration statement or prospectus of the Shares, or any omission to state a material fact therein if such statement or omission was made in reliance upon, and in conformity with, information furnished to the Trust in connection therewith by or on behalf of the Distributor.
(C) Notwithstanding any other provision of this Agreement, the Distributor shall not be liable for any errors of the transfer agent(s) of the Shares, or for any failure of any such transfer agent to perform its duties.
THIRTEENTH: Nothing herein contained shall require the Trust to take any action contrary to any provision of its Agreement and Declaration of Trust, as amended, or to any applicable statute or regulation.
FOURTEENTH: This Agreement shall become effective with respect to the Shares of each Portfolio upon its approval by the Board of Trustees of the Trust and by vote of a majority of the trustees of the Trust who are not interested parties to this Agreement or "interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of any party to this Agreement cast in person at a meeting called for such purpose, shall continue in force and effect until June 30, 2001, and from year to year thereafter, provided, that such continuance is specifically approved with respect to the Shares of each Portfolio at least annually (a)(i) by the Board of Trustees of the Trust or (ii) by the vote of a majority of the outstanding Shares of such class of such Portfolio, and (b) by vote of a majority of the trustees of the Trust who are not parties to this Agreement or "interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of any party to this Agreement cast in person at a meeting called for such purpose.
FIFTEENTH:
(A) This Agreement may be terminated with respect to the Shares of any Portfolio, at any time, without the payment of any penalty, by vote of the Board of Trustees of the Trust or by vote of a majority of the outstanding Shares of such Portfolio, or by the Distributor, on sixty (60) days' written notice to the other party; and
(B) This Agreement shall also automatically terminate in the event of
its assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act; provided, that, subject to the provisions of the
following sentence, if this Agreement is terminated for any reason, the
obligations of the Trust and the Distributor pursuant to Sections FOURTH: (D),
FOURTH: (E), SEVENTH: (B), SEVENTH: (C), EIGHTH: (A) through (E) and TWELFTH:
(A) of this Agreement will continue and survive any such termination.
Notwithstanding the foregoing, upon Complete Termination of the Plan (as such
term is defined in Section 8 of the Plan in effect at the date of this
Agreement), the obligations of the Trust pursuant to the terms of Sections
SEVENTH: (B), EIGHTH: (A), EIGHTH: (C), EIGHTH: (D) and EIGHTH: (E) (with
respect to payments of Distributor's 12b-1 Share and Assignee's 12b-1 Portion)
of this Agreement shall terminate. A termination of the Plan with respect to any
or all Shares of any or all Portfolios shall not affect the obligations of the
Trust pursuant to Sections FOURTH: (D), EIGHTH: (A), EIGHTH: (C), EIGHTH: (D)
and EIGHTH: (E) (with respect to payments of Distributor's Earned CDSC or
Assignee's CDSC Portion) hereof or of the obligations of the Distributor
pursuant to Section FOURTH: (E) or EIGHTH: (B) hereof.
(C) The Transfer of the Distributor's rights to Distributor's 12b-1
Share or Distributor's Earned CDSC shall not cause a termination of this
Agreement or be deemed to be an assignment for purposes of Section FIFTEENTH:
(B) above.
SIXTEENTH: Any notice under this Agreement shall be in writing, addressed and delivered, or mailed postage prepaid, to the other party at such address as the other party may designate for the receipt of notices. Until further notice to the other party, the addresses of both the Trust and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.
SEVENTEENTH: Notice is hereby given that, as provided by applicable law, the obligations of or arising out of this Agreement are not binding upon any of the shareholders of the Trust or any Portfolio individually, but are binding only upon the assets and property of the Trust or such Portfolio 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 EQUITY FUNDS
By: /s/ ROBERT H. GRAHAM
-------------------------------
Name: Robert H. Graham
Title: President
Attest:
/s/ LISA A. MOSS
-------------------------------
Name: Lisa A. Moss
Title: Assistant Secretary
|
A I M DISTRIBUTORS, INC.
By: /s/ MARILYN M. MILLER
-------------------------------
Name: Marilyn M. Miller
Title: Senior Vice President
Attest:
/s/ LISA A. MOSS
-------------------------------
Name: Lisa A. Moss
Title: Assistant Secretary
|
SCHEDULE A
TO
MASTER DISTRIBUTION AGREEMENT
OF
AIM EQUITY FUNDS
CLASS B SHARES
AIM Aggressive Growth 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 Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund
As of June 1, 2000
EXHIBIT A
The Distributor's 12b-1 Share in respect of each Portfolio shall be 100 percent until such time as the Distributor shall cease to serve as exclusive distributor of the Shares of such Portfolio and thereafter shall be a percentage, recomputed first on the date of any termination of the Distributor's services as exclusive distributor of Shares of any Portfolio and thereafter periodically (but not less than monthly), representing the percentage of Shares of such Portfolio outstanding on each such computation date allocated to the Distributor in accordance with the following rules:
1. DEFINITIONS. For purposes of this Exhibit A defined terms used herein shall have the meaning assigned to such terms in the Distribution Agreement and the following terms shall have the following meanings:
"Commission Shares" shall mean shares of the Portfolio or another portfolio the redemption of which would, in the absence of the application of some standard waiver provision, give rise to the payment of a CDSC and shall include Commission Shares which due to the expiration of the CDSC period no longer bear a CDSC.
"Distributor" shall mean the Distributor.
"Other Distributor" shall mean each person appointed as the exclusive distributor for the Shares of the Portfolio after the Distributor ceases to serve in that capacity.
2. ALLOCATION RULES. In determining the Distributor's 12b-1 Share in respect of a particular Portfolio:
(a) There shall be allocated to the Distributor and each Other Distributor all Commission Shares of such Portfolio which were sold while such Distributor or such Other Distributor, as the case may be, was the exclusive distributor for the Shares of the Portfolio, determined in accordance with the transfer records maintained for such Portfolio.
(b) Reinvested Shares: On the date that any Shares are issued by a Portfolio as a result of the reinvestment of dividends or other distributions, whether ordinary income, capital gains or exempt-interest dividends or distributions ("Reinvested Shares"), Reinvested Shares shall be allocated to the Distributor and each Other Distributor in a number obtained by multiplying the total number of Reinvested Shares issued on such date by a fraction, the numerator of which is the total number of all Shares outstanding in such Portfolio as of the opening of business on such date and allocated to the Distributor or Other Distributor as of such date of determination pursuant to these allocation procedures and the denominator is the total number of Shares outstanding as of the opening of business on such date.
(c) Exchange Shares: There shall be allocated to the Distributor and each Other Distributor, as the case may be, all Commission Shares of such Portfolio which were issued during or after the period referred to in (a) as a consequence of one or more free exchanges of Commission Shares of the Portfolio or of another portfolio (other than Free Appreciation Shares) (the "Exchange Shares"), which in accordance with the transfer records maintained for such Portfolio can be traced to Commission Shares of the Portfolio or another portfolio initially issued by the Trust or such other portfolio during the time the Distributor or such Other Distributor, as the case may be, was the exclusive distributor for the Shares of the Portfolio or such other portfolio.
(d) Free Appreciation Shares: Shares (other than Exchange Shares) that were acquired by the holders of such Shares in a free exchange of Shares of any other Portfolio, which represent the appreciated value of the Shares of the exiting portfolio over the initial purchase price paid for the Shares being redeemed and exchanged and for which the original purchase date and the original purchase price are not identified on an on-going basis, shall be allocated to the Distributor and each Other Distributor ("Free Appreciation Shares") daily in a number obtained by multiplying the total number of Free Appreciation Shares issued by the exiting portfolio on such date by a fraction, the numerator of which is the total number of all Shares outstanding as of the opening of business on such date allocated to the Distributor or such Other Distributor as of such date of determination pursuant to these allocation procedures and the denominator is the total number of Shares outstanding as of the opening of business on such date.
(e) Redeemed Shares: Shares (other than Reinvested Shares and Free Appreciation Shares) that are redeemed will be allocated to the Distributor and each Other Distributor to the extent such Share was previously allocated to the Distributor or such Other Distributor in accordance with the rules set forth in 2(a) or (c) above. Reinvested Shares and Free Appreciation Shares that are redeemed will be allocated to the Distributor and each Other Distributor daily in a number obtained by multiplying the total number of Free Appreciation Shares and Reinvested Shares being redeemed by such Portfolio on such date by a fraction, the numerator of which is the total number of all Free Appreciation Shares and Reinvested Shares of such Portfolio outstanding as of the opening of business on such date allocated to the Distributor or such Other Distributor as of such date of determination pursuant to these allocation procedures and the denominator is the total number of Free Appreciation Shares and Reinvested Shares of such Portfolio outstanding as of the opening of business on such date.
The Trust shall use its best efforts to assure that the transfer agents and sub-transfer agents for each Portfolio maintain the data necessary to implement the foregoing rules. If, notwithstanding the foregoing, the transfer agents or sub-transfer agents for such Portfolio are unable to maintain the data necessary to implement the foregoing rules as written, or if the Distributor shall cease to serve as exclusive distributor of the Shares of the Portfolio, the Distributor and the Portfolio agree to negotiate in good faith with each other, with the transfer agents and sub-transfer agents for such
Portfolio and with any third party that has obtained an interest in the Distributor's 12b-1 Share in respect of such Portfolio with a view to arriving at mutually satisfactory modifications to the foregoing rules designed to accomplish substantially identical results on the basis of data which can be made available.
Exhibit e(14)
FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
BETWEEN
AIM EQUITY FUNDS
(CLASS B SHARES)
AND
A I M DISTRIBUTORS, INC.
THIS AGREEMENT made as of this 31st day of December, 2000, by and between AIM Equity Funds, a Delaware business trust (the "Trust"), with respect to each of the Class B shares (the "Shares") of each series of shares of beneficial interest set forth on Schedule A to this agreement (the "Portfolios"), and A I M DISTRIBUTORS, INC., a Delaware corporation (the "Distributor").
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 Trust hereby appoints the Distributor as its exclusive agent for the sale of the Shares to the public directly and through investment dealers in the United States and throughout the world. If subsequent to the termination of the Distributor's services to the Trust pursuant to this Agreement, the Trust retains the services of another distributor, the distribution agreement with such distributor shall contain provisions comparable to Clauses FOURTH and SEVENTH hereof and Exhibit A hereto, and without limiting the generality of the foregoing, will require such distributor to maintain and make available to the Distributor records regarding sales, redemptions and reinvestments of Shares necessary to implement the terms of Clauses FOURTH, SEVENTH and EIGHTH hereof.
SECOND: The Trust shall not sell any Shares except through the Distributor and under the terms and conditions set forth in paragraph FOURTH below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Trust may issue Shares to any other investment company or personal holding company, or to the shareholders thereof, in exchange for all or a majority of the shares or assets of any such company;
(B) the Trust may issue Shares at their net asset value in connection with certain classes of transactions or to certain classes of persons, in accordance with Rule 22d-1 under the Investment Company Act of 1940, as amended (the "1940 Act"), provided that any such class is specified in the then current prospectus of the applicable Shares; and
(C) the Trust shall have the right to specify minimum amounts for initial and subsequent orders for the purchase of Shares.
THIRD: The Distributor hereby accepts appointment as exclusive agent for the sale of the Shares and agrees that it will use its best efforts to sell such Shares; provided, however, that:
(A) the Distributor may, and when requested by the Trust on behalf of the Shares shall, suspend its efforts to effectuate such sales at any time when, in the opinion of the Distributor or of the Trust, no sales should be made because of market or other economic considerations or abnormal circumstances of any kind;
(B) the Trust may withdraw the offering of the Shares (i) at any time with the consent of the Distributor, or (ii) without such consent when so required by the provisions of any statute or of any order, rule or regulation of any governmental body having jurisdiction; and
(C) the Distributor, as agent, does not undertake to sell any specific amount of the Shares.
FOURTH:
(A) The public offering price of the Shares shall be the net asset value per share of the applicable Shares. Net asset value per share shall be determined in accordance with the provisions of the then current prospectus and statement of additional information of the applicable Portfolio. The Distributor may establish a schedule of contingent deferred sales charges to be imposed at the time of redemption of the Shares, and such schedule shall be disclosed in the current prospectus of each Portfolio. Such schedule of contingent deferred sales charges may reflect variations in or waivers of such charges on redemptions of Shares, either generally to the public or to any specified class of shareholders and/or in connection with any specified class of transactions, in accordance with applicable rules and regulations and exemptive relief granted by the Securities and Exchange Commission, and as set forth in the Portfolios' current prospectus(es). The Distributor and the Trust shall apply any then applicable scheduled variation in or waiver of contingent deferred sales charges uniformly to all shareholders and/or all transactions belonging to a specified class.
(B) The Distributor may pay to investment dealers and other financial institutions through whom Shares are sold, such sales commission as the Distributor may specify from time to time. Payment of any such sales commissions shall be the sole obligation of the Distributor.
(C) No provision of this Agreement shall be deemed to prohibit any payments by the Trust to the Distributor or by the Trust or the Distributor to investment dealers, financial institutions and 401(k) plan service providers where such payments are made under a distribution plan adopted by the Trust pursuant to Rule 12b-1 under the 1940 Act.
(D) The Trust shall redeem the Shares from shareholders in accordance with the terms set forth from time to time in the current prospectus and statement of additional information of each Portfolio. The price to be paid to a shareholder to redeem the Shares shall be equal to the net asset value of the Shares being redeemed ("gross redemption proceeds"), less any applicable contingent deferred sales charge, calculated pursuant to the then applicable schedule of contingent deferred sales charges ("net redemption proceeds"). The Distributor shall be entitled to receive the amount of the contingent deferred sales charge that has been subtracted from gross redemption proceeds (the "CDSC"), provided that the Shares being redeemed were (i) issued by a Portfolio during the term of this Agreement and any predecessor Agreement between the Trust or its predecessor and the Distributor or (ii) issued by a Portfolio during or after the term of this Agreement or any
predecessor Agreement between the Trust or its predecessor and the Distributor in one or a series of free exchanges of Shares for class B shares of another portfolio, which can be traced to Shares or class B shares of another portfolio initially issued by a Portfolio or such other portfolio during the term of this Agreement, any predecessor Agreement or any other distribution agreement with the Distributor with respect to such other portfolio (the "Distributor's Earned CDSC"). The Trust shall pay or cause the Trust's transfer agent to pay the Distributor's Earned CDSC to the Distributor on the date net redemption proceeds are payable to the redeeming shareholder.
(E) The Distributor shall maintain adequate books and records to identify Shares (i) issued by a Portfolio during the term of this Agreement and any predecessor Agreement between the Trust or its predecessor and the Distributor or (ii) issued by a Portfolio during or after the term of this Agreement or any predecessor Agreement between the Trust or its predecessor and the Distributor in one or a series of free exchanges of Shares for class B shares of another portfolio, which can be traced to Shares or class B shares of another portfolio initially issued by a Portfolio or such other portfolio during the term of this Agreement, any predecessor Agreement or any other distribution agreement with the Distributor with respect to such other portfolio and shall calculate the Distributor's Earned CDSC, if any, with respect to such Shares, upon their redemption. The Trust shall be entitled to rely on Distributor's books, records and calculations with respect to Distributor's Earned CDSC.
FIFTH: The Distributor shall act as an agent of the Trust in connection with the sale and redemption of Shares. Except with respect to such sales and redemptions, the Distributor shall act as principal in all matters relating to the promotion of the sale of Shares and shall enter into all of its own engagements, agreements and contracts as principal on its own account. The Distributor shall enter into agreements with investment dealers and financial institutions selected by the Distributor, authorizing such investment dealers and financial institutions to offer and sell the Shares to the public upon the terms and conditions set forth therein, which shall not be inconsistent with the provisions of this Agreement. Each agreement shall provide that the investment dealer or financial institution shall act as a principal, and not as an agent, of the Trust.
SIXTH: The Shares shall bear:
(A) the expenses of qualification of Shares for sale in connection with such public offerings in such states as shall be selected by the Distributor, and of continuing the qualification therein until the Distributor notifies the Trust that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the final proof and distributing the prospectuses and statements of additional information for the Shares (including supplements thereto) relating to public offerings made by the Trust pursuant to such prospectuses (which shall not include those prospectuses and statements of additional information, and supplements thereto, to be distributed to existing shareholders of the Shares), and any other promotional or sales literature used by the Distributor or furnished by the Distributor to dealers in connection with such public offerings, and expenses of advertising in connection with such public offerings.
(B) Subject to the limitations, if any, of applicable law including the NASD Conduct Rules (formerly, the NASD Rules of Fair Practice) regarding asset-based sales charges, the Trust shall
pay to the Distributor as a reimbursement for all or a portion of such expenses, or as reasonable compensation for distribution of the Shares, an asset-based sales charge in an amount equal to 0.75% per annum of the average daily net asset value of the Shares of each Portfolio from time to time (the "Distributor's 12b-1 Share"), such sales charge to be payable pursuant to the distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The Distributor's 12b-1 Share shall be a percentage, which shall be recomputed periodically (but not less than monthly) in accordance with Exhibit A to this Agreement. The Distributor's 12b-1 Share shall accrue daily and be paid to the Distributor as soon as practicable after the end of each calendar month within which it accrues but in any event within 10 business days after the end of each such calendar month (unless the Distributor shall specify a later date in written instructions to the Trust) provided, however, that any notices and calculation required by Section EIGHTH: (B) and (C) have been received by the Trust.
(C) The Distributor shall maintain adequate books and records to permit calculations periodically (but not less than monthly) of, and shall calculate on a monthly basis, the Distributor's 12b-1 Share to be paid to the Distributor. The Trust shall be entitled to rely on Distributor's books, records and calculations relating to Distributor's 12b-1 Share.
EIGHTH:
(A) The Distributor may, from time to time, assign, transfer or pledge ("Transfer") to one or more designees (each an "Assignee"), its rights to all or a designated portion of (i) the Distributor's 12b-1 Share (but not the Distributor's duties and obligations pursuant hereto or pursuant to the Plan), and (ii) the Distributor's Earned CDSC, free and clear of any offsets or claims the Trust may have against the Distributor. Each such Assignee's ownership interest in a Transfer of a designated portion of a Distributor's 12b-1 Share and a Distributor's Earned CDSC is hereinafter referred to as an "Assignee's 12b-1 Portion" and an "Assignee's CDSC Portion," respectively. A Transfer pursuant to this Section EIGHTH: (A) shall not reduce or extinguish any claim of the Trust against the Distributor.
(B) The Distributor shall promptly notify the Trust in writing of each Transfer pursuant to Section EIGHTH: (A) by providing the Trust with the name and address of each such Assignee.
(C) The Distributor may direct the Trust to pay directly to an Assignee such Assignee's 12b-1 Portion and Assignee's CDSC Portion. In such event, Distributor shall provide the Trust with a monthly calculation of (i) the Distributor's Earned CDSC and Distributor's 12b-1 Share and (ii) each Assignee's 12b-1 Portion and Assignee's CDSC Portion, if any, for such month (the "Monthly Calculation"). The Monthly Calculation shall be provided to the Trust by the Distributor promptly after the close of each month or such other time as agreed to by the Trust and the Distributor which allows timely payment of the Distributor's 12b-1 Share and Distributor's Earned CDSC and/or the Assignee's 12b-1 Portion and Assignee's CDSC Portion. The Trust shall not be liable for any interest on such payments occasioned by delayed delivery of the Monthly Calculation by the Distributor. In such event following receipt from the Distributor of (i) notice of Transfer referred to in Section EIGHTH: (B) and (ii) each Monthly Calculation, the Trust shall make all payments directly to the Assignee or Assignees in accordance with the information provided in such notice and Monthly Calculation, on the same terms and conditions as if such payments were to be paid directly to the Distributor. The Trust shall be entitled to rely on Distributor's notices, and Monthly Calculations in respect of amounts to be paid pursuant to this Section EIGHTH: (B).
(D) Alternatively, in connection with a Transfer the Distributor may direct the Trust to pay all of such Distributor's 12b-1 Share and Distributor's Earned CDSC from time to time to a depository
or collection agent designated by any Assignee, which depository or collection agent may be delegated the duty of dividing such Distributor's 12b-1 Share and Distributor's Earned CDSC between the Assignee's 12b-1 Portion and Assignee's CDSC Portion and the balance of the Distributor's 12b-1 Share (such balance, when distributed to the Distributor by the depository or collection agent, the "Distributor's 12b-1 Portion") and of the Distributor's Earned CDSC (such balance, when distributed to the Distributor by the depository or collection agent, the "Distributor's Earned CDSC Portion"), in which case only the Distributor's 12b-1 Portion and Distributor's Earned CDSC Portion may be subject to offsets or claims the Trust may have against the Distributor.
(E) The Trust shall not amend the Plan to reduce the amount payable to the Distributor or any Assignee under Section SEVENTH: (B) hereof with respect to the Shares for any Shares which have been issued prior to the date of such amendment.
NINTH: The Distributor will accept orders for the purchase of Shares only to the extent of purchase orders actually received and not in excess of such orders, and it will not avail itself of any opportunity of making a profit by expediting or withholding orders.
TENTH:
(A) Pursuant to the Plan and this Agreement, the Distributor, as agent, shall enter into Shareholder Service Agreements with investment dealers (including itself acting as principal), financial institutions and certain 401(K) plan service providers (collectively "Service Providers") selected by the Distributor for the provision of certain continuing personal services to customers of such Service Providers who have purchased Shares. Such agreements shall authorize Service Providers to provide continuing personal shareholder services to their customers upon the terms and conditions set forth therein, which shall not be inconsistent with the provisions of this Agreement. Each Shareholder Service Agreement shall provide that the Service Provider shall act as principal, and not as an agent of the Trust.
(B) Shareholder Service Agreements may provide that the Service
Providers may receive a service fee in the amount of .25% of the average daily
net assets of the Shares held by customers of such Service Providers provided
that such Service Providers furnish continuing personal shareholder services to
their customers in respect of such Shares. The continuing personal services to
be rendered by Service Providers under the Shareholder Service Agreements may
include, but shall not be limited to, some or all of the following:
distributing sales literature; answering routine customer inquiries concerning
the Trust; assisting customers in changing dividend elections, options, account
designations and addresses, and in enrolling in any of several special
investment plans offered in connection with the purchase of Shares; assisting
in the establishment and maintenance of or establishing and maintaining
customer accounts and records and the processing of purchase and redemption
transactions; performing subaccounting; investing dividends and any capital
gains distributions automatically in the Trust's shares; providing periodic
statements showing a customer's account balance and the integration of such
statements with those of other transactions and balances in the customer's
account serviced by the Service Provider; forwarding applicable prospectus,
proxy statements, reports and notices to customers who hold Shares and
providing such other information and services as the Trust or the customers may
reasonably request.
(C) The Distributor may advance service fees payable to Service Providers pursuant to the Plan or any other distribution plan adopted by the Trust with respect to Shares of one or more of the Portfolios pursuant to Rule 12b-1 under the 1940 Act; and thereafter the Distributor may be
reimbursed for such advances through retention of service fee payments during the period for which the service fees were advanced.
ELEVENTH: The Trust and the Distributor shall each comply with all applicable provisions of the 1940 Act, the Securities Act of 1933, as amended, and of all other federal and state laws, rules and regulations governing the issuance and sale of the Shares.
TWELFTH:
(A) In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Trust shall indemnify the Distributor against any and all
claims, demands, liabilities and expenses which the Distributor may incur under
the Securities Act of 1933, or common law or otherwise, arising out of or based
upon any alleged untrue statement of a material fact contained in any
registration statement or prospectus of the Shares, or any omission to state a
material fact therein, the omission of which makes any statement contained
therein misleading, unless such statement or omission was made in reliance
upon, and in conformity with, information furnished to the Trust in connection
therewith by or on behalf of the Distributor. The Distributor shall indemnify
the Trust and the Shares against any and all claims, demands, liabilities and
expenses which the Trust or the Shares may incur arising out of or based upon
(i) any act or deed of the Distributor or its sales representatives which has
not been authorized by the Trust in its prospectus or in this Agreement and
(ii) the Trust's reliance on the Distributor's books, records, calculations and
notices in Sections FOURTH: (E), SEVENTH: (C), EIGHTH: (B), EIGHTH: (C) and
EIGHTH: (D).
(B) The Distributor shall indemnify the Trust and the Shares against any and all claims, demands, liabilities and expenses which the Trust or the Shares may incur under the Securities Act of 1933, as amended, or common law or otherwise, arising out of or based upon any alleged untrue statement of a material fact contained in any registration statement or prospectus of the Shares, or any omission to state a material fact therein if such statement or omission was made in reliance upon, and in conformity with, information furnished to the Trust in connection therewith by or on behalf of the Distributor.
(C) Notwithstanding any other provision of this Agreement, the Distributor shall not be liable for any errors of the transfer agent(s) of the Shares, or for any failure of any such transfer agent to perform its duties.
THIRTEENTH: Nothing herein contained shall require the Trust to take any action contrary to any provision of its Agreement and Declaration of Trust, as amended, or to any applicable statute or regulation.
FOURTEENTH: This Agreement shall become effective with respect to the
Shares of each Portfolio upon its approval by the Board of Trustees of the
Trust and by vote of a majority of the trustees of the Trust who are not
interested parties to this Agreement or "interested persons" (as defined in
Section 2(a)(19) of the 1940 Act) of any party to this Agreement cast in person
at a meeting called for such purpose, shall continue in force and effect until
June 30, 2001, and from year to year thereafter, provided, that such
continuance is specifically approved with respect to the Shares of each
Portfolio at least annually (a)(i) by the Board of Trustees of the Trust or
(ii) by the vote of a majority of the outstanding Shares of such class of such
Portfolio, and (b) by vote of a majority of the trustees of the Trust who are
not parties to this Agreement or "interested persons" (as defined in Section
2(a)(19) of the 1940 Act) of any party to this Agreement cast in person at a
meeting called for such purpose.
FIFTEENTH:
(A) This Agreement may be terminated with respect to the Shares of any Portfolio, at any time, without the payment of any penalty, by vote of the Board of Trustees of the Trust or by vote of a majority of the outstanding Shares of such Portfolio, or by the Distributor, on sixty (60) days' written notice to the other party; and
(B) This Agreement shall also automatically terminate in the event of
its assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act; provided, that, subject to the provisions of the
following sentence, if this Agreement is terminated for any reason, the
obligations of the Trust and the Distributor pursuant to Sections FOURTH: (D),
FOURTH: (E), SEVENTH: (B), SEVENTH: (C), EIGHTH: (A) through (E) and TWELFTH:
(A) of this Agreement will continue and survive any such termination.
Notwithstanding the foregoing, upon Complete Termination of the Plan (as such
term is defined in Section 8 of the Plan in effect at the date of this
Agreement), the obligations of the Trust pursuant to the terms of Sections
SEVENTH: (B), EIGHTH: (A), EIGHTH: (C), EIGHTH: (D) and EIGHTH: (E) (with
respect to payments of Distributor's 12b-1 Share and Assignee's 12b-1 Portion)
of this Agreement shall terminate. A termination of the Plan with respect to
any or all Shares of any or all Portfolios shall not affect the obligations of
the Trust pursuant to Sections FOURTH: (D), EIGHTH: (A), EIGHTH: (C), EIGHTH:
(D) and EIGHTH: (E) (with respect to payments of Distributor's Earned CDSC or
Assignee's CDSC Portion) hereof or of the obligations of the Distributor
pursuant to Section FOURTH: (E) or EIGHTH: (B) hereof.
(C) The Transfer of the Distributor's rights to Distributor's 12b-1
Share or Distributor's Earned CDSC shall not cause a termination of this
Agreement or be deemed to be an assignment for purposes of Section FIFTEENTH:
(B) above.
SIXTEENTH: Any notice under this Agreement shall be in writing, addressed and delivered, or mailed postage prepaid, to the other party at such address as the other party may designate for the receipt of notices. Until further notice to the other party, the addresses of both the Trust and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.
SEVENTEENTH: Notice is hereby given that, as provided by applicable law, the obligations of or arising out of this Agreement are not binding upon any of the shareholders of the Trust or any Portfolio individually, but are binding only upon the assets and property of the Trust or such Portfolio 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.
EIGHTEENTH: This Agreement shall be deemed to be a contract made in the State of Delaware and governed by, construed in accordance with and enforced pursuant to the internal laws of the State of Delaware without reference to its conflicts of laws rules.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate on the day and year first above written.
AIM EQUITY FUNDS
By: /s/ ROBERT H. GRAHAM
-----------------------------
Name: Robert H. Graham
Title: President
Attest:
/s/ RENEE A. FRIEDLI
-----------------------------
Name:
Title:
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A I M DISTRIBUTORS, INC.
By: /s/ MICHAEL J. CEMO
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Name: Michael J. Cemo
Title: President
Attest:
/s/ LISA A. MOSS
-----------------------------
Name:
Title:
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SCHEDULE A
TO
FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
OF
AIM EQUITY FUNDS
CLASS B SHARES
AIM Aggressive Growth 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 Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Mid Cap Growth Fund
AIM Weingarten Fund
As of June 1, 2000
EXHIBIT A
The Distributor's 12b-1 Share in respect of each Portfolio shall be 100 percent until such time as the Distributor shall cease to serve as exclusive distributor of the Shares of such Portfolio and thereafter shall be a percentage, recomputed first on the date of any termination of the Distributor's services as exclusive distributor of Shares of any Portfolio and thereafter periodically (but not less than monthly), representing the percentage of Shares of such Portfolio outstanding on each such computation date allocated to the Distributor in accordance with the following rules:
1. DEFINITIONS. For purposes of this Exhibit A defined terms used herein shall have the meaning assigned to such terms in the Distribution Agreement and the following terms shall have the following meanings:
"Commission Shares" shall mean shares of the Portfolio or another portfolio the redemption of which would, in the absence of the application of some standard waiver provision, give rise to the payment of a CDSC and shall include Commission Shares which due to the expiration of the CDSC period no longer bear a CDSC.
"Distributor" shall mean the Distributor.
"Other Distributor" shall mean each person appointed as the exclusive distributor for the Shares of the Portfolio after the Distributor ceases to serve in that capacity.
2. ALLOCATION RULES. In determining the Distributor's 12b-1 Share in respect of a particular Portfolio:
(a) There shall be allocated to the Distributor and each Other Distributor all Commission Shares of such Portfolio which were sold while such Distributor or such Other Distributor, as the case may be, was the exclusive distributor for the Shares of the Portfolio, determined in accordance with the transfer records maintained for such Portfolio.
(b) Reinvested Shares: On the date that any Shares are issued by a Portfolio as a result of the reinvestment of dividends or other distributions, whether ordinary income, capital gains or exempt-interest dividends or distributions ("Reinvested Shares"), Reinvested Shares shall be allocated to the Distributor and each Other Distributor in a number obtained by multiplying the total number of Reinvested Shares issued on such date by a fraction, the numerator of which is the total number of all Shares outstanding in such Portfolio as of the opening of business on such date and allocated to the Distributor or Other Distributor as of such date of determination pursuant to these allocation procedures and the denominator is the total number of Shares outstanding as of the opening of business on such date.
(c) Exchange Shares: There shall be allocated to the Distributor and each Other Distributor, as the case may be, all Commission Shares of such Portfolio which were issued during or after the period referred to in (a) as a consequence of one or more free exchanges of Commission Shares of the Portfolio or of another portfolio (other than Free Appreciation Shares) (the "Exchange Shares"), which in accordance with the transfer records maintained for such Portfolio can be traced to Commission Shares of the Portfolio or another portfolio initially issued by the Trust or such other portfolio during the time the Distributor or such Other Distributor, as the case may be, was the exclusive distributor for the Shares of the Portfolio or such other portfolio.
(d) Free Appreciation Shares: Shares (other than Exchange Shares) that were acquired by the holders of such Shares in a free exchange of Shares of any other Portfolio, which represent the appreciated value of the Shares of the exiting portfolio over the initial purchase price paid for the Shares being redeemed and exchanged and for which the original purchase date and the original purchase price are not identified on an on-going basis, shall be allocated to the Distributor and each Other Distributor ("Free Appreciation Shares") daily in a number obtained by multiplying the total number of Free Appreciation Shares issued by the exiting portfolio on such date by a fraction, the numerator of which is the total number of all Shares outstanding as of the opening of business on such date allocated to the Distributor or such Other Distributor as of such date of determination pursuant to these allocation procedures and the denominator is the total number of Shares outstanding as of the opening of business on such date.
(e) Redeemed Shares: Shares (other than Reinvested Shares and Free Appreciation Shares) that are redeemed will be allocated to the Distributor and each Other Distributor to the extent such Share was previously allocated to the Distributor or such Other Distributor in accordance with the rules set forth in 2(a) or (c) above. Reinvested Shares and Free Appreciation Shares that are redeemed will be allocated to the Distributor and each Other Distributor daily in a number obtained by multiplying the total number of Free Appreciation Shares and Reinvested Shares being redeemed by such Portfolio on such date by a fraction, the numerator of which is the total number of all Free Appreciation Shares and Reinvested Shares of such Portfolio outstanding as of the opening of business on such date allocated to the Distributor or such Other Distributor as of such date of determination pursuant to these allocation procedures and the denominator is the total number of Free Appreciation Shares and Reinvested Shares of such Portfolio outstanding as of the opening of business on such date.
The Trust shall use its best efforts to assure that the transfer agents and sub-transfer agents for each Portfolio maintain the data necessary to implement the foregoing rules. If, notwithstanding the foregoing, the transfer agents or sub-transfer agents for such Portfolio are unable to maintain the data necessary to implement the foregoing rules as written, or if the Distributor shall cease to serve as exclusive distributor of the Shares of the Portfolio, the Distributor and the Portfolio agree to negotiate in good faith with each other, with the transfer agents and sub-transfer agents for such
Portfolio and with any third party that has obtained an interest in the Distributor's 12b-1 Share in respect of such Portfolio with a view to arriving at mutually satisfactory modifications to the foregoing rules designed to accomplish substantially identical results on the basis of data which can be made available.
EXHIBIT e(16)
SELECTED DEALER AGREEMENT
[AIM LOGO APPEARS HERE] FOR INVESTMENT COMPANIES MANAGED
BY A I M ADVISORS, INC.
TO THE UNDERSIGNED SELECTED DEALER:
Gentlemen:
A I M Distributors, Inc., is the exclusive national distributor of shares (the "Shares") of the registered investment companies for which we now or in the future act as underwriter, as disclosed in each Fund's prospectus, which may be amended from time to time by us (the "Funds"). You represent that you are a member in good standing of the National Association of Securities Dealers, Inc. ("NASD"), or, if a foreign dealer, that you agree to abide by all of the rules and regulations of the NASD for purposes of this Agreement (which you confirm by your signature below). In consideration of the mutual covenants and representations stated herein, you and we hereby agree as follows:
1. Sales of Shares through you will be at the public offering price of such Shares (the net asset value of the Shares plus any sales charge applicable to such Shares (the "Sales Charge")), as determined in accordance with the then effective prospectus or Statement of Additional Information used in connection with the offer and sale of Shares (collectively, the "Prospectus"), which public offering price may reflect scheduled variations in, or the elimination of, the Sales Charge on sales of the Funds' Shares either generally to the public or in connection with special purchase plans, as described in the Prospectus. You agree that you will apply any scheduled variation in, or elimination of, the Sales Charge uniformly to all offerees in the class specified in the Prospectus.
2. You agree to purchase Shares solely through us and only for the purpose of covering purchase orders already received from customers or for your own bona fide investment. You agree not to purchase for any other securities dealer unless you have an agreement with such other dealer or broker to handle clearing arrangements and then only in the ordinary course of business for such purpose and only if such other dealer has executed a Selected Dealer Agreement with us. You also agree not to withhold any customer order so as to profit therefrom.
3. The procedures relating to the handling of orders shall be subject to instructions which we will forward from time to time to all selected dealers with whom we have entered into a Selected Dealer Agreement. The minimum initial order shall be specified in the Funds' then current Prospectuses. All purchase orders are subject to receipt of Shares by us from the Funds concerned and to acceptance of such orders by us. We reserve the right in our sole discretion to reject any order.
4. With respect to the Funds, the Shares of which are indicated in that Fund's Prospectus as being sold with a Sales Charge (the "Load Funds"), you will be allowed the concessions from the public offering price provided in the Load Funds' Prospectus and/or periodic instruction from us. With respect to the Funds, the Shares of which are indicated in that Fund's Prospectus as being sold with a contingent deferred sales charge or early withdrawal charge (the "CDSC Funds"), you will be paid a commission as disclosed in the CDSC Fund's Prospectus and/or periodic instructions from us. With respect to the Funds whose Shares are indicated as being sold without a Sales Charge or a contingent deferred sales charge (the "No-Load Funds"), you may charge a reasonable administrative fee. For the purposes of this Agreement the term "Dealer Commission" means commissions or concessions payable to you as disclosed in the Funds' Prospectuses and the terms "Sales Charge" and "Dealer Commission" apply only to the Load Funds and the CDSC Funds. All
Dealer Commissions are subject to change without notice by us and will comply with any changes in regulatory requirements. You agree that you will not combine customer orders to reach breakpoints in commissions for any purpose whatsoever unless authorized by the Prospectus or by us in writing.
5. You agree that your transactions in Shares of the Funds will be limited to
(a) the purchase of Shares from us for resale to your customers at the
public offering price then in effect or for your own bona fide investment,
(b) exchanges of Shares between Funds, as permitted by the Funds' then
current registration statement (which includes the Prospectus) and in
accordance with procedures as they may be modified by us from time to time,
and (c) transactions involving the redemption of Shares by a Fund or the
repurchase of Shares by us as an accommodation to shareholders or where
applicable, through tender offers. Redemptions by a Fund and repurchases by
us will be effected in the manner and upon the terms described in the
Prospectus. We will, upon your request, assist you in processing such
orders for redemptions or repurchases. To facilitate prompt payment
following a redemption or repurchase of Shares, the owner's signature shall
appear as registered on the Funds' records and, as described in the
Prospectus, it may be required to be guaranteed by a commercial bank, trust
company or a member of a national securities exchange.
6. Sales and exchanges of Shares may only be made in those states and jurisdictions where the Shares are registered or qualified for sale to the public. We agree to advise you currently of the identity of those states and jurisdictions in which the Shares are registered or qualified for sale, and you agree to indemnify us and/or the Funds for any claim, liability, expense or loss in any way arising out of a sale of Shares in any state or jurisdiction in which such Shares are not so registered or qualified.
7. We shall accept orders only on the basis of the then current offering price. You agree to place orders in respect of Shares immediately upon the receipt of orders from your customers for the same number of Shares. Orders which you receive from your customers shall be deemed to be placed with us when received by us. Orders which you receive prior to the close of business, as defined in the Prospectus, and placed with us within the time frame set forth in the Prospectus shall be priced at the offering price next computed after they are received by you. We will not accept from you a conditional order on any basis. All orders shall be subject to confirmation by us.
8. Your customer will be entitled to a reduction in the Sales Charge on purchases made under a Letter of Intent or Right of Accumulation described in the Prospectus. In such case, your Dealer Commission will be based upon such reduced Sales Charge; however, in the case of a Letter of Intent signed by your customer, an adjustment to a higher Dealer Commission will thereafter be made to reflect actual purchases by your customer if he should fail to fulfill his Letter of Intent. When placing wire trades, you agree to advise us of any Letter of Intent signed by your customer or of any Right of Accumulation available to him of which he has made you aware. If you fail to so advise us, you will be liable to us for the return of any Dealer Commission plus interest thereon.
9. You and we agree to abide by the Conduct Rules of the NASD and all other federal and state rules and regulations that are now or may become applicable to transactions hereunder. Your expulsion from the NASD will automatically terminate this Agreement without notice. Your suspension from
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the NASD or a violation by you of applicable state and federal laws and rules and regulations of authorized regulatory agencies will terminate this Agreement effective upon notice received by you from us. You agree that it is your responsibility to determine the suitability of any Shares as investments for your customers, and that AIM Distributors has no responsibility for such determination.
10. With respect to the Load Funds and the CDSC Funds, and unless otherwise agreed, settlement shall be made at the offices of the Funds' transfer agent within three (3) business days after our acceptance of the order. With respect to the No-Load Funds, settlement will be made only upon receipt by the Fund of payment in the form of federal funds. If payment is not so received or made within ten (10) business days of our acceptance of the order, we reserve the right to cancel the sale or, at our option, to sell the Shares to the Funds at the then prevailing net asset value. In this event, or in the event that you cancel the trade for any reason, you agree to be responsible for any loss resulting to the Funds or to us from your failure to make payments as aforesaid. You shall not be entitled to any gains generated thereby.
11. If any Shares of any of the Load Funds sold to you under the terms of this Agreement are redeemed by the Fund or repurchased for the account of the Funds or are tendered to the Funds for redemption or repurchase within seven (7) business days after the date of our confirmation to you of your original purchase order therefore, you agree to pay forthwith to us the full amount of the Dealer Commission allowed to you on the original sale and we agree to pay such amount to the Fund when received by us. We also agree to pay to the Fund the amount of our share of the Sales Charge on the original sale of such Shares.
12. Any order placed by you for the repurchase of Shares of a Fund is subject to the timely receipt by the Fund's transfer agent of all required documents in good order. If such documents are not received within a reasonable time after the order is placed, the order is subject to cancellation, in which case you agree to be responsible for any loss resulting to the Fund or to us from such cancellation.
13. We reserve the right in our discretion without notice to you to suspend sales or withdraw any offering of Shares entirely, to change the offering prices as provided in the Prospectus or, upon notice to you, to amend or cancel this Agreement. You agree that any order to purchase Shares of the Funds placed by you after notice of any amendment to this Agreement has been sent to you shall constitute your agreement to any such amendment.
14. In every transaction, we will act as agent for the Fund and you will act as principal for your own account. You have no authority whatsoever to act as our agent or as agent for the Funds, any other Selected Dealer or the Funds' transfer agent and nothing in this Agreement shall serve to appoint you as an agent of any of the foregoing in connection with transactions with your customers or otherwise.
15. No person is authorized to make any representations concerning the Funds or their Shares except those contained in the Prospectus and any such information as may be released by us as information supplemental to the Prospectus. If you should make such unauthorized representation,
02/01
you agree to indemnify the Funds and us from and against any and all claims, liability, expense or loss in any way arising out of or in any way connected with such representation.
16. We will supply you with copies of the Prospectuses of the Funds (including any amendments thereto) in reasonable quantities upon request. You will provide all customers with a prospectus prior to or at the time such customer purchases Shares. You will provide any customer who so requests a copy of the Statement of Additional Information within the time dictated by regulatory requirements, as they may be amended from time to time.
17. You shall be solely responsible for the accuracy, timeliness and completeness of any orders transmitted by you on behalf of your customers by wire or telephone for purchases, exchanges or redemptions, and shall indemnify us against any claims by your customers as a result of your failure to properly transmit their instructions.
18. No advertising or sales literature, as such terms are defined by the NASD, of any kind whatsoever will be used by you with respect to the Funds or us unless first provided to you by us or unless you have obtained our prior written approval. You agree to indemnify us against any and all claims, liability, expense or loss in any way arising out of your use of any such advertising or sales literature not so provided or approved.
19. You shall be responsible for complying with all applicable money laundering laws, regulations, and government guidance, including cash and suspicious activity reporting and recordkeeping requirements and to have adequate policies, procedures and internal controls in place to ensure compliance. You shall provide us, upon request and within a reasonable time, copies of your Bank Secrecy Act and/or anti-money laundering compliance programs or materials, including policies and procedures for complying with the Bank Secrecy Act and money laundering laws and regulations, "Know Your Customer" policies and procedures, and procedures for identifying and reporting suspicious transactions. This request of information shall not in any way be construed or impose any obligation upon us to review and ensure the accuracy or adequacy of any of your policies or procedures.
20. You represent that you have adopted and implemented procedures to safeguard customer information and records that are reasonably designed to: (i) insure the security and confidentiality of your customer records and information; (ii) protect against any anticipated threats or hazards to the security or integrity of customer records and information; (iii) protect against unauthorized access to or use of your customer records or information that could result in substantial harm or inconvenience to any customer; (iv) protect against unauthorized disclosure of non-public personal information to unaffiliated third parties; and (v) otherwise ensure your compliance with the Securities and Exchange Commission's Regulation S-P. You agree to indemnify us against any and all claims, liability, expense or loss in any way arising out of your failure to adopt and implement these and such other privacy or confidentiality procedures that may in the future be required by law or regulation.
21. You represent and acknowledge that you have read and understand the "Exchange Conditions" section, as disclosed in each Fund's Prospectus. You further represent and acknowledge your
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understanding that the "Exchange Conditions" are designed to deter and prevent excessive short-term trading and market-timing, and that these conditions will be strictly enforced.
22. All expenses incurred in connection with your activities under this Agreement shall be borne by you.
23. This Agreement shall not be assignable by you. This Agreement shall be constructed in accordance with the laws of the State of Texas without regard to its conflict of laws provisions.
24. Any notice to you shall be duly given if mailed or telegraphed to you at your address as registered from time to time with the NASD.
25. This Agreement constitutes the entire agreement between the undersigned and supersedes all prior oral or written agreements between the parties hereto.
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A I M DISTRIBUTORS, INC.
The undersigned accepts your invitation to become a Selected Dealer and agrees to abide by the foregoing terms and conditions. The undersigned acknowledges receipt of Prospectuses for use in connection with offers and sales of the Funds.
Date By: X
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Signature
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Print Name Title
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Dealer's Name
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Address
-------------------------------
City State Zip
-------------------------------
Telephone
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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
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EXHIBIT f(4)
AIM FUNDS
DIRECTOR DEFERRED COMPENSATION AGREEMENT
As Amended March 7, 200O
AIM FUNDS
AGREEMENT, made on this ____ day of _______, 20___, by and between the registered open-end investment companies listed on Appendix A hereto (the "Funds"), and _______________________________________________ (the "Director") residing at ____________________________________________.
WHEREAS, the Funds and the Director have entered into agreements pursuant to which the Director will serve as a director/trustee of the Funds; and
WHEREAS, if the Funds and the Director have previously entered into an additional agreement whereby the Funds will provide to the Director a vehicle under which the Director can defer receipt of directors' fees payable by the Funds, they now desire to amend and restate such agreement.
NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth in this Agreement, the Funds and the Director hereby agree as follows:
1.1 Definitions. Unless a different meaning is plainly implied by the context, the following terms as used in this Agreement shall have the following meanings:
(a) "Beneficiary" shall mean such person or persons designated pursuant to Section 4.3 hereof to receive benefits after the death of the Director.
(b) "Boards of Directors" shall mean the respective Boards of Directors of the Funds.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, or any successor statute.
(d) "Compensation" shall mean the amount of directors' fees paid by each of the Funds to the Director during a Deferral Year prior to reduction for Compensation Deferrals made under this Agreement.
(e) "Compensation Deferral" shall mean the amount or amounts of the Director's Compensation deferred under the provisions of Section 3 of this Agreement.
(f) "Deferral Accounts" shall mean the accounts maintained to reflect the Director's Compensation Deferrals made pursuant to Section 3 hereof (or pursuant to any prior agreement) and any other credits or debits thereto.
(g) "Deferral Year" shall mean each calendar year during which the Director makes, or is entitled to make, Compensation Deferrals under Section 3 hereof.
(h) "Retirement" shall have the same meaning as set forth under the Retirement Plan.
(i) "Retirement Plan" shall mean the "AIM Funds Retirement Plan for Eligible Directors/Trustees."
(j) "Valuation Date" shall mean the last business day of each calendar year and any other day upon which the Funds makes valuations of the Deferral Accounts.
1.2 Plurals and Gender. Where appearing in this Agreement the singular shall include the plural and the masculine shall include the feminine, and vice versa, unless the context clearly indicates a different meaning.
1.3 Directors and Trustees. Where appearing in this Agreement, "Director" shall also refer to "Trustee" and "Board of Directors" shall also refer to "Board of Trustees."
1.4 Headings. The headings and sub-headings in this Agreement are inserted for the convenience of reference only and are to be ignored in any construction of the provisions hereof.
1.5 Separate Agreement for Each Fund. This Agreement is drafted, and shall be construed, as a separate agreement between the Director and each of the Funds.
2.1 Commencement of Compensation Deferrals. The Director may elect, on a form provided by, and submitted to, the Presidents of the respective Funds, to commence Compensation Deferrals under Section 3 hereof for the period beginning on the later of (i) the date this Agreement is executed or (ii) the date such form is submitted to the Presidents of the Funds.
2.2 Termination of Deferrals. The Director shall not be eligible to make Compensation Deferrals after the earliest of the following dates:
(a) The date on which he ceases to serve as a Director of all of the Funds; or
(b) The effective date of the termination of this Agreement.
(a) On or prior to the first day of any Deferral Year, the Director may elect, on the form described in Section 2.1 hereof, to defer the receipt of all or a portion of his Compensation for such Deferral Year. Such writing shall set forth the amount of such Compensation Deferral (in whole percentage amounts). Such election shall continue in effect for all subsequent Deferral Years unless it is canceled or modified as provided below.
(b) Compensation Deferrals shall be withheld from each payment of Compensation by the Funds to the Director based upon the percentage amount elected by the Director under Section 3.1 (a) hereof.
(c) The Director may cancel or modify the amount of his Compensation Deferrals on a prospective basis by submitting to the Presidents of the Funds a revised Compensation Deferral election form. Such change will be effective as of the first day of the Deferral Year following the date such revision is submitted to the Presidents of the Funds.
(a) Each Fund shall establish a bookkeeping Deferral Account to which will be credited an amount equal to the Director's Compensation Deferrals under this Agreement made with respect to Compensation earned from each such Fund. Compensation Deferrals shall be allocated to the Deferral Accounts on the first business day following the date such Compensation Deferrals are withheld from the Director's Compensation. As of the date of this Agreement, the Deferral Accounts also shall be credited with the amounts credited to the Director under each other outstanding elective deferred compensation agreement entered into by and between the Funds and the Director which is superseded by this Agreement pursuant to Section 6.11 hereof. The Deferral Accounts shall be debited to reflect any distributions from such Accounts. Such debits shall be allocated to the Deferral Accounts as of the date such distributions are made.
(b) As of each Valuation Date, income, gain and loss equivalents (determined as if the Deferral Accounts are invested in the manner set forth under Section 3.3, below) attributable to the period following the next preceding Valuation Date shall be credited to and/or deducted from the Director's Deferral Accounts.
(a) (1) The Director may select, from various options made available by the Funds, the investment media in which all or part of his Deferral Accounts shall be deemed to be invested.
(2) The Director shall make an investment designation on a form provided by the Presidents of the Funds which shall remain effective until another valid direction has been made by the Director as herein provided. The Director may amend his investment designation by giving written direction to the Presidents of the Funds in such manner and at such time as the Funds may permit, but no less frequently than quarterly on thirty (30) days' notice prior to the end of a calendar quarter. A timely change to a Director's investment designation shall become effective as soon as practicable following receipt by the Presidents of the Funds.
(3) The investment media deemed to be made available to the Director, and any limitation on the maximum or minimum percentages of the Director's Deferral Accounts that may be invested any particular medium, shall be the same as from time-to-time communicated to the Director by the Presidents of the Funds.
(b) Except as provided below, the Director's Deferral Accounts shall be deemed to be invested in accordance with his investment designations, provided such designations conform to the provisions of this Section. If-
(1) the Director does not furnish the Presidents of the Funds with complete, written investment instructions, or
(2) the written investment instructions from the Director are unclear, then the Director's election to make Compensation Deferrals hereunder shall be held in abeyance and have no force or effect until such time as the Director shall provide the Presidents of the Funds with complete investment instructions. Notwithstanding the above, the Boards of Directors, in their sole discretion, may disregard the Director's election and determine that all Compensation Deferrals shall be deemed to be invested in a fund determined by the Boards of Directors. In the event that any fund under which any portion of the Director's Deferral Accounts is deemed to be invested ceases to exist, such portion of the Deferral Accounts thereafter shall be held in the successor to such fund, subject to subsequent deemed investment elections.
The Funds shall provide an annual statement to the Director showing such information as is appropriate, including the aggregate amount in the Deferral Accounts, as of a reasonably current date.
(a) Designation of Date. Each deferral direction given pursuant to
Section 3.1 shall include designation of the Payment Date for the value of the
amount deferred. Such Payment Date shall be the first day of any calendar
quarter, subject to the limitation set forth in paragraph 4.1(c).
(b) Extension Date. At least one year before the Payment Date initially designated pursuant to paragraph 4.1(a) above, the Participant may irrevocably elect to extend such Payment Date to the first day of any calendar quarter, subject to the limitation set forth in paragraph 4.1(c).
(c) Limitation. The Director shall select a Payment Date (or extended Payment Date) that is no sooner than the earlier of (i) the January 1 that follows the second anniversary of the Participant's deferral election made pursuant to paragraph 4.1(a) or (b) or (ii) the January 1 of the year after the Participant's Retirement.
(d) Methods of Payment. Distributions from the Director's Deferral Accounts shall be paid in cash in a single sum unless the Participant elects, at the time a Payment Date is selected pursuant to paragraph 4.1(a) or 4.1(b), to receive the amount payable in generally equal quarterly installments over a period not to exceed ten (10) years. In addition, at least one year before the Payment Date, a Director may change the method of payment previously selected.
(e) Irrevocability. Except as provided in paragraphs 4.1(b) and 4.1(d), a designation of a Payment Date and an election of installment payments shall be irrevocable; provided, however, that payment shall be made or begin on a different date as follows:
(1) Upon the Director's death, payment shall be made in accordance with Section 4.2,
(2) Upon the Director's ceasing to serve as a director of all of the Funds for reasons other than death or Retirement, payment shall be made or begin within three months after the end of the calendar year in which such termination occurs in accordance with the method elected by the Director pursuant to paragraph 4.1(d) provided the designation of such method had been made at least one year before such termination occurred, except that the Boards of Directors, in their sole discretion, may accelerate the distribution of such Deferral Accounts,
(3) Upon termination of this Agreement, payment shall be made in accordance with Section 5.2, and
(4) In the event of the liquidation, dissolution or winding up of a Fund or the distribution of all or substantially all of a Fund's assets and property relating to one or more series of its shares to the shareholders of such series (for this purpose a sale, conveyance or transfer of a Fund's assets to a trust, partnership, association or corporation in exchange for cash, shares or other securities with the transfer being made subject to, or with the assumption by the transferee of, the liabilities of the Fund shall not be deemed a termination of the Fund or such a distribution), all unpaid balances of the Deferral Accounts related to such Fund as of the effective date thereof shall be paid in a lump sum on such effective date.
4.2 Death Prior to Complete Distribution of Deferral Accounts. Upon the death of the Director prior to the commencement of the distribution of the amounts credited to his Deferral Accounts, the balance of such Accounts shall be distributed to his Beneficiary in accordance with the method of payment selected pursuant to paragraph 4.1(d), commencing as soon as practicable after the Director's death. In the event of the death of the Director after the commencement of such distribution, but prior to the complete distribution of his Deferral Accounts, the balance of the amounts credited to his Deferral Accounts shall be distributed to his Beneficiary over the remaining period during which such amounts were distributable to the Director under Section 4.1 hereof. Notwithstanding the above, the Boards of Directors, in their sole discretion, may accelerate the distribution of the Deferral Accounts.
4.3 Designation of Beneficiary. For purposes of Section 4.2 hereof, the
Director's Beneficiary shall be the person or persons so designated by the
Director in a written instrument submitted to the Presidents of the Funds. In
the event the Director fails to properly designate a Beneficiary, his
Beneficiary shall be the person or persons in the first of the following classes
of successive preference Beneficiaries surviving at the death of the Director:
the Director's (1) surviving spouse or (2) estate.
4.4 Payments Due Missing Persons. The Funds shall make a reasonable effort to locate all persons entitled to benefits under this Agreement. However, notwithstanding any provisions of this Agreement to the contrary, if, after a period of five (5) years from the date such
benefit shall be due, any such persons entitled to benefits have not been located, their rights under this Agreement shall stand suspended. Before this provision becomes operative, the Funds shall send a certified letter to all such persons to their last known address advising them that their benefits under this Agreement shall be suspended. Any such suspended amounts shall be held by the Funds for a period of three (3) additional years (or a total of eight (8) years from the time the benefits first become payable) and thereafter, if unclaimed, such amounts shall be forfeited.
(a) The Funds and the Director may, by a written instrument signed by, or on behalf of, such parties, amend this Agreement at any time and in any manner.
(b) The Funds reserve the right to amend, in whole or in part, and in any manner, any or all of the provisions of this Agreement by action of their Boards of Directors for the purposes of complying with any provision of the Code or any other technical or legal requirements, provided that:
(1) No such amendment shall make it possible for any part of the Director's Deferral Accounts to be used for, or diverted to, purposes other than for the exclusive benefit of the Director or his Beneficiaries, except to the extent otherwise provided in this Agreement; and
(2) No such amendment may reduce the amount of the Director's Deferral Accounts as of the effective date of such amendment.
5.2 Termination. The Director and the Funds may, by written instrument signed by, or on behalf of, such parties, terminate this Agreement at any time. In the event of the termination of this Agreement, the Boards of Directors, in their sole discretion, may choose to pay out the Director's Deferral Accounts prior to the designated Payment Dates. Otherwise, following a termination of this Agreement, such Accounts shall continue to be maintained in accordance with the provisions of this Agreement until the time they are paid out.
(a) This Agreement is unfunded. Neither the Director nor any other persons shall have any interest in any specific asset or assets of the Funds by reason of any Deferral Accounts hereunder, nor any rights to receive distribution of his Deferral Accounts except and as to the extent expressly provided hereunder. The Funds shall not be required to purchase, hold or dispose of any investments pursuant to this Agreement; however, if in order to cover their obligations hereunder the Funds elect to purchase any investments the same shall continue for all purposes to be a part of the general assets and property of the Funds, subject to the claims of their general creditors and no person other than the Funds shall by virtue of the provisions of this Agreement have any interest in such assets other than an interest as a general creditor.
(b) The rights of the Director and the Beneficiaries to the amounts held in the Deferral Accounts are unsecured and shall be subject to the creditors of the Funds. With respect to the payment of amounts held under the Deferral Accounts, the Director and his Beneficiaries have the status of unsecured creditors of the Funds. This Agreement is executed on behalf of the Funds by an officer, or other representative, of the Funds as such and not individually. Any obligation of the Funds hereunder shall be an unsecured obligation of the Funds and not of any other person.
6.2 Agents. The Funds may employ agents and provide for such clerical, legal, actuarial, accounting, advisory or other services as it deems necessary to perform their duties under this Agreement. The Funds shall bear the cost of such services and all other expenses they incur in connection with the administration of this Agreement.
6.3 Liability and Indemnification. Except for their own gross negligence, willful misconduct or willful breach of the terms of this Agreement, the Funds shall be indemnified and held harmless by the Director against liability or losses occurring by reason of any act or omission of the Funds or any other person.
6.4 Incapacity. If the Funds shall receive evidence satisfactory to them that the Director or any Beneficiary entitled to receive any benefit under the Agreement is, at the time when such benefit becomes payable, a minor, or is physically or mentally incompetent to receive such benefit and to give a valid release therefor, and that another person or an institution is then maintaining or has custody of the Director or Beneficiary and that no guardian, committee or other representative of the estate of the Director or Beneficiary shall have been duly appointed, the Funds may make payment of such benefit otherwise payable to the Director or Beneficiary to such other person or institution, including a custodian under a Uniform Gifts to Minors Act, or corresponding legislation (who shall be an adult, a guardian of the minor or a trust company), and the release of such other person or institution shall be a valid and complete discharge for the payment of such benefit.
6.5 Cooperation of Parties. All parties to this Agreement and any person claiming any interest hereunder agree to perform any and all acts and execute any and all documents and papers which are necessary or desirable for carrying out this Agreement or any of its provisions.
6.6 Governing Law. This Agreement is made and entered into in the State of Texas and all matters concerning its validity, construction and administration shall be governed by the laws of the State of Texas.
6.7 Nonguarantee of Directorship. Nothing contained in this Agreement shall be construed as a contract or guarantee of the right of the Director to be, or remain as, a director of any of the Funds or to receive any, or any particular rate of, Compensation from any of the Funds.
6.8 Counsel. The Funds may consult with legal counsel with respect to the meaning or construction of this Agreement, their obligations or duties hereunder or with respect to any action or proceeding or any question of law, and they shall be fully protected with respect to any action taken or omitted by them in good faith pursuant to the advice of legal counsel.
6.9 Spendthrift Provision. The Director's and Beneficiaries' interests in the Deferral Accounts may not be anticipated, sold, encumbered, pledged, mortgaged, charged, transferred, alienated, assigned nor become subject to execution, garnishment or attachment and any attempt to do so by any person shall render the Deferral Accounts immediately forfeitable.
6.10 Notices. For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally or mailed by United States registered or certified mail, return receipt requested, postage prepaid, or by nationally recognized overnight delivery service providing for a signed return receipt, addressed to the Director at the home address set forth in the Funds' records and to the Funds at the address set forth on the first page of this Agreement, provided that all notices to the Funds shall be directed to the attention of the Presidents of the Funds or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.
6.11 Entire Agreement. This Agreement contains the entire understanding between the Funds and the Director with respect to the payment of non-qualified elective deferred compensation by the Fund to the Director. Effective as of the date hereof, this Agreement replaces, and supersedes, all other non-qualified elective deferred compensation agreements by and between the Director and the Funds.
6.12 Interpretation of Agreement. Interpretations of, and determinations (including factual determinations) related to, this Agreement made by the Funds in good faith, including any determinations of the amounts of the Deferral Accounts, shall be conclusive and binding upon all parties; and the Funds shall not incur any liability to the Director for any such interpretation or determination so made or for any other action taken by it in connection with this Agreement in good faith.
6.13 Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of, the Funds and their successors and assigns and to the Director and his heirs, executors, administrators and personal representatives.
6.14 Severability. In the event any one or more provisions of this Agreement are held to be invalid or unenforceable, such illegality or unenforceability shall not affect the validity or enforceability of the other provisions hereof and such other provisions shall remain in full force and effect unaffected by such invalidity or unenforceability.
6.15 Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.
The Funds
By:
---------------------------- --------------------------------------
Witness Name:
Title:
----------------------------
Witness
-----------------------------------------
Director
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For the purposes of the Deferred Compensation Agreement "AIM Funds" shall mean each of the regulated investment companies constituting classes or series of shares of the following entities:
AIM EQUITY FUNDS, INC.
AIM FUNDS GROUP
AIM INTERNATIONAL FUNDS, INC.
AIM INVESTMENT SECURITIES FUNDS
AIM STRATEGIC INCOME FUND, INC.
AIM SUMMIT FUND, INC.
AIM TAX-EXEMPT FUNDS, INC.
AIM VARIABLE INSURANCE FUNDS, INC.
SHORT-TERM INVESTMENTS CO.
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS CO.
TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation agreement (the "Agreement") dated as of______________________________ by and between the undersigned and the AIM Funds, I hereby make the following elections:
Starting with Compensation to be paid to me with respect to services provided by me to the AIM Funds after the date this election Form is received by the AIM Funds, I hereby elect that ______ percent (__%) of my Compensation (as defined under the Agreement) be reduced and that the Fund establish a bookkeeping account credited with amounts equal to the amount so reduced (the "Deferral Account"). The Deferral Account shall be further credited with income equivalents as provided under the Agreement. I understand that this election will remain in effect with respect to Compensation I earn in subsequent years unless I modify or revoke it. I further understand that such modification or revocation will be effective only prospectively and will apply commencing with the Compensation I earn in the calendar year that begins after the change is received by you.
I hereby designate _____________1 (select the first month in any calendar quarter) in the year ____________ (select a year that is at least two years after the year this election is made) as the Payment Date for the amounts credited to my Deferral Account pursuant to the election made above. If my Retirement (as defined in the Agreement) occurs sooner, I [_] do [_] do not (check the appropriate box) want payment of such amounts to commence effective the January 1 following my Retirement. I understand that amounts credited to my Deferral Account may be paid to me prior to the Payment Date as provided in the Agreement.
I hereby elect to receive the amounts credited to my Deferral Account in (check one)
[_] a single payment in cash
[_] annual installments for a period of _________ (select no more than 10 years)
beginning within 30 days following the payment date selected above.
I understand that the amounts credited to my Deferral Account shall remain the general assets of the AIM Funds and that, with respect to the payment of such amounts, I am merely a general creditor of the AIM Funds. I may not sell, encumber, pledge, assign or otherwise alienate the amounts credited to my Deferral Account.
I hereby agree that the terms of the Agreement are incorporated herein and are made a part hereof Dated as of the day and year first above written.
WITNESS: DIRECTOR:
----------------------------- ---------------------------------
WITNESS: RECEIVED:
AIM Funds
-----------------------------
By:
-----------------------
Date:
-----------------------
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TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation Agreement (the "Agreement") by and between the undersigned and the AIM Funds, I hereby elect that my Deferral Account under the Agreement be considered to be invested as follows (in multiples of 10%):
NAME OF FUND %
------------ ---
____________________________________ __ %
____________________________________ __ %
____________________________________ __ %
____________________________________ __ %
____________________________________ __ %
____________________________________ __ %
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I acknowledge that I may amend this Investment Agreement in the manner, and at such time, as permitted under the Agreement. Furthermore, I acknowledge that, pursuant to Section 3.3(b) of the Agreement, the Fund has reserved the right to disregard the elections made above to consider my Deferral Account to be deemed to be invested in a fund of its choosing.
WITNESS: DIRECTOR:
------------------------- -----------------------------
WITNESS: RECEIVED:
AIM Funds
By:
------------------------- ----------------------------
Date:
--------------------------
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TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation Agreement (the "Agreement") by and between the undersigned and the AIM Funds, I hereby make the following beneficiary designations:
I hereby appoint the following as my Primary Beneficiary(ies) to receive at my death the amounts credited to my Deferral Account under the Agreement. In the event I am survived by more than one Primary Beneficiary, such Primary Beneficiaries shall share equally in such amounts unless I indicate otherwise on an attachment to this form:
--------------------------------------------------------------------- Name Relationship --------------------------------------------------------------------- Address --------------------------------------------------------------------- City State Zip |
In the event I am not survived by any Primary Beneficiary, I hereby appoint the following as Secondary Beneficiary(ies) to receive death benefits under the Agreement. In the event I am survived by more than one Secondary Beneficiary, such Secondary Beneficiaries shall share equally unless I indicate otherwise on an attachment to this form:
--------------------------------------------------------------------- Name Relationship --------------------------------------------------------------------- Address --------------------------------------------------------------------- City State Zip |
I understand that I may revoke or amend the above designations at any time. I further understand that if I am not survived by a Primary or Secondary Beneficiary, my Beneficiary shall be as set forth under the Agreement.
WITNESS: DIRECTOR:
------------------------- -----------------------------
WITNESS: RECEIVED:
AIM Funds
By:
------------------------- ----------------------------
Date:
--------------------------
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TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation agreement (the "Agreement") by and between the undersigned and the AIM Funds, pursuant to which I have previously elected to defer Compensation,
I hereby designate _________1 (select the first month in any calendar quarter) in the year _________ (select a year that is at least two years after the year this election is made) as the Payment Date for the amounts previously credited to my Deferral Account and amounts subsequently credited thereto. If my Retirement (as defined in the Agreement) occurs sooner, I [_] do [_] do not (check the appropriate box) want payment of such amounts to commence effective the January 1 following my Retirement. I understand that amounts credited to my Deferral Account may be paid to me prior to the Payment Date as provided in the Agreement.
I hereby elect to receive the amounts credited to my Deferral Account in (check one)
[_] a single payment in cash
[_] annual installments for a period of ________ (select no more than 10 years)
I understand that this change in payment method will not be given effect unless my Payment Date is at least one year from the date hereof and I do not cease to be a Director within such year.
I understand that I may amend this designation in the manner, and at such time, as permitted under the Agreement.
WITNESS: DIRECTOR:
------------------------- -----------------------------
WITNESS: RECEIVED:
AIM Funds
By:
------------------------- ----------------------------
Date:
--------------------------
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EXHIBIT f(7)
AIM FUNDS
RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES
Effective as of March 8, 1994
As Restated September 18, 1995
As Restated March 7, 2000
AIM FUNDS
RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES
TABLE OF CONTENTS
Page
----
ARTICLE I................................................................. 1
1.1 Definitions...................................................... 1
1.2 Plurals and Gender............................................... 3
1.3 Directors/Trustees............................................... 3
1.4 Headings......................................................... 3
1.5 Severability..................................................... 3
ARTICLE II................................................................ 3
2.1 Commencement of Participation.................................... 3
2.2 Termination of Participation..................................... 3
2.3 Resumption of Participation...................................... 4
2.4 Determination of Eligibility..................................... 4
ARTICLE III............................................................... 4
3.1 Retirement....................................................... 4
3.2 Retirement Benefit............................................... 4
3.3 Termination of Service Before Retirement......................... 4
3.4 Termination of Service by Reason of Death........................ 5
3.5 Benefits Calculated in the Aggregate for all of the AIM Funds.... 5
ARTICLE IV................................................................ 5
4.1 Death Prior to Commencement of Benefits.......................... 5
4.2 Death Subsequent to Commencement of Benefits..................... 5
4.3 Death of Spouse.................................................. 5
ARTICLE V................................................................. 6
5.1 Suspension of Benefits Upon Resumption of Service................ 6
5.2 Payments Due Missing Persons..................................... 6
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ARTICLE VI................................................................ 6
6.1 Appointment of Administrator..................................... 6
6.2 Powers and Duties of Administrator............................... 6
6.3 Action by Administrator.......................................... 7
6.4 Participation by Administrators.................................. 7
6.5 Agents and Expenses.............................................. 8
6.6 Allocation of Duties............................................. 8
6.7 Delegation of Duties............................................. 8
6.8 Administrator's Action Conclusive................................ 8
6.9 Records and Reports.............................................. 8
6.10 Information from the AIM Funds.................................. 8
6.11 Reservation of Rights by Boards of Directors.................... 9
6.12 Liability and Indemnification................................... 9
ARTICLE VII............................................................... 9
7.1 Amendments....................................................... 9
7.2 Termination...................................................... 10
ARTICLE VIII.............................................................. 10
8.1 Rights of Creditors.............................................. 10
8.2 Liability Limited................................................ 10
8.3 Incapacity....................................................... 10
8.4 Cooperation of Parties........................................... 10
8.5 Governing Law.................................................... 11
8.6 Nonguarantee of Directorship..................................... 11
8.7 Counsel.......................................................... 11
8.8 Spendthrift Provision............................................ 11
8.9 Forfeiture for Cause............................................. 11
ARTICLE IX................................................................ 12
9.1 Notice of Denial................................................. 12
9.2 Right to Reconsideration......................................... 12
9.3 Review of Documents.............................................. 12
9.4 Decision by Administrator........................................ 12
9.5 Notice by Administrator.......................................... 12
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RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES
PREAMBLE
Effective as of March 8, 1994, the regulated investment companies managed, administered and/or distributed by A I M Advisors, Inc. or its affiliates (the "AIM Funds") have adopted THE AIM FUNDS RETIREMENT PLAN FOR ELIGIBLE DIRECTORS/TRUSTEES (the "Plan") for the benefit of each of the directors and trustees of each of the AIM Funds who is not an employee of any of the AIM Funds, A I M Management Group Inc. or any of their affiliates. As the Plan does not benefit any employees of the AIM Funds, it is not intended to be classified as an employee benefit plan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
ARTICLE I
DEFINITION OF TERMS AND CONSTRUCTION
Unless a different meaning is plainly implied by the context, the following terms as used in this Plan shall have the following meanings:
(a) "Accrued Benefit" shall mean, as of any date prior to a Participant's Retirement date, his Retirement Benefit commencing on such Retirement date, but based upon his Compensation and Years of Service computed as of such date of determination.
(b) "Actuary" shall mean the independent actuary selected by the Administrator.
(c) "Administrator" shall mean the administrative committee provided for in Article VI.
(d) "AIM Funds" shall mean those regulated investment companies managed, administered or distributed by A I M Advisors, Inc. or its affiliates, set forth on Appendix A hereto, as such Appendix may be amended from time to time.
(e) "Board of Directors" shall mean the Board of Directors or Board of Trustees of each of the AIM Funds.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, or any successor statute.
(g) "Compensation" shall mean, for any Director, the amount of the retainer paid or accrued by the AIM Funds for such Director during the twelve month period immediately
preceding the Director's Retirement, including amounts deferred under a separate agreement between the AIM Funds and the Director. The amount of such retainer Compensation shall be as determined by the Administrator.
(h) "Deferred Retirement Date" shall mean the last day of the Plan Year in which a Participant terminated Service after his Normal Retirement Date.
(i) "Director" shall mean an individual who is a director or trustee of one or more of the AIM Funds which have adopted the Plan but who is not an employee of any of the AIM Funds, A I M Management Group Inc. or any of their affiliates.
(j) "Disability" shall mean the inability of the Participant to participate in meetings of the Board of Directors, either in person or by telephone, for a period of at least nine (9) months.
(k) "Effective Date" shall mean March 8, 1994.
(l) "Fund" shall mean an AIM Fund which has adopted this Plan.
(m) "Mandatory Retirement Date" shall mean the last day of the Plan Year in which a participant has reached the age of 72. Such Mandatory Retirement Date may be extended upon the majority vote of the Boards of Directors of the AIM Funds.
(n) "Normal Retirement Date" shall mean the last day of the Plan Year in which a Participant has both attained age 65 (or at least age 55 in the event of the Director's termination of Service by reason of death or Disability) and has completed at least five continuous and non-forfeited Years of Service (and thirty months of Service with one or more of the AIM Funds).
(o) "Participant" shall mean a Director who has met all of the eligibility requirements of the Plan and who is currently included in the Plan as provided in Article II hereof.
(p) "Plan" shall mean the "AIM Funds Retirement Plan for Eligible Directors/Trustees" as described herein or as hereafter amended from time to time.
(q) "Plan Year" shall mean the calendar year.
(r) "Retirement" shall mean a Director's termination of his active Service with the AIM Funds on or after his Normal Retirement Date, due to his death, Disability, or voluntary or involuntary termination of his Service.
(s) "Retirement Benefit" shall mean the benefit described under
Section 3.2 hereof.
(t) "Service" shall mean an individual's serving as a Director of one or more of the AIM Funds. Furthermore, any unbroken service provided by a Participant (i) to an AIM Fund immediately prior to its being managed or administered by AIM Advisors, Inc. (or any of
its affiliates) or (ii) to a predecessor of an AIM Fund immediately prior to its being merged into such AIM Fund, will be taken into account in determining such Participant's Years of Service, subject to all restrictions and other forfeiture provisions contained herein.
(u) "Year of Service" shall mean a twelve consecutive month period of
Service. For all purposes in this Plan, if a Participant's Service terminates
prior to his Retirement, he shall forfeit credit for all Years of Service
completed prior to such termination unless (a) he again becomes a Director and
(b) the number of Years of Service he accumulated prior to such termination
exceeded the number of years in which he did not serve as a Director.
Where appearing in the Plan, the masculine gender shall include the feminine and neuter genders, and the singular shall include the plural, and vice versa, unless the context clearly indicates a different meaning.
Where appropriate, the term "director" shall refer to "trustee", "directorship" shall refer to "trusteeship" and "Board of Directors" shall refer to "Board of Trustees."
The headings and sub-headings in this Plan are inserted for the convenience of reference only and are to be ignored in any construction of the provisions hereof.
In case any provision of this Plan shall be held illegal or void, such illegality or invalidity shall not affect the remaining provisions of this Plan, but shall be fully severable, and the Plan shall be construed and enforced as if said illegal or invalid provisions had never been inserted herein.
ARTICLE II
PARTICIPATION
Each Director shall become a Participant hereunder on the date his directorship of one or more of the AIM Funds commences.
After commencement or resumption of his participation, a Director shall remain a Participant until the earliest of the following dates:
(a) His actual Retirement date;
(b) His date of death;
(c) The date on which he otherwise incurs a termination of Service; or
(d) The effective date of the termination of the Plan.
Any Participant whose Service terminates and who thereafter again becomes a Director shall resume participation immediately upon again becoming a Director except that, as provided in Section 1.1(u) hereof, if his Service is terminated prior to his Normal Retirement Date, for all purposes of this Plan he shall forfeit credit for all Years of Service completed prior to such termination of his Service.
The Administrator shall determine the eligibility of Directors in accordance with the provisions of this Article.
ARTICLE III
BENEFITS UPON
RETIREMENT AND OTHER TERMINATION OF SERVICE
In order to receive Retirement Benefits under this Plan a Director must reach
the age of 65 (55 in the event of death or disability), the Normal Retirement
Date, as defined in Section 1.1(n) before retiring. Each Director must retire
on reaching the age of 72, the Mandatory Retirement Date, as defined in Section
1.1(m). Such Mandatory Retirement Date may be extended upon the majority vote
of the Board of Directors of the AIM Funds.
Upon Retirement a Participant shall be entitled to receive an annual benefit from the AIM Funds commencing on the first day of the calendar quarter coincident with or next following his date of Retirement, payable in quarterly installments for a period of no more than ten (10) years (or, if less, the number of his Years of Service) equal to seventy-five percent (75%) of his Compensation.
In the event that a Participant's Service terminates by reason of death, Disability or removal by the Board for cause (as defined in Section 8.9) prior to his Normal Retirement Date, he shall not be entitled to receive any benefits hereunder. If a Participant's Service terminates for any other reason and he has accumulated at least five (5) continuous and non-forfeited Years of Service, he shall be entitled to receive his Accrued Benefit determined as of such date of termination.
No benefits will be paid under this Plan with respect to a Participant after his death other than as provided in Article IV.
With respect to each Participant, the benefits payable hereunder shall be based on the aggregate Compensation paid by the AIM Funds and on the Participant's non-forfeited Years of Service. Each Fund's share of the obligation to provide such benefits shall be determined by use of accounting methods adopted by the Administrator.
ARTICLE IV
DEATH BENEFITS
In the event of a Participant's death subsequent to his Normal Retirement Date, but prior to the commencement of his Retirement Benefits under Article III hereof, the surviving spouse (if any) of such Participant shall be entitled to receive a quarterly survivor's benefit for a period of no more than ten (10) years (or, if less, the number of the Participant's Years of Service) beginning on the first day of the calendar quarter next following the date of the Participant's death equal to fifty percent (50%) of the amount of the quarterly installments of Retirement Benefits that would have been paid to the Participant under Sections 3.2 or 3.3 hereof had his Retirement occurred on his date of death.
In the event a Participant dies after the commencement of his Retirement Benefit under Article III, but prior to the cessation of the payment of such Retirement Benefits, the surviving spouse (if any) of such Participant shall be entitled to receive survivor's benefits equal to fifty percent (50%) of the amount of the annual Retirement Benefit payable to the Participant under Article III hereunder, paid at such times, and for such period, as such Retirement Benefit would have continued to have been paid to the Participant had he not died.
(a) In the event a Participant is not survived by a spouse, no benefits will be paid hereunder upon the Participant's death.
(b) If a deceased Participant's surviving spouse dies while receiving survivor's benefits hereunder, any installments not paid at the time of the surviving spouse's death shall be forfeited.
ARTICLE V
SUSPENSION OF BENEFITS, ETC.
In the case of a Participant who, at a time when he is receiving Retirement Benefits under Article III of this Plan, resumes Service with any AIM Fund, such Retirement Benefits shall be suspended until his subsequent Retirement, termination of Service or death. Subject to the Years of Service limitations of Section 3.2 hereof, in the event of his Retirement or termination of Service following such a suspension, the quarterly amount of his remaining Retirement Benefits shall thereafter be adjusted, if appropriate, to reflect any additional Years of Service completed by, or a higher rate of Compensation received by, such Participant.
The Administrator shall make a reasonable effort to locate all persons entitled to benefits (including Retirement Benefits and survivor's benefits for spouses) under the Plan; however, notwithstanding any provisions of this Plan to the contrary, if, after a period of 5 years from the date any of such benefits first become due, any such persons entitled to benefits have not been located, their rights under the Plan shall stand suspended. Before this provision becomes operative, the Administrator shall send a certified letter to all such persons (if any) at their last known address advising them that their benefits under the Plan shall be suspended. Any such suspended amounts shall be held by the AIM Funds for a period of 3 additional years (or a total of 8 years from the time the benefits first became payable) and thereafter such amounts shall be forfeited.
ARTICLE VI
ADMINISTRATOR
This Plan shall be administered by the Nominating and Compensation Committees of the Boards of Directors of the AIM Funds. The members of such committees are not "interested persons" (within the meaning of Section 2(a)(19) of the Investment Company Act of 1940) of any of the AIM Funds. The term "Administrator" as used in this Plan shall refer to the members of such committees, either individually or collectively, as appropriate.
Except as provided below, the Administrator shall have the following duties and responsibilities in connection with the administration of this Plan:
(a) To promulgate and enforce such rules, regulations and procedures as shall be proper for the efficient administration of the Plan;
(b) To determine all questions arising in the administration, interpretation and application of the Plan, including questions of eligibility and of the status and rights of Participants and any other persons hereunder;
(c) To decide any dispute arising hereunder; provided, however, that no Administrator shall participate in any matter involving any questions relating solely to his own participation or benefits under this Plan;
(d) To advise the Boards of Directors of the AIM Funds regarding the known future need for funds to be available for distribution;
(e) To correct defects, supply omissions and reconcile inconsistencies to the extent necessary to effectuate the Plan;
(f) To compute the amount of benefits and other payments which shall be payable to any Participant or surviving spouse in accordance with the provisions of the Plan and to determine the person or persons to whom such benefits shall be paid;
(g) To make recommendations to the Boards of Directors of the AIM Funds with respect to proposed amendments to the Plan;
(h) To file all reports with government agencies, Participants and other parties as may be required by law, whether such reports are initially the obligation of the AIM Funds, or the Plan;
(i) To engage the Actuary of the Plan and to cause the liabilities of the Plan to be evaluated by the Actuary; and
(j) To have all such other powers as may be necessary to discharge its duties hereunder.
The Administrator may elect a Chairman and Secretary from among its members and may adopt rules for the conduct of its business. A majority of the members then serving shall constitute a quorum for the transacting of business. All resolutions or other action taken by the Administrator shall be by vote of a majority of those present at such meeting and entitled to vote. Resolutions may be adopted or other action taken without a meeting upon written consent signed by at least a majority of the members. All documents, instruments, orders, requests, directions, instructions and other papers shall be executed on behalf of the Administrator by either the Chairman or the Secretary of the Administrator, if any, or by any member or agent of the Administrator duly authorized to act on the Administrator's behalf.
No Administrator shall be precluded from becoming a Participant in the Plan if he would be otherwise eligible, but he shall not be entitled to vote or act upon matters or to sign any documents relating specifically to his own participation under the Plan, except when such
matters or documents relate to benefits generally. If this disqualification results in the lack of a quorum, then the Boards of Directors, by majority vote of the members of a majority of such Boards of Directors (a "Majority Vote"), shall appoint a sufficient number of temporary Administrators, who shall serve for the sole purpose of determining such a question.
The Administrator may employ agents and provide for such clerical, legal, actuarial, accounting, medical, advisory or other services as it deems necessary to perform its duties under this Plan. The cost of such services and all other expenses incurred by the Administrator in connection with the administration of the Plan shall be allocated to each Fund pursuant to the method utilized under Section 3.5 hereof with respect to costs related to benefit accruals. For purposes of the preceding sentence, if an individual serves as a Director for more than one Fund, he shall be deemed to be a separate Director for each such Fund in determining the aggregate number of Directors of the AIM Funds.
The duties, powers and responsibilities reserved to the Administrator may be allocated among its members so long as such allocation is pursuant to written procedures adopted by the Administrator, in which case no Administrator shall have any liability, with respect to any duties, powers or responsibilities not allocated to him, for the acts or omissions of any other Administrator.
The Administrator may delegate any of its duties to employees of A I M Advisors, Inc. or any of its affiliates or to any other person or firm, provided that the Administrator shall prudently choose such agents and rely in good faith on their actions.
Any action on matters within the discretion of the Administrator shall be final and conclusive.
The Administrator shall maintain adequate records of its actions and proceedings in administering this Plan and shall file all reports and take all other actions as it deems appropriate in order to comply with any federal or state law.
The AIM Funds shall promptly furnish all necessary information to the Administrator to permit it to perform its duties under this Plan. The Administrator shall be entitled to rely upon the accuracy and completeness of all information furnished to it by the AIM Funds, unless it knows or should have known that such information is erroneous.
When rights are reserved in this plan to the Boards of Directors, such rights shall be exercised only by Majority Vote of the Boards of Directors, except where the Boards of Directors, by unanimous written resolution, delegate any such rights to one or more persons or to the Administrator. Subject to the rights reserved to the Boards of Directors as set forth in this Plan, no member of the Boards of Directors shall have any duties or responsibilities under this Plan, except to the extent he shall be acting in the capacity of an Administrator.
(a) The Administrator shall perform all duties required of it under this Plan in a prudent manner. The Administrator shall not be responsible in any way for any action or omission of the AIM Funds or their employees in the performance of their duties and obligations as set forth in this Plan. The Administrator also shall not be responsible for any act or omission of any of its agents provided that such agents were prudently chosen by the Administrator and that the Administrator relied in good faith upon the action of such agents.
(b) Except for its own gross negligence, willful misconduct or willful breach of the terms of this Plan, the Administrator shall be indemnified and held harmless by the AIM Funds against any and all liability, loss, damages, cost and expense which may arise, occur by reason of, or be based upon, any matter connected with or related to this Plan or its administration (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending any litigation, commenced or threatened, or in settlement of any such claim).
ARTICLE VII
AMENDMENTS AND TERMINATION
The Boards of Directors reserve the right at any time and from time to time, and retroactively if deemed necessary or appropriate by them, to amend in whole or in part by Majority Vote any or all of the provisions of this Plan, provided that:
(a) No amendment shall make it possible for any part of a Participant's or former Participant's Retirement Benefit to be used for, or diverted to, purposes other than for the exclusive benefit of such Participant or surviving spouse, except to the extent otherwise provided in this Plan;
(b) No amendment may reduce any Participant's or former Participant's Retirement Benefit as of the effective date of the amendment;
Amendments may be made in the form of Board of Directors' resolutions or separate written document.
Except as provided below, the Boards of Directors reserve the right to terminate this Plan at any time by Majority Vote by giving to the Administrator notice in writing of such desire to terminate. The Plan shall terminate upon the date of receipt of such notice and the rights of all Participants to their Retirement Benefits (determined as of the date the Plan is terminated) shall become payable upon the effective date of the termination of the Plan in quarterly installments or in an actuarially equivalent lump sum as determined by the Administrator.
ARTICLE VIII
MISCELLANEOUS
(a) The Plan is unfunded. Neither the Participants nor any other persons shall have any interest in any fund or in any specific asset or assets of any of the AIM Funds by reason of any Accrued or Retirement Benefit hereunder, nor any rights to receive distribution of any Retirement Benefit except and as to the extent expressly provided hereunder.
(b) The Accrued and Retirement Benefits of each Participant are unsecured and shall be subject to the claims of the general creditors of the AIM Funds.
Neither the AIM Funds, the Administrator, nor any agents, employees, officers, directors or shareholders of any of them, nor any other person shall have any liability or responsibility with respect to this Plan, except as expressly provided herein.
If the Administrator shall receive evidence satisfactory to it that a Participant or surviving spouse entitled to receive any benefit under the Plan is, at the time when such benefit becomes payable, physically or mentally incompetent to receive such benefit and to give a valid release therefor, and that another person or an institution is then maintaining or has custody of such Participant or surviving spouse and that no guardian, committee or other representative of the estate of such Participant or surviving spouse shall have been duly appointed, the Administrator may make payment of such benefit otherwise payable to such Participant or surviving spouse to such other person or institution, and the release of such other person or institution shall be a valid and complete discharge for the payment of such benefit.
All parties to this Plan and any person claiming any interest hereunder agree to perform any and all acts and execute any and all documents and papers which are necessary or desirable for carrying out this Plan or any of its provisions.
All rights under the Plan shall be governed by and construed in accordance with rules of Federal law applicable to such plans and, to the extent not preempted, by the laws of the State of Texas without regard to principles of conflicts of law. No action shall be brought by or on behalf of any Participant for or with respect to benefits due under this Plan unless the person bringing such action has timely exhausted the Plan's claim review procedure. Any such action must be commenced within three years. This three-year period shall be computed from the earlier of (a) the date a final determination denying such benefit, in whole or in part, is issued under the Plan's claim review procedure or (b) the date such individual's cause of action first accrued. Any dispute, controversy or claim arising out of or in connection with this Plan (including the applicability of this arbitration provision) and not resolved pursuant to the Plan's claim review procedure shall be determined and settled by arbitration conducted by the American Arbitration Association ("AAA") in the County and State of the Funds' principal place of business and in accordance with the then existing rules, regulations, practices and procedures of the AAA. Any award in such arbitration shall be final, conclusive and binding upon the parties to the arbitration and may be enforced by either party in any court of competent jurisdiction. Each party to the arbitration will bear its own costs and fees (including attorney's fees).
Nothing contained in this Plan shall be construed as a guaranty or right of any Participant to be continued as a Director of one or more of the AIM Funds (or of a right of a Director to any specific level of Compensation) or as a limitation of the right of the AIM Funds to remove any of its directors.
The Administrator may consult with legal counsel, who may be counsel for one or more of the Boards of Directors of the AIM Funds and for the Administrator, with respect to the meaning or construction of this Plan, its obligations or duties hereunder or with respect to any action or proceeding or any question of law, and they shall be fully protected with respect to any action taken or omitted by them in good faith pursuant to the advice of legal counsel.
A Participant's interest in his Accrued Benefit or Retirement Benefit may not be transferred, alienated, assigned nor become subject to execution, garnishment or attachment, and any attempt to do so will render benefits hereunder immediately forfeitable.
Notwithstanding any other provision of this Plan to the contrary, any benefits to which a Participant (or his surviving spouse) may otherwise be entitled hereunder will be forfeited in the event the Administrator, in its sole discretion, determines that a Participant's termination of Service is due to such Participant's willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Director.
ARTICLE IX
CLS PROCEDURE
If a Participant is denied any Retirement Benefit (or a surviving spouse is denied a survivor's benefit) under this Plan, either in total or in an amount less than the full Retirement Benefit to which he would normally be entitled, the Administrator shall advise the Participant (or surviving spouse) in writing of the amount of his Retirement Benefit (or survivor's benefit), if any, and the specific reasons for the denial. The Administrator shall also furnish the Participant (or surviving spouse) at that time with a written notice containing:
(a) A specific reference to pertinent Plan provisions.
(b) A description of any additional material or information necessary for the Participant (or surviving spouse) to perfect his claim, if possible, and an explanation of why such material or information is needed.
(c) An explanation of the Plan's claim review procedure.
Within 60 days of receipt of the information stated in Section 9.1 above, the Participant (or surviving spouse) shall, if he desires further review, file a written request for reconsideration with the Administrator.
So long as the Participant's (or surviving spouse's) request for review is pending (including the 60 day period in 9.2 above), the Participant (or surviving spouse) or his duly authorized representative may review pertinent Plan documents and may submit issues and comments in writing to the Administrator.
A final and binding decision shall be made by the Administrator within 60 days of the filing by the Participant (or surviving spouse) of his request for reconsideration, provided, however, that if the Administrator, in its discretion, feels that a hearing with the Participant (or surviving spouse) or his representative present is necessary or desirable, this period shall be extended an additional 60 days.
The Administrator's decision shall be conveyed to the Participant (or surviving spouse) in writing and shall include specific reasons for the provisions on which the decision is based.
APPENDIX A
March 7, 2000
For the purposes of the Retirement Plan for Eligible Directors/Trustees "AIM Funds" shall mean each of the regulated investment companies constituting classes or series of shares of the following entities:
AIM ADVISOR FUNDS, INC.
AIM EQUITY FUNDS, INC.
AIM FUNDS GROUP
AIM INTERNATIONAL FUNDS, INC.
AIM INVESTMENT SECURITIES FUNDS
AIM SPECIAL OPPORTUNITIES FUNDS
AIM SUMMIT FUND, INC.
AIM TAX-EXEMPT FUNDS, INC.
AIM VARIABLE INSURANCE FUNDS, INC.
SHORT-TERM INVESTMENTS CO.
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS CO.
EXHIBIT 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.
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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
----------------------------
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APPENDIX A
(AS REVISED JANUARY 1, 2001)
AIM ADVISOR FUNDS AIM VARIABLE INSURANCE FUNDS
o AIM Advisor Flex Fund o AIM V.I. Aggressive Growth Fund
o AIM Advisor International Value Fund o AIM V.I. Balanced Fund
o AIM Advisor Real Estate Fund o AIM V.I. Blue Chip Fund
o AIM V.I. Capital Appreciation Fund
AIM EQUITY FUNDS o AIM V.I. Capital Development Fund
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 Utilities Fund
o AIM Capital Development Fund o AIM V.I. Government Securities Fund
o AIM Charter Fund o AIM V.I. Growth and Income Fund
o AIM Constellation Fund o AIM V.I. Growth Fund
o AIM Dent Demographic Trends Fund o AIM V.I. High Yield Fund
o AIM Emerging Growth Fund o AIM V.I. International Equity Fund
o AIM Large Cap Basic Value Fund o AIM V.I. Telecommunications and
o AIM Large Cap Growth Fund Technology Fund
o AIM Mid Cap Growth Fund o AIM V.I. Value Fund
o AIM Weingarten Fund
AIM FLOATING RATE FUND
AIM FUNDS GROUP
AIM GROWTH SERIES
o AIM Balanced Fund
o AIM European Small Company Fund o AIM Basic Value Fund
o AIM Global Utilities Fund o AIM Euroland Growth Fund
o AIM International Emerging Growth Fund o AIM Japan Growth Fund
o AIM New Technology Fund o AIM Mid Cap Equity Fund
o AIM Select Growth Fund o AIM Small Cap Growth Fund
o AIM Small Cap Equity Fund
o AIM Value Fund AIM INVESTMENT FUNDS
o AIM Value II Fund
o AIM Worldwide Spectrum Fund o AIM Developing Markets Fund
o AIM Global Consumer Products and
AIM INTERNATIONAL FUNDS, INC. Services Fund
o AIM Global Financial Services Fund
o AIM Asian Growth Fund o AIM Global Health Care Fund
o AIM European Development Fund o AIM Global Infrastructure Fund
o AIM Global Aggressive Growth Fund o AIM Global Resources Fund
o AIM Global Growth Fund o AIM Global Telecommunications and
o AIM Global Income Fund Technology Fund
o AIM International Equity Fund o AIM Latin American Growth Fund
o AIM Strategic Income Fund
AIM INVESTMENT SECURITIES FUNDS
AIM SERIES TRUST
o AIM High Yield Fund
o AIM High Yield Fund II o AIM Global Trends Fund
o AIM Income Fund
o AIM Intermediate Government Fund GLOBAL INVESTMENT PORTFOLIO
AIM SPECIAL OPPORTUNITIES FUNDS o Global Consumer Products and
Services Portfolio
o AIM Large Cap Opportunities Fund o Global Resources Portfolio
o AIM Mid Cap Opportunities Fund
o AIM Small Cap Opportunities Fund
AIM SUMMIT FUND
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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
-------
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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
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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
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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
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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.
--------
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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
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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
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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
(AS REVISED JANUARY 1, 2001)
AIM ADVISOR FUNDS AIM VARIABLE INSURANCE FUNDS
o AIM Advisor Flex Fund o AIM V.I. Aggressive Growth Fund
o AIM Advisor International Value Fund o AIM V.I. Balanced Fund
o AIM Advisor Real Estate Fund o AIM V.I. Blue Chip Fund
o AIM V.I. Capital Appreciation Fund
AIM EQUITY FUNDS o AIM V.I. Capital Development Fund
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 Utilities Fund
o AIM Capital Development Fund o AIM V.I. Government Securities Fund
o AIM Charter Fund o AIM V.I. Growth and Income Fund
o AIM Constellation Fund o AIM V.I. Growth Fund
o AIM Dent Demographic Trends Fund o AIM V.I. High Yield Fund
o AIM Emerging Growth Fund o AIM V.I. International Equity Fund
o AIM Large Cap Basic Value Fund o AIM V.I. Telecommunications and
o AIM Large Cap Growth Fund Technology Fund
o AIM Mid Cap Growth Fund o AIM V.I. Value Fund
o AIM Weingarten Fund
AIM FLOATING RATE FUND
AIM FUNDS GROUP
AIM GROWTH SERIES
o AIM Balanced Fund
o AIM European Small Company Fund o AIM Basic Value Fund
o AIM Global Utilities Fund o AIM Euroland Growth Fund
o AIM International Emerging Growth Fund o AIM Japan Growth Fund
o AIM New Technology Fund o AIM Mid Cap Equity Fund
o AIM Select Growth Fund o AIM Small Cap Growth Fund
o AIM Small Cap Equity Fund
o AIM Value Fund AIM INVESTMENT FUNDS
o AIM Value II Fund
o AIM Worldwide Spectrum Fund o AIM Developing Markets Fund
o AIM Global Consumer Products and
AIM INTERNATIONAL FUNDS, INC. Services Fund
o AIM Global Financial Services Fund
o AIM Asian Growth Fund o AIM Global Health Care Fund
o AIM European Development Fund o AIM Global Infrastructure Fund
o AIM Global Aggressive Growth Fund o AIM Global Resources Fund
o AIM Global Growth Fund o AIM Global Telecommunications and
o AIM Global Income Fund Technology Fund
o AIM International Equity Fund o AIM Latin American Growth Fund
o AIM Strategic Income Fund
AIM INVESTMENT SECURITIES FUNDS
AIM SERIES TRUST
o AIM High Yield Fund
o AIM High Yield Fund II o AIM Global Trends Fund
o AIM Income Fund
o AIM Intermediate Government Fund GLOBAL INVESTMENT PORTFOLIO
AIM SPECIAL OPPORTUNITIES FUNDS o Global Consumer Products and
Services Portfolio
o AIM Large Cap Opportunities Fund o Global Resources Portfolio
o AIM Mid Cap Opportunities Fund
o AIM Small Cap Opportunities Fund
AIM SUMMIT FUND
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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
|
* 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
|
* 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
|
* 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.
|
EXHIBIT h(7)(a)
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
AIM EQUITY FUNDS
AND
A I M FUND SERVICES, INC.
TABLE OF CONTENTS
PAGE
ARTICLE 1 TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT............. 1
ARTICLE 2 FEES AND EXPENSES.............................................. 2
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT........... 3
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE FUND..................... 3
ARTICLE 5 INDEMNIFICATION................................................ 4
ARTICLE 6 COVENANTS OF THE FUND AND THE TRANSFER AGENT................... 5
ARTICLE 7 TERMINATION OF AGREEMENT....................................... 6
ARTICLE 8 ADDITIONAL FUNDS............................................... 6
ARTICLE 9 LIMITATION OF SHAREHOLDER LIABILITY............................ 6
ARTICLE 10 ASSIGNMENT..................................................... 6
ARTICLE 11 AMENDMENT...................................................... 7
ARTICLE 12 TEXAS LAW TO APPLY............................................. 7
ARTICLE 13 MERGER OF AGREEMENT............................................ 7
ARTICLE 14 COUNTERPARTS................................................... 7
|
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 21st day of June, 2000, by and between AIM EQUITY FUNDS, a Delaware business trust, having its principal office and place of business at 11 Greenway Plaza, Suite 100, Houston, Texas 77046 (the "Fund"), and A I M Fund Services, Inc., a Delaware corporation having its principal office and place of business at 11 Greenway Plaza, Suite 100, Houston, Texas 77046 (the "Transfer Agent").
WHEREAS, the Transfer Agent is registered as such with the Securities and Exchange Commission (the "SEC"); and
WHEREAS, the Fund is authorized to issue shares in separate series and classes, with each such series representing interests in a separate portfolio of securities and other assets and each such class having different distribution arrangements; and
WHEREAS, the Fund on behalf of the Retail Class and Institutional Class of each of the Portfolios thereof (the "Portfolios") desires to appoint the Transfer Agent as its transfer agent, and agent in connection with certain other activities, with respect to the Portfolios, and the Transfer Agent desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE 1
TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT
1.01 Subject to the terms and conditions set forth in this Agreement, the Fund hereby employs and appoints the Transfer Agent to act as, and the Transfer Agent agrees to act as, its transfer agent for the authorized and issued shares of beneficial interest of the Fund representing interests in the Retail Class and Institutional Class of each of the respective Portfolios ("Shares"), dividend disbursing agent, and agent in connection with any accumulation or similar plans provided to shareholders of each of the Portfolios (the "Shareholders"), including without limitation any periodic investment plan or periodic withdrawal program, as provided in the currently effective prospectus and statement of additional information (the "Prospectus") of the Fund on behalf of the Portfolios.
1.02 The Transfer Agent agrees that it will perform the following services:
(a) The Transfer Agent shall, in accordance with procedures established from time to time by agreement between the Fund on behalf of each of the Portfolios, as applicable, and the Transfer Agent:
(i) receive for acceptance, orders for the purchase of Shares, and promptly deliver payment and appropriate documentation thereof to the Custodian of the Fund authorized pursuant to the Charter of the Fund (the "Custodian");
(ii) pursuant to purchase orders, issue the appropriate number of Shares and hold such Shares in the appropriate Shareholder account;
(iii) receive for acceptance redemption requests and redemption directions and deliver the appropriate documentation thereof to the Custodian;
(iv) at the appropriate time as and when it receives monies paid to it by the Custodian with respect to any redemption, pay over or cause to be paid over in the appropriate manner such monies as instructed by the Fund;
(v) effect transfers of Shares by the registered owners thereof upon receipt of appropriate instructions;
(vi) prepare and transmit payments for dividends and distributions declared by the Fund on behalf of the Shares;
(vii) maintain records of account for and advise the Fund and its Shareholders as to the foregoing; and
(viii) record the issuance of Shares of the Fund and maintain pursuant to SEC Rule 17Ad-1O(e) a record of the total number of Shares which are authorized, based upon data provided to it by the Fund, and issued and outstanding.
The Transfer Agent shall also provide the Fund on a regular basis with the total number of Shares which are authorized and issued and outstanding and shall have no obligation, when recording the issuance of Shares, to monitor the issuance of such Shares or to take cognizance of any laws relating to the issue or sale of such Shares, which function shall be the sole responsibility of the Fund.
(b) In addition to the services set forth in the above paragraph (a), the Transfer Agent shall: (i) perform the customary services of a transfer agent, including but not limited to: maintaining all Shareholder accounts, mailing Shareholder reports and prospectuses to current Shareholders, preparing and mailing confirmation forms and statements of accounts to Shareholders for all purchases and redemptions of Shares and other confirmable transactions in Shareholder accounts, preparing and mailing activity statements for Shareholders, and providing Shareholder account information.
(c) Procedures as to who shall provide certain of these services in Article 1 may be established from time to time by agreement between the Fund on behalf of each Portfolio and the Transfer Agent. The Transfer Agent may at times perform only a portion of these services and the Fund or its agent may perform these services on the Fund's behalf.
ARTICLE 2
FEES AND EXPENSES
2.01 For performance by the Transfer Agent pursuant to this Agreement, the Fund agrees on behalf of each of the Portfolios to pay the Transfer Agent fees as set out in the initial fee schedule attached hereto for the Retail Classes and an annual fee in the amount of .0125% of average daily net assets, payable monthly for the Institutional Classes. Such fees and out-of-pocket expenses and advances identified under Section 2.02 below may be changed from time to time subject to mutual written agreement between the Fund and the Transfer Agent.
2.02 In addition to the fee paid under Section 2.01 above, the Fund agrees to reimburse the Transfer Agent for out-of-pocket expenses or advances incurred by the Transfer Agent for the items set out in the fee schedule attached hereto. In addition, any other expenses incurred by the Transfer Agent at the request or with the consent of the Fund, will be reimbursed by the Fund on behalf of the applicable Shares.
2.03 The Fund agrees on behalf of each of the Portfolios to pay all fees and reimbursable expenses following the mailing of the respective billing notice. Postage for mailing of dividends, proxies, Fund reports and other mailings to all Shareholder accounts shall be advanced to the Transfer Agent by the Fund at least seven (7) days prior to the mailing date of such materials.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT
The Transfer Agent represents and warrants to the Fund that:
3.01 It is a corporation duly organized and existing and in good standing under the laws of the state of Delaware.
3.02 It is duly qualified to carry on its business in Delaware and in Texas.
3.03 It is empowered under applicable laws and by its Charter and By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement.
3.06 It is registered as a Transfer Agent as required by the federal securities laws.
3.07 This Agreement is a legal, valid and binding obligation to it.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to the Transfer Agent that:
4.01 It is a business trust duly organized and existing and in good standing under the laws of Delaware.
4.02 It is empowered under applicable laws and by its Agreement and Declaration of Trust and By-Laws to enter into and perform this Agreement.
4.03 All corporate proceedings required by said Agreement and Declaration of Trust and By-Laws have been taken to authorize it to enter into and perform this Agreement.
4.04 It is an open-end, diversified management investment company registered under the Investment Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act of 1933, as amended on behalf of each of the Portfolios is currently effective and will remain effective, with respect to all Shares of the Fund being offered for sale.
ARTICLE 5
INDEMNIFICATION
5.01 The Transfer Agent shall not be responsible for, and the Fund shall on behalf of the applicable Portfolio, indemnify and hold the Transfer Agent harmless from and against, any and all losses, damages, costs, charges, counsel fees, payments, expenses and liability arising out of or attributable to:
(a) all actions of the Transfer Agent or its agents or subcontractors required to be taken pursuant to this Agreement, provided that such actions are taken in good faith and without negligence or willful misconduct;
(b) the Fund's lack of good faith, negligence or willful misconduct which arise out of the breach of any representation or warranty of the Fund hereunder;
(c) the reliance on or use by the Transfer Agent or its agents or subcontractors of information, records and documents or services which (i) are received or relied upon by the Transfer Agent or its agents or subcontractors and/or furnished to it or performed by on behalf of the Fund, and (ii) have been prepared, maintained and/or performed by the Fund or any other person or firm on behalf of the Fund; provided such actions are taken in good faith and without negligence or willful misconduct;
(d) the reliance on, or the carrying out by the Transfer Agent or its agents or subcontractors of any instructions or requests of the Fund on behalf of the applicable Portfolio; provided such actions are taken in good faith and without negligence or willful misconduct; or
(e) the offer or sale of Shares in violation of any requirement under the federal securities laws or regulations or the securities laws or regulations of any state that such Shares be registered in such state or in violation of any stop order or other determination or ruling by any federal agency or any state with respect to the offer or sale of such Shares in such state.
5.02 The Transfer Agent shall indemnify and hold the Fund harmless from and against any and all losses, damages, costs, charges, counsel fees, payments, expenses and liability arising out of or attributable to any action or failure or omission to act by the Transfer Agent as result of the Transfer Agent's lack of good faith, negligence or willful misconduct.
5.03 At any time the Transfer Agent may apply to any officer of the Fund for instructions, and may consult with legal counsel with respect to any matter arising in connection with the services to be performed by the Transfer Agent under this Agreement, and the Transfer Agent and its agents or subcontractors shall not be liable to and shall be indemnified by the Fund on behalf of the applicable Portfolio for any action taken or omitted by it in reliance upon such instructions or upon the opinion of such counsel. The Transfer Agent shall be protected and indemnified in acting upon any paper or document furnished by or on behalf of the Fund, reasonably believed to be genuine and to have been signed by the proper person or persons, or upon any instruction, information, data, records or documents provided to the Transfer Agent or its agents or subcontractors by
machine readable input, telex, CRT data entry or other similar means authorized by the Fund, and shall not be held to have notice of any change of authority of any person, until receipt of written notice thereof from the Fund.
5.04 In the event either party is unable to perform its obligations under the terms of this Agreement because of acts of God, strikes, equipment or transmission failure or damage reasonably beyond its control, or other causes reasonably beyond its control, such party shall not be liable for damages to the other for any damages resulting from such failure to perform or otherwise from such causes.
5.05 Neither party to this Agreement shall be liable to the other party for consequential damages under any provision of this Agreement or for any consequential damages arising out of any act or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this Article 5 shall apply, upon the assertion of a claim for which either party may be required to indemnify the other, the party seeking indemnification shall promptly notify the other party of such assertion, and shall keep the other party advised with respect to all developments concerning such claim. The party who may be required to indemnify shall have the option to participate with the party seeking indemnification in the defense of such claim. The party seeking indemnification shall in no case confess any claim or make any compromise in any case in which the other party may be required to indemnify it except with the other party's prior written consent.
ARTICLE 6
COVENANTS OF THE FUND AND THE TRANSFER AGENT
6.01 The Fund shall, upon request, on behalf of each of the Portfolios promptly furnish to the Transfer Agent the following:
(a) a certified copy of the resolution of the Board of Trustees of the Fund authorizing the appointment of the Transfer Agent and the execution and delivery of this Agreement; and
(b) a copy of the Agreement and Declaration of Trust and By-Laws of the Fund and all amendments thereto.
6.02 The Transfer Agent shall keep records relating to the services to be performed hereunder, in the form and manner as it may deem advisable. To the extent required by Section 31 of the Investment Company Act of 1940, as amended, and the Rules thereunder, the Transfer Agent agrees that all such records prepared or maintained by the Transfer Agent relating to the services to be performed by the Transfer Agent hereunder are the property of the Fund and will be preserved, maintained and made available in accordance with such Section and Rules, and will be surrendered promptly to the Fund on and in accordance with its request.
6.03 The Transfer Agent and the Fund agree that all books, records, information and data pertaining to the business of the other party which are exchanged or received pursuant to the negotiation or the carrying out of this Agreement shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be required by law.
6.04 In case of any requests or demands for the inspection of the Shareholder records of the Fund, the Transfer Agent will endeavor to notify the Fund and to secure instructions from an
authorized officer of the Fund as to such inspection. The Transfer Agent reserves the right, however, to exhibit the Shareholder records to any person whenever it is advised by its counsel that it may be held liable for the failure to exhibit the Shareholder records to such person.
ARTICLE 7
TERMINATION OF AGREEMENT
7.01 This Agreement may be terminated by either party upon sixty (60) days written notice to the other.
7.02 Should the Fund exercise its right to terminate this Agreement, all out-of-pocket expenses associated with the movement of records and material will be borne by the Fund on behalf of the applicable Portfolios. Additionally, the Transfer Agent reserves the right to charge for any other reasonable expenses associated with such termination and/or a charge equivalent to the average of three (3) months' fees.
ARTICLE 8
ADDITIONAL FUNDS
8.01 In the event that the Fund establishes one or more series of Shares in addition to the Portfolios with respect to which it desires to have the Transfer Agent render services as transfer agent under the terms hereof, it shall so notify the Transfer Agent in writing, and if the Transfer Agent agrees in writing to provide such services, such series of Shares shall become a Portfolio hereunder.
ARTICLE 9
LIMITATION OF SHAREHOLDER LIABILITY
9.01 Notice is hereby given that this Agreement is being executed by the Fund by a duly authorized officer thereof acting as such and not individually. The obligations of this Agreement are not binding upon any of the trustees, officers, shareholders or the investment advisor of the Fund individually but are binding only upon the assets and property belonging to the Fund, on its own behalf or on behalf of a Portfolio, for the benefit of which the trustees or directors have caused this Agreement to be executed.
ARTICLE 10
ASSIGNMENT
10.01 Except as provided in Section 10.03 below, neither this Agreement nor any rights or obligations hereunder may be assigned by either party without the written consent of the other party.
10.02 This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and assigns.
10.03 The Transfer Agent may, without further consent on the part of the Fund, subcontract for the performance hereof with any entity which is duly registered as a transfer agent pursuant to Section 17A(c)(1) of the Securities Exchange Act of 1934 as amended ("Section 17A(c)(1)"); provided, however, that the Transfer Agent shall be as fully responsible to the Fund for the acts and omissions of any subcontractor as it is for its own acts and omissions.
ARTICLE 11
AMENDMENT
11.01 This Agreement may be amended or modified by a written agreement executed by both parties and authorized or approved by a resolution of the Board of Trustees of the Fund.
ARTICLE 12
TEXAS LAW TO APPLY
12.01 This Agreement shall be construed and the provisions thereof interpreted under and in accordance with the laws of the State of Texas.
ARTICLE 13
MERGER OF AGREEMENT
13.01 This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject matter hereof whether oral or written.
ARTICLE 14
COUNTERPARTS
14.01 This Agreement may be executed by the parties hereto on any number of counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf by and through their duly authorized officers, as of the day and year first above written.
AIM EQUITY FUNDS
By: /s/ ROBERT H. GRAHAM
-------------------------------
President
Attest:
/s/ LISA A. MOSS
-------------------------------
Assistant Secretary
|
A I M FUND SERVICES, INC.
By: /s/ TONY D. GREEN
-------------------------------
Senior Vice President
Attest:
/s/ LISA A. MOSS
-------------------------------
Assistant Secretary
|
RETAIL CLASSES
FEE SCHEDULE
1. For performance by the Transfer Agent pursuant to this Agreement, the Fund agrees on behalf of each of the Portfolios to pay the Transfer Agent an annualized fee for shareholder accounts that are open during any monthly period as set forth below, and an annualized fee of $.70 per shareholder account that is closed during any monthly period. Both fees shall be billed by the Transfer Agent monthly in arrears on a prorated basis of 1/12 of the annualized fee for all such accounts.
Per Account Fee
Fund Type Annualized
--------- ---------------
Class A Annual/Semi-Annual Dividends $15.15
Class A Quarterly & Monthly Dividend 17.15
Class A Daily Accrual 19.65
Class B 19.65
Class C 19.65
|
2. The Transfer Agent shall provide the AIM Funds with an annualized credit to the monthly billings of (a) $1.50 for each open account in excess of 100,000 open AIM Funds Accounts up to and including 125,000 open AIM Funds Accounts; (b) $1.75 for each open account in excess of 125,000 open AIM Funds Accounts up to and including 150,000 open AIM Funds Accounts; (c) $2.00 for each open AIM Funds Account in excess of 150,000 open AIM Funds Accounts up to and including 200,000 open AIM Funds Accounts; (d) $2.25 for each open AIM Funds Account in excess of 200,000 open AIM Funds Accounts up to and including 500,000 open AIM Funds Accounts; (e) $2.50 for each open AIM Funds Account in excess of 500,000 open AIM Funds Accounts up to and including 1,000,000 open AIM Funds Accounts; and (f) $3.00 for each open AIM Funds Account in excess of 1,000,000 open AIM Funds Accounts.
3. In addition, beginning on the anniversary date of the execution of the Remote Services Agreement with The Shareholder Services Group, Inc., and on each subsequent anniversary date, the per account fees shall each be increased by a percentage amount equal to the percentage increase in the then current Consumer Price Index (all urban consumers) or its successor index, though in no event shall such increase be greater than a 7% increase over the previous fees.
4. Other Fees
IRA Annual Maintenance Fee $10 per IRA account per year (paid by
investor per tax I.D. number).
Balance Credit The total fees due to the Transfer
Agent from all funds affiliated with the
Fund shall be reduced by an amount equal
to one half of investment income earned
by the Transfer Agent on the DDA balances
of the disbursement accounts for those
funds.
Remote Services Fee $3.60 per open account per year, payable
monthly and $1.80 per closed account per
year, payable monthly.
|
5. OUT-OF-POCKET EXPENSES
The Fund shall reimburse the Transfer Agent monthly for applicable out-of-pocket expenses, including, but not limited to the following items:
- Microfiche/microfilm production & equipment
- Magnetic media tapes and freight
- Printing costs, including, without limitation, certificates, envelopes, checks, stationery, confirmations and statements
- Postage (bulk, pre-sort, ZIP+4, bar coding, first class) direct pass through to the Fund
- Due diligence mailings
- Telephone and telecommunication costs, including all lease, maintenance and line costs
- Ad hoc reports
- Proxy solicitations, mailings and tabulations
- Daily & Distribution advice mailings
- Shipping, Certified and Overnight mail and insurance
- Year-end form production and mailings
- Terminals, communication lines, printers and other equipment and any expenses incurred in connection with such terminals and lines
- Duplicating services
- Courier services
- Banking charges, including without limitation incoming and outgoing wire charges @ $8.00 per wire
- Rendering fees as billed
- Federal Reserve charges for check clearance
- Record retention, retrieval and destruction costs, including, but not limited to exit fees charged by third party record keeping vendors
- Third party audit reviews
- All client specific Systems enhancements will be at the Funds' cost.
- Certificate Insurance
- Such other miscellaneous expenses reasonably incurred by the Transfer Agent in performing its duties and responsibilities under this Agreement
- Check writing fee of $.75 per check redemption.
The Fund agrees that postage and mailing expenses will be paid on the day of or prior to mailing. In addition, the Fund will promptly reimburse the Transfer Agent for any other unscheduled expenses incurred by the Transfer Agent whenever the Fund and the Transfer Agent mutually agree that such expenses are not otherwise properly borne by the Transfer Agent as part of its duties and obligations under the Agreement.
EXHIBIT h(7)(b)
AMENDMENT NUMBER 1 TO THE TRANSFER AGENCY
AND SERVICE AGREEMENT
This Amendment, dated as of July 1, 2000 is made to the Transfer Agency and Service Agreement dated June 21, 2000 (the "Agreement") between AIM Equity Funds (the "Fund") and A I M Fund Services, Inc. ("AFS") pursuant to Article 11 of the Agreement.
Paragraph 1 of the Fee Schedule is hereby deleted in its entirety and replaced with the following:
"1. For performance by the Transfer Agent pursuant to this Agreement, the Fund agrees on behalf of each of the Portfolios to pay the Transfer Agent an annualized fee for shareholder accounts that are open during any monthly period as set forth below, and an annualized fee of $ .70 per shareholder account that is closed during any monthly period. Both fees shall be billed by the Transfer Agent monthly in arrears on a prorated basis of 1/12 of the annualized fee for all such accounts.
Per Account Fee
Fund Type Annualized
--------- ---------------
Class A, B and C
Non-Daily Accrual Funds $15.20
Class A, B and C
Monthly Dividend and Daily Accrual Funds 16.20"
|
Paragraph 4 of the Fee Schedule is hereby deleted in its entirety and replaced with the following:
"4. Other Fees
IRA Annual Maintenance Fee $10 per IRA account per year (paid by
investor per tax I.D. number).
Balance Credit The total fees due to the Transfer Agent
from all funds affiliated with the Fund
shall be reduced by an amount equal to
the investment income earned by the
Transfer Agent on the DDA balances of the
disbursement accounts for those funds.
Remote Services Fee $3.60 per open account per year, payable
monthly and $1.80 per closed account per
year, payable monthly."
|
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
AIM EQUITY FUNDS
By: /s/ ROBERT H. GRAHAM
-------------------------------
President
ATTEST:
/s/ CAROL F. RELIHAN
-------------------------------
Secretary
|
A I M FUND SERVICES, INC.
By: /s/ TONY D. GREEN
-------------------------------
President
ATTEST:
/s/ LISA A. MOSS
-------------------------------
Assistant Secretary
|
EXHIBIT h(9)(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
-------------------------------- -----------------------------
|
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(21)
MASTER ADMINISTRATIVE SERVICES AGREEMENT
This MASTER ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement") is made this 30th day of March, 2000 by and between A I M ADVISORS, INC., a Delaware corporation (the "Administrator") and AIM EQUITY FUNDS, INC., a Maryland corporation (the "Company") with respect to the separate series set forth in Appendix A to this Agreement, as the same may be amended from time to time (the "Portfolios").
WITNESSETH:
WHEREAS, the Company is an open-end investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Company, on behalf of the Portfolios, has retained the Administrator to perform (or arrange for the performance of) accounting, shareholder servicing and other administrative services as well as investment advisory services to the Portfolios, and that the Administrator may receive reasonable compensation or may be reimbursed for its costs in providing such additional services, upon the request of the Board of Directors and upon a finding by the Board of Directors that the provision of such services is in the best interest of the Portfolios and their shareholders; and
WHEREAS, the Board of Directors has found that the provision of such administrative services is in the best interest of the Portfolios and their shareholders, and has requested that the Administrator perform such services;
NOW, THEREFORE, the parties hereby agree as follows:
1. The Administrator hereby agrees to provide, or arrange for the provision of, any or all of the following services by the Administrator or its affiliates:
(a) the services of a principal financial officer of the Company (including related office space, facilities and equipment) whose normal duties consist of maintaining the financial accounts and books and records of the Company and the Portfolios, including the review of daily net asset value calculations and the preparation of tax returns; and the services (including related office space, facilities and equipment) of any of the personnel operating under the direction of such principal financial officer;
(b) supervising the operations of the custodian(s), transfer agent(s) or dividend agent(s) for the Portfolios; and
(c) such other administrative services as may be furnished from time to time by the Administrator to the Company or the Portfolios at the request of the Company's Board of Directors.
2. The services provided hereunder shall at all times be subject to the direction and supervision of the Company's Board of Directors.
3. As full compensation for the services performed and the facilities furnished by or at the direction of the Administrator, the Portfolios shall reimburse the Administrator for expenses incurred by them or their affiliates in accordance with the methodologies established from time to time
by the Company's Board of Directors. Such amounts shall be paid to the Administrator on a quarterly basis.
4. The Administrator shall not be liable for any error of judgment or for any loss suffered by the Company or the Portfolios in connection with any matter to which this Agreement relates, except a loss resulting from the Administrator's willful misfeasance, bad faith or gross negligence in the performance of its duties or from reckless disregard of its obligations and duties under this Agreement.
5. The Company and the Administrator each hereby represent and warrant, but only as to themselves, that each has all requisite authority to enter into, execute, deliver and perform its obligations under this Agreement and that this Agreement is legal, valid and binding, and enforceable in accordance with its terms.
6. Nothing in this Agreement shall limit or restrict the rights of any director, officer or employee of the Administrator who may also be a trustee, officer or employee of the Company to engage in any other business or to devote his time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the right of the Administrator to engage in any other business or to render services of any kind to any other corporation, firm, individual or association.
7. This Agreement shall become effective with respect to a Portfolio on the Effective Date for such Portfolio, as set forth in Appendix A attached hereto. This Agreement shall continue in effect with respect to a Portfolio for an initial period of two years from the Effective Date for such Portfolio and may be continued from year to year thereafter, provided that the continuation of the Agreement is specifically approved at least annually:
(a) (i) by the Company's Board of Directors or (ii) by the vote of "a majority of the outstanding voting securities" of such Portfolio (as defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the directors who are not parties to this Agreement or "interested persons" (as defined in the 1940 Act) of a party to this Agreement (other than as Company directors), by votes cast in person at a meeting specifically called for such purpose.
This Agreement shall terminate automatically in the event of its assignment (as defined in Section 2(a)(4) of the 1940 Act).
8. This Agreement may be amended or modified with respect to one or more Portfolios, but only by a written instrument signed by both the Company and the Administrator.
9. Notice is hereby given that, as provided by applicable law, the obligations of or arising out of this Agreement are not binding upon any of the shareholders of the 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.
11. Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (a) to the Administrator at Eleven Greenway Plaza, Suite 100, Houston, Texas 77046, Attention: President,
with a copy to the General Counsel, or (b) to the Company at Eleven Greenway Plaza, Suite 100, Houston, Texas 77046, Attention: President, with a copy to the General Counsel.
12. This Agreement contains the entire agreement between the parties hereto and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof.
13. This Agreement shall be governed by and construed in accordance with the laws (without reference to conflicts of law provisions) of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.
A I M ADVISORS, INC.
Attest: /s/ LISA A. MOSS By: /s/ ROBERT H. GRAHAM ------------------------------- ------------------------------- Assistant Secretary President (SEAL) Attest: AIM EQUITY FUNDS, INC. /s/ LISA A. MOSS By: /s/ ROBERT H. GRAHAM ------------------------------- ------------------------------- Assistant Secretary President |
(SEAL)
APPENDIX A
TO
MASTER ADMINISTRATIVE SERVICES AGREEMENT
OF
AIM EQUITY FUNDS, INC.
PORTFOLIOS EFFECTIVE DATE OF AGREEMENT ---------- --------------------------- AIM Emerging Growth Fund March 30, 2000 |
Dated: March 30, 2000
EXHIBIT h(22)
MASTER ADMINISTRATIVE SERVICES AGREEMENT
This MASTER ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement") is made this 21st day of June, 2000 by and between A I M ADVISORS, INC., a Delaware corporation (the "Administrator") and AIM EQUITY FUNDS, a Delaware business trust (the "Trust") with respect to the separate series set forth in Appendix A to this Agreement, as the same may be amended from time to time (the "Portfolios").
WITNESSETH:
WHEREAS, the Trust is an open-end investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust, on behalf of the Portfolios, has retained the Administrator to perform (or arrange for the performance of) accounting, shareholder servicing and other administrative services as well as investment advisory services to the Portfolios, and that the Administrator may receive reasonable compensation or may be reimbursed for its costs in providing such additional services, upon the request of the Board of Trustees and upon a finding by the Board of Trustees that the provision of such services is in the best interest of the Portfolios and their shareholders; and
WHEREAS, the Board of Trustees has found that the provision of such administrative services is in the best interest of the Portfolios and their shareholders, and has requested that the Administrator perform such services;
NOW, THEREFORE, the parties hereby agree as follows:
1. The Administrator hereby agrees to provide, or arrange for the provision of, any or all of the following services by the Administrator or its affiliates:
(a) the services of a principal financial officer of the Trust (including related office space, facilities and equipment) whose normal duties consist of maintaining the financial accounts and books and records of the Trust and the Portfolios, including the review of daily net asset value calculations and the preparation of tax returns; and the services (including related office space, facilities and equipment) of any of the personnel operating under the direction of such principal financial officer;
(b) supervising the operations of the custodian(s), transfer agent(s) or dividend agent(s) for the Portfolios; or otherwise providing services to shareholders of the Portfolios; and
(c) such other administrative services as may be furnished from time to time by the Administrator to the Trust or the Portfolios at the request of the Trust's Board of Trustees.
2. The services provided hereunder shall at all times be subject to the direction and supervision of the Trust's Board of Trustees.
3. As full compensation for the services performed and the facilities furnished by or at the direction of the Administrator, the Portfolios shall reimburse the Administrator for expenses incurred by them or their affiliates in accordance with the methodologies established from time to
time by the Trust's Board of Trustees. Such amounts shall be paid to the Administrator on a quarterly basis.
4. The Administrator shall not be liable for any error of judgment or for any loss suffered by the Trust or the Portfolios in connection with any matter to which this Agreement relates, except a loss resulting from the Administrator's willful misfeasance, bad faith or gross negligence in the performance of its duties or from reckless disregard of its obligations and duties under this Agreement.
5. The Trust and the Administrator each hereby represent and warrant, but only as to themselves, that each has all requisite authority to enter into, execute, deliver and perform its obligations under this Agreement and that this Agreement is legal, valid and binding, and enforceable in accordance with its terms.
6. Nothing in this Agreement shall limit or restrict the rights of any director, officer or employee of the Administrator who may also be a trustee, officer or employee of the Trust to engage in any other business or to devote his time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the right of the Administrator to engage in any other business or to render services of any kind to any other corporation, firm, individual or association.
7. This Agreement shall become effective with respect to a Portfolio on the Effective Date for such Portfolio, as set forth in Appendix A attached hereto. This Agreement shall continue in effect until June 30, 2001, and may be continued from year to year thereafter, provided that the continuation of the Agreement is specifically approved at least annually:
(a) (i) by the Trust's Board of Trustees or (ii) by the vote of "a majority of the outstanding voting securities" of such Portfolio (as defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the trustees who are not parties to this Agreement or "interested persons" (as defined in the 1940 Act) of a party to this Agreement (other than as trustees of the Trust), by votes cast in person at a meeting specifically called for such purpose.
This Agreement shall terminate automatically in the event of its assignment (as defined in Section 2(a)(4) of the 1940 Act).
8. This Agreement may be amended or modified with respect to one or more Portfolios, but only by a written instrument signed by both the Trust and the Administrator.
9. Notice is hereby given that, as provided by applicable law, the obligations of or arising out of this Agreement are not binding upon any of the shareholders of the Trust individually but are binding only upon the assets and property of the Trust and that the shareholders shall be entitled, to the fullest extent permitted by applicable law, to the same limitation on personal liability as stockholders of private corporations for profit.
11. Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (a) to the Administrator at Eleven Greenway Plaza, Suite 100, Houston, Texas 77046, Attention: President,
with a copy to the General Counsel, or (b) to the Trust at Eleven Greenway Plaza, Suite 100, Houston, Texas 77046, Attention: President, with a copy to the General Counsel.
12. This Agreement contains the entire agreement between the parties hereto and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof.
13. This Agreement shall be governed by and construed in accordance with the laws (without reference to conflicts of law provisions) of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.
A I M ADVISORS, INC.
Attest: /s/ LISA A. MOSS By: /s/ ROBERT H. GRAHAM ------------------------------- ------------------------------- Assistant Secretary President (SEAL) Attest: AIM EQUITY FUNDS, INC. /s/ LISA A. MOSS By: /s/ ROBERT H. GRAHAM ------------------------------- ------------------------------- Assistant Secretary President |
(SEAL)
APPENDIX A
TO
MASTER ADMINISTRATIVE SERVICES AGREEMENT
OF
AIM EQUITY FUNDS
PORTFOLIOS EFFECTIVE DATE OF AGREEMENT ---------- --------------------------- AIM Aggressive Growth Fund June 1, 2000 AIM Blue Chip Fund June 1, 2000 AIM Capital Development Fund June 1, 2000 AIM Charter Fund June 1, 2000 AIM Constellation Fund June 1, 2000 AIM Dent Demographic Trends Fund June 1, 2000 AIM Emerging Growth Fund June 1, 2000 AIM Large Cap Basic Value Fund June 1, 2000 AIM Large Cap Growth Fund June 1, 2000 AIM Mid Cap Growth Fund June 1, 2000 AIM Weingarten Fund June 1, 2000 |
Dated: June 1, 2000
EXHIBIT h(23)(c)
MEMORANDUM OF AGREEMENT
This Memorandum of Agreement is entered into as of this 6th day of January, 2000 between AIM Equity Funds, Inc. (the "Company"), on behalf of the funds listed on Exhibit "A" to this Memorandum of Agreement (the "Funds"), and A I M Advisors, Inc. ("AIM").
For and in consideration of the mutual terms and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and AIM agree as follows:
The Company and AIM agree until the date set forth on the attached Exhibit "A" that AIM will limit expenses at the rates set forth on Exhibit "A" of the average daily net assets allocable to such class. Neither the Company nor AIM may remove or amend the expense limitations to the Company's detriment prior to the date set forth on Exhibit "A." AIM will not have any right to reimbursement of any amount so limited.
The Company and AIM agree to review the then-current expense limitations for each class of each Fund listed on Exhibit "A" on a date prior to the date listed on that Exhibit to determine whether such expense limitations should be amended, continued or terminated. Unless the Company, by vote of its Board of Directors, or AIM terminates the expense limitations, or the Company and AIM are unable to reach an agreement on the amount of the expense limitations to which the Company and AIM desire to be bound, the expense limitations will continue for additional one-year terms at the rate to which the Company and AIM mutually agree. Exhibit "A" will be amended to reflect that rate and the new date through which the Company and AIM agree to be bound.
IN WITNESS WHEREOF, the Company and AIM have entered into this Memorandum of Agreement as of the date first above written.
AIM Equity Funds, Inc. on behalf of each Fund listed in Exhibit "A" to this Memorandum of Agreement
A I M Advisors, Inc.
EXHIBIT "A"
AIM EQUITY FUNDS, INC.
FUND EXPENSE LIMITATION COMMITTED UNTIL
---- ------------------ ---------------
AIM Large Cap Growth Fund
Class A, B and C Shares waive fees and/or reimburse expenses to June 30, 2000
the extent necessary to limit expenses
(excluding interest expense, taxes,
dividends on short sales, extraordinary
expenses, management fees and
distribution and/or service (12b-1) fees) of
Class A shares to 0.85%
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EXHIBIT h(23)(d)
MEMORANDUM OF AGREEMENT
This Memorandum of Agreement is entered into as of the date indicated on Exhibit "A" between AIM Advisor Funds, AIM Equity Funds, AIM Funds Group, AIM International Funds, Inc., AIM Investment Securities Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Variable Insurance Funds, Short-Term Investments Co., Short-Term Investments Trust, and Tax-Free Investments Co. (each a "Company" and collectively, the "Companies"), on behalf of the portfolios listed on Exhibit "A" to this Memorandum of Agreement (the "Funds"), and A I M Advisors, Inc. ("AIM").
For and in consideration of the mutual terms and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Companies and AIM agree as follows:
1. Each Company, for itself and its Funds, and AIM agree that until the expiration date, if any, of the commitment set forth on the attached Exhibit "A" occurs, as such Exhibit "A" is amended from time to time, AIM will not charge any administrative fee under each Fund's advisory agreement in connection with securities lending activities.
2. Neither a Company nor AIM may remove or amend the fee waivers to a Company's detriment prior to requesting and receiving the approval of the Fund's Board to remove or amend such fee waiver as described on the attached Exhibit "A". AIM will not have any right to reimbursement of any amount so waived.
Unless a Company, by vote of its Board of Directors/Trustees, or AIM terminates the fee waiver, or a Company and AIM are unable to reach an agreement on the amount of the fee waiver to which the Company and AIM desire to be bound, the fee waiver will continue indefinitely with respect to such Company. Exhibit "A" will be amended to reflect the new date through which a Company and AIM agree to be bound.
Nothing in this Memorandum of Agreement is intended to affect any other memorandum of agreement executed by any Company or AIM with respect to any other fee waivers, expense reimbursements and/or expense limitations
IN WITNESS WHEREOF, each Company, on behalf of itself and its Funds listed in Exhibit "A" to this Memorandum of Agreement, and AIM have entered into this Memorandum of Agreement as of the date written above.
AIM ADVISOR FUNDS
AIM EQUITY FUNDS
AIM FUNDS GROUP
AIM INTERNATIONAL FUNDS, INC.
AIM INVESTMENT SECURITIES FUNDS
AIM SUMMIT FUND
AIM TAX-EXEMPT FUNDS
AIM VARIABLE INSURANCE FUNDS
SHORT-TERM INVESTMENTS CO.
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS CO.
By: /s/ ROBERT H. GRAHAM
---------------------------
Title: President
-----------------------
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A I M ADVISORS, INC.
By: /s/ ROBERT H. GRAHAM
---------------------------
Title: President
-----------------------
|
EXHIBIT "A"
AIM ADVISOR FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- -------------- --------------- AIM Advisor Flex Fund September 11, 2000 AIM Advisor International Value Fund September 11, 2000 AIM Advisor Real Estate Fund September 11, 2000 |
AIM EQUITY FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- -------------- --------------- AIM Aggressive Growth Fund June 21, 2000 AIM Blue Chip Fund June 21, 2000 AIM Capital Development Fund June 21, 2000 AIM Charter Fund June 21, 2000 AIM Constellation Fund June 21, 2000 AIM Dent Demographic Trends Fund June 21, 2000 AIM Emerging Growth Fund June 21, 2000 AIM Large Cap Basic Value June 21, 2000 AIM Large Cap Growth Fund June 21, 2000 AIM Mid Cap Growth Fund June 21, 2000 AIM Weingarten Fund June 21, 2000 |
AIM FUNDS GROUP
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- -------------- --------------- AIM Balanced Fund June 1, 2000 AIM European Small Company Fund August 30, 2000 AIM Global Utilities Fund June 1, 2000 AIM International Emerging Growth Fund August 30, 2000 AIM New Technology Fund August 30, 2000 AIM Select Growth Fund June 1, 2000 AIM Small Cap Equity Fund August 30, 2000 AIM Value Fund June 1, 2000 AIM Value II Fund August 30, 2000 |
AIM INTERNATIONAL FUNDS, INC.
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- -------------- --------------- AIM Asian Growth Fund June 21, 2000 AIM European Development Fund June 21, 2000 AIM Global Aggressive Growth Fund June 21, 2000 AIM Global Growth Fund June 21, 2000 AIM Global Income Fund June 21, 2000 AIM International Equity Fund June 21, 2000 |
* Committed until the Company or AIM requests and receives the approval of the Company's Board to remove or amend such fee waiver. Such commitments are evergreen until amended and apply to each Fund.
AIM INVESTMENT SECURITIES FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- -------------- --------------- AIM High Yield Fund II June 1, 2000 AIM High Yield Fund June 1, 2000 AIM Income Fund June 1, 2000 AIM Intermediate Government Fund June 1, 2000 AIM Limited Maturity Treasury Fund June 1, 2000 AIM Money Market Fund June 1, 2000 AIM Municipal Bond Fund June 1, 2000 |
AIM SUMMIT FUND
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- -------------- --------------- AIM Summit Fund July 24, 2000 |
AIM TAX-EXEMPT FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- -------------- --------------- AIM High Income Municipal Fund June 1, 2000 AIM Tax-Exempt Bond Fund of Connecticut June 1, 2000 AIM Tax-Exempt Cash Fund June 1, 2000 AIM Tax-Free Intermediate Fund June 1, 2000 |
AIM VARIABLE INSURANCE FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- -------------- --------------- AIM V.I. Aggressive Growth Fund May 1, 2000 AIM V.I. Balanced Fund May 1, 2000 AIM V.I. Blue Chip Fund May 1, 2000 AIM V.I. Capital Appreciation Fund May 1, 2000 AIM V.I. Capital Development Fund May 1, 2000 AIM V.I. Dent Demographic Trends Fund May 1, 2000 AIM V.I. Diversified Income Fund May 1, 2000 AIM V.I. Global Utilities Fund May 1, 2000 AIM V.I. Government Securities Fund May 1, 2000 AIM V.I. Growth Fund May 1, 2000 AIM V.I. Growth and Income Fund May 1, 2000 AIM V.I. High Yield Fund May 1, 2000 AIM V.I. International Equity Fund May 1, 2000 AIM V.I. Money Market Fund May 1, 2000 AIM V.I. Telecommunications and Technology Fund May 1, 2000 AIM V.I. Value Fund May 1, 2000 |
* Committed until the Company or AIM requests and receives the approval of the Company's Board to remove or amend such fee waiver. Such commitments are evergreen until amended and apply to each Fund.
SHORT-TERM INVESTMENTS CO.
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- -------------- --------------- Liquid Assets Portfolio June 1, 2000 Prime Portfolio June 1, 2000 |
SHORT-TERM INVESTMENTS TRUST
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- -------------- --------------- Government & Agency Portfolio June 1, 2000 Government TaxAdvantage Portfolio June 1, 2000 Treasury Portfolio June 1, 2000 |
TAX-FREE INVESTMENTS CO.
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- -------------- --------------- Cash Reserve Portfolio June 1, 2000 |
* Committed until the Company or AIM requests and receives the approval of the Company's Board to remove or amend such fee waiver. Such commitments are evergreen until amended and apply to each Fund.
EXHIBIT h(23)(e)
MEMORANDUM OF AGREEMENT
This Memorandum of Agreement is entered into as of this 1st day of July, 2000 between AIM Equity Funds (the "Trust"), on behalf of the funds listed on Exhibit "A" to this Memorandum of Agreement (the "Funds"), and A I M Advisors, Inc. ("AIM").
For and in consideration of the mutual terms and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Trust and AIM agree as follows:
The Company and AIM agree until the date set forth on the attached Exhibit "A" that AIM will waive its fees or reimburse expenses to the extent that expenses (excluding interest, taxes, dividend expense on short sales, extraordinary items, and increases for indirect expenses resulting from expense offset arrangements, if any) of a class of a Fund exceed the rate set forth on Exhibit "A" of the average daily net assets allocable to such class. Neither the Trust nor AIM may remove or amend the waivers or expense limitations to the Company's detriment prior to the date set forth on Exhibit "A." AIM will not have any right to reimbursement of any amount so waived or reimbursed.
The Company and AIM agree to review the then-current waivers or expense limitations for each class of each Fund listed on Exhibit "A" on a date prior to the date listed on that Exhibit to determine whether such waivers or limitations should be amended, continued or terminated. Unless the Company, by vote of its Board of Directors, or AIM terminates the waivers or limitations, or the Company and AIM are unable to reach an agreement on the amount of the waivers or limitations to which the Company and AIM desire to be bound, the waivers or limitations will continue for additional one-year terms at the rate to which the Company and AIM mutually agree. Exhibit "A" will be amended to reflect that rate and the new date through which the Company and AIM agree to be bound.
IN WITNESS WHEREOF, the Company and AIM have entered into this Memorandum of Agreement as of the date first above written.
AIM Equity Funds, on behalf of each Fund listed in Exhibit "A" to this Memorandum of Agreement
By: /s/ ROBERT H. GRAHAM
----------------------------------------
Title: President
-------------------------------------
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A I M Advisors, Inc.
By: /s/ ROBERT H. GRAHAM
----------------------------------------
Title: President
-------------------------------------
|
EXHIBIT "A"
AIM EQUITY FUNDS
FUND EXPENSE LIMITATION COMMITTED UNTIL
---- ------------------ ---------------
AIM LARGE CAP GROWTH FUND
Class A 1.95% June 30, 2001
Class B (See Note 1 below) June 30, 2001
Class C (See Note 1 below) June 30, 2001
AIM LARGE CAP BASIC VALUE FUND
Class A 1.25% June 30, 2001
Class B (See Note 2 below) June 30, 2001
Class C (See Note 2 below) June 30, 2001
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NOTE 1: The amount equal to Total Operating Expenses (as calculated in the
Fund's financial statements less expense exclusions listed in the
Memorandum of Agreement) less the basis point amounts necessary to
limit Class A shares' Total Operating Expenses to 1.95%.
NOTE 2: The amount equal to Total Operating Expenses (as calculated in the
Fund's financial statements less expense exclusions listed in the
Memorandum of Agreement) less the basis point amounts necessary to
limit Class A shares' Total Operating Expenses to 1.25%.
EXHIBIT i(4)
CONSENT OF COUNSEL
We hereby consent to the use of our name and to the reference to our firm under the caption "Miscellaneous Information - Legal Matters" in the Statement of Additional Information for the retail classes of the eleven series portfolios of AIM Equity Funds (the "Company") and the Statement of Additional Information for the institutional classes of AIM Charter Fund, AIM Constellation Fund and AIM Weingarten Fund, both of which are included in Post-Effective Amendment No. 67 to the Registration Statement under the Securities Act of 1933, as amended (No. 2-25469), and Amendment No. 67 to the Registration Statement under the Investment Company Act of 1940, as amended (No. 811-1424), on Form N-1A of the Company.
/s/ Ballard Spahr Andrews & Ingersoll, LLP
------------------------------------------
Ballard Spahr Andrews & Ingersoll, LLP
Philadelphia, Pennsylvania
February 20, 2001
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EXHIBIT j(1)
The Board of Trustees and Shareholders
AIM Equity Funds:
We consent to the use of our reports on AIM Aggressive Growth 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 Large Cap Basic Value Fund, AIM Large Cap Growth Fund, AIM Mid Cap Growth Fund and AIM Weingarten Fund (series portfolios of AIM Equity Funds) dated December 6, 2000 included herein and the references to our firm under the headings "Financial Highlights" in the Prospectuses and "Audit Reports" in the Statements of Additional Information.
/s/ KPMG LLP Houston, Texas February 22, 2001 |
EXHIBIT l(5)
[AIM LOGO APPEARS HERE] P.O. Box 4333
Houston, TX 77210-4333
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
713-626-1919
A I M Advisors, Inc.
March 30, 2000
Board of Directors
AIM Equity Funds, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Re: Initial Capital Investment in New Portfolios of AIM Equity Funds, Inc. (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:
AIM Emerging Growth Fund - Class A $ 1,000,000 AIM Emerging Growth Fund - Class B $ -0- AIM Emerging Growth Fund - Class C $ -0- |
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.
By: /s/ ROBERT H. GRAHAM
--------------------
Robert H. Graham
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A Member of the AMVESCAP Group
EXHIBIT m(10)(h)
AMENDMENT NO. 7
AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
The Amended and Restated Master Distribution Plan (the "Plan"), dated as of June 30, 1997, pursuant to Rule 12b-1 of AIM Equity Funds, Inc., a Maryland corporation, is hereby amended as follows:
Schedule A of the Plan is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A TO
MASTER DISTRIBUTION PLAN
AIM EQUITY FUNDS, INC.
(CLASS B SHARES)
MAXIMUM MAXIMUM MAXIMUM
ASSET BASED SERVICE AGGREGATE
FUND SALES CHARGE FEE FEE
AIM Aggressive Growth Fund 0.75% 0.25% 1.00%
AIM Blue Chip Fund 0.75% 0.25% 1.00%
AIM Capital Development Fund 0.75% 0.25% 1.00%
AIM Charter Fund 0.75% 0.25% 1.00%
AIM Constellation Fund 0.75% 0.25% 1.00%
AIM Dent Demographic Trends Fund 0.75% 0.25% 1.00%
AIM Emerging Growth Fund 0.75% 0.25% 1.00%
AIM Large Cap Basic Value Fund 0.75% 0.25% 1.00%
AIM Large Cap Growth Fund 0.75% 0.25% 1.00%
AIM Mid Cap Growth Fund 0.75% 0.25% 1.00%
AIM Weingarten Fund 0.75% 0.25% 1.00%"
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All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: March 30, 2000
-------------- AIM EQUITY FUNDS, INC.
(on behalf of its Class B Shares)
Attest: /s/ LISA MOSS By: /s/ CAROL F. RELIHAN
----------------------------- -----------------------------
Assistant Secretary Senior Vice President
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EXHIBIT m(11)
MASTER DISTRIBUTION PLAN
OF
AIM EQUITY FUNDS
(CLASS B SHARES)
(SECURITIZATION FEATURE)
SECTION 1. AIM Equity Funds (the "Fund"), on behalf of the series of beneficial interest set forth in Schedule A to this plan (the "Portfolios"), may pay for distribution of the Class B Shares of such Portfolios (the "Shares") which the Fund issues from time to time, pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act"), according to the terms of this Distribution Plan (the "Plan").
SECTION 2. The Fund may incur expenses for and pay any institution selected to act as the Fund's agent for distribution of the Shares of any Portfolio from time to time (each, a "Distributor") at the rates set forth on Schedule A hereto based on the average daily net assets of each class of Shares subject to any applicable limitations imposed by the Conduct Rules of the National Association of Securities Dealers, Inc. in effect from time to time (the "Conduct Rules"). All such payments are the legal obligation of the Fund and not of any Distributor or its designee.
SECTION 3.
(a) Amounts set forth in Section 2 may be used to finance any activity which is primarily intended to result in the sale of the Shares, including, but not limited to, expenses of organizing and conducting sales seminars and running advertising programs, payment of finders fees, printing of prospectuses and statements of additional information (and supplements thereto) and reports for other than existing shareholders, preparation and distribution of advertising material and sales literature, payment of overhead and supplemental payments to dealers and other institutions as asset-based sales charges. Amounts set forth in Section 2 may also be used to finance payments of service fees under a shareholder service arrangement, which may be established by each Distributor in accordance with Section 4, the costs of administering the Plan. To the extent that amounts paid hereunder are not used specifically to reimburse the Distributor for any such expense, such amounts may be treated as compensation for the Distributor's distribution-related services. No provision of this Plan shall be interpreted to prohibit any payments by the Fund during periods when the Fund has suspended or otherwise limited sales.
(b) Subject to the provisions of Sections 8 and 9 hereof, amounts payable pursuant to Section 2 in respect of Shares of each Portfolio shall be paid by the Fund to the Distributor in respect of such Shares or, if more than one institution has acted or is acting as Distributor in respect of such Shares, then amounts payable pursuant to Section 2 in respect of such Shares shall be paid to each such Distributor in proportion to the number of such Shares sold by or attributable to such Distributor's distribution efforts in respect of such Shares in accordance with allocation provisions of each Distributor's distribution agreement (the "Distributor's 12b-1 Share") notwithstanding that such Distributor's distribution agreement with the
Fund may have been terminated. That portion of the amounts paid under the Plan that is not paid or advanced by the Distributor to dealers or other institutions that provide personal continuing shareholder service as a service fee pursuant to Section 4 shall be deemed an asset-based sales charge.
(c) Any Distributor may assign, transfer or pledge ("Transfer") to one or more designees (each an "Assignee"), its rights to all or a designated portion of its Distributor's 12b-1 Share from time to time (but not such Distributor's duties and obligations pursuant hereto or pursuant to any distribution agreement in effect from time to time, if any, between such Distributor and the Fund), free and clear of any offsets or claims the Fund may have against such Distributor. Each such Assignee's ownership interest in a Transfer of a specific designated portion of a Distributor's 12b-1 Share is hereafter referred to as an "Assignee's 12b-1 Portion." A Transfer pursuant to this Section 3(c) shall not reduce or extinguish any claims of the Fund against the Distributor.
(d) Each Distributor shall promptly notify the Fund in writing of each such Transfer by providing the Fund with the name and address of each such Assignee.
(e) A Distributor may direct the Fund to pay an Assignee's 12b-1 Portion directly to such Assignee. In such event, the Distributor shall provide the Fund with a monthly calculation of the amount of (i) the Distributor's 12b-1 Share, and (ii) each Assignee's 12b-1 Portion, if any, for such month (the "Monthly Calculation"). In such event, the Fund shall, upon receipt of such notice and Monthly Calculation from the Distributor, make all payments required under such distribution agreement directly to the Assignee in accordance with the information provided in such notice and Monthly Calculation upon the same terms and conditions as if such payments were to be paid to the Distributor.
(f) Alternatively, in connection with a Transfer, a Distributor may direct the Fund to pay all of such Distributor's 12b-1 Share from time to time to a depository or collection agent designated by any Assignee, which depository or collection agent may be delegated the duty of dividing such Distributor's 12b-1 Share between the Assignee's 12b-1 Portion and the balance of the Distributor's 12b-1 Share (such balance, when distributed to the Distributor by the depository or collection agent, the "Distributor's 12b-1 Portion"), in which case only the Distributor's 12b-1 Portion may be subject to offsets or claims the Fund may have against such Distributor.
SECTION 4.
(a) Amounts expended by the Fund under the Plan shall be used in part for the implementation by the Distributor of shareholder service arrangements with respect to the Shares. The maximum service fee payable to any provider of such shareholder service shall be twenty-five one-hundredths of one percent (0.25%) per annum of the average daily net assets of the Shares attributable to the customers of such service provider. All such payments are the legal obligation of the Fund and not of any Distributor or its designee.
(b) Pursuant to this Plan, the Distributor may enter
into agreements substantially in the form attached hereto as
Exhibit A ("Service Agreements") with such broker-dealers
("Dealers")
as may be selected from time to time by the Distributor for the provision of continuing shareholder services in connection with Shares held by such Dealers' clients and customers ("Customers") who may from time to time directly or beneficially own Shares. The personal continuing shareholder services to be rendered by Dealers under the Service Agreements may include, but shall not be limited to, some or all of the following: (i) distributing sales literature; (ii) answering routine Customer inquiries concerning the Fund and the Shares; (iii) assisting Customers in changing dividend options, account designations and addresses, and enrolling in any of several retirement plans offered in connection with the purchase of Shares; (iv) assisting in the establishment and maintenance of Customer accounts and records, and in the processing of purchase and redemption transactions; (v) investing dividends and capital gains distributions automatically in Shares; (vi) performing sub-accounting; (vii) providing periodic statements showing a Customer's shareholder account balance and the integration of such statements with those of other transactions and balances in the Customer's account serviced by such institution; (viii) forwarding applicable prospectuses, proxy statements, reports and notices to Customers who hold Shares; and (ix) providing such other information and administrative services as the Fund or the Customer may reasonably request.
(c) The Distributor may also enter into Bank Shareholder Service Agreements substantially in the form attached hereto as Exhibit B ("Bank Agreements") with selected banks and financial institutions acting in an agency capacity for their customers ("Banks"). Banks acting in such capacity will provide some or all of the shareholder services to their customers as set forth in the Bank Agreements from time to time.
(d) The Distributor may also enter into Agency Pricing Agreements substantially in the form attached hereto as Exhibit C ("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 shareholder services to their customers as set forth in the Pricing Agreements from time to time.
(e) The Distributor may also enter into Shareholder Service Agreements substantially in the form attached hereto as Exhibit D ("Bank Trust Department Agreements and Brokers for Bank Trust Department Agreements") with selected bank trust departments and brokers for bank trust departments. Such bank trust departments and brokers for bank trust departments will provide some or all of the shareholder services to their customers as set forth in the Bank Trust Department Agreements and Brokers for Bank Trust Department Agreements from time to time.
SECTION 5. This Plan shall not take effect until (i) it has been
approved, together with any related agreements, by votes of the majority of both
(a) the Board of Trustees of the Fund, and (b) those trustees of the Fund who
are not "interested persons" of the Fund (as defined in the 1940 Act) and have
no direct or indirect financial interest in the operation of this Plan or any
agreements related to it (the "Dis-interested Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan or such agreements, and
(ii) the execution by the Fund and A I M Distributors, Inc. of a Master
Distribution Agreement in respect of the Shares.
SECTION 6. Unless sooner terminated pursuant to Section 8, this Plan shall continue in effect until June 30, 2001 and thereafter shall continue in effect so long as such continuance is
specifically approved, at least annually, in the manner provided for approval of this Plan in Section 5.
SECTION 7. Each Distributor shall provide to the Fund's Board of Trustees and the Board of Trustees shall review, at least quarterly, a written report of the amounts expended for distribution of the Shares and the purposes for which such expenditures were made.
SECTION 8. This Plan may be terminated with respect to the Shares of any Portfolio at any time by vote of a majority of the Dis-interested Trustees, or by vote of a majority of outstanding Shares of such Portfolio. Upon termination of this Plan with respect to any or all such classes, the obligation of the Fund to make payments pursuant to this Plan with respect to such classes shall terminate, and the Fund shall not be required to make payments hereunder beyond such termination date with respect to expenses incurred in connection with Shares sold prior to such termination date, provided, in each case that each of the requirements of a Complete Termination of this Plan in respect of such class, as defined below, are met. A termination of this Plan with respect to any or all Shares of any or all Portfolios shall not affect the obligation of the Fund to withhold and pay to any Distributor contingent deferred sales charges to which such distributor is entitled pursuant to any distribution agreement. For purposes of this Section 8 a "Complete Termination" of this Plan in respect of any Portfolio shall mean a termination of this Plan in respect of such Portfolio, provided that: (i) the Dis-interested Trustees of the Fund shall have acted in good faith and shall have determined that such termination is in the best interest of the Fund and the shareholders of such Portfolio; (ii) the Fund does not alter the terms of the contingent deferred sales charges applicable to Shares outstanding at the time of such termination; and (iii) unless the applicable Distributor at the time of such termination was in material breach under the distribution agreement in respect of such Portfolio, the Fund shall not, in respect of such Portfolio, pay to any person or entity, other than such Distributor or its designee, either the asset-based sales charge or the service fee (or any similar fee) in respect of the Shares sold by such Distributor prior to such termination.
SECTION 9. Any agreement related to this Plan shall be made in writing, and shall provide:
(a) that such agreement may be terminated with
respect to the Shares of any or all Portfolios at any time,
without payment of any penalty, by vote of a majority of the
Dis-interested Trustees or by a vote of the majority of the
outstanding Shares of such Portfolio, on not more than sixty
(60) days' written notice to any other party to the agreement;
and
(b) that such agreement shall terminate automatically
in the event of its assignment; provided, however, that,
subject to the provisions of Section 8 hereof, if such
agreement is terminated for any reason, the obligation of the
Fund to make payments of (i) the Distributor's Share in
accordance with the directions of the Distributor pursuant to
Section 3(e) or (f) hereof if there exist Assignees for all or
any portion of such Distributor's 12b-1 Share, and (ii) the
remainder of such Distributor's 12b-1 Share to such
Distributor if there are no Assignees for such Distributor's
Share, pursuant to such agreement and this Plan will continue
with respect to the Shares until such Shares are redeemed or
automatically converted into another class of shares of the
Fund.
SECTION 10. This Plan may not be amended to increase materially the amount of distribution expenses provided for in Section 2 hereof unless such amendment is approved by a vote of at least a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the
Shares, and no material amendment to the Plan shall be made unless approved in the manner provided for in Section 5 hereof.
AIM EQUITY FUNDS
(on behalf of its Class B Shares)
Attest: By:
--------------------------- -----------------------------
Assistant Secretary President
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Effective as of June 21, 2000.
SCHEDULE A
TO
MASTER DISTRIBUTION PLAN
OF
AIM EQUITY FUNDS
(DISTRIBUTION FEE)
MAXIMUM
ASSET-BASED SERVICE AGGREGATE
FUND SALES CHARGE FEE FEE
---- ------------ ------- ---------
AIM Aggressive Growth Fund 0.75% 0.25% 1.00%
AIM Blue Chip Fund 0.75% 0.25% 1.00%
AIM Capital Development Fund 0.75% 0.25% 1.00%
AIM Charter Fund 0.75% 0.25% 1.00%
AIM Constellation Fund 0.75% 0.25% 1.00%
AIM Dent Demographic Trends Fund 0.75% 0.25% 1.00%
AIM Emerging Growth Fund 0.75% 0.25% 1.00%
AIM Large Cap Basic Value Fund 0.75% 0.25% 1.00%
AIM Large Cap Growth Fund 0.75% 0.25% 1.00%
AIM Mid Cap Growth Fund 0.75% 0.25% 1.00%
AIM Weingarten Fund 0.75% 0.25% 1.00%
|
Exhibit m(12)
FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
OF
AIM EQUITY FUNDS
(CLASS B SHARES)
(SECURITIZATION FEATURE)
SECTION 1. AIM Equity Funds (the "Fund"), on behalf of the series of beneficial interest set forth in Schedule A to this plan (the "Portfolios"), may pay for distribution of the Class B Shares of such Portfolios (the "Shares") which the Fund issues from time to time, pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act"), according to the terms of this Distribution Plan (the "Plan").
SECTION 2. The Fund may incur expenses for and pay any institution selected to act as the Fund's agent for distribution of the Shares of any Portfolio from time to time (each, a "Distributor") at the rates set forth on Schedule A hereto based on the average daily net assets of each class of Shares subject to any applicable limitations imposed by the Conduct Rules of the National Association of Securities Dealers, Inc. in effect from time to time (the "Conduct Rules"). All such payments are the legal obligation of the Fund and not of any Distributor or its designee.
SECTION 3.
(a) Amounts set forth in Section 2 may be used to finance any activity which is primarily intended to result in the sale of the Shares, including, but not limited to, expenses of organizing and conducting sales seminars and running advertising programs, payment of finders fees, printing of prospectuses and statements of additional information (and supplements thereto) and reports for other than existing shareholders, preparation and distribution of advertising material and sales literature, payment of overhead and supplemental payments to dealers and other institutions as asset-based sales charges. Amounts set forth in Section 2 may also be used to finance payments of service fees under a shareholder service arrangement, which may be established by each Distributor in accordance with Section 4, and the costs of administering the Plan. To the extent that amounts paid hereunder are not used specifically to reimburse the Distributor for any such expense, such amounts may be treated as compensation for the Distributor's distribution-related services. No provision of this Plan shall be interpreted to prohibit any payments by the Fund during periods when the Fund has suspended or otherwise limited sales.
(b) Subject to the provisions of Sections 8 and 9 hereof, amounts payable pursuant to Section 2 in respect of Shares of each Portfolio shall be paid by the Fund to the Distributor in respect of such Shares or, if more than one institution has acted or is acting as Distributor in respect of such Shares, then amounts payable pursuant to Section 2 in respect of such Shares shall be paid to each such Distributor in proportion to the number of such Shares sold by or attributable to such Distributor's distribution efforts in respect of such Shares in accordance with allocation provisions of each Distributor's distribution agreement (the "Distributor's 12b-1 Share") notwithstanding that such Distributor's distribution agreement with the Fund may have been terminated. That portion of the amounts paid under the Plan that is not paid to the Distributor, or paid or advanced by the Distributor 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.
(c) Any Distributor may assign, transfer or pledge
("Transfer") to one or more designees (each an "Assignee"),
its rights to all or a designated portion of its
Distributor's 12b-1 Share from time to time (but not such
Distributor's duties and obligations pursuant hereto or
pursuant to any distribution agreement in effect from time to
time, if any, between such Distributor and the Fund), free
and clear of any offsets or claims the Fund may have against
such Distributor. Each such Assignee's ownership interest in
a Transfer of a specific designated portion of a
Distributor's 12b-1 Share is hereafter referred to as an
"Assignee's 12b-1 Portion." A Transfer pursuant to this
Section 3(c) shall not reduce or extinguish any claims of the
Fund against the Distributor.
(d) Each Distributor shall promptly notify the Fund in writing of each such Transfer by providing the Fund with the name and address of each such Assignee.
(e) A Distributor may direct the Fund to pay an Assignee's 12b-1 Portion directly to such Assignee. In such event, the Distributor shall provide the Fund with a monthly calculation of the amount of (i) the Distributor's 12b-1 Share, and (ii) each Assignee's 12b-1 Portion, if any, for such month (the "Monthly Calculation"). In such event, the Fund shall, upon receipt of such notice and Monthly Calculation from the Distributor, make all payments required under such distribution agreement directly to the Assignee in accordance with the information provided in such notice and Monthly Calculation upon the same terms and conditions as if such payments were to be paid to the Distributor.
(f) Alternatively, in connection with a Transfer, a Distributor may direct the Fund to pay all of such Distributor's 12b-1 Share from time to time to a depository or collection agent designated by any Assignee, which depository or collection agent may be delegated the duty of dividing such Distributor's 12b-1 Share between the Assignee's 12b-1 Portion and the balance of the Distributor's 12b-1 Share (such balance, when distributed to the Distributor by the depository or collection agent, the "Distributor's 12b-1 Portion"), in which case only the Distributor's 12b-1 Portion may be subject to offsets or claims the Fund may have against such Distributor.
SECTION 4.
(a) Amounts expended by the Fund under the Plan shall be used in part for the implementation by the Distributor of shareholder service arrangements with respect to the Shares. The maximum service fee payable to any provider of such shareholder service shall be twenty-five one-hundredths of one percent (0.25%) per annum of the average daily net assets of the Shares attributable to the customers of such service provider. All such payments are the legal obligation of the Fund and not of any Distributor or its designee.
(b) Pursuant to this Plan, the Distributor may enter into agreements substantially in the form attached hereto as Exhibit A ("Service Agreements") with such broker-dealers ("Dealers") as may be selected from time to time by the Distributor for the provision of continuing shareholder services in connection with Shares held by such Dealers' clients and customers ("Customers") who may from time to time directly or beneficially own Shares. The personal continuing shareholder services to be rendered by Dealers under the Service Agreements may include, but shall not be limited to, some or all of the following: (i) distributing sales literature; (ii)
answering routine Customer inquiries concerning the Fund and
the Shares; (iii) assisting Customers in changing dividend
options, account designations and addresses, and enrolling in
any of several retirement plans offered in connection with
the purchase of Shares; (iv) assisting in the establishment
and maintenance of Customer accounts and records, and in the
processing of purchase and redemption transactions; (v)
investing dividends and capital gains distributions
automatically in Shares; (vi) performing sub-accounting;
(vii) providing periodic statements showing a Customer's
shareholder account balance and the integration of such
statements with those of other transactions and balances in
the Customer's account serviced by such institution; (viii)
forwarding applicable prospectuses, proxy statements, reports
and notices to Customers who hold Shares; and (ix) providing
such other information and administrative services as the
Fund or the Customer may reasonably request.
(c) The Distributor may also enter into Bank Shareholder Service Agreements substantially in the form attached hereto as Exhibit B ("Bank Agreements") with selected banks and financial institutions acting in an agency capacity for their customers ("Banks"). Banks acting in such capacity will provide some or all of the shareholder services to their customers as set forth in the Bank Agreements from time to time.
(d) The Distributor may also enter into Agency Pricing Agreements substantially in the form attached hereto as Exhibit C ("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 shareholder services to their customers as set forth in the Pricing Agreements from time to time.
(e) The Distributor may also enter into Shareholder Service Agreements substantially in the form attached hereto as Exhibit D ("Bank Trust Department Agreements and Brokers for Bank Trust Department Agreements") with selected bank trust departments and brokers for bank trust departments. Such bank trust departments and brokers for bank trust departments will provide some or all of the shareholder services to their customers as set forth in the Bank Trust Department Agreements and Brokers for Bank Trust Department Agreements from time to time.
(f) The Distributor, as agent of the Portfolios, may also enter in a Shareholder Service Agreement substantially in the form attached hereto as Exhibit E (the "Agreement") with the Distributor, acting as principal. The Distributor, acting as principal, will provide some or all of the shareholder services to Portfolio shareholders for which the Distributor is the broker of record, as set forth in the Agreement.
SECTION 5. This Plan shall not take effect until (i) it has been
approved, together with any related agreements, by votes of the majority of
both (a) the Board of Trustees of the Fund, and (b) those trustees of the Fund
who are not "interested persons" of the Fund (as defined in the 1940 Act) and
have no direct or indirect financial interest in the operation of this Plan or
any agreements related to it (the "Dis-interested Trustees"), cast in person at
a meeting called for the purpose of voting on this Plan or such agreements, and
(ii) the execution by the Fund and A I M Distributors, Inc. of a Master
Distribution Agreement in respect of the Shares.
SECTION 6. Unless sooner terminated pursuant to Section 8, this Plan shall continue in effect until June 30, 2001 and thereafter shall continue in effect so long as such continuance is specifically approved, at least annually, in the manner provided for approval of this Plan in Section 5.
SECTION 7. Each Distributor shall provide to the Fund's Board of Trustees and the Board of Trustees shall review, at least quarterly, a written report of the amounts expended for distribution of the Shares and the purposes for which such expenditures were made.
SECTION 8. This Plan may be terminated with respect to the Shares of any Portfolio at any time by vote of a majority of the Dis-interested Trustees, or by vote of a majority of outstanding Shares of such Portfolio. Upon termination of this Plan with respect to any or all such classes, the obligation of the Fund to make payments pursuant to this Plan with respect to such classes shall terminate, and the Fund shall not be required to make payments hereunder beyond such termination date with respect to expenses incurred in connection with Shares sold prior to such termination date, provided, in each case that each of the requirements of a Complete Termination of this Plan in respect of such class, as defined below, are met. A termination of this Plan with respect to any or all Shares of any or all Portfolios shall not affect the obligation of the Fund to withhold and pay to any Distributor contingent deferred sales charges to which such distributor is entitled pursuant to any distribution agreement. For purposes of this Section 8 a "Complete Termination" of this Plan in respect of any Portfolio shall mean a termination of this Plan in respect of such Portfolio, provided that: (i) the Dis-interested Trustees of the Fund shall have acted in good faith and shall have determined that such termination is in the best interest of the Fund and the shareholders of such Portfolio; (ii) the Fund does not alter the terms of the contingent deferred sales charges applicable to Shares outstanding at the time of such termination; and (iii) unless the applicable Distributor at the time of such termination was in material breach under the distribution agreement in respect of such Portfolio, the Fund shall not, in respect of such Portfolio, pay to any person or entity, other than such Distributor or its designee, either the asset-based sales charge or the service fee (or any similar fee) in respect of the Shares sold by such Distributor prior to such termination.
SECTION 9. Any agreement related to this Plan shall be made in writing, and shall provide:
(a) that such agreement may be terminated with
respect to the Shares of any or all Portfolios at any time,
without payment of any penalty, by vote of a majority of the
Dis-interested Trustees or by a vote of the majority of the
outstanding Shares of such Portfolio, on not more than sixty
(60) days' written notice to any other party to the
agreement; and
(b) that such agreement shall terminate automatically in the event of its assignment; provided, however, that, subject to the provisions of Section 8 hereof, if such agreement is terminated for any reason, the obligation of the Fund to make payments of (i) the Distributor's Share in accordance with the directions of the Distributor pursuant to Section 3(e) or (f) hereof if there exist Assignees for all or any portion of such Distributor's 12b-1 Share, and (ii) the remainder of such Distributor's 12b-1 Share to such Distributor if there are no Assignees for such Distributor's Share, pursuant to such agreement and this Plan will continue with respect to the Shares until such Shares are redeemed or automatically converted into another class of shares of the Fund.
SECTION 10. This Plan may not be amended to increase materially the amount of distribution expenses provided for in Section 2 hereof unless such amendment is approved by a vote of at least a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the Shares, and no material amendment to the Plan shall be made unless approved in the manner provided for in Section 5 hereof.
AIM EQUITY FUNDS
(on behalf of its Class B Shares)
Attest: By:
---------------------------- -----------------------------
Assistant Secretary Senior Vice President
|
Effective as of June 21, 2000.
Amended and restated for all Portfolios as of December 31, 2000.
SCHEDULE A
TO
FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
OF
AIM EQUITY FUNDS
(DISTRIBUTION FEE)
MAXIMUM MAXIMUM MAXIMUM
ASSET-BASED SERVICE AGGREGATE
FUND SALES CHARGE FEE FEE
AIM Aggressive Growth Fund 0.75% 0.25% 1.00%
AIM Blue Chip Fund 0.75% 0.25% 1.00%
AIM Capital Development Fund 0.75% 0.25% 1.00%
AIM Charter Fund 0.75% 0.25% 1.00%
AIM Constellation Fund 0.75% 0.25% 1.00%
AIM Dent Demographic Trends 0.75% 0.25% 1.00%
Fund
AIM Emerging Growth Fund 0.75% 0.25% 1.00%
AIM Large Cap Basic Value Fund 0.75% 0.25% 1.00%
AIM Large Cap Growth Fund 0.75% 0.25% 1.00%
AIM Mid Cap Growth Fund 0.75% 0.25% 1.00%
AIM Weingarten Fund 0.75% 0.25% 1.00%
|
EXHIBIT m(13)(g)
AMENDMENT NO. 6
FOURTH AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
The Fourth Amended and Restated Master Distribution Plan (the "Plan"), dated as of June 30, 1998, pursuant to Rule 12b-1 of AIM Equity Funds, Inc., a Maryland corporation, is hereby amended as follows:
Appendix A of the Plan is hereby deleted in its entirety and replaced with the following:
"APPENDIX A
TO
MASTER DISTRIBUTION PLAN OF
AIM EQUITY FUNDS, INC.
(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 as designated below, a Distribution Fee* determined by applying the annual rate set forth below as to each Portfolio (or Class A or Class C thereof) to the average daily net assets of the Portfolio (or Class A or Class C thereof) for the plan year, computed in a manner used for the determination of the offering price of shares of the Portfolio (or Class A or Class C).
MINIMUM MAXIMUM MAXIMUM
ASSET BASED SERVICE AGGREGATE
PORTFOLIO (Class A Shares) SALES CHARGE FEE FEE
--------- ------------ ------- ---------
AIM Aggressive Growth Fund 0.00% 0.25% 0.25%
AIM Charter Fund 0.05% 0.25% 0.30%
AIM Constellation Fund 0.05% 0.25% 0.30%
AIM Weingarten Fund 0.05% 0.25% 0.30%
AIM Blue Chip Fund 0.10% 0.25% 0.35%
AIM Capital Development Fund 0.10% 0.25% 0.35%
AIM Dent Demographic Trends Fund 0.10% 0.25% 0.35%
AIM Emerging Growth Fund 0.10% 0.25% 0.35%
AIM Large Cap Basic Value Fund 0.10% 0.25% 0.35%
AIM Large Cap Growth Fund 0.10% 0.25% 0.35%
AIM Mid Cap Growth Fund 0.10% 0.25% 0.35%
|
MINIMUM MAXIMUM MAXIMUM
ASSET BASED SERVICE AGGREGATE
PORTFOLIO (Class C Shares) SALES CHARGE FEE FEE
--------- ------------ ------- ---------
AIM Aggressive Growth Fund 0.75% 0.25% 1.00%
AIM Charter Fund 0.75% 0.25% 1.00%
AIM Constellation Fund 0.75% 0.25% 1.00%
AIM Weingarten Fund 0.75% 0.25% 1.00%
AIM Blue Chip Fund 0.75% 0.25% 1.00%
AIM Capital Development Fund 0.75% 0.25% 1.00%
AIM Dent Demographic Trends Fund 0.75% 0.25% 1.00%
AIM Emerging Growth Fund 0.75% 0.25% 1.00%
AIM Large Cap Basic Value Fund 0.75% 0.25% 1.00%
AIM Large Cap Growth Fund 0.75% 0.25% 1.00%
AIM Mid Cap Growth 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 Class and the applicable Portfolio.
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: March 30, 2000
-------------- AIM EQUITY FUNDS, INC.
(on behalf of its Class A and Class C Shares)
Attest: /s/ LISA MOSS By: /s/ CAROL F. RELIHAN
------------------- -------------------------------
Assistant Secretary Senior Vice President
|
EXHIBIT m(14)
MASTER DISTRIBUTION PLAN
OF
AIM EQUITY FUNDS
(CLASS A SHARES AND CLASS C SHARES)
SECTION 1. AIM Equity Funds, 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 such 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 or advanced by Distributors to dealers or other institutions that provide personal continuing shareholder service as a service fee pursuant to Section 4 shall be deemed an asset-based sales charge. No provision of this Plan shall be interpreted to prohibit any payments by the Fund during periods when the Fund has suspended or otherwise limited sales.
SECTION 4.
(a) Amounts expended by the Fund under the Plan shall be used in part for the implementation by Distributors of shareholder service arrangements. 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.
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 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 EQUITY FUNDS
(on behalf of its Class A Shares
and Class C Shares)
Attest: /s/ LISA MOSS By: /s/ ROBERT H. GRAHAM
------------------- -----------------------------
Assistant Secretary President
|
Effective as of June 21, 2000.
SCHEDULE A
TO
MASTER DISTRIBUTION PLAN
OF
AIM EQUITY FUNDS
(DISTRIBUTION FEE)
The Fund shall pay the Distributor as full compensation for all services rendered and all facilities furnished under the Distribution Plan for each Portfolio (or Class 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 Aggressive Growth Fund 0.00% 0.25% 0.25%
AIM Blue Chip Fund 0.10% 0.25% 0.35%
AIM Capital Development Fund 0.10% 0.25% 0.35%
AIM Charter Fund 0.05% 0.25% 0.30%
AIM Constellation Fund 0.05% 0.25% 0.30%
AIM Dent Demographic Trends Fund 0.10% 0.25% 0.35%
AIM Emerging Growth Fund 0.10% 0.25% 0.35%
AIM Large Cap Basic Value Fund 0.10% 0.25% 0.35%
AIM Large Cap GrowthFund 0.10% 0.25% 0.35%
AIM Mid Cap Growth Fund 0.10% 0.25% 0.35%
AIM Weingarten Fund 0.05% 0.25% 0.30%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
CLASS C SHARES CHARGE FEE FEE
-------------- ------- ------- ---------
AIM Aggressive Growth Fund 0.75% 0.25% 1.00%
AIM Blue Chip Fund 0.75% 0.25% 1.00%
AIM Capital Development Fund 0.75% 0.25% 1.00%
AIM Charter Fund 0.75% 0.25% 1.00%
AIM Constellation Fund 0.75% 0.25% 1.00%
AIM Dent Demographic Trends Fund 0.75% 0.25% 1.00%
AIM Emerging Growth Fund 0.75% 0.25% 1.00%
AIM Large Cap Basic Value Fund 0.75% 0.25% 1.00%
AIM Large Cap Growth Fund 0.75% 0.25% 1.00%
AIM Mid Cap Growth Fund 0.75% 0.25% 1.00%
AIM Weingarten 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 Fund and A I M Advisors, Inc.
EXHIBIT m(15)
FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
OF
AIM EQUITY FUNDS
(CLASS A SHARES AND CLASS C SHARES)
SECTION 1. AIM Equity Funds, 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 such 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 Disinterested 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 EQUITY FUNDS
(on behalf of its Class A Shares
and Class C Shares)
Attest: /s/ LISA MOSS By: /s/ ROBERT H. GRAHAM
----------------------- -----------------------------
Assistant Secretary President
|
Effective as of June 21, 2000.
Amended and restated for all Portfolios as of July 1, 2000.
SCHEDULE A
TO
FIRST AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
OF
AIM EQUITY FUNDS
(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 Aggressive Growth Fund 0.00% 0.25% 0.25%
AIM Blue Chip Fund 0.10% 0.25% 0.35%
AIM Capital Development Fund 0.10% 0.25% 0.35%
AIM Charter Fund 0.05% 0.25% 0.30%
AIM Constellation Fund 0.05% 0.25% 0.30%
AIM Dent Demographic Trends Fund 0.10% 0.25% 0.35%
AIM Emerging Growth Fund 0.10% 0.25% 0.35%
AIM Large Cap Basic Value Fund 0.10% 0.25% 0.35%
AIM Large Cap Growth Fund 0.10% 0.25% 0.35%
AIM Mid Cap Growth Fund 0.10% 0.25% 0.35%
AIM Weingarten Fund 0.05% 0.25% 0.30%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
CLASS C SHARES CHARGE FEE FEE
-------------- -------- ------- ---------
AIM Aggressive Growth Fund 0.75% 0.25% 1.00%
AIM Blue Chip Fund 0.75% 0.25% 1.00%
AIM Capital Development Fund 0.75% 0.25% 1.00%
AIM Charter Fund 0.75% 0.25% 1.00%
AIM Constellation Fund 0.75% 0.25% 1.00%
AIM Dent Demographic Trends Fund 0.75% 0.25% 1.00%
AIM Emerging Growth Fund 0.75% 0.25% 1.00%
AIM Large Cap Basic Value Fund 0.75% 0.25% 1.00%
AIM Large Cap Growth Fund 0.75% 0.25% 1.00%
AIM Mid Cap Growth Fund 0.75% 0.25% 1.00%
AIM Weingarten Fund 0.75% 0.25% 1.00%
|
EXHIBIT m(21)
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
|
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
12/29/00
|
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
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
|
(1) AIM Large Cap Opportunities Fund intends to close to new investors
on September 29, 2000.
12/29/00
|
Shareholder Service Agreement 6
Fund Fee Rate* Plan Calculation Date
------------------------------------------------------------------------------------------
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
AIM Worldwide Spectrum Fund A Shares 0.25 December 29, 2000
AIM Worldwide Spectrum Fund B Shares 0.25 December 29, 2000
AIM Worldwide Spectrum Fund C Shares 1.00** December 29, 2000
|
*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.
12/29/00
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
|
12/29/00
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%
12/29/00
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.