As filed with the United States Securities and Exchange
Commission on October 18, 2007
1933 Act File No. 333-36074
1940 Act File No. 811-09913
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. _____
Post-Effective Amendment No. 30 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 31
AIM COUNSELOR SERIES TRUST
(Exact Name of Registrant as Specified in Charter)
11 Greenway Plaza, Suite 100, Houston, TX 77046
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (713) 626-1919
John M. Zerr, Esquire
11 Greenway Plaza, Suite 100
Houston, TX 77046
(Name and Address of Agent for Service)
Copies to:
Margaret Gallardo-Cortez, Esquire Christian A. Szautner, Esquire A I M Advisors, Inc. Ballard Spahr Andrews & Ingersoll, LLP 11 Greenway Plaza, Suite 100 1735 Market Street, 51st Floor Houston, TX 77046 Philadelphia, PA 19103-7599 |
Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date), pursuant to paragraph (b) _____ 60 days after filing pursuant to paragraph (a)(1)
[X] on December 20, 2007, pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date), pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a previously filed post-effective amendment.
AIM STRUCTURED CORE FUND
PROSPECTUS
DECEMBER 20, 2007
AIM Structured Core Fund's investment objective is long-term growth of capital.
This prospectus contains important information about the Class A, B, C, R and Investor Class shares of the fund. Please read it before investing and keep it for future reference.
Investor Class shares offered by this prospectus are offered only to grandfathered investors. Please see the section of the prospectus entitled "General Information--Share Class Eligibility--Investor Class Shares."
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.
RISK/RETURN SUMMARY 1 ------------------------------------------------------ PERFORMANCE INFORMATION 1 ------------------------------------------------------ FEE TABLE AND EXPENSE EXAMPLE 2 ------------------------------------------------------ Fee Table 2 Expense Example 2 HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION 3 ------------------------------------------------------ INVESTMENT OBJECTIVE, STRATEGIES AND RISKS 4 ------------------------------------------------------ Objective and Strategies 4 Risks 5 DISCLOSURE OF PORTFOLIO HOLDINGS 6 ------------------------------------------------------ FUND MANAGEMENT 6 ------------------------------------------------------ The Advisor(s) 6 Advisor Compensation 6 Portfolio Manager(s) 6 OTHER INFORMATION 7 ------------------------------------------------------ Sales Charges 7 Dividends and Distributions 7 FINANCIAL HIGHLIGHTS 8 ------------------------------------------------------ GENERAL INFORMATION A-1 ------------------------------------------------------ Choosing a Share Class A-1 Share Class Eligibility A-1 Distribution and Service (12b-1) Fees A-2 Initial Sales Charges (Class A Shares Only) A-2 Contingent Deferred Sales Charges (CDSCs) A-4 Redemption Fees A-5 Purchasing Shares A-6 Redeeming Shares A-8 Exchanging Shares A-9 Rights Reserved by the Funds A-11 Pricing of Shares A-11 Taxes A-12 Payments to Financial Advisors A-13 Excessive Short-Term Trading Activity (Market Timing) Disclosures A-13 OBTAINING ADDITIONAL INFORMATION Back Cover ------------------------------------------------------ |
The AIM Family of Funds, AIM and Design, AIM, AIM Funds, AIM Funds and Design, AIM Investments, AIM Investor, AIM Lifetime America, AIM LINK, AIM Institutional Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM de Fondos and Design, Invierta con DISCIPLINA, Invest with DISCIPLINE, The AIM College Savings Plan, AIM Solo 401(k), AIM Investments and Design and Your goals. Our solutions. are registered service marks and AIM Bank Connection, AIM Internet Connect, AIM Private Asset Management, AIM Private Asset Management and Design, AIM Stylized and/or Design, AIM Alternative Assets and Design and myaim.com are service marks of A I M Management Group Inc. AIM Trimark is a registered service mark of A I M Management Group Inc. and AIM Funds Management 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.
INVESTMENT OBJECTIVE
The fund's investment objective is long-term growth of capital.
PRIMARY INVESTMENT STRATEGIES
The fund normally invests at least 80% of its assets in a diversified portfolio
of equity securities of large capitalization companies.
The portfolio managers use a quantitative, research based model to select
potential investment securities. They then use a proprietary and non-
proprietary computer model to forecast risks and transaction costs. The
information gathered from this process is used to structure the investment
portfolio.
The fund uses the S&P 500 Index as a guide in structuring the portfolio and
selecting securities, but the fund is not an index fund and will invest in
securities not included in the index.
The principal type of equity securities purchased by the fund is common
stock. The fund may invest up to 20% of its assets in foreign securities and up
to 20% of its assets in debt securities.
The fund may also invest in derivative instruments such as futures contracts
and equity linked derivatives.
Please see "Investment Objective, Strategies and Risks" for additional
information regarding the fund's investment strategies.
PRINCIPAL RISKS
Among the principal risks of investing in the fund, which could adversely affect its net asset value, yield and total return are:
Market Risk Leverage Risk Derivatives Interest Rate Risk Equity Securities Risk Risk Foreign Securities Risk Credit Risk Management Risk |
Please see "Investment Objective, Strategies and Risks" for a description of
these risks and other risks of investing in the fund.
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 rise and fall with the prices of the
securities in which the fund invests. An investment in the fund is not a deposit
in a bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other governmental agency.
No performance information is available for the fund because it has not yet completed a full calendar year of operations. In the future, the fund will disclose performance information in a bar chart and performance table. Such disclosure will give some indication of the risks of an investment in the fund by comparing the fund's performance with a broad measure of market performance and by showing changes in the fund's performance from year to year.
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 INVESTOR investment) CLASS A CLASS B CLASS C CLASS R CLASS ------------------------------------------------------------------------------------ Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) 5.50% None None 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% None(1) None(1) ------------------------------------------------------------------------------------------------- |
ANNUAL FUND OPERATING EXPENSES(2) ------------------------------------------------------------------------------------ (expenses that are deducted from INVESTOR fund assets) CLASS A CLASS B CLASS C CLASS R CLASS ------------------------------------------------------------------------------------------------- Management Fees % % % % 0.60% Distribution and/or Service (12b-1) Fees 0.25 Other Expenses(3) 6.03 Acquired Fund Fees and Expenses(4) 0.01 Total Annual Fund Operating Expenses 6.89 Fee Waiver(5) 5.86 Net Annual Fund Operating Expenses 1.03 ------------------------------------------------------------------------------------------------- |
(1) [A contingent deferred sales charge may apply in some cases. See "General Information -- Contingent Deferred Sales Charges (CDSCs)."
(2) There is no guarantee that actual expenses will be the same as those shown in the table.
(3) Other Expenses are based on estimated amounts for the current fiscal year.
(4) Acquired Fund Fees and Expenses are not fees or expenses incurred by the fund directly but are expenses of the investment companies in which the fund invests. You incur these fees and expenses indirectly through the valuation of the fund's investment in those investment companies. As a result, the Net Annual Fund Operating Expenses listed above may exceed the expense limit numbers reflected below in footnote 4. The impact of the Acquired Fund Fees and Expenses are included in the total returns of the fund.
(5) The fund's advisor has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit Total Annual Fund Operating Expense (excluding certain items discussed below) of Class A, Class B, Class C, Class R and Investor Class shares to 1.00%, 1.75%, 1.75%, 1.25% and 1.00% of average daily net assets, respectively. In determining the advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the Net Annual Fund Operating Expenses to exceed the numbers reflected above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items; (v) expenses related to a merger or reorganization, as approved by the fund's Board of Trustees; and (vi) expenses that the fund has incurred but did not actually pay because of an expense offset arrangement. Currently, the expense offset arrangements from which the fund may benefit are in the form of credits that the fund receives from banks where the fund or its transfer agent has deposit accounts in which it holds uninvested cash. In addition, the fund may also benefit from a one time credit to be used to offset custodian expenses. These credits are used to pay certain expenses incurred by the fund. This expense limitation agreement is in effect through at least June 30, 2008. The fee waiver reflects this agreement.]
If a financial institution is managing your account you may also be charged a
transaction or other fee by such financial institution.
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 expense example assumes you:
(i) invest $10,000 in the fund for the time periods indicated;
(ii) redeem all of your shares at the end of the periods indicated;
(iii) earn a 5% return on your investment before operating expenses each year;
(iv) incur the same amount in operating expenses each year (after giving effect to any applicable contractual fee waivers and/or expense reimbursements); and
(v) incur the applicable initial sales charges (see "General Information--Choosing a Share Class" section of this prospectus for applicability of initial sales charge)
To the extent fees are waived and/or expenses are reimbursed voluntarily, your 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
---------------------------------------------------------------------------------
Class A
Class B
Class C
Class R
Investor Class $105 $1,511
---------------------------------------------------------------------------------
|
You would pay the following expenses if you did not redeem your shares:
1 YEAR 3 YEARS
---------------------------------------------------------------------------------
Class A
Class B
Class C
Class R
Investor Class $105 $1,511
---------------------------------------------------------------------------------
|
The settlement agreement between A I M Advisors, Inc. and certain of its affiliates and the New York Attorney General requires A I M Advisors, Inc. and certain of its affiliates to provide certain hypothetical information regarding investment and expense information. The chart below is intended to reflect the annual and cumulative impact of the fund's expenses, including investment advisory fees and other fund costs, on the fund's return over a 10-year period. The example reflects the following assumptions:
- You invest $10,000 in the fund and hold it for the entire 10 year period;
- Your investment has a 5% return before expenses each year;
- The fund's current annual expense ratio includes any applicable contractual fee waiver or expense reimbursement for the period committed;
- Hypotheticals both with and without any applicable initial sales charge applied (see "General Information--Choosing a Share Class" section of this prospectus for applicability of initial sales charge); and
- There is no sales charge on reinvested dividends.
There is no assurance that the annual expense ratio will be the expense ratio for the fund classes for any of the years shown. To the extent that A I M Advisors, Inc. and certain of its affiliates make any fee waivers and/or expense reimbursements pursuant to a voluntary arrangement, your actual expenses may be less. This is only a hypothetical presentation made to illustrate what expenses and returns would be under the above scenarios, your actual returns and expenses are likely to differ (higher or lower) from those shown below.
CLASS A (INCLUDES MAXIMUM SALES CHARGE) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) % % % % % Cumulative Return Before Expenses % % % % % Cumulative Return After Expenses % % % % % End of Year Balance $ $ $ $ $ Estimated Annual Expenses $ $ $ $ $ -------------------------------------------------------------------------------------------- CLASS A (INCLUDES MAXIMUM SALES CHARGE) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 Annual Expense Ratio(1) % % % % % Cumulative Return Before Expenses % % % % % Cumulative Return After Expenses % % % % % End of Year Balance $ $ $ $ $ Estimated Annual Expenses $ $ $ $ $ -------------------------------------------------------------------------------------------- |
CLASS A (WITHOUT MAXIMUM SALES CHARGE) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) % % % % % Cumulative Return Before Expenses % % % % % Cumulative Return After Expenses % % % % % End of Year Balance $ $ $ $ $ Estimated Annual Expenses $ $ $ $ $ -------------------------------------------------------------------------------------------- CLASS A (WITHOUT MAXIMUM SALES CHARGE) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) % % % % % Cumulative Return Before Expenses % % % % % Cumulative Return After Expenses % % % % % End of Year Balance $ $ $ $ $ Estimated Annual Expenses $ $ $ $ $ -------------------------------------------------------------------------------------------- |
CLASS B(2) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) % % % % % Cumulative Return Before Expenses % % % % % Cumulative Return After Expenses % % % % % End of Year Balance $ $ $ $ $ Estimated Annual Expenses $ $ $ $ $ -------------------------------------------------------------------------------------------- CLASS B(2) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) % % % % % Cumulative Return Before Expenses % % % % % Cumulative Return After Expenses % % % % % End of Year Balance $ $ $ $ $ Estimated Annual Expenses $ $ $ $ $ -------------------------------------------------------------------------------------------- |
CLASS C(2) YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) % % % % % Cumulative Return Before Expenses % % % % % Cumulative Return After Expenses % % % % % End of Year Balance $ $ $ $ $ Estimated Annual Expenses $ $ $ $ $ -------------------------------------------------------------------------------------------- CLASS C(2) YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) % % % % % Cumulative Return Before Expenses % % % % % Cumulative Return After Expenses % % % % % End of Year Balance $ $ $ $ $ Estimated Annual Expenses $ $ $ $ $ -------------------------------------------------------------------------------------------- |
CLASS R YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) % % % % % Cumulative Return Before Expenses % % % % % Cumulative Return After Expenses % % % % % End of Year Balance $ $ $ $ $ Estimated Annual Expenses $ $ $ $ $ -------------------------------------------------------------------------------------------- CLASS R YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) % % % % % Cumulative Return Before Expenses % % % % % Cumulative Return After Expenses % % % % % End of Year Balance $ $ $ 1 $ $ Estimated Annual Expenses $ $ $ $ $ -------------------------------------------------------------------------------------------- |
INVESTOR CLASS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 1.03% 6.89% 6.89% 6.89% 6.89% Cumulative Return Before Expenses 5.00% 10.25% 15.76% 21.55% 27.63% Cumulative Return After Expenses 3.97% 2.00% 0.08% (1.81)% (3.67)% End of Year Balance $10,397.00 $10,200.50 $10,007.71 $ 9,818.56 $ 9,632.99 Estimated Annual Expenses $ 105.04 $ 709.58 $ 696.17 $ 683.01 $ 670.11 -------------------------------------------------------------------------------------------- INVESTOR CLASS YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 -------------------------------------------------------------------------------------------- Annual Expense Ratio(1) 6.89% 6.89% 6.89% 6.89% 6.89% Cumulative Return Before Expenses 34.01% 40.71% 47.75% 55.13% 62.89% Cumulative Return After Expenses (5.49)% (7.28)% (9.03)% (10.75)% (12.44)% End of Year Balance $ 9,450.93 $ 9,272.30 $ 9,097.06 $ 8,925.12 $ 8,756.44 Estimated Annual Expenses $ 657.44 $ 645.02 $ 632.82 $ 620.86 $ 609.13 -------------------------------------------------------------------------------------------- |
[(1) Your actual expenses may be higher or lower than those shown.
(2) The hypothetical assumes you hold your investment for a full 10 years. Therefore, any applicable deferred sales charge that might apply in years one through six for Class B and year one for Class C, have not been deducted.]
OBJECTIVE AND STRATEGIES
The fund's investment objective is long-term growth of capital.
The investment objective may be changed by the Board of Trustees without
shareholder approval.
The fund seeks to meet its objective by investing, normally, at least 80% of
its assets in a diversified portfolio of equity securities of large
capitalization companies. The principal type of equity securities purchased by
the fund is common stock.
The fund considers a company to be a large capitalization company if it has
a market capitalization, at the time of purchase, no smaller than the smallest
capitalized company included in the S&P 500 Index (the benchmark index). The
fund uses the S&P 500 Index as a guide in structuring and selecting its
investments, but will invest in both benchmark index and non-benchmark index
securities.
The fund may invest up to 20% of its assets in foreign securities. The fund
may invest up to 20% of its assets in debt securities.
The fund may also invest in derivative instruments such as futures contracts
and equity linked derivatives including exchange traded funds.
The fund's investments in the type of securities described in this
prospectus varies from time to time, and at any time, the fund may not be
invested in all types of securities described in this prospectus. Any percentage
limitations with respect to assets of the fund are applied at the time of
purchase.
The fund seeks to outperform the benchmark index by quantitatively
evaluating fundamental and technical factors to forecast individual security
returns and will apply proprietary and non-proprietary risk and transaction cost
models to forecast individual security risk and transaction costs. The portfolio
managers incorporate these individual security forecasts, using a proprietary
program, to construct the optimal portfolio holdings and further manage risks.
The portfolio managers focus on securities they believe have favorable
prospects for above average growth while keeping a low deviation between the
return of the S&P 500 Index and the return of the portfolio.
The portfolio managers will attempt to overweight securities with positive
characteristics identified in the evaluation process and underweight securities
with negative characteristics. The security and portfolio evaluation process is
repeated periodically.
The portfolio managers will consider selling or reducing a security position
(i) if the forecasted return of a security becomes less attractive relative to
industry peers, or (ii) if a particular security's risk profile changes.
The fund typically maintains a portion of its assets in cash, which is generally invested in money market funds advised by the fund's adviser. The fund holds cash to handle its daily cash needs, which include payment of fund expenses, redemption requests and securities transactions. The amount of cash held by the fund may increase if the fund takes a temporary defensive position. The fund may take a temporary defensive position when it receives unusually large redemption requests; or if there are inadequate investment opportunities due to adverse market, economic, political or other conditions. A larger amount of cash could negatively affect the fund's investment results in a period of rising market prices; conversely it could reduce the magnitude of the fund's loss in the event of falling market prices and provide liquidity to make additional investments or to meet redemptions. As a result, the fund may not achieve its investment objective.
RISKS
The principal risks of investing in the fund are:
Market Risk--The prices of securities held by the fund may decline in
response to certain events, including those directly involving the companies
whose securities are owned by the fund; general economic and market conditions;
regional or global economic instability; and currency and interest rate
fluctuations.
Interest Rate Risk--Interest rate risk refers to the risk that bond prices generally fall as interest rates rise; conversely, bond prices generally rise as interest rates fall. Specific bonds differ in their sensitivity to changes in interest rates depending on specific characteristics of each bond. A measure investors commonly use to determine this sensitivity is called duration. The longer the duration of a particular bond, the greater is its price sensitivity to interest rates. Similarly, a longer duration portfolio of securities has greater price sensitivity. Duration is determined by a number of factors including coupon rate, whether the coupon is fixed or floating, time to maturity, call or put features, and various repayment features.
Foreign Securities Risk--Foreign securities have additional risks, including fluctuations in the value of the U.S. dollar relative to the values of other currencies, and may have relatively low market liquidity, decreased publicly available information about issuers, inconsistent and potentially less stringent accounting, auditing and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers, expropriation, nationalization or other adverse political or economic developments and the difficulty of enforcing obligations in other countries. Investments in foreign securities may also be subject to dividend withholding or confiscatory taxes, currency blockage and/or transfer restrictions.
Leverage Risk--The use of derivatives may give rise to a form of leverage. Leverage may cause the fund's portfolio to be more volatile than if the portfolio had not been leveraged because leverage can exaggerate the effect of any increase or decrease in the value of securities held by the fund.
Equity Securities Risk--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.
Credit Risk--Credit risk is the risk of loss on an investment due to the deterioration of an issuer's financial health. Such a deterioration of financial health may result in a reduction of the credit rating of the issuer's securities and may lead to the issuer's inability to honor its contractual obligations including making timely payment of interest and principal. Credit ratings are a measure of credit quality. Although a downgrade or upgrade of a bond's credit ratings may or may not affect its price, a decline in credit quality may make bonds less attractive, thereby driving up the yield on the bond and driving down the price. Declines in credit quality can result in bankruptcy for the issuer and permanent loss of investment.
Derivatives Risk--The value of "derivatives" -- so-called because their value "derives" from the value of an underlying asset (including an underlying security), reference rate or index -- may rise or fall more rapidly than other investments. For some derivatives, it is possible to lose more than the amount invested in the derivative. If the fund uses derivatives to "hedge" a portfolio risk, it is possible that the hedge may not succeed. This may happen for various reasons, including unexpected changes in the value of the rest of the fund's portfolio. Over the counter derivatives are also subject to counterparty risk, which is the risk that the other party to the contract will not fulfill its contractual obligation to complete the transaction with the fund.
Management Risk--There is no guarantee that the investment techniques and risk analyses used by the fund's portfolio managers will produce the desired results.
The fund's portfolio holdings are disclosed on a regular basis in its semi-annual and annual reports to shareholders, and on Form N-Q, which is filed with the Securities and Exchange Commission (SEC) within 60 days of the fund's first and third fiscal quarter-ends. In addition, portfolio holdings information for the fund is available at http://www.aiminvestments.com. To reach this information, access the fund's overview page on the website. Links to the following fund information are located in the upper right side of this website page:
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APPROXIMATE DATE OF INFORMATION REMAINS
INFORMATION WEBSITE POSTING POSTED ON WEBSITE
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Top ten holdings as of month-end 15 days after month-end Until posting of the following month's top
ten holdings
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Complete portfolio holdings as of 30 days after calendar quarter-end For one year
calendar quarter-end
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A description of the fund's policies and procedures with respect to the disclosure of the fund's portfolio holdings is available in the fund's Statement of Additional Information, which is available at http://www.aiminvestments.com.
THE ADVISOR(S)
A I M Advisors, Inc. (the advisor or AIM) serves as the fund's investment advisor and manages the investment operations of the fund and has agreed to perform or arrange the performance of the fund's day-to-day management. The advisor is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. INVESCO Institutional (N.A.), Inc. (the subadvisor or INVESCO Institutional) is located at One Midtown Plaza, 1360 Peachtree Street, N.E., Atlanta, Georgia 30309. The subadvisor is responsible for the fund's day-to-day management, including the fund's investment decisions and the execution of securities transactions with respect to 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 1979. Today, the advisor, together with its subsidiaries, advises or manages over 225 investment portfolios, including the fund, encompassing a broad range of investment objectives.
Civil lawsuits, including a regulatory proceeding and purported class action and shareholder derivative suits, have been filed against certain AIM funds, INVESCO Funds Group, Inc. (IFG) (the former investment advisor to certain AIM funds), AIM, A I M Distributors, Inc. (ADI) (the distributor of the retail AIM funds) and/or related entities and individuals, depending on the lawsuit, alleging among other things: (i) that the defendants permitted improper market timing and related activity in the funds; and (ii) that certain funds inadequately employed fair value pricing.
Additional civil lawsuits related to the above or other matters may be filed
by regulators or private litigants against the AIM funds, IFG, AIM, ADI and/or
related entities and individuals in the future. You can find more detailed
information concerning all of the above matters, including the parties to the
civil lawsuits and summaries of the various allegations and remedies sought in
such lawsuits, in the fund's Statement of Additional Information.
As a result of the matters discussed above, investors in the AIM funds might
react by redeeming their investments. This might require the funds to sell
investments to provide for sufficient liquidity and could also have an adverse
effect on the investment performance of the funds.
ADVISOR COMPENSATION
The advisor is to receive a fee from the fund calculated at the annual rate of .
A discussion regarding the basis for the Board of Trustees approval of the investment advisory agreement and the sub-advisory agreement of the fund is available in the fund's most recent report to shareholders for the period ended August 31.
PORTFOLIO MANAGER(S)
Investment decisions for the fund are made by investment management teams at INVESCO Institutional. The following individuals are jointly and primarily responsible for the day-to-day management of the fund's portfolio:
- Jeremy S. Lefkowitz, is Portfolio Manager and the lead manager of INVESCO Institutional's Structured Products Group (SPG) Portfolio Management Team. He has been responsible for the fund since inception and has been associated with the advisor and/or its affiliates since 1982. As the lead manager, Mr. Lefkowitz generally has final authority over all aspects of the fund's investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio construction techniques, portfolio risk assessment, and the management of daily cash flows in accordance with portfolio holdings. The degree to which Mr. Lefkowitz may perform these functions and the nature of these functions, may change from time to time.
- Maureen Donnellan, Portfolio Manager, who has been responsible for the fund since inception and has been associated with the subadvisor and/or its affiliates since 1974.
- W. Lawson McWhorter, Portfolio Manager, who has been responsible for the fund since inception and has been associated with the subadvisor and/or its affiliates since 2005. In 2004, he was Head Trader for Managed Quantitative Advisors. From 2000 to 2003, he was Managing Partner at Balsam Capital Management, LLC.
- William E. Merson, Portfolio Manager, who has been responsible for the fund since inception and has been associated with the subadvisor and/or its affiliates since 1984.
- Daniel Tsai, Portfolio Manager, who has been responsible for the fund since inception and has been associated with the subadvisor and/or its affiliates since 2000.
- Anne M. Unflat, Portfolio Manager, who has been responsible for the fund since inception and has been associated with the subadvisor and/or its affiliates since 1988.
The portfolio managers are assisted by the U.S. SPG Research Team, which is comprised of portfolio managers and research analysts. Team members provide research support and make securities recommendations with respect to the fund's portfolio, but do not have day-to-day management responsibilities with respect to the fund's portfolio. Members of the team may change from time to time. More information on the portfolio manager(s) and the team, including biographies of members of the team, may be found on the advisor's website http://www.aiminvestments.com. The website is not part of this prospectus.
The fund's Statement of Additional Information provides additional information about the portfolio managers' investments in the fund, a description of their compensation structure, and information regarding other accounts they manage.
SALES CHARGES
Purchases of Class A shares of AIM Structured Core Fund are subject to the maximum 5.50% initial sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in the "General Information--Initial Sales Charges (Class A Shares Only)" section of this prospectus. Certain purchases of Class A shares at net asset value may be subject to the contingent deferred sales charge listed in that section. Purchases of Class B and Class C shares are subject to the contingent deferred sales charges listed in that section. Certain purchases of Class R shares may be subject to the contingent deferred sales charge listed in that section. For more information on contingent deferred sales charges, see "General Information -- Contingent Deferred Sales Charges (CDSCs)" section of this prospectus.
DIVIDENDS AND DISTRIBUTIONS
The fund expects that its distributions, if any, will consist of both capital gains and ordinary income.
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 has been audited by , whose report, along with the fund's financial statements, is included in the fund's annual report, which is available upon request.
As of the date of this prospectus, the Investor Class shares had not yet commenced operations and, therefore, financial information for such shares is not available.
CLASS A
------------------
MARCH 31, 2006
(DATE OPERATIONS
COMMENCED)
THROUGH AUGUST 31,
2006
------------------
Net asset value, beginning of period $
--------------------------------------------------------------------------------
Income from investment operations:
Net investment income
--------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized)
================================================================================
Total from investment operations
================================================================================
Net asset value, end of period $
________________________________________________________________________________
================================================================================
Total return %
________________________________________________________________________________
================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $
________________________________________________________________________________
================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements %
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Without fee waivers and/or expense reimbursements %
================================================================================
Ratio of net investment income to average net assets %
________________________________________________________________________________
================================================================================
Portfolio turnover rate %
________________________________________________________________________________
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CLASS B
------------------
MARCH 31, 2006
(DATE OPERATIONS
COMMENCED)
THROUGH AUGUST 31,
2006
------------------
Net asset value, beginning of period $
--------------------------------------------------------------------------------
Income from investment operations:
Net investment income
--------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized)
================================================================================
Total from investment operations
================================================================================
Net asset value, end of period $
________________________________________________________________________________
================================================================================
Total return %
________________________________________________________________________________
================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $
________________________________________________________________________________
================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements %
--------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements %
================================================================================
Ratio of net investment income to average net assets %
________________________________________________________________________________
================================================================================
Portfolio turnover rate %
________________________________________________________________________________
================================================================================
|
CLASS C
------------------
MARCH 31, 2006
(DATE OPERATIONS
COMMENCED)
THROUGH AUGUST 31,
2006
------------------
Net asset value, beginning of period $
--------------------------------------------------------------------------------
Income from investment operations:
Net investment income
--------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized)
================================================================================
Total from investment operations
================================================================================
Net asset value, end of period $
________________________________________________________________________________
================================================================================
Total return %
________________________________________________________________________________
================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $
________________________________________________________________________________
================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements %
--------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements %
================================================================================
Ratio of net investment income to average net assets %
________________________________________________________________________________
================================================================================
Portfolio turnover rate %
________________________________________________________________________________
================================================================================
|
CLASS R
------------------
MARCH 31, 2006
(DATE OPERATIONS
COMMENCED)
THROUGH AUGUST 31,
2006
------------------
Net asset value, beginning of period $
--------------------------------------------------------------------------------
Income from investment operations:
Net investment income
--------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized)
================================================================================
Total from investment operations
================================================================================
Net asset value, end of period $
________________________________________________________________________________
================================================================================
Total return %
________________________________________________________________________________
================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $
________________________________________________________________________________
================================================================================
Ratio of expenses to average net assets:
With fee waivers and/or expense reimbursements %
--------------------------------------------------------------------------------
Without fee waivers and/or expense reimbursements %
================================================================================
Ratio of net investment income to average net assets %
________________________________________________________________________________
================================================================================
Portfolio turnover rate %
________________________________________________________________________________
================================================================================
|
-------------
THE AIM FUNDS
-------------
GENERAL INFORMATION
-----------------------------------------------------------------------------------------------------------------------------
In addition to the fund, AIM serves as investment advisor to many other mutual funds that are offered to retail investors.
The following information is about all the AIM funds that offer retail share classes.
CHOOSING A SHARE CLASS
Each of the funds offer multiple classes of shares. Each class represents an interest in the same portfolio of investments.
Certain classes have higher expenses than other classes which may lower the return on your investment when compared to a less
expensive class. In deciding which class of shares to purchase, you should consider the following attributes of the various
share classes, among other things: (i) the eligibility requirements that apply to purchases of a particular class, (ii) the
initial sales charges and contingent deferred sales charges (CDSCs), if any, applicable to the class, (iii) the 12b-1 fee, if
any, paid by the class, and (iv) any services you may receive from a financial intermediary. Please contact your financial
advisor to assist you in making your decision. In addition to the share classes shown in the chart below, AIM Money Market
Fund offers AIM Cash Reserve Shares and AIM Summit Fund offers Class P shares.
AIM FUND RETAIL SHARE CLASSES
CLASS A CLASS A3 CLASS B CLASS C CLASS R INVESTOR CLASS
-----------------------------------------------------------------------------------------------------------------------------
- Initial sales - No initial - No initial - No initial - No initial - No initial
charge which may sales charge sales charge sales charge sales charge sales charge
be waived or
reduced
- Contingent - No contingent - Contingent - Contingent - Contingent - No contingent
deferred sales deferred sales deferred sales deferred sales deferred sales deferred sales
charge on certain charge charge on charge on charge on charge
redemptions redemptions redemptions certain
within six years within one redemptions
year(3)
- 12b-1 fee of - 12b-1 fee - 12b-1 fee - 12b-1 fee - 12b-1 fee - 12b-1 fee
0.25%(1) of 0.25% of 1.00% of 1.00%(4) of 0.50% of 0.25%(1)
- Does not - Converts to - Does not - Does not - Does not
convert to Class A shares convert to convert to convert to
Class A shares on or about the Class A shares Class A shares Class A shares
end of the month
which is at
least eight
years after the
date on which
shares were
purchased along
with a pro rata
portion of
reinvested
dividends and
distributions(2)
- Generally - Available - Purchase - Generally - Generally, - Generally
more appropriate only through a orders limited more available only closed to new
for long-term limited number to amount less appropriate for to employee investors
investors of funds than $100,000 short-term benefit plans
investors
- Purchase orders
limited to
amounts less
than $1,000,000
-----------------------------------------------------------------------------------------------------------------------------
(1) Class A shares of AIM Tax-Free Intermediate Fund and Investor Class shares of AIM Money Market Fund, AIM Tax-Exempt Cash
Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio do not have a 12b-1
fee.
(2) Class B shares of AIM Money Market Fund convert to AIM Cash Reserve Shares.
(3) CDSC does not apply to redemption of Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund unless you
received Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund through an exchange from Class C shares from
another AIM Fund that is still subject to a CDSC.
(4) Class C shares of AIM Floating Rate Fund have a 12b-1 fee of 0.75%.
SHARE CLASS ELIGIBILITY
CLASS A, A3, B, C AND AIM CASH RESERVE SHARES
Class A, A3, B, C and AIM Cash Reserve Shares are available to all retail investors, including individuals, trusts,
corporations and other business and charitable organizations and employee benefit plans. The share classes offer different
fee structures which are intended to compensate financial intermediaries for services provided in connection with the sale of
shares and continued maintenance of the customer relationship. You should consider the services provided by your financial
advisor and any other intermediaries who will be involved in the servicing of your account when choosing a share class.
Class B shares are not available as an investment for retirement plans maintained pursuant to Section 401 of the
Internal Revenue Code (the Code). These plans include 401(k) plans (including AIM Solo 401(k) plans), money purchase pension
plans and profit sharing plans. However, plans that have existing accounts invested in Class B shares will continue to be
allowed to make additional purchases.
CLASS P SHARES
In addition to the other share classes discussed herein, the AIM Summit Fund offers Class P shares, which were historically
sold only through the AIM Summit Investors Plans I and II (the Summit Plans). Class P shares are sold with no initial sales
charge and have a 12b-1 fee of 0.10%. However, Class P shares are not sold to members of the general public. Only
shareholders who had accounts in the Summit Plans at the close of business on December 8, 2006, may purchase Class P shares
and only until the total of their combined investments in the Plans and in Class P shares directly equals the face amount of
their former Plan under the 30 year extended investment option. The face amount of a Plan is the combined total of all
scheduled monthly investments under the Plan. For a Plan with a scheduled monthly investment of $100.00, the face amount
would have been $36,000.00 under the 30 year extended investment option.
|
MCF--07/07 A-1
-------------
THE AIM FUNDS
-------------
CLASS R SHARES
Class R shares are generally available only to employee benefit plans. These may include, for example, retirement and
deferred compensation plans maintained pursuant to Sections 401, 403, and 457 of the Code; nonqualified deferred compensation
plans; health savings accounts maintained pursuant to Section 223 of the Code; and voluntary employees' beneficiary
arrangements maintained pursuant to Section 501(c)(9) of the Code. Retirement plans maintained pursuant to Section 401
generally include 401(k) plans, profit sharing plans, money purchase pension plans, and defined benefit plans. Retirement
plans maintained pursuant to Section 403 must be established and maintained by non-profit organizations operating pursuant to
Section 501(c)(3) of the Code in order to purchase Class R shares. Class R shares are generally not available for individual
retirement accounts (IRAs) such as traditional, Roth, SEP, SAR-SEP and SIMPLE IRAs.
INVESTOR CLASS SHARES
Some of the funds offer Investor Class shares. Investor Class shares are sold with no initial sales charge and have a maximum
12b-1 fee of 0.25%. Investor Class shares are not sold to members of the general public. Only the following persons may
purchase Investor Class shares:
- Investors who established accounts prior to April 1, 2002, in Investor Class shares who have continuously maintained an
account in Investor Class shares (this includes anyone listed in the registration of an account, such as a joint owner,
trustee or custodian, and immediate family members of such persons). These investors are referred to as "grandfathered
investors."
- Customers of certain financial intermediaries which have had relationships with the funds' distributor or any funds that
offered Investor Class shares prior to April 1, 2002, who have continuously maintained such relationships. These
intermediaries are referred to as "grandfathered intermediaries."
- Employee benefit plans; provided, however, that retirement plans maintained pursuant to Section 403 must be established
and maintained by non-profit organizations operating pursuant to Section 501(c)(3) of the Code in order to purchase
Investor Class shares, unless the plan is considered a grandfathered investor or the account is opened through a
grandfathered intermediary. Investor Class shares are generally not available for IRAs, unless the IRA depositor is
considered a grandfathered investor or the account is opened through a grandfathered intermediary.
- Any trustee, director, officer or employee of any fund or of INVESCO PLC or any of its subsidiaries or affiliates, or
any employee benefit plan maintained by any of them (this includes any immediate family members of such persons).
DISTRIBUTION AND SERVICE (12B-1) FEES
Except as noted below, each fund has adopted a distribution plan pursuant to SEC Rule 12b-1. A 12b-1 plan allows a fund to
pay distribution fees to A I M Distributors, Inc. (AIM Distributors) to compensate or reimburse, as applicable, AIM
Distributors for its efforts in connection with the sale and distribution of the fund's shares and for services provided to
shareholders, all or a substantial portion of which are paid to the dealer of record. Because the funds pay these fees out of
their 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.
The following funds and share classes do not have 12b-1 plans:
- AIM Tax-Free Intermediate Fund, Class A shares. - Premier Portfolio, Investor Class shares.
- AIM Money Market Fund, Investor Class shares. - Premier U.S. Government Money Portfolio, Investor Class shares.
- AIM Tax-Exempt Cash Fund, Investor Class shares. - Premier Tax-Exempt Portfolio, Investor Class shares.
INITIAL SALES CHARGES (CLASS A SHARES ONLY)
The funds are grouped into four categories for determining initial sales charges. The "Other Information" section of each
fund's prospectus will tell you the sales charge category in which the fund is classified. As used below, the term "offering
price" with respect to all categories of Class A shares includes the initial sales charge.
CATEGORY I INITIAL SALES CHARGES CATEGORY II INITIAL SALES CHARGES
------------------------------------------------------------- -------------------------------------------------------------
INVESTOR'S SALES CHARGE INVESTOR'S SALES CHARGE
-------------------------- --------------------------
AMOUNT INVESTED AS A % OF AS A % OF AMOUNT INVESTED AS A % OF AS A % OF
IN A SINGLE TRANSACTION OFFERING PRICE INVESTMENT IN A SINGLE TRANSACTION OFFERING PRICE INVESTMENT
------------------------------------------------------------- -------------------------------------------------------------
Less than $ 25,000 5.50% 5.82% Less than $ 50,000 4.75% 4.99%
$ 25,000 but less than $ 50,000 5.25 5.54 $ 50,000 but less than $ 100,000 4.00 4.17
$ 50,000 but less than $ 100,000 4.75 4.99 $100,000 but less than $ 250,000 3.75 3.90
$100,000 but less than $ 250,000 3.75 3.90 $250,000 but less than $ 500,000 2.50 2.56
$250,000 but less than $ 500,000 3.00 3.09 $500,000 but less than $1,000,000 2.00 2.04
$500,000 but less than $1,000,000 2.00 2.04
------------------------------------------------------------- -------------------------------------------------------------
|
-------------
THE AIM FUNDS
-------------
CATEGORY III INITIAL SALES CHARGES CATEGORY IV INITIAL SALES CHARGES
------------------------------------------------------------- -------------------------------------------------------------
INVESTOR'S SALES CHARGE INVESTOR'S SALES CHARGE
-------------------------- --------------------------
AMOUNT INVESTED AS A % OF AS A % OF AMOUNT INVESTED AS A % OF AS A % OF
IN A SINGLE TRANSACTION OFFERING PRICE INVESTMENT IN A SINGLE TRANSACTION OFFERING PRICE INVESTMENT
------------------------------------------------------------- -------------------------------------------------------------
Less than $ 100,000 1.00% 1.01% Less than $ 100,000 2.50% 2.56%
$100,000 but less than $ 250,000 0.75 0.76 $100,000 but less than $ 250,000 2.00 2.04
$250,000 but less than $1,000,000 0.50 0.50 $250,000 but less than $ 500,000 1.50 1.52
$500,000 but less than $1,000,000 1.25 1.27
------------------------------------------------------------- -------------------------------------------------------------
CLASS A SHARES SOLD WITHOUT AN INITIAL SALES CHARGE
Certain categories of investors are permitted to purchase and certain intermediaries are permitted to sell Class A shares of
the funds without an initial sales charge because their transactions involve little or no expense. The investors who are
entitled to purchase Class A shares without paying an initial sales charge include the following:
- Any current or retired trustee, director, officer or employee of any fund or of INVESCO PLC or any of its subsidiaries
or affiliates, or any foundation, trust or employee benefit plan maintained by any of them (this includes any immediate
family members of such persons).
- Any registered representative or employee of any intermediary who has an agreement with AIM Distributors to sell shares
of the funds (this includes any immediate family members of such persons).
- Any investor who purchases their shares through an approved fee-based program (this may include any type of account for
which there is some alternative arrangement made between the investor and the intermediary to provide for compensation
of the intermediary for services rendered in connection with the sale of the shares and maintenance of the customer
relationship).
- Any investor who purchases their shares with the proceeds of a rollover, transfer or distribution from a retirement plan
or individual retirement account for which AIM Distributors acts as the prototype sponsor to another retirement plan or
individual retirement account for which AIM Distributors acts as the prototype sponsor, to the extent that such proceeds
are attributable to the redemption of shares of a fund held through the plan or account.
- Employee benefit plans; provided, however, that they meet at least one of the following requirements:
a. the plan has assets of at least $1 million;
b. there are at least 100 employees eligible to participate in the plan; or
c. all plan transactions are executed through a single omnibus account per fund; further provided that retirement
plans maintained pursuant to Section 403(b) of the Code are not eligible to purchase shares without paying an
initial sales charge based on the aggregate investment made by the plan or the number of eligible employees unless
the employer or plan sponsor is a tax-exempt organization operated pursuant to Section 501(c)(3) of the Code.
- Any investor who maintains an account in Investor Class shares of a fund (this includes anyone listed in the
registration of an account, such as a joint owner, trustee or custodian, and immediate family members of such persons).
- Qualified Tuition Programs created and maintained in accordance with Section 529 of the Code.
- Insurance company separate accounts.
No investor will pay an initial sales charge in the following circumstances:
- When buying Class A shares of AIM Tax-Exempt Cash Fund and Class A3 shares of AIM Limited Maturity Treasury Fund or AIM
Tax-Free Intermediate Fund.
- When reinvesting dividends and distributions.
- When exchanging shares of one fund, that were previously assessed a sales charge, for shares of another fund.
- As a result of a fund's merger, consolidation, or acquisition of the assets of another fund.
Additional information regarding eligibility to purchase shares at reduced or without sales charges is available on the
Internet at www.aiminvestments.com, then click on the link for My Account, then Service Center, or consult the fund's
Statement of Additional Information, which is available on that same website or upon request free of charge.
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 advisor must notify the transfer agent at the time of purchase that your purchase qualifies for such
treatment. Certain individuals and employer-sponsored retirement plans may link accounts for the purpose of qualifying for
lower initial sales charges. You or your financial consultant must provide other account numbers to be considered for Rights
of Accumulation, or mark the Letter of Intent section on the account application, or provide other relevant documentation, so
that the transfer agent can verify your eligibility for the reduction or exception. Please consult the fund's Statement of
Additional Information for details.
Purchases of Class A shares of AIM Tax-Exempt Cash Fund, Class A3 shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund, AIM Cash Reserve Shares of AIM Money Market Fund and Investor Class shares of any fund will not
be taken into account in determining whether a purchase qualifies for a reduction in initial sales charges pursuant to Rights
of Accumulation or Letters of Intent.
|
-------------
THE AIM FUNDS
-------------
RIGHTS OF ACCUMULATION
You may combine your new purchases of Class A shares of a fund with other fund shares currently owned (Class A, B, C, P or R)
and investments in the AIM College Savings Plan(R) 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 public offering price of all other shares you own. The transfer agent may automatically link certain
accounts registered in the same name with the same taxpayer identification number for the purpose of qualifying you for lower
initial sales charge rates. There may be other accounts that are eligible to be linked, as described in the fund's Statement
of Additional Information. However, if the accounts are not registered in the same name with the same taxpayer identification
number, you will have to contact the transfer agent to request that those accounts be linked. The transfer agent will not be
responsible for identifying all accounts that may be eligible to be linked.
LETTERS OF INTENT
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount of Class A shares of one or more funds
during a 13-month period. The amount you agree to purchase determines the initial sales charge you pay. If the full amount
committed to in the LOI is not invested by the end of the 13-month period, your account will be assessed the higher initial
sales charge that would normally be applicable to the amount actually invested.
REINSTATEMENT FOLLOWING REDEMPTION
If you redeem shares of a fund, you may reinvest all or a portion of the proceeds from the redemption in the same share class
of any fund in the same Category within 180 days of the redemption without paying an initial sales charge. Class B and P
redemptions may be reinvested only into Class A shares with no initial sales charge. This reinstatement privilege does not
apply to:
- A purchase made through a regularly scheduled automatic investment plan, such as a purchase by a regularly scheduled
payroll deduction or transfer from a bank account, or
- A purchase paid for with proceeds from the redemption of shares that were held indirectly through an employee benefit
plan.
In order to take advantage of this reinstatement privilege, you must inform your financial advisor or the transfer agent
that you wish to do so at the time of your investment.
CONTINGENT DEFERRED SALES CHARGES (CDSCS)
CDSCS ON CLASS A SHARES AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND
You can purchase $1,000,000 or more (a Large Purchase) of Class A shares of Category I, II and IV funds without paying an
initial sales charge. However, if you redeem these shares prior to 18 months after the date of purchase, they will be subject
to a CDSC of 1%.
If you currently own Class A shares of a Category I, II or IV fund, and make additional purchases without paying an
initial sales charge that result in account balances of $1,000,000 or more, the additional shares purchased will be subject
to an 18-month, 1% CDSC.
If AIM Distributors pays a concession to the dealer of record in connection with a Large Purchase of Class A shares by
an employee benefit plan, the Class A shares may be subject to a 1% CDSC if all of the plan's shares are redeemed within one
year from the date of the plan's initial purchase.
If you acquire AIM Cash Reserve Shares of AIM Money Market Fund, Class A shares of AIM Tax-Exempt Cash Fund, Class A3
shares of AIM Limited Maturity Treasury Fund or AIM Tax-Free Intermediate Fund through an exchange involving Class A shares
that were subject to a CDSC, the shares acquired as a result of the exchange will continue to be subject to that same CDSC.
CDSCS ON CLASS A SHARES AND AIM CASH RESERVE SHARES ACQUIRED BY EXCHANGE
If you purchase $1,000,000 or more of Class A shares of any fund, or if you make additional purchases of Class A shares
without paying an initial sales charge, your shares may be subject to a CDSC upon redemption in the following circumstances:
SHARES INITIALLY PURCHASED SHARES HELD AFTER AN EXCHANGE CDSC APPLICABLE UPON REDEMPTION OF SHARES
-------------------------------------- ----------------------------------------- ------------------------------------------
- Class A shares of any Category I, - Class A shares of any Category I, II - 1% if shares are redeemed within 18
II or IV fund or IV fund months of initial purchase of any
Category I, II or IV Fund
- AIM Cash Reserve Shares of AIM Money
Market Fund
- Class A Shares of AIM Tax-Exempt Cash
Fund
- Class A3 Shares of AIM Limited
Maturity Treasury Fund and
AIM Tax-Free Intermediate Fund
CDSCS ON CLASS B SHARES AND ON CLASS C SHARES OF FUNDS OTHER THAN
AIM LIBOR ALPHA FUND AND AIM SHORT TERM BOND FUND
Class B and Class C shares are sold without an initial sales charge. However, they are subject to a CDSC. If you redeem your
shares during the CDSC period, you will be assessed a CDSC as follows, unless you qualify for one of the CDSC exceptions
outlined below:
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
-----------------------------------------------------------------------------------------------------------------------------
|
-------------
THE AIM FUNDS
-------------
CDSCS ON CLASS C SHARES -- EMPLOYEE BENEFIT PLAN
AIM Distributors pays a concession to the dealer of record in connection with a purchase of Class C shares by an employee
benefit plan; the Class C shares are subject to a 1.00% CDSC at the time of redemption if all of the plan's shares are
redeemed within one year from the date of the plan's initial purchase.
CDSCS ON CLASS C SHARES OF AIM LIBOR ALPHA FUND AND AIM SHORT TERM BOND FUND
Class C shares of AIM LIBOR Alpha Fund and AIM Short Term Bond Fund are not normally subject to a CDSC. However, if you
acquired shares of those funds through an exchange, and the shares originally purchased were subject to a CDSC, the shares
acquired as a result of the exchange will continue to be subject to that same CDSC. Conversely, if you acquire Class C shares
of any other fund as a result of an exchange involving Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund
that were not subject to a CDSC, then the shares acquired as a result of the exchange will not be subject to a CDSC.
CDSCS ON CLASS R SHARES
Class R shares are not normally subject to a CDSC. However, if AIM Distributors pays a concession to the dealer of record in
connection with a purchase of Class R shares by an employee benefit plan, the Class R shares are subject to a 0.75% CDSC at
the time of redemption if all of the plan's shares are redeemed within one year from the date of the plan's initial purchase.
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their original purchase price or current net asset value,
net of reinvested dividends and capital gains distributions. In determining whether to charge a CDSC, shares are accounted
for on a first-in, first-out basis, which means that you will redeem shares on which there is no CDSC first and, then, shares
in the order of their purchase.
CDSC EXCEPTIONS
Investors who own shares that are otherwise subject to a CDSC will not pay a CDSC in the following circumstances:
- If you participate in the Systematic Redemption Plan and withdraw up to 12% of the value of your shares that are subject
to a CDSC in any twelve-month period.
- If you redeem shares to pay account fees.
- If you are the executor, administrator or beneficiary of an estate or are otherwise entitled to assets remaining in an
account following the death or post-purchase disability of a shareholder or beneficial owner and you choose to redeem
those shares.
There are other circumstances under which you may be able to redeem shares without paying CDSCs. Additional information
regarding CDSC exceptions is available on the Internet at www.aiminvestments.com, then click on the link for My Account, then
Service Center, or consult the fund's Statement of Additional Information, which is available on that same website or upon
request free of charge.
Shares acquired through the reinvestment of dividends and distributions are not subject to CDSCs.
The following share classes are sold with no CDSC:
- Class A shares of any Category III Fund.
- Class A shares of AIM Tax-Exempt Cash Fund.
- Class A3 shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund.
- AIM Cash Reserve Shares of AIM Money Market Fund.
- Investor Class shares of any fund.
- Class P shares of AIM Summit Fund.
REDEMPTION FEES
Certain funds impose a 2% redemption fee (on redemption proceeds) if you redeem or exchange shares within 31 days of
purchase. Please refer to the applicable fund's prospectus to determine whether that fund imposes a redemption fee. As of the
date of this prospectus, the following funds impose redemption fees:
AIM Asia Pacific Growth Fund AIM Global Aggressive Growth Fund AIM Gold & Precious Metals Fund AIM International
AIM China Fund AIM Global Equity Fund AIM High Yield Fund Total Return Fund
AIM Developing Markets Fund AIM Global Growth Fund AIM International Allocation Fund AIM Japan Fund
AIM European Growth Fund AIM Global Health Care Fund AIM International Core Equity Fund AIM S&P 500 Index Fund
AIM European Small Company Fund AIM Global Real Estate Fund AIM International Growth Fund AIM Trimark Fund
AIM Floating Rate Fund AIM Global Value Fund AIM International Small Company Fund
The redemption fee will be retained by the fund from which you are redeeming or exchanging shares, and is intended to
offset the trading costs, market impact and other costs associated with short-term money movements in and out of the fund.
The redemption fee is imposed on a first-in, first-out basis, which means that you will redeem shares in the order of their
purchase.
|
-------------
THE AIM FUNDS
-------------
Redemption fees generally will not be charged in the following circumstances:
- Redemptions and exchanges of shares held in accounts maintained by intermediaries that do not have the systematic
capability to assess the redemption fees.
- Redemptions and exchanges of shares held by funds of funds, qualified tuition plans maintained pursuant to Section 529
of the Code, and variable insurance contracts which use the funds as underlying investments.
- Redemptions and exchanges effectuated pursuant to automatic investment rebalancing or dollar cost averaging programs or
systematic withdrawal plans.
- Redemptions requested within 31 days following the death or post-purchase disability of an account owner.
- Redemptions or exchanges initiated by a fund.
The following shares are not subject to redemption fees, irrespective of whether they are redeemed in accordance with
any of the exceptions set forth above:
- Shares acquired through the reinvestment of dividends and distributions.
- Shares acquired through systematic purchase plans.
- Shares acquired in connection with a rollover or transfer of assets from the trustee or custodian of an employee benefit
plan to the trustee or custodian of another employee benefit plan.
Shares held by employee benefit plans will only be subject to redemption fees if the shares were acquired by exchange
and are redeemed by exchange within 31 days of purchase.
Some investments in the funds are made through accounts that are maintained by intermediaries (rather than the funds'
transfer agent) and some investments are made indirectly through products that use the funds as underlying investments, such
as employee benefit plans, funds of funds, qualified tuition plans, and variable insurance contracts (these products are
generally referred to as conduit investment vehicles). If shares of the funds are held in an account maintained by an
intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary
account or conduit investment vehicle may be considered an individual shareholder of the funds for purposes of assessing
redemption fees. In these cases, the funds are likely to be limited in their ability to assess redemption fees on
transactions initiated by individual investors, and the applicability of redemption fees will be determined based on the
aggregate holdings and redemptions of the intermediary account or the conduit investment vehicle.
If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment
vehicle (and not in the names of individual investors), the intermediary or conduit investment vehicle may impose rules
intended to limit short-term money movements in and out of the funds which differ from those described in this prospectus. In
such cases, there may be redemption fees imposed by the intermediary or conduit investment vehicle on different terms (and
subject to different exceptions) than those set forth above. Please consult your financial advisor or other intermediary for
details.
The funds have the discretion to waive the 2% redemption fee if a fund is in jeopardy of losing its registered
investment company qualification for tax purposes.
Your financial advisor or other intermediary may charge service fees for handling redemption transactions. Your shares
also may be subject to a CDSC in addition to the redemption fee.
TEMPORARY REDEMPTION FEE FOR CLASS A SHARES OF AIM SELECT REAL ESTATE INCOME FUND
On March 12, 2007, AIM Select Real Estate Income Fund, a closed-end fund, was reorganized as an open-end fund. Shareholders
of the Common Shares of the closed-end AIM Select Real Estate Income Fund received Class A shares of the open-end AIM Select
Real Estate Income Fund in connection with the reorganization. If you redeem those shares received in connection with the
reorganization, including redeeming by exchange, within 12 months following the date of the reorganization, you will be
charged a 2.00% redemption fee.
This 2.00% redemption fee will not apply to Class A shares of the open-end AIM Select Real Estate Income Fund that are
purchased after the reorganization. The redemption fee will be retained by the open-end AIM Select Real Estate Income Fund to
offset transaction costs and other expenses associated with redemptions or exchanges. It is designed, in part, to stabilize
outflows from the open-end AIM Select Real Estate Income Fund after the reorganization and to deter arbitrage trades by
investors seeking to profit from the difference between the cost of purchasing Common Shares of the closed-end AIM Select
Real Estate Income Fund at a discount to net asset value, and the proceeds of redeeming Class A shares of the open-end AIM
Select Real Estate Fund at their net asset value following the reorganization. To the extent that arbitrage and other
short-term trading still occurs, the redemption fee would protect AIM Select Real Estate Income Fund and its long-term
shareholders by recouping some of the costs of the arbitrage-related redemptions and exchanges. The redemption fee may also
offset to some extent some of the direct and indirect costs associated with the reorganization.
PURCHASING SHARES
If you hold your shares through a financial advisor or other intermediary, your eligibility to purchase shares and the
terms by which you may purchase, redeem and exchange shares may differ depending on that institution's policies.
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MINIMUM INVESTMENTS
There are no minimum investments for Class P or R shares for fund accounts. The minimum investments for Class A, A3, B, C,
and Investor Class shares for fund accounts are as follows:
INITIAL INVESTMENT ADDITIONAL INVESTMENTS
TYPE OF ACCOUNT PER FUND PER FUND
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Wrap-fee accounts managed by your financial advisor None None
Employee benefit plans, SEP, SARSEP and SIMPLE IRA plans None None
Any type of account if the investor is purchasing shares through a systematic
purchase plan $ 50 $50
IRAs, Roth IRAs and Coverdell ESAs 250 25
All other accounts 1,000 50
AIM Distributors has the discretion to accept orders for lesser amounts.
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HOW TO PURCHASE SHARES
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OPENING AN ACCOUNT ADDING TO AN ACCOUNT
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Through a Financial Contact your financial advisor. Contact your financial advisor.
Advisor
By Mail Mail completed account application and check to Mail your check and the remittance slip from your
the transfer agent, confirmation statement to the transfer agent.
AIM Investment Services, Inc., P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed account application to the Call the transfer agent to receive a reference
transfer agent. Call the transfer agent at (800) number. Then, use the wire instructions provided
959-4246 to receive a reference number. Then, use below.
the wire instructions provided below.
Wire Instructions Beneficiary Bank ABA/Routing #: 021000021
Beneficiary Account Number: 00100366807
Beneficiary Account Name: AIM Investment
Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By Telephone Open your account using one of the methods Select the AIM Bank Connection(SM) option on your
described above. completed account application or complete a
Special Account Options Form. Mail the
application or form to the transfer agent. Once
the transfer agent has received the form, call
the transfer agent at the number below to place
your purchase order.
Automated Investor Line Open your account using one of the methods Call the AIM 24-hour Automated Investor Line at
described above. 1-800-246-5463. You may place your order after
you have provided the bank instructions that will
be requested.
By Internet Open your account using one of the methods Access your account at www.aiminvestments.com.
described above. The proper bank instructions must have been
provided on your account. You may not purchase
shares in retirement accounts on the internet.
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Purchase orders will not be processed unless the account application and purchase payment are received in good order. In
accordance with the USA PATRIOT Act, if you fail to provide all the required information requested in the current account
application, your purchase order will not be processed. Additionally, federal law requires that the fund verify and record
your identifying information.
SYSTEMATIC PURCHASE PLAN
You can arrange for periodic investments in any of the funds by authorizing the transfer agent 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 per fund. You may stop the
Systematic Purchase Plan at any time by giving the transfer agent notice ten days prior to your next scheduled withdrawal.
Certain financial advisors and other intermediaries may also offer systematic purchase plans.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic periodic exchanges, if permitted, from one fund to another fund or
multiple other funds. 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 day of the month you specify, in the amount you specify. Dollar Cost
Averaging cannot be set up for the 29th through the 31st of the month. The minimum amount you can exchange to another fund is
$50. Certain financial advisors and other intermediaries may also offer dollar cost averaging programs. If you participate in
one of these programs and it is the same or similar to AIM's Dollar Cost Averaging program, exchanges made under the program
generally will not be counted toward the limitation of four exchanges out of a fund per calendar year, discussed below.
AUTOMATIC DIVIDEND AND DISTRIBUTION INVESTMENT
Your dividends and distributions may be paid in cash or reinvested in the same fund or another fund without paying an initial
sales charge. Unless you specify otherwise, your dividends and distributions will automatically be reinvested in the same
fund. If you elect to receive your distributions by check, and the distribution amount is $10 or less, then the amount will
be automatically reinvested in the same fund and no check will be issued. If you have elected to receive distributions by
check, and the postal service is unable to deliver checks to your address of record, then your distribution election may be
converted to having all subsequent distributions reinvested in the same fund and no checks will be issued. You should contact
the
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transfer agent to change your distribution option, and your request to do so must be received by the transfer agent
before the record date for a distribution in order to be effective for that distribution. No interest will accrue on amounts
represented by uncashed distribution checks.
You must comply with the following requirements to be eligible to invest your dividends and distributions in shares of
another fund:
- Your account balance in the fund paying the dividend or distribution must be at least $5,000; and
- Your account balance in the fund receiving the dividend or distribution must be at least $500.
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 fund holdings should be rebalanced, on a percentage basis, between two and ten
of your funds on a quarterly, semiannual or annual basis. Your portfolio will be rebalanced through the exchange of shares in
one or more of your funds for shares of the same class of one or more other funds in your portfolio. Rebalancing will not
occur if your portfolio is within 2% of your stated allocation. 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. We may modify, suspend or terminate the Program at any time on 60 days prior written notice to participating
investors. Certain financial advisors and other intermediaries may also offer portfolio rebalancing programs. If you
participate in one of these programs and it is the same as or similar to AIM's program, exchanges made under the program
generally will not be counted toward the limitation of four exchanges out of a fund per calendar year, discussed below.
RETIREMENT PLANS SPONSORED BY AIM DISTRIBUTORS
AIM Distributors acts as the prototype sponsor for certain types of retirement plan documents. These plan documents are
generally available to anyone wishing to invest plan assets in the funds. These documents are provided subject to terms,
conditions and fees that vary by plan type. Contact your financial advisor or other intermediary for details.
REDEEMING SHARES
For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, 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 net asset value. For Premier Portfolio, Premier Tax-Exempt Portfolio and
Premier U.S. Government Money Portfolio, the transfer agent must receive your call before the last net asset value
determination in order to effect the redemption that day.
HOW TO REDEEM SHARES
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Through a Financial Advisor Contact your financial advisor or intermediary (including your retirement plan administrator).
or Other Intermediary
By Mail Send a written request to the transfer agent which includes:
- Original signatures of all registered owners/trustees;
- The dollar value or number of shares that you wish to redeem;
- The name of the fund(s) and your account number; and
- Signature guarantees, if necessary (see below).
The transfer agent may require that you provide additional documentation, or information, such
as corporate resolutions or powers of attorney, if applicable. If you are redeeming from an IRA
or other type of retirement account, you must complete the appropriate distribution form.
By Telephone Call the transfer agent at 1-800-959-4246. You will be allowed to redeem by telephone if:
- Your redemption proceeds are to be mailed to your address on record (and there has been no
change in your address of record within the last 30 days) or transferred electronically to
a pre-authorized checking account;
- You do not hold physical share certificates;
- You can provide proper identification information;
- Your redemption proceeds do not exceed $250,000 per fund; and
- You have not previously declined the telephone redemption privilege.
You may, in limited circumstances, initiate a redemption from an AIM IRA account by telephone.
Redemptions from other types of retirement plan accounts may be initiated only in writing and
require the completion of the appropriate distribution form.
Automated Investor Line Call the AIM 24-hour Automated Investor Line at 1-800-246-5463. You may place your redemption
order after you have provided the bank instructions that will be requested.
By Internet Place your redemption request at www.aiminvestments.com. You will be allowed to redeem by
Internet if:
- You do not hold physical share certificates;
- You can provide proper identification information;
- Your redemption proceeds do not exceed $250,000 per fund; and
- You have already provided proper bank information.
Redemptions from most retirement plan accounts may be initiated only in writing and require the
completion of the appropriate distribution form.
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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 your redemption
request is received in good order (meaning that all necessary information and documentation related to the redemption request
have been provided to the transfer agent). If you redeem shares recently purchased by check or ACH, you may be required to
wait up to ten business days before we send your redemption proceeds. This delay is necessary to ensure that the purchase has
cleared. Payment may be postponed in cases where the SEC declares an emergency or normal trading is halted on the NYSE.
Redemption checks are mailed to your address of record, via first class U.S. mail, unless you make other arrangements with
the transfer agent.
We use reasonable procedures to confirm that instructions communicated via telephone and the Internet are genuine, and
we are not liable for losses arising from actions taken in accordance with instructions that are reasonably believed to be
genuine.
SYSTEMATIC WITHDRAWALS
You may arrange for regular periodic withdrawals from your account in amounts equal to or greater than $50 per fund. We will
redeem the appropriate number of shares from your account to provide redemption proceeds in the amount requested. You must
have an account balance of at least $5,000 in order to establish a Systematic Redemption 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 you place your redemption order before 11:30 a.m. Eastern Time and request an expedited redemption, we will transmit
payment of redemption proceeds on that same day via federal wire to a bank of record on your account. 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 will
transmit payment on the next business day.
CHECK WRITING
The transfer agent provides check writing privileges for accounts in the
following funds and share classes:
- AIM Money Market Fund, AIM Cash Reserve Shares and Investor Class shares
- AIM Tax-Exempt Cash Fund, Class A shares and Investor Class shares
- Premier Portfolio, Investor Class shares
- Premier Tax-Exempt Portfolio, Investor Class shares
- Premier U.S. Government Money Portfolio, Investor Class shares
You may redeem shares of these 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. Checks are not eligible to be converted to ACH by the
payee. You may not give authorization to a payee by phone to debit your account by ACH for a debt owed to the payee.
SIGNATURE GUARANTEES
We require a signature guarantee in the following circumstances:
- When your redemption proceeds will equal or exceed $250,000 per fund.
- When you request that redemption proceeds be paid to someone other than the registered owner of the account.
- When you request that redemption proceeds be sent somewhere other than the address of record or bank of record on the
account.
- When you request that redemption proceeds 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 different types 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 to determine whether the signature guarantee offered will be sufficient to cover
the value of your transaction request.
REDEMPTIONS IN KIND
Although the funds generally intend to pay redemption proceeds solely in cash, the funds reserve the right to determine, in
their sole discretion, whether to satisfy redemption requests by making payment in securities or other property (known as a
redemption in kind).
REDEMPTIONS INITIATED BY THE FUNDS
If your account (Class A, A3, B, C, P and Investor Class shares only) 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, the 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 initiating a
Systematic Purchase Plan.
If the fund determines that you have not provided a correct Social Security or other tax identification number on your
account application, or the fund is not able to verify your identity as required by law, the 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 fund for those of another fund. An exchange is the purchase of
shares in one fund which is paid for with the proceeds from a redemption of shares of another fund effectuated on the same
day. Accordingly, the procedures and processes
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THE AIM FUNDS
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applicable to redemptions of fund shares, as discussed under the heading "Redeeming Shares" above, will apply. Before
requesting an exchange, review the prospectus of the fund you wish to acquire.
All exchanges are subject to the limitations set forth in the prospectuses of the funds. If you wish to exchange shares
of one fund for those of another fund, you must consult the prospectus of the fund whose shares you wish to acquire to
determine whether the fund is offering shares to new investors and whether you are eligible to acquire shares of that fund.
PERMITTED EXCHANGES
Except as otherwise provided below under "Exchanges Not Permitted", you generally may exchange your shares for shares of the
same class of another fund. The following below shows permitted exchanges:
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EXCHANGE FROM EXCHANGE TO
-----------------------------------------------------------------------------------------------------------------------------
AIM Cash Reserve Shares Class A, A3, B, C, R, Investor Class
Class A Class A, A3, Investor Class, AIM Cash Reserve Shares
Class A3 Class A, A3, Investor Class, AIM Cash Reserve Shares
Investor Class Class A, A3, Investor Class
Class P Class A, A3, AIM Cash Reserve Shares
Class B Class B
Class C Class C
Class R Class R
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EXCHANGES NOT PERMITTED
The following exchanges are not permitted:
- Investor Class shares cannot be exchanged for Class A shares of any fund which offers Investor Class shares.
- Exchanges into Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund (also known as
the Category III funds) are not permitted.
- Class A Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund cannot be exchanged for Class A3
Shares of those funds.
- AIM Cash Reserve Shares cannot be exchanged for Class B, C or R shares if the shares being exchanged were acquired by
exchange from Class A shares of any fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- Shares must have been held for at least one day prior to the exchange with the exception of dividends and distributions
that are reinvested; and
- If you have physical share certificates, you must return them to the transfer agent in order to effect the exchange.
Under unusual market conditions, a fund may delay the exchange of shares for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange proceeds. The exchange privilege is not an
option or right to purchase shares. Any of the participating funds or the distributor may modify or terminate this privilege
at any time.
LIMIT ON THE NUMBER OF EXCHANGES
You will generally be limited to four exchanges out of a fund per calendar year (other than the money market funds);
provided, however, that the following transactions will not count toward the exchange limitation:
- Exchanges of shares held in accounts maintained by intermediaries that do not have the systematic capability to apply
the exchange limitation.
- Exchanges of shares held by funds of funds, qualified tuition plans maintained pursuant to Section 529 of the Code, and
insurance company separate accounts which use the funds as underlying investments.
- Generally, exchanges effectuated pursuant to automatic investment rebalancing or dollar cost averaging programs.
- Exchanges initiated by a fund or by the trustee, administrator or other fiduciary of an employee benefit plan (not in
response to distribution or exchange instructions received from a plan participant).
Each fund reserves the discretion to accept exchanges in excess of these guidelines on a case-by-case basis if the fund,
or its designated agent, believes that granting such exceptions would be consistent with the best interests of shareholders.
There is no limit on the number of exchanges out of AIM Limited Maturity Treasury Fund, AIM Money Market Fund, AIM
Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio.
If you exchange shares of one fund for shares of multiple other funds as part of a single transaction, that transaction
is counted as one exchange out of a fund.
INITIAL SALES CHARGES AND CDSCS APPLICABLE TO EXCHANGES
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 into shares that are subject to a CDSC, we will begin the holding period for
purposes of calculating the CDSC on the date you made your initial purchase.
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THE AIM FUNDS
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RIGHTS RESERVED BY THE FUNDS
Each fund and its agents reserve the right at any time to:
- Reject or cancel all or any part of any purchase or exchange order.
- Modify any terms or conditions related to the purchase, redemption or exchange of shares of any fund.
- Reject or cancel any request to establish a Systematic Purchase Plan, Systematic Redemption Plan or Portfolio
Rebalancing Program.
- Suspend, change or withdraw all or any part of the offering made by this prospectus.
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each fund's 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 all other securities and assets for which market
quotations are unavailable or unreliable at their fair value in good faith using procedures approved by the Boards of
Trustees of the funds (collectively, the Board). Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day.
Even when market quotations are available, they may be stale or unreliable because the security is not traded
frequently, trading on the security ceased before the close of the trading market or issuer specific events occurred after
the security ceased trading or because of the passage of time between the close of the market on which the security trades
and the close of the NYSE and when the fund calculates its net asset value. Issuer specific events may cause the last market
quotation to be unreliable. Such events may include a merger or insolvency, events which affect a geographical area or an
industry segment, such as political events or natural disasters, or market events, such as a significant movement in the U.S.
market. Where market quotations are not readily available, including where AIM determines that the closing price of the
security is unreliable, AIM will value the security at fair value in good faith using procedures approved by the Board. Fair
value pricing may reduce the ability of frequent traders to take advantage of arbitrage opportunities resulting from
potentially "stale" prices of portfolio holdings. However, it cannot eliminate the possibility of frequent trading.
Fair value is that amount that the owner might reasonably expect to receive for the security upon its current sale. Fair
value requires consideration of all appropriate factors, including indications of fair value available from pricing services.
A fair value price is an estimated price and may vary from the prices used by other mutual funds to calculate their net asset
values.
AIM may use indications of fair value from pricing services approved by the Board. In other circumstances, the AIM
valuation committee may fair value securities in good faith using procedures approved by the Board. As a means of evaluating
its fair value process, AIM routinely compares closing market prices, the next day's opening prices for the security in its
primary market if available, and indications of fair value from other sources. Fair value pricing methods and pricing
services can change from time to time as approved by the Board.
Specific types of securities are valued as follows:
Senior Secured Floating Rate Loans and Senior Secured Floating Rate Debt Securities. Senior secured floating rate loans
and senior secured floating rate debt securities are fair valued using an evaluated quote provided by an independent pricing
service. Evaluated quotes provided by the pricing service may reflect appropriate factors such as ratings, tranche type,
industry, company performance, spread, individual trading characteristics, institution-size trading in similar groups of
securities and other market data.
Domestic Exchange Traded Equity Securities. Market quotations are generally available and reliable for domestic exchange
traded equity securities. If market quotations are not available or are unreliable, AIM will value the security at fair value
in good faith using procedures approved by the Board.
Foreign Securities. If market quotations are available and reliable for foreign exchange traded equity securities, the
securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close
of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and
the close of the customary trading session on the NYSE events occur that are significant and may make the closing price
unreliable, the fund may fair value the security. If an issuer specific event has occurred that AIM determines, in its
judgment, is likely to have affected the closing price of a foreign security, it will price the security at fair value. AIM
also relies on a screening process from a pricing vendor to indicate the degree of certainty, based on historical data, that
the closing price in the principal market where a foreign security trades is not the current market value as of the close of
the NYSE. For foreign securities where AIM believes, at the approved degree of certainty, that the price is not reflective of
current market value, AIM will use the indication of fair value from the pricing service to determine the fair value of the
security. The pricing vendor, pricing methodology or degree of certainty may change from time to time.
Fund securities primarily traded on foreign markets may trade on days that are not business days of the fund. Because
the net asset value of fund shares is determined only on business days of the fund, the value of the portfolio securities of
a fund that invests in foreign securities may change on days when you will not be able to purchase or redeem shares of the
fund.
Fixed Income Securities. Government, corporate, asset-backed and municipal bonds, convertible securities, including high
yield or junk bonds, and loans, normally are valued on the basis of prices provided by independent pricing services. Prices
provided by the pricing services may be determined without exclusive reliance on quoted prices, and may reflect appropriate
factors such as institution-size trading in similar groups of securities, developments related to special securities,
dividend rate, maturity and other market data. Prices received from pricing services are fair value prices. In addition, if
the price provided by the pricing service and independent quoted prices are unreliable, the AIM valuation committee will fair
value the security using procedures approved by the Board.
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Short-term Securities. The funds' short-term investments are valued at amortized cost when the security has 60 days or
less to maturity. AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt Portfolio and
Premier U.S. Government Money Portfolio value all their securities at amortized cost. AIM High Income Municipal Fund, AIM
Municipal Bond Fund 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.
Futures and Options. Futures and options are valued on the basis of market quotations, if available.
Swap Agreements. Swap Agreements are fair valued using an evaluated quote provided by an independent pricing service.
Evaluated quotes provided by the pricing service are based on a model that may include end of day net present values,
spreads, ratings, industry and company performance.
Open-end Funds. To the extent a fund invests in other open-end funds, other than open-end funds that are exchange
traded, the investing fund will calculate its net asset value using the net asset value of the underlying fund in which it
invests.
Each fund determines the net asset value of its shares on each day the NYSE is open for business (a business day), as of
the close of the customary trading session, or 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 business day. Premier Portfolio, Premier Tax-Exempt Portfolio and
Premier U.S. Government Money Portfolio determine the net asset value of their shares every fifteen minutes on each business
day, beginning at 8:00 a.m. Eastern Time. The last net asset value determination on any business day for Premier Portfolio
and Premier U.S. Government Money Portfolio will generally occur at 5:30 p.m. Eastern Time, and the last net asset value
determination on any business day for Premier Tax-Exempt Portfolio will generally occur at 4:30 p.m. Eastern Time. Premier
Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio are authorized not to open for trading on
a day that is otherwise a business day if the Federal Reserve Bank of New York and the Bank of New York, the fund's
custodian, are not open for business or the Securities Industry and Financial Markets Association (SIFMA) recommends that
government securities dealers not open for trading and any such day will not be considered a business day. Premier Portfolio,
Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio also may close early on a business day if SIFMA
recommends that government securities dealers close early. If Premier Portfolio, Premier Tax-Exempt Portfolio or Premier U.S.
Government Money Portfolio uses its discretion to close early on a business day, the last net asset value calculation will
occur as of the time of such closing.
From time to time and in circumstances deemed appropriate by AIM in its sole discretion, each of Premier Portfolio,
Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio may remain open for business, during customary
business day hours, on a day that the NYSE is closed for business. In such event, on such day you will be permitted to
purchase or redeem shares of such funds and net asset values will be calculated for such funds.
TIMING OF ORDERS
For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, you can
purchase or redeem shares on each business day prior to the close of the customary trading session or any earlier NYSE
closing time that day. For funds other than Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money
Portfolio, purchase orders that are received and accepted before the close of the customary trading session or any earlier
NYSE closing time on a business day generally are processed that day and settled on the next business day.
For Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S. Government Money Portfolio, you can purchase or
redeem shares on each business day, prior to the last net asset value determination on such business day; however, if your
order is received and accepted after the close of the customary trading session or any earlier NYSE closing time that day,
your order generally will be processed on the next business day and settled on the second business day following the receipt
and acceptance of your order.
For all funds, you can exchange shares on each business day, prior to the close of the customary trading session or any
earlier NYSE closing time that day. Shareholders of Premier Portfolio, Premier Tax-Exempt Portfolio and Premier U.S.
Government Money Portfolio therefore cannot exchange their shares after the close of the customary trading session or any
earlier NYSE closing time on a particular day, even though these funds remain open after such closing time.
The funds price purchase, exchange and redemption orders at the net asset value calculated after the transfer agent
receives an order in good order. Any applicable sales charges are applied at the time an order is processed. 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.
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 and the type of income that the fund
earns. Different tax rates apply to ordinary income, qualified dividend income, and long-term capital gain distributions.
Every year, you will be sent information showing the amount of dividends and distributions you received from each fund during
the prior year.
Any long-term or short-term capital gains realized from redemptions of fund shares will be subject to federal income
tax. Exchanges of shares for shares of another 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 the applicable fund's prospectus.
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The foreign, state and local tax consequences of investing in fund shares may differ materially from the federal income
tax consequences described above. In addition, the preceding discussion concerning the taxability of fund dividends and
distributions and of redemptions and exchanges of fund shares is inapplicable to investors that are generally exempt from
federal income tax, such as retirement plans that are qualified under Section 401, 403, 408, 408A and 457 of the Code,
individual retirement accounts (IRAs) and Roth IRAs. You should consult your tax advisor before investing.
PAYMENTS TO FINANCIAL ADVISORS
The financial advisor or intermediary through which you purchase your shares may receive all or a portion of the sales
charges and distribution fees discussed above. In addition to those payments, AIM Distributors or one or more of its
corporate affiliates (collectively, AIM Affiliates) may make additional cash payments to financial advisors in connection
with the promotion and sale of shares of the funds. These additional cash payments may include cash payments and other
payments for certain marketing and support services. AIM Affiliates make these payments from their own resources, from AIM
Distributors' retention of initial sales charges and from payments to AIM Distributors made by the funds under their 12b-1
plans. In this context, "financial advisors" include any broker, dealer, bank (including bank trust departments), registered
investment advisor, financial planner, retirement plan administrator and any other financial intermediary having a selling,
administration or similar agreement with AIM Affiliates.
AIM Affiliates make payments as incentives to certain financial advisors to promote and sell shares of the funds. The
benefits AIM Affiliates receive when they make these payments include, among other things, placing the funds on the financial
advisor's funds sales system, and access (in some cases on a preferential basis over other competitors) to individual members
of the financial advisor's sales force or to the financial advisor's management. These payments are sometimes referred to as
"shelf space" payments because the payments compensate the financial advisor for including the funds in its fund sales system
(on its "sales shelf"). AIM Affiliates compensate financial advisors differently depending typically on the level and/or type
of considerations provided by the financial advisor. The payments AIM Affiliates make may be calculated based on sales of
shares of the funds (Sales-Based Payments), in which case the total amount of such payments shall not exceed 0.25% of the
public offering price of all shares sold by the financial advisor during the particular period. Payments may also be
calculated based on the average daily net assets of the applicable funds attributable to that particular financial advisor
(Asset-Based Payments), in which case the total amount of such cash payments shall not exceed 0.25% per annum of those assets
during a defined period. Sales-Based Payments primarily create incentives to make new sales of shares of the funds and
Asset-Based Payments primarily create incentives to retain previously sold shares of the funds in investor accounts. AIM
Affiliates may pay a financial advisor either or both Sales-Based Payments and Asset-Based Payments.
AIM Affiliates are motivated to make these payments as they promote the sale of fund shares and the retention of those
investments by clients of financial advisors. To the extent financial advisors sell more shares of the funds or retain shares
of the funds in their clients' accounts, AIM Affiliates benefit from the incremental management and other fees paid to AIM
Affiliates by the funds with respect to those assets.
AIM Affiliates also may make payments to certain financial advisors for certain administrative services, including
record keeping and sub-accounting of shareholder accounts pursuant to a sub-transfer agency, omnibus account service or
sub-accounting agreement. All fees payable by AIM Affiliates under this category of services are charged back to the funds,
subject to certain limitations approved by the Board.
You can find further details in the fund's Statement of Additional Information about these payments and the services
provided by financial advisors. In certain cases these payments could be significant to the financial advisor. Your financial
advisor may charge you additional fees or commissions other than those disclosed in this prospectus. You can ask your
financial advisor about any payments it receives from AIM Affiliates or the funds, as well as about fees and/or commissions
it charges.
EXCESSIVE SHORT-TERM TRADING ACTIVITY (MARKET TIMING) DISCLOSURES
While the funds provide their shareholders with daily liquidity, their investment programs are designed to serve long-term
investors and are not designed to accommodate excessive short-term trading activity in violation of our policies described
below. Excessive short-term trading activity in the funds' shares (i.e., a purchase of fund shares followed shortly
thereafter by a redemption of such shares, or vice versa) may hurt the long-term performance of certain funds by requiring
them to maintain an excessive amount of cash or to liquidate portfolio holdings at a disadvantageous time, thus interfering
with the efficient management of such funds by causing them to incur increased brokerage and administrative costs. Where
excessive short-term trading activity seeks to take advantage of arbitrage opportunities from stale prices for portfolio
securities, the value of fund shares held by long-term investors may be diluted. The Board has adopted policies and
procedures designed to discourage excessive or short-term trading of fund shares for all funds except the money market funds.
However, there is the risk that these funds' policies and procedures will prove ineffective in whole or in part to detect or
prevent excessive or short-term trading. These funds may alter their policies at any time without prior notice to
shareholders if the advisor believes the change would be in the best interests of long-term shareholders.
The AIM Affiliates currently use the following tools designed to discourage excessive short-term trading in the retail
funds:
- Trade activity monitoring.
- Trading guidelines.
- Redemption fees on trades in certain funds.
- The use of fair value pricing consistent with procedures approved by the Board.
Each of these tools is described in more detail below. Although these tools are designed to discourage excessive
short-term trading, you should understand that none of these tools alone nor all of them taken together eliminate the
possibility that excessive short-term trading activity in the funds
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THE AIM FUNDS
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will occur. Moreover, each of these tools involves judgments that are inherently subjective. AIM Affiliates seek to make
these judgments to the best of their abilities in a manner that they believe is consistent with long-term shareholder
interests.
Some investments in the funds are made through accounts that are maintained by intermediaries (rather than the funds'
transfer agent) and some investments are made indirectly through products that use the funds as underlying investments, such
as employee benefit plans, funds of funds, qualified tuition plans, and variable insurance contracts (these products are
generally referred to as conduit investment vehicles). If shares of the funds are held in an account maintained by an
intermediary or in the name of a conduit investment vehicle (and not in the names of individual investors), the intermediary
account or conduit investment vehicle may be considered an individual shareholder of the funds for purposes of assessing
redemption fees. In these cases, the funds are likely to be limited in their ability to assess redemption fees on
transactions initiated by individual investors, and the applicability of redemption fees will be determined based on the
aggregate holdings and redemptions of the intermediary account or the conduit investment vehicle.
If shares of the funds are held in an account maintained by an intermediary or in the name of a conduit investment
vehicle (and not in the names of individual investors), the intermediary or conduit investment vehicle may impose rules
intended to limit short-term money movements in and out of the funds which differ from those described in this prospectus. In
such cases, there may be redemption fees imposed by the intermediary or conduit investment vehicle on different terms (and
subject to different exceptions) than those set forth above. Please consult your financial advisor or other intermediary for
details.
Money Market Funds. The Board of AIM Money Market Fund, AIM Tax-Exempt Cash Fund, Premier Portfolio, Premier Tax-Exempt
Portfolio and Premier U.S. Government Money Portfolio (the money market funds) have not adopted any policies and procedures
that would limit frequent purchases and redemptions of such funds' shares. The Board considered the risks of not having a
specific policy that limits frequent purchases and redemptions, and determined that those risks were minimal. Nonetheless, to
the extent that a money market fund must maintain additional cash and/or securities with short-term durations in greater
amounts than may otherwise be required or borrow to honor redemption requests, the money market fund's yield could be
negatively impacted.
The Board does not believe that it is appropriate to adopt any such policies and procedures for the money market funds
for the following reasons:
- The money market funds are offered to investors as cash management vehicles; investors must perceive an investment in
such funds as an alternative to cash, and must be able to purchase and redeem shares regularly and frequently.
- One of the advantages of a money market fund as compared to other investment options is liquidity. Any policy that
diminishes the liquidity of the money market funds will be detrimental to the continuing operations of such funds.
- The money market funds' portfolio securities are valued on the basis of amortized cost, and such funds seek to maintain
a constant net asset value. As a result, there are no price arbitrage opportunities.
- Because the money market funds seek to maintain a constant net asset value, investors expect to receive upon redemption
the amount they originally invested in such funds. Imposition of redemption fees would run contrary to investor
expectations.
AIM Limited Maturity Treasury Fund. The Board of AIM Limited Maturity Treasury Fund has not adopted any policies and
procedures that would limit frequent purchases and redemptions of such fund's shares. The Board considered the risks of not
having a specific policy that limits frequent purchases and redemptions and determined that those risks were minimal.
Nonetheless, to the extent that AIM Limited Maturity Treasury Fund must maintain additional cash and/or securities with
short-term durations in greater amounts than may otherwise be required or borrow to honor redemption requests, AIM Limited
Maturity Treasury Fund's yield could be negatively impacted.
The Board does not believe that it is appropriate to adopt any such policies and procedures for the fund for the
following reasons:
- Many investors use AIM Limited Maturity Treasury Fund as a short-term investment alternative and should be able to
purchase and redeem shares regularly and frequently.
- One of the advantages of AIM Limited Maturity Treasury Fund as compared to other investment options is liquidity. Any
policy that diminishes the liquidity of AIM Limited Maturity Treasury Fund will be detrimental to the continuing
operations of such fund.
TRADE ACTIVITY MONITORING
AIM Affiliates monitor selected trades on a daily basis in an effort to detect excessive short-term trading activities. If,
as a result of this monitoring, AIM Affiliates believe that a shareholder has engaged in excessive short-term trading, they
will seek to act in a manner that they believe is consistent with the best interests of long-term investors, which may
include taking steps such as (i) asking the shareholder to take action to stop such activities or (ii) refusing to process
future purchases or exchanges related to such activities in the shareholder's accounts other than exchanges into a money
market fund. AIM Affiliates will use reasonable efforts to apply the fund's policies uniformly given the practical
limitations described above.
The ability of AIM Affiliates to monitor trades that are made through accounts that are maintained by intermediaries
(rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent.
TRADING GUIDELINES
If you exceed four exchanges out of a fund per calendar year (other than the money market funds and AIM Limited Maturity
Treasury Fund), or a fund or an AIM Affiliate determines, in its sole discretion, that your short-term trading activity is
excessive (regardless of whether or not you exceed such guidelines), it may, in its discretion, reject any additional
purchase and exchange orders.
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THE AIM FUNDS
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The ability of AIM Affiliates to monitor exchanges made through accounts that are maintained by intermediaries (rather than
the funds' transfer agent) and through conduit investment vehicles may be severely limited or non-existent. If shares of the
funds are held in the name of a conduit investment vehicle and not in the names of the individual investors who have invested
in the funds through the conduit investment vehicle, the conduit investment vehicle may be considered an individual
shareholder of the funds. To the extent that a conduit investment vehicle is considered an individual shareholder of the
funds, the funds are likely to be limited in their ability to impose exchange limitations on individual transactions
initiated by investors who have invested in the funds through the conduit investment vehicle.
REDEMPTION FEES
You may be charged a 2% redemption fee if you redeem, including redeeming by exchange, shares of certain funds within 31 days
of purchase. The ability of a fund to assess a redemption fee on redemptions effectuated through accounts that are maintained
by intermediaries (rather than the funds' transfer agent) and through conduit investment vehicles may be severely limited or
non-existent.
FAIR VALUE PRICING
Securities owned by a fund are to be valued at current market value if market quotations are readily available. All other
securities and assets of a fund for which market quotations are not readily available are to be valued at fair value
determined in good faith using procedures approved by the Board. Fair value pricing may reduce the ability of frequent
traders to take advantage of arbitrage opportunities resulting from potentially "stale" prices of portfolio holdings.
However, it cannot eliminate the possibility of frequent trading.
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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 the 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. The fund also files its complete schedule of portfolio holdings with the SEC for the 1st and 3rd quarters of each fiscal year on Form N-Q. The fund's most recent portfolio holdings, as filed on Form N-Q, are also available at http://www.aiminvestments.com.
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 at AIM Investment Services, Inc., P.O. Box 4739, Houston, TX 77210-4739 or
BY TELEPHONE: (800) 959-4246
ON THE INTERNET: You can send us a request by e-mail or download
prospectuses, SAIs, annual or semiannual reports via our
website: http://www.aiminvestments.com
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You can also review and obtain copies of the fund's SAI, financial reports, the fund's Forms N-Q 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 duplicating 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.
AIMinvestments.com SCOR-PRO-1
[AIM INVESTMENTS LOGO APPEARS HERE]
--Registered Trademark--
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STATEMENT OF
ADDITIONAL INFORMATION
AIM COUNSELOR SERIES TRUST
11 GREENWAY PLAZA
SUITE 100
HOUSTON, TEXAS 77046-1173
(713) 626-1919
THIS STATEMENT OF ADDITIONAL INFORMATION RELATES TO EACH PORTFOLIO (EACH A "FUND", COLLECTIVELY THE "FUNDS") OF AIM COUNSELOR SERIES TRUST LISTED BELOW. THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS, AND IT SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUSES FOR THE FUNDS LISTED BELOW. PORTIONS OF EACH FUND'S FINANCIAL STATEMENTS ARE INCORPORATED INTO THIS STATEMENT OF ADDITIONAL INFORMATION BY REFERENCE TO SUCH FUND'S MOST RECENT ANNUAL REPORT TO SHAREHOLDERS. YOU MAY OBTAIN, WITHOUT CHARGE, A COPY OF ANY PROSPECTUS AND/OR ANNUAL REPORT FOR ANY FUND LISTED BELOW FROM AN AUTHORIZED DEALER OR BY WRITING TO:
AIM INVESTMENT SERVICES, INC.
P.O. BOX 4739
HOUSTON, TEXAS 77210-4739
OR BY CALLING (800) 959-4246
THIS STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 20, 2007, RELATES TO THE CLASS A, CLASS B, CLASS C, CLASS R AND INVESTOR CLASS SHARES, AS APPLICABLE, OF THE FOLLOWING PROSPECTUSES:
FUND DATED
---- -----
AIM MULTI-SECTOR FUND DECEMBER 20, 2007
AIM STRUCTURED CORE FUND DECEMBER 20, 2007
AIM STRUCTURED GROWTH FUND DECEMBER 20, 2007
AIM STRUCTURED VALUE FUND DECEMBER 20, 2007
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THIS STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 20, 2007, ALSO RELATES TO THE INSTITUTIONAL CLASS SHARES OF THE FOLLOWING PROSPECTUS:
FUND DATED
---- -----
AIM MULTI-SECTOR FUND DECEMBER 20, 2007
AIM STRUCTURED CORE FUND DECEMBER 20, 2007
AIM STRUCTURED GROWTH FUND DECEMBER 20, 2007
AIM STRUCTURED VALUE FUND DECEMBER 20, 2007
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AIM COUNSELOR SERIES TRUST
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
PAGE
----
GENERAL INFORMATION ABOUT THE TRUST...................................... 1
Fund History.......................................................... 1
Shares of Beneficial Interest......................................... 2
DESCRIPTION OF THE FUNDS AND THEIR INVESTMENTS AND RISKS................. 4
Classification........................................................ 4
Investment Strategies and Risks....................................... 4
Equity Investments................................................. 4
Foreign Investments................................................ 5
Debt Investments................................................... 7
Other Investments.................................................. 11
Investment Techniques.............................................. 13
Derivatives........................................................ 17
Additional Securities or Investment Techniques..................... 22
Fund Policies......................................................... 22
Temporary Defensive Positions......................................... 26
Policies and Procedures for Disclosure of Fund Holdings............... 26
MANAGEMENT OF THE TRUST.................................................. 29
Board of Trustees..................................................... 29
Management Information................................................ 29
Trustee Ownership of Fund Shares................................... 32
Compensation.......................................................... 32
Retirement Plan For Trustees....................................... 32
Deferred Compensation Agreements................................... 33
Purchase of Class A Shares of the Funds at Net Asset Value......... 33
Codes of Ethics....................................................... 33
Proxy Voting Policies................................................. 33
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES...................... 34
INVESTMENT ADVISORY AND OTHER SERVICES................................... 34
Investment Advisor.................................................... 34
Investment Sub-Advisor................................................ 36
Portfolio Manager(s)............................................... 36
Securities Lending Arrangements.................................... 36
Service Agreements.................................................... 37
Other Service Providers............................................... 37
BROKERAGE ALLOCATION AND OTHER PRACTICES................................. 38
Brokerage Transactions................................................ 38
Commissions........................................................... 39
Broker Selection...................................................... 39
Directed Brokerage (Research Services)................................ 42
Regular Brokers....................................................... 42
Allocation of Portfolio Transactions.................................. 42
Allocation of Equity Initial Public Offering ("IPO") Transactions..... 43
PURCHASE, REDEMPTION AND PRICING OF SHARES............................... 43
Transactions through Financial Intermediaries......................... 43
Purchase and Redemption of Shares..................................... 43
Institutional Class Shares............................................ 61
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Offering Price........................................................ 61
Redemptions In Kind................................................... 63
Backup Withholding.................................................... 63
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS................................. 64
Dividends and Distributions.......................................... 64
Tax Matters.......................................................... 65
DISTRIBUTION OF SECURITIES............................................... 72
Distribution Plans.................................................... 72
Distributor........................................................... 74
FINANCIAL STATEMENTS..................................................... 76
PENDING LITIGATION....................................................... 76
APPENDICIES:
RATINGS OF DEBT SECURITIES............................................... A-1
PERSONS TO WHOM AIM PROVIDES NON-PUBLIC PORTFOLIO HOLDINGS ON AN
ONGOING BASIS......................................................... B-1
TRUSTEES AND OFFICERS.................................................... C-1
TRUSTEE COMPENSATION TABLE............................................... D-1
PROXY POLICIES AND PROCEDURES............................................ E-1
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES...................... F-1
MANAGEMENT FEES.......................................................... G-1
PORTFOLIO MANAGERS....................................................... H-1
ADMINISTRATIVE SERVICES FEES............................................. I-1
BROKERAGE COMMISSIONS.................................................... J-1
DIRECTED BROKERAGE (RESEARCH SERVICES) AND PURCHASES OF SECURITIES OF
REGULAR BROKERS OR DEALERS............................................ K-1
CERTAIN FINANCIAL ADVISORS THAT RECEIVE ONE OR MORE TYPES OF PAYMENTS.... L-1
AMOUNTS PAID TO A I M DISTRIBUTORS, INC. PURSUANT TO DISTRIBUTION PLANS.. M-1
ALLOCATION OF ACTUAL FEES PAID PURSUANT TO DISTRIBUTION PLANS............ N-1
TOTAL SALES CHARGES...................................................... O-1
PENDING LITIGATION....................................................... P-1
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GENERAL INFORMATION ABOUT THE TRUST
FUND HISTORY
AIM Counselor Series Trust (the "Trust") is a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company. The Trust currently consists of six separate portfolios: AIM Floating Rate Fund, AIM Multi-Sector Fund, AIM Select Real Estate Income Fund, AIM Structured Core Fund, AIM Structured Growth Fund and AIM Structured Value Fund. This Statement of Additional Information relates to AIM Multi-Sector Fund, AIM Structured Core Fund, AIM Structured Growth Fund and AIM Structured Value Fund (each a "Fund" and collectively, the "Funds"). Under the Second Amended and Restated Agreement and Declaration of Trust, dated December 6, 2005, as amended, (the "Trust Agreement"), the Board of Trustees of the Trust (the "Board") is authorized to create new series of shares without the necessity of a vote of shareholders of the Trust.
The Trust was organized as a Delaware statutory trust on July 29, 2003. Pursuant to shareholder approval obtained at a shareholder meeting held on October 21, 2003, each series portfolio of AIM Counselor Series Funds, Inc. (the "Company") and INVESCO Multi-Sector Fund, the single series portfolio of AIM Manager Series Funds, Inc. were redomesticated as new series of the Trust on November 25, 2003. The Company was incorporated under the laws of Maryland as INVESCO Advantage Series Funds, Inc. on April 24, 2000. On November 8, 2000, the Company changed its name to INVESCO Counselor Series Funds, Inc. and on October 1, 2003, the Company's name was changed to AIM Counselor Series Funds, Inc. INVESCO Manager Series Funds, Inc. ("Manager Series Funds") was incorporated under the laws of Maryland on May 23, 2002 and on October 1, 2003, Manager Series Fund's name was changed to AIM Manager Series Funds, Inc.
On May 16, 2001, AIM Advantage Health Sciences Fund ("Advantage Health") assumed all the assets and liabilities of INVESCO Global Health Sciences Fund. On September 30, 2003, Advantage Health's name was changed from INVESCO Advantage Global Health Sciences Fund to INVESCO Advantage Health Sciences Fund. On October 15, 2004, Advantage Health's name was changed from INVESCO Advantage Health Sciences Fund to AIM Advantage Health Sciences Fund. On October 15, 2004, AIM Multi-Sector Fund's name was changed from INVESCO Multi-Sector Fund to AIM Multi-Sector Fund. In addition, on April 27, 2007, AIM Global Health Care Fund, a portfolio of AIM Investment Funds, acquired all the assets of AIM Advantage Health Sciences Fund.
Each of AIM Structured Core Fund, AIM Structured Growth Fund and AIM Structured Value Fund (collectively, the "Structured Funds") commenced operations as a series of the Trust. Pursuant to shareholder approval obtained at a shareholder meeting held on April 11, 2006, AIM Floating Rate Fund assumed all of the assets and liabilities of closed-end AIM Floating Rate Fund, the fund's predecessor, the sole series portfolio of AIM Floating Rate Fund. The sole purpose of the reorganization on April 13, 2006 was to convert the closed-end fund into an open-end fund. Pursuant to shareholder approval obtained at a shareholder meeting on February 26, 2007, AIM Select Real Estate Income Fund assumed all of the assets and liabilities of closed-end AIM Select Real Estate Income Fund, the fund's predecessor, the sole series portfolio of AIM Select Real Estate Income Fund. The sole purpose of the reorganization on March 12, 2007 was to convert the closed-end fund into an open-end fund.
"Open-end" means that a Fund may issue an indefinite number of shares which are continuously offered and which may be redeemed at net asset value per share ("NAV"). A "management" investment company actively buys and sells securities for the portfolio of the Fund at the direction of a professional manager. Open-end management investment companies (or one or more series of such companies, such as the Fund) are commonly referred to as mutual funds.
SHARES OF BENEFICIAL INTEREST
Shares of beneficial interest of the Trust are redeemable at their net asset value (subject, in certain circumstances, to a contingent deferred sales charge or redemption fee) at the option of the shareholder or at the option of the Trust in certain circumstances.
The Trust allocates moneys and other property it receives from the issue or sale of shares of each of its series of shares, and all income, earnings and profits from such issuance and sales, subject only to the rights of creditors, to the appropriate fund. These assets constitute the underlying assets of each fund, are segregated on the Trust's books of account, and are charged with the expenses of such fund and its respective classes. The Trust allocates any general expenses of the Trust not readily identifiable as belonging to a particular fund by or under the direction of the Board, primarily on the basis of relative net assets, or other relevant factors.
Each share of each fund represents an equal proportionate interest in that fund with each other share and is entitled to such dividends and distributions out of the income belonging to such fund as are declared by the Board. Each fund offers the following separate classes of shares.
INSTITUTIONAL INVESTOR
FUND CLASS A CLASS B CLASS C CLASS R CLASS CLASS
---- ------- ------- ------- ------- ------------- --------
AIM Floating Rate Fund X X X X
AIM Multi-Sector Fund X X X X
AIM Select Real Estate Income Fund X X X X
AIM Structured Core Fund X X X X X X
AIM Structured Growth Fund X X X X X
AIM Structured Value Fund X X X X X
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This Statement of Additional Information relates to the Class A, Class B, Class C, Class R, Investor Class and Institutional Class shares, if applicable, of the Funds. The Institutional Class shares of AIM Multi-Sector Fund and the Structured Funds are intended for use by certain eligible institutional investors, including the following:
- banks and trust companies acting in a fiduciary or similar capacity;
- bank and trust company common and collective trust funds;
- banks and trust companies investing for their own account;
- entities acting for the account of a public entity (e.g., Taft-Hartley funds, states, cities or government agencies);
- retirement plans;
- platform sponsors with which A I M Distributors, Inc. ("AIM Distributors") has entered into an agreement;
- proprietary asset allocation funds; and
- A I M Management Group Inc. and its affiliates.
Each class of shares represents an interest in the same portfolio of investments. Differing sales charges and expenses 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.
Each share of a fund generally has the same voting, dividend, liquidation and other rights; however, each class of shares of a fund is subject to different sales loads, conversion features, exchange privileges and class-specific expenses. Only shareholders of a specific class may vote on matters relating to that class' distribution plan.
Because Class B shares automatically convert to Class A shares on or about month-end which is at least eight years after the date of purchase, the Funds' distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act requires that Class B shareholders must also approve any material increase in distribution fees submitted to Class A shareholders of that Fund. A pro rata portion of shares from reinvested dividends and distributions convert along with the Class B shares.
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 shares of a fund. However, on matters affecting an individual fund or class of shares, a separate vote of shareholders of that fund or class is required. Shareholders of a fund or class are not entitled to vote on any matter which does not affect that fund or class but that requires a separate vote of another fund or class. An example of a matter that would be voted on separately by shareholders of each fund is the approval of the advisory agreement with A I M Advisors, Inc. ("AIM"), and an example of a matter that would be voted on separately by shareholders of each class of shares is approval of the distribution plans. When issued, shares of each fund are fully paid and nonassessable, have no preemptive or subscription rights, and are freely transferable. Other than the automatic conversion of Class B shares to Class A shares, there are no conversion rights. Shares do not have cumulative voting rights, which means that in situations in which shareholders elect trustees, holders of more than 50% of the shares voting for the election of trustees can elect all of the trustees of the Trust, and the holders of less than 50% of the shares voting for the election of trustees will not be able to elect any trustees.
Under Delaware law, shareholders of a Delaware statutory trust shall be entitled to the same limitations of liability extended to shareholders of private for-profit corporations. There is a remote possibility, however, 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. 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 is unable to meet its obligations and the complaining party is not held to be bound by the disclaimer.
The trustees and officers of the Trust will not be liable for any act, omission or obligation of the Trust or any trustee or officer; however, a trustee or officer is not protected 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 ("Disabling Conduct"). The Trust's Bylaws generally provide for indemnification by the Trust of the trustees, the officers and employees or agents of the Trust, provided that such persons have not engaged in Disabling Conduct. Indemnification does not extend to judgments or amounts paid in settlement in any actions by or in the right of the Trust. The Trust Agreement also
authorizes the purchase of liability insurance on behalf of trustees and officers. The Trust's Bylaws provide for the advancement of payments to current and former trustees, officers and employees or agents of the Trust, or anyone serving at their request, in connection with the preparation and presentation of a defense to any claim, action, suit or proceeding, expenses for which such person would be entitled to indemnification; provided that any advancement of payments would be reimbursed unless it is ultimately determined that such person is entitled to indemnification for such expenses.
SHARE CERTIFICATES. Shareholders of the Funds do not have the right to demand or require the Trust to issue share certificates and share certificates are not issued.
DESCRIPTION OF THE FUNDS AND THEIR INVESTMENTS AND RISKS
CLASSIFICATION
The Trust is an open-end management investment company. Each of the Funds is "diversified" for purposes of the 1940 Act.
INVESTMENT STRATEGIES AND RISKS
Set forth below are detailed descriptions of the various types of securities and investment techniques that AIM and/or INVESCO Institutional (N.A.), Inc. ("INVESCO Institutional" or the "Sub-Advisor") may use in managing the Funds, as well as the risks associated with those types of securities and investment techniques. The descriptions of the types of securities and investment techniques below supplement the discussion of principal investment strategies and risks contained in each Fund's Prospectus; where a particular type of security or investment technique is not discussed in a Fund's Prospectus, that security or investment technique is not a principal investment strategy.
Not all of the Funds invest in all of the types of securities or use all of the investment techniques described below, and a Fund may not invest in all of these types of securities or use all of these techniques at any one time. A Fund's transactions in a particular type of security or use of a particular technique is subject to limitations imposed by a Fund's investment objective, policies and restrictions described in the Fund's Prospectus and/or this Statement of Additional Information, as well as the federal securities laws. AIM and/or the Sub-Advisor may invest in other types of securities and may use other investment techniques in managing the Funds, including those described below for Funds not specifically mentioned as investing in the security or using the investment technique, as well as securities and techniques not described, subject to limitations imposed by a Fund's investment objective, policies and restrictions described in the Fund's Prospectus and/or this Statement of Additional Information, as well as the federal securities laws.
The Funds' investment objectives, policies, strategies and practices described below are non-fundamental unless otherwise indicated.
Equity Investments
Each Fund may invest in all of the following types of equity investments.
COMMON STOCK. Common stock is issued by companies principally to raise cash for business purposes and represents a residual interest in the issuing company. A Fund participates in the success or failure of any company in which it holds stock. 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.
PREFERRED STOCK. Preferred stock, unlike common stock, often offers a stated dividend rate payable from a corporation's earnings. If interest rates rise, the fixed dividend on preferred stocks may be less attractive, causing the price of preferred stocks to decline. Preferred stock may have mandatory sinking fund provisions, as well as call/redemption provisions prior to maturity, a negative feature when
interest rates decline. Dividends on some preferred stock may be "cumulative," requiring all or a portion of prior unpaid dividends to be paid before dividends are paid on the issuer's common stock. Preferred stock also generally has a preference over common stock on the distribution of a corporation's assets in the event of liquidation of the corporation, and may be "participating," which means that it may be entitled to a dividend exceeding the stated dividend in certain cases. In some cases an issuer may offer auction rate preferred stock, which means that the dividend to be paid is set by auction and will often be reset at stated intervals. The rights of preferred stocks on the distribution of a corporation's assets in the event of a liquidation are generally subordinate to the rights associated with a corporation's debt securities.
CONVERTIBLE SECURITIES. Convertible securities include bonds, debentures, notes, preferred stocks and other securities that may be converted into a prescribed amount of common stock or other equity securities at a specified price and time. The holder of convertible securities is entitled to receive interest paid or accrued on debt, or dividends paid or accrued on preferred stock, until the security matures or is converted.
The value of a convertible security depends on interest rates, the yield of similar nonconvertible securities, the financial strength of the issuer and the seniority of the security in the issuer's capital structure. Convertible securities may be illiquid, and may be required to convert at a time and at a price that is unfavorable to the Fund.
The Funds will invest in a convertible debt security based primarily on the characteristics of the equity security into which it converts, and without regard to the credit rating of the convertible security (even if the credit rating is below investment grade). To the extent that a Fund invests in convertible debt securities with credit ratings below investment grade, such securities may have a higher likelihood of default, although this may be somewhat offset by the convertibility feature.
ALTERNATIVE ENTITY SECURITIES. Companies that are formed as limited partnerships, limited liability companies, business trusts or other non-corporate entities may issue equity securities that are similar to common or preferred stock of corporations.
Foreign Investments
FOREIGN SECURITIES. AIM Multi-Sector Fund may invest up to 25% of its total assets in foreign securities. Each Structured Fund may invest up to 20% of its total assets in foreign securities. Foreign securities are equity or debt securities issued by issuers outside the United States. The Structured Funds include securities in the form of American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"), and other securities representing underlying securities of foreign issuers in their limitation on investments in foreign securities. Although ADRs and securities of Canadian issuers are foreign securities, AIM Multi-Sector Fund does not include ADRs and securities of Canadian issuers in its foreign securities limitation, but does include EDRs and other securities representing underlying securities of foreign issuers in such limitation. Depositary receipts are typically issued by a bank or trust company and evidence ownership of underlying securities issued by foreign corporations.
Investments by a Fund in foreign securities, whether denominated in U.S. dollars or foreign currencies, may entail some or all of the risks set forth below; in addition to those accompanying an investment in U.S. issued securities. Investments by a Fund in ADRs, EDRs or similar securities also may entail some or all of the risks described below, as well as risks set forth below under "Description of the Funds and Their Investments - Investment Strategies and Risks - Foreign Investments - ADRs and EDRs."
Currency Risk. The value of the Funds' foreign investments will be affected by changes in currency exchange rates. The U.S. dollar value of a foreign security decreases when the value of the U.S. dollar rises against the foreign currency in which the security is denominated, and increases when the value of the U.S. dollar falls against such currency.
Political and Economic Risk. The economies of many of the countries in which the Funds may invest may not be as developed as the United States' economy and may be subject to significantly different forces. Political or social instability, expropriation or confiscatory taxation, and limitations on the removal of funds or other assets could also adversely affect the value of the Funds' investments.
Regulatory Risk. Foreign companies may not be registered with the Securities and Exchange Commission ("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, corporate governance practices and requirements comparable to those applicable to domestic companies. Therefore, financial information about foreign companies may be incomplete, or may not be comparable to the information available on U.S. 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.
Risks of Developing Countries. Developing countries are those countries that are not included in the MSCI World Index. The Funds consider various factors when determining whether a company is in a developing country, including whether (1) it is organized under the laws of a developing country; (2) it has a principal office in a developing country; (3) it derives 50% or more of its total revenues from business in a developing country; or (4) its securities are traded principally on a stock exchange, or in an over-the-counter market, in a developing country. Investments in developing countries present risks greater than, and in addition to, those presented by investments in foreign issuers in general. A number of developing countries restrict, to varying degrees, foreign investment in stocks. Repatriation of investment income, capital, and the proceeds of sales by foreign investors may require governmental registration and/or approval in some developing countries. A number of the currencies of developing countries have experienced significant declines against the U.S. dollar in recent years, and devaluation may occur after investments in these currencies by the Funds. Inflation and rapid fluctuations in inflation rates have had and may continue to have negative effects on the economies and securities markets of certain emerging market countries. Many of the developing securities markets are relatively small or less diverse, have low trading volumes, suffer periods of relative illiquidity, and are characterized by significant price volatility. There is a risk in developing countries that a future economic or political crisis could lead to price controls, forced mergers of companies, expropriation or confiscatory taxation, seizure, nationalization, or creation of government monopolies, any of which may have a detrimental effect on the Fund's investments.
FOREIGN GOVERNMENT OBLIGATIONS. Each Fund may invest in debt securities of foreign governments. Debt securities issued by foreign governments are often, but not always, supported by the full faith and credit of the foreign governments, or their subdivisions, agencies or instrumentalities, that issue them. These securities involve the risks discussed above with respect to foreign securities. Additionally, the issuer of the debt or the governmental authorities that control repayment of the debt may be unwilling or unable to pay interest or repay principal when due. Political or economic changes or the balance of trade may affect a country's willingness or ability to service its debt obligations. Periods of economic uncertainty may result in the volatility of market prices of sovereign debt obligations, especially debt obligations issued by the governments of developing countries. Foreign government obligations of developing countries, and some structures of emerging market debt securities, both of which are generally below investment grade, are sometimes referred to as "Brady Bonds".
FOREIGN EXCHANGE TRANSACTIONS. Each Fund has authority to deal in foreign exchange between currencies of the different countries in which it will invest as a hedge against possible variations in the foreign exchange rates between those currencies. A Fund may commit the same percentage of its assets to foreign exchange hedges as it can invest in foreign securities. Foreign exchange transactions include direct purchases of futures contracts with respect to foreign currency, and contractual agreements to purchase or sell a specified currency at a specified future date (up to one year) at a price set at the time of the contract. Such contractual commitments may be forward currency contracts entered into directly with another party or exchange traded futures contracts. Foreign exchange transactions also include transactions conducted on a cash or "spot" basis at the spot rate for purchasing or selling currency in the foreign currency exchange markets.
The Funds may utilize either specific transactions ("transaction hedging") or portfolio positions ("position hedging") to hedge foreign currency exposure through foreign exchange transactions. Transaction hedging is the purchase or sale of foreign currency with respect to specific receivables or payables of a 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. There can be no guarantee that these investments will be successful. Additionally, foreign exchange transactions may involve some of the risks of investments in foreign securities.
ADRS AND EDRS. American Depositary Receipts, or ADRs, are receipts typically issued by U.S. banks. ADRs are receipts for the shares of foreign corporations that are held by the bank issuing the receipt. An ADR entitles its holder to all dividends and capital gains on the underlying foreign securities, less any fees paid to the bank. Purchasing ADRs gives a Fund the ability to purchase the functional equivalent of foreign securities without going to the foreign securities markets to do so. ADRs are bought and sold in U.S. dollars, not foreign currencies. An ADR that is "sponsored" means that the foreign corporation whose shares are represented by the ADR is actively involved in the issuance of the ADR, and generally provides material information about the corporation to the U.S. market. An "unsponsored" ADR program means that the foreign corporation whose shares are held by the bank is not obligated to disclose material information in the United States, and, therefore, the market value of the ADR may not reflect important fats known only to the foreign company. Since they mirror their underlying foreign securities, ADRs generally have the same risks as investing directly in the underlying foreign securities. European Depositary Receipts, or EDRs, are similar to ADRs, except they are typically issued by European banks or trust companies.
Debt Investments
U.S. GOVERNMENT OBLIGATIONS. Each Fund may invest, subject to the limitations set forth above, in U.S. Government obligations. Obligations issued or guaranteed by the U.S. Government, its agencies and instrumentalities include bills, notes and bonds issued by the U.S. Treasury, as well as "stripped" or "zero coupon" U.S. Treasury obligations representing future interest or principal payments on U.S. Treasury notes or bonds. Stripped securities are sold at a discount to their "face value," and may exhibit greater price volatility than interest-bearing securities because investors receive no payment until maturity. Obligations of certain agencies and instrumentalities of the U.S. Government, such as the Government National Mortgage Association ("GNMA"), are supported by the full faith and credit of the U.S. Treasury; others, such as those of the Federal National Mortgage Association ("FNMA"), are supported by the right of the issuer to borrow from the U.S. Treasury; others, such as those of the former Student Loan Marketing Association ("SLMA"), are supported by the discretionary authority of the U.S. Government to purchase the agency's obligations; still others, although issued by an instrumentality chartered by the U.S. Government, like the Federal Farm Credit Bureau ("FFCB"), are supported only by the credit of the instrumentality. The U.S. Government may choose not to provide financial support to U.S. Government-sponsored agencies or instrumentalities if it is not legally obligated to do so, in which case, if the issuer were to default, the Funds holding securities of such issuer might not be able to recover their investment from the U.S. Government.
INVESTMENT GRADE CORPORATE DEBT OBLIGATIONS. Each Fund may invest in U.S. dollar-denominated debt obligations issued or guaranteed by U.S. corporations or U.S. commercial banks, U.S. dollar-denominated obligations of foreign issuers and debt obligations of foreign issuers denominated in foreign currencies. Such debt obligations include, among others, bonds, notes, debentures and variable rate demand notes. In choosing corporate debt securities on behalf of a Fund, its investment adviser may consider (i) general economic and financial conditions; (ii) the specific issuer's (a) business and management, (b) cash flow, (c) earnings coverage of interest and dividends, (d) ability to operate under adverse economic conditions, (e) fair market value of assets, and (f) in the case of foreign issuers, unique political, economic or social conditions applicable to such issuer's country; and, (iii) other considerations deemed appropriate. The Funds other than AIM Advantage Health Sciences Fund and AIM Multi-Sector Fund will purchase only investment grade corporate debt securities.
Descriptions of debt securities ratings are found in Appendix A.
BANK INSTRUMENTS. AIM Multi-Sector Fund may invest in certificates of deposits, time deposits, and bankers' acceptances from U.S. or foreign banks. A bankers' acceptance is a bill of exchange or time draft drawn on and accepted by a commercial bank. A certificate of deposit is a negotiable interest-bearing instrument with a specific maturity. Certificates of deposit are issued by banks and savings and loan institutions in exchange for the deposit of funds, and normally can be traded in the secondary market prior to maturity. A time deposit is a non-negotiable receipt issued by a bank in exchange for the deposit of funds. Like a certificate of deposit, it earns a specified rate of interest over a definite period of time; however, it cannot be traded in the secondary market.
AIM Multi-Sector Fund may invest in certificates of deposit ("Eurodollar CDs") and time deposits ("Eurodollar time deposits") of foreign branches of domestic banks. Accordingly, an investment in AIM Multi-Sector Fund may involve risks that are different in some respects from those incurred by an investment company which invests only in debt obligations of U.S. domestic issuers. Such risks include future political and economic developments, the possible seizure or nationalization of foreign deposits and the possible imposition of foreign country withholding taxes on interest income.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. AIM Multi-Sector Fund may invest in mortgage-backed and asset-backed securities. Mortgage-backed securities are mortgage-related securities issued or guaranteed by the U.S. Government, its agencies and instrumentalities, or issued by non-government entities. Mortgage-related securities represent pools of mortgage loans assembled for sale to investors by various government agencies such as GNMA and government-related organizations such as FNMA and the Federal Home Loan Mortgage Corporation ("FHLMC"), as well as by non-government issuers such as commercial banks, savings and loan institutions, mortgage bankers and private mortgage insurance companies. Although certain mortgage-related securities are guaranteed by a third party or otherwise similarly secured, the market value of the security, which may fluctuate, is not so secured.
There are a number of important differences among the agencies and instrumentalities of the U.S. Government that issue mortgage-related securities and among the securities they issue. Mortgage-related securities issued by GNMA include GNMA Mortgage Pass-Through Certificates (also known as "Ginnie Maes") which are guaranteed as to the timely payment of principal and interest. That guarantee is backed by the full faith and credit of the U.S. Treasury. GNMA is a corporation wholly owned by the U.S. Government within the Department of Housing and Urban Development. Mortgage-related securities issued by FNMA include FNMA Guaranteed Mortgage Pass-Through Certificates (also known as "Fannie Maes") and are guaranteed as to payment of principal and interest by FNMA itself and backed by a line of credit with the U.S. Treasury. FNMA is a government-sponsored entity wholly owned by public stockholders. Mortgage-related securities issued by FHLMC include FHLMC Mortgage Participation Certificates (also known as "Freddie Macs") guaranteed as to payment of principal and interest by FHLMC itself and backed by a line of credit with the U.S. Treasury. FHLMC is a government-sponsored entity wholly owned by public stockholders.
Other asset-backed securities are structured like mortgage-backed securities, but instead of mortgage loans or interests in mortgage loans, the underlying assets may include such items as motor vehicle installment sales or installment loan contracts, leases of various types of real and personal property, and receivables from credit card agreements and from sales of personal property. Regular payments received in respect of such securities include both interest and principal. Asset-backed securities typically have no U.S. Government backing. Additionally, the ability of an issuer of asset-backed securities to enforce its security interest in the underlying assets may be limited.
COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS"). AIM Multi-Sector Fund may invest in CMOs. A CMO is a hybrid between a mortgage-backed bond and a mortgage pass-through security. Similar to a bond, interest and prepaid principal is paid, in most cases, semiannually. CMOs may be collateralized by whole mortgage loans, but are more typically collateralized by portfolios of mortgage pass-through securities guaranteed by GNMA, FHLMC, or FNMA, and their income streams.
CMOs are structured into multiple classes, each bearing a different stated maturity. Actual maturity and average life will depend upon the prepayment experience of the collateral. CMOs provide for a modified form of call protection through a de facto breakdown of the underlying pool of mortgages according to how quickly the loans are repaid. Monthly payment of principal received from the pool of underlying mortgages, including prepayments, is first returned to investors holding the shortest maturity class. Investors holding the longer maturity classes receive principal only after the first class has been retired. An investor is partially guarded against a sooner than desired return of principal because of the sequential payments.
In a typical CMO transaction, a corporation ("issuer") issues multiple series (e.g., A, B, C, Z) of CMO bonds ("Bonds"). Proceeds of the Bond offering are used to purchase mortgages or mortgage pass-through certificates ("Collateral"). The Collateral is pledged to a third party trustee as security for the Bonds. Principal and interest payments from the Collateral are used to pay principal on the Bonds in the order A, B, C, Z. The Series A, B, and C Bonds all bear current interest. Interest on Series Z Bond is accrued and added to principal and a like amount is paid as principal on the Series A, B, or C Bond currently being paid off. When the Series A, B, and C Bonds are paid in full, interest and principal on the Series Z Bond begins to be paid currently. With some CMOs, the issuer serves as a conduit to allow loan originators (primarily builders or savings and loan associations) to borrow against their loan portfolios.
CMOs that are issued or guaranteed by the U.S. government or by any of its agencies or instrumentalities will be considered U.S. government securities by the Fund, while other CMOs, even if collateralized by U.S. government securities, will have the same status as other privately issued securities for purposes of applying the Fund's diversification tests.
FHLMC CMOs. FHLMC CMOs are debt obligations of FHLMC issued in multiple classes having different maturity dates which are secured by the pledge of a pool of conventional mortgage loans purchased by FHLMC. Unlike FHLMC Participation Certificates ("PCs"), payments of principal and interest on the CMOs are made semiannually, as opposed to monthly. The amount of principal payable on each semiannual payment date is determined in accordance with FHLMC's mandatory sinking fund schedule, which, in turn, is equal to approximately 100% of FHA prepayment experience applied to the mortgage collateral pool. All sinking fund payments in the CMOs are allocated to the retirement of the individual classes of bonds in the order of their stated maturities. Payment of principal on the mortgage loans in the collateral pool in excess of the amount of FHLMC's minimum sinking fund obligation for any payment date are paid to the holders of the CMOs as additional sinking fund payments. Because of the "pass-through" nature of all principal payments received on the collateral pool in excess of FHLMC's minimum sinking fund requirement, the rate at which principal of the CMOs is actually repaid is likely to be such that each class of bonds will be retired in advance of its scheduled maturity date.
If collection of principal (including prepayments) on the mortgage loans during any semiannual payment period is not sufficient to meet FHLMC's minimum sinking fund obligation on the next sinking fund payment date, FHLMC agrees to make up the deficiency from its general funds.
Risks of Mortgage-Related Securities. Investment in mortgage-backed securities poses several risks, including prepayment, market, and credit risk. Prepayment risk reflects the risk that borrowers may prepay their mortgages faster than expected, thereby affecting the investment's average life and perhaps its yield. Whether or not a mortgage loan is prepaid is almost entirely controlled by the borrower. Borrowers are most likely to exercise prepayment options at the time when it is least advantageous to investors, generally prepaying mortgages as interest rates fall, and slowing payments as interest rates rise. Besides the effect of prevailing interest rates, the rate of prepayment and refinancing of mortgages may also be affected by home value appreciation, ease of the refinancing process and local economic conditions.
Market risk reflects the risk that the price of the security may fluctuate over time. The price of mortgage-backed securities may be particularly sensitive to prevailing interest rates, the length of time the security is expected to be outstanding, and the liquidity of the issue. In a period of unstable interest rates, there may be decreased demand for certain types of mortgage-backed securities, and a Fund invested in such securities wishing to sell them may find it difficult to find a buyer, which may in turn decrease the price at which they may be sold.
Credit risk reflects the risk that the Fund may not receive all or part of its principal because the issuer or credit enhancer has defaulted on its obligations. Obligations issued by U.S. government-related entities are guaranteed as to the payment of principal and interest, but are not backed by the full faith and credit of the U.S. government. The performance of private label mortgage-backed securities, issued by private institutions, is based on the financial health of those institutions. With respect to GNMA certificates, although GNMA guarantees timely payment even if homeowners delay or default, tracking the "pass-through" payments may, at times, be difficult.
ZERO-COUPON AND PAY-IN-KIND SECURITIES. AIM Multi-Sector Fund may invest in zero-coupon or pay-in-kind securities. These securities are debt securities that do not make regular cash interest payments. Zero-coupon securities are sold at a deep discount to their face value. Pay-in-kind securities pay interest through the issuance of additional securities. Because zero-coupon and pay-in-kind securities do not pay current cash income, the price of these securities can be volatile when interest rates fluctuate. While these securities do not pay current cash income, federal tax law requires the holders of zero-coupon and pay-in-kind securities to include in income each year the portion of the original issue discount (or deemed discount) and other non-cash income on such securities accrued during that year. In order to qualify as a "regulated investment company" under the Internal Revenue Code of 1986, as amended (the "Code") and to avoid certain excise taxes, AIM Multi-Sector Fund may be required to distribute a portion of such discount and income, and may be required to dispose of other portfolio securities, which could occur during periods of adverse market prices, in order to generate sufficient cash to meet these distribution requirements.
JUNK BONDS. AIM Multi-Sector Fund may invest in lower-rated or non-rated debt securities commonly known as junk bonds. AIM Multi-Sector Fund will limit its investments in junk bonds to those which are rated at least Caa by Moody's and CCC by S&P.
Junk bonds are considered speculative with respect to their capacity to pay interest and repay principal in accordance with the terms of the obligation. While generally providing greater income and opportunity for gain, non-investment grade debt securities are subject to greater risks than higher-rated securities.
Companies that issue junk bonds are often highly leveraged, and may not have more traditional methods of financing available to them. During an economic downturn or recession, highly leveraged issuers of high yield securities may experience financial stress, and may not have sufficient revenues to meet their interest payment obligations. Economic downturns tend to disrupt the market for junk bonds, lowering their values, and increasing their price volatility. The risk of issuer default is higher with respect to junk bonds because such issues may be subordinated to other creditors of the issuer.
The credit rating of a junk bond does not necessarily address its market value risk, and ratings may from time to time change to reflect developments regarding the issuer's financial condition. The lower the rating of a junk bond, the more speculative its characteristics.
A Fund may have difficulty selling certain junk bonds because they may have a thin trading market. The lack of a liquid secondary market may have an adverse effect on the market price and a Fund's ability to dispose of particular issues and may also make it more difficult for the Fund to obtain accurate market quotations in valuing these assets. In the event a Fund experiences an unexpected level of net redemptions, the Fund could be forced to sell its junk bonds at an unfavorable price. Prices of junk bonds have been found to be less sensitive to fluctuations in interest rates, and more sensitive to adverse economic changes and individual corporate developments than those of higher-rated debt securities.
LIQUID ASSETS. For cash management purposes, each Fund may hold a portion of its assets in cash or cash equivalents, including shares of affiliated money market funds. In anticipation of or in response to adverse market or other conditions, or atypical circumstances such as unusually large cash inflows or redemptions, each Fund may temporarily hold all or a portion of its assets in cash, cash equivalents (including shares of affiliated money market funds) or high-quality debt instruments. As a result, a Fund may not achieve its investment objective.
Cash equivalents include money market instruments (such as certificates of deposit, time deposits, bankers' acceptances from U.S. or foreign banks, and repurchase agreements), shares of affiliated money market funds or high-quality debt obligations (such as U.S. Government obligations, commercial paper, master notes and other short-term corporate instruments and municipal obligations).
Other Investments
REAL ESTATE INVESTMENT TRUSTS ("REITS"). To the extent consistent with their respective investment objectives and policies, AIM Multi-Sector Fund and each Structured Fund may invest up to 15% of its total assets in equity and/or debt securities issued by REITs. REITs are trusts that 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.
REITs can generally be classified as equity REITs, mortgage REITs and hybrid REITs. Equity REITs generally invest a majority of their assets in income-producing real estate properties in order to generate cash flow from rental income and a gradual asset appreciation. The income-producing real estate properties in which equity REITs invest typically include properties such as office, retail, industrial, hotel and apartment buildings and healthcare facilities. Equity REITs can realize capital gains by selling properties that have appreciated in value. Mortgage REITs invest the majority of their assets in real estate mortgages and derive their income primarily from interest payments on the mortgages. Hybrid REITs combine the characteristics of both equity REITs and mortgage REITs.
REITs can be listed and traded on national securities exchanges or can be traded privately between individual owners. The Funds may invest in both publicly and privately traded REITs.
The Funds could conceivably own real estate directly as a result of a default on the securities it owns. The Funds, therefore, may be subject to certain risks associated with the direct ownership of real estate including difficulties in valuing and trading real estate, declines in the value of real estate, risks related to general and local economic conditions, adverse changes in the climate for real estate, environmental liability risks, increases in property taxes and operating expenses, changes in zoning laws, casualty or condemnation losses, limitations on rents, changes in neighborhood values, the appeal of properties to tenants, and increases in interest rates.
In addition to the risks described above, equity 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 an exemption from the 1940 Act. Changes in interest rates may also affect the value of debt securities held by the Funds. By investing in REITs indirectly through the Funds, a shareholder will bear not only his/her proportionate share of the expenses of the Funds, but also, indirectly, similar expenses of the REITs.
OTHER INVESTMENT COMPANIES. Each Fund may purchase shares of other investment companies. For each Fund, the 1940 Act imposes the following restrictions on investments in other investment companies: (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. These restrictions do not apply to investments by the Funds in investment companies that are money market funds, including money market funds that have AIM or an affiliate of AIM as an investment advisor (the "Affiliated Money Market Funds").
With respect to a Fund's purchase of shares of another investment company, including an Affiliated Money Market Fund, the Fund will indirectly bear its proportionate share of the advisory fees and other operating expenses of such investment company.
EXCHANGE-TRADED FUNDS. Each Fund may purchase shares of exchange-traded funds ("ETFs"). Most ETFs are registered under the 1940 Act as investment companies. Therefore, a Fund's purchase of shares of an ETF may be subject to the restrictions on investments in other investment companies discussed above under "Other Investment Companies."
ETFs hold portfolios of securities, commodities and/or currencies that are designed to replicate, as closely as possible before expenses, the price and/or yield of (i) a specified market or other index; (ii) a basket of securities, commodities or currencies, or (iii) a particular commodity or currency. The performance results of ETFs will not replicate exactly the performance of the pertinent index, basket, commodity or currency due to transaction and other expenses, including fees to service providers, borne by ETFs. ETF shares are sold and redeemed at net asset value only in large blocks called creation units and redemption units, respectively. ETFs shares also may be purchased and sold in secondary market trading on national securities exchanges, which allows investors to purchase and sell ETF shares at their market price throughout the day.
Investments in ETFs involve the same risks associated with a direct
investment in the commodity or currency, or in the types of securities,
commodities and/or currencies included in the indices or baskets the ETFs are
designed to replicate. In addition, shares of an ETF may trade at a market price
that is less than their net asset value and an active trading market in such
shares may not develop or continue. Moreover, trading of an ETF's shares may be
halted if the listing exchange's officials deem such action to be appropriate,
the shares are de-listed from the exchange, or the activation of market-wide
"circuit breakers" (which are tied to large decreases in stock prices) halts
stock trading generally. Finally, there can be no assurance that the portfolio
of securities, commodities and/or currencies purchased by an ETF to replicate
(i) a particular index or basket will replicate such index or basket; or (ii) a
commodity or currency will replicate the prices of such commodity or currency.
INDEXED SECURITIES. Each Fund may invest in indexed securities the value of which is linked to interest rates, commodities, indices or other financial indicators. Most indexed securities are short to intermediate term fixed income securities whose values at maturity (principal value) or interest rates rise or fall according to changes in the value of one or more specified underlying instruments. Indexed securities may be positively or negatively indexed (i.e., their principal value or interest rates may increase or decrease if the underlying instrument appreciates), and may have return characteristics similar to direct investments in the underlying instrument or to one or more options on the underlying instrument. Indexed securities may be more volatile than the underlying instrument itself and could involve the loss of all or a portion of the principal amount of the indexed security.
Investment Techniques
DELAYED DELIVERY TRANSACTIONS. Delayed delivery transactions, also referred to as forward commitments, involve commitments by a Fund to dealers or issuers to acquire or sell securities at a specified future date beyond the customary settlement for such securities. These commitments may fix the payment price and interest rate to be received or paid on the investment. A Fund may purchase securities on a delayed delivery basis to the extent it can anticipate having available cash on settlement date. Delayed delivery agreements may be used as a speculative or leverage technique.
Investment in securities on a 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 delayed delivery commitment. Until the settlement date, a Fund will segregate liquid assets of a dollar value sufficient at all times to make payment for the delayed delivery transactions. Such segregated liquid assets will be marked-to-market daily, and the amount segregated will be increased if necessary to maintain adequate coverage of the delayed delivery commitments.
The delayed delivery securities, which will not begin to accrue interest or dividends until the settlement date, will be recorded as an asset of a Fund and will be subject to the risk of market fluctuation. The purchase price of the delayed delivery securities is a liability of a Fund until settlement. Absent extraordinary circumstances, a Fund will not sell or otherwise transfer the delayed delivery basis securities prior to settlement.
A Fund may enter into buy/sell back transactions (a form of delayed delivery agreement). In a buy/sell back transaction, a Fund enters a trade to sell securities at one price and simultaneously enters a trade to buy the same securities at another price for settlement at a future date.
WHEN-ISSUED SECURITIES. Each Fund may purchase when-issued securities. Purchasing securities on a "when-issued" basis means that the date for delivery of and payment for the securities is not fixed at the date of purchase, but is set after the securities are issued. The payment obligation and, if applicable, the interest rate that will be received on the securities are fixed at the time the buyer enters into the commitment. A Fund will only make commitments to purchase such securities with the intention of actually acquiring such securities, but the Fund may sell these securities before the settlement date if it is deemed advisable.
Securities purchased on a when-issued basis and the securities held in a Fund's portfolio are subject to changes in market value based upon the public's perception of the creditworthiness of the issuer and, if applicable, changes in the level of interest rates. Therefore, if a Fund is to remain substantially fully invested at the same time that it has purchased securities on a when-issued basis, there will be a possibility that the market value of the Fund's assets will fluctuate to a greater degree. Furthermore, when the time comes for the Fund to meet its obligations under when-issued commitments, the Fund will do so by using then available cash flow, by sale of the segregated liquid assets, by sale of other securities or, although it would not normally expect to do so, by directing the sale of the when-issued securities themselves (which may have a market value greater or less than the Fund's payment obligation).
Investment in securities on a when-issued 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 sell another security in order to honor a when-issued commitment. The Funds 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 liquid assets will be segregated on a daily basis so that the market value of the segregated assets will equal the amount of the Fund's when-issued commitments. No additional when-issued commitments will be made by a Fund if, as a result, more than 25% of the Fund's total assets would become so committed.
SHORT SALES. Each Fund may engage in short sales "against the box," meaning that 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 in an amount equal to, the securities sold short. To secure its obligation to deliver the securities sold short against the box, a Fund will segregate with its custodian an equal amount of the securities sold short or securities convertible into or exchangeable for such securities. The Funds will not sell a security short against the box, if, as a result of such short sale, the aggregate market value of all securities sold short exceeds 10% of the Fund's total assets.
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 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.
Short sales against the box may be subject to special tax treatment as "constructive sales" and require a Fund to recognize any taxable gain unless an exception to the constructive sale rule applies. See "Dividends, Distributions and Tax Matters - Tax Matters - Determination of Taxable Income of a Regulated Investment Company."
In addition to enabling the Funds to hedge against market risk, short sales may afford the Funds an opportunity to earn additional current income to the extent the Funds are able to enter into arrangements with broker-dealers through which the short sales are executed to receive income with respect to the proceeds of the short sales during the period the Funds' short positions remain open. There is no assurance that the Funds will be able to enter into such arrangements.
MARGIN TRANSACTIONS. None of the Funds will purchase any security on margin, except that each Fund may obtain such short-term credits as may be necessary for the clearance of purchases and sales of portfolio securities. The payment by a Fund of initial or variation margin in connection with futures or related options transactions will not be considered the purchase of a security on margin.
SWAP AGREEMENTS. AIM Multi-Sector Fund may enter into swap agreements for purposes of attempting to obtain a particular desired return at a lower cost to the Fund than if it had invested directly in an instrument that yielded that desired return. Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a few weeks to more than one year. In a standard "swap" transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or "swapped" between the parties are calculated based on a "notional amount," i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate, in a particular foreign currency, or in a "basket" of securities representing a particular index. Commonly used swap agreements include: (i) interest rate caps, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates exceed a specified rate, or "cap"; (ii) interest rate floors, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates fall below a specified level, or "floor"; and (iii) interest rate collars, under which a party sells a cap and purchases a floor or vice versa in an attempt to protect itself against interest rate movements exceeding given minimum or maximum levels.
The "notional amount" of the swap agreement is only a fictitious amount used to calculate the obligations that the parties to a swap agreement have agreed to exchange. Swaps are generally governed by a single master agreement for each counterparty, and the agreements allow for netting of
counterparties' obligations on specific transactions. A Fund's obligation or rights will be the net amount owed to or by the counterparty.
A Fund's current obligations under a swap agreement will be accrued daily (on a net basis), and the Fund will maintain cash or liquid assets in an amount equal to amounts owed to a swap counterparty less the value of any collateral posted. A Fund will not enter into a transaction with any single counterparty if the net amount owed or to be received under existing transactions under the swap agreements with that counterparty would exceed 5% of the Fund's net assets determined on the date the transaction is entered into.
Although this will not guarantee that the counterparty does not default, the Fund will not enter into a transaction with any counterparty that AIM believes does not have the financial resources to honor its obligation under the transaction. Further, AIM will continually monitor the financial stability of a counterparty to a transaction in an effort to proactively protect the Fund's investments. Where the obligations of the counterparty are guaranteed, AIM monitors the financial stability of the guarantor instead of the counterparty. For a discussion of the tax considerations relating to swap agreements, see "Dividends, Distributions and Tax Matters - Tax Matters - Swap Agreements."
INTERFUND LOANS. Each Fund may lend uninvested cash up to 15% of its net assets to other Funds advised by AIM (the "AIM Funds") and each Fund may borrow from other AIM Funds to the extent permitted under such Fund's investment restrictions. During temporary or emergency periods, the percentage of a Fund's net assets that may be loaned to other AIM Funds may be increased as permitted by the SEC. If a Fund has borrowed from other AIM Funds and has aggregate borrowings from all sources that exceed 10% of such Fund's total assets, such Fund will secure all of its loans from other AIM Funds. The ability of a Fund to lend its securities to other AIM Funds is subject to certain other terms and conditions.
BORROWING. Each Fund may borrow money to a limited extent for temporary or emergency purposes. If there are unusually heavy redemptions because of changes in interest rates or Fund performance, or for any other reason, a Fund may have to sell a portion of its investment portfolio at a time when it may be disadvantageous to do so. Selling fund securities under these circumstances may result in a lower net asset value per share or decreased dividend income, or both. The Trust believes that, in the event of abnormally heavy redemption requests, a Fund's borrowing ability would help to mitigate any such effects and could make the forced sale of their portfolio securities less likely.
LENDING PORTFOLIO SECURITIES. The Funds may each lend their portfolio securities where such loans are callable at any time and are continuously secured by segregated 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. Each Fund may lend portfolio securities to the extent of one-third of its total assets.
A Fund will not have the right to vote securities while they are on loan, but it can call a loan in anticipation of an important vote. The Fund would receive income in lieu of dividends on loaned securities and would, at the same time, earn interest on the loan collateral or on the investment of any cash collateral. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the loaned securities increases and the collateral is not increased accordingly, or in the event of a default by the borrower. The Fund could also experience delays and costs in gaining access to the collateral.
Any cash received as collateral for loaned securities will be invested, in accordance with a Fund's investment guidelines, in short-term money market instruments or Affiliated Money Market Funds. For purposes of determining whether a Fund is complying with its investment policies, strategies and restrictions, the Fund will consider the loaned securities as assets of the Fund, but will not consider any collateral received as a Fund asset.
REPURCHASE AGREEMENTS. Each Fund may engage in repurchase agreement transactions involving the types of securities in which it is permitted to invest. Repurchase agreements are agreements under which a Fund acquires ownership of a security from a broker-dealer or bank that agrees to repurchase the security at a mutually agreed upon time and price (which is higher than the purchase price), thereby determining the yield during a Fund's holding period. A Fund may, however, enter into a "continuing contract" or "open" repurchase agreement under which the seller is under a continuing obligation to repurchase the underlying obligation from the Fund on demand and the effective interest rate is negotiated on a daily basis.
If the seller of a repurchase agreement fails to repurchase the security in accordance with the terms of the agreement, a Fund might incur expenses in enforcing its rights, and could experience losses, including a decline in the value of the underlying security and loss of income. In addition, although the Bankruptcy Code and other insolvency laws may provide certain protections for some types of repurchase agreements, if the seller of a repurchase agreement should be involved in bankruptcy or insolvency proceedings, a Fund may incur delay and costs in selling the underlying security or may suffer a loss of principal and interest if the value of the underlying security declines. The securities underlying a repurchase agreement will be marked-to-market every business day so that the value of such securities is at least equal to the investment value of the repurchase agreement, including any accrued interest thereon.
The Funds may invest their cash balances in joint accounts with other AIM Funds for the purpose of investing in repurchase agreements with maturities not to exceed 60 days, and in certain other money market instruments with remaining maturities not to exceed 90 days. Repurchase agreements are considered loans by a Fund under the 1940 Act.
ILLIQUID SECURITIES. Each Fund may invest up to 15% of its net assets in securities that are illiquid. Illiquid securities are securities that cannot be disposed of within seven days in the normal course of business at the price at which they are valued. Illiquid securities may include securities that are subject to restrictions on resale because they have not been registered under the Securities Act of 1933 (the "1933 Act"). Restricted securities may, in certain circumstances, be resold pursuant to Rule 144A under the 1933 Act, and thus may or may not constitute illiquid securities.
Limitations on the resale of restricted securities may have an adverse effect on their marketability, which may prevent a Fund from disposing of them promptly at reasonable prices. A Fund may have to bear the expense of registering such securities for resale, and the risk of substantial delays in effecting such registrations.
RULE 144A SECURITIES. Each Fund may invest in Rule 144A securities. Rule 144A securities are securities which, while privately placed, are eligible for purchase and resale pursuant to Rule 144A under the 1933 Act. This Rule permits certain qualified institutional buyers, such as the Funds, to trade in privately placed securities even though such securities are not registered under the 1933 Act. AIM, under the supervision of the Board, will consider whether securities purchased under Rule 144A are illiquid and thus subject to the Funds' restriction on investment 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). AIM will also monitor the liquidity of Rule 144A securities and, if as a result of changed conditions, AIM determines that a Rule 144A security is no longer liquid, AIM will review a Fund's holdings of illiquid securities to determine what, if any, action is required to assure that such Fund complies with its restriction on investment in illiquid securities. Investing in Rule 144A securities could increase the amount of each Fund's investments in illiquid securities if qualified institutional buyers are unwilling to purchase such securities.
Derivatives
As set forth below the Funds may invest in some or all of the following:
(i) in forward currency 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; (ii) fixed-rate certificates
("TRAINS") that represent fractional undivided interests in the assets of a
Targeted Return Index Securities Trust. 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).
HOLDRS. With respect to AIM Multi-Sector Fund, Holding Company Depositary Receipts, or HOLDRs, are trust-issued receipts that represent the Fund's benficial ownership of a specific group of stocks. HOLDRs involve risks similar to the risks of investing in common stock. For example, the Fund's investment will decline in value if the underlying stocks decline in value. Because HOLDRs are not subject to concentration limits, the relative weight of an individual stock may increase substantially, causing the HOLDRs to be less diverse and creating more risks.
PUT AND CALL OPTIONS. Each Fund may purchase and sell put and call options. A call option gives the purchaser the right to buy the underlying security, contract or foreign currency at the stated exercise price at any time prior to the expiration of the option (or on a specified date if the option is a European style option), regardless of the market price or exchange rate of the security, contract or foreign currency, as the case may be, at the time of exercise. If the purchaser exercises the call option, the writer of a call option is obligated to sell the underlying security, contract or foreign currency. A put option gives the purchaser the right to sell the underlying security, contract or foreign currency at the stated exercise price at any time prior to the expiration date of the option (or on a specified date if the option is a European style option), regardless of the market price or exchange rate of the security, contract or foreign currency, as the case may be, at the time of exercise. If the purchaser exercises the put option, the writer of a put option is obligated to buy the underlying security, contract or foreign currency. The premium paid to the writer is consideration for undertaking the obligations under the option contract. Until an option expires or is offset, the option is said to be "open." When an option expires or is offset, the option is said to be "closed."
A Fund will not write (sell) 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 the time of the investment, the aggregate premiums paid for the options will exceed 5% of the Fund's total assets.
Pursuant to federal securities rules and regulations, if a Fund writes options, it may be required to set aside assets to reduce the risks associated with using those options. This process is described in more detail below in the section "Cover."
Writing Options. A Fund may write put and call options in an attempt to realize, through the receipt of premiums, a greater current return than would be realized on the underlying security, contract, or foreign currency alone. A Fund may only write a call option on a security if it 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 subject to the call option. In return for the premium received for writing a call option, the Fund foregoes the opportunity for profit from a price increase in the underlying security, contract, or foreign currency above the exercise price so long as the option remains open, but retains the risk of loss should the price of the security, contract, or foreign currency decline.
A Fund may write a put option without owning the underlying security if it covers the option as described in the section "Cover." A Fund may only write a put option on a security as part of an investment strategy and not for speculative purposes. In return for the premium received for writing a put option, the Fund assumes the risk that the price of the underlying security, contract, or foreign currency
will decline below the exercise price, in which case the put would be exercised and the Fund would suffer a loss.
If an 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 a 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. A Fund would write a put option at an exercise price that, reduced by the premium received on the option, reflects the price it is willing to pay for the underlying security, contract or currency. The obligation imposed upon the writer of an option is terminated upon the expiration of the option, or such earlier time at which a Fund effects a closing purchase transaction by purchasing an option (put or call as the case may be) identical to that previously sold.
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.
Purchasing Options. A Fund may purchase a call option for the purpose of acquiring the underlying security, contract or currency for its portfolio. The Fund is not required to own the underlying security in order to purchase a call option, and may only cover the transaction with cash, liquid assets and/or short-term debt securities. 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 increase in the market price of the underlying security, contract or currency. If the market price does not exceed the exercise price, the Fund could purchase the security on the open market and could allow the call option to expire, incurring a loss only to the extent of the premium paid for the option. Each of the Funds may also purchase call options on underlying securities, contracts or currencies against which it has written other call options. For example, where a Fund has written a call option on an underlying security, rather than entering a closing transaction of the written option, it may purchase a call option with a different exercise strike and/or expiration date that would eliminate some or all of the risk associated with the written call. Used in combinations, these strategies are commonly referred to as "call spreads."
A Fund may only 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 the exercise of the put 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."
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. Because purchased OTC options in certain cases may be difficult to dispose of in a timely manner, the Fund may be required to treat some or all of these options (i.e., the market value) as illiquid securities. 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.
Index Options. Index options (or options on securities indices) are similar in many respects to options on securities, except that an index option gives the holder the right to receive, upon exercise, cash instead of securities, if the closing level of the securities index upon which the option is based is greater than, in the case of a call, or less than, in the case of a put, the exercise price of the option. 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.
Pursuant to federal securities rules and regulations, if a Fund writes index options, it may be required to set aside assets to reduce the risks associated with writing those options. This process is described in more detail below in the section "Cover".
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. Each Fund may purchase futures contracts and options on futures contracts. 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 (collectively, "Futures Contracts"). A stock index Futures Contract 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 when a Futures Contract is outstanding.
A Fund will enter into Futures Contracts for hedging purposes only; that is, Futures Contracts will be sold to protect against a decline in the price of securities or currencies that the Fund owns, or Futures Contracts 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. A Fund's hedging may include sales of Futures Contracts 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 Contracts as an offset against the effect of expected declines in interest rates, and increases in currency exchange rates or stock prices.
The Funds currently may not invest in any security (including futures contracts or options thereon) that is secured by physical commodities.
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 Investments" in this Statement of Additional Information.
Closing out an open Futures Contract is effected by entering into an offsetting Futures Contract 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 Futures Contract 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 Futures Contract.
"Margin" with respect to Futures Contracts is the amount of funds that must be deposited by a Fund in order to initiate Futures Contracts trading and maintain its open positions in Futures Contracts. 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 Futures Contract is set by the exchange on which the Futures Contract 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," received from or paid to 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 Contract more or less valuable, a process known as marking-to-market.
If a Fund were unable to liquidate a Futures Contract or an option on a Futures Contract 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 Futures Contract 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 Contract 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 Contract margin account. The Funds currently may not invest in any security (including futures contracts or options thereon) that is secured by physical commodities.
Limitations on Futures Contracts and Options on Futures Contracts and on 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%.
Pursuant to federal securities rules and regulations, a Fund's use of Futures Contracts and options on Futures Contracts may require that Fund to set aside assets to reduce the risks associated with using Futures Contracts and options on Futures Contracts. This process is described in more detail below in the section "Cover."
FORWARD CURRENCY CONTRACTS. AIM Multi-Sector Fund may enter into foreign currency contracts. A forward currency 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, which may be any fixed number of days (term) from the date of the forward currency contract agreed upon by the parties, and price as agreed upon by the parties at the time the contract is entered. The Fund either may accept or make delivery of the currency at the maturity of the forward currency contract. The 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 currency 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.
A Fund may engage in forward currency transactions in anticipation of, or to protect itself against, fluctuations in exchange rates (hedging). The Fund may enter into forward currency contracts with respect to a specific purchase or sale of a security, or with respect to its portfolio positions generally. When the 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 currency 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 the Fund of engaging in forward currency contracts varies with factors such as the currencies involved, the length of the contract period and the market conditions then prevailing. Because forward currency contracts are usually entered into on a principal basis, no fees or commissions are involved. The use of forward currency 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 currency 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.
Pursuant to federal securities rules and regulations, the Fund's use of forward currency contracts may require that Fund to set aside assets to reduce the risks associated with using forward currency contracts. This process is described in more detail below in the section "Cover."
COVER. Transactions using forward currency 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, in addition to complying with all the restrictions noted in the disclosure above, it owns either (1) an offsetting ("covered") position in securities, currencies, or other options 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 or option is deemed to be illiquid, the assets used to "cover" a 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, a 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 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.
GENERAL RISKS OF OPTIONS AND FUTURES STRATEGIES. The use by the Funds of options and futures 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 and/or INVESCO Institutional's ability to correctly predict the direction of changes in the value of the applicable markets and securities, contracts and/or currencies. While AIM and/or INVESCO Institutional are 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 or option thereon at any particular time.
(5) As described above, 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 a 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.
Additional Securities or Investment Techniques
INVESTMENTS IN ENTITIES WITH RELATIONSHIPS WITH THE FUNDS/ADVISOR. Each Fund may invest in securities issued, sponsored or guaranteed by the following types of entities or their affiliates: (i) entities that sell shares of the AIM Funds; (ii) entities that rate or rank the AIM Funds; (iii) exchanges on which the AIM Funds buy or sell securities; and (iv) entities that provide services to the AIM Funds (e.g., custodian banks). The Funds will decide whether to invest in or sell securities issued by these entities based on the merits of the specific investment opportunity.
FUND POLICIES
FUNDAMENTAL RESTRICTIONS. Each Fund is subject to the following investment
restrictions, which may be changed only by a vote 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. 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.
With respect to AIM Multi-Sector Fund:
(1) The Fund may not with respect to 75% of the Fund's 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, or securities of other investment companies) 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.
(2) The Fund may not underwrite securities of other issuers, except insofar as it may be deemed to be an underwriter under the 1933 Act in connection with the disposition of the Fund's portfolio securities.
(3) The Fund may not borrow money, except that 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).
(4) The Fund may not issue senior securities, except as permitted under the 1940 Act.
(5) The Fund may not lend any security or make any loan if, as a result, more than 33 1/3% of its total assets would be lent to other parties, but this limitation does not apply to the purchase of debt securities or to repurchase agreements.
(6) The Fund may not purchase or sell physical commodities; however, this policy shall not prevent the Fund from purchasing and selling foreign currency, futures contracts, options, forward contracts, swaps, caps, floors, collars, and other financial instruments.
(7) The Fund may not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the Fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business).
(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 managed by AIM or an affiliate or a successor thereof, with substantially the same fundamental investment objective, policies, and limitations as the Fund.
(9) The Fund may not purchase the securities or any issuer (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities, or municipal securities) if, as a result, more than 25% of the Fund's total assets would be invested in the securities of companies whose principal business activities are in the same industry.
With respect to the Structured Funds:
(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 1933 Act.
(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 has adopted non-fundamental restrictions for each of the Funds relating to certain of these restrictions which AIM and the sub-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.
NON-FUNDAMENTAL RESTRICTIONS. The following non-fundamental investment restrictions apply to the Funds. They may be changed for any Fund without approval of that Fund's voting securities.
With respect to AIM Multi-Sector Fund:
(1) The Fund may not sell securities short (unless it owns or has the right to obtain securities equivalent in kind and amount to the securities sold short) or purchase securities on margin, except that (i) this policy does not prevent the Fund from entering into short positions in foreign currency, futures contracts, options, forward contracts, swaps, caps, floors, collars, and other financial instruments, (ii) the Fund may obtain such short-term credits as are necessary for the clearance of transactions, and (iii) the Fund may make margin payments in connection with futures contracts, options, forward contracts, swaps, caps, floors, collars, and other financial instruments.
(2) The Fund may borrow money only from a bank or from an open-end management investment company managed by AIM or an affiliate or a successor thereof for temporary or emergency purposes (not for leveraging or investing) or by engaging in reverse repurchase agreements with any
party (reverse repurchase agreements will be treated as borrowings for purposes of fundamental limitation (3)).
(3) The Fund does not currently intend to purchase any security if, as a result, more than 15% of its net assets would be invested in securities that are deemed to be illiquid because they are subject to legal or contractual restrictions on resale or because they cannot be sold or disposed of in the ordinary course of business at approximately the prices at which they are valued.
(4) The Fund may invest in securities issued by other investment companies to the extent that such investments are consistent with the Fund's investment objective and policies and permissible under the 1940 Act.
(5) The Fund may not acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance on Sections 12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act.
With respect to the Structured Funds:
(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 and securities issued by other investment companies), 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 purchase securities of other investment companies as permitted by the 1940 Act Laws, Interpretations and Exemptions.
(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 Fund. The Fund may not borrow for leveraging, but may borrow for temporary or emergency purposes, in anticipation of or in response to adverse market conditions, or for cash management purposes. The Fund may not purchase additional securities when any borrowings from banks exceed 5% of the Fund's total assets or when any borrowings from an AIM Fund are outstanding.
(3) In complying with the fundamental restriction regarding industry concentration, the Fund may invest up to 25% of its total assets in the securities of issuers whose principal business activities are in the same industry.
(4) In complying with the fundamental restriction with regard to making loans, the Fund may lend up to 33 1/3% of its total assets and may lend money to an AIM 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.
(6) Notwithstanding the fundamental restriction with regard to engaging in transactions involving futures contracts and options thereon or investing in securities that are secured by physical commodities, the Fund currently may not invest in any security (including futures contracts or options thereon) that is secured by physical commodities.
(7) The Fund may not acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance on Sections 12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act.
The Funds do not consider currencies or other financial commodities or contracts and financial instruments related thereto to be physical commodities (which include, for example, oil precious metals
and grains). Accordingly, the Funds interpret their fundamental restriction regarding purchasing and selling physical commodities and their related non-fundamental restriction (for Funds other than AIM Multi-Sector Fund) to permit the Funds, subject to each Fund's investment objectives and general investment policies (as stated in the Funds' prospectuses and elsewhere in this Statement of Additional Information), to invest directly in foreign currencies and other financial commodities and to purchase, sell or enter into commodity futures contracts and options thereon, foreign currency forward contracts, foreign currency options, commodity-related swap agreements, hybrid instruments, interest rate or securities-related or foreign currency-related hedging instruments or other commodity-related derivative instruments, subject to compliance with any applicable provisions of the federal securities or commodities laws. The Funds also interpret their fundamental restriction regarding purchasing and selling physical commodities and their related non-fundamental restriction (for Funds other than AIM Multi-Sector Fund) to permit the Funds to invest in exchange-traded funds that invest in physical and/or financial commodities, subject to the limits described in "Description of the Funds and Their Investments and Risks - Investment Strategies and Risks - Other Investments - Other Investment Companies."
TEMPORARY DEFENSIVE POSITIONS
In anticipation of or in response to adverse market or other conditions, or atypical circumstances such as unusually large cash inflows or redemptions, the Funds may temporarily hold all or a portion of their assets in cash, cash equivalents or high-quality debt instruments. The Funds may also invest up to 25% of its total assets in Affiliated Money Market Funds for these purposes.
POLICIES AND PROCEDURES FOR DISCLOSURE OF FUND HOLDINGS
The Board has adopted policies and procedures with respect to the disclosure of the Funds' portfolio holdings (the "Holdings Disclosure Policy"). AIM and the Board may amend the Holdings Disclosure Policy at any time without prior notice. Details of the Holdings Disclosure Policy and a description of the basis on which employees of AIM and its affiliates may release information about portfolio securities in certain contexts are provided below.
PUBLIC RELEASE OF PORTFOLIO HOLDINGS. The Funds disclose the following portfolio holdings information on http://www.aiminvestments.com(1):
APPROXIMATE DATE OF WEBSITE INFORMATION REMAINS POSTED ON
INFORMATION POSTING WEBSITE
----------- ---------------------------------- -------------------------------
Top ten holdings as of month-end 15 days after month-end Until replaced with the
following month's top ten
holdings
Select holdings included in the 29 days after calendar quarter-end Until replaced with the
Fund's Quarterly Performance Update following quarter's Quarterly
Performance Update
Complete portfolio holdings as of 30 days after calendar quarter-end For one year
calendar quarter-end
Complete portfolio holdings as of 60-70 days after fiscal For one year
fiscal quarter-end quarter-end
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These holdings are listed along with the percentage of the Fund's net assets they represent. Generally, employees of AIM and its affiliates may not disclose such portfolio holdings until one day after they have been posted on http://www.aiminvestments.com. You may also obtain the publicly available portfolio holdings information described above by contacting us at 1-800-959-4246.
SELECTIVE DISCLOSURE OF PORTFOLIO HOLDINGS PURSUANT TO NON-DISCLOSURE AGREEMENT. Employees of AIM and its affiliates may disclose non-public full portfolio holdings on a selective basis only if the Internal Compliance Controls Committee (the "ICCC") of A I M Management Group Inc. ("AIM Management") approves the parties to whom disclosure of non-public full portfolio holdings will be made. The ICCC must determine that the proposed selective disclosure will be made for legitimate business purposes of the applicable Fund and address any perceived conflicts of interest between shareholders of such Fund and AIM or its affiliates as part of granting its approval.
The Board exercises continuing oversight of the disclosure of Fund portfolio holdings by (1) overseeing the implementation and enforcement of the Holdings Disclosure Policy and the AIM Funds Code of Ethics by the Chief Compliance Officer (or his designee) of AIM and the AIM Funds and (2) considering reports and recommendations by the Chief Compliance Officer concerning any material compliance matters (as defined in Rule 38a-1 under the 1940 Act and Rule 206(4)-7 under the Investment Advisers Act of 1940, as amended) that may arise in connection with the Holdings Disclosure Policy. Pursuant to the Holdings Disclosure Policy, the Board reviews the types of situations in which AIM provides such selective disclosure and approves situations involving perceived conflicts of interest between shareholders of the Fund and AIM or its affiliates brought to the Board's attention by AIM.
AIM discloses non-public full portfolio holdings information to the following persons in connection with the day-to-day operations and management of the AIM Funds:
- Attorneys and accountants;
- Securities lending agents;
- Lenders to the AIM Funds;
- Rating and rankings agencies;
- Persons assisting in the voting of proxies;
- AIM Funds' custodians;
- The AIM Funds' transfer agent(s) (in the event of a redemption in kind)
- Pricing services, market makers, or other persons who provide systems or software support in connection with AIM Funds' operations (to determine the price of securities held by an AIM Fund);
- Financial printers;
- Brokers identified by the AIM Funds' portfolio management team who provide execution and research services to the team; and
- Analysts hired to perform research and analysis to the AIM Funds' portfolio management team.
In many cases, AIM will disclose current portfolio holdings on a daily basis to these persons. In these situations, AIM has entered into non-disclosure agreements which provide that the recipient of the portfolio holdings will maintain the confidentiality of such portfolio holdings and will not trade on such information ("Non-disclosure Agreements"). Please refer to Appendix B for a list of examples of persons to whom AIM provides non-public portfolio holdings on an ongoing basis.
AIM will also disclose non-public portfolio holdings information if such disclosure is required by applicable laws, rules or regulations, or by regulatory authorities having jurisdiction over AIM and its affiliates or the Funds.
The Holdings Disclosure Policy provides that AIM will not request, receive or accept any compensation (including compensation in the form of the maintenance of assets in any Fund or other mutual fund or account managed by AIM or one of its affiliates) for the selective disclosure of portfolio holdings information.
DISCLOSURE OF CERTAIN PORTFOLIO HOLDINGS AND RELATED INFORMATION WITHOUT NON-DISCLOSURE AGREEMENT. AIM and its affiliates that provide services to the Funds, and the Funds' sub-advisors, if
applicable, and each of their employees may receive or have access to portfolio holdings as part of the day to day operations of the Funds.
From time to time, employees of AIM and its affiliates may express their views orally or in writing on one or more of the Funds' portfolio securities or may state that a Fund has recently purchased or sold, or continues to own, one or more securities. The securities subject to these views and statements may be ones that were purchased or sold since the Fund's most recent quarter-end and therefore may not be reflected on the list of a Fund's most recent quarter-end portfolio holdings disclosed on the website. Such views and statements may be made to various persons, including members of the press, brokers and other financial intermediaries that sell shares of the Funds, shareholders in the applicable Fund, persons considering investing in the applicable Fund or representatives of such shareholders or potential shareholders, such as fiduciaries of a 401(k) plan or a trust and their advisers, and other entities for which AIM or its affiliates provides or may provide investment advisory services. The nature and content of the views and statements provided to each of these persons may differ.
From time to time, employees of AIM and its affiliates also may provide oral or written information ("portfolio commentary") about a Fund, including, but not limited to, how the Fund's investments are divided among various sectors, industries, countries, investment styles and capitalization sizes, and among stocks, bonds, currencies and cash, security types, bond maturities, bond coupons and bond credit quality ratings. This portfolio commentary may also include information on how these various weightings and factors contributed to Fund performance. AIM may also provide oral or written information ("statistical information") about various financial characteristics of a Fund or its underlying portfolio securities including, but not limited to, alpha, beta, R-squared, coefficient of determination, duration, maturity, information ratio, sharpe ratio, earnings growth, payout ratio, price/book value, projected earnings growth, return on equity, standard deviation, tracking error, weighted average quality, market capitalization, percent debt to equity, price to cash flow, dividend yield or growth, default rate, portfolio turnover, and risk and style characteristics. This portfolio commentary and statistical information about a Fund may be based on the Fund's portfolio as of the most recent quarter-end or the end of some other interim period, such as month-end. The portfolio commentary and statistical information may be provided to various persons, including those described in the preceding paragraph. The nature and content of the information provided to each of these persons may differ.
DISCLOSURE OF PORTFOLIO HOLDINGS BY TRADERS. Additionally, employees of AIM and its affiliates may disclose one or more of the portfolio securities of a Fund when purchasing and selling securities through broker-dealers, requesting bids on securities, obtaining price quotations on securities, or in connection with litigation involving the Funds' portfolio securities. AIM does not enter into formal Non-disclosure Agreements in connection with these situations; however, the Funds would not continue to conduct business with a person who AIM believed was misusing the disclosed information.
DISCLOSURE OF PORTFOLIO HOLDINGS OF OTHER AIM-MANAGED PRODUCTS. AIM and its affiliates manage products sponsored by companies other than AIM, including investment companies, offshore funds, and separate accounts. In many cases, these other products are managed in a similar fashion to certain AIM Funds (as defined herein) and thus have similar portfolio holdings. The sponsors of these other products managed by AIM and its affiliates may disclose the portfolio holdings of their products at different times than AIM discloses portfolio holdings for the AIM Funds.
AIM provides portfolio holdings information for portfolios of AIM Variable Insurance Funds (the "Insurance Funds") to insurance companies whose variable annuity and variable life insurance accounts invest in the Insurance Funds ("Insurance Companies"). AIM may disclose portfolio holdings information for the Insurance Funds to Insurance Companies with which AIM has entered into Non-disclosure Agreements up to five days prior to the scheduled dates for AIM's disclosure of similar portfolio holdings information for other AIM Funds on http://www.aiminvestments.com. AIM provides portfolio holdings information for the Insurance Funds to such Insurance Companies to allow them to disclose this information on their websites at approximately the same time that AIM discloses portfolio holdings information for the other AIM Funds on its website. AIM manages the Insurance Funds in a similar fashion to certain other AIM Funds and thus the Insurance Funds and such other AIM Funds have similar
portfolio holdings. AIM does not disclose the portfolio holdings information for the Insurance Funds on its website, and not all Insurance Companies disclose this information on their websites.
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES
The Trustees have the authority to take all actions necessary in connection with the business affairs of the Trust. The Trustees, among other things, approve the investment objectives, policies and procedures for the Funds. The Trust enters into agreements with various entities to manage the day-to-day operations of the Funds, including the Funds' investment advisers, administrator, transfer agent, distributor and custodians. The Trustees are responsible for selecting these service providers, and approving the terms of their contracts with the Funds. On an ongoing basis, the Trustees exercise general oversight of these service providers.
Certain trustees and officers of the Trust are affiliated with AIM and AIM Management, the parent corporation of AIM. All of the Trust's executive officers hold similar officers with some or all of the other AIM Funds.
MANAGEMENT INFORMATION
The trustees and officers of the Trust, their principal occupations during at least the last five years and certain other information concerning them are set forth in Appendix C.
The standing committees of the Board are the Audit Committee, the Compliance Committee, the Governance Committee, the Investments Committee, the Valuation Committee, and the Special Market Timing Litigation Committee (the "Committees").
The members of the Audit Committee are James T. Bunch, Bruce L. Crockett,
Lewis F. Pennock, Raymond Stickel, Jr. (Chair), Dr. Larry Soll, and Ruth H.
Quigley (Vice Chair). The Audit Committee's primary purposes are to: (i) assist
the Board in oversight of the independent registered public accountant's
qualifications, independence and performance; (ii) appoint independent
registered public accountants for the Funds; (iii) pre-approve all permissible
audit and non-audit services that are provided to Funds by their independent
registered public accountants to the extent required by Section 10A(h) and (i)
of the Exchange Act; (iv) pre-approve, in accordance with Rule 2-01(c)(7)(ii) of
Regulation S-X, certain non-audit services provided by the Funds' independent
registered public accountants to the Funds' investment adviser and certain other
affiliated entities; (v) oversee the financial reporting process for the Funds;
(vi) prepare an audit committee report for inclusion in any proxy statement
issued by a Fund to the extent required by Regulation 14A under the Exchange
Act; (vii) assist the Board's oversight of the performance of the Funds'
internal audit function to the extent an internal audit function exists; (viii)
assist the Board's oversight of the integrity of the Funds' financial
statements; and (ix) assist the Board's oversight of the Funds' compliance with
legal and regulatory requirements. During the fiscal year ended August 31, 2007,
the Audit Committee held six meetings.
The members of the Compliance Committee are Frank S. Bayley, Mr. Crockett
(Chair), Albert R. Dowden (Vice Chair) and Mr. Stickel. The Compliance Committee
is responsible for: (i) recommending to the Board and the independent trustees
the appointment, compensation and removal of the Funds' Chief Compliance
Officer; (ii) recommending to the independent trustees the appointment,
compensation and removal of the Funds' Senior Officer appointed pursuant to the
terms of the Assurances of Discontinuance entered into by the New York Attorney
General, AIM and INVESCO Funds Group, Inc. ("IFG"); (iii) recommending to the
independent trustees the appointment and removal of AIM's independent Compliance
Consultant (the "Compliance Consultant") and reviewing the report prepared by
the Compliance Consultant upon its compliance review of AIM (the "Report") and
any objections made by AIM with respect to the Report; (iv) reviewing any report
prepared by a third party who is not an interested person of AIM, upon the
conclusion by such third party of a compliance review of AIM; (v) reviewing all
reports on compliance matters from the Funds' Chief Compliance Officer, (vi) reviewing all recommendations made by the Senior Officer regarding AIM's compliance procedures, (vii) reviewing all reports from the Senior Officer of any violations of state and federal securities laws, the Colorado Consumer Protection Act, or breaches of AIM's fiduciary duties to Fund shareholders and of AIM's Code of Ethics; (viii) overseeing all of the compliance policies and procedures of the Funds and their service providers adopted pursuant to Rule 38a-1 of the 1940 Act; (ix) from time to time, reviewing certain matters related to redemption fee waivers and recommending to the Board whether or not to approve such matters; (x) receiving and reviewing quarterly reports on the activities of AIM's Internal Compliance Controls Committee; (xi) reviewing all reports made by AIM's Chief Compliance Officer; (xii) reviewing and recommending to the independent trustees whether to approve procedures to investigate matters brought to the attention of AIM's ombudsman; (xiii) risk management oversight with respect to the Funds and, in connection therewith, receiving and overseeing risk management reports from AMVESCAP PLC that are applicable to the Funds or its service providers; and (xiv) overseeing potential conflicts of interest that are reported to the Compliance Committee by the AIM, the Chief Compliance Officer, the Senior Officer and/or the Compliance Consultant. During the fiscal year ended August 31, 2007, the Compliance Committee held seven meetings.
The members of the Governance Committee are Messrs. Bob R. Baker, Bayley, Dowden (Chair), Jack M. Fields (Vice Chair), Carl Frischling and Dr. Prema Mathai-Davis. The Governance Committee is responsible for: (i) nominating persons who will qualify as independent trustees for (a) election as trustees in connection with meetings of shareholders of the Funds that are called to vote on the election of trustees, (b) appointment by the Board as trustees in connection with filling vacancies that arise in between meetings of shareholders; (ii) reviewing the size of the Board, and recommending to the Board whether the size of the Board shall be increased or decreased; (iii) nominating the Chair of the Board; (iv) monitoring the composition of the Board and each committee of the Board, and monitoring the qualifications of all trustees; (v) recommending persons to serve as members of each committee of the Board (other than the Compliance Committee), as well as persons who shall serve as the chair and vice chair of each such committee; (vi) reviewing and recommending the amount of compensation payable to the independent trustees; (vii) overseeing the selection of independent legal counsel to the independent trustees; (viii) reviewing and approving the compensation paid to independent legal counsel to the independent trustees; (ix) reviewing and approving the compensation paid to counsel and other advisers, if any, to the Committees of the Board; and (x) reviewing as they deem appropriate administrative and/or logistical matters pertaining to the operations of the Board.
The Governance 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 Governance Committee or the Board, as applicable, shall make the
final determination of persons to be nominated. During the fiscal year ended
August 31, 2007, the Governance Committee held eight meetings.
Notice procedures set forth in the Trust's bylaws require that any shareholder of the Funds desiring to nominate a trustee for election at a shareholder meeting must submit to the Trust's Secretary the nomination in writing not later than the close of business on the later of the 90th day prior to such shareholder meeting or the tenth day following the day on which public announcement is made of the shareholder meeting and not earlier than the close of business on the 120th day prior to the shareholder meeting.
The members of the Investments Committee are Messrs. Baker (Vice Chair), Bayley (Chair), Bunch, Crockett, Dowden, Fields, Martin L. Flanagan, Frischling, Pennock, Soll, Stickel and Philip A. Taylor and Dr. Mathai-Davis (Vice Chair) and Miss Quigley (Vice Chair). The Investments Committee's primary purposes are to: (i) assist the Board in its oversight of the investment management services provided by AIM as well as any sub-advisers; and (ii) review all proposed and existing advisory, sub-advisory and distribution arrangements for the Funds, and to recommend what action the full Boards and the independent trustees take regarding the approval of all such proposed arrangements and the
continuance of all such existing arrangements. During the fiscal year ended August 31, 2007, the Investments Committee held six meetings.
The Investments Committee has established three Sub-Committees. The
Sub-Committees are responsible for: (i) reviewing the performance, fees and
expenses of the Funds that have been assigned to a particular Sub-Committee (for
each Sub-Committee, the "Designated Funds"), unless the Investments Committee
takes such action directly; (ii) reviewing with the applicable portfolio
managers from time to time the investment objective(s), policies, strategies and
limitations of the Designated Funds; (iii) evaluating the investment advisory,
sub-advisory and distribution arrangements in effect or proposed for the
Designated Funds, unless the Investments Committee takes such action directly;
(iv) being familiar with the registration statements and periodic shareholder
reports applicable to their Designated Funds; and (v) such other
investment-related matters as the Investments Committee may delegate to the
Sub-Committee from time to time.
The members of the Valuation Committee are Messrs. Bunch, Pennock (Vice
Chair), Soll, Taylor and Miss Quigley (Chair). The Valuation Committee is
responsible for: (i) developing a sufficient knowledge of the valuation process
and of AIM's Procedures for Valuing Securities (Pricing Procedures) (the
"Pricing Procedures") in order to carry out their responsibilities; (ii)
periodically reviewing information provided by AIM or other advisers regarding
industry developments in connection with valuation and pricing, and making
recommendations to the Board with respect to the Pricing Procedures based upon
such review; (iii) reviewing the reports described in the Pricing Procedures and
other information from AIM regarding fair value determinations made pursuant to
the Pricing Procedures by AIM's internal valuation committee, and reporting to
and making recommendations to the Board in connection with such reports; (iv)
receiving the reports of AIM's internal valuation committee requesting approval
of any changes to pricing vendors or pricing methodologies as required by the
Pricing Procedures, receiving the annual report of AIM evaluating the pricing
vendors, and approving changes to pricing vendors and pricing methodologies as
provided in the Pricing Procedures and recommending the pricing vendors for
approval by the Board annually; (v) upon request of AIM, assisting AIM's
internal valuation committee and/or the Board in resolving particular fair
valuation issues; (vi) receiving any reports of concerns by AIM's internal
valuation committee regarding actual or potential conflicts of interest by
investment personnel or others that could color their input or recommendations
regarding pricing issues, and receiving information from AIM disclosing
differences between valuation and pricing procedures used for the Funds and
private funds, if any, advised by AIM for which AIM Fund Administration has
exclusive accounting responsibility, and the reasons for such differences; and
(vii) in each of the foregoing areas, making regular reports to the Board.
During the fiscal year ended August 31, 2007, the Valuation Committee held five
meetings.
The members of the Special Market Timing Litigation Committee are Messrs. Bayley, Bunch (Chair), Crockett and Dowden (Vice Chair). The Special Market Timing Litigation Committee is responsible: (i) for receiving reports from time to time from management, counsel for management, counsel for the AIM Funds and special counsel for the independent trustees, as applicable, related to (a) the civil lawsuits, including purported class action and shareholder derivative suits, that have been filed against the AIM Funds concerning alleged excessive short term trading in shares of the AIM Funds ("market timing") and (b) the civil enforcement actions and investigations related to market timing activity in the AIM Funds that were settled with certain regulators, including without limitation the SEC, the New York Attorney General and the Colorado Attorney General, and for recommending to the independent trustees what actions, if any, should be taken by the AIM Funds in light of all such reports; (ii) for overseeing the investigation(s) on behalf of the independent trustees by special counsel for the independent trustees and the independent trustees' financial expert of market timing activity in the AIM Funds, and for recommending to the independent trustees what actions, if any, should be taken by the AIM Funds in light of the results of such investigation(s); (iii) for (a) reviewing the methodology developed by AIM's Independent Distribution Consultant (the "Distribution Consultant") for the monies ordered to be paid under the settlement order with the SEC, and making recommendations to the independent trustees as to the acceptability of such methodology and (b) recommending to the independent trustees whether to consent to any firm with which the Distribution Consultant is affiliated entering into any employment, consultant, attorney-client, auditing or other professional relationship with AIM, or any of its present or
former affiliates, directors, officers, employees or agents acting in their capacity as such for the period of the Distribution Consultant's engagement and for a period of two years after the engagement; and (iv) for taking reasonable steps to ensure that any AIM Fund which the Special Market Timing Litigation Committee determines was harmed by improper market timing activity receives what the Special Market Timing Litigation Committee deems to be full restitution. During the fiscal year ended August 31, 2007, the Special Market Timing Litigation Committee held one meeting.
Trustee Ownership of Fund Shares
The dollar range of equity securities beneficially owned by each trustee
(i) in the Funds and (ii) on an aggregate basis, in all registered investment
companies overseen by the trustee within the AIM Funds complex, is set forth in
Appendix C.
COMPENSATION
Each trustee who is not affiliated with AIM 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. The Chair of the Board and Chairs and Vice Chairs of certain committees receive additional compensation for their services.
Information regarding compensation paid or accrued for each trustee of the Trust who was not affiliated with AIM during the year ended December 31, 2006 is found in Appendix D.
Retirement Plan For Trustees
The trustees have adopted a retirement plan for the trustees of the Trust who are not affiliated with AIM.
The trustees have also adopted a retirement policy that permits each non-AIM-affiliated trustee to serve until December 31 of the year in which the trustee turns 72. A majority of the trustees may extend from time to time the retirement date of a trustee.
Annual retirement benefits are available to each non-AIM-affiliated trustee of the Trust and/or the other AIM Funds (each, a "Covered Fund") who has at least five years of credited service as a trustee (including service to a predecessor fund) for a Covered Fund. Effective January 1, 2006, for retirements after December 31, 2005, the retirement benefits will equal 75% of the trustee's annual retainer paid to or accrued by any Covered Fund with respect for such trustee during the twelve-month period prior to retirement, including the amount of any retainer deferred under a separate deferred compensation agreement between the Covered Fund and the trustee. The amount of the annual retirement benefit does not include additional compensation paid for Board meeting fees or compensation paid to the Chair of the Board and the Chairs and Vice Chairs of certain Board committees, whether such amounts are paid directly to the trustee or deferred. The annual retirement benefit is payable in quarterly installments for a number of years equal to the lesser of (i) sixteen years or (ii) the number of such trustee's credited years of service. If a trustee dies prior to receiving the full amount of retirement benefits, the remaining payments will be made to the deceased trustee's designated beneficiary for the same length of time that the trustee would have received the payments, based on his or her service. A trustee must have attained the age of 65 (60 in the event of death or disability) to receive any retirement benefit. A trustee may make an irrevocable election to commence payment of retirement benefits upon retirement from the Board before age 72; in such a case, the annual retirement benefit is subject to a reduction for early payment.
Deferred Compensation Agreements
Messrs. Crockett, Edward K. Dunn, Jr. (a former trustee), Fields, Frischling, Louis S. Sklar (a former trustee) and Drs. Mathai-Davis and Soll (for purposes of this paragraph only, the "Deferring Trustees") have each executed a Deferred Compensation Agreement (collectively, the "Compensation Agreements"). Pursuant to the Compensation Agreements, the Deferring Trustees have the option to elect to defer receipt of up to 100% of their compensation payable by the Trust, and such amounts are placed into a deferral account and deemed to be invested in one or more AIM Funds selected by the Deferring Trustee. Distributions from the Deferring Trustees' deferral accounts will be paid in cash, generally in equal quarterly installments over a period of up to ten (10) years (depending on the Compensation Agreement) beginning on the date selected under the Compensation Agreement. 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. 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.
Purchase of Class A Shares of the Funds at Net Asset Value
The trustees and other affiliated persons of the Trust may purchase Class A
shares of the AIM Funds without paying an initial sales charge. AIM Distributors
permits such purchases because there is a reduced sales effort involved in sales
to such purchasers, thereby resulting in relatively low expenses of
distribution. For a complete description of the persons who will not pay an
initial sales charge on purchases of Class A shares of the Funds, see "Purchase,
Redemption and Pricing of Shares - Purchase and Redemption of Shares - Purchases
of Class A Shares, Class A3 Shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund and AIM Cash Reserve Shares of AIM Money Market Fund
- Purchases of Class A Shares at Net Asset Value."
CODES OF ETHICS
AIM, the Trust and AIM Distributors, and INVESCO Institutional, have adopted Codes of Ethics which apply to all AIM Fund trustees and officers, employees of AIM and its subsidiaries, and INVESCO Institutional, and governs, among other things, personal trading activities of such persons. The Codes of Ethics are intended to address conflicts of interest with the Trust that may arise from personal trading, including personal trading in most of the funds within The AIM Family of Funds Registered Trademark. Personal trading, including personal trading involving securities that may be purchased or held by a fund within The AIM Family of Funds Registered Trademark, is permitted under the Codes subject to certain restrictions; however, employees are required to pre-clear security transactions with the Compliance Officer or a designee and to report transactions on a regular basis.
PROXY VOTING POLICIES
The Board has delegated responsibility for decisions regarding proxy voting for securities held by AIM Multi-Sector Fund to AIM. The Board has delegated responsibility for decisions regarding proxy voting for securities held by the Structured Funds to the Sub-Advisor. AIM and the Sub-Advisor will vote such proxies in accordance with its proxy policies and procedures, which have been reviewed and approved by the Board, and which are found in Appendix E.
Any material changes to the proxy policies and procedures will be submitted to the Board for approval. The Board will be supplied with a summary quarterly report of each Fund's proxy voting record.
Information regarding how the Funds voted proxies related to their portfolio securities during the 12 months ended June 30, 2007 is available at our website, http://www.aiminvestments.com. This information will also be available at the SEC website, http://www.sec.gov.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Information about the ownership of each class of each Fund's shares by beneficial or record owners of such Funds and by trustees and officers as a group is found in Appendix F. A shareholder who owns beneficially 25% or more of the outstanding shares of a Fund is presumed to "control" that Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISOR
AIM, the Funds' investment advisor, was organized in 1976, and along with its subsidiaries, manages or advises over 200 investment portfolios encompassing a broad range of investment objectives. AIM is a direct, wholly owned subsidiary of AIM Management, a holding company that has been engaged in the financial services business since 1976. AIM Management is an indirect, wholly owned subsidiary of AMVESCAP. AMVESCAP and its subsidiaries are an independent global investment management group. Certain of the directors and officers of AIM are also executive officers of the Trust and their affiliations are shown under "Management Information" herein.
As investment advisor, 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. The Advisory Agreement provides that, in fulfilling its responsibilities, AIM may engage the services of other investment managers with respect to the Funds. The investment advisory services of AIM and the investment sub-advisory services of the Sub-Advisor are not exclusive and AIM and the Sub-Advisor are free to render investment advisory services to others, including other investment companies.
AIM is also responsible for furnishing to the Funds, at AIM's expense, the services of persons believed to be competent to perform all supervisory and administrative services required by the Funds, in the judgment of the trustees, to conduct their respective businesses effectively, as well as the offices, equipment and other facilities necessary for their operations. Such functions include the maintenance of each Fund's accounts and records, and the preparation of all requisite corporate documents such as tax returns and reports to the SEC and shareholders.
The Master Investment Advisory Agreement (the "Advisory Agreement") provides that each Fund will pay or cause to be paid all expenses of such Fund not assumed by AIM, including, without limitation: brokerage commissions, taxes, legal, auditing or governmental fees, custodian, transfer and shareholder service agent costs, expenses of issue, sale, redemption, and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to trustee and shareholder meetings, the cost of preparing and distributing reports and notices to shareholders, the fees and other expenses incurred by the Trust on behalf of each Fund in connection with membership in investment company organizations, and the cost of printing copies of prospectuses and statements of additional information distributed to the Funds' shareholders.
AIM, at its own expense, furnishes to the Trust office space and facilities. AIM furnishes to the Trust all personnel for managing the affairs of the Trust and each of its series of shares.
Pursuant to the Advisory Agreement with the Trust, AIM receives a monthly fee from each Fund calculated at the following annual rates based on the average daily net assets of each Fund during the year. Each Fund allocates advisory fees to a class based on the relative net asset of each class.
MAXIMUM ADVISORY
ANNUAL RATE/NET ASSET MAXIMUM ADVISORY FEE RATE FEE RATES COMMITTED
FUND NAME PER ADVISORY AGREEMENT AFTER JANUARY 1, 2005 UNTIL DATE
--------- ----------------------------- ------------------------- -------------------
AIM Multi-Sector Fund 0.695% of the first $250M N/A N/A
0.67% of the next $250M
0.645% of the next $500M
0.62% of the next $1.5B
0.595% of the next $2.5B
0.57% of the next $2.5B
0.545% of the next $2.5B
0.52% of the excess over $10B
AIM Structured Core Fund 0.60% of first $250M N/A N/A
AIM Structured Growth Fund 0.575% of next $250M
AIM Structured Value Fund 0.55% of next $500M
0.525% of next $1.5B
0.50% of next $2.5B
0.475% of next $2.5B
0.45% of next 2.5B
0.425% of excess over $10B
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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.
AIM has contractually agreed through at least June 30, 2008 to waive advisory fees payable by each Fund in an amount equal to 100% of the advisory fee AIM receives from the Affiliated Money Market Funds as a result of each Fund's investment of uninvested cash in the Affiliated Money Market Funds. See "Description of the Funds and Their Investments and Risks - Investment Strategies and Risks - Other Investments - Other Investment Companies."
AIM also has contractually agreed through at least June 30, 2008 to waive advisory fees or reimburse expenses to the extent necessary to limit total Net Annual Fund Operating Expenses (excluding (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items; (v) expenses related to a merger or reorganization, as approved by each Fund's Board; and (vi) expenses that each Fund has incurred but did not actually pay because of an expense offset arrangement) for the following Funds' shares as follows:
FUND EXPENSE LIMITATION
---- ------------------
AIM Structured Core Fund
Class A Shares 1.00%
Class B Shares 1.75%
Class C Shares 1.75%
Class R Shares 1.25%
Institutional Class Shares 0.75%
AIM Structured Growth Fund
Class A Shares 1.00%
Class B Shares 1.75%
Class C Shares 1.75%
Class R Shares 1.25%
Institutional Class Shares 0.75%
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AIM Structured Value Fund Class A Shares 1.00% Class B Shares 1.75% Class C Shares 1.75% Class R Shares 1.25% Institutional Class Shares 0.75 |
The above contractual fee waivers or reductions are set forth in the Fee Table to each Fund's Prospectus and may not be terminated or amended to a Fund's detriment during the period stated in the agreement between AIM and such Fund.
Currently, the only expense offset arrangements from which the Funds benefit are in the form of credits that each Fund receives from banks where the Fund or its transfer agent has deposit accounts in which it holds uninvested cash. Those credits are used to pay certain expenses incurred by each Fund. Such contractual fee waivers of reductions are set forth in the Fee Table to each Fund's Prospectus and may not be terminated or amended to the Funds' detriment during the period stated in the agreement between AIM and the Fund.
INVESTMENT SUB-ADVISOR
AIM has entered into a Sub-Advisory Agreement with INVESCO Institutional to provide investment sub-advisory services to the Structured Funds.
INVESCO Institutional is registered as an investment advisor' under the Advisers Act. INVESCO Institutional is responsible for the Structured Funds day-to-day management, including the Structured Funds investment decisions and the execution of securities transactions with respect to the Structured Funds.
AIM and INVESCO Institutional are indirect wholly owned subsidiaries of
AMVESCAP.
For the services to be rendered by INVESCO Institutional under the Sub-Advisory Agreement, the Advisor will pay the Sub-Advisor a fee which will be computed daily and paid as of the last day of each month on the basis of each Fund's daily net asset value, using for each daily calculation the most recently determined net asset value of each Fund. (See "Computation of Net Asset Value.") On an annual basis, the sub-advisory fee is equal to 40% of the Advisor's compensation of the sub-advised assets per year, for the Structured Funds.
The management fees payable by each Fund, the amounts waived by AIM and the net fees paid by each Fund for the last three fiscal years ended August 31 are found in Appendix G.
Portfolio Manager(s)
Appendix H contains the following information regarding the portfolio manager(s) identified in each Fund's prospectus:
- The dollar range of the manager's investments in each Fund.
- A description of the manager's compensation structure.
- Information regarding other accounts managed by the manager and potential conflicts of interest that might arise from the management of multiple accounts.
Securities Lending Arrangements
If a Fund engages in securities lending, AIM will provide the Fund investment advisory services and related administrative services. The 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.
SERVICE AGREEMENTS
ADMINISTRATIVE SERVICES AGREEMENT. AIM and the Trust have entered into a Master Administrative Services Agreement ("Administrative Services Agreement") pursuant to which AIM may perform or arrange for the provision of certain accounting and other administrative services to each Fund which are not required to be performed by AIM under the Advisory Agreement. The Administrative Services Agreement provides that it will remain in effect and continue from year to year only if such continuance is specifically approved at least annually by the Board, including the independent trustees, by votes cast in person at a meeting called for such purpose. Under the Administrative Services Agreement, AIM is entitled to receive from the Funds reimbursement of its costs or such reasonable compensation as may be approved by the Board. Currently, AIM is reimbursed for the services of the Trust's principal financial officer and her staff, and any expenses related to fund accounting services.
Administrative services fees paid to AIM by each Fund for the last three fiscal years ended August 31 are found in Appendix I.
OTHER SERVICE PROVIDERS
TRANSFER AGENT. AIM Investment Services, Inc. ("AIS"), 11 Greenway Plaza, Suite 100, Houston, Texas 77046, a wholly owned subsidiary of AIM, is the Trust's transfer agent.
The Transfer Agency and Service Agreement (the "TA Agreement") between the Trust and AIS provides that AIS will perform certain services related to the servicing of shareholders of the Funds. Other such services may be delegated or sub-contracted to third party intermediaries. For servicing accounts holding Class A, A3, B, C, P, R, AIM Cash Reserve and Investor Class Shares, the TA Agreement provides that the Trust, on behalf of the Funds, will pay AIS an annual fee per open shareholder account plus certain out of pocket expenses. This fee is paid monthly at the rate of 1/12 of the annual rate and is based upon the number of open shareholder accounts during each month. In addition, all fees payable by AIS or its affiliates to third party intermediaries who service accounts pursuant to sub-transfer agency, omnibus account services and sub-accounting agreements are charged back to the Funds, subject to certain limitations approved by the Board of the Trust. These payments are made in consideration of services that would otherwise be provided by AIS if the accounts serviced by such intermediaries were serviced by AIS directly. For more information regarding such payments to intermediaries, see the discussion under "Administrative and Processing Support Payments" below.
For servicing accounts holding Institutional Class Shares, the TA Agreement provides that the Trust, on behalf of the Fund, will pay AIS a fee equal to $2.00 per trade executed, to be billed monthly plus certain out of pocket expenses. In addition, all fees payable by AIS or its affiliates to third party intermediaries who service accounts pursuant to sub-transfer agency, omnibus account services and sub-accounting agreements are charged back to the Funds, subject to certain limitations approved by the
Board of the Trust (including a limitation on the amount of any fee payable to an intermediary of 0.10% of the average net assets held in accounts serviced by such intermediary). These payments are made in consideration of services that would otherwise be provided by AIS if the accounts serviced by such intermediaries were serviced by AIS directly. For more information regarding such payments to intermediaries, see the discussion under, "Administrative and Processing Support Payments," below.
SUB-TRANSFER AGENT. Effective January 1, 2007, A I M Funds Management, Inc. ("AFMI"), 5140 Yonge Street, Suite 900, Toronto, Ontario M2N6X7, a wholly owned, indirect subsidiary of AMVESCAP PLC, began providing services to the Trust as a sub-transfer agent, pursuant to an agreement between AFMI and AIS. The Trust does not pay a fee to AFMI for these services. Rather AFMI is compensated by AIS, as a sub-contractor.
CUSTODIANS. State Street Bank and Trust Company (the "Custodian"), 225 Franklin Street, Boston, Massachusetts 02110, is custodian of all securities and cash of the Funds. JPMorgan Chase Bank of Texas, N.A., 712 Main, Houston, Texas 77002, serves as sub-custodian for purchases of shares of the Funds. The Bank of New York, 2 Hanson Place, Brooklyn, New York 11217-1431, also serves as sub-custodian to facilitate cash management.
The custodians are authorized to establish separate accounts in foreign countries and to cause foreign securities owned by the Funds to be held outside the United States in branches of U.S. banks and, to the extent permitted by applicable regulations, in certain foreign banks and securities depositories. AIM is responsible for selecting eligible foreign securities depositories and for assessing the risks associated with investing in foreign countries, including the risk of using eligible foreign securities depositories in a country. The Custodian is responsible for monitoring eligible foreign securities depositories.
Under its contract with the Trust, the Custodian maintains the portfolio securities of the Funds, administers the purchases and sales of portfolio securities, collects interest and dividends and other distributions made on the securities held in the portfolio of the Funds and performs other ministerial duties. These services do not include any supervisory function over management or provide any protection against any possible depreciation of assets.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. The Funds' independent registered public accounting firm is responsible for auditing the financial statements of the Funds. The Audit Committee of the Board has appointed ____________________________, as the independent registered public accounting firm to audit the financial statements of the Funds. Such appointment was ratified and approved by the Board.
COUNSEL TO THE TRUST. Legal matters for the Trust have been passed upon by Ballard Spahr Andrews & Ingersoll, LLP, 1735 Market Street, Philadelphia, Pennsylvania 19103-7599.
BROKERAGE ALLOCATION AND OTHER PRACTICES
The Sub-Advisor has adopted compliance procedures that cover, among other items, brokerage allocation and other trading practices. Unless specifically noted, the Sub-Advisor's procedures do not materially differ from AIM's procedures as set forth below.
BROKERAGE TRANSACTIONS
AIM or the Sub-Advisor makes decisions to buy and sell securities for each Fund, selects broker-dealers (each, a "Broker"), 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 best execution, which AIM defines as prompt and efficient execution of the transaction at the best obtainable price with payment of commissions, mark-ups or mark-downs which are reasonable in relation to the value of the brokerage
services provided by the Broker. While AIM seeks reasonably competitive commission rates, the Funds may not pay the lowest commission or spread available. See "Broker Selection" below.
Some of the securities in which the Funds invests are traded in over-the-counter markets. Portfolio transactions placed in such markets may be effected on a principal basis at net prices without commissions, but which include compensation to the Broker in the form of a mark up or mark down, or on an agency basis, which involves the payment of negotiated brokerage commissions to the Broker, including electronic communication networks. Purchases of underwritten issues include a commission or concession paid by the issuer (not the Fund) to the underwriter. Purchases of money market instruments may be made directly from issuers without the payment of commissions.
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.
Brokerage commissions paid by each of the Fund's during the last three fiscal years ended August 31 are found in Appendix J.
COMMISSIONS
During the last three fiscal years ended August 31, 2007 [none of the Funds] paid brokerage commissions to Brokers affiliated with the Funds, AIM, AIM Distributors, or any affiliates of such entities.
The Funds may engage in certain principal and agency transactions with banks and their affiliates that own 5% or more of the outstanding voting securities of an AIM Fund, provided the conditions of an exemptive order received by the AIM Funds from the SEC are met. In addition, a Fund may purchase or sell a security from or to certain other AIM Funds or other accounts (and may invest in the Affiliated Money Market Funds) provided the Funds follows procedures adopted by the Boards 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.
BROKER SELECTION
AIM's primary consideration in selecting Brokers to execute portfolio transactions for a Fund is to obtain best execution. In selecting a Broker to execute a portfolio transaction in equity securities for a Fund, AIM considers the full range and quality of a Broker's services, including the value of research and/or brokerage services provided, execution capability, commission rate, willingness to commit capital, anonymity and responsiveness. AIM's primary consideration when selecting a Broker to execute a portfolio transaction in fixed income securities for a Fund is the Broker's ability to deliver or sell the relevant fixed income securities; however, AIM will also consider the various factors listed above. In each case, the determinative factor is not the lowest commission or spread available but whether the transaction represents the best qualitative execution for the Fund. AIM will not select Brokers based upon their promotion or sale of Fund shares.
In choosing Brokers to execute portfolio transactions for the Funds, AIM may select Brokers that provide brokerage and/or research services ("Soft Dollar Products") to the Funds and/or the other accounts over which AIM and its affiliates have investment discretion. Section 28(e) of the Securities Exchange Act of 1934, as amended, provides that AIM, under certain circumstances, lawfully may cause an account to pay a higher commission than the lowest available. Under Section 28(e)(1), 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, a Fund may pay a Broker higher commissions than those available from another Broker in recognition of such Broker's provision of Soft Dollar Products to AIM.
AIM faces a potential conflict of interest when it uses client trades to obtain Soft Dollar Products. This conflict exists because AIM is able to use the Soft Dollar Products to manage client accounts without paying cash for the Soft Dollar Products, which reduces AIM's expenses to the extent that AIM would have purchased such products had they not been provided by Brokers. Section 28(e) permits AIM to use Soft Dollar Products for the benefit of any account it manages. Certain AIM-managed accounts may generate soft dollars used to purchase Soft Dollar Products that ultimately benefit other AIM-managed accounts, effectively cross subsidizing the other AIM-managed accounts that benefit directly from the product. AIM may not use all of the Soft Dollar Products provided by Brokers through which the Fund effects securities transactions in connection with managing such Fund.
AIM and certain of its affiliates presently engage in the following instances of cross-subsidization:
1. Fixed income funds normally do not generate soft dollar commissions to pay for Soft Dollar Products. Therefore, soft dollar commissions used to pay for Soft Dollar Products which are used to manage the fixed income AIM Funds are generated entirely by equity AIM Funds and other equity client accounts managed by AIM or A I M Capital, Inc. ("AIM Capital"), a subsidiary of AIM. In other words, the fixed income AIM Funds are cross-subsidized by the equity AIM Funds in that the fixed income AIM Funds receive the benefit of Soft Dollar Products services for which they do not pay.
2. The investment models used to manage many of the AIM Funds are also used to manage other accounts of AIM and/or AIM Capital. The Soft Dollar Products obtained through the use of soft dollar commissions generated by the transactions of the AIM Funds and/or other accounts managed by AIM and/or AIM Capital are used to maintain the investment models relied upon by both of these advisory affiliates.
This type of cross-subsidization occurs in both directions. For example, soft dollar commissions generated by transactions of the AIM Funds and/or other accounts managed by AIM are used for Soft Dollar Products which may benefit those AIM Funds and/or accounts as well as accounts managed by AIM Capital. Additionally, soft dollar commissions generated by transactions of accounts managed by AIM Capital are used for Soft Dollar Products which may benefit those accounts as well as accounts managed by AIM. In certain circumstances, AIM Capital accounts may indicate that their transactions should not be used to generate soft dollar commissions but may still receive the benefits of Soft Dollar Products received by AIM or AIM Capital.
3. Some of the common investment models used to manage various Funds and other accounts of AIM and/or AIM Capital are also used to manage accounts of AIM Private Asset Management, Inc. ("APAM"), another AIM subsidiary. The Soft Dollar Products obtained through the use of soft dollar commissions generated by the transactions of the Funds and/or other accounts managed by AIM and/or AIM Capital are used to maintain the investment models relied upon by AIM, AIM Capital and APAM. This cross-subsidization occurs in only one direction. Most of APAM's accounts do not generate soft dollar commissions which can be used to purchase Soft Dollar Products. The soft dollar commissions generated by transactions of the Funds and/or other accounts managed by AIM and/or AIM Capital are used for Soft Dollar Products which may benefit the accounts managed by AIM, AIM Capital and APAM; however, APAM does not provide any soft dollar research benefit to the Funds and/or other accounts managed by AIM or AIM Capital.
AIM and AIM Capital attempt to reduce or eliminate the potential conflicts of interest concerning the use of Soft Dollar Products by directing client trades for Soft Dollar Products only if AIM and AIM Capital conclude that the Broker supplying the product is capable of providing best execution.
Certain Soft Dollar Products may be available directly from a vendor on a hard dollar basis; other Soft Dollar Products are available only through Brokers in exchange for soft dollars. AIM uses soft dollars to purchase two types of Soft Dollar Products:
- proprietary research created by the Broker executing the trade, and
- other products created by third parties that are supplied to AIM through the Broker executing the trade.
Proprietary research consists primarily of traditional research reports, recommendations and similar materials produced by the in house research staffs of broker-dealer firms. This research includes evaluations and recommendations of specific companies or industry groups, as well as analyses of general economic and market conditions and trends, market data, contacts and other related information and assistance. AIM periodically rates the quality of proprietary research produced by various Brokers. Based on the evaluation of the quality of information that AIM receives from each Broker, AIM develops an estimate of each Broker's share of AIM clients' commission dollars. AIM attempts to direct trades to the firms to meet these estimates.
AIM also uses soft dollars to acquire products from third parties that are supplied to AIM through Brokers executing the trades or other Brokers who "step in" to a transaction and receive a portion of the brokerage commission for the trade. AIM may from time to time instruct the executing Broker to allocate or "step out" a portion of a transaction to another Broker. The Broker to which AIM has "stepped out" would then settle and complete the designated portion of the transaction, and the executing Broker would settle and complete the remaining portion of the transaction that has not been "stepped out." Each Broker may receive a commission or brokerage fee with respect to that portion of the transaction that it settles and completes.
Soft Dollar Products received from Brokers supplement AIM's own research (and the research of certain of its affiliates), and may include the following types of products and services:
- Database Services - comprehensive databases containing current and/or historical information on companies and industries and indices. Examples include historical securities prices, earnings estimates and financial data. These services may include software tools that allow the user to search the database or to prepare value-added analyses related to the investment process (such as forecasts and models used in the portfolio management process).
- Quotation/Trading/News Systems - products that provide real time market data information, such as pricing of individual securities and information on current trading, as well as a variety of news services.
- Economic Data/Forecasting Tools - various macro economic forecasting tools, such as economic data or currency and political forecasts for various countries or regions.
- Quantitative/Technical Analysis - software tools that assist in quantitative and technical analysis of investment data.
- Fundamental/Industry Analysis - industry specific fundamental investment research.
- Fixed Income Security Analysis - data and analytical tools that pertain specifically to fixed income securities. These tools assist in creating financial models, such as cash flow projections and interest rate sensitivity analyses, which are relevant to fixed income securities.
- Other Specialized Tools - other specialized products, such as consulting analyses, access to industry experts, and distinct investment expertise such as forensic accounting or custom built investment-analysis software.
If AIM determines that any service or product has a mixed use (i.e., it also serves functions that do not assist the investment decision-making or trading process), AIM will allocate the costs of such service or product accordingly in its reasonable discretion. AIM will allocate brokerage commissions to Brokers only for the portion of the service or product that AIM determines assists it in the investment decision-making or trading process and will pay for the remaining value of the product or service in cash.
Outside research assistance is useful to AIM since the Brokers used by AIM tend to provide more in-depth analysis of a broader universe of securities and other matters than AIM's staff follows. In addition, such services provide AIM with a diverse perspective on financial markets. Some Brokers 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 Fund. However, the Funds are not under any obligation to deal with any Broker in the execution of transactions in portfolio securities. In some cases, Soft Dollar Products are available only from the Broker providing them. In other cases, Soft Dollar Products may be obtainable from alternative sources in return for cash payments. AIM believes that because Broker research supplements rather than replaces AIM's research, the receipt of such research tends to improve the quality of AIM's investment advice. The advisory fee paid by the Funds is not reduced because AIM receives such services. To the extent the Funds' portfolio transactions are used to obtain Soft Dollar Products, the brokerage commissions obtained by the Funds might exceed those that might otherwise have been paid.
AIM may determine target levels of brokerage 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; and (2) the research services provided by the Broker. Portfolio transactions may be effected through Brokers that recommend the Funds to their clients, or that act as agent in the purchase of a Fund's shares for their clients, provided that AIM believes such Brokers provide best execution and such transactions are executed in compliance with AIM's policy against using directed brokerage to compensate Brokers for promoting or selling AIM Fund shares. AIM will not enter into a binding commitment with Brokers to place trades with such Brokers involving brokerage commissions in precise amounts.
DIRECTED BROKERAGE (RESEARCH SERVICES)
Directed brokerage (research services) paid by each of the Funds during the last fiscal year ended August 31, 2007 are found in Appendix K.
REGULAR BROKERS
Information concerning the Funds' acquisition of securities of their Brokers during the last fiscal year ended August 31, 2007 is found in Appendix K.
ALLOCATION OF PORTFOLIO TRANSACTIONS
AIM and its affiliates manage numerous AIM Funds and other 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 AIM Funds and by another fund or one or more other accounts. However, the position of each account in the same security and the length of time that each account may hold its investment in the same security 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 Servicemark and one or more other accounts, and is considered at or about the same time, AIM will allocate transactions in such securities among the Fund Servicemark and these accounts on a pro rata basis based on order size or in such other manner believed by AIM to be fair and equitable. 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.
ALLOCATION OF EQUITY INITIAL PUBLIC OFFERING ("IPO") TRANSACTIONS
Certain of the AIM Funds or other accounts managed by AIM may become interested in participating in equity IPOs. Purchases of equity IPOs by one AIM Fund or other account may also be considered for purchase by one or more other AIM Funds or accounts. AIM shall combine indications of interest for equity IPOs for all AIM Funds and accounts participating in purchase transactions for that IPO. When the full amount of all IPO orders for such AIM Funds and accounts cannot be filled completely, AIM shall allocate such transactions in accordance with the following procedures:
AIM or the Sub-Advisor will determine the eligibility of each AIM Fund and account that seeks to participate in a particular equity IPO by reviewing a number of factors, including market capitalization/liquidity suitability and sector/style suitability of the investment with the AIM Fund's or account's investment objective, policies, strategies and current holdings. AIM will allocate equity securities issued in IPOs to eligible AIM Funds and accounts on a pro rata basis based on order size.
INVESCO Institutional allocates equity IPOs on a pro rata basis based on account size or in such other manner believed by INVESCO Institutional to be fair and equitable.
PURCHASE, REDEMPTION AND PRICING OF SHARES
TRANSACTIONS THROUGH FINANCIAL INTERMEDIARIES
If you are investing indirectly in a Fund through a financial intermediary such as a broker-dealer, a bank (including a bank trust department), an insurance company separate account, an investment advisor, an administrator or trustee of a retirement plan or a qualified tuition plan or a sponsor of a fee-based program that maintains a master account (an omnibus account) with the Fund for trading on behalf of its customers, different guidelines, conditions and restrictions may apply than if you held your shares of the Fund directly. These differences may include, but are not limited to: (i) different eligibility standards to purchase and sell shares, different eligibility standards to invest in funds with limited offering status and different eligibility standards to exchange shares by telephone; (ii) different minimum and maximum initial and subsequent purchase amounts; (iii) system inability to provide Letter of Intent privileges; and (iv) different annual amounts (less than 12%) subject to withdrawal under a Systematic Redemption Plan without being subject to a contingent deferred sales charge. The financial intermediary through whom you are investing may also choose to adopt different exchange and/or transfer limit guidelines and restrictions, including different trading restrictions designed to discourage excessive or short-term trading. The financial intermediary through whom you are investing may also choose to impose a redemption fee that has different characteristics, which may be more or less restrictive, than the redemption fee currently imposed on certain Funds.
If the financial intermediary is managing your account, you may also be charged a transaction or other fee by such financial intermediary, including service fees for handling redemption transactions. Consult with your financial intermediary (or, in the case of a retirement plan, your plan sponsor) to determine what fees, guidelines, conditions and restrictions, including any of the above, may be applicable to you.
PURCHASE AND REDEMPTION OF SHARES
Purchases of Class A Shares, Class A3 Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund and AIM Cash Reserve Shares of AIM Money Market Fund
INITIAL SALES CHARGES. Each AIM Fund (other than AIM Tax-Exempt Cash Fund) is grouped into one of four categories to determine the applicable initial sales charge for its Class A Shares. The sales charge is used to compensate AIM Distributors and participating dealers for their expenses incurred in connection with the distribution of the Funds' shares. You may also be charged a transaction or other fee by the financial institution managing your account.
Class A shares of AIM Tax-Exempt Cash Fund, Class A3 Shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund and AIM Cash Reserve Shares of AIM Money Market Fund are sold without an initial sales charge.
CATEGORY I FUNDS
AIM Asia Pacific Growth Fund
AIM Basic Balanced Fund
AIM Basic Value Fund
AIM Capital Development Fund
AIM Charter Fund
AIM China Fund
AIM Conservative Allocation Fund
AIM Constellation Fund
AIM Developing Markets Fund
AIM Diversified Dividend Fund
AIM Dynamics Fund
AIM Energy Fund
AIM European Growth Fund
AIM European Small Company Fund
AIM Financial Services Fund
AIM Global Aggressive Growth Fund
AIM Global Equity Fund
AIM Global Growth Fund
AIM Global Health Care Fund
AIM Global Real Estate Fund
AIM Global Value Fund
AIM Gold & Precious Metals Fund
AIM Growth Allocation Fund
AIM Income Allocation Fund
AIM Independence Now Fund
AIM Independence 2010 Fund
AIM Independence 2020 Fund
AIM Independence 2030 Fund
AIM Independence 2040 Fund
AIM Independence 2050 Fund
AIM International Allocation Fund
AIM International Core Equity Fund
AIM International Growth Fund
AIM International Small Company Fund
AIM Japan Fund
AIM Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM Leisure Fund
AIM Mid Cap Basic Value Fund
AIM Mid Cap Core Equity Fund
AIM Moderate Allocation Fund
AIM Moderate Growth Allocation Fund
AIM Moderately Conservative Allocation Fund
AIM Multi-Sector Fund
AIM Real Estate Fund
AIM Select Equity Fund
AIM Select Real Estate Income Fund
AIM Small Cap Equity Fund
AIM Small Cap Growth Fund
AIM Structured Core Fund
AIM Structured Growth Fund
AIM Structured Value Fund
AIM Summit Fund
AIM Technology Fund
AIM Trimark Endeavor Fund
AIM Trimark Fund
AIM Trimark Small Companies Fund
AIM Utilities Fund
Dealer
Investor's Sales Charge Concession
-------------------------- -------------
As a As a As a
Percentage Percentage Percentage
of the Public of the Net of the Public
Amount of Investment in Offering Amount Offering
Single Transaction Price Invested Price
----------------------- ------------- ---------- -------------
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
|
CATEGORY II FUNDS
AIM High Income Municipal Fund
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM International Total Return Fund
AIM Municipal Bond Fund
AIM Total Return Bond Fund
Dealer
Investor's Sales Charge Concession
-------------------------- -------------
As a As a As a
Percentage Percentage Percentage
of the Public of the Net of the Public
Amount of Investment in Offering Amount Offering
Single Transaction Price Invested Price
----------------------- ------------- ---------- -------------
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 FUNDS
AIM Limited Maturity Treasury Fund
AIM Tax-Free Intermediate Fund
Dealer
Investor's Sales Charge Concession
----------------------- -------------
As a As a As a
Percentage Percentage Percentage
of the Public of the Net of the Public
Amount of Investment in Offering Amount Offering
Single Transaction Price Invested Price
----------------------- ------------- ---------- -------------
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
|
As of the close of business on October 30, 2002 Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund were closed to new investors. Current investors must maintain a share balance in order to continue to make incremental purchases.
CATEGORY IV FUNDS
AIM Floating Rate Fund
AIM LIBOR Alpha Fund
AIM Short Term Bond Fund
Dealer
Investor's Sales Charge Concession
-------------------------- -------------
As a As a As a
Percentage Percentage Percentage
of the Public of the Net of the Public
Amount of Investment in Offering Amount Offering
Single Transaction Price Invested Price
----------------------- ------------- ---------- -------------
Less than $ 100,000 2.50% 2.56% 2.00%
$100,000 but less than $ 250,000 2.00 2.04 1.50
$250,000 but less than $ 500,000 1.50 1.52 1.25
$500,000 but less than $1,000,000 1.25 1.27 1.00
|
LARGE PURCHASES OF CLASS A SHARES. Investors who purchase $1,000,000 or more of Class A Shares of a Category I, II, III or IV Fund do not pay an initial sales charge. In addition, investors who currently own Class A shares of Category I, II, III or IV Funds and make additional purchases that result in account balances of $1,000,000 or more do not pay an initial sales charge on the additional purchases. The additional purchases, as well as initial purchases of $1,000,000 or more, are referred to as Large Purchases ("Large Purchases"). If an investor makes a Large Purchase of Class A shares of a Category I, II or IV Fund, each share will generally be subject to a 1.00% contingent deferred sales charge ("CDSC") if the investor redeems those shares within 18 months after purchase.
AIM Distributors may pay a dealer concession and/or advance a service fee on Large Purchases, as set forth below. Exchanges between the AIM Funds may affect total compensation paid.
PURCHASES OF CLASS A SHARES BY NON-RETIREMENT PLANS. AIM Distributors may
make the following payments to dealers of record for Large Purchases of Class A
shares of Category I, II or IV Funds by investors other than: (i) retirement
plans that are maintained pursuant to Sections 401 and 457 of the Code, and (ii)
retirement plans that are maintained pursuant to Section 403 of the Code if the
employer or plan sponsor is a tax-exempt organization operated pursuant to
Section 501(c)(3) of the Code:
PERCENT OF PURCHASE
1% of the first $2 million
plus 0.80% of the next $1 million
plus 0.50% of the next $17 million
plus 0.25% of amounts in excess of $20 million
If (i) the amount of any single purchase order plus (ii) the public offering price of all other shares owned by the same customer submitting the purchase order on the day on which the purchase order is received equals or exceeds $1,000,000, the purchase will be considered a "jumbo accumulation purchase." With regard to any individual jumbo accumulation purchase, AIM Distributors may make payment to the dealer of record based on the cumulative total of jumbo accumulation purchases made by the same customer over the life of his or her account(s).
If an investor makes a Large Purchase of Class A3 shares of a Category III Fund on and after October 31, 2002 and exchanges those shares for Class A shares of a Category I, II or IV Fund, AIM Distributors will pay 1.00% of such purchase as dealer compensation upon the exchange. The Class A shares of the Category I, II or IV Fund received in exchange generally will be subject to a 1.00% CDSC if the investor redeems such shares within 18 months from the date of exchange.
PURCHASES OF CLASS A SHARES BY CERTAIN RETIREMENT PLANS AT NAV. For purchases of Class A shares of Category I, II and IV Funds, AIM Distributors may make the following payments to investment
dealers or other financial service firms for sales of such shares at net asset value ("NAV") to certain retirement plans provided that the applicable dealer of record is able to establish that the retirement plan's purchase of such Class A shares is a new investment (as defined below):
PERCENT OF PURCHASES
0.50% of the first $20 million
plus 0.25% of amounts in excess of $20 million
This payment schedule will be applicable to purchases of Class A shares at NAV by the following types of retirement plans: (i) all plans maintained pursuant to Sections 401 and 457 of the Code, and (ii) plans maintained pursuant to Section 403 of the Code if the employer or plan sponsor is a tax-exempt organization operated pursuant to Section 501(c)(3) of the Code.
A "new investment" means a purchase paid for with money that does not represent (i) the proceeds of one or more redemptions of AIM Fund shares, (ii) an exchange of AIM Fund shares, or (iii) the repayment of one or more retirement plan loans that were funded through the redemption of AIM Fund shares, or (iv) money returned from another fund family. If AIM Distributors pays a dealer concession in connection with a plan's purchase of Class A shares at NAV, such shares may be subject to a CDSC of 1.00% of net assets for 12 months, commencing on the date the plan first invests in Class A shares of an AIM Fund. If the applicable dealer of record is unable to establish that a plan's purchase of Class A shares at NAV is a new investment, AIM Distributors will not pay a dealer concession in connection with such purchase and such shares will not be subject to a CDSC.
With regard to any individual jumbo accumulation purchase, AIM Distributors may make payment to the dealer of record based on the cumulative total of jumbo accumulation purchases made by the same plan over the life of the plan's account(s).
PURCHASERS QUALIFYING FOR REDUCTIONS IN INITIAL SALES CHARGES. As shown in the tables above, purchases of certain amounts of AIM Fund shares may reduce the initial sales charges. These reductions are available to purchasers that meet the qualifications listed below. We will refer to purchasers that meet these qualifications as "Qualified Purchasers."
DEFINITIONS
As used herein, the terms below shall be defined as follows:
- "Individual" refers to a person, as well as his or her Spouse or Domestic Partner and his or her Children;
- "Spouse" is the person to whom one is legally married under state law;
- "Domestic Partner" is an adult with whom one shares a primary residence for at least six-months, is in a relationship as a couple where one or each of them provides personal or financial welfare of the other without a fee, is not related by blood and is not married;
- "Child" or "Children" include a biological, adopted or foster son or daughter, a Step-child, a legal ward or a Child of a person standing in loco parentis;
- "Parent" is a person's biological or adoptive mother or father;
- "Step-child" is the child of one's Spouse by a previous marriage or relationship;
- "Step-parent" is the Spouse of a Child's Parent; and
- "Immediate Family" includes an Individual (including, as defined above, a person, his or her Spouse or Domestic Partner and his or her Children) as well as his or her Parents, Step-parents and the Parents of Spouse or Domestic Partner.
INDIVIDUALS
- an Individual (including his or her spouse or domestic partner, and children);
- a retirement plan established exclusively for the benefit of an Individual, specifically including, but not limited to, a Traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, Solo 401(k), Keogh plan, or a tax-sheltered 403(b)(7) custodial account; and
- a qualified tuition plan account, maintained pursuant to Section 529 of the Code, or a Coverdell Education Savings Account, maintained pursuant to Section 530 of the Code (in either case, the account must be established by an Individual or have an Individual named as the beneficiary thereof).
EMPLOYER-SPONSORED RETIREMENT PLANS
- a retirement plan maintained pursuant to Sections 401, 403 (only if the employer or plan sponsor is a tax-exempt organization operated pursuant to Section 501(c)(3) of the Code), 408 (includes SEP, SARSEP and SIMPLE IRA plans) or 457 or the Code, if:
a. the employer or plan sponsor submits all contributions for all participating employees in a single contribution transmittal (the AIM Funds will not accept separate contributions submitted with respect to individual participants);
b. each transmittal is accompanied by a single check or wire transfer; and
c. if the AIM Funds are expected to carry separate accounts in the names of each of the plan participants, (i) the employer or plan sponsor notifies AIM Distributors in writing that the separate accounts of all plan participants should be linked, and (ii) all new participant accounts are established by submitting an appropriate Account Application on behalf of each new participant with the contribution transmittal.
HOW TO QUALIFY FOR REDUCTIONS IN INITIAL SALES CHARGES. The following sections discuss different ways that a Qualified Purchaser can qualify for a reduction in the initial sales charges for purchases of Class A shares of the AIM Funds.
LETTERS OF INTENT
A Qualified Purchaser may pay reduced initial sales charges by (i) indicating on the Account Application that he, she or it intends to provide a Letter of Intent ("LOI") and (ii) subsequently fulfilling the conditions of that LOI. Employer-sponsored retirement plans, with the exception of Solo 401(k) plans and SEP plans, are not eligible for a LOI.
The LOI confirms the total investment in shares of the AIM Funds that the Qualified Purchaser intends to make within the next 13 months. By marking the LOI section on the account application and by signing the account application, the Qualified Purchaser indicates that he, she or it understands and agrees to the terms of the LOI and is bound by the provisions described below:
Calculating the Initial Sales Charge
- 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 (to determine what the applicable public offering price is, look at the sales charge table in the section on "Initial Sales Charges" above).
- 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 below under "Rights of Accumulation" if AIS, the Funds' transfer agent ("Transfer Agent") is advised of all other accounts at the time of the investment.
- Reinvestment of dividends and capital gains distributions acquired during the 13-month LOI period will not be applied to the LOI.
Calculating the Number of Shares to be Purchased
- Purchases made and shares acquired through reinvestment of dividends and capital gains distributions prior to the LOI effect date will be applied toward the completion of the LOI based on the value of the shares calculated at the public offering price on the effective date of the LOI.
- If a purchaser wishes to revise the LOI investment amount upward, he, she or it may submit a written and signed request at any time prior to the completion of the original LOI. This revision will not change the original expiration date.
- The Transfer Agent will process necessary adjustments upon the expiration or completion date of the LOI.
Fulfilling the Intended Investment
- 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 purchaser will have to pay the increased amount of sales charge.
- To assure compliance with the provisions of the 1940 Act, the Transfer Agent will escrow in the form of shares an appropriate dollar amount (computed to the nearest full share) out of the initial purchase (or subsequent purchases if necessary). 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 sales charge on the amount actually purchased. If the purchaser does not pay such difference within 20 days of the expiration date, he or she 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.
Canceling the LOI
- If at any time before completing the LOI Program, the purchaser wishes to cancel the agreement, he or she must give written notice to AIM Distributors or its designee.
- 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, the LOI will be automatically
canceled. 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.
Other Persons Eligible for the LOI Privilege
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.
LOIs and Contingent Deferred Sales Charges
All LOIs to purchase $1,000,000 or more of Class A shares of Category I, II and IV Funds are subject to an 18-month, 1.00% CDSC.
RIGHTS OF ACCUMULATION
A Qualified Purchaser may also qualify for reduced initial sales charges based upon his, her or its existing investment in shares of any of the AIM Funds at the time of the proposed purchase. 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 owned by such purchaser, calculated at their then current public offering price.
If a purchaser qualifies for a reduced sales charge, the reduced sales charge applies to the total amount of money being invested, even if only a portion of that amount exceeds the breakpoint for the reduced sales charge. 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 the Transfer Agent 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.
Rights of Accumulation are also available to holders of the Connecticut General Guaranteed Account, established for tax-qualified group annuities, for contract purchased on or before June 30, 1992.
If an investor's new purchase of Class A shares of a Category I, II or IV Fund is at net asset value, the newly purchased shares will be subject to a CDSC if the investor redeems them prior to the end of the 18 month holding period.
REINSTATEMENT FOLLOWING REDEMPTION
If you redeem shares of a fund, you may reinvest all or a portion of the proceeds from the redemption in the same share class of any fund in the same Category within 180 days of the redemption without paying an initial sales charge. Class B and P redemptions may be reinvested in Class A shares with no initial sales charge. This reinstatement privilege does not apply to:
- A purchase made through a regularly scheduled automatic investment plan, such as a purchase by a regularly scheduled payroll deduction or transfer from a bank account, or
- A purchase paid for with proceeds from the redemption of shares that were held indirectly through an employee benefit plan.
In order to take advantage of this reinstatement privilege, you must inform your financial advisor or the transfer agent that you wish to do so at the time of your investment.
OTHER REQUIREMENTS FOR REDUCTIONS IN INITIAL SALES CHARGES. As discussed above, 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 to the reduced sales charge based on the definition of a Qualified Purchaser listed above. No person or entity may distribute shares of the AIM Funds without payment of the applicable sales charge other than to Qualified Purchasers.
Purchases of Class A shares of AIM Tax-Exempt Cash Fund, Class A3 shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund, AIM Cash Reserve Shares of AIM Money Market Fund and Investor Class shares of any fund will not be taken into account in determining whether a purchase qualifies for a reduction in initial sales charges.
PURCHASES OF CLASS A SHARES AT NET ASSET VALUE. AIM Distributors permits certain categories of persons to purchase Class A shares of AIM Funds without paying an initial sales charge. These are typically categories of persons whose transactions involve little expense, such as persons who have a relationship with the funds or with AIM and certain programs for purchase. It is the purchaser's responsibility to notify AIM Distributors or its designee of any qualifying relationship at the time of purchase.
AIM Distributors believes that it is appropriate and in the Funds' best interests that such persons, and certain other persons whose purchases result in relatively low expenses of distribution, be permitted to purchase shares through AIM Distributors without payment of a sales charge.
Accordingly, 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:
- Any current or retired officer, director, trustee or employee of any AIM Fund or of INVESCO PLC or any of its subsidiaries or affiliates, or any foundation, trust or employee benefit plan maintained by any of them (this includes any members of their Immediate Family);
- Any current or retired officer, director, or employee (and members of their Immediate Family) of DST Systems, Inc. or Personix, a division of Fiserv Solutions, Inc.;
- Any registered representative or employee of any intermediary who has an agreement with AIM Distributors to sell shares of the Fund (this includes any members of their Immediate Family);
- Any investor who purchases their shares through an approved fee-based program (this may include any type of account for which there is some alternative arrangement made between the investor and the intermediary to provide for compensation of the intermediary for services rendered in connection with the sale of the shares and maintenance of the customer relationship);
- Any investor who purchases their shares with the proceeds of a rollover, transfer or distribution from a retirement plan or individual retirement account for which AIM Distributors acts as the prototype sponsor to another retirement plan or individual retirement account for which AIM Distributors acts as the prototype sponsor, to the extent that such proceeds are attributable to the redemption of shares of a fund held through the plan or account;
- Employer-sponsored retirement plans that are Qualified Purchasers, as defined above, provided that:
a. the plan has assets of at least $1 million;
b. there are at least 100 employees eligible to participate in the plan; or
c. all plan transactions are executed through a single omnibus account per Fund;further provided that retirement plans maintained pursuant to Section 403(b) of the Code are not eligible to purchase shares without paying an initial sales charge based on the aggregate investment made by the plan or the number of eligible employees unless the employer or plan sponsor is a tax-exempt organization operated pursuant to Section 501(c)(3) of the Code.
- "Grandfathered" shareholders as follows:
a. 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;
b. 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 and who purchase additional shares of AIM Constellation Fund or AIM Charter Fund, respectively;
c. Unitholders of G/SET series unit investment trusts investing proceeds from such trusts in shares of 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 Constellation Fund is effected within 30 days of the redemption or repurchase;
d. 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;
e. Shareholders of the former GT Global funds as of April 30, 1987 who since that date continually have owned shares of one or more of these funds;
f. 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 former GT Global funds since that time;
g. 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;
h. Additional purchases of Class A shares by shareholders of record of Class K shares on October 21, 2005 whose Class K shares were converted to Class A shares;
- Any investor who maintains an account in Investor Class shares of a Fund (this includes anyone listed in the registration of an account, such as a joint owner, trustee or custodian, and members of their Immediate Family);
- Qualified Tuition Programs created and maintained in accordance with
Section 529 of the Code;
- Insurance company separate accounts;
- Retirement plan established exclusively for the benefit of an individual (specifically including, but not limited to, a Traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, Solo 401(k), Keogh plan, or a tax-sheltered 403(b)(7) custodial account) if:
a. such plan is funded by a rollover of assets from an Employer-Sponsored Retirement Plan;
b. the account being funded by such rollover is to be maintained by the same trustee, custodian or administrator that maintained the plan from which the rollover distribution funding such rollover originated, or an affiliate thereof; and
c. the dealer of record with respect to the account being funded by such rollover is the same as the dealer of record with respect to the plan from which the rollover distribution funding such rollover originated, or an affiliate thereof.
- Transfers to IRAs that are attributable to AIM Fund investments held in 403(b)(7)s, SIMPLES, SEPs, SARSEPs, Traditional or Roth IRAs; and
- Rollovers from AIM-held 403(b)(7)s, 401(K)s, SEPs, SIMPLEs, SARSEPs, Money Purchase Plans, and Profit Sharing Plans if the assets are transferred to an AIM IRA.
In addition, an investor may acquire shares of any of the AIM Funds at net asset value in connection with:
- when reinvesting dividends and distributions;
- when exchanging shares of one Fund, that were previously assessed a sales charge, for shares of another Fund; as more fully described in the Prospectus;
- the purchase of shares in connection with the repayment of a retirement plan loan administered by AIS;
- as a result of a Fund's merger, consolidation or acquisition of the assets of another Fund;
- the purchase of Class A shares with proceeds from the redemption of Class B or Class C shares where the redemption and purchase are effectuated on the same business day; or
- when buying Class A shares of AIM Tax-Exempt Cash Fund.
PAYMENTS TO DEALERS. 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 1933 Act.
The financial advisor through which you purchase your shares may receive all or a portion of the sales charges and Rule 12b-1 distribution fees discussed above. In this context, "financial advisors" include any broker, dealer, bank (including bank trust departments), insurance company separate account, transfer agent, registered investment advisor, financial planner, retirement plan administrator and any other financial intermediary having a selling, administration or similar agreement with AIM Distributors or one or more of its corporate affiliates (collectively, the "ADI Affiliates"). In addition to those payments, ADI Affiliates may make additional cash payments to financial advisors in connection with the promotion and sale of shares of AIM funds. ADI Affiliates makes these payments from its own resources, from AIM Distributors' retention of underwriting concessions and from payments to AIM Distributors under Rule 12b-1 plans. In the case of sub-accounting payments, discussed below, ADI Affiliates will be reimbursed directly by the AIM Funds for such payments. These additional cash payments are described below. The categories described below are not mutually exclusive. The same financial advisor, or one or more of its affiliates may receive payments under more than one or all categories. Most financial advisors that sell shares of AIM Funds receive one or more types of these cash payments. Financial advisors negotiate the cash payments to be paid on an individual basis. Where services are provided, the costs of providing the services and the overall package of services
provided may vary from one financial advisor to another. ADI Affiliates do not make an independent assessment of the cost of providing such services.
A list of certain financial advisors that received one or more types of payments below during the prior calendar year is attached hereto as Appendix L. This list is not necessarily current and will change over time. Certain arrangements are still being negotiated, and there is a possibility that payments will be made retroactively to financial intermediaries not listed below. Accordingly, please contact your financial advisor to determine whether they currently may be receiving such payments and to obtain further information regarding any such payments.
FINANCIAL SUPPORT PAYMENTS. ADI Affiliates make financial support payments as incentives to certain financial advisors to promote and sell shares of AIM Funds. The benefits ADI Affiliates receive when they make these payments include, among other things, placing AIM Funds on the financial advisor's funds sales system and access (in some cases on a preferential basis over other competitors) to individual members of the financial advisor's sales force or to the financial advisor's management. Financial support payments are sometimes referred to as "shelf space" payments because the payments compensate the financial advisor for including AIM Funds in its fund sales system (on its "sales shelf"). ADI Affiliates compensate financial advisors differently depending typically on the level and/or type of considerations provided by the financial advisor. In addition, payments typically apply only to retail sales, and may not apply to other types of sales or assets (such as sales to retirement plans, qualified tuition programs, or fee based advisor programs - some of which may generate certain other payments described below.)
The financial support payments ADI Affiliates make may be calculated on sales of shares of AIM Funds ("Sales-Based Payments"), in which case the total amount of such payments shall not exceed 0.25% (for non-Institutional Class shares) or 0.10% (for Institutional Class shares) of the public offering price of all such shares sold by the financial advisor during the particular period. Such payments also may be calculated on the average daily net assets of the applicable AIM Funds attributable to that particular financial advisor ("Asset-Based Payments"), in which case the total amount of such cash payments shall not exceed 0.25% per annum of those assets during a defined period. Sales-Based Payments primarily create incentives to make new sales of shares of AIM Funds and Asset-Based Payments primarily create incentives to retain previously sold shares of AIM Fund in investor accounts. ADI Affiliates may pay a financial advisor either or both Sales-Based Payments and Asset-Based Payments.
SUB-ACCOUNTING AND NETWORKING SUPPORT PAYMENTS. AIS, an ADI Affiliate, acts
as the transfer agent for the AIM Funds, registering the transfer, issuance and
redemption of AIM Fund shares, and disbursing dividends and other distributions
to AIM Funds shareholders. However, many AIM Fund shares are owned or held by
financial advisors, as that term is defined above, for the benefit of their
customers. In those cases, the AIM Funds often do not maintain an account for
the shareholder. Thus, some or all of the transfer agent functions for these
accounts are performed by the financial advisor. In these situations, ADI
Affiliates may make payments to financial advisors that sell AIM Fund shares for
certain transfer agency services, including record keeping and sub-accounting
shareholder accounts. Payments for these services typically do not exceed 0.25%
(for non-Institutional Class shares) or 0.10% (for Institutional Class shares)
of average annual assets of such share classes or $19 per annum per shareholder
account (for non-Institutional Class shares only). ADI Affiliates also may make
payments to certain financial advisors that sell AIM Fund shares in connection
with client account maintenance support, statement preparation and transaction
processing. The types of payments that ADI Affiliates may make under this
category include, among others, payment of networking fees of up to $12 per
shareholder account maintained on certain mutual fund trading systems.
All fees payable by ADI Affiliates pursuant to a sub-transfer agency, omnibus account service or sub-accounting agreement are charged back to the AIM Funds, subject to certain limitations approved by the Board of the Trust.
OTHER CASH PAYMENTS. From time to time, ADI Affiliates, at their expense and out of their own resources, may provide additional compensation to financial advisors which sell or arrange for the sale of shares of the Fund. Such compensation provided by ADI Affiliates may include payment of ticket charges per purchase or exchange order placed by a financial advisor, one-time payments for ancillary services such as setting up funds on a financial advisor's mutual fund trading systems, financial assistance to financial advisors that enable ADI Affiliates to participate in and/or present at conferences or seminars, sales or training programs for invited registered representatives and other employees, client entertainment, client and investor events, and other financial advisor-sponsored events, and travel expenses, including lodging incurred by registered representatives and other employees in connection with client prospecting, retention and due diligence trips. Other compensation may be offered to the extent not prohibited by state laws or any self-regulatory agency, such as the Financial Industry Regulatory Authority ("FINRA") (formerly NASD, Inc.). ADI Affiliates makes payments for entertainment events it deems appropriate, subject to ADI Affiliates guidelines and applicable law. These payments may vary depending upon the nature of the event or the relationship.
ADI Affiliates is motivated to make the payments described above since they promote the sale of AIM Fund shares and the retention of those investments by clients of financial advisors. To the extent financial advisors sell more shares of AIM Funds or retain shares of AIM Funds in their clients' accounts, ADI Affiliates benefits from the incremental management and other fees paid to ADI Affiliates by the AIM Funds with respect to those assets.
In certain cases these payments could be significant to the financial advisor. Your financial advisor may charge you additional fees or commissions other than those disclosed in the prospectus. You can ask your financial advisor about any payments it receives from ADI Affiliates or the AIM Funds, as well as about fees and/or commissions it charges. You should consult disclosures made by your financial advisor at the time of purchase.
Purchases of Class B Shares
Class B shares are sold at net asset value, and are not subject to an initial sales charge. Instead, investors may pay a CDSC if they redeem their shares within six years after purchase. See the Prospectus for additional information regarding contingent deferred sales charges. 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 will equal 4.00% of the purchase price and will consist of a sales commission equal to 3.75% plus an advance of the first year service fee of 0.25%.
Purchases of Class C Shares
Class C shares are sold at net asset value, and are not subject to an initial sales charge. Instead, investors may pay a CDSC if they redeem their shares within the first year after purchase (no CDSC applies to Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund unless you exchange shares of another AIM Fund that are subject to a CDSC into AIM LIBOR Alpha Fund or AIM Short Term Bond Fund). See the Prospectus for additional information regarding this CDSC. AIM Distributors may pay sales commissions to dealers and institutions who sell Class C shares of the AIM Funds (except for Class C shares of AIM LIBOR Alpha Fund and AIM Short Term Bond Fund) at the time of such sales. Payments with respect to Funds other than AIM Floating Rate Fund will equal 1.00% of the purchase price and will consist of a sales commission of 0.75% plus an advance of the first year service fee of 0.25%. Payments with respect to AIM Floating Rate Fund will equal 0.75% of the purchase price and will consist of a sales commission of 0.50% plus an advance of the first year service fee of 0.25%. 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.
Payments With Regard to Converted Class K Shares
For Class A shares acquired by a former Class K shareholder (i) as a result of a fund merger; or (ii) as a result of the conversion of Class K shares into Class A shares on October 21, 2005, AIM Distributors will pay financial intermediaries 0.45% on such Class A shares as follows: (i) 0.25% from the Class A shares' Rule 12b-1 plan fees; and (ii) 0.20% from AIM Distributors' own resources provided that, on an annualized basis for 2005 as of October 21, 2005, the 0.20% exceeds $2,000 per year.
Purchases and Redemption of Class P Shares
Certain former investors in the AIM Summit Plans I and II may acquire Class P shares at net asset value. Please see AIM Summit Fund's Prospectus for details.
Purchases of Class R Shares
Class R shares are sold at net asset value, and are not subject to an initial sales charge. If AIM Distributors pays a concession to the dealer of record, however, the Class R shares are subject to a 0.75% CDSC at the time of redemption if all retirement plan assets are redeemed within one year from the date of the retirement plan's initial purchase. For purchases of Class R shares of Category I, II or IV Funds, AIM Distributors may make the following payments to dealers of record provided that the applicable dealer of record is able to establish that the purchase of Class R shares is a new investment or a rollover from a retirement plan in which an AIM Fund was offered as an investment option:
PERCENT OF CUMULATIVE PURCHASES
0.75% of the first $5 million
plus 0.50% of amounts in excess of $5 million
With regard to any individual purchase of Class R shares, AIM Distributors may make payment to the dealer of record based on the cumulative total of purchases made by the same plan over the life of the plan's account(s).
Purchases of Investor Class Shares
Investor Class shares are sold at net asset value, and are not subject to an initial sales charge or to a CDSC. AIM Distributors may pay dealers and institutions an annual service fee of 0.25% of average daily net assets and such payments will commence immediately. The Investor Class is closed to new investors.
Purchases of Institutional Class Shares
Institutional Class shares are sold at net asset value, and are not subject to an initial sales charge or to a CDSC. Please refer to the Institutional Class Prospectus for more information.
Exchanges
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.
Redemptions
GENERAL. Shares of the AIM Funds may be redeemed directly through AIM Distributors or through any dealer who has entered into an agreement with AIM Distributors. In addition to the Funds' obligation to redeem shares, AIM Distributors may also repurchase shares as an accommodation to shareholders. To effect a repurchase, those dealers who have executed Selected Dealer Agreements with AIM Distributors must phone orders to the order desk of the Funds at (800) 959-4246 and guarantee delivery of all required documents in good order. A repurchase is effected at the net asset value per share of the applicable Fund next determined after the repurchase order is received in good order. Such an arrangement is subject to timely receipt by AIS, the Funds' transfer agent, of all required documents in good order. If such documents are not received within a reasonable time after the order is placed, the order is subject to cancellation. While there is no charge imposed by a Fund or by AIM Distributors (other than any applicable contingent deferred sales charge and any applicable redemption fee) when shares are redeemed or repurchased, dealers may charge a fair service fee for handling the transaction.
SUSPENSION OF REDEMPTIONS. The right of redemption may be suspended or the date of payment postponed when (a) trading on the NYSE is restricted, as determined by applicable rules and regulations of the SEC, (b) the NYSE is closed for other than customary weekend and holiday closings, (c) the SEC has by order permitted such suspension, or (d) an emergency as determined by the SEC exists making disposition of portfolio securities or the valuation of the net assets of a Fund not reasonably practicable.
SYSTEMATIC REDEMPTION PLAN. A Systematic Redemption Plan permits a shareholder of an AIM Fund to withdraw on a regular basis at least $50 per withdrawal. Under a Systematic Redemption Plan, all shares are to be held by AIS. To provide funds for payments made under the Systematic Redemption Plan, AIS redeems sufficient full and fractional shares at their net asset value in effect at the time of each such redemption.
Payments under a Systematic Redemption 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 Class A shares, it is disadvantageous to effect such purchases while a Systematic Redemption Plan is in effect.
Each AIM Fund bears its share of the cost of operating the Systematic Redemption Plan.
Contingent Deferred Sales Charges Imposed upon Redemption of Shares
A CDSC may be imposed upon the redemption of Large Purchases of Class A shares of Category I, II and IV Funds, upon the redemption of Class B shares or Class C shares (no CDSC applies to Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund unless you exchange shares of another AIM Fund that are subject to a CDSC into AIM LIBOR Alpha Fund or AIM Short Term Bond Fund) and, in certain circumstances, upon the redemption of Class R shares. See the Prospectus for additional information regarding CDSCs.
CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS FOR LARGE PURCHASES OF CLASS A SHARES. An investor who has made a Large Purchase of Class A shares of a Category I, II or IV Fund, will not be subject to a CDSC upon the redemption of those shares in the following situations:
- Redemptions of shares of Category I, II or IV Funds held more than 18 months;
- Redemptions of shares held by retirement plans in cases where (i) the plan has remained invested in Class A shares of a Fund for at least 12 months, or (ii) the redemption is not a complete redemption of shares held by the plan;
- Redemptions 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;
- 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;
- Redemptions following the death or post-purchase disability of (i) any registered shareholders on an account or (ii) a settlor of a living trust, of shares held in the account at the time of death or initial determination of post-purchase disability, provided that shares have not been commingled with shares that are subject to CDSC;
- Amounts from a monthly, quarterly or annual Systematic Redemption Plan of up to an annual amount of 12% of the account value on a per fund basis provided the investor reinvests his dividends. At the time the withdrawal plan is established, the account value must be $5,000 or more;
CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS FOR CLASS B AND C SHARES. CDSCs will not apply to the following redemptions of Class B or Class C shares, as applicable:
- Additional purchases of Class C shares of AIM International Core Equity Fund and AIM Real Estate Fund by shareholders of record on April 30, 1995, of AIM International Value Fund, predecessor to AIM International Core Equity Fund, and AIM Real Estate Fund, except that shareholders whose broker-dealers maintain a single omnibus account with AIS 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;
- 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, provided that shares have not been commingled with shares that are subject to CDSC;
- 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 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 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 Code) of
the participant or beneficiary;
- Amounts from a monthly or quarterly Systematic Redemption Plan of up to an annual amount of 12% of the account value on a per fund basis provided the investor reinvests his dividends. At the time the withdrawal plan is established, the account value must be $5,000 or more;
- Liquidation initiated by the Fund when the account value falls below the minimum required account size of $500; and
- Investment account(s) of AIM and its affiliates.
CDSCs will not apply to the following redemptions of Class C shares:
- A total or partial redemption of shares where the investor's dealer of record notifies the distributor prior to the time of investment that the dealer would waive the upfront payment otherwise payable to him;
- A total or partial redemption which is necessary to fund a distribution requested by a participant in a retirement plan maintained pursuant to Section 401, 403, or 457 of the Code; and
- Redemptions of Class C shares of a Fund other than AIM LIBOR Alpha Fund or AIM Short Term Bond Fund if you received such Class C shares by exchanging Class C shares of AIM LIBOR Alpha Fund or AIM Short Term Bond Fund.
CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS FOR CLASS R SHARES. CDSCs will
not apply to the following redemptions of Class R shares:
- A total or partial redemption of Class R shares where the retirement plan's dealer of record notifies the distributor prior to the time of investment that the dealer waives the upfront payment otherwise payable to him; and
- Redemptions of shares held by retirement plans in cases where (i) the plan has remained invested in Class R shares of a Fund for at least 12 months, or (ii) the redemption is not a complete redemption of all Class R shares held by the plan.
General Information Regarding Purchases, Exchanges and Redemptions
GOOD ORDER. Purchase, exchange and redemption orders must be received in good order in accordance with AIS policy and procedures and U.S. regulations. AIS reserves the right to refuse transactions. Transactions not in good order will not be processed and once brought into good order, will receive current price. To be in good order, an investor or financial intermediary must supply AIS with all required information and documentation, including signature guarantees when required. In addition, if a purchase of shares is made by check, the check must be received in good order. This means that the check must be properly completed and signed, and legible to AIS in its sole discretion. 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.
AUTHORIZED AGENTS. AIS and AIM Distributors may authorize agents to accept purchase and redemption orders that are in good form on behalf of the AIM Funds. In certain cases, these authorized agents are authorized to designate other intermediaries to accept purchase and redemption orders on a Fund's behalf. The Fund will be deemed to have received the purchase or redemption order when the Fund's authorized agent or its designee accepts the order. The order will be priced at the net asset value next determined after the order is accepted by the Fund's authorized agent or its designee.
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; (4) written redemptions or exchanges of shares held in certificate form previously reported to AIM as lost, whether or not the redemption amount is under $250,000 or the proceeds are to be sent to the address of record; and (5) requests to redeem accounts where the proceeds are over $250,000 or the proceeds are to be sent to an address or a bank other than the address or bank 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 AIS' current Signature Guarantee Standards and Procedures, such as certain domestic banks, credit unions, securities dealers, or securities exchanges. Notary public signatures are not an acceptable replacement for a signature guarantee. AIS 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 total 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" and to determine how to fulfill a signature guarantee requirement, an investor should contact the Client Services Department of AIS.
TRANSACTIONS BY TELEPHONE. By signing an account application form, an investor appoints AIS as his true and lawful attorney-in-fact to surrender for redemption any and all unissued shares held by AIS 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. AIS 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 AIS 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. AIS 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.
INTERNET TRANSACTIONS. An investor may effect transactions in his account through the internet by establishing a Personal Identification Number (PIN). By establishing a PIN the investor acknowledges and agrees that neither AIS nor AIM Distributors will be liable for any loss, expense or cost arising out of any internet transaction effected by them in accordance with any instructions submitted by a user who transmits the PIN as authentication of his or her identity. 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 the ability to effect internet transactions may be terminated at any time by the AIM Funds. Policies for processing transactions via the Internet may differ from policies for transactions via telephone due to system settings.
ABANDONED PROPERTY. It is the responsibility of the investor to ensure that AIS maintains a correct address for his account(s). An incorrect address may cause an investor's account statements and other mailings to be returned to AIS. Upon receiving returned mail, AIS will attempt to locate the investor or rightful owner of the account. If unsuccessful, AIS will retain a shareholder locator service with a national information database to conduct periodic searches for the investor. If the search firm is unable to locate the investor, the search firm will determine whether the investor's account has legally been abandoned. AIS is legally obligated to escheat (or transfer) abandoned property to the appropriate state's unclaimed property administrator in accordance with statutory requirements. The investor's last known address of record determines which state has jurisdiction.
MISCELLANEOUS FEES. In certain circumstances, the intermediary maintaining the shareholder account through which your Fund shares are held may assess various fees related to the maintenance of that account, such as:
- an annual custodial fee on accounts where AIM Distributors acts as the prototype sponsor;
- expedited mailing fees in response to overnight redemption requests; and
- copying and mailing charges in response to requests for duplicate statements.
Please consult with your intermediary for further details concerning any applicable fees.
INSTITUTIONAL CLASS SHARES
Before the initial purchase of shares, an investor must submit a completed account application to his financial intermediary, who should forward the application to AIM Investment Services, Inc. at P.O. Box 4497, Houston, Texas 77210-4497. An investor may change information in his account application by submitting written changes or a new account application to his intermediary or to AIS.
Purchase and redemption orders must be received in good order. To be in good order, the financial intermediary must give AIS all required information and documentation with respect to the investor. If the intermediary fails to deliver the investor's payment on the required settlement date, the intermediary must reimburse the Fund for any overdraft charges incurred.
A financial intermediary may submit a written request to AIS for correction of transactions involving a Fund's shares. If AIS agrees to correct a transaction, and the correction requires a dividend adjustment, the intermediary must agree in writing to reimburse a Fund for any resulting loss.
An investor may terminate his relationship with an intermediary and become the shareholder of record on his account. However, until the investor establishes a relationship with an intermediary, the investor will not be able to purchase additional shares of the Funds, except through the reinvestment of distributions.
Payment for redeemed shares is normally made by Federal Reserve wire to the bank account designated in the investor's account application, but may be sent by check at the investor's request. By providing written notice to his financial intermediary or to AIS, an investor may change the bank account designated to receive redemption proceeds. AIS may request additional documentation.
AIS may request that an intermediary maintain separate master accounts in the Funds for shares held by the intermediary (a) for its own account, for the account of other institutions and for accounts for which the intermediary acts as a fiduciary; and (b) for accounts for which the intermediary acts in some other capacity. An intermediary may aggregate its master accounts and subaccounts to satisfy the minimum investment requirement.
Platform sponsors that provide investment vehicles to fund Section 401 defined contribution plans and have entered into written agreements with AIM Distributors to waive applicable investment minimums may purchase Institutional Class shares for accounts within such plans.
OFFERING PRICE
The following formula may be used to determine the public offering price per Class A share of an investor's investment:
Net Asset Value / (1 - Sales Charge as % of Offering Price ) = Offering Price.
For example, at the close of business on August 31, 2007, AIM Multi-Sector Fund
- Class A shares had a net asset value per share of $28.93. The offering price,
assuming an initial sales charge of 5.50%, therefore was $30.61.
Institutional Class shares of the Fund are offered at net asset value.
Calculation of Net Asset Value
Each Fund determines its net asset value per share 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, each Fund determines its net asset value per share as of the close of the NYSE on such day. 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 NYSE. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. The Funds determine net asset value per share by dividing the value of a Fund's securities, cash and other assets (including interest accrued but not collected) attributable to a particular class, less all its liabilities (including accrued expenses and dividends payable) attributable to that class, by the total number of shares outstanding of that class. Determination of a Fund's net asset value per share is made in accordance with generally accepted accounting principles. The net asset value for shareholder transactions may be different than the net asset value reported in the Fund's financial statement due to adjustments required by generally accepted accounting principles made to the net assets of the Fund at period end.
Each equity security (excluding convertible bonds) held by a Fund is valued at its last sales price on the exchange where the security is principally traded or, lacking any sales on a particular day, the security is valued at the closing bid price on that day. Each equity 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 furnished by independent pricing vendors or market makers. Each security reported on the NASDAQ National Market System is valued at the NASDAQ Official Closing Price ("NOCP") or absent a NOCP, at the closing bid price on that day. Debt securities (including convertible bonds) are fair valued using an evaluated quote on the basis of prices provided by an independent pricing vendor. Evaluated quotes provided by the pricing vendor may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to special securities, dividend rate, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data.
Investments in open-end registered investment companies and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price as of the close of the customary trading session on the exchange where the security is principally traded.
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 Corporate Loans and in the case of debt obligations (excluding Corporate Loans), the mean between the last bid and ask prices. Securities for which market quotations are not available, including situations where market quotations are unreliable, are valued at fair value as determined in good faith by or under the supervision of the Trust's officers in accordance with procedures approved by the Board. Short-term investments are valued at amortized cost when the security has 60 days or less to maturity.
Generally, trading in corporate bonds, U.S. Government securities and money market instruments is substantially completed each day at various times prior to the close of the customary
trading session of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined at such times. Occasionally, events affecting the values of such securities may occur between the times at which such values are determined and the close of the customary trading session of the NYSE. If AIM believes a development/event has actually caused a closing price to no longer reflect current market value, the closing price may be adjusted to reflect the fair value of the affected security as of the close of the NYSE as determined in good faith using procedures approved by the Board.
Foreign securities are converted into U.S. dollar amounts using exchange rates as of the close of the NYSE. Trading in certain 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 each Fund's shares are determined as of the close of the respective markets. Events affecting the values of such foreign securities may occur between the times at which the particular foreign market closes and the close of the customary trading session of the NYSE. If an issuer specific event has occurred that AIM determines, in its judgment, is likely to have affected the closing price of a foreign security, it will price the security at fair value. Issuer specific events may include a merger or insolvency, events which affect a geographical area or an industry segment, such as political events or natural disasters, or market events, such as a significant movement in the U.S. market. AIM also relies on a screening process from a pricing vendor to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current market value as of the close of the NYSE. For foreign securities where AIM believes, at the approved degree of certainty, that the price is not reflective of current market value, AIM will use the indication of fair value from the pricing vendor to determine the fair value of the security. The pricing vendor, pricing methodology or degree of certainty may change from time to time. Multiple factors may be considered by the independent pricing vendor in determining adjustments to reflect fair value and may include information relating to sector indices, ADRs, domestic and foreign index futures, and exchange-traded funds.
Fund securities primarily traded in foreign markets may be traded in such markets on days that 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 value of the portfolio securities of a Fund that invests in foreign securities may change on days when an investor cannot exchange or redeem shares of the Fund.
REDEMPTIONS IN KIND
Although the Funds generally intend to pay redemption proceeds solely in cash, the Funds reserve the right to determine, in their sole discretion, whether to satisfy redemption requests by making payment in securities or other property (known as a redemption in kind). For instance, a Fund may make a redemption in kind, if a cash redemption would disrupt its operations or performance. Securities that will be delivered as payment in redemptions in kind will be valued using the same methodologies that the Fund typically utilizes in valuing such securities. Shareholders receiving such securities are likely to incur transaction and brokerage costs on their subsequent sales of such securities, and the securities may increase or decrease in value until the shareholder sells them. The Trust, on behalf of the Funds made an election under Rule 18f-1 under the 1940 Act (a "Rule 18f-1 Election"), and therefore, the Trust, on behalf of a Fund is obligated to redeem for cash all shares presented to such Fund for redemption by any one shareholder in an amount up to the lesser of $250,000 or 1% of that Fund's net assets in any 90-day period. The Rule 18f-1 Election is irrevocable while Rule 18f-1 under the 1940 Act is in effect unless the SEC by order permits withdrawal of such Rule 18f-1 Election.
BACKUP WITHHOLDING
Accounts submitted without a correct, certified taxpayer identification number or, alternatively, a correctly completed and currently effective 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 Fund, and other payers, generally must withhold 28% of reportable dividends (whether paid or accrued), including long-term capital gain distributions, 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;
2. the IRS notifies the Fund that the investor furnished an incorrect TIN;
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);
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 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. AIM or AIS will not provide Form 1099 to those payees.
Investors should contact the IRS if they have any questions concerning withholding.
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 generally remains in effect for a period starting on the date the Form is signed and ending on the last day of the third succeeding calendar year. Such shareholders may, however, be subject to federal income tax withholding at a 30% rate on ordinary income dividends and other distributions. Under applicable treaty law, residents of treaty countries may qualify for a reduced rate of withholding or a withholding exemption.
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
It is the present policy of each Fund to declare and pay annually net investment income dividends and any capital gain distributions. It is each Fund's intention to distribute substantially all of its net investment income and realized net capital gains.
All dividends and distributions will be 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." Such dividends and distributions will be reinvested at the net asset value per share determined on the ex-
dividend date. If a shareholder's account does not have any shares in it on a dividend or capital gain 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.
Dividends on Class B, Class C and Class R shares are expected to be lower than those for Class A shares because of higher distribution fees paid by Class B, Class C and Class R shares. Other class-specific expenses may also affect dividends on shares of those classes. Expenses attributable to a particular class ("Class Expenses") include distribution plan expenses, which must be allocated to the class for which they are incurred. Other expenses may be allocated as Class Expenses, consistent with applicable legal principles under the 1940 Act and the Code.
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 under Subchapter M of the Code as a regulated investment company and intends to maintain its qualification as such in each of its taxable years. 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 an amount equal to (i) at least 90% of its investment company taxable income (i.e., net investment income, net foreign currency ordinary gain or loss and the excess of net short-term capital gain over net long-term capital loss) and (ii) at least 90% of the excess of its tax-exempt interest income under Code Section 103(a) over its deductions disallowed under Code Sections 265 and 171(a)(2) 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 gain of the taxable year and can therefore satisfy the Distribution Requirement.
Each Fund presently intends to elect under applicable Treasury regulations to treat any net capital loss and any net long-term capital loss incurred after October 31 as if it had been incurred in the succeeding taxable year in determining its taxable income for the current taxable year. Certain Funds may also elect under the same regulations to treat all or part of any net foreign currency loss incurred after October 31 as if it had been incurred in the succeeding taxable year.
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 gain to redemptions of Fund shares and will reduce the amount of such income and gain that it distributes in cash. However, each Fund intends to make cash distributions for each taxable year in an aggregate amount that is sufficient to satisfy the Distribution Requirement without taking into account its use of equalization accounting. The IRS has not published any guidance concerning the methods to be used in allocating investment income and capital gain to redemptions of shares. In the event that the IRS 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, securities or foreign currencies (to the extent such currency gain is directly related to the regulated investment company's principal business of investing in stock or securities), other income (including, but not limited to, gains from options, futures or forward contracts) derived from its business of investing in such stock, securities or currencies and net
income derived from certain publicly traded partnerships (the "Income Requirement"). Under certain circumstances, the Fund may be required to sell portfolio holdings in order to meet this 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 (the "Asset Diversification Test"). 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 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), of two or more issuers which the Fund controls and which are engaged in the same or similar trades or businesses, or, collectively, in the securities of certain publicly traded partnerships.
For purposes of the Asset Diversification Test, the IRS has ruled that the issuer of a purchased listed call option on stock is the issuer of the stock underlying the option. The IRS has also informally ruled that, in general, the issuers of purchased or written call and put options on securities, of long and short positions on futures contracts on securities and of options on such futures contracts are the issuers of the securities underlying such financial instruments where the instruments are traded on an exchange.
Where the writer of a listed call option owns the underlying securities, the IRS has ruled that the Asset Diversification Test will be applied solely to such securities and not to the value of the option itself. With respect to options on securities indexes, futures contracts on securities indexes and options on such futures contracts, the IRS has informally ruled that the issuers of such options and futures contracts are the separate entities whose securities are listed on the index, in proportion to the weighting of securities in the computation of the index. It is unclear under present law who should be treated as the issuer of forward foreign currency exchange contracts, of options on foreign currencies, or of foreign currency futures and related options. It has been suggested that the issuer in each case may be the foreign central bank or the foreign government backing the particular currency. Due to this uncertainty and because the Funds may not rely on informal rulings of the IRS, the Funds may find it necessary to seek a ruling from the IRS as to the application of the Asset Diversification Test to certain of the foregoing types of financial instruments or to limit its holdings of some or all such instruments in order to stay within the limits of such test.
Under an IRS revenue procedure, a Fund may treat its position as lender under a repurchase agreement as a U.S. Government security for purposes of the Asset Diversification Test where the repurchase agreement is fully collateralized (under applicable SEC standards) with securities that constitute U.S. Government securities.
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 (to the extent discussed below) in the case of corporate shareholders and will be included in the qualified dividend income of non-corporate shareholders. See "Fund Distributions" below.
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. If a Fund purchases a debt obligation that was originally issued at a discount, the Fund is generally required to include in gross income each year the portion of the original issue discount which accrues during such year. In 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 certain cases, a Fund may make an election to treat such gain or loss as capital.
Certain 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 generally 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).
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 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. If such a future or option is held as an offsetting position and can be considered a straddle under Section 1092 of the Code, such a straddle will constitute a mixed straddle. A mixed straddle will be subject to both Section 1256 and Section 1092 unless certain elections are made by the Fund.
Other hedging transactions in which the Funds may engage may result in "straddles" or "conversion transactions" for U.S. federal income tax purposes. The straddle and conversion transaction rules may affect the character of gains (or in the case of the straddle rules, losses) realized by the Funds. In addition, losses realized by the Funds on positions that are part of a straddle may be deferred under the straddle rules, rather than being taken into account in calculating the taxable income for the taxable year in which the losses are realized. Because only a few regulations implementing the straddle rules and the conversion transaction rules have been promulgated, the tax consequences to the Funds of hedging transactions are not entirely clear. The hedging transactions may increase the amount of short-term capital gain realized by the Funds (and, if they are conversion transactions, the amount of ordinary income) which is taxed as ordinary income when distributed to shareholders.
Because application of any of the foregoing rules governing Section 1256 contracts, constructive sales, straddle and conversion transactions may affect the character of gains or losses, defer losses and/or accelerate the recognition of gains or losses from the affected investment or straddle positions, the taxable income of a Fund may exceed or be less than its book income. Accordingly, the amount which must be distributed to shareholders and which will be taxed to shareholders as ordinary income, qualified dividend income, or long-term capital gain may also differ from the book income of the Fund and may be increased or decreased as compared to a fund that did not engage in such transactions.
SWAP AGREEMENTS. Each Fund may enter into swap agreements as permitted by each Fund's prospectus. Certain requirements that must be met under the Code in order for a Fund to qualify as a regulated investment company may limit the extent to which a Fund will be able to engage in certain types of swap agreements. Moreover, the rules governing the tax aspects of certain types of these
agreements are in a developing stage and are not entirely clear in certain respects. Accordingly, while a Fund intends to account for such transactions in a manner deemed to be appropriate, the IRS might not accept such treatment. If it did not, the status of a Fund as a regulated investment company might be affected. Each Fund intends to monitor developments in this area.
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 (excess of capital gains over capital losses) for the one-year period ended on October 31 of such calendar year (or, at the election of a regulated investment company having a taxable year ending November 30 or December 31, for its taxable year (a "taxable year election")). The balance of such income must be distributed during the next calendar year. For the foregoing purposes, a regulated investment company is treated as having distributed any amount on which it is subject to income tax for any taxable year ending in such calendar year.
For purposes of the excise tax, a regulated investment company shall (1) reduce its capital gain net income (but not below its net capital gain) by the amount of any net ordinary loss for the calendar year and (2) exclude Section 988 foreign currency gains and losses incurred after October 31 (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 generally 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 IRS 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. In addition, under certain circumstances, a Fund may elect to pay a minimal amount of excise tax.
PFIC INVESTMENTS. The Funds are permitted to invest in foreign equity securities and thus may invest in stocks of foreign companies that are classified under the Code as passive foreign investment companies ("PFICs"). In general, a foreign company is classified as a PFIC if at least one-half of its assets constitute investment-type assets or 75% or more of its gross income is investment-type income.
The application of the PFIC rules may affect, among other things, the character of gain, the amount of gain or loss and the timing of the recognition and character of income with respect to PFIC stock, as well as subject the Funds themselves to tax on certain income from PFIC stock. For these reasons the amount that must be distributed to shareholders, and which will be taxed to shareholders as ordinary income or long-term capital gain, may be increased or decreased substantially as compared to a fund that did not invest in PFIC stock.
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 and as qualified dividend income for individuals and other non-corporate taxpayers to the extent that shareholders have held their fund shares for a minimum required period and the distributions satisfy other requirements that are discussed below.
A Fund may either retain or distribute to shareholders its net capital gain (net long-term capital gain over net short-term capital loss) 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 (currently taxable at a maximum rate of 15% for non-corporate shareholders) or as recaptured long-term capital gain (currently taxable at a maximum rate of 25% for non-corporate shareholders) regardless of the length of time the shareholder has held his shares or whether such gain was recognized by the Fund prior to the date on which the shareholder acquired his
shares. Conversely, if a Fund elects to retain its net capital gain, the Fund will be taxed thereon (except to the extent of any available capital loss 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 pro rata share of tax paid by the Fund on the gain, and will increase the tax basis for its shares by an amount equal to the deemed distribution less the tax credit.
Subject to applicable Code limitations, each Fund will be allowed to take into account a net capital loss (excess of losses over gains from the sale of capital assets) from a prior taxable year as a short-term capital loss for the current taxable year in determining its investment company taxable income and net capital gain.
Ordinary income dividends paid by a Fund with respect to a taxable year will qualify for the 70% dividends received deduction generally available to corporations to the extent of the amount of qualifying dividends, if any, received by the Fund from domestic corporations for the taxable year.
Ordinary income dividends paid by a Fund to individuals and other non-corporate taxpayers will be treated as qualified dividend income that is subject to tax at a maximum rate of 15% to the extent of the amount of qualifying dividends, if any, received by the Fund from domestic corporations and from foreign corporations that are either incorporated in a possession of the United States, or are eligible for benefits under certain income tax treaties with the United States that include an exchange of information program. In addition, qualifying dividends include dividends paid with respect to stock of a foreign corporation that is readily tradable on an established securities market in the United States. Dividends received by the Fund from PFICs are not qualifying dividends. If the qualifying dividend income received by a Fund is equal to 95% (or a greater percentage) of the Fund's gross income (exclusive of net capital gain) in any taxable year, all of the ordinary income dividends paid by the Fund will be qualifying dividend income.
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. However, the AMT on capital gain dividends and qualified dividend income paid by a Fund to a non-corporate shareholder may not exceed the maximum applicable capital gains rate for non-corporate taxpayers. The AMT applicable to corporations may reduce the value of dividends received deduction. However, certain small corporations are wholly exempt from the AMT.
Distributions by a Fund that are not paid from earnings and profits 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.
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 ex-dividend date.
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.
If the net asset value of shares is reduced below a shareholder's cost as a result of a distribution by a Fund, such distribution generally will be taxable even though it represents a return of invested capital. Investors should be careful to consider the tax implications of buying shares of a Fund just prior to a distribution. The price of shares purchased at this time may reflect the amount of the forthcoming distribution. Those purchasing just prior to a distribution will receive a distribution which generally will be taxable to them.
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 deferred under the wash sale rules if the shareholder purchases other shares of the Fund within 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 a maximum tax rate of 15%. 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. 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.
AIS may provide Fund shareholders with information concerning the average cost basis of their shares in order to help them calculate their gain or loss from a sale or redemption. This information is supplied as a convenience to shareholders and will not be reported to the IRS. Although the IRS permits the use of several methods to determine the cost basis of mutual fund shares, the cost basis information provided by AIS will be calculated using only the single-category average cost method. Neither AIS nor a Fund recommends any particular method of determining cost basis, and the use of other methods may result in more favorable tax consequences for some shareholders. Even if you have reported gains or losses for a Fund in past years using another method of basis determination, you may be able to use the average cost method for determining gains or losses in the current year. However, once you have elected to use the average cost method, you must continue to use it unless you apply to the IRS for permission to change methods.
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. The wash sale rules may also limit the amount of loss that may be taken into account on disposition after such adjustments.
BACKUP WITHHOLDING. The Funds may be required to withhold 28% of taxable distributions and/or redemption payments. For more information refer to "Purchase, Redemption and Pricing of Shares - Backup Withholding".
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, 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 to the extent discussed below. Such a foreign shareholder would generally be exempt from U.S. federal income tax on gains realized on the redemption of shares of a Fund, capital gain dividends and amounts retained by a Fund that are designated as undistributed net capital gain.
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, short-term capital gain dividends, interest-related 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 28% 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.
Foreign shareholders may be subject to U.S. withholding tax at a rate of 30% on the income resulting from the Foreign Tax Election (as discussed below), but may not be able to claim a credit or deduction with respect to the withholding tax for the foreign tax treated as having been paid by them.
Foreign persons who file a United States tax return to obtain a U.S. tax refund and who are not eligible to obtain a social security number must apply to the IRS for an individual taxpayer identification number, using IRS Form W-7. For a copy of the IRS Form W-7 and accompanying instructions, please contact your tax adviser or the IRS.
Transfers by gift of shares of the Fund by a foreign shareholder who is a nonresident alien individual will not be subject to U.S. federal gift tax. An individual who, at the time of death, is a foreign shareholder will nevertheless be subject to U.S. federal estate tax with respect to shares at the graduated rates applicable to U.S. citizens and residents, unless a treaty exception applies. In the absence of a treaty, there is a $13,000 statutory estate tax credit. Estates of non-resident alien shareholders dying after December 31, 2004 and before January 1, 2008 will be able to exempt from federal estate tax the proportion of the value of the Fund's shares attributable to "qualifying assets" held by the Fund at the end of the quarter immediately preceding the non-resident alien shareholder's death (or such other time as the IRS may designate in regulations). Qualifying assets include bank deposits and other debt obligations that pay interest or accrue original issue discount that is exempt from withholding tax, debt obligations of a domestic corporation that are treated as giving rise to foreign source income, and other investments that are not treated for tax purposes as being within the United States. Shareholders will be advised annually of the portion of the Fund's assets that constituted qualifying assets at the end of each quarter of its taxable year.
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 the Fund, including the applicability of foreign tax.
FOREIGN INCOME TAX. Investment income received by the Fund from sources within foreign countries may be subject to foreign income tax withheld at the source, and the amount of tax withheld will generally be treated as an expense of the Fund. The United States has entered into tax treaties with many foreign countries which entitle the Funds to a reduced rate of, or exemption from, tax on such income. It is impossible to determine the effective rate of foreign tax in advance since the amount of a Fund's assets to be invested in various countries is not known.
If more than 50% of the value of a Fund's total assets at the close of each taxable year consists of the stock or securities of foreign corporations, the Fund may elect to "pass through" to the Fund's shareholders the amount of foreign income tax paid by the Fund (the "Foreign Tax Election") in lieu of deducting such amount in determining its investment company taxable income. Pursuant to the Foreign Tax Election, shareholders will be required (i) to include in gross income, even though not actually received, their respective pro-rata shares of the foreign income tax paid by the Fund that are attributable to any distributions they receive; and (ii) either to deduct their pro-rata share of foreign tax in computing their taxable income, or to use it (subject to various Code limitations) as a foreign tax credit against
Federal income tax (but not both). No deduction for foreign tax may be claimed by a non-corporate shareholder who does not itemize deductions or who is subject to AMT.
Unless certain requirements are met, a credit for foreign tax is subject to the limitation that it may not exceed the shareholder's U.S. tax (determined without regard to the availability of the credit) attributable to the shareholder's foreign source taxable income. In determining the source and character of distributions received from a Fund for this purpose, shareholders will be required to allocate Fund distributions according to the source of the income realized by the Fund. Each Fund's gain from the sale of stock and securities and certain currency fluctuation gain and loss will generally be treated as derived from U.S. sources. In addition, the limitation on the foreign tax credit is applied separately to foreign source "passive" income, such as dividend income, and the portion of foreign source income consisting of qualified dividend income is reduced by approximately 57% to account for the tax rate differential. Individuals who have no more than $300 ($600 for married persons filing jointly) of creditable foreign tax included on Form 1099 and whose foreign source income is all "qualified passive income" may elect each year to be exempt from the foreign tax credit limitation and will be able to claim a foreign tax credit without filing Form 1116 with its corresponding requirement to report income and tax by country. Moreover, no foreign tax credit will be allowable to any shareholder who has not held his shares of the Fund for at least 16 days during the 30-day period beginning 15 days before the day such shares become ex-dividend with respect to any Fund distribution to which foreign income taxes are attributed (taking into account certain holding period reduction requirements of the Code). Because of these limitations, shareholders may be unable to claim a credit for the full amount of their proportionate shares of the foreign income tax paid by a Fund.
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 October 1, 2007. Future legislative or administrative changes or court decisions may significantly change the conclusions expressed herein, and any such changes or decisions may have a retroactive effect with respect to the transactions contemplated herein.
Rules of state and local taxation of ordinary income, qualified dividend income and capital gain dividends may differ from the rules for U.S. federal income taxation described above. Distributions may also be subject to additional state, local and foreign taxes depending on each shareholder's particular situation. Non-U.S. shareholders may be subject to U.S. tax rules that differ significantly from those summarized 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.
DISTRIBUTION OF SECURITIES
DISTRIBUTION PLANS
The Trust has adopted distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to each Fund's Class A shares, Class B shares, Class C shares, Class R shares and Investor Class shares, if applicable, (collectively the "Plans").
Each Fund, pursuant to the Plans, pays AIM Distributors compensation at the annual rate, shown immediately below, of the Fund's average daily net assets of the applicable class.
INVESTOR
FUND CLASS A CLASS B CLASS C CLASS R CLASS
---- ------- ------- ------- ------- --------
AIM Multi-Sector Fund 0.25% 1.00% 1.00% N/A N/A
AM Structured Core Fund 0.25% 1.00% 1.00% 0.50% 0.25%
AIM Structured Growth Fund 0.25% 1.00% 1.00% 0.50% N/A
AIM Structured Value Fund 0.25% 1.00% 1.00% 0.50% N/A
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All of the Plans compensate AIM Distributors for the purpose of financing any activity which is primarily intended to result in the sale of shares of the Funds. Such activities 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 each Plan.
Amounts payable by a Fund under the Class A, Class B, Class C, Class R and Investor Class Plans need not be directly related to the expenses actually incurred by AIM Distributors on behalf of each Fund. These Plans do not obligate the Funds to reimburse AIM Distributors for the actual allocated share of expenses AIM Distributors may incur in fulfilling its obligations under these Plans. Thus, even if AIM Distributors' actual allocated share of expenses exceeds the fee payable to AIM Distributors at any given time, under these Plans the Funds will not be obligated to pay more than that fee. If AIM Distributors' actual allocated share of expenses is less than the fee it receives, under these Plans AIM Distributors will retain the full amount of the fee.
AIM Distributors may from time to time waive or reduce any portion of its 12b-1 fee for Class A, Class C, Class R shares or Investor Class 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.
The Funds may pay a service fee of 0.25% of the average daily net assets of the Class A, Class B, Class C, Class R shares and Investor Class shares, as applicable, attributable to the customers of selected dealers and financial institutions to such dealers and financial institutions, including AIM Distributors, acting as principal, who furnish continuing personal shareholder services to their customers who purchase and own the applicable class of shares of the Fund. Under the terms of a shareholder service agreement, such personal shareholder services include responding to customer inquiries and providing customers with information about their investments. Any amounts not paid as a service fee under each Plan would constitute an asset-based sales charge.
AIM Distributors may pay dealers and institutions who sell Class R shares an annual fee of 0.50% of average daily net assets. These payments will consist of an asset-based fee of 0.25% and a service fee of 0.25% and will commence either on the thirteenth month after the first purchase, on accounts on which a dealer concession was paid, or immediately, on accounts on which a dealer concession was not paid. If AIM Distributors pays a dealer concession, it will retain all payments received by it relating to Class R shares for the first year after they are purchased. AIM Distributors will make quarterly payments to dealers and institutions based on the average net asset value of Class R shares which are attributable to shareholders for whom the dealers and institutions are designated as dealers of record.
Under a Shareholder Service Agreement, a Fund agrees to pay periodically fees to selected dealers and other institutions who render the foregoing services to their customers. The fees payable under a Shareholder Service Agreement will be calculated at the end of each payment period for each business day of the Funds during such period at the annual rate specified in each agreement based on the average daily net asset value of the Funds' shares purchased or acquired through exchange. Fees 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 Fund's shares are held.
Selected dealers and other institutions entitled to receive compensation for selling Fund shares may receive different compensation for selling shares of one particular class over another. 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.
Payments pursuant to the Plans are subject to any applicable limitations imposed by rules of FINRA.
See Appendix M for a list of the amounts paid by each class of shares of each Fund to AIM Distributors pursuant to the Plans for the year, or period, ended August 31, 2007 and Appendix N for an estimate by category of the allocation of actual fees paid by each class of shares of each Fund pursuant to its respective distribution plan for the year or period ended August 31, 2007.
As required by Rule 12b-1, the Plans and related forms of Shareholder Service Agreements were approved by the Board, including a majority of the trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust and who have no direct or indirect financial interest in the operation of the Plans or in any agreements related to the Plans (the "Rule 12b-1 Trustees"). In approving the Plans in accordance with the requirements of Rule 12b-1, the trustees considered various factors and determined that there is a reasonable likelihood that the Plans would benefit each class of the Funds and its respective shareholders.
The anticipated benefits that may result from the Plans with respect to each Fund and/or the classes of each Fund and its shareholders include but are not limited to the following: (1) rapid account access; (2) relatively predictable flow of cash; and (3) a well-developed, dependable network of shareholder service agents to help to curb sharp fluctuations in rates of redemptions and sales, thereby reducing the chance that an unanticipated increase in net redemptions could adversely affect the performance of each Fund.
Unless terminated earlier in accordance with their terms, the Plans continue from year to year as long as such continuance is specifically approved, in person, at least annually by the Board, including a majority of the Rule 12b-1 Trustees. A Plan may be terminated as to any Fund or class by the vote of a majority of the Rule 12b-1 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, the Plans may be amended by the trustees, including a majority of the Rule 12b-1 Trustees, by votes cast in person at a meeting called for the purpose of voting upon such amendment. As long as the Plans are in effect, the selection or nomination of the Independent Trustees is committed to the discretion of the Independent Trustees.
The Class B Plan obligates Class B shares to continue to make payments to AIM Distributors following termination of the Class B shares Distribution Agreement with respect to Class B shares sold by or attributable to the distribution efforts of AIM Distributors or its predecessors, unless there has been a complete termination of the Class B Plan (as defined in such Plan) and the Class B Plan expressly authorizes AIM Distributors to assign, transfer or pledge its rights to payments pursuant to the Class B Plan.
DISTRIBUTOR
The Trust has entered into master distribution agreements, as amended, relating to the Funds (the "Distribution Agreements") with AIM Distributors, a registered broker-dealer and a wholly owned subsidiary of AIM, pursuant to which AIM Distributors acts as the distributor of shares of the Funds. AIM Distributors became the distributor of AIM Multi-Sector Fund effective July 1, 2003. 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. See "Management of the Trust."
The Distribution Agreements provides AIM Distributors with the exclusive right to distribute shares of the Funds on a continuous basis directly and through other broker-dealers with whom AIM Distributors has entered into selected dealer agreements. 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, Class C and Class R 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. In the future, if multiple distributors serve a Fund, each such distributor (or its assignee or transferee) would receive a share of the payments under the Class B Plan based on the portion of the Fund's Class B shares sold by or attributable to the distribution efforts of that distributor.
AIM Distributors may pay sales commissions to dealers and institutions who sell Class C shares of the AIM Funds at the time of such sales. Payments with respect to Class C shares will equal 1.00% of the purchase price of the Class C shares sold by the dealer or institution, and will consist of a sales commission of 0.75% of the purchase price of the Class C shares sold plus an advance of the first year service fee of 0.25% with respect to such shares. AIM Distributors will retain all payments received by it relating to Class C shares for the first year after they are purchased. The portion of the payments to AIM Distributors under the Class C Plan which constitutes an asset-based sales charge (0.75%) is intended in part to permit AIM Distributors to recoup a portion of the sales commissions to dealers plus financing costs, if any. After the first full year, AIM Distributors will make quarterly payments 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 payments will consist of an asset-based sales charge of 0.75% and a service fee of 0.25%.
AIM Distributors may pay dealers and institutions who sell Class R shares an annual fee of 0.50% of average daily net assets. These payments will consist of an asset-based fee of 0.25% and a service fee of 0.25% and will commence either on the thirteenth month after the first purchase, on accounts on which a dealer concession was paid, or immediately, on accounts on which a dealer concession was not paid. If AIM Distributors pays a dealer concession, it will retain all payments received by it relating to Class R shares for the first year after they are purchased. AIM Distributors will make quarterly payments to dealers and institutions based on the average net asset value of Class R 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 Fund) or AIM Distributors may terminate the Distribution Agreements on 60 days' written notice without penalty. The Distribution Agreements will terminate automatically in the event of its 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 or its predecessors; provided, however that a complete termination of the Class B Plan (as defined in such Plan) would terminate all payments to AIM Distributors. Termination of the Class B Plan or the Distribution Agreement for Class B shares would not affect the obligation of Class B shareholders to pay contingent deferred sales charges.
Total sales charges (front end and contingent deferred sales charges) paid in connection with the sale of shares of each class of each Fund, if applicable, for the last three fiscal years ended August 31 are found in Appendix O.
FINANCIAL STATEMENTS
Each Fund's financial statements for the period ended August 31, 2007, including the Financial Highlights and the report of the independent registered public accounting firm pertaining thereto, are incorporated by reference into this Statement of Additional Information ("SAI") from such fund's Annual Report to shareholders contained in the Trust's Form N-CSR filed on ________________.
The portions of such Annual Reports that are not specifically listed above will not be incorporated by reference into this SAI and will not be a part of this Registration Statement.
PENDING LITIGATION
Settled Enforcement Actions Related to Market Timing
On October 8, 2004, INVESCO Funds Group, Inc. ("IFG") (the former investment advisor to certain AIM Funds), AIM and ADI reached final settlements with certain regulators, including the SEC, the New York Attorney General and the Colorado Attorney General, to resolve civil enforcement actions and/or investigations related to market timing and related activity in the AIM Funds, including those formerly advised by IFG. As part of the settlements, a $325 million fair fund ($110 million of which is civil penalties) has been created to compensate shareholders harmed by market timing and related activity in funds formerly advised by IFG. Additionally, AIM and ADI created a $50 million fair fund ($30 million of which is civil penalties) to compensate shareholders harmed by market timing and related activity in funds advised by AIM, which was done pursuant to the terms of the settlements. These two fair funds will be distributed in accordance with a methodology to be determined by AIM's independent distribution consultant, in consultation with AIM and the independent trustees of the AIM Funds and acceptable to the staff of the SEC.
The AIM Funds expect that the SEC will, in the near future, provide notice to the public that it has approved the distribution methodology (the "IDC Plan") determined by AIM's independent distribution consultant, as described above, and that payments from the two fair funds may be distributed in accordance with the terms of the IDC Plan. AIM has informed the AIM Funds that, as soon as practicable upon the SEC's issuance of such notice, AIM intends to make or cause to be made available further details regarding the IDC Plan and planned distributions thereunder on AIM's website, available at http:www.aiminvestments.com. AIM's website is not a part of this Statement of Additional Information or the prospectus of any AIM Fund. While the AIM Funds expect that the SEC will make the above-described notice available in the near future, neither AIM nor the AIM Funds are able to guarantee this or make any specific representation as to the actual timing of such notice's availability.
Regulatory Action Alleging Market Timing
On August 30, 2005, the West Virginia Office of the State Auditor - Securities Commission ("WVASC") issued a Summary Order to Cease and Desist and Notice of Right to Hearing to AIM and ADI (Order No. 05-1318). The WVASC makes findings of fact that AIM and ADI entered into certain arrangements permitting market timing of the AIM Funds and failed to disclose these arrangements in the prospectuses for such Funds, and conclusions of law to the effect that AIM and ADI violated the West Virginia securities laws. The WVASC orders AIM and ADI to cease any further violations and seeks to impose monetary sanctions, including restitution to affected investors, disgorgement of fees, reimbursement of investigatory, administrative and legal costs and an "administrative assessment," to be determined by the Commissioner. Initial research indicates that these damages could be limited or capped by statute. By agreement with the Commissioner of Securities, AIM's time to respond to that Order has been indefinitely suspended.
Private Civil Actions Alleging Market Timing
Multiple civil lawsuits, including purported class action and shareholder derivative suits, have been filed against various parties (including, depending on the lawsuit, certain AIM Funds, IFG, AIM, AIM Management Group Inc. ("AIM Management"), INVESCO PLC ("INVESCO"), the parent company of IFG
and AIM, certain related entities, certain of their current and former officers and/or certain unrelated third parties) based on allegations of improper market timing and related activity in the AIM Funds. These lawsuits allege a variety of theories of recovery, including but not limited to: (i) violation of various provisions of the Federal and state securities laws; (ii) violation of various provisions of ERISA; (iii) breach of fiduciary duty; and/or (iv) breach of contract. These lawsuits were initiated in both Federal and state courts and seek such remedies as compensatory damages; restitution; injunctive relief; disgorgement of management fees; imposition of a constructive trust; removal of certain directors and/or employees; various corrective measures under ERISA; rescission of certain Funds' advisory agreements; interest; and attorneys' and experts' fees. A list identifying such lawsuits (excluding those lawsuits that have been recently transferred as mentioned herein) that have been served on IFG, AIM, the AIM Funds or related entities, or for which service of process has been waived is set forth in Appendix P-1.
All lawsuits based on allegations of market timing, late trading, and related issues have been transferred to the United States District Court for the District of Maryland (the "MDL Court") for consolidated or coordinated pre-trial proceedings. Pursuant to an Order of the MDL Court, plaintiffs in these lawsuits consolidated their claims for pre-trial purposes into three amended complaints against various AIM- and IFG-related parties. A list identifying the amended complaints in the MDL Court is included in Appendix P-1. Plaintiffs in two of the underlying lawsuits transferred to the MDL Court continue to seek remand of their action to state court. These lawsuits are identified in Appendix P-1.
Private Civil Actions Alleging Improper Use of Fair Value Pricing
Multiple civil class action lawsuits have been filed against various
parties (including, depending on the lawsuit, certain AIM Funds, IFG and/or AIM)
alleging that certain AIM Funds inadequately employed fair value pricing. These
lawsuits allege a variety of theories of recovery, including but not limited to:
(i) violations of various provisions of the Federal securities laws; (ii) common
law breach of duty; and (iii) common law negligence and gross negligence. These
lawsuits have been filed in both Federal and state courts and seek such remedies
as compensatory and punitive damages; interest; and attorneys' fees and costs. A
list identifying such lawsuits that have been served on IFG, AIM, the AIM Funds
or related entities, or for which service of process has been waived is set
forth in Appendix P-2.
APPENDIX A
RATINGS OF DEBT SECURITIES
The following is a description of the factors underlying the debt ratings of Moody's, S&P and Fitch:
MOODY'S LONG-TERM DEBT RATINGS
Moody's corporate ratings are as follows:
Aaa: Bonds and preferred stock 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-edged." 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 and preferred stock which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. These are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risk in Aa rated bonds appear somewhat larger than those securities rated Aaa.
A: Bonds and preferred stock which are rated A possess many favorable investment attributes and are to be considered as upper-medium-grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds and preferred stock which are rated Baa are considered as medium-grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.
Ba: Bonds and preferred stock which are rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.
B: Bonds and preferred stock which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.
Caa: Bonds and preferred stock which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.
Ca: Bonds and preferred stock which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings.
C: Bonds and preferred stock which are rated C are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing.
Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.
MOODY'S SHORT-TERM PRIME RATING SYSTEM
Moody's short-term ratings are opinions of the ability of issuers to honor senior financial obligations and contracts. Such obligations generally have an original maturity not exceeding one year, unless explicitly noted.
Moody's employs the following designations, all judged to be investment grade, to indicate the relative repayment ability of rated issuers.
PRIME-1: Issuers (or supporting institutions) rated Prime-1 have a superior
ability for repayment of senior short-term obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:
leading market positions in well-established industries; high rates of return on
funds employed; conservative capitalization structure with moderate reliance on
debt and ample asset protection; broad margins in earnings coverage of fixed
financial charges and high internal cash generation; and well-established access
to a range of financial markets and assured sources of alternate liquidity.
PRIME-2: Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay senior short-term debt obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained.
PRIME-3: Issuers (or supporting institutions) rated Prime-3 have an acceptable ability for repayment of senior short-term debt obligations. The effect of industry characteristics and market compositions may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt protection measurements and may require relatively high financial leverage. Adequate alternate liquidity is maintained.
NOT PRIME: Issuers rated Not Prime do not fall within any of the Prime rating categories.
Note: In addition, in certain countries the prime rating may be modified by the issuer's or guarantor's senior unsecured long-term debt rating.
Moody's municipal ratings are as follows:
MOODY'S U.S. LONG-TERM MUNICIPAL BOND RATING DEFINITIONS
Municipal Ratings are opinions of the investment quality of issuers and issues in the US municipal and tax-exempt markets. As such, these ratings incorporate Moody's assessment of the default probability and loss severity of these issuers and issues.
Municipal Ratings are based upon the analysis of four primary factors relating to municipal finance: economy, debt, finances, and administration/management strategies. Each of the factors is evaluated individually and for its effect on the other factors in the context of the municipality's ability to repay its debt.
Aaa: Issuers or issues rated Aaa demonstrate the strongest creditworthiness relative to other US municipal or tax-exempt issuers or issues.
Aa: Issuers or issues rated Aa demonstrate very strong creditworthiness relative to other US municipal or tax-exempt issuers or issues.
A: Issuers or issues rated A present above-average creditworthiness relative to other US municipal or tax-exempt issuers or issues.
Baa: Issuers or issues rated Baa represent average creditworthiness relative to other US municipal or tax-exempt issuers or issues.
Ba: Issuers or issues rated Ba demonstrate below-average creditworthiness relative to other US municipal or tax-exempt issuers or issues.
B: Issuers or issues rated B demonstrate weak creditworthiness relative to other US municipal or tax-exempt issuers or issues.
Caa: Issuers or issues rated Caa demonstrate very weak creditworthiness relative to other US municipal or tax-exempt issuers or issues.
Ca: Issuers or issues rated Ca demonstrate extremely weak creditworthiness relative to other US municipal or tax-exempt issuers or issues.
C: Issuers or issues rated C demonstrate the weakest creditworthiness relative to other US municipal or tax-exempt issuers or issues.
Note: Also, Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from Aa to Caa. The modifier 1 indicates that the issue ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks in the lower end of its generic category.
MOODY'S MIG/VMIG US SHORT-TERM RATINGS
In municipal debt issuance, there are three rating categories for short-term obligations that are considered investment grade. These ratings are designated as Moody's Investment Grade (MIG) and are divided into three levels - MIG 1 through MIG 3.
In addition, those short-term obligations that are of speculative quality are designated SG, or speculative grade.
In the case of variable rate demand obligations (VRDOs), a two-component rating is assigned. The first element represents Moody's evaluation of the degree of risk associated with scheduled principal and interest payments. The second element represents Moody's evaluation of the degree of risk associated with the demand feature, using the MIG rating scale.
The short-term rating assigned to the demand feature of VRDOs is designated as VMIG. When either the long- or short-term aspect of a VRDO is not rated, that piece is designated NR, e.g., Aaa/NR or NR/VMIG 1.
MIG ratings expire at note maturity. By contrast, VMIG rating expirations will be a function of each issue's specific structural or credit features.
Gradations of investment quality are indicated by rating symbols, with each symbol representing a group in which the quality characteristics are broadly the same.
MIG 1/VMIG 1: This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support or demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2: This designation denotes strong credit quality. Margins of protection are ample although not as large as in the preceding group.
MIG 3/VMIG 3: This designation denotes acceptable credit quality. Liquidity and cash flow protection may be narrow and market access for refinancing is likely to be less well established.
SG: This designation denotes speculative-grade credit quality. Debt instruments in this category may lack sufficient margins of protection.
STANDARD & POOR'S LONG-TERM CORPORATE AND MUNICIPAL RATINGS
Issue credit ratings are based in varying degrees, on the following considerations: likelihood of payment - capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation; nature of and provisions of the obligation; and protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights.
The issue ratings definitions are expressed in terms of default risk. As such, they pertain to senior obligations of an entity. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority in bankruptcy, as noted above.
S&P describes its ratings for corporate and municipal bonds as follows:
AAA: Debt rated AAA has the highest rating assigned by S&P. Capacity to pay interest and repay principal is extremely strong.
AA: Debt rated AA has a very strong capacity to pay interest and repay principal and differs from the highest rated issues only in a small degree.
A: Debt rated A has a strong capacity to meet its financial commitments although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories.
BBB: Debt rated BBB exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to meet its financial commitment on the obligation.
BB-B-CCC-CC-C: Debt rated BB, B, CCC, CC and C is regarded as having significant speculative characteristics with respect to capacity to pay interest and repay principal. BB indicates the least degree of speculation and C the highest. While such debt will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.
NR: Not Rated.
S&P DUAL RATINGS
S&P assigns "dual" ratings to all debt issues that have a put option or demand feature as part of their structure.
The first rating addresses the likelihood of repayment of principal and interest as due, and the second rating addresses only the demand feature. The long-term debt rating symbols are used for bonds to denote the long-term maturity and the commercial paper rating symbols for the put option (for example, AAA/A-1+). With short-term demand debt, the note rating symbols are used with the commercial paper rating symbols (for example, SP-1+/A-1+).
S&P COMMERCIAL PAPER RATINGS
An S&P commercial paper rating is a current assessment of the likelihood of timely payment of debt having an original maturity of no more than 365 days.
These categories are as follows:
A-1: This highest category indicates that the degree of safety regarding timely payment is strong. Those issues determined to possess extremely strong safety characteristics are denoted with a plus sign (+) designation.
A-2: Capacity for timely payment on issues with this designation is satisfactory. However, the relative degree of safety is not as high as for issues designated A-1.
A-3: Issues carrying this designation have adequate capacity for timely payment. They are, however, more vulnerable to the adverse effects of changes in circumstances than obligations carrying the higher designations.
B: Issues rated 'B' are regarded as having only speculative capacity for timely payment.
C: This rating is assigned to short-term debt obligations with a doubtful capacity for payment.
D: Debt rated 'D' is in payment default. The 'D' rating category is used when interest payments or principal payments are not made on the date due, even if the applicable grace period has not expired, unless Standard & Poor's believes such payments will be made during such grace period.
S&P SHORT-TERM MUNICIPAL RATINGS
An S&P note rating reflect the liquidity factors and market-access risks
unique to notes. Notes due in three years or less will likely receive a note
rating. Notes maturing beyond three years will most likely receive a long-term
debt rating. The following criteria will be used in making that assessment:
amortization schedule (the larger the final maturity relative to other
maturities, the more likely it will be treated as a note); and source of payment
(the more dependant the issue is on the market for its refinancing, the more
likely it will be treated as a note).
Note rating symbols are as follows:
SP-1: Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation.
SP-2: Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.
SP-3: Speculative capacity to pay principal and interest.
FITCH LONG-TERM CREDIT RATINGS
Fitch Ratings provides an opinion on the ability of an entity or of a securities issue to meet financial commitments, such as interest, preferred dividends, or repayment of principal, on a timely basis. These credit ratings apply to a variety of entities and issues, including but not limited to sovereigns, governments, structured financings, and corporations; debt, preferred/preference stock, bank loans, and counterparties; as well as the financial strength of insurance companies and financial guarantors.
Credit ratings are used by investors as indications of the likelihood of
getting their money back in accordance with the terms on which they invested.
Thus, the use of credit ratings defines their function: "investment grade"
ratings (international Long-term 'AAA' - 'BBB' categories; Short-term 'F1' -
'F3') indicate a relatively low probability of default, while those in the
"speculative" or "non-investment grade" categories (international Long-term 'BB'
- 'D'; Short-term 'B' - 'D') either signal a higher probability of default or
that a default has already occurred. Ratings imply no specific prediction of
default probability. However, for example, it is relevant to note that over the
long term, defaults on 'AAA' rated U.S. corporate bonds have averaged less than
0.10% per annum, while the equivalent rate for 'BBB' rated bonds was 0.35%, and
for 'B' rated bonds, 3.0%.
Fitch ratings do not reflect any credit enhancement that may be provided by insurance policies or financial guaranties unless otherwise indicated.
Entities or issues carrying the same rating are of similar but not necessarily identical credit quality since the rating categories do not fully reflect small differences in the degrees of credit risk.
Fitch credit and research are not recommendations to buy, sell or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature of taxability of payments of any security.
The ratings are based on information obtained from issuers, other obligors, underwriters, their experts, and other sources Fitch Ratings believes to be reliable. Fitch Ratings does not audit or verify the truth or accuracy of such information. Ratings may be changed or withdrawn as a result of changes in, or the unavailability of, information or for other reasons.
Our program ratings relate only to standard issues made under the program concerned; it should not be assumed that these ratings apply to every issue made under the program. In particular, in the case of non-standard issues, i.e., those that are linked to the credit of a third party or linked to the performance of an index, ratings of these issues may deviate from the applicable program rating.
Credit ratings do not directly address any risk other than credit risk. In particular, these ratings do not deal with the risk of loss due to changes in market interest rates and other market considerations.
AAA: Bonds considered to be investment grade and of the highest credit quality. The obligor has an exceptionally strong capacity for timely payment of financial commitments, which is unlikely to be affected by foreseeable events.
AA: Bonds considered to be investment grade and of very high credit quality. The obligor has a very strong capacity for timely payment of financial commitments which is not significantly vulnerable to foreseeable events.
A: Bonds considered to be investment grade and of high credit quality. The obligor's ability to pay interest and repay principal is considered to be strong, but may be more vulnerable to adverse changes in economic conditions and circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of good credit quality. The obligor's ability to pay interest and repay principal is considered to be adequate. Adverse changes in economic conditions and circumstances are more likely to impair this capacity.
PLUS (+) MINUS (-): Plus and minus signs are used with a rating symbol to indicate the relative position of a credit within the rating category. Plus and minus signs, however, are not used in the "AAA" category.
NR: Indicates that Fitch does not rate the specific issue.
WITHDRAWN: A rating will be withdrawn when an issue matures or is called or refinanced and at Fitch's discretion, when Fitch Ratings deems the amount of information available to be inadequate for ratings purposes.
RATINGWATCH: Ratings are placed on RatingWatch to notify investors that there is a reasonable possibility of a rating change and the likely direction of such change. These are designated as "Positive," indicating a potential upgrade, "Negative," for potential downgrade, or "Evolving," if ratings may be raised, lowered or maintained. RatingWatch is typically resolved over a relatively short period.
FITCH SPECULATIVE GRADE BOND RATINGS
BB: Bonds are considered speculative. There is a possibility of credit risk developing, particularly as the result of adverse economic changes over time. However, business and financial alternatives may be available to allow financial commitments to be met.
B: Bonds are considered highly speculative. Significant credit risk is present but a limited margin of safety remains. While bonds in this class are currently meeting financial commitments, the capacity for continued payment is contingent upon a sustained, favorable business and economic environment.
CCC: Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments.
CC: Default of some kind appears probable.
C: Bonds are in imminent default in payment of interest or principal.
DDD, DD, AND D: Bonds are in default on interest and/or principal payments. Such bonds are extremely speculative and are valued on the basis of their prospects for achieving partial or full recovery value in liquidation or reorganization of the obligor. "DDD" represents the highest potential for recovery on these bonds, and "D" represents the lowest potential for recovery.
PLUS (+) MINUS (-): Plus and minus signs are used with a rating symbol to indicate the relative position of a credit within the rating category. Plus and minus signs, however, are not used in categories below CCC.
FITCH SHORT-TERM CREDIT RATINGS
The following ratings scale applies to foreign currency and local currency ratings. A Short-term rating has a time horizon of less than 12 months for most obligations, or up to three years for U.S. public finance securities, and thus places greater emphasis on the liquidity necessary to meet financial commitments in a timely manner.
F-1+: Exceptionally Strong Credit Quality. Issues assigned this rating are regarded as having the strongest degree of assurance for timely payment.
F-1: Very Strong Credit Quality. Issues assigned this rating reflect an assurance of timely payment only slightly less in degree than issues rated "F-1+."
F-2: Good Credit Quality. Issues assigned this rating have a satisfactory degree of assurance for timely payment, but the margin of safety is not as great as in the case of the higher ratings.
F-3: Fair Credit Quality. Issues assigned this rating have characteristics suggesting that the degree of assurance for timely payment is adequate, however, near-term adverse changes could result in a reduction to non-investment grade.
B: Speculative. Minimal capacity for timely payment of financial commitments, plus vulnerability to near-term adverse changes in financial and economic conditions.
C: High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon a sustained, favorable business and economic environment.
D: Default. Issues assigned this rating are in actual or imminent payment default.
APPENDIX B
PERSONS TO WHOM AIM PROVIDES
NON-PUBLIC PORTFOLIO HOLDINGS ON AN ONGOING BASIS
(AS OF SEPTEMBER 30, 2007)
SERVICE PROVIDER DISCLOSURE CATEGORY
---------------- -------------------
ABN AMRO Financial Services, Inc. Broker (for certain AIM funds)
AIM Investment Services, Inc. Transfer Agent
Anglemyer & Co. Analyst (for certain AIM funds)
Ballard Spahr Andrews & Ingersoll, LLP Legal Counsel
BB&T Capital Markets Broker (for certain AIM funds)
Bear, Stearns Pricing Direct Pricing Vendor (for certain AIM funds)
BOSC, Inc. Broker (for certain AIM funds)
BOWNE & Co. Financial Printer
Brown Brothers Harriman & Co. Securities Lender (for certain AIM funds)
Cabrera Capital Markets Broker (for certain AIM funds)
CENVEO Financial Printer
Charles River Systems, Inc. System Provider
Citigroup Global Markets, Inc. Broker (for certain AIM funds)
Classic Printers Inc. Financial Printer
Color Dynamics Financial Printer
Commerce Capital Markets Broker (for certain AIM funds)
D.A. Davidson & Co. Broker (for certain AIM funds)
Earth Color Houston Financial Printer
EMCO Press Financial Printer
Empirical Research Partners Analyst (for certain AIM funds)
Finacorp Securities Broker (for certain AIM funds)
First Albany Capital Broker (for certain AIM funds)
First Tryon Securities Broker (for certain AIM funds)
F T Interactive Data Corporation Pricing Vendor
GainsKeeper Software Provider (for certain AIM funds)
GCom2 Solutions Software Provider (for certain AIM funds)
George K. Baum & Company Broker (for certain AIM funds)
Glass, Lewis & Co. System Provider (for certain AIM funds)
Global Trend Alert Analyst (for certain AIM funds)
Greater Houston Publishers Financial Printer
Grover Printing Financial Printer
Gulfstream Graphics Corp. Financial Printer
Hattier, Sanford & Reynoir Broker (for certain AIM funds)
Hutchinson, Shockey, Erley & Co. Broker (for certain AIM funds)
Imageset Financial Printer
iMoneyNet, Inc. Rating & Ranking Agency (for certain AIM funds)
Infinity Web, Inc. Financial Printer
Initram Data, Inc. Pricing Vendor
Institutional Shareholder Services, Inc. Proxy Voting Service (for certain AIM funds)
INVESCO Senior Secured Management System Provider (for certain AIM funds)
Investortools, Inc. Broker (for certain AIM funds)
ITG, Inc. Pricing Vendor (for certain AIM funds)
J.P. Morgan Securities, Inc. Analyst (for certain AIM funds)
JPMorgan Securities Inc.\Citigroup Global
Markets Inc.\JPMorgan Chase Bank, N.A. Lender (for certain AIM funds)
John Hancock Investment Management
Services, LLC Sub-advisor (for certain sub-advised accounts)
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SERVICE PROVIDER DISCLOSURE CATEGORY
---------------- -------------------
Jorden Burt LLP Special Insurance Counsel
Kramer, Levin Naftalis & Frankel LLP Legal Counsel
Lipper, Inc. Rating & Ranking Agency (for certain AIM funds)
Loan Pricing Corporation Pricing Service (for certain AIM funds)
Loop Capital Markets Broker (for certain AIM funds)
MarkIt Group Limited Pricing Vendor (for certain AIM funds)
Merrill Communications, LLC Financial Printer
Mesirow Financial, Inc. Broker (for certain AIM funds)
Moody's Investors Service Rating & Ranking Agency (for certain AIM funds)
Morgan Keegan & Company, Inc. Broker (for certain AIM funds)
Morrison Foerster LLP Legal Counsel
MS Securities Services, Inc. and Morgan
Stanley & Co. Incorporated Securities Lender (for certain AIM funds)
Muzea Insider Consulting Services, LLC Analyst (for certain AIM funds)
Ness USA System provider
Noah Financial, LLC Analyst (for certain AIM funds)
OMGEO Oasys Trading System
Page International Financial Printer
PCP Publishing Financial Printer
Piper Jaffray Analyst (for certain AIM funds)
Prager, Sealy & Co. Broker (for certain AIM funds)
PricewaterhouseCoopers LLP Independent Registered Public Accounting Firm
(for all AIM funds)
Protective Securities Broker (for certain AIM funds)
Ramirez & Co., Inc. Broker (for certain AIM funds)
Raymond James & Associates, Inc. Broker (for certain AIM funds)
RBC Capital Markets Analyst (for certain AIM funds)
RBC Dain Rauscher Incorporated Broker (for certain AIM funds)
Reuters America, LLC Pricing Service (for certain AIM funds)
Robert W. Baird & Co. Incorporated Broker (for certain AIM funds)
RR Donnelley Financial Financial Printer
Ryan Beck & Co. Broker (for certain AIM funds)
Seattle-Northwest Securities Corporation Broker (for certain AIM funds)
Siebert Brandford Shank & Co., L.L.C. Broker (for certain AIM funds)
Signature Financial Printer
Simon Printing Company Financial Printer
Southwest Precision Printers, Inc. Financial Printer
Standard and Poor's/Standard and Poor's Pricing Service and Rating and Ranking Agency
Securities Evaluations, Inc. (each, respectively, for certain AIM funds)
StarCompliance, Inc. System Provider
State Street Bank and Trust Company Custodian, Lender, Securities Lender, and System
Provider (each, respectively, for certain AIM
funds)
Sterne, Agee & Leach, Inc. Broker (for certain AIM funds)
Stifel, Nicolaus & Company, Incorporated Broker (for certain AIM funds)
The Bank of New York Custodian and Securities Lender (each,
respectively, for certain AIM funds)
The MacGregor Group, Inc. Software Provider
The Savader Group Broker (for certain AIM funds)
Thomson Information Services Incorporated Software Provider
UBS Financial Services, Inc. Broker (for certain AIM funds)
VCI Group Inc. Financial Printer
Wachovia National Bank, N.A. Broker (for certain AIM funds)
Western Lithograph Financial Printer
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SERVICE PROVIDER DISCLOSURE CATEGORY
---------------- -------------------
Wiley Bros. Aintree Capital L.L.C. Broker (for certain AIM funds)
William Blair & Co. Broker (for certain AIM funds)
XSP, LLC\Solutions PLUS, Inc. Software Provider
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APPENDIX C
TRUSTEES AND OFFICERS
As of September 30, 2007
The address of each trustee and officer is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust's organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.
TRUSTEE OTHER
AND/OR TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND OFFICER DIRECTORSHIPS(S)
POSITION(S) HELD WITH THE TRUST SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS HELD BY TRUSTEE/DIRECTOR
---------------------------------- ------- ------------------------------------------------------- ------------------------
INTERESTED PERSONS
Martin L. Flanagan(1) - 1960 2007 Director, Chief Executive Officer and President, None
Trustee INVESCO PLC (parent of AIM and a global investment
management firm); Chairman, A I M Advisors, Inc.
(registered investment advisor); Director, Chairman,
Chief Executive Officer and President, IVZ Inc.
(holding company); INVESCO North American Holdings,
Inc. (holding company); Chairman and President,
INVESCO Group Services, Inc. (service provider);
Trustee, The AIM Family of Funds Registered Trademark;
Chairman, Investment Company Institute; and Member of
Executive Board, SMU Cox School of Business
Formerly: President, Co-Chief Executive Officer,
Co-President, Chief Operating Officer and Chief
Financial Officer, Franklin Resources, Inc. (global
investment management organization)
Philip A. Taylor(2) - 1954 2006 Director, Chief Executive Officer and President, AIM None
Trustee, President and Principal Mutual Fund Dealer Inc. (registered broker dealer),
Executive Officer A I M Advisors, Inc., AIM Funds Management Inc. d/b/a
INVESCO Enterprise Services (registered investment
advisor and registered transfer agent) and 1371
Preferred Inc. (holding company); Director, Chairman,
Chief Executive Officer and President, A I M
Management Group Inc. (financial services holding
company), A I M Capital Management, Inc. (registered
investment advisor); Director and President, INVESCO
Funds Group, Inc. (registered investment advisor and
registered transfer agent) and AIM GP Canada Inc.
(general partner for limited partnership); Director,
A I M Distributors, Inc. (registered broker dealer);
Director and Chairman, AIM Investment Services, Inc.
(registered transfer agent), Fund Management Company
(registered broker dealer) and INVESCO Distributors,
Inc. (registered broker dealer); Director, President
and Chairman, IVZ Callco Inc. (holding company),
INVESCO Inc. (holding company) and AIM Canada
Holdings Inc. (holding company);
|
(2) Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the advisor to, and a director of the principal underwriter of the Trust.
TRUSTEE OTHER
AND/OR TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND OFFICER DIRECTORSHIPS(S)
POSITION(S) HELD WITH THE TRUST SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS HELD BY TRUSTEE/DIRECTOR
---------------------------------- ------- ------------------------------------------------------- ------------------------
Director and Chief Executive Officer, AIM Trimark
Corporate Class Inc. (formerly AIM Trimark Global Fund
Inc.) (corporate mutual fund company) and AIM Trimark
Canada Fund Inc. (corporate mutual fund company);
Trustee, President and Principal Executive Officer, The
AIM Family of Funds Registered Trademark (other than
AIM Treasurer's Series Trust, Short-Term Investments
Trust and Tax-Free Investments Trust); Trustee and
Executive Vice President, The AIM Family of Funds
Registered Trademark (AIM Treasurer's Series Trust,
Short-Term Investments Trust and Tax-Free Investments
Trust only) ; and Manager, PowerShares Capital
Management LLC
Formerly: President and Principal Executive Officer,
The AIM Family of Funds Registered Trademark (AIM
Treasurer's Series Trust, Short-Term Investments Trust
and Tax-Free Investments Trust only); Chairman, AIM
Canada Holdings, Inc.; President, AIM Trimark Global
Fund Inc. and AIM Trimark Canada Fund Inc.; and
Director, Trimark Trust (federally regulated Canadian
trust company)
INDEPENDENT TRUSTEES
Bruce L. Crockett - 1944 2003 Chairman, Crockett Technology Associates (technology ACE Limited (insurance
Trustee and Chair consulting company) company); and Captaris,
Inc. (unified messaging
provider)
Bob R. Baker - 1936 1983 Retired None
Trustee
Frank S. Bayley - 1939 2003 Retired Badgley Funds, Inc.
Trustee Formerly: Partner, law firm of Baker & McKenzie (registered investment
company) (2 portfolios)
James T. Bunch - 1942 2000 Founder, Green, Manning & Bunch Ltd. (investment None
Trustee banking firm); and Director, Policy Studies, Inc. and
Van Gilder Insurance Corporation
Albert R. Dowden - 1941 2003 Director of a number of public and private business None
Trustee corporations, including the Boss Group, Ltd. (private
investment and management), Reich & Tang Funds
(Chairman) (registered investment company) (7
portfolios), Daily Income Fund (4 portfolios),
California Daily Tax Free Income Fund, Inc.,
Connecticut Daily Tax Free Income Fund, Inc. and New
Jersey Daily Municipal Income Fund, Inc., Annuity and
Life Re (Holdings), Ltd. (insurance company), and
Homeowners of America Holding Corporation (property
casualty company)
Formerly: Director, CompuDyne Corporation (provider
of product and services to the public security
market), Director, President and Chief Executive
Officer, Volvo Group North America, Inc.; Senior Vice
President, AB Volvo; Director of various affiliated
Volvo companies; and Director, Magellan Insurance
Company
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TRUSTEE OTHER
AND/OR TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND OFFICER DIRECTORSHIPS(S)
POSITION(S) HELD WITH THE TRUST SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS HELD BY TRUSTEE/DIRECTOR
---------------------------------- ------- ------------------------------------------------------- ------------------------
Jack M. Fields - 1952 2003 Chief Executive Officer, Twenty First Century Group, Administaff
Trustee Inc. (government affairs company); Owner and Chief
Executive Officer, Dos Angelos Ranch, L.P. (cattle,
hunting, corporate entertainment); and Discovery
Global Education Fund (non-profit)
Formerly: Chief Executive Officer, Texana Timber LP
(sustainable forestry company)
Carl Frischling - 1937 2003 Partner, law firm of Kramer Levin Naftalis and Director, Reich & Tang
Trustee Frankel LLP Funds (7 portfolios)
Prema Mathai-Davis - 1950 2003 Formerly: Chief Executive Officer, YWCA of the USA None
Trustee
Lewis F. Pennock - 1942 2003 Partner, law firm of Pennock & Cooper None
Trustee
Ruth H. Quigley - 1935 2003 Retired None
Trustee
Larry Soll - 1942 1997 Retired None
Trustee
Raymond Stickel, Jr. - 1944 2005 Retired None
Trustee Formerly: Partner, Deloitte & Touche; and Director,
Mainstay VP Series Funds, Inc. (25 portfolios)
OTHER OFFICERS
Russell C. Burk - 1958 2005 Senior Vice President and Senior Officer, The AIM N/A
Senior Vice President and Senior Family of Funds Registered Trademark
Officer
Formerly: Director of Compliance and Assistant
General Counsel, ICON Advisers, Inc.; Financial
Consultant, Merrill Lynch; General Counsel and
Director of Compliance, ALPS Mutual Funds, Inc.
John M. Zerr - 1962 2006 Director, Senior Vice President, Secretary and N/A
Senior Vice President, Chief General Counsel, A I M Management Group Inc., A I M
Legal Officer and Secretary Advisors, Inc. and A I M Capital Management, Inc.;
Director, Vice President and Secretary, AIM
Investment Services, Inc., Fund Management Company
and INVESCO Distributors, Inc.; Director, Senior Vice
President and Secretary, A I M Distributors, Inc.;
Director and Vice President, INVESCO Funds Group, Inc.;
Senior Vice President, Chief Legal Officer and
Secretary, The AIM Family of Funds Registered
Trademark; and Manager, PowerShares Capital Management
LLC
Formerly: Vice President, A I M Capital Management,
Inc.; Chief Operating Officer, Senior Vice President,
General Counsel and Secretary, Liberty Ridge Capital,
Inc. (an investment adviser); Vice President and
Secretary, PBHG Funds (an investment company); Vice
President and Secretary, PBHG Insurance Series Fund
(an investment company); General Counsel and
Secretary, Pilgrim Baxter Value Investors (an
investment adviser); Chief Operating Officer, General
Counsel and Secretary, Old Mutual Investment Partners
(a broker-dealer); General Counsel and Secretary, Old
Mutual Fund Services (an
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TRUSTEE OTHER
AND/OR TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND OFFICER DIRECTORSHIPS(S)
POSITION(S) HELD WITH THE TRUST SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS HELD BY TRUSTEE/DIRECTOR
---------------------------------- ------- ------------------------------------------------------- ------------------------
administrator); General Counsel and Secretary, Old
Mutual Shareholder Services (a shareholder servicing
center); Executive Vice President, General Counsel and
Secretary, Old Mutual Capital, Inc. (an investment
adviser); and Vice President and Secretary, Old Mutual
Advisors Funds (an investment company)
Lisa O. Brinkley - 1959 2004 Global Compliance Director, INVESCO PLC; and Vice N/A
Vice President President, The AIM Family of Funds Registered Trademark
Formerly: Senior Vice President, A I M Management
Group Inc.; Senior Vice President and Chief
Compliance Officer, A I M Advisors, Inc. and The AIM
Family of Funds Registered Trademark; Vice President
and Chief Compliance Officer, A I M Capital Management,
Inc. and A I M Distributors, Inc.; Vice President, AIM
Investment Services, Inc. and Fund Management Company;
and Senior Vice President and Compliance Director,
Delaware Investments Family of Funds
Kevin M. Carome - 1956 2003 Senior Vice President and General Counsel, INVESCO N/A
Vice President PLC; Director, INVESCO Funds Group, Inc.; Director
and Secretary, IVZ, Inc. and INVESCO Group Services,
Inc.; Secretary, INVESCO North American Holdings,
Inc. and Vice President, The AIM Family of Funds
Registered Trademark
Formerly: Director, Senior Vice President, Secretary
and General Counsel, A I M Management Group Inc. and
A I M Advisors, Inc.; Senior Vice President, A I M
Distributors, Inc.; Director, General Counsel and
Vice President, Fund Management Company; Vice
President, A I M Capital Management, Inc. and AIM
Investment Services, Inc.; and Senior Vice President,
Chief Legal Officer and Secretary, The AIM Family of
Funds Registered Trademark; Director and Vice
President, INVESCO Distributors, Inc.; Chief Executive
Officer and President, INVESCO Funds Group; and Senior
Vice President and General Counsel, Liberty Financial
Companies, Inc.
Sidney M. Dilgren - 1961 2004 Vice President, A I M Advisors, Inc. and A I M N/A
Vice President, Treasurer and Capital Management, Inc.; and Vice President,
Principal Financial Officer Treasurer and Principal Financial Officer, The AIM
Family of Funds Registered Trademark
Formerly: Fund Treasurer, A I M Advisors, Inc.;
Senior Vice President, AIM Investment Services, Inc.
and Vice President, A I M Distributors, Inc.
|
TRUSTEE OTHER
AND/OR TRUSTEESHIP(S)/
NAME, YEAR OF BIRTH AND OFFICER DIRECTORSHIPS(S)
POSITION(S) HELD WITH THE TRUST SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS HELD BY TRUSTEE/DIRECTOR
---------------------------------- ------- ------------------------------------------------------- ------------------------
Karen Dunn Kelley - 1960 2003 Head of INVESCO's World Wide Fixed Income and Cash N/A
Vice President Management Group; Director of Cash Management and
Senior Vice President, A I M Advisors, Inc. and A I M
Capital Management, Inc.; Director and President,
Fund Management Company; Senior Vice President, A I M
Management Group Inc.; Vice President, The AIM Family
of Funds Registered Trademark (other than AIM
Treasurer's Series Trust, Short-Term Investments Trust
and Tax-Free Investments Trust); and President and
Principal Executive Officer, The AIM Family of Funds
Registered Trademark (AIM Treasurer's Series Trust,
Short-Term Investments Trust and Tax-Free Investments
Trust only)
Formerly: Chief Cash Management Officer and Managing
Director, A I M Capital Management, Inc.; Vice
President, A I M Advisors, Inc. and The AIM Family of
Funds Registered Trademark (AIM Treasurer's Series
Trust, Short-Term Investments Trust and Tax-Free
Investments Trust only)
Patrick J.P. Farmer - 1962 2007 Head of North American Retail Investments, Chief N/A
Vice President Investment Officer and Executive Vice President, AIM
Funds Management Inc. d/b/a AIM Trimark Investments;
Senior Vice President and Head of Equity Investments,
A I M Advisors, Inc. and A I M Capital Management,
Inc.; and Vice President, The AIM Family of Funds
Registered Trademark
Formerly: Director, Trimark Trust and AIM Funds
Management, Inc.
Lance A. Rejsek - 1967 2005 Anti-Money Laundering Compliance Officer, A I M N/A
Anti-Money Laundering Compliance Advisors, Inc., A I M Capital Management, Inc., A I M
Officer Distributors, Inc., AIM Investment Services, Inc.,
AIM Private Asset Management, Inc., Fund Management
Company and The AIM Family of Funds Registered
Trademark
Formerly: Manager of the Fraud Prevention
Department, AIM Investment Services, Inc.
Todd L. Spillane - 1958 2006 Senior Vice President, A I M Management Group Inc.; N/A
Chief Compliance Officer Senior Vice President and Chief Compliance Officer,
A I M Advisors, Inc. and A I M Capital Management,
Inc.; Chief Compliance Officer, The AIM Family of
Funds Registered Trademark, INVESCO Global Asset
Management (N.A.), Inc. (registered investment
advisor), INVESCO Institutional (N.A.), Inc.
(registered investment advisor), INVESCO Private
Capital Investments, Inc. (holding company), INVESCO
Private Capital, Inc. (registered investment advisor)
and INVESCO Senior Secured Management, Inc. (registered
investment advisor); and Vice President, A I M
Distributors, Inc., AIM Investment Services, Inc. and
Fund Management Company
Formerly: Vice President, A I M Capital Management,
Inc.; Global Head of Product Development, AIG-Global
Investment Group, Inc.; and Chief Compliance Officer
and Deputy General Counsel, AIG-SunAmerica Asset
Management
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TRUSTEE OWNERSHIP OF FUND SHARES AS OF DECEMBER 31, 2006
AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES
IN ALL REGISTERED INVESTMENT COMPANIES
OVERSEEN BY TRUSTEE IN THE AIM FAMILY
NAME OF TRUSTEE DOLLAR RANGE OF EQUITY SECURITIES PER FUND OF FUNDS Registered Trademark
--------------------- ------------------------------------------------------- -------------------------------------------
Martin L. Flanagan(3) N/A N/A
Robert H. Graham(4) AIM Select Real Estate Income Fund $50,001 - $100,000 Over $100,000
Philip A. Taylor(5) - 0 - - 0 -
Bob R. Baker AIM Select Real Estate Income Fund $10,001 - $50,000 Over $100,000
Frank S. Bayley - 0 - Over $100,000
James T. Bunch AIM Select Real Estate Income Fund $1 - $10,000 Over $100,000(6)
AIM Floating Rate Fund $1 - $10,000
Bruce L. Crockett AIM Select Real Estate Income Fund $1 - $10,000 Over - $100,000(6)
Albert R. Dowden - 0 - Over $100,000
Jack M. Fields - 0 - Over $100,000(6)
Carl Frischling - 0 - Over $100,000(6)
Prema Mathai-Davis AIM Select Real Estate Income Fund $1 - $10,000 Over $100,000(6)
Lewis F. Pennock AIM Select Real Estate Income Fund $1 - $10,000 Over $100,000
Ruth H. Quigley AIM Select Real Estate Income Fund $1 - $10,000 Over $100,000
Larry Soll AIM Multi-Sector Fund $50,001 - $100,000 Over $100,000(6)
Raymond Stickel, Jr. - 0 - Over $100,000
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(4) Mr. Graham retired effective June 15, 2007.
(5) Mr. Taylor was elected as trustee on September 20, 2006.
(6) Includes the total amount of compensation deferred by the trustee at his or her election pursuant to a deferred compensation plan. Such deferred compensation is placed in a deferral account and deemed to be invested in one or more of the AIM Funds.
APPENDIX D
TRUSTEES COMPENSATION TABLE
Set forth below is information regarding compensation paid or accrued for each trustee of the Trust who was not affiliated with AIM during the year ended December 31, 2006:
RETIREMENT ESTIMATED
AGGREGATE BENEFITS ANNUAL TOTAL
COMPENSATION ACCRUED BY BENEFITS COMPENSATION
FROM THE ALL AIM UPON FROM ALL AIM
TRUSTEE TRUST(1) FUNDS(2) RETIREMENT(3) FUNDS(4)
------- ------------ ---------- ------------- ------------
Bob R. Baker $___________ $_________ $____________ $___________
Frank S. Bayley ___________ _________ ____________ ___________
James T. Bunch ___________ _________ ____________ ___________
Bruce L. Crockett ___________ _________ ____________ ___________
Albert R. Dowden ___________ _________ ____________ ___________
Jack M. Fields ___________ _________ ____________ ___________
Carl Frischling(6) ___________ _________ ____________ ___________
Prema Mathai-Davis ___________ _________ ____________ ___________
Lewis F. Pennock ___________ _________ ____________ ___________
Ruth H. Quigley ___________ _________ ____________ ___________
Larry Soll ___________ _________ ____________ ___________
Raymond Stickel, Jr.(7) ___________ -- ____________ ___________
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(1) Amounts shown are based on the fiscal year ended August 31, 2007. The total amount of compensation deferred by all trustees of the Trust during the fiscal year ended August 31, 2007, including earnings, was $_______.
(2) During the fiscal year ended August 31, 2007, the total amount of expenses allocated to the Trust in respect of such retirement benefits was $_______.
(3) These amounts represent the estimated annual benefits payable by the AIM Funds upon the trustee's retirement and assumes each trustee serves until his or her normal retirement date.
(4) All trustees currently serve as trustees of 16 registered investment companies advised by AIM.
(5) During the fiscal year ended August 31, 2007, the Trust paid $_______ in legal fees to Kramer Levin Naftalis & Frankel LLP for services rendered by such firm as counsel to the independent trustees of the Trust. Mr. Frischling is a partner of such firm.
APPENDIX E
PROXY POLICIES AND PROCEDURES
(AIM MULTI-SECTOR FUND)
(AS AMENDED OCTOBER 1, 2005)
A. PROXY POLICIES
Each of A I M Advisors, Inc., A I M Capital Management, Inc. and AIM Private Asset Management, Inc. (each an "AIM Advisor" and collectively "AIM") has the fiduciary obligation to, at all times, make the economic best interest of advisory clients the sole consideration when voting proxies of companies held in client accounts. As a general rule, each AIM Advisor shall vote against any actions that would reduce the rights or options of shareholders, reduce shareholder influence over the board of directors and management, reduce the alignment of interests between management and shareholders, or reduce the value of shareholders' investments. At the same time, AIM believes in supporting the management of companies in which it invests, and will accord proper weight to the positions of a company's board of directors, and the AIM portfolio managers who chose to invest in the companies. Therefore, on most issues, our votes have been cast in accordance with the recommendations of the company's board of directors, and we do not currently expect that trend to change. Although AIM's proxy voting policies are stated below, AIM's proxy committee considers all relevant facts and circumstances, and retains the right to vote proxies as deemed appropriate.
I. BOARDS OF DIRECTORS
A board that has at least a majority of independent directors is integral to good corporate governance. The key board committees (e.g., Audit, Compensation and Nominating) should be composed of only independent trustees.
There are some actions by directors that should result in votes being withheld. These instances include directors who:
- Are not independent directors and (a) sit on the board's audit, compensation or nominating committee, or (b) sit on a board where the majority of the board is not independent;
- Attend less than 75 percent of the board and committee meetings without a valid excuse;
- It is not clear that the director will be able to fulfill his function;
- Implement or renew a dead-hand or modified dead-hand poison pill;
- Enacted egregious corporate governance or other policies or failed to replace management as appropriate;
- Have failed to act on takeover offers where the majority of the shareholders have tendered their shares; or
- Ignore a shareholder proposal that is approved by a majority of the shares outstanding.
Votes in a contested election of directors must be evaluated on a case-by-case basis, considering the following factors:
- Long-term financial performance of the target company relative to its industry;
- Management's track record;
- Portfolio manager's assessment;
- Qualifications of director nominees (both slates);
- Evaluation of what each side is offering shareholders as well as the likelihood that the proposed objectives and goals can be met; and
- Background to the proxy contest.
II. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
A company should limit its relationship with its auditors to the audit engagement, and certain closely related activities that do not, in the aggregate, raise an appearance of impaired independence. We will support the reappointment of the company's auditors unless:
- It is not clear that the auditors will be able to fulfill their function;
- There is reason to believe the independent auditors have rendered an opinion that is neither accurate nor indicative of the company's financial position; or
- The auditors have a significant professional or personal relationship with the issuer that compromises the auditors' independence.
III. COMPENSATION PROGRAMS
Appropriately designed equity-based compensation plans, approved by shareholders, can be an effective way to align the interests of long-term shareholders and the interests of management, employees and directors. Plans should not substantially dilute shareholders' ownership interests in the company, provide participants with excessive awards or have objectionable structural features. We will consider all incentives, awards and compensation, and compare them to a company-specific adjusted allowable dilution cap and a weighted average estimate of shareholder wealth transfer and voting power dilution.
- We will generally vote against equity-based plans where the total dilution (including all equity-based plans) is excessive.
- We will support the use of employee stock purchase plans to increase company stock ownership by employees, provided that shares purchased under the plan are acquired for no less than 85% of their market value.
- We will vote against plans that have any of the following structural features: ability to re-price underwater options without shareholder approval, ability to issue options with an exercise price below the stock's current market price, ability to issue reload options, or automatic share replenishment ("evergreen") feature.
- We will vote for proposals to reprice options if there is a value-for-value (rather than a share-for-share) exchange.
- We will generally support the board's discretion to determine and grant appropriate cash compensation and severance packages.
IV. CORPORATE MATTERS
We will review management proposals relating to changes to capital structure, reincorporation, restructuring and mergers and acquisitions on a case by case basis, considering the impact of the changes on corporate governance and shareholder rights, anticipated financial and operating benefits, portfolio manager views, level of dilution, and a company's industry and performance in terms of shareholder returns.
- We will vote for merger and acquisition proposals that the proxy committee and relevant portfolio managers believe, based on their review of the materials, will result in financial and operating benefits, have a fair offer price, have favorable prospects for the combined companies, and will not have a negative impact on corporate governance or shareholder rights.
- We will vote against proposals to increase the number of authorized shares of any class of stock that has superior voting rights to another class of stock.
- We will vote for proposals to increase common share authorization for a stock split, provided that the increase in authorized shares would not result in excessive dilution given a company's industry and performance in terms of shareholder returns.
- We will vote for proposals to institute open-market share repurchase plans in which all shareholders participate on an equal basis.
V. SHAREHOLDER PROPOSALS
Shareholder proposals can be extremely complex, and the impact on
share value can rarely be anticipated with any high degree of
confidence. The proxy committee reviews shareholder proposals on a
case-by-case basis, giving careful consideration to such factors as:
the proposal's impact on the company's short-term and long-term share
value, its effect on the company's reputation, the economic effect of
the proposal, industry and regional norms applicable to the company,
the company's overall corporate governance provisions, and the
reasonableness of the request.
- We will generally abstain from shareholder social and environmental proposals.
- We will generally support the board's discretion regarding shareholder proposals that involve ordinary business practices.
- We will generally vote for shareholder proposals that are designed to protect shareholder rights if the company's corporate governance standards indicate that such additional protections are warranted.
- We will generally vote for proposals to lower barriers to shareholder action.
- We will generally vote for proposals to subject shareholder rights plans to a shareholder vote. In evaluating these plans, we give favorable consideration to the presence of "TIDE" provisions (short-term sunset provisions, qualified bid/permitted offer provisions, and/or mandatory review by a committee of independent directors at least every three years).
VI. OTHER
- We will vote against any proposal where the proxy materials lack sufficient information upon which to base an informed decision.
- We will vote against any proposals to authorize the proxy to conduct any other business that is not described in the proxy statement.
- We will vote any matters not specifically covered by these proxy policies and procedures in the economic best interest of advisory clients.
AIM's proxy policies, and the procedures noted below, may be amended from time to time.
B. PROXY COMMITTEE PROCEDURES
The proxy committee currently consists of representatives from the Legal and Compliance Department, the Investments Department and the Finance Department.
The committee members review detailed reports analyzing the proxy issues and have access to proxy statements and annual reports. Committee members may also speak to management of a company regarding proxy issues and should share relevant considerations with the proxy committee. The committee then discusses the issues and determines the vote. The committee shall give appropriate and significant weight to portfolio managers' views regarding a proposal's impact on shareholders. A proxy committee meeting requires a quorum of three committee members, voting in person or by e-mail.
AIM's proxy committee shall consider its fiduciary responsibility to all clients when addressing proxy issues and vote accordingly. The proxy committee may enlist the services of reputable outside professionals and/or proxy evaluation services, such as Institutional Shareholder Services or any of its subsidiaries ("ISS"), to assist with the analysis of voting issues and/or to carry out the actual voting process. To the extent the services of ISS or another provider are used, the proxy committee shall periodically review the policies of that provider. The proxy committee shall prepare a report for the Funds' Board of Trustees on a periodic basis regarding issues where AIM's votes do not follow the recommendation of ISS or another provider because AIM's proxy policies differ from those of such provider.
In addition to the foregoing, the following shall be strictly adhered to unless contrary action receives the prior approval of the Funds' Board of Trustees:
1. Other than by voting proxies and participating in Creditors' committees, AIM shall not engage in conduct that involves an attempt to change or influence the control of a company.
2. AIM will not publicly announce its voting intentions and the reasons therefore.
3. AIM shall not participate in a proxy solicitation or otherwise seek proxy-voting authority from any other public company shareholder.
4. All communications regarding proxy issues between the proxy committee and companies or their agents, or with fellow shareholders shall be for the sole purpose of expressing and discussing AIM's concerns for its advisory clients' interests and not for an attempt to influence or control management.
C. BUSINESS/DISASTER RECOVERY
If the proxy committee is unable to meet due to a temporary business interruption, such as a power outage, a sub-committee of the proxy committee, even if such subcommittee does not constitute a quorum of the proxy committee, may vote proxies in accordance with the policies stated herein. If the sub-committee of the proxy committee is not able to vote proxies, the sub-committee shall authorize ISS to vote proxies by default in accordance with ISS' proxy policies and procedures, which may vary slightly from AIM's.
D. RESTRICTIONS AFFECTING VOTING
If a country's laws allow a company in that country to block the sale of the company's shares by a shareholder in advance of a shareholder meeting, AIM will not vote in shareholder meetings held in that country, unless the company represents that it will not block the sale of its shares in connection with the meeting. Administrative or other procedures, such as securities lending, may also cause AIM to refrain from voting. Although AIM considers proxy voting to be an important shareholder
right, the proxy committee will not impede a portfolio manager's ability to trade in a stock in order to vote at a shareholder meeting.
E. CONFLICTS OF INTEREST
The proxy committee reviews each proxy to assess the extent to which there may be a material conflict between AIM's interests and those of advisory clients. A potential conflict of interest situation may include where AIM or an affiliate manages assets for, administers an employee benefit plan for, provides other financial products or services to, or otherwise has a material business relationship with, a company whose management is soliciting proxies, and failure to vote proxies in favor of management of the company may harm AIM's relationship with the company. In order to avoid even the appearance of impropriety, the proxy committee will not take AIM's relationship with the company into account, and will vote the company's proxies in the best interest of the advisory clients, in accordance with these proxy policies and procedures.
If AIM's proxy policies and voting record do not guide the proxy committee's vote in a situation where a conflict of interest exists, the proxy committee will vote the proxy in the best interest of the advisory clients, and will provide information regarding the issue to the Funds' Board of Trustees in the next quarterly report.
If a committee member has any conflict of interest with respect to a company or an issue presented, that committee member should inform the proxy committee of such conflict and abstain from voting on that company or issue.
F. FUND OF FUNDS
When an AIM Fund (an "Investing Fund") that invests in another AIM Fund Servicemark (an "Underlying Fund") has the right to vote on the proxy of the Underlying Fund, the Investing Fund will echo the votes of the other shareholders of the Underlying AIM Fund.
G. CONFLICT IN THESE POLICIES
If following any of the policies listed herein would lead to a vote that the proxy committee deems to be not in the best interest of AIM's advisory clients, the proxy committee will vote the proxy in the manner that they deem to be the best interest of AIM's advisory clients and will inform the Funds' Board of Trustees of such vote and the circumstances surrounding it promptly thereafter.
PROXY POLICIES AND PROCEDURES
(AIM STRUCTURED CORE FUND, AIM STRUCTURED GROWTH FUND
AND AIM STRUCTURED VALUE FUND)
(DATED FEBRUARY 10, 2005)
GENERAL POLICY
INVESCO Institutional (N.A.), Inc. and its wholly-owned subsidiaries, and INVESCO Global Asset Management (N.A.), Inc. (collectively, "INVESCO"), each has responsibility for making investment decisions that are in the best interests of its clients. As part of the investment management services it provides to clients, INVESCO may be authorized by clients to vote proxies appurtenant to the shares for which the clients are beneficial owners.
INVESCO believes that it has a duty to manage clients' assets in the best economic interests of the clients and that the ability to vote proxies is a client asset.
INVESCO reserves the right to amend its proxy policies and procedures from time to time without prior notice to its clients.
PROXY VOTING POLICIES
VOTING OF PROXIES
INVESCO will vote client proxies in accordance with the procedures set forth below unless the client for non-ERISA clients retains in writing the right to vote, the named fiduciary (e.g., the plan sponsor) for ERISA clients retains in writing the right to direct the plan trustee or a third party to vote proxies or INVESCO determines that any benefit the client might gain from voting a proxy would be outweighed by the costs associated therewith.
BEST ECONOMIC INTERESTS OF CLIENTS
In voting proxies, INVESCO will take into consideration those factors that may affect the value of the security and will vote proxies in a manner in which, in its opinion, is in the best economic interests of clients. INVESCO endeavors to resolve any conflicts of interest exclusively in the best economic interests of clients.
ISS SERVICES
INVESCO has contracted with Institutional Shareholder Services ("ISS"), an
independent third party service provider, to vote INVESCO's clients' proxies
according to ISS's proxy voting recommendations. In addition, ISS will provide
proxy analyses, vote recommendations, vote execution and record-keeping services
for clients for which INVESCO has proxy voting responsibility. On an annual
basis, INVESCO will review information obtained from ISS to ascertain whether
ISS (i) has the capacity and competency to adequately analyze proxy issues, and
(ii) can make such recommendations in an impartial manner and in the best
economic interest of INVESCO's clients. This may include a review of ISS'
Policies, Procedures and Practices Regarding Potential Conflicts of Interests
and obtaining information about the work ISS does for corporate issuers and the
payments ISS receives from such issuers.
Custodians forward proxy materials for clients who rely on INVESCO to vote proxies to ISS. ISS is responsible for exercising the voting rights in accordance with the ISS proxy voting guidelines. If INVESCO receives proxy materials in connection with a client's account where the client has, in writing, communicated to INVESCO that the client, plan fiduciary or other third party has reserved the right to vote proxies, INVESCO will forward to the party appointed by client any proxy materials it receives with respect to the account. In order to avoid voting proxies in circumstances where INVESCO, or any of its affiliates
have or may have any conflict of interest, real or perceived, INVESCO has engaged ISS to provide the proxy analyses, vote recommendations and voting of proxies.
In the event that (i) ISS recuses itself on a proxy voting matter and makes no recommendation or (ii) INVESCO decides to override the ISS vote recommendation, the Proxy Committee will review the issue and direct ISS how to vote the proxies as described below.
PROXY COMMITTEE
The Proxy Committee shall have seven (7) members, which shall include representatives from portfolio management, operations, and legal/compliance or other functional departments as deemed appropriate who are knowledgeable regarding the proxy process. A majority of the members of the Proxy Committee shall constitute a quorum and the Proxy Committee shall act by a majority vote. The chair of the Proxy Committee shall be chosen by the Chief Compliance Officer of INVESCO. The Proxy Committee shall keep minutes of its meetings that shall be kept with the proxy voting records of INVESCO. The Proxy Committee will appoint a Proxy Manager to manage the proxy voting process, which includes the voting of proxies and the maintenance of appropriate records.
Proxy Committee meetings shall be called by the Proxy Manager when override submissions are made and in instances when ISS has recused itself from a vote recommendation. In these situations, the Proxy Committee shall meet and determine how proxies are to be voted in the best interests of clients.
The Proxy Committee periodically reviews new types of corporate governance issues, evaluates proposals not addressed by the ISS proxy voting guidelines in instances when ISS has recused itself, and determines how INVESCO should vote. The Committee monitors adherence to these Procedures, industry trends and reviews the ISS proxy voting guidelines.
ISS RECUSAL
When ISS makes no recommendation on a proxy voting issue or is recused due to a conflict of interest, the Proxy Committee will review the issue and, if INVESCO does not have a conflict of interest, direct ISS how to vote the proxies. In such cases where INVESCO has a conflict of interest, INVESCO, in its sole discretion, shall either (a) vote the proxies pursuant to ISS's general proxy voting guidelines, (b) engage an independent third party to provide a vote recommendation, or (c) contact its client(s) for direction as to how to vote the proxies.
OVERRIDE OF ISS RECOMMENDATION
There may be occasions where the INVESCO investment personnel, senior officers or a member of the Proxy Committee seek to override ISS's recommendations if they believe that ISS's recommendations are not in accordance with the best economic interests of clients. In the event that an individual listed above in this section disagrees with an ISS recommendation on a particular voting issue, the individual shall document in writing the reasons that he/she believes that the ISS recommendation is not in accordance with clients' best economic interests and submit such written documentation to the Proxy Manager for consideration by the Proxy Committee. Upon review of the documentation and consultation with the individual and others as the Proxy Committee deems appropriate, the Proxy Committee may make a determination to override the ISS voting recommendation if the Committee determines that it is in the best economic interests of clients and the Committee has addressed conflict of interest issues as discussed below.
PROXY COMMITTEE MEETINGS
When a Proxy Committee Meeting is called, whether because of an ISS recusal or request for override of an ISS recommendation, the Proxy Committee shall review the report of the Chief Compliance Officer as to whether any INVESCO person has reported a conflict of interest.
The Proxy Committee shall review the information provided to it to determine if a real or perceived conflict of interest exists and the minutes of the Proxy Committee shall:
(1) describe any real or perceived conflict of interest,
(2) discuss any procedure used to address such conflict of interest,
(3) report any contacts from outside parties (other than routine communications from proxy solicitors), and
(4) include confirmation that the recommendation as to how the proxies are to be voted is in the best economic interests of clients and was made without regard to any conflict of interest.
Based on the above review and determinations, the Proxy Committee will direct ISS how to vote the proxies.
CERTAIN PROXY VOTES MAY NOT BE CAST
In some cases, INVESCO may determine that it is not in the best economic interests of clients to vote proxies. For example, proxy voting in certain countries outside the United States requires share blocking. Shareholders who wish to vote their proxies must deposit their shares 7 to 21 days before the date of the meeting with a designated depositary. During the blocked period, shares to be voted at the meeting cannot be sold until the meeting has taken place and the shares have been returned to the Custodian/Sub-Custodian bank. In addition, voting certain international securities may involve unusual costs to clients. In other cases, it may not be possible to vote certain proxies despite good faith efforts to do so, for instance when inadequate notice of the matter is provided. In the instance of loan securities, voting of proxies typically requires termination of the loan, so it is not usually in the best economic interests of clients to vote proxies on loaned securities. INVESCO typically will not, but reserves the right to, vote where share blocking restrictions, unusual costs or other barriers to efficient voting apply. If INVESCO does not vote, it would have made the determination that the cost of voting exceeds the expected benefit to the client. The Proxy Manager shall record the reason for any proxy not being voted, which record shall be kept with the proxy voting records of INVESCO.
PROXY VOTING RECORDS
Clients may obtain information about how INVESCO voted proxies on their behalf by contacting their client services representative. Alternatively, clients may make a written request for proxy voting information to: Proxy Manager, 1360 Peachtree Street, N.E., Atlanta, Georgia 30309.
CONFLICTS OF INTEREST
PROCEDURES TO ADDRESS CONFLICTS OF INTEREST AND IMPROPER INFLUENCE
In order to avoid voting proxies in circumstances where INVESCO or any of its affiliates have or may have any conflict of interest, real or perceived, INVESCO has contracted with ISS to provide proxy analyses, vote recommendations and voting of proxies. Unless noted otherwise by ISS, each vote recommendation provided by ISS to INVESCO includes a representation from ISS that ISS faces no conflict of interest with respect to the vote. In instances where ISS has recused itself and makes no recommendation on a particular matter or if an override submission is requested, the Proxy Committee shall determine how the proxy is to be voted and instruct the Proxy Manager accordingly in which case the conflict of interest provisions discussed below shall apply.
In effecting the policy of voting proxies in the best economic interests of clients, there may be occasions where the voting of such proxies may present a real or perceived conflict of interest between INVESCO, as the investment manager, and clients.
For each director, officer and employee of INVESCO ("INVESCO person"), the interests of INVESCO's clients must come first, ahead of the interest of INVESCO and any person within the INVESCO organization, which includes INVESCO's affiliates.
Accordingly, each INVESCO person must not put "personal benefit," whether tangible or intangible, before the interests of clients of INVESCO or otherwise take advantage of the relationship to INVESCO's clients. "Personal benefit" includes any intended benefit for oneself or any other individual, company, group or organization of any kind whatsoever, except a benefit for a client of INVESCO, as appropriate. It is imperative that each of INVESCO's directors, officers and employees avoid any situation that might compromise, or call into question, the exercise of fully independent judgment in the interests of INVESCO's clients.
Occasions may arise where a person or organization involved in the proxy voting process may have a conflict of interest. A conflict of interest may also exist if INVESCO has a business relationship with (or is actively soliciting business from) either the company soliciting the proxy or a third party that has a material interest in the outcome of a proxy vote or that is actively lobbying for a particular outcome of a proxy vote. An INVESCO person (excluding members of the Proxy Committee) shall not be considered to have a conflict of interest if the INVESCO person did not know of the conflict of interest and did not attempt to influence the outcome of a proxy vote. Any individual with actual knowledge of a conflict of interest relating to a particular referral item shall disclose that conflict to the Chief Compliance Officer.
The following are examples of situations where a conflict may exist:
- Business Relationships - where INVESCO manages money for a company or an employee group, manages pension assets or is actively soliciting any such business, or leases office space from a company;
- Personal Relationships - where a INVESCO person has a personal relationship with other proponents of proxy proposals, participants in proxy contests, corporate directors, or candidates for directorships; and
- Familial Relationships - where an INVESCO person has a known familial relationship relating to a company (e.g. a spouse or other relative who serves as a director of a public company or is employed by the company).
In the event that INVESCO (or an affiliate) manages assets for a company, its pension plan, or related entity or where any member of the Proxy Committee has a personal conflict of interest, and where clients' funds are invested in that company's shares, the Proxy Committee will not take into consideration this relationship and will vote proxies in that company solely in the best economic interest of its clients.
It is the responsibility of the Proxy Manager and each member of the Proxy Committee to report any real or potential conflict of interest of which such individual has actual knowledge to the Chief Compliance Officer, who shall present any such information to the Proxy Committee. However, once a particular conflict has been reported to the Chief Compliance Officer, this requirement shall be deemed satisfied with respect to all individuals with knowledge of such conflict.
In addition, the Proxy Manager and each member of the Proxy Committee shall certify annually as to their compliance with this policy. In addition, any INVESCO person who submits an ISS override recommendation to the Proxy Committee shall certify as to their compliance with this policy concurrently with the submission of their override recommendation. A form of such certification is attached as Appendix A hereto.
In addition, members of the Proxy Committee must notify INVESCO's Chief Compliance Officer, with impunity and without fear of retribution or retaliation, of any direct, indirect or perceived improper influence made by anyone within INVESCO or by an affiliated company's representatives with regard to how INVESCO should vote proxies. The Chief Compliance Officer will investigate the allegations and will report his or her findings to the INVESCO Risk Management Committee. In the event that it is determined that improper influence was made, the Risk Management Committee will determine the appropriate action to take which may include, but is not limited to, (1) notifying the affiliated company's Chief Executive Officer, its Management Committee or Board of Directors, (2) taking remedial action, if necessary, to correct the result of any improper influence where clients have been harmed, or (3) notifying the appropriate regulatory agencies of the improper influence and to fully cooperate with these regulatory agencies as required. In all cases, the Proxy Committee shall not take into consideration the improper influence in determining how to vote proxies and will vote proxies solely in the best economic interest of clients.
Furthermore, members of the Proxy Committee must advise INVESCO's Chief Compliance Officer and fellow Committee members of any real or perceived conflicts of interest he or she may have with regard to how proxies are to be voted regarding certain companies (e.g., personal security ownership in a company, or personal or business relationships with participants in proxy contests, corporate directors or candidates for corporate directorships). After reviewing such conflict, upon advice from the Chief Compliance Officer, the Committee may require such Committee member to recuse himself or herself from participating in the discussions regarding the proxy vote item and from casting a vote regarding how INVESCO should vote such proxy.
ISS PROXY VOTING GUIDELINES
A copy of ISS's Proxy Voting Guidelines Summary in effect as of the revised date set forth on the title page of this Proxy Voting Policy is attached hereto as Appendix B.
APPENDIX A
ACKNOWLEDGEMENT AND CERTIFICATION
I acknowledge that I have read the INVESCO Proxy Voting Policy (a copy of which has been supplied to me, which I will retain for future reference) and agree to comply in all respects with the terms and provisions thereof. I have disclosed or reported all real or potential conflicts of interest to the INVESCO Compliance Officer and will continue to do so as matters arise. I have complied with all provisions of this Policy.
APPENDIX B
ISS 2005 PROXY VOTING GUIDELINES SUMMARY
The following is a condensed version of all proxy voting recommendations contained in the ISS Proxy Voting Manual.
1. Operational Items
ADJOURN MEETING
Generally vote AGAINST proposals to provide management with the authority to adjourn an annual or special meeting absent compelling reasons to support the proposal.
Vote FOR proposals that relate specifically to soliciting votes for a merger or transaction for which ISS has recommended a FOR vote. Vote AGAINST proposals if the wording is too vague or if the proposal includes "other business."
AMEND QUORUM REQUIREMENTS
Vote AGAINST proposals to reduce quorum requirements for shareholder meetings below a majority of the shares outstanding unless there are compelling reasons to support the proposal.
AMEND MINOR BYLAWS
Vote FOR bylaw or charter changes that are of a housekeeping nature (updates or corrections).
CHANGE COMPANY NAME
Vote FOR proposals to change the corporate name.
CHANGE DATE, TIME, OR LOCATION OF ANNUAL MEETING
Vote FOR management proposals to change the date/time/location of the annual meeting unless the proposed change is unreasonable.
Vote AGAINST shareholder proposals to change the date/time/location of the annual meeting unless the current scheduling or location is unreasonable.
RATIFYING AUDITORS
Vote FOR proposals to ratify auditors, unless any of the following apply:
- An auditor has a financial interest in or association with the company, and is therefore not independent
- Fees for non-audit services are excessive, or
- There is reason to believe that the independent auditor has rendered an opinion which is neither accurate nor indicative of the company's financial position.
Vote CASE-BY-CASE on shareholder proposals asking companies to prohibit or limit their auditors from engaging in non-audit services.
Vote CASE-BY-CASE on shareholder proposals asking for audit firm rotation, taking into account the tenure of the audit firm, the length of rotation specified in the proposal, any significant audit-related issues at the company, the number of Audit Committee meetings held each year, the number of financial experts
serving on the committee, and whether the company has a periodic renewal process where the auditor is evaluated for both audit quality and competitive price.
TRANSACT OTHER BUSINESS
Vote AGAINST proposals to approve other business when it appears as voting item.
VOTING ON DIRECTOR NOMINEES IN UNCONTESTED ELECTIONS
Votes on director nominees should be made on a CASE-BY-CASE basis, examining the following factors:
composition of the board and key board committees, attendance at board meetings, corporate governance provisions and takeover activity, long-term company performance relative to a market index, directors' investment in the company, whether the chairman is also serving as CEO, and whether a retired CEO sits on the board. However, there are some actions by directors that should result in votes being withheld. These instances include directors who:
- Attend less than 75 percent of the board and committee meetings without a valid excuse
- Implement or renew a dead-hand or modified dead-hand poison pill
- Adopt a poison pill without shareholder approval since the company's last annual meeting and there is no requirement to put the pill to shareholder vote within 12 months of its adoption
- Ignore a shareholder proposal that is approved by a majority of the shares outstanding
- Ignore a shareholder proposal that is approved by a majority of the votes cast for two consecutive years
- Failed to act on takeover offers where the majority of the shareholders tendered their shares
- Are inside directors or affiliated outsiders and sit on the audit, compensation, or nominating committees
- Are inside directors or affiliated outsiders and the full board serves as the audit, compensation, or nominating committee or the company does not have one of these committees
- Are audit committee members and the non -audit fees paid to the auditor are excessive. In addition, directors who enacted egregious corporate governance policies or failed to replace management as appropriate would be subject to recommendations to withhold votes.
- Are inside directors or affiliated outside directors and the full board is less than majority independent
- Sit on more than six public company boards or on more than two public boards in addition to their own if they are CEOs of public companies.
- Are on the compensation committee when there is a negative correlation between chief executive pay and company performance
- Have failed to address the issue(s) that resulted in any of the directors receiving more than 50% withhold votes out of those cast at the previous board election
AGE LIMITS
Vote AGAINST shareholder or management proposals to limit the tenure of outside directors either through term limits or mandatory retirement ages.
BOARD SIZE
Vote FOR proposals seeking to fix the board size or designate a range for the board size.
Vote AGAINST proposals that give management the ability to alter the size of the board outside of a specified range without shareholder approval.
CLASSIFICATION/DECLASSIFICATION OF THE BOARD
Vote AGAINST proposals to classify the board.
Vote FOR proposals to repeal classified boards and to elect all directors annually.
CUMULATIVE VOTING
Vote AGAINST proposals to eliminate cumulative voting.
Vote proposals to restore or permit cumulative voting on a CASE-BY-CASE basis based on the extent that shareholders have access to the board through their own nominations.
DIRECTOR AND OFFICER INDEMNIFICATION AND LIABILITY PROTECTION
Proposals on director and officer indemnification and liability protection should be evaluated on a CASE-BY-CASE basis, using Delaware law as the standard.
Vote AGAINST proposals to eliminate entirely directors' and officers' liability for monetary damages for violating the duty of care.
Vote AGAINST indemnification proposals that would expand coverage beyond just legal expenses to acts, such as negligence, that are more serious violations of fiduciary obligation than mere carelessness.
Vote FOR only those proposals providing such expanded coverage in cases when a director's or officer's legal defense was unsuccessful if both of the following apply:
- The director was found to have acted in good faith and in a manner that he reasonably believed was in the best interests of the company, and
- Only if the director's legal expenses would be covered.
ESTABLISH/AMEND NOMINEE QUALIFICATIONS
Vote CASE-BY-CASE on proposals that establish or amend director qualifications. Votes should be based on how reasonable the criteria are and to what degree they may preclude dissident nominees from joining the board.
Vote AGAINST shareholder proposals requiring two candidates per board seat.
FILLING VACANCIES/REMOVAL OF DIRECTORS
Vote AGAINST proposals that provide that directors may be removed only for cause.
Vote FOR proposals to restore shareholder ability to remove directors with or without cause.
Vote AGAINST proposals that provide that only continuing directors may elect replacements to fill board vacancies.
Vote FOR proposals that permit shareholders to elect directors to fill board vacancies.
INDEPENDENT CHAIRMAN (SEPARATE CHAIRMAN/CEO)
Generally vote FOR shareholder proposals requiring the position of chairman be filled by an independent director unless there are compelling reasons to recommend against the proposal, such as a counterbalancing governance structure. This should include all of the following:
- Designated lead director, elected by and from the independent board members with clearly delineated and comprehensive duties (the role may alternatively reside with a presiding director, vice chairman, or rotating lead director)
- Two-thirds independent board
- All-independent key committees
- Established governance guidelines
Additionally, the company should not have under-performed its peers.
MAJORITY OF INDEPENDENT DIRECTORS/ESTABLISHMENT OF COMMITTEES
Vote FOR shareholder proposals asking that a majority or more of directors be independent unless the board composition already meets the proposed threshold by ISS's definition of independence.
Vote FOR shareholder proposals asking that board audit, compensation, and/or nominating committees be composed exclusively of independent directors if they currently do not meet that standard.
OPEN ACCESS
Vote CASE-BY-CASE on shareholder proposals asking for open access taking into account the ownership threshold specified in the proposal and the proponent's rationale for targeting the company in terms of board and director conduct.
STOCK OWNERSHIP REQUIREMENTS
Generally vote AGAINST shareholder proposals that mandate a minimum amount of stock that directors must own in order to qualify as a director or to remain on the board. While ISS favors stock ownership on the part of directors, the company should determine the appropriate ownership requirement.
Vote CASE-BY-CASE shareholder proposals asking that the company adopt a holding or retention period for its executives (for holding stock after the vesting or exercise of equity awards), taking into account any stock ownership requirements or holding period/retention ratio already in place and the actual ownership level of executives.
TERM LIMITS
Vote AGAINST shareholder or management proposals to limit the tenure of outside directors either through term limits or mandatory retirement ages.
2. Proxy Contests
VOTING FOR DIRECTOR NOMINEES IN CONTESTED ELECTIONS
Votes in a contested election of directors must be evaluated on a CASE-BY-CASE basis, considering the following factors:
- Long-term financial performance of the target company relative to its industry; management's track record
- Background to the proxy contest
- Qualifications of director nominees (both slates)
- Evaluation of what each side is offering shareholders s well as the likelihood that the proposed objectives and goals can be met; and stock ownership positions
REIMBURSING PROXY SOLICITATION EXPENSES
Voting to reimburse proxy solicitation expenses should be analyzed on a CASE-BY-CASE basis. In cases where ISS recommends in favor of the dissidents, we also recommend voting for reimbursing proxy solicitation expenses.
CONFIDENTIAL VOTING
Vote FOR shareholder proposals requesting that corporations adopt confidential voting, use independent vote tabulators and use independent inspectors of election, as long as the proposal includes a provision for proxy contests as follows: In the case of a contested election, management should be permitted to request that the dissident group honor its confidential voting policy. If the dissidents agree, the policy remains in place. If the dissidents will not agree, the confidential voting policy is waived.
Vote FOR management proposals to adopt confidential voting.
3. Anti-takeover Defenses and Voting Related Issues
ADVANCE NOTICE REQUIREMENTS FOR SHAREHOLDER PROPOSALS/NOMINATIONS
Votes on advance notice proposals are determined on a CASE-BY-CASE basis, giving support to those proposals which allow shareholders to submit proposals as close to the meeting date as reasonably possible and within the broadest window possible.
AMEND BYLAWS WITHOUT SHAREHOLDER CONSENT
Vote AGAINST proposals giving the board exclusive authority to amend the bylaws.
Vote FOR proposals giving the board the ability to amend the bylaws in addition to shareholders.
POISON PILLS
Vote FOR shareholder proposals requesting that the company submit its poison pill to a shareholder vote or redeem it.
Vote FOR shareholder proposals asking that any future pill be put to a shareholder vote.
SHAREHOLDER ABILITY TO ACT BY WRITTEN CONSENT
Vote AGAINST proposals to restrict or prohibit shareholder ability to take action by written consent.
Vote FOR proposals to allow or make easier shareholder action by written consent.
SHAREHOLDER ABILITY TO CALL SPECIAL MEETINGS
Vote AGAINST proposals to restrict or prohibit shareholder ability to call special meetings.
Vote FOR proposals that remove restrictions on the right of shareholders to act independently of management.
SUPERMAJORITY VOTE REQUIREMENTS
Vote AGAINST proposals to require a supermajority shareholder vote.
Vote FOR proposals to lower supermajority vote requirements.
4. Mergers and Corporate Restructurings
APPRAISAL RIGHTS
Vote FOR proposals to restore, or provide shareholders with, rights of appraisal.
ASSET PURCHASES
Vote CASE-BY-CASE on asset purchase proposals, considering the following factors:
- Purchase price
- Fairness opinion
- Financial and strategic benefits
- How the deal was negotiated
- Conflicts of interest
- Other alternatives for the business
- Non-completion risk
ASSET SALES
Votes on asset sales should be determined on a CASE-BY-CASE basis, considering the following factors:
- Impact on the balance sheet/working capital
- Potential elimination of diseconomies
- Anticipated financial and operating benefits
- Anticipated use of funds
- Value received for the asset
- Fairness opinion
- How the deal was negotiated
- Conflicts of interest
BUNDLED PROPOSALS
Review on a CASE-BY-CASE basis bundled or "conditioned" proxy proposals.
In the case of items that are conditioned upon each other, examine the benefits and costs of the packaged items.
In instances when the joint effect of the conditioned items is not in shareholders' best interests, vote against the proposals. If the combined effect is positive, support such proposals.
CONVERSION OF SECURITIES
Votes on proposals regarding conversion of securities are determined on a CASE-BY-CASE basis. When evaluating these proposals the investor should review the dilution to existing shareholders, the conversion price relative to market value, financial issues, control issues, termination penalties, and conflicts of interest. Vote FOR the conversion if it is expected that the company will be subject to onerous penalties or will be forced to file for bankruptcy if the transaction is not approved.
CORPORATE REORGANIZATION/DEBT RESTRUCTURING/PREPACKAGED BANKRUPTCY PLANS/REVERSE LEVERAGED BUYOUTS/WRAP PLANS
Votes on proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan are determined on a CASE-BY-CASE basis, taking into consideration the following:
- Dilution to existing shareholders' position
- Terms of the offer
- Financial issues
- Management's efforts to pursue other alternatives
- Control issues
- Conflicts of interest
Vote FOR the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not approved.
FORMATION OF HOLDING COMPANY
Votes on proposals regarding the formation of a holding company should be determined on a CASE-BY-CASE basis, taking into consideration the following:
- The reasons for the change
- Any financial or tax benefits
- Regulatory benefits
- Increases in capital structure
- Changes to the articles of incorporation or bylaws of the company.
Absent compelling financial reasons to recommend the transaction, vote AGAINST the formation of a holding company if the transaction would include either of the following:
- Increases in common or preferred stock in excess of the allowable maximum as calculated by the ISS
- Capital Structure model
- Adverse changes in shareholder rights
GOING PRIVATE TRANSACTIONS (LBOS AND MINORITY SQUEEZEOUTS)
Vote going private transactions on a CASE-BY-CASE basis, taking into account the following:
- offer price/premium, fairness opinion, how the deal was negotiated, conflicts of interest, other alternatives/offers considered, and non-completion risk.
JOINT VENTURES
Votes CASE-BY-CASE on proposals to form joint ventures, taking into account the following:
- percentage of assets/business contributed percentage ownership, financial and strategic benefits, governance structure, conflicts of interest, other alternatives, and non-completion risk.
LIQUIDATIONS
Votes on liquidations should be made on a CASE-BY-CASE basis after reviewing management's efforts to pursue other alternatives, appraisal value of assets, and the compensation plan for executives managing the liquidation.
Vote FOR the liquidation if the company will file for bankruptcy if the proposal is not approved.
MERGERS AND ACQUISITIONS/ ISSUANCE OF SHARES TO FACILITATE MERGER OR ACQUISITION
Votes on mergers and acquisitions should be considered on a CASE-BY-CASE basis, determining whether the transaction enhances shareholder value by giving consideration to the following:
- Prospects of the combined company, anticipated financial and operating benefits
- Offer price
- Fairness opinion
- How the deal was negotiated
- Changes in corporate governance
- Change in the capital structure
- Conflicts of interest
PRIVATE PLACEMENTS/WARRANTS/CONVERTIBLE DEBENTURES
Votes on proposals regarding private placements should be determined on a
CASE-BY-CASE basis. When evaluating these proposals the investor should review:
dilution to existing shareholders' position, terms of the offer, financial
issues, management's efforts to pursue other alternatives, control issues, and
conflicts of interest. Vote FOR the private placement if it is expected that the
company will file for bankruptcy if the transaction is not approved.
SPIN-OFFS
Votes on spin-offs should be considered on a CASE-BY-CASE basis depending on:
- Tax and regulatory advantages
- Planned use of the sale proceeds
- Valuation of spin-off
- Fairness opinion
- Benefits to the parent company
- Conflicts of interest
- Managerial incentives
- Corporate governance changes
- Changes in the capital structure
VALUE MAXIMIZATION PROPOSALS
Vote CASE-BY-CASE on shareholder proposals seeking to maximize shareholder value by hiring a financial advisor to explore strategic alternatives, selling the company or liquidating the company and distributing the proceeds to shareholders. These proposals should be evaluated based on the following factors: prolonged poor performance with no turnaround in sight, signs of entrenched board and management, strategic plan in place for improving value, likelihood of receiving reasonable value in a sale or dissolution, and whether company is actively exploring its strategic options, including retaining a financial advisor.
5. State of Incorporation
CONTROL SHARE ACQUISITION PROVISIONS
Vote FOR proposals to opt out of control share acquisition statutes unless doing so would enable the completion of a takeover that would be detrimental to shareholders.
Vote AGAINST proposals to amend the charter to include control share acquisition provisions.
Vote FOR proposals to restore voting rights to the control shares.
CONTROL SHARE CASH-OUT PROVISIONS
Vote FOR proposals to opt out of control share cash-out statutes.
DISGORGEMENT PROVISIONS
Vote FOR proposals to opt out of state disgorgement provisions.
FAIR PRICE PROVISIONS
Vote proposals to adopt fair price provisions on a CASE-BY-CASE basis, evaluating factors such as the vote required to approve the proposed acquisition, the vote required to repeal the fair price provision, and the mechanism for determining the fair price.
Generally, vote AGAINST fair price provisions with shareholder vote requirements greater than a majority of disinterested shares.
FREEZE-OUT PROVISIONS
Vote FOR proposals to opt out of state freeze-out provisions.
GREENMAIL
Vote FOR proposals to adopt anti-greenmail charter of bylaw amendments or otherwise restrict a company's ability to make greenmail payments.
Review on a CASE-BY-CASE basis anti-greenmail proposals when they are bundled with other charter or bylaw amendments.
REINCORPORATION PROPOSALS
Proposals to change a company's state of incorporation should be evaluated on a CASE-BY-CASE basis, giving consideration to both financial and corporate governance concerns, including the reasons for reincorporating, a comparison of the governance provisions, and a comparison of the jurisdictional laws.
Vote FOR reincorporation when the economic factors outweigh any neutral or negative governance changes.
STAKEHOLDER PROVISIONS
Vote AGAINST proposals that ask the board to consider non-shareholder constituencies or other non-financial effects when evaluating a merger or business combination.
STATE ANTI-TAKEOVER STATUTES
Review on a CASE-BY-CASE basis proposals to opt in or out of state takeover statutes (including control share acquisition statutes, control share cash-out statutes, freeze-out provisions, fair price provisions, stakeholder laws, poison pill endorsements, severance pay and labor contract provisions, anti-greenmail provisions, and disgorgement provisions).
6. Capital Structure
ADJUSTMENTS TO PAR VALUE OF COMMON STOCK
Vote FOR management proposals to reduce the par value of common stock.
COMMON STOCK AUTHORIZATION
Votes on proposals to increase the number of shares of common stock authorized for issuance are determined on a CASE-BY-CASE basis using a model developed by ISS.
Vote AGAINST proposals at companies with dual-class capital structures to increase the number of authorized shares of the class of stock that has superior voting rights.
Vote FOR proposals to approve increases beyond the allowable increase when a company's shares are in danger of being de-listed or if a company's ability to continue to operate as a going concern is uncertain.
DUAL-CLASS STOCK
Vote AGAINST proposals to create a new class of common stock with superior voting rights.
Vote FOR proposals to create a new class of nonvoting or sub-voting common stock if:
- It is intended for financing purposes with minimal or no dilution to current shareholders
- It is not designed to preserve the voting power of an insider or significant shareholder
ISSUE STOCK FOR USE WITH RIGHTS PLAN
Vote AGAINST proposals that increase authorized common stock for the explicit purpose of implementing a shareholder rights plan (poison pill).
PREEMPTIVE RIGHTS
Review on a CASE-BY-CASE basis shareholder proposals that seek preemptive rights. In evaluating proposals on preemptive rights, consider the size of a company, the characteristics of its shareholder base, and the liquidity of the stock.
PREFERRED STOCK
Vote AGAINST proposals authorizing the creation of new classes of preferred stock with unspecified voting, conversion, dividend distribution, and other rights ("blank check" preferred stock).
Vote FOR proposals to create "de-clawed" blank check preferred stock (stock that cannot be used as a takeover defense).
Vote FOR proposals to authorize preferred stock in cases where the company specifies the voting, dividend, conversion, and other rights of such stock and the terms of the preferred stock appear reasonable. Vote AGAINST proposals to increase the number of blank check preferred stock authorized for issuance when no shares have been issued or reserved for a specific purpose.
Vote CASE-BY-CASE on proposals to increase the number of blank check preferred shares after analyzing the number of preferred shares available for issue given a company's industry and performance in terms of shareholder returns.
RECAPITALIZATION
Votes CASE-BY-CASE on recapitalizations (reclassifications of securities), taking into account the following:
- more simplified capital structure, enhanced liquidity, fairness of conversion terms, impact on voting power and dividends, reasons for the reclassification, conflicts of interest, and other alternatives considered.
REVERSE STOCK SPLITS
Vote FOR management proposals to implement a reverse stock split when the number of authorized shares will be proportionately reduced.
Vote FOR management proposals to implement a reverse stock split to avoid delisting.
Votes on proposals to implement a reverse stock split that do not proportionately reduce the number of shares authorized for issue should be determined on a CASE-BY-CASE basis using a model developed by ISS.
SHARE REPURCHASE PROGRAMS
Vote FOR management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms.
STOCK DISTRIBUTIONS: SPLITS AND DIVIDENDS
Vote FOR management proposals to increase the common share authorization for a stock split or share dividend, provided that the increase in authorized shares would not result in an excessive number of shares available for issuance as determined using a model developed by ISS.
TRACKING STOCK
Votes on the creation of tracking stock are determined on a CASE-BY-CASE basis, weighing the strategic value of the transaction against such factors as: adverse governance changes, excessive increases in authorized capital stock, unfair method of distribution, diminution of voting rights, adverse conversion features, negative impact on stock option plans, and other alternatives such as spin-off.
7. Executive and Director Compensation
Votes with respect to equity-based compensation plans should be determined on a CASE-BY-CASE basis. Our methodology for reviewing compensation plans primarily focuses on the transfer of shareholder wealth (the dollar cost of pay plans to shareholders instead of simply focusing on voting power dilution). Using the expanded compensation data disclosed under the SEC's rules, ISS will value every award type. ISS will include in its analyses an estimated dollar cost for the proposed plan and all continuing plans. This cost, dilution to shareholders' equity, will also be expressed as a percentage figure for the transfer of shareholder wealth, and will be considered along with dilution to voting power. Once ISS determines the estimated cost of the plan, we compare it to a company-specific dilution cap.
Our model determines a company-specific allowable pool of shareholder wealth that may be transferred from the company to plan participants, adjusted for:
- Long-term corporate performance (on an absolute basis and relative to a standard industry peer group and an appropriate market index),
- Cash compensation, and
- Categorization of the company as emerging, growth, or mature.
These adjustments are pegged to market capitalization.
Vote AGAINST plans that expressly permit the re-pricing of underwater stock options without shareholder approval.
Generally vote AGAINST plans in which (I) there is a disconnect between the CEO's pay and company performance (an increase in pay and a decrease in performance) and the main source of the pay increase (over half) is equity-based and (2) the CEO is the participant of the equity proposal. A decrease in performance is based on negative one- and three-year total shareholder returns. An increase in pay is based on the CEO's total direct compensation (salary, cash bonus, present value of stock options, face value of restricted stock, face value of long-term incentive plan payouts, and all other compensation) increasing over the previous year. Also may WITHHOLD votes from the Compensation Committee members.
Generally vote AGAINST plans if the company's most recent three-year burn rate exceeds one standard deviation in excess of the industry mean and is over two percent of common shares outstanding. See Table 1 for details.
TABLE 1: PROXY SEASON 2005 BURN RATE THRESHOLDS
RUSSELL 3000 NON-RUSSELL 3000
-------------------------- --------------------------
STANDARD MEAN + STANDARD MEAN +
GICS GICS DSEC MEAN DEVIATION STD DEV MEAN DEVIATION STD DEV
---- ------------------------ ---- --------- ------- ---- --------- -------
1010 Energy 1.60% 1.02% 2.61% 2.59% 2.19% 4.78%
1510 Materials 1.55% 0.81% 2.36% 2.54% 1.92% 4.46%
2010 Capital Goods 1.86% 1.19% 3.05% 3.23% 2.93% 6.17%
2020 Commercial Services &
Supplies 287% 1.53% 4.40% 4.39% 3.68% 8.07%
2030 Transportation 2.10% 1.50% 3.60% 2.44% 2.22% 4.66%
2510 Automobiles & Components 2.10% 1.37% 3.48% 2.90% 2.28% 5.18%
2520 Consumer Durables &
Apparel 2.40% 1.51% 3.90% 3.42% 2.79% 6.21%
2530 Hotels Restaurants &
Leisure 2.39% 1.08% 3.48% 3.30% 2.87% 6.17%
2540 Media 2.34% 1.50% 3.84% 4.12% 2.89% 7.01%
2550 Retailing 2.89% 1.95% 4.84% 4.26% 3.50% 7.75%
3010 to 3030 Food & Staples Retailing 1.98% 1.50% 3.48% 3.37% 3.32% 6.68%
3510 Health Care Equipment &
Services 3.24% 1.96% 5.20% 4.55% 3.24% 7.79%
3520 Pharmaceuticals &
Biotechnology 3.60% 1.72% 5.32% 5.77% 4.15% 9.92%
4010 Banks 1.44% 1.17% 2.61% 1.65% 1.60% 3.25%
4020 Diversified Financials 3.12% 2.54% 5.66% 5.03% 3.35% 8.55%
4030 Insurance 1.45% 0.88% 2.32% 2.47% 1.77% 4.24%
4040 Real Estate 1.01% 0.89% 1.90% 1.51% 1.50% 3.01%
4510 Software & Services 5.44% 3.05% 8.49% 8.08% 6.01% 14.10%
4520 Technology Hardware &
Equipment 4.00% 2.69% 6.68% 5.87% 4.25% 10.12%
4530 Semiconductors &
Semiconductor Equipment 5.12% 2.86% 7.97% 6.79% 3.95% 10.74%
5010 Telecommunications
Services 2.56% 2.39% 4.95% 4.66% 3.90% 8.56%
5510 Utilities 0.90% 0.65% 1.55% 3.74% 4.63% 8.38%
1010 Energy 1.60% 1.02% 2.61% 2.59% 2.19% 4.78%
1510 Materials 1.55% 0.81% 2.36% 2.54% 1.92% 4.46%
2010 Capital Goods 1.86% 1.19% 3.05% 3.23% 2.93% 6.17%
2020 Commercial Services &
Supplies 287% 1.53% 4.40% 4.39% 3.68% 8.07%
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A company with high three-year average burn rates may avoid triggering the burn rate policy by committing to the industry average over the next years.
However, the above general voting guidelines for pay for performance may change if the compensation committee members can demonstrate that they have improved committee performance based on additional public filing such as a DEFA 14A or 8K. The additional filing needs to present strong and compelling evidence of improved performance with new information that has not been disclosed in the original proxy statement. The reiteration of the compensation committee report will not be sufficient evidence of improved committee performance.
Evidence of improved compensation committee performance includes all of the following:
The compensation committee has reviewed all components of the CEO's compensation, including the following:
- Base salary, bonus, long-term incentives
- Accumulative realized and unrealized stock option and restricted stock gains
- Dollar value of perquisites and other personal benefits to the CEO and the cost to the company
- Earnings and accumulated payment obligations under the company's nonqualified deferred compensation program
- Actual projected payment obligations under the company's supplemental executive retirement plan (SERPs)
A tally sheet setting forth all the above components was prepared and reviewed affixing dollar amounts under the various payout scenarios.
A tally sheet with all the above components should be disclosed for the following termination scenarios:
- Payment if termination occurs within 12 months: $_____
- Payment if "not for cause" termination occurs within 12 months:
$______
- Payment if "change of control" termination occurs within 12 months:
$_____
The compensation committee is committed to provide additional information on the named executives' annual cash bonus program and/or long-term incentive cash plan for the current fiscal year. The compensation committee will provide full disclosure of the qualitative and quantitative performance criteria and hurdle rates used to determine the payouts of the cash program. From this disclosure, shareholders will know the minimum level of performance required for any cash bonus to be delivered as well as the maximum cash bonus payable for superior performance.
The repetition of the compensation committee report does not meet ISS' requirement of compelling and strong evidence of improved disclosure. The level of transparency and disclosure is at the highest level where shareholders can understand the mechanics of the annual cash bonus and/or long-term incentive cash plan based on the additional disclosure.
(8) The compensation committee is committed to grant a substantial portion of performance-based equity awards to the named executive officers. A substantial portion of performance-based awards would be at least 50 percent of the shares awarded to each of the named executive officers. Performance-based equity awards are earned or paid out based on the achievement of company performance targets. The company will disclose the details of the performance criteria (e.g., return on equity) and the hurdle rates (e.g., 15 percent) associated with the performance targets. From this disclosure, shareholders will know the minimum level of performance required for any equity grants to be made. The performance-based equity awards do not refer to non-qualified stock options' or performance-accelerated grants2. Instead,
performance-based equity awards are performance-contingent grants where the individual will not receive the equity grant by not meeting the target performance and vice versa.
The level of transparency and disclosure is at the highest level where shareholders can understand the mechanics of the performance-based equity awards based on the additional disclosure.
(9) The compensation committee has the sole authority to hire and fire outside compensation consultants. The role of the outside compensation consultant is to assist the compensation committee to analyze executive pay packages or contracts and understand the company's financial measures.
Based on the additional disclosure of improved performance of the compensation committee, ISS will generally vote FOR the compensation committee members up for annual election and vote FOR the employee-based stock plan if there is one on the ballot. However, ISS is not likely to vote FOR the compensation committee members and/or the employee-based stock plan if ISS believes the company has not provided compelling and sufficient evidence of transparent additional disclosure of executive compensation based on the above requirements.
DIRECTOR COMPENSATION
Votes on compensation plans for directors are determined on a CASE-BY-CASE basis, using a proprietary, quantitative model developed by ISS.
On occasion, director stock plans that set aside a relatively small of shares when combined with employee or executive stock compensation plans exceed the allowable cap. In such cases, starting proxy season 2005, ISS will supplement the analytical approach with a qualitative review of board compensation for companies, taking into consideration:
- Director stock ownership guidelines
- A minimum of three times the annual cash retainer.
Vesting schedule or mandatory holding/deferral period
- A minimum vesting of three years for stock options or restricted stock, or
- Deferred stock payable at the end of a three-year deferral period.
- Mix between cash and equity
- A balanced mix of cash and equity, for example 40% cash/60% equity or 50% cash/50% equity.
- If the mix is heavier on the equity component, the vesting schedule or deferral period should be more stringent, with the lesser of five years or the term of directorship.
- Retirement/Benefit and Perquisites programs
- No retirement/benefits and perquisites provided to non-employee directors.
- Quality of disclosure
- Provide detailed disclosure on cash and equity compensation delivered to each non-employee director for the most recent fiscal year in a table. The column headers for the table may include the following: name of each non-employee director, annual retainer, board meeting fees, committee retainer, committee-meeting fees, and equity grants.
For ISS to recommend a vote FOR director equity plans based on the above qualitative features, a company needs to demonstrate that it meets all the above qualitative features in its proxy statement.
STOCK PLANS IN LIEU OF CASH
Votes for plans which provide participants with the option of taking all or a portion of their cash compensation in the form of stock are determined on a CASE-BY-CASE basis.
Vote FOR plans which provide a dollar-for-dollar cash for stock exchange.
Votes for plans which do not provide a dollar-for-dollar cash for stock exchange should be determined on a CASE-BY-CASE basis using a proprietary, quantitative model developed by ISS. In cases where the exchange is not dollar-for-dollar, the request for new or additional shares for such equity program will be considered in the quantitative model. However, the cost would be lower than full-value awards since part of the deferral compensation is in-lieu-of cash compensation.
DIRECTOR RETIREMENT PLANS
Vote AGAINST retirement plans for non-employee directors.
Vote FOR shareholder proposals to eliminate retirement plans for non-employee directors.
MANAGEMENT PROPOSALS SEEKING APPROVAL TO RE-PRICE OPTIONS
Votes on management proposals seeking approval to re-price options are evaluated on a CASE-BY-CASE basis giving consideration to the following:
- Historic trading patterns
- Rationale for the re-pricing
- Value-for-value exchange
- Treatment of surrendered options
- Option vesting
- Term of the option
- Exercise price
- Participation
QUALIFIED EMPLOYEE STOCK PURCHASE PLANS
Votes on qualified employee stock purchase plans should be determined on a CASE-BY-CASE basis.
Vote FOR employee stock purchase plans where all of the following apply:
- Purchase price is at least 85 percent of fair market value
- Offering period is 27 months or less, and
- The number of shares allocated to the plan is ten percent or less of the outstanding shares
Vote AGAINST qualified employee stock purchase plans where any of the following apply:
- Purchase price is less than 85 percent of fair market value, or
- Offering period is greater than 27 months, or
- The number of shares allocated to the plan is more than ten percent of the outstanding shares
NONQUALIFIED EMPLOYEE STOCK PURCHASE PLANS
Votes on nonqualified employee stock purchase plans should be determined on a CASE-BY-CASE basis.
Vote FOR nonqualified employee stock purchase plans with all the following features:
- Broad-based participation (i.e., all employees of the company with the exclusion of individuals with 5 percent or more of beneficial ownership of the company)
- Limits on employee contribution, which may be a fixed dollar amount or expressed as a percent of base salary
- Company matching contribution up to 25 percent of employee's contribution, which is effectively a discount of 20 percent from market value
- No discount on the stock price on the date of purchase since there is a company matching contribution
Vote AGAINST nonqualified employee stock purchase plans when any of the plan features do not meet the above criteria.
INCENTIVE BONUS PLANS AND TAX DEDUCTIBILITY PROPOSALS (OBRA-RELATED COMPENSATION PROPOSALS)
Vote FOR proposals that simply amend shareholder-approved compensation plans to include administrative features or place a cap on the annual grants any one participant may receive to comply with the provisions of Section 162(m).
Vote FOR proposals to add performance goals to existing compensation plans to comply with the provisions of Section 162(m) unless they are clearly inappropriate.
Votes to amend existing plans to increase shares reserved and to qualify for favorable tax treatment under the provisions of Section 162(m) should be considered on a CASE-BY-CASE basis using a proprietary, quantitative model developed by ISS.
Generally vote FOR cash or cash and stock bonus plans that are submitted to shareholders for the purpose of exempting compensation from taxes under the provisions of Section 162(m) if no increase in shares is requested.
EMPLOYEE STOCK OWNERSHIP PLANS (ESOPS)
Vote FOR proposals to implement an ESOP or increase authorized shares for
existing ESOPs, unless the number of shares allocated to the ESOP is excessive
(more than five percent of outstanding shares.)
401(K) EMPLOYEE BENEFIT PLANS
Vote FOR proposals to implement a 40 1(k) savings plan for employees.
SHAREHOLDER PROPOSALS REGARDING EXECUTIVE AND DIRECTOR PAY
Generally, vote FOR shareholder proposals seeking additional disclosure of executive and director pay information, provided the information requested is relevant to shareholders' needs, would not put the company at a competitive disadvantage relative to its industry, and is not unduly burdensome to the company.
Vote AGAINST shareholder proposals seeking to set absolute levels on compensation or otherwise dictate the amount or form of compensation.
Vote AGAINST shareholder proposals requiring director fees be paid in stock only. Vote FOR shareholder proposals to put option re-pricings to a shareholder vote.
Vote on a CASE-BY-CASE basis for all other shareholder proposals regarding executive and director pay, taking into account company performance, pay level versus peers, pay level versus industry, and long term corporate outlook.
OPTION EXPENSING
Generally vote FOR shareholder proposals asking the company to expense stock options, unless the company has already publicly committed to expensing options by a specific date
PERFORMANCE-BASED AWARDS
Generally vote FOR shareholder proposals advocating the use of performance-based awards like indexed, premium-priced, and performance-vested options or performance-based shares, unless:
- The proposal is overly restrictive (e.g., it mandates that awards to all employees must be performance-based or all awards to top executives must be a particular type, such as indexed options)
- The company demonstrates that it is using a substantial portion of performance-based awards for its top executives
GOLDEN PARACHUTES AND EXECUTIVE SEVERANCE AGREEMENTS
Vote FOR shareholder proposals to require golden parachutes or executive severance agreements to be submitted for shareholder ratification, unless the proposal requires shareholder approval prior to entering into employment contracts.
Vote on a CASE-BY-CASE basis on proposals to ratify or cancel golden parachutes. An acceptable parachute should include the following:
- The triggering mechanism should be beyond the control of management
- The amount should not exceed three times base amount (defined as the average annual taxable W-2 compensation during the five years prior to the year in which the change of control occurs
- Change-in-control payments should be double-triggered, i.e., (1) after a change in control has taken place, and (2) termination of the executive as a result of the change in control. ISS defines change in control as a change in the company ownership structure
PENSION PLAN INCOME ACCOUNTING
Generally vote FOR shareholder proposals to exclude pension plan income in the calculation of earnings used in determining executive bonuses/compensation.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS (SERP5)
Generally vote FOR shareholder proposals requesting to put extraordinary benefits contained in SERP agreements to a shareholder vote unless the company's executive pension plans do not contain excessive benefits beyond what is offered under employee-wide plans.
8. Social and Environmental Issues
CONSUMER ISSUES AND PUBLIC SAFETY
ANIMAL RIGHTS
Vote CASE-BY-CASE on proposals to phase out the use of animals in product testing, taking into account:
- The nature of the product and the degree that animal testing is necessary or federally mandated (such as medical products),
- The availability and feasibility of alternatives to animal testing to ensure product safety, and
- The degree that competitors are using animal-free testing
Generally vote FOR proposals seeking a report on the company's animal welfare standards unless:
- The company has already published a set of animal welfare standards and monitors compliance
- The company's standards are comparable to or better than those of peer firms, and
- There are no serious controversies surrounding the company's treatment of animals
DRUG PRICING
Vote CASE-BY-CASE on proposals asking the company to implement price restraints on pharmaceutical products, taking into account:
- Whether the proposal focuses on a specific drug and region
- Whether the economic benefits of providing subsidized drugs (e.g., public goodwill) outweigh the costs in
- Terms of reduced profits, lower R&D spending, and harm to competitiveness
- The extent that reduced prices can be offset through the company's marketing budget without affecting
- R&D spending
- Whether the company already limits price increases of its products
- Whether the company already contributes life -saving pharmaceuticals to the needy and Third World countries
- The extent that peer companies implement price restraints
GENETICALLY MODIFIED FOODS
Vote AGAINST proposals asking companies to voluntarily label genetically engineered (GE) ingredients in their products or alternatively to provide interim labeling and eventually eliminate GE ingredients due to the costs and feasibility of labeling and/or phasing out the use of GE ingredients.
Vote CASE-BY-CASE on proposals asking for a report on the feasibility of labeling products containing GE ingredients taking into account:
- The relevance of the proposal in terms of the company's business and the proportion of it affected by the resolution
- The quality of the company's disclosure on GE product labeling and related voluntary initiatives and how this disclosure compares with peer company disclosure
- Company's quality of the company's disclosure on GE product labeling and related voluntary initiatives and how this disclosure compares with peer company disclosure
- Any voluntary labeling initiatives undertaken or considered by the company
- Vote CASE-BY-CASE on proposals asking for the preparation of a report on the financial, legal, and environmental impact of continued use of GE ingredients/seeds
- The relevance of the proposal in terms of the company's business and the proportion of it affected by the resolution
- The quality of the company's disclosure on risks related to GE product use and how this disclosure compares with peer company disclosure
- The percentage of revenue derived from international operations, particularly in Europe, where GE products are more regulated and consumer backlash is more pronounced
Vote AGAINST proposals seeking a report on the health and environmental effects of genetically modified organisms (GMOs). Health studies of this sort are better undertaken by regulators and the scientific community. Vote AGAINST proposals to completely phase out GE ingredients from the company's products or proposals asking for reports outlining the steps necessary to eliminate GE ingredients from the company's products. Such resolutions presuppose that there are proven health risks to GE ingredients (an issue better left to federal regulators) that outweigh the economic benefits derived from biotechnology.
HANDGUNS
Generally vote AGAINST requests for reports on a company's policies aimed at curtailing gun violence in the United States unless the report is confined to product safety information. Criminal misuse of firearms is beyond company control and instead falls within the purview of law enforcement agencies.
HIV/AIDS
Vote CASE-BY-CASE on requests for reports outlining the impact of the health pandemic (HI V/AIDS, malaria and tuberculosis) on the company's Sub-Saharan operations and how the company is responding to it, taking into account:
- The nature and size of the company's operations in Sub-Saharan Africa and the number of local employees
- The company's existing healthcare policies, including benefits and healthcare access for local workers
- Company donations to healthcare providers operating in the region
Vote AGAINST proposals asking companies to establish, implement, and report on a standard of response to the HIV/AIDS, TB, and Malaria health pandemic in Africa and other developing countries, unless the company has significant operations in these markets and has failed to adopt policies and/or procedures to address these issues comparable to those of industry peers.
PREDATORY LENDING
Vote CASE-BY CASE on requests for reports on the company's procedures for preventing predatory lending, including the establishment of a board committee for oversight, taking into account:
- Whether the company has adequately disclosed mechanisms in place to prevent abusive lending practices
- Whether the company has adequately disclosed the financial risks of its sub-prime business
- Whether the company has been subject to violations of lending laws or serious lending controversies
- Peer companies' policies to prevent abusive lending practices
TOBACCO
Most tobacco-related proposals should be evaluated on a CASE-BY-CASE basis, taking into account the following factors:
Second-hand smoke:
- Whether the company complies with all local ordinances and regulations
- The degree that voluntary restrictions beyond those mandated by law might hurt the company's competitiveness
- The risk of any health-related liabilities.
Advertising to youth:
- Whether the company complies with federal, state, and local laws on the marketing of tobacco or if it has been fined for violations
- Whether the company has gone as far as peers in restricting advertising
- Whether the company entered into the Master Settlement Agreement, which restricts marketing of tobacco to youth
- Whether restrictions on marketing to youth extend to foreign countries Cease production of tobacco-related products or avoid selling products to tobacco companies:
- The percentage of the company's business affected
- The economic loss of eliminating the business versus any potential tobacco-related liabilities. Spin-off tobacco-related businesses:
- The percentage of the company's business affected
- The feasibility of a spin-off
- Potential future liabilities related to the company's tobacco business
Stronger product warnings:
Vote AGAINST proposals seeking stronger product warnings. Such decisions are better left to public health authorities.
Investment in tobacco stocks:
Vote AGAINST proposals prohibiting investment in tobacco equities. Such decisions are better left to portfolio managers.
ENVIRONMENT AND ENERGY
ARCTIC NATIONAL WILDLIFE REFUGE
Generally vote AGAINST request for reports outlining potential environmental damage from drilling in the Arctic National Wildlife Refuge (ANWR) unless:
- New legislation is adopted allowing development and drilling in the ANWR region;
- The company intends to pursue operations in the ANWR; and
- The company does not currently disclose an environmental risk report for their operations in the ANWR.
CERES PRINCIPLES
Vote CASE-BY-CASE on proposals to adopt the CERES Principles, taking into account:
- The company's current environmental disclosure beyond legal requirements, including environmental health and safety (EHS) audits and reports that may duplicate CERES
- The company's environmental performance record, including violations of federal and state regulations, level of toxic emissions, and accidental spills
- Environmentally conscious practices of peer companies, including endorsement of CERES
- Costs of membership and implementation.
ENVIRONMENTAL-ECONOMIC RISK REPORT
Vote CASE by CASE on proposals requesting an economic risk assessment of environmental performance considering:
- The feasibility of financially quantifying environmental risk factors,
- The company's compliance with applicable legislation and/or regulations regarding environmental performance,
- The costs associated with implementing improved standards,
- The potential costs associated with remediation resulting from poor environmental performance, and
- The current level of disclosure on environmental policies and initiatives.
ENVIRONMENTAL REPORTS
Generally vote FOR requests for reports disclosing the company's environmental policies unless it already has well-documented environmental management systems that are available to the public.
GLOBAL WARMING
Generally vote FOR proposals requesting a report on greenhouse gas emissions from company operations and/or products unless this information is already publicly disclosed or such factors are not integral to the company's line of business.
Generally vote AGAINST proposals that call for reduction in greenhouse gas emissions by specified amounts or within a restrictive time frame unless the company lags industry standards and has been the subject of recent, significant fines or litigation resulting from greenhouse gas emissions.
RECYCLING
Vote CASE-BY-CASE on proposals to adopt a comprehensive recycling strategy, taking into account:
- The nature of the company's business and the percentage affected
- The extent that peer companies are recycling
- The timetable prescribed by the proposal
- The costs and methods of implementation
- Whether the company has a poor environmental track record, such as violations of federal and state regulations
RENEWABLE ENERGY
In general, vote FOR requests for reports on the feasibility of developing renewable energy sources unless the report is duplicative of existing disclosure or irrelevant to the company's line of business.
Generally vote AGAINST proposals requesting that the company invest in renewable energy sources. Such decisions are best left to management's evaluation of the feasibility and financial impact that such programs may have on the company.
SUSTAINABILITY REPORT
Generally vote FOR proposals requesting the company to report on policies and initiatives related to social, economic, and environmental sustainability, unless:
- The company already discloses similar information through existing reports or policies such as an Environment, Health, and Safety (EHS) report; comprehensive Code of Corporate Conduct; and/or Diversity Report; or
- The company has formally committed to the implementation of a reporting program based on Global Reporting Initiative (GRI) guidelines or a similar standard within a specified time frame.
GENERAL CORPORATE ISSUES
OUTSOURCING/OFFSHORING
Vote CASE-BY-CASE on proposals calling for companies to report on the risks associated with outsourcing, considering:
- Risks associated with certain international markets
- The utility of such a report to shareholders
- The existence of a publicly available code of corporate conduct that applies to international operations
LINK EXECUTIVE COMPENSATION TO SOCIAL PERFORMANCE
Vote CASE-BY-CASE on proposals to review ways of linking executive compensation to social factors, such as corporate downsizings, customer or employee satisfaction, community involvement, human rights, environmental performance, predatory lending, and executive/employee pay disparities. Such resolutions should be evaluated in the context of:
- The relevance of the issue to be linked to pay
- The degree that social performance is already included in the company's pay structure and disclosed
- The degree that social performance is used by peer companies in setting pay
- Violations or complaints filed against the company relating to the particular social performance measure
- Artificial limits sought by the proposal, such as freezing or capping executive pay
- Independence of the compensation committee
- Current company pay levels.
CHARITABLE/POLITICAL CONTRIBUTIONS
Generally vote AGAINST proposals asking the company to affirm political nonpartisanship in the workplace so long as:
- The company is in compliance with laws governing corporate political activities, and
- The company has procedures in place to ensure that employee contributions to company-sponsored political action committees (PACs) are strictly voluntary and not coercive.
Vote AGAINST proposals to report or publish in newspapers the company's political contributions. Federal and state laws restrict the amount of corporate contributions and include reporting requirements.
Vote AGAINST proposals disallowing the company from making political contributions. Businesses are affected by legislation at the federal, state, and local level and barring contributions can put the company at a competitive disadvantage.
Vote AGAINST proposals restricting the company from making charitable contributions. Charitable contributions are generally useful for assisting worthwhile causes and for creating goodwill in the community. In the absence of bad faith, self-dealing, or gross negligence, management should determine which contributions are in the best interests of the company.
Vote AGAINST proposals asking for a list of company executives, directors, consultants, legal counsels, lobbyists, or investment bankers that have prior government service and whether such service had a bearing on the business of the company. Such a list would be burdensome to prepare without providing any meaningful information to shareholders.
LABOR STANDARDS AND HUMAN RIGHTS
CHINA PRINCIPLES
Vote AGAINST proposals to implement the China Principles unless:
- There are serious controversies surrounding the company's China operations, and
- The company does not have a code of conduct with standards similar to those promulgated by the International Labor Organization (ILO).
COUNTRY-SPECIFIC HUMAN RIGHTS REPORTS
Vote CASE-BY-CASE on requests for reports detailing the company's operations in a particular country and steps to protect human rights, based on:
- The nature and amount of company business in that country
- The company's workplace code of conduct
- Proprietary and confidential information involved
- Company compliance with U.S. regulations on investing in the country
- Level of peer company involvement in the country.
INTERNATIONAL CODES OF CONDUCT/VENDOR STANDARDS
Vote CASE-BY-CASE on proposals to implement certain human rights standards at company facilities or those of its suppliers and to commit to outside, independent monitoring. In evaluating these proposals, the following should be considered:
- The company's current workplace code of conduct or adherence to other global standards and the degree they meet the standards promulgated by the proponent
- Agreements with foreign suppliers to meet certain workplace standards
- Whether company and vendor facilities are monitored and how
- Company participation in fair labor organizations
- Type of business
- Proportion of business conducted overseas
- Countries of operation with known human rights abuses
- Whether the company has been recently involved in significant labor and human rights controversies or violations
- Peer company standards and practices
- Union presence in company's international factories
Generally vote FOR reports outlining vendor standards compliance unless any of the following apply:
- The company does not operate in countries with significant human rights violations
- The company has no recent human rights controversies or violations, or
- The company already publicly discloses information on its vendor standards compliance.
MACBRIDE PRINCIPLES
Vote CASE-BY-CASE on proposals to endorse or increase activity on the MacBride Principles, taking into account:
- Company compliance with or violations of the Fair Employment Act of 1989
- Company antidiscrimination policies that already exceed the legal requirements
- The cost and feasibility of adopting all nine principles
- The cost of duplicating efforts to follow two sets of standards (Fair Employment and the MacBride Principles)
- The potential for charges of reverse discrimination
- The potential that any company sales or contracts in the rest of the United Kingdom could be negatively impacted
- The level of the company's investment in Northern Ireland
- The number of company employees in Northern Ireland
- The degree that industry peers have adopted the MacBride Principles
- Applicable state and municipal laws that limit contracts with companies that have not adopted the MacBride Principles.
MILITARY BUSINESS
FOREIGN MILITARY SALES/OFFSETS
Vote AGAINST reports on foreign military sales or offsets. Such disclosures may involve sensitive and confidential information. Moreover, companies must comply with government controls and reporting on foreign military sales.
LANDMINES AND CLUSTER BOMBS
Vote CASE-BY-CASE on proposals asking a company to renounce future involvement in antipersonnel landmine production, taking into account:
- Whether the company has in the past manufactured landmine components
- Whether the company's peers have renounced future production
Vote CASE-BY-CASE on proposals asking a company to renounce future involvement in cluster bomb production, taking into account:
- What weapons classifications the proponent views as cluster bombs
- Whether the company currently or in the past has manufactured cluster bombs or their components
- The percentage of revenue derived from cluster bomb manufacture
- Whether the company's peers have renounced future production
NUCLEAR WEAPONS
Vote AGAINST proposals asking a company to cease production of nuclear weapons components and delivery systems, including disengaging from current and proposed contracts. Components and delivery systems serve multiple military and non-military uses, and withdrawal from these contracts could have a negative impact on the company's business.
OPERATIONS IN NATIONS SPONSORING TERRORISM (IRAN)
Vote CASE-BY-CASE on requests for a board committee review and report outlining the company's financial and reputational risks from its operations in Iran, taking into account current disclosure on:
- The nature and purpose of the Iranian operations and the amount of business involved (direct and indirect revenues and expenses) that could be affected by political disruption
- Compliance with U.S. sanctions and laws
SPACED-BASED WEAPONIZATION
Generally vote FOR reports on a company's involvement in spaced-based weaponization unless:
- The information is already publicly available or
- The disclosures sought could compromise proprietary information.
WORKPLACE DIVERSITY
BOARD DIVERSITY
Generally vote FOR reports on the company's efforts to diversify the board, unless:
- The board composition is reasonably inclusive in relation to companies of similar size and business or
- The board already reports on its nominating procedures and diversity initiatives.
Generally vote AGAINST proposals that would call for the adoption of specific committee charter language regarding diversity initiatives unless the company fails to publicly disclose existing equal opportunity or non-discrimination policies.
Vote CASE-BY-CASE on proposals asking the company to increase the representation of women and minorities on the board, taking into account:
- The degree of board diversity
- Comparison with peer companies
- Established process for improving board diversity
- Existence of independent nominating committee
- Use of outside search firm
- History of EEO violations
EQUAL EMPLOYMENT OPPORTUNITY (EEO)
Generally vote FOR reports outlining the company's affirmative action initiatives unless all of the following apply:
- The company has well-documented equal opportunity programs
- The company already publicly reports on its company-wide affirmative initiatives and provides data on its workforce diversity, and
- The company has no recent EEO-related violations or litigation.
Vote AGAINST proposals seeking information on the diversity efforts of suppliers and service providers, which can pose a significant cost and administration burden on the company.
GLASS CEILING
Generally vote FOR reports outlining the company's progress towards the Glass Ceiling Commission's business recommendations, unless:
- The composition of senior management and the board is fairly inclusive
- The company has well-documented programs addressing diversity initiatives and leadership development
- The company already issues public reports on its company-wide affirmative initiatives and provides data on its workforce diversity, and
- The company has had no recent, significant EEO-related violations or litigation
SEXUAL ORIENTATION
Vote FOR proposals seeking to amend a company's EEO statement in order to prohibit discrimination based on sexual orientation, unless the change would result in excessive costs for the company.
Vote AGAINST proposals to ext end company benefits to or eliminate benefits from domestic partners. Benefits decisions should be left to the discretion of the company.
10. Mutual Fund Proxies
ELECTION OF DIRECTORS
Vote the election of directors on a CASE-BY-CASE basis, considering the following factors: board structure; director independence and qualifications; and compensation of directors within the fund and the family of funds attendance at board and committee meetings.
Votes should be withheld from directors who:
- attend less than 75 percent of the board and committee meetings without a valid excuse for the absences. Valid reasons include illness or absence due to company business. Participation via telephone is acceptable.
- In addition, if the director missed only one meeting or one day's meetings, votes should not be withheld even if such absence dropped the director's attendance below 75 percent.
- ignore a shareholder proposal that is approved by a majority of shares outstanding;
- ignore a shareholder proposal that is approved by a majority of the votes cast for two consecutive years;
- are interested directors and sit on the audit or nominating committee; or
- are interested directors and the full board serves as the audit or
- nominating committee or the company does not have one of these committees.
CONVERTING CLOSED-END FUND TO OPEN-END FUND
Vote conversion proposals on a CASE-BY-CASE basis, considering the following factors: past performance as a closed-end fund; market in which the fund invests; measures taken by the board to address the discount; and past shareholder activism, board activity, and votes on related proposals.
PROXY CONTESTS
Votes on proxy contests should be determined on a CASE-BY-CASE basis, considering the following factors:
- Past performance relative to its peers
- Market in which fund invests
- Measures taken by the board to address the issues
- Past shareholder activism, board activity, and votes on related proposals
- Strategy of the incumbents versus the dissidents
- Independence of directors
- Experience and skills of director candidates
- Governance profile of the company
- Evidence of management entrenchment
INVESTMENT ADVISORY AGREEMENTS
Votes on investment advisory agreements should be determined on a CASE-BY-CASE basis, considering the following factors:
- Proposed and current fee schedules
- Fund category/investment objective
- Performance benchmarks
- Share price performance as compared with peers
- Resulting fees relative to peers
- Assignments (where the advisor undergoes a change of control)
APPROVING NEW CLASSES OR SERIES OF SHARES
Vote FOR the establishment of new classes or series of shares.
PREFERRED STOCK PROPOSALS
Votes on the authorization for or increase in preferred shares should be determined on a CASE-BY-CASE basis, considering the following factors: stated specific financing purpose, possible dilution for common shares, and whether the shares can be used for anti-takeover purposes
1940 ACT POLICIES
Votes on 1940 Act policies should be determined on a CASE-BY-CASE basis, considering the following factors:
- potential competitiveness; regulatory developments; current and potential returns; and current and potential risk.
Generally vote FOR these amendments as long as the proposed changes do not fundamentally alter the investment focus of the fund and do comply with t he current SEC interpretation.
CHANGING A FUNDAMENTAL RESTRICTION TO A NON-FUNDAMENTAL RESTRICTION
Proposals to change a fundamental restriction to a non-fundamental restriction
should be evaluated on a CASE- BY-CASE basis, considering the following factors:
the fund's target investments, the reasons given by the fund for the change, and
the projected impact of the change on the portfolio.
CHANGE FUNDAMENTAL INVESTMENT OBJECTIVE TO NON-FUNDAMENTAL
Vote AGAINST proposals to change a fund's fundamental investment objective to non-fundamental.
NAME CHANGE PROPOSALS
Votes on name change proposals should be determined on a CASE-BY-CASE basis, considering the following factors: political/economic changes in the target market, consolidation in the target market, and current asset composition
CHANGE IN FUND'S SUB-CLASSIFICATION
Votes on changes in a fund's sub-classification should be determined on a CASE-BY-CASE basis, considering the following factors: potential competitiveness, current and potential returns, risk of concentration, and consolidation in target industry
DISPOSITION OF ASSETS/TERMINATION/LIQUIDATION
Vote these proposals on a CASE-BY-CASE basis, considering the following factors:
strategies employed to salvage the company; the fund's past performance; and
terms of the liquidation.
CHANGES TO THE CHARTER DOCUMENT
Votes on changes to the charter document should be determined on a CASE-BY-CASE basis, considering the following factors:
- The degree of change implied by the proposal
- The efficiencies that could result
- The state of incorporation
- Regulatory standards and implications
Vote AGAINST any of the following changes:
- Removal of shareholder approval requirement to reorganize or terminate the trust or any of its series
- Removal of shareholder approval requirement for amendments to the new declaration of trust
- Removal of shareholder approval requirement to amend the fund's management contract, allowing the contract to be modified by the investment manager and the trust management, as permitted by the 1940 Act
- Allow the trustees to impose other fees in addition to sales charges on investment in a fund, such as deferred sales charges and redemption fees that may be imposed upon redemption of a fund's shares
- Removal of shareholder approval requirement to engage in and terminate sub-advisory arrangements
- Removal of shareholder approval requirement to change the domicile of the fund
CHANGING THE DOMICILE OF A FUND
Vote re-incorporations on a CASE-BY-CASE basis, considering the following factors:
- regulations of both states; required fundamental policies of both states; and the increased flexibility available.
AUTHORIZING THE BOARD TO HIRE AND TERMINATE SUB-ADVISORS WITHOUT SHAREHOLDER APPROVAL
Vote AGAINST proposals authorizing the board to hire/terminate sub-advisors without shareholder approval.
DISTRIBUTION AGREEMENTS
Vote these proposals on a CASE-BY-CASE basis, considering the following factors:
- fees charged to comparably sized funds with similar objectives, the proposed distributor's reputation and past performance, the competitiveness of the fund in the industry, and terms of the agreement.
MASTER-FEEDER STRUCTURE
Vote FOR the establishment of a master-feeder structure.
MERGERS
Vote merger proposals on a CASE-BY-CASE basis, considering the following factors:
- resulting fee structure, performance of both funds, continuity of management personnel, and changes in corporate governance and their impact on shareholder rights.
SHAREHOLDER PROPOSALS TO ESTABLISH DIRECTOR OWNERSHIP REQUIREMENT
Generally vote AGAINST shareholder proposals that mandate a specific minimum amount of stock that directors must own in order to qualify as a director or to remain on the board. While ISS favors stock ownership on the part of directors, the company should determine the appropriate ownership requirement.
SHAREHOLDER PROPOSALS TO REIMBURSE SHAREHOLDER FOR EXPENSES INCURRED
Voting to reimburse proxy solicitation expenses should be analyzed on a CASE-BY-CASE basis. In cases where ISS recommends in favor of the dissidents, we also recommend voting for reimbursing proxy solicitation expenses.
SHAREHOLDER PROPOSALS TO TERMINATE THE INVESTMENT ADVISOR
Vote to terminate the investment advisor on a CASE-BY-CASE basis, considering the following factors: performance of the fund's NAV, the fund's history of shareholder relations, and the performance of other funds under the advisor's management.
- performance of the fund's NAV, the fund's history of shareholder relations, and the performance of other funds under the advisor's management.
APPENDIX F
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
To the best knowledge of the Trust, the names and addresses of the record and beneficial holders of 5% or more of the outstanding shares of each class of the Trust's equity securities and the percentage of the outstanding shares held by such holders are set forth below. Unless otherwise indicated below, the Trust has no knowledge as to whether all or any portion of the shares owned of record are also owned beneficially.
A shareholder who owns beneficially 25% or more of the outstanding securities of a fund is presumed to "control" that Fund as defined in the 1940 Act. Such control may affect the voting rights of other shareholders.
All information listed below is as of October 10, 2007.
AIM FLOATING RATE FUND
CLASS A SHARES CLASS C SHARES CLASS R SHARES INSTITUTIONAL CLASS
-------------- -------------- -------------- -------------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD RECORD
------------------- -------------- -------------- -------------- -------------------
AIM Advisors Inc.
Attn: Corporate Controller
11 E. Greenway Plz
Ste 1919
Houston, TX 77046-1103 -- -- 5.05% --
AIM Conservative Asset Allocation
Fund Omnibus Account
C/O AIM Advisors
11 E. Greenway Plz
Ste 100
Houston, TX 77046-1113 -- -- -- 16.19%
AIM Income Allocation Fund
Omnibus Account
C/O AIM Advisors
11 E. Greenway Plz
Ste 100
Houston, TX 77046-1113 -- -- -- 12.73%
AIM Moderate Asset Allocation Fund
Omnibus Account
C/O AIM Advisors
11 E. Greenway Plz
Ste 100
Houston, TX 77046-1113 -- -- -- 44.31%
AIM Moderately Conservative
Allocation Fund Omnibus Account
C/O AIM Advisors
11 Greenway Plz
Ste 100
Houston, TX 77046-1113 -- -- -- 10.23%
American Enterprise Investment
Svcs
PO Box 9446
Minneapolis, MN 55474-0001 -- -- 5.49% --
|
CLASS A SHARES CLASS C SHARES CLASS R SHARES INSTITUTIONAL CLASS
-------------- -------------- -------------- -------------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD RECORD
------------------- -------------- -------------- -------------- -------------------
Charles Schwab & Co Inc
Special Custody FBO Customers
(SIM)
Attn: Mutual Funds
101 Montgomery St
San Francisco, CA 94104-4151 9.42% -- -- --
Citigroup Global Markets House
Acct
Attn: Cindy Tempesta, 7th Floor
333 W. 34th St
New York, NY 10001-2402 -- 6.64% -- --
Judith C. Foss
Judith C Foss
336 Cousins St
Yarmouth, ME 04096-5508 -- -- 12.41% --
Jennifer R. Jacobson
Jennifer R. Jocobson
PO Box 677
Yarmouth, ME 04096-0677 -- -- 9.49% --
Merrill Lynch Pierce Fenner &
Smith
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr. East
2nd Floor
Jacksonville, FL 32246-6484 -- 18.89% -- --
MG Trustco 401k
FBO Heifer International
Foundation 403B
700 17th St Ste 300
Denver, CO 80202-3531 -- -- 7.46% --
MG Trustco Cust FBO
Heifer International Foundation
Emp
700 17th Street Suite 300
Denver, CO 80202-3531 -- -- 6.81% --
Morgan Stanley DW
Attn: Mutual Fund Operations
3 Harborside Pl
Floor 6
Jersey City, NJ 07311-3907 -- 5.34% -- --
Pershing LLC
1 Pershing Plz
Jersey City, NJ 07339-0001 14.74% 15.75% -- --
George E. Prescott
George E. Prescott
4 Windward Ln
Scarborough, ME 04074-8244 -- -- 33.28% --
Ryder Creative Inc
Thomas A. Ryder
5 Old Oregon Trl
Acton, MA 01720-7744 -- -- 10.35% --
Wells Fargo Investments LLC
625 Marquette Ave S, 13th Floor
Minneapolis, MN 55402-2308 -- -- -- 10.30%
|
AIM MULTI-SECTOR FUND
INSTITUTIONAL CLASS
CLASS A SHARES CLASS B SHARES CLASS C SHARES SHARES
-------------- -------------- -------------- -------------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD RECORD
------------------- -------------- -------------- -------------- -------------------
AIM Growth Allocation Fund
Omnibus Account
C/O AIM Advisors
11 E. Greenway Plz Ste 100
Houston TX 77046-1113 -- -- -- 52.46%
AIM Moderate Asset Allocation Fund
Omnibus Account
C/O AIM Advisors
11 E. Greenway Plz Ste 100
Houston TX 77046-1113 -- -- -- 22.45%
AIM Moderate Growth Allocation
Fund Omnibus Account
C/O AIM Advisors
11 E. Greenway Plz Ste 100
Houston TX 77046-1113 -- -- -- 21.24%
Charles Schwab & Co Inc.
Special Custody Acct for the
Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco CA 94104-4122 33.78% -- -- --
Merrill Lynch
4800 Deer Lake Dr East
Jacksonville FL, 32246-6484 -- -- 6.87% --
Pershing LLC
1 Pershing Plz
Jersey City, NJ 07399-0001 10.34% 15.64% 21.93% --
|
AIM SELECT REAL ESTATE INCOME FUND
INSTITUTIONAL CLASS
CLASS A SHARES CLASS B SHARES CLASS C SHARES SHARES
-------------- -------------- -------------- -------------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD RECORD
------------------- -------------- -------------- -------------- -------------------
A I M Advisors Inc.
Attn: Corporate Controller
11 E. Greenway Plz, Ste 1919
Houston, TX 77046-1103 -- 5.75% -- 100.00%
American Enterprise Investment
Svcs.
PO Box 9446
Minneapolis, MN 55474-0001 -- 6.33% -- --
ANTC
Atlas Engineering, Inc.
Tom Caldwell
6205 Winthrop Dr
Raleigh, NC 27612-2145 -- 11.04% -- --
|
INSTITUTIONAL CLASS
CLASS A SHARES CLASS B SHARES CLASS C SHARES SHARES
-------------- -------------- -------------- -------------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD RECORD
------------------- -------------- -------------- -------------- -------------------
ANTC
Baptist Medical & Dental Mission
Margaret P. Carr
134 Zabe Rd
Mount Olive, MS 39119-5389 -- 5.76% -- --
ANTC Cust IRA FBO
Joseph Prescia
3607 E. Old Spanish Trl
New Iberia, LA 70560-8282 -- -- 7.37% --
Bon Temps Ventures
Robert E. George
31325 Shannon Dr.
Lacombe, LA 70445-2811 -- -- 11.89% --
Charles Schwab & Co Inc
101 Montgomery St
San Francisco, CA 94104-4151 5.31% -- -- --
Citigroup Global Markets House
Acct
Attn: Cindy Tempesta, 7th Floor
333 W. 34th St
New York, NY 10001-2402 23.55% -- -- --
Carle G. Danis
178 Old Post Rd
Arundel, ME 04046-7710 -- -- 5.45% --
Joseph F. Dimaria
Joseph F. Dimaria
602 Place Du Bois
Mandeville, LA 70471-1720 -- 15.45% -- --
LPL Financial Services
9785 Towne Centre Dr
San Diego, CA 92121-1968 -- -- 9.25% --
Merrill Lynch Pierce Fenner &
Smith
FBO The Sole Benefit of Customers
Attn: Fund Administration
4800 Deer Lake Dr East 2nd Floor
Jacksonville, FL 32246-6484 11.19% -- -- --
NFS LLC FBO
George R. McClelland
Catherine H. McClelland
14000 Fox Run Ct
Phoenix, MD 21131-1852 -- -- 30.97% --
NFS LLC FBO #
NFS / FMTC IRA
FBO Robert C. Wren II
6 Blueberry Ln
Stockton Springs, ME 04981-4119 -- 5.91% -- --
Pershing LLC
1 Pershing Plz
Jersey City, NJ 07399-0001 -- 22.05% 14.37% --
|
AIM STRUCTURED CORE FUND
CLASS A CLASS B CLASS C CLASS R INSTITUTIONAL INVESTOR
SHARES SHARES SHARES SHARES CLASS SHARES CLASS SHARES*
---------- ---------- ---------- ---------- ------------- -------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD RECORD RECORD RECORD
------------------- ---------- ---------- ---------- ---------- ------------- -------------
A I M Advisors(1)
Attn: Corporate Controller
11 E. Greenway Plz
Suite 1919
Houston, TX 77046-1103 44.43% 77.34% 64.52% 99.40% 72.68%
Charles Schwab & Co Inc.
Special Custody FBO
Customers (SIM)
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4151 9.42% -- -- -- --
Frank Cristo & Jeffrey
Isaacs TTEES
District #15 Ordinary Life
Fund UA
DTD 03-01-2007
43 N. Central Avenue
Valley Stream, NY 11580-3897 -- -- -- -- 27.32% --
Merrill Lynch Pierce Fenner
& Smith
FBO The Sole Benefit of
Customers
Attn: Fund Administration
4800 Deer Lake Dr East 2nd Floor
Jacksonville, FL 32246-6484 -- -- 18.70% -- -- --
NFS LLC FBO
Merrill Lynch Bk&Tr Co FSB
Merrill Lynch Bk&Tr Co FSB
210 West 90th Street #6B
New York, NY 10024-1242 10.97% -- -- -- --
|
(1) Owned of record and beneficially.
* Investor Class shares commenced operations on December 20, 2007.
AIM STRUCTURED GROWTH FUND
CLASS A CLASS B CLASS C CLASS R INSTITUTIONAL
SHARES SHARES SHARES SHARES CLASS SHARES
---------- ---------- ---------- ---------- -------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD RECORD RECORD
------------------- ---------- ---------- ---------- ---------- -------------
A I M Advisors, Inc.
Attn: Corporate Controller
11 E. Greenway Plaza
Suite 1919
Houston, TX 77046-1103 -- -- -- 27.69% --
AIM Growth Allocation
Fund Omnibus Account
C/O AIM Advisors
11 E. Greenway Plz
Ste 100
Houston, TX 77046-1113 -- -- -- -- 42.43%
AIM Moderate Asset
Allocation Fund Omnibus
Account
C/O AIM Advisors
11 E. Greenway Plz
Ste 100
Houston, TX 77046-1113 -- -- -- -- 28.38%
AIM Moderate Growth
Allocation Fund Omnibus
Account
C/O AIM Advisors
11 Greenway Plz
Ste 100
Houston, TX 77046-1113 -- -- -- -- 23.62%
Amoskeag Chiropractic Inc.
Edward J. Rusher
357 Coolidge Ave
Manchester, NH 03102-3206 -- -- -- 44.98% --
Amoskeag Chiropractic Inc.
Eleanor Rusher
357 Coolidge Ave
Manchester, NH 03102-3206 -- -- -- 26.16% --
ANTC Cust IRA R/O
FBO Lisa M. Butterfield
Lisa Butterfield
169 Limerock Rd
Smithfield, RI 02917-1916 -- 5.41% -- -- --
Charles Schwab & Co Inc
Special Custody Acct
FBO Customers
Attn: Mutual Funds
101 Montgomery St
San Francisco, CA 94104-4151 -- -- 14.88% -- --
|
CLASS A CLASS B CLASS C CLASS R INSTITUTIONAL
SHARES SHARES SHARES SHARES CLASS SHARES
---------- ---------- ---------- ---------- -------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD RECORD RECORD
------------------- ---------- ---------- ---------- ---------- -------------
LPL Financial Services
9785 Towne Centre Drive
San Diego, CA 92121-1968 -- 11.43% -- -- --
Merrill Lynch Pierce
Fenner & Smith
FBO The Sole Benefit of
Customers
Attn: Fund Administration
48800 Deer Lake Dr. East
2nd Floor
Jacksonville, FL 32246-6484 24.76% 10.50% 68.60% -- --
Morgan Stanley DW
Attn: Mutual Fund
Operations
3 Harborside Pl FL 6
Jersey City, NJ 07311-3907 8.17% -- -- -- --
NFS LLC FBO
Bruce Jacobs
PO Box 204
Richmond, VT 05477-0204 -- 6.00% -- -- --
Pershing LLC
1 Pershing Plz
Jersey City, NJ 07399-0001 31.75% -- -- -- --
|
AIM STRUCTURED VALUE FUND
CLASS A CLASS B CLASS C CLASS R INSTITUTIONAL
SHARES SHARES SHARES SHARES CLASS SHARES
---------- ---------- ---------- ---------- -------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD RECORD RECORD
------------------- ---------- ---------- ---------- ---------- -------------
A G Edwards & Sons Inc C/F
Patric A. Thomas
IRA Account
262 Shady Oaks Ct
Baton Rouge, LA 70810-5349 -- 5.00% -- -- --
A I M Advisors, Inc.
Attn: Corporate Controller
11 E. Greenway Plaza
Suite 1919
Houston, TX 77046-1103 -- -- -- 13.48% --
|
CLASS A CLASS B CLASS C CLASS R INSTITUTIONAL
SHARES SHARES SHARES SHARES CLASS SHARES
---------- ---------- ---------- ---------- -------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD RECORD RECORD
------------------- ---------- ---------- ---------- ---------- -------------
AIM Growth Allocation
Fund Omnibus Account
C/O AIM Advisors
11 E. Greenway Plz
Ste 100
Houston, TX 77046-1113 -- -- -- -- 43.45%
AIM Moderate Asset
Allocation Fund Omnibus
Account
C/O AIM Advisors
11 E. Greenway Plz
Ste 100
Houston, TX 77046-1113 -- -- -- -- 26.56%
AIM Moderate Growth
Allocation Fund Omnibus
Account
C/O AIM Advisors
11 Greenway Plz
Ste 100
Houston, TX 77046-1113 -- -- -- -- 23.46%
Amoskeag Chiropractic Inc.
Edward J. Rusher
357 Coolidge Ave
Manchester, NH 03102-3206 -- -- -- 54.14% --
Amoskeag Chiropractic Inc.
Eleanor Rusher
357 Coolidge Ave
Manchester, NH 03102-3206 -- -- -- 31.63% --
ANTC
Capital Q
Kelly Bleak
PO Box 823
Heber, AZ 85928-0823 -- -- 5.65% -- --
ANTC
Victorian Sales
William T. Spangler
536 Smith Ct
Robertsville, MO 63072-1938 -- -- 9.11% -- --
ANTC
Sudon Brothers Inc
Joseph Sudon
4958 Maple St
Vienna, OH 44473-9632 -- -- 5.51% -- --
ANTC Cust IRA
FBO Gary R. Warren
18 Dunmow Cres
Fairport, NY 14450-3837 -- -- 5.63% -- --
|
CLASS A CLASS B CLASS C CLASS R INSTITUTIONAL
SHARES SHARES SHARES SHARES CLASS SHARES
---------- ---------- ---------- ---------- -------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
NAME AND ADDRESS OF OWNED OF OWNED OF OWNED OF OWNED OF OWNED OF
PRINCIPAL HOLDER RECORD RECORD RECORD RECORD RECORD
------------------- ---------- ---------- ---------- ---------- -------------
Charles Schwab & Co Inc
Special Custody FBO
Customers (SIM)
Attn: Mutual Funds
101 Montgomery St
San Francisco, CA 94104-4151 7.84% -- -- -- --
Merrill Lynch Pierce Fenner
& Smith
FBO The Sole Benefit of
Customers
Attn: Fund Administration
4800 Deer lake Dr East 2nd
Floor
Jacksonville, FL 32246-6484 5.52% -- -- -- --
Pershing LLC
1 Pershing Plz
Jersey City, NJ 07399-0001 5.46% 6.11% 6.68% -- --
Resources Trust Company
FBO Joan R. Higley
PO Box 5900
Denver, CO 80217-5900 -- -- 7.91% -- --
Resources Trust Company
FBO Richard A. Pierce
PO Box 5900
Denver, CO 80217-5900 -- -- 8.41% -- --
Robert L. Shoss & Elizabeth
K. Shoss JTWROS
5320 Braeburn Dr
Bellaire, TX 77401-4802 8.79% -- -- -- --
USHA Balasubramanian & Bala
Balasubramanian JTWROS
1240 Normandy Dr
Blue Bell, PA 19422-1432 13.92% -- -- -- --
Window Treatments By Susan
Susan T. Keck
910 Bear Claw Way
Madison, WI 53717-2749 -- -- 9.48% -- --
|
MANAGEMENT OWNERSHIP
As of October 10, 2007, the trustees and officers as a group owned less than 1% of the outstanding shares of each class of each Fund, except the trustees and officers as a group owned 1.69% of the outstanding Class A Shares of AIM Structured Core Fund.
APPENDIX G
MANAGEMENT FEES
For the last three fiscal years ended August 31, the management fees payable by each Fund, the amounts waived by AIM and the net fees paid by each Fund were as follows:
2007 2006 2005
---------------------------------- ---------------------------------- ----------------------------------
MANAGEMENT MANAGEMENT NET MANAGEMENT MANAGEMENT NET MANAGEMENT MANAGEMENT NET
FEE FEE MANAGEMENT FEE FEE MANAGEMENT FEE FEE MANAGEMENT
FUND NAME PAYABLE WAIVERS FEE PAID PAYABLE WAIVERS FEE PAID PAYABLE WAIVERS FEE PAID
--------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
AIM Multi-Sector Fund 2,935,448 255,636 2,679,812 874,904 51,656 823,248
AIM Structured Core
Fund(1) 8,256 8,256 0 N/A N/A N/A
AIM Structured Growth
Fund(1) 19,191 19,191 0 N/A N/A N/A
AIM Structured Value
Fund(1) 17,557 17,557 0 N/A N/A N/A
|
(1) Commenced operations on March 31, 2006.
APPENDIX H
PORTFOLIO MANAGER(S)
PORTFOLIO MANAGER FUND HOLDINGS AND INFORMATION ON OTHER MANAGED ACCOUNTS
The following chart reflects the portfolio managers' investments in the
Funds that they manage. The chart also reflects information regarding accounts
other than the Funds for which each portfolio manager has day-to-day management
responsibilities. Accounts are grouped into three categories: (i) mutual funds,
(ii) other pooled investment vehicles, and (iii) other accounts. To the extent
that any of these accounts pay advisory fees that are based on account
performance ("performance-based fees"), information on those accounts is
specifically broken out. In addition, any assets denominated in foreign
currencies have been converted into U.S. Dollars using the exchange rates as of
the applicable date.
The following table reflects information as of August 31, 2007:
OTHER REGISTERED OTHER POOLED
DOLLAR MUTUAL FUNDS INVESTMENT VEHICLES OTHER ACCOUNTS
RANGE OF (ASSETS IN MILLIONS) (ASSETS IN MILLIONS) (ASSETS IN MILLIONS)
INVESTMENTS -------------------- -------------------- --------------------
IN EACH NUMBER OF NUMBER OF NUMBER OF
PORTFOLIO MANAGER FUND(1) ACCOUNTS ASSETS ACCOUNTS ASSETS ACCOUNTS ASSETS
----------------- ----------- ---------- ------ ---------- ------ ---------- ------
AIM FLOATING RATE FUND
Thomas Ewald
Gregory Stoeckle
AIM MULTI-SECTOR FUND
Michelle Fenton
Mark D. Greenberg
Lanny Sachnowitz(2)
|
[(1) This column reflects investments in a Fund's shares owned directly by a portfolio manager or beneficially owned by a portfolio manager (as determined in accordance with Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, as amended). A portfolio manager is presumed to be a beneficial owner of securities that are held by his or her immediate family members sharing the same household.
(2) Mr. Sachnowitz began serving as portfolio manager on AIM Multi-Sector Fund on March 12, 2007. The information provided for Mr. Sachnowitz is as of February 28, 2007.]
OTHER REGISTERED OTHER POOLED
DOLLAR MUTUAL FUNDS INVESTMENT VEHICLES OTHER ACCOUNTS
RANGE OF (ASSETS IN MILLIONS) (ASSETS IN MILLIONS) (ASSETS IN MILLIONS)
INVESTMENTS -------------------- -------------------- --------------------
IN EACH NUMBER OF NUMBER OF NUMBER OF
PORTFOLIO MANAGER FUND(1) ACCOUNTS ASSETS ACCOUNTS ASSETS ACCOUNTS ASSETS
----------------- ----------- ---------- ------ ---------- ------ ---------- ------
John S. Segner (3)
Michael J. Simon (3)
Derek Taner (4)
AIM STRUCTURED CORE FUND
Maureen Donnellan
Jeremy Lefkowitz
W. Lawson McWhorter
William E. Merson
Daniel Tsai
Anne M. Unflat
AIM STRUCTURED GROWTH FUND
Daniel A. Kostyk
Jeremy Lefkowitz
Anthony J. Munchak
Glen E. Murphy
Francis M. Orlando
AIM STRUCTURED VALUE FUND
Daniel A. Kostyk
Jeremy Lefkowitz
Anthony J. Munchak
Glen E. Murphy
|
[(1) This column reflects investments in a Fund's shares owned directly by a portfolio manager or beneficially owned by a portfolio manager (as determined in accordance with Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, as amended). A portfolio manager is presumed to be a beneficial owner of securities that are held by his or her immediate family members sharing the same household.
(3) These are accounts of individual investors for which AIM's affiliate, AIM Private Asset Management, Inc. ("APAM") provides investment advice. APAM offers separately managed accounts that are managed according to the investment models developed by AIM's portfolio managers and used in connection with the management of certain AIM funds. APAM accounts may be invested in accordance with one or more of those investment models and investments held in those accounts are traded in accordance with the applicable models.
(4) This amount includes a fund that pays performance-based fees with $149.5M in total assets under management.]
OTHER REGISTERED OTHER POOLED
DOLLAR MUTUAL FUNDS INVESTMENT VEHICLES OTHER ACCOUNTS
RANGE OF (ASSETS IN MILLIONS) (ASSETS IN MILLIONS) (ASSETS IN MILLIONS)
INVESTMENTS -------------------- -------------------- --------------------
IN EACH NUMBER OF NUMBER OF NUMBER OF
PORTFOLIO MANAGER FUND(1) ACCOUNTS ASSETS ACCOUNTS ASSETS ACCOUNTS ASSETS
----------------- ----------- ---------- ------ ---------- ------ ---------- ------
Francis M. Orlando
|
POTENTIAL CONFLICTS OF INTEREST
Actual or apparent conflicts of interest may arise when a portfolio manager has day-to-day management responsibilities with respect to more than one Fund or other account. More specifically, portfolio managers who manage multiple Funds and /or other accounts may be presented with one or more of the following potential conflicts:
- The management of multiple Funds and/or other accounts may result in a portfolio manager devoting unequal time and attention to the management of each Fund and/or other account. AIM seeks to manage such competing interests for the time and attention of portfolio managers by having portfolio managers focus on a particular investment discipline. Most other accounts managed by a portfolio manager are managed using the same investment models that are used in connection with the management of the Funds.
- If a portfolio manager identifies a limited investment opportunity which may be suitable for more than one Fund or other account, a Fund may not be able to take full advantage of that opportunity due to an allocation of filled purchase or sale orders across all eligible Funds and other accounts. To deal with these situations, AIM and the Funds have adopted procedures for allocating portfolio transactions across multiple accounts.
- With respect to securities transactions for the Funds, AIM determines which broker to use to execute each order, consistent with its duty to seek best execution of the transaction. However, with respect to certain other accounts (such as mutual funds for which AIM or an affiliate acts as sub-advisor, other pooled investment vehicles that are not registered mutual funds, and other accounts managed for organizations and individuals), AIM may be limited by the client with respect to the selection of brokers or may be instructed to direct trades through a particular broker. In these cases, trades for a Fund in a particular security may be placed separately from, rather than aggregated with, such other accounts. Having separate transactions with respect to a security may temporarily affect the market price of the security or the execution of the transaction, or both, to the possible detriment of the Fund or other account(s) involved.
- Finally, the appearance of a conflict of interest may arise where AIM has an incentive, such as a performance-based management fee, which relates to the management of one Fund or account but not all Funds and accounts with respect to which a portfolio manager has day-to-day management responsibilities.
AIM and the Funds have adopted certain compliance procedures which are designed to address these types of conflicts. However, there is no guarantee that such procedures will detect each and every situation in which a conflict arises.
DESCRIPTION OF COMPENSATION STRUCTURE
AIM ADVISORS, INC.
AIM seeks to maintain a compensation program that is competitively positioned to attract and retain high-caliber investment professionals. Portfolio managers receive a base salary, an incentive bonus opportunity, an equity compensation opportunity, a benefits package, and a relocation package if such benefit is applicable. Portfolio manager compensation is reviewed and may be modified each year as
appropriate to reflect changes in the market, as well as to adjust the factors used to determine bonuses to promote good sustained fund performance. AIM evaluates competitive market compensation by reviewing compensation survey results conducted by an independent third party of investment industry compensation. Each portfolio manager's compensation consists of the following five elements:
- BASE SALARY. Each portfolio manager is paid a base salary. In setting the base salary, AIM's intention is to be competitive in light of the particular portfolio manager's experience and responsibilities.
- ANNUAL BONUS. Each portfolio manager is eligible to receive an annual cash bonus which has quantitative and non-quantitative components. Generally, 70% of the bonus is quantitatively determined, based typically on a four-year rolling average of pre-tax performance of all registered investment company accounts for which a portfolio manager has day-to-day management responsibilities versus the performance of a pre-determined peer group. In instances where a portfolio manager has responsibility for management of more than one fund, an asset weighted four-year rolling average is used.
High fund performance (against applicable peer group) would deliver compensation generally associated with top pay in the industry (determined by reference to the third-party provided compensation survey information) and poor fund performance (versus applicable peer group) could result in no bonus. The amount of fund assets under management typically has an impact on the bonus potential (for example, managing more assets increases the bonus potential); however, this factor typically carries less weight than relative performance. The remaining 30% portion of the bonus is discretionary as determined by AIM and takes into account other subjective factors.
- EQUITY-BASED COMPENSATION. Portfolio managers may be awarded options to purchase common shares and/or granted restricted shares of AMVESCAP stock from pools determined from time to time by the Remuneration Committee of the AMVESCAP Board of Directors. Awards of equity-based compensation typically vest over time, so as to create incentives to retain key talent.
- PARTICIPATION IN GROUP PROGRAMS. Portfolio managers are provided life insurance coverage in the form of a group variable universal life insurance policy, under which they may make additional contributions to purchase additional insurance coverage or for investment purposes.
- PARTICIPATION IN DEFERRED COMPENSATION PLAN Portfolio managers are eligible to participate in a non-qualified deferred compensation plan, which affords participating employees the tax benefits of deferring the receipt of a portion of their cash compensation.
Portfolio managers also participate in benefit plans and programs available generally to all employees.
INVESCO INSTITUTIONAL, (N.A.) INC. (SUB-ADVISOR TO AIM STRUCTURED CORE FUND, AIM STRUCTURED GROWTH FUND, AND AIM STRUCTURED VALUE FUND)
INVESCO Institutional (N.A.), Inc. seeks to maintain a compensation program that is competitively positioned to attract and retain high-caliber investment professionals. Portfolio managers receive, as more fully described below, a base salary, an incentive bonus opportunity, an equity compensation opportunity, a benefits package, and a relocation package if such benefit is applicable. Portfolio manager compensation is reviewed and may be modified each year as appropriate to reflect changes in the market, as well as to adjust the factors used to determine bonuses to promote good sustained fund performance. INVESCO Institutional (N.A.), Inc. evaluates competitive market compensation by reviewing compensation survey results conducted by an independent third party of investment industry compensation. Each portfolio manager's compensation consists of the following five elements:
- BASE SALARY. Each portfolio manager is paid a base salary which is set at a level determined to be appropriate based upon an individual's experience and responsibilities through the use of independent compensation surveys of the investment management industry.
- ANNUAL BONUS. Each portfolio manager is paid an annual cash bonus which has a performance driven component and a discretionary component, the combined total of which will typically range from 50 to over 100 percent of the manager's base salary. Generally, the majority of the of the bonus is pre-tax performance driven, based on the success of the team's investment results which are measured against appropriate market benchmarks and peer groups. The remaining portion of the bonus is discretionary and is determined by the sub-advisor's Chief Investment Officer and Chief Executive Officer.
- EQUITY-BASED COMPENSATION. Portfolio managers may be awarded options to purchase common shares and/or granted restricted shares or deferred shares of AMVESCAP stock from pools determined from time to time by the Remuneration Committee of the AMVESCAP Board of Directors. Awards of equity-based compensation typically vest over time, so as to create incentives to retain key talent.
- PARTICIPATION IN GROUP INSURANCE PROGRAMS. Portfolio managers are provided life insurance coverage in the form of a group variable universal life insurance policy, under which they may make additional contributions to purchase additional insurance coverage or for investment purposes.
- PARTICIPATION IN DEFERRED COMPENSATION PLAN. Portfolio managers are eligible to participate in a non-qualified deferred compensation plan, which affords participating employees the tax benefits of deferring the receipt of a portion of their cash compensation.
Portfolio managers also participate in benefit plans and programs available generally to all employees.
INVESCO SENIOR SECURED MANAGEMENT, INC. (SUB-ADVISOR TO AIM FLOATING RATE FUND)
INVESCO Senior Secured Management, Inc. seeks to maintain a compensation program that is competitively positioned to attract and retain high-caliber investment professionals. Portfolio managers receive, as more fully described below, a base salary, an incentive bonus opportunity, an equity compensation opportunity, a benefits package, and a relocation package if such benefit is applicable. Portfolio manager compensation is reviewed and may be modified each year as appropriate to reflect changes in the market, as well as to adjust the factors used to determine bonuses to promote good sustained fund performance. INVESCO Senior Secured Management, Inc. evaluates competitive market compensation by reviewing compensation survey results conducted by an independent third party of investment industry compensation. Each portfolio manager's compensation consists of the following five elements:
- BASE SALARY. Each portfolio manager is paid a base salary which is set at a level determined to be appropriate based upon an individual's experience and responsibilities through the use of independent compensation surveys of the investment management industry.
- ANNUAL BONUS. Each portfolio manager is paid an annual cash bonus which has a performance driven component and a discretionary component, the combined total of which will typically range from 50 to over 100 percent of the manager's base salary. Generally, the majority of the bonus is pre-tax performance driven, based on the success of the team's investment results which are measured against appropriate market benchmarks and peer groups. The remaining portion of the bonus is discretionary and is determined by the sub-advisor's Chief Investment Officer and Chief Executive Officer.
- EQUITY-BASED COMPENSATION. Portfolio managers may be awarded options to purchase common shares and/or granted restricted shares or deferred shares of AMVESCAP stock from pools determined from time to time by the Remuneration Committee of the AMVESCAP Board of Directors. Awards of equity-based compensation typically vest over time, so as to create incentives to retain key talent.
- PARTICIPATION IN GROUP PROGRAMS. Portfolio managers are provided life insurance coverage in the form of a group variable universal life insurance policy, under which they may make additional contributions to purchase additional insurance coverage or for investment purposes.
- PARTICIPATION IN DEFERRED COMPENSATION PLAN. Portfolio managers are eligible to participate in a non-qualified deferred compensation plan, which affords participating employees the tax benefits of deferring the receipt of a portion of their cash compensation.
Portfolio managers also participate in benefit plans and programs available generally to all employees.
APPENDIX I
ADMINISTRATIVE SERVICES FEES
The Funds paid AIM the following amounts for administrative services for the last three fiscal years ended August 31:
FUND NAME 2007 2006 2005
--------- ---- ------- ------
AIM Multi-Sector Fund 120,020 50,000
AIM Structured Core Fund(1) 21,096 N/A
AIM Structured Growth Fund(1) 21,096 N/A
AIM Structured Value Fund(1) 21,096 N/A
|
(1) COMMENCED OPERATIONS ON MARCH 31, 2006.
APPENDIX J
BROKERAGE COMMISSIONS
Brokerage commissions(1) paid by each of the Funds listed below during the last three fiscal years ended August 31 were as follows:
FUND 2007 2006 2005
---- ---- ------- ------
AIM Multi-Sector Fund 818,221
AIM Structured Core Fund(2) 1,359 N/A
AIM Structured Growth Fund(2) 27,277 N/A
AIM Structured Value Fund(2) 20,489 N/A
|
(1) Disclosure regarding brokerage commissions are limited to commissions paid on agency trades and designated as such on the trade confirms.
(2) Commenced operations on March 31, 2006.
APPENDIX K
DIRECTED BROKERAGE (RESEARCH SERVICES) AND PURCHASES OF
SECURITIES OF REGULAR BROKERS OR DEALERS
During the last fiscal year ended August 31, 2007, each Fund allocated the following amount of transactions to broker-dealers that provided AIM with certain research, statistics and other information:
Related
Fund Transactions(1) Brokerage Commissions(1)
---- --------------- ------------------------
AIM Multi-Sector Fund
AIM Structured Core Fund
AIM Structured Growth Fund
AIM Structured Value Fund
|
(1) Amount is inclusive of commissions paid to, and brokerage transactions placed with, certain brokers that provide execution, research and other services.
During the last fiscal year ended August 31, 2007, the following Funds purchased securities by the following companies, which are "regular" brokers or dealers of one or more of the Funds identified below:
Market Value
Issuer Security (as of August 31, 2007)
------ -------- -----------------------
|
APPENDIX L
CERTAIN FINANCIAL ADVISORS THAT RECEIVE ONE OR MORE TYPES OF PAYMENTS
1st Global Capital Corporation
A G Edwards & Sons, Inc.
ADP Broker Dealer, Inc.
Advantage Capital Corporation
American General Securities, Inc.
American Skandia Life Assurance Corporation
American United Life Insurance Company
Ameriprise Financial Services, Inc.
APS Financial
Associated Securities Corporation
AXA Advisors, LLC
Bank of New York
Bank of Oklahoma N.A.
BBVA Investments
Bear Stearns Securities Co
Brown Brothers Harriman
Cadaret Grant & Company, Inc.
Cambridge Investment Research, Inc.
Cantella
Cantor Fitzgerald
Centennial Bank
Charles Schwab & Company, Inc.
Chase Investment Services Corporation
Chicago Mercantile Exchange
Citigroup
CitiCorp Investment Services
Citigroup Global Markets, Inc.
Citistreet Equities LLC
Comerica Bank
Commonwealth Financial Network
Compass Brokerage, Inc.
Contemporary Financial Solutions, Inc.
Credit Suisse
CUNA Brokerage Services, Inc.
CUSO Financial Services, Inc.
Equity Services, Inc.
Fidelity Brokerage Services, LLC
Fidelity Institutional Operations Company, Inc.
Fifth Third Bank
Financial Network Investment Corporation
Fiserv
Frost Brokerage Services, Inc.
Frost National Bank
FSC Securities Corporation
Fund Services Advisors
Goldman Sachs
Great West Life & Annuity Company
Guaranty Bank & Trust
Guardian Insurance & Annuity Company, Inc.
GunnAllen Finanical
Harris Nesbitt Burns
H. D. Vest Investment Securities, Inc.
Hilliard Lyons, Inc.
Hornor Townsend & Kent, Inc.
Huntington
ING Financial Partners, Inc.
ING USA Annuity and Life Insurance Company
Intersecurities, Inc.
INVEST Financial Corporation, Inc.
Investment Centers of America, Inc.
Jefferson Pilot Securities Corporation
JM Lummis Securities
JP Morgan Chase
LaSalle
Lincoln Financial Advisors Corporation
Lincoln Investment Planning, Inc.
Linsco/Private Ledger Corporation
M & I Trust
M & T Securities, Inc.
M M L Investors Services, Inc.
Matrix
McDonald Investments, Inc.
Mellon Financial
Merrill Lynch & Company, Inc.
Merrill Lynch Life Insurance Company
Metlife Securities, Inc.
Meyer Financial Group
Money Concepts Capital Corporation
Morgan Keegan & Company, Inc.
Morgan Stanley
Morgan Stanley DW Inc.
Multi-Financial Securities Corporation
Mutual Service Corporation
N F P Securities, Inc.
NatCity Investments, Inc.
National Planning Corporation
Nationwide Investment Services Corporation
New England Securities Corporation
Next Financial Group, Inc.
Northwestern Mutual Investment Services
NYLIFE Distributors, LLC
Oppenheimer & Company, Inc.
Pershing LLC
PFS Investments, Inc.
Piper Jaffray & Company
PNC Capital Markets
Primevest Financial Services, Inc.
Proequities, Inc.
R B C Centura Securities, Inc.
R B C Dain Rauscher, Inc.
Raymond James & Associates, Inc.
Raymond James Financial Services, Inc.
Ross Sinclair and Associates
Royal Alliance Associates, Inc.
SCF Securities
S I I Investments, Inc.
Securities America, Inc.
Sentra Securities Corporation
Signator Investors, Inc.
Simmons 1st Investment Group
Spelman & Company, Inc.
State Farm VP Management Corp
State Street Bank & Trust Company
SunAmerica Securities, Inc.
SunGard Institutional Brokerage, Inc.
Sungard Investment Products, Inc.
SunTrust Bank, Central Florida, N.A.
SunTrust Robinson Humphrey
SWS Financial Services
The (Wilson) William Financial
Tower Square Securities, Inc.
Transamerica Financial Advisors, Inc.
Transamerica Life Insurance & Annuity Company
Trust Management Network
U.S. Bancorp Investments, Inc.
UBS Financial Services Inc.
Union Bank of California
United Planner Financial Service
USAllianz Securities, Inc.
US Bank
UVEST Financial Services, Inc.
V S R Financial Services, Inc.
VALIC Financial Advisors, Inc.
vFinance Investments
Wachovia Capital Markets LLC
Wachovia Securities, LLC
Walnut Street Securities, Inc.
Waterstone Financial Group, Inc.
Wells Fargo Investments, LLC
Woodbury Financial Services, Inc.
X C U Capital Corporation, Inc.
Zions Bank
APPENDIX M
AMOUNTS PAID TO A I M DISTRIBUTORS, INC. PURSUANT TO DISTRIBUTION PLANS
A list of amounts paid by each class of shares to AIM Distributors pursuant to the Plans for the fiscal year ended August 31, 2007 follows:
INVESTOR
CLASS A CLASS B CLASS C CLASS R CLASS
FUND SHARES SHARES SHARES SHARES SHARES
---- ------- ------- ------- ------- --------
AIM Multi-Sector Fund N/A N/A
AIM Structured Core Fund N/A
AIM Structured Growth Fund N/A
AIM Structured Value Fund N/A
|
(1) Commenced operations on December 20, 2007.
APPENDIX N
ALLOCATION OF ACTUAL FEES PAID PURSUANT TO DISTRIBUTION PLANS
An estimate by category of the allocation of actual fees paid by Class A shares of the Funds during the fiscal year ended August 31, 2007 follows:
PRINTING & UNDERWRITERS DEALERS TRAVEL RELATING
ADVERTISING MAILING SEMINARS COMPENSATION COMPENSATION TO MARKETING PERSONNEL
----------- ---------- -------- ------------ ------------ --------------- ---------
AIM Multi-Sector Fund
AIM Structured Core Fund
AIM Structured Growth Fund
AIM Structured Value Fund
|
An estimate by category of the allocation of actual fees paid by Class B shares of the Funds during the fiscal year ended August 31, 2007 follows:
PRINTING & UNDERWRITERS DEALERS TRAVEL RELATING
ADVERTISING MAILING SEMINARS COMPENSATION COMPENSATION TO MARKETING PERSONNEL
----------- ---------- -------- ------------ ------------ --------------- ---------
AIM Multi-Sector Fund
AIM Structured Core Fund
AIM Structured Growth Fund
AIM Structured Value Fund
|
An estimate by category of the allocation of actual fees paid by Class C shares of the Funds during the fiscal year ended August 31, 2007 follows:
PRINTING & UNDERWRITERS DEALERS TRAVEL RELATING
ADVERTISING MAILING SEMINARS COMPENSATION COMPENSATION TO MARKETING PERSONNEL
----------- ---------- -------- ------------ ------------ --------------- ---------
AIM Multi-Sector Fund
AIM Structured Core Fund
AIM Structured Growth Fund
AIM Structured Value Fund
|
An estimate by category of the allocation of actual fees paid by Class R shares of the Funds during the fiscal year ended August 31, 2007 follows:
PRINTING & UNDERWRITERS DEALERS TRAVEL RELATING
ADVERTISING MAILING SEMINARS COMPENSATION COMPENSATION TO MARKETING PERSONNEL
----------- ---------- -------- ------------ ------------ --------------- ---------
AIM Multi-Sector Fund(1)
AIM Structured Core Fund
AIM Structured Growth Fund
AIM Structured Value Fund
|
(1) Class R shares are not offered.
As of the date of this Statement of Additional Information, the Investor Class shares of AIM Structured Core Fund had not yet commenced operations.
APPENDIX O
TOTAL SALES CHARGES
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 last three fiscal years ending August 31:
2007 2006 2005
------------------ ------------------------ ------------------
SALES AMOUNT AMOUNT SALES AMOUNT
CHARGES RETAINED SALES CHARGES RETAINED CHARGES RETAINED
------- -------- ------------- -------- ------- --------
AIM Multi-Sector Fund 1,939,743 293,781 356,171 52,345
AIM Structured Core Fund(1) 2,138 421 N/A N/A
AIM Structured Growth Fund(1) 3,034 566 N/A N/A
AIM Structured Value Fund(1) 2,494 381 N/A N/A
|
The following chart reflects the contingent deferred sales charges paid by Class A, Class B, Class C and Class R shareholders and retained by AIM Distributors for the last three fiscal years ended August 31:
2007 2006 2005
---- ------ ------
AIM Multi-Sector Fund 50,045 17,040
AIM Structured Core Fund(1) -0- N/A
AIM Structured Growth Fund(1) -0- N/A
AIM Structured Value Fund(1) -0- N/A
|
(1) Commenced operations on March 31, 2006.
APPENDIX P-1
PENDING LITIGATION ALLEGING MARKET TIMING
The following civil lawsuits, including purported class action and shareholder derivative suits, involve, depending on the lawsuit, one or more AIM Funds, IFG, AIM, AIM Management, INVESCO, certain related entities, certain of their current and former officers and/or certain unrelated third parties and are based on allegations of improper market timing and related activity in the AIM Funds. These lawsuits either have been served or have had service of process waived (with the exception of the Sayegh lawsuit discussed below).
RICHARD LEPERA, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, V.
INVESCO FUNDS GROUP, INC., INVESCO STOCK FUNDS, INC., INVESCO BOND FUNDS,
INC., INVESCO SECTOR FUNDS, INC. AND DOE DEFENDANTS 1-100, in the District
Court, City and County of Denver, Colorado, (Civil Action No. 03-CV-7600),
filed on October 2, 2003. This claim alleges: common law breach of
fiduciary duty; common law breach of contract; and common law tortious
interference with contract. The plaintiff in this case is seeking:
compensatory and punitive damages; injunctive relief; disgorgement of
revenues and profits; and costs and expenses, including counsel fees and
expert fees.
MIKE SAYEGH, ON BEHALF OF THE GENERAL PUBLIC, V. JANUS CAPITAL CORPORATION,
JANUS CAPITAL MANAGEMENT LLC, JANUS INVESTMENT FUND, EDWARD J. STERN,
CANARY CAPITAL PARTNERS LLC, CANARY INVESTMENT MANAGEMENT LLC, CANARY
CAPITAL PARTNERS LTD., KAPLAN & CO. SECURITIES INC., BANK ONE CORPORATION,
BANC ONE INVESTMENT ADVISORS, THE ONE GROUP MUTUAL FUNDS, BANK OF AMERICA
CORPORATION, BANC OF AMERICA CAPITAL MANAGEMENT LLC, BANC OF AMERICA
ADVISORS LLC, NATIONS FUND INC., ROBERT H. GORDON, THEODORE H. SIHPOL III,
CHARLES D. BRYCELAND, SECURITY TRUST COMPANY, STRONG CAPITAL MANAGEMENT
INC., JB OXFORD & COMPANY, ALLIANCE CAPITAL MANAGEMENT HOLDING L.P.,
ALLIANCE CAPITAL MANAGEMENT L.P., ALLIANCE CAPITAL MANAGEMENT CORPORATION,
AXA FINANCIAL INC., ALLIANCEBERNSTEIN REGISTRANTS, GERALD MALONE, CHARLES
SCHAFFRAN, MARSH & MCLENNAN COMPANIES, INC., PUTNAM INVESTMENTS TRUST,
PUTNAM INVESTMENT MANAGEMENT LLC, PUTNAM INVESTMENT FUNDS, AND DOES 1-500,
in the Superior Court of the State of California, County of Los Angeles
(Case No. BC304655), filed on October 22, 2003 and amended on December 17,
2003 to substitute INVESCO Funds Group, Inc. and Raymond R. Cunningham for
unnamed Doe defendants. This claim alleges unfair business practices and
violations of Sections 17200 and 17203 of the California Business and
Professions Code. The plaintiff in this case is seeking: injunctive relief;
restitution, including pre-judgment interest; an accounting to determine
the amount to be returned by the defendants and the amount to be refunded
to the public; the creation of an administrative process whereby injured
customers of the defendants receive their losses; and counsel fees.
RAJ SANYAL, DERIVATIVELY ON BEHALF OF NATIONS INTERNATIONAL EQUITY FUND, V. WILLIAM P. CARMICHAEL, WILLIAM H. GRIGG, THOMAS F. KELLER, CARL E. MUNDY, JR., CORNELIUS J. PINGS, A. MAX WALKER, CHARLES B. WALKER, EDMUND L. BENSON, III, ROBERT H. GORDON, JAMES B. SOMMERS, THOMAS S. WORD, JR., EDWARD D. BEDARD, GERALD MURPHY, ROBERT B. CARROLL, INVESCO GLOBAL ASSET
MANAGEMENT, PUTNAM INVESTMENT MANAGEMENT, BANK OF AMERICA CORPORATION, MARSICO CAPITAL MANAGEMENT, LLC, BANC OF AMERICA ADVISORS, LLC, BANC OF AMERICA CAPITAL MANAGEMENT, LLC, AND NATIONS FUNDS TRUST, in the Superior Court Division, State of North Carolina (Civil Action No. 03-CVS-19622), filed on November 14, 2003.
This claim alleges common law breach of fiduciary duty; abuse of control; gross mismanagement; waste of fund assets; and unjust enrichment. The plaintiff in this case is seeking: injunctive relief, including imposition of a constructive trust; damages; restitution and disgorgement; and costs and expenses, including counsel fees and expert fees.
L. SCOTT KARLIN, DERIVATIVELY ON BEHALF OF INVESCO FUNDS GROUP, INC. V.
AMVESCAP, PLC, INVESCO, INC., CANARY CAPITAL PARTNERS, LLC, CANARY
INVESTMENT MANAGEMENT, LLC, AND CANARY CAPITAL PARTNERS, LTD., in the
United States District Court, District of Colorado (Civil Action No.
03-MK-2406), filed on November 28, 2003. This claim alleges violations of
Section 36(b) of the Investment Company Act of 1940 ("Investment Company
Act"), and common law breach of fiduciary duty. The plaintiff in this case
is seeking damages and costs and expenses, including counsel fees and
expert fees.
RICHARD RAVER, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,
V. INVESCO FUNDS GROUP, INC., INVESCO STOCK FUNDS, INC, AIM MANAGEMENT
GROUP, INC., AIM STOCK FUNDS, AIM STOCK FUNDS, INC., AMVESCAP PLC, INVESCO
ADVANTAGE HEALTH SCIENCES FUND, INVESCO CORE EQUITY FUND, INVESCO DYNAMICS
FUND, INVESCO ENERGY FUND, INVESCO FINANCIAL SERVICES FUND, INVESCO GOLD &
PRECIOUS METALS FUND, INVESCO HEALTH SCIENCES FUND, INVESCO INTERNATIONAL
CORE EQUITY FUND, INVESCO LEISURE FUND, INVESCO MID-CAP GROWTH FUND,
INVESCO MULTI-SECTOR FUND, INVESCO S&P 500 INDEX FUND, INVESCO SMALL
COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, INVESCO TOTAL RETURN FUND,
INVESCO UTILITIES FUND, INVESCO ADVANTAGE FUND, INVESCO BALANCED FUND,
INVESCO EUROPEAN FUND, INVESCO GROWTH FUND, INVESCO HIGH YIELD FUND,
INVESCO GROWTH & INCOME FUND, INVESCO INTERNATIONAL BLUE CHIP VALUE FUND,
INVESCO REAL ESTATE OPPORTUNITY FUND, INVESCO SELECT FUND, INVESCO TAX-FREE
BOND FUND, INVESCO TELECOMMUNICATIONS FUND, INVESCO U.S. GOVERNMENT
SECURITIES FUND, INVESCO VALUE FUND, EDWARD J. STERN, CANARY INVESTMENT
MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., CANARY CAPITAL PARTNERS,
LLC, AND DOES 1-100, in the United States District Court, District of
Colorado (Civil Action No. 03-F-2441), filed on December 2, 2003. This
claim alleges violations of: Sections 11 and 15 of the Securities Act of
1933 (the "Securities Act"); Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 (the "Exchange Act"); Rule 10b-5 under the Exchange
Act; and Sections 34(b), 36(a) and 36(b) of the Investment Company Act. The
claim also alleges common law breach of fiduciary duty. The plaintiffs in
this case are seeking: damages; pre-judgment and post-judgment interest;
counsel fees and expert fees; and other relief.
JERRY FATTAH, CUSTODIAN FOR BASIM FATTAH, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. INVESCO ADVANTAGE HEALTH SCIENCES FUND, INVESCO CORE EQUITY FUND, INVESCO DYNAMICS FUND, INVESCO ENERGY FUND, INVESCO FINANCIAL SERVICES FUND, INVESCO GOLD & PRECIOUS METALS FUND, INVESCO HEALTH SCIENCES FUND, INVESCO INTERNATIONAL CORE EQUITY FUND (FORMERLY KNOWN AS INTERNATIONAL BLUE CHIP VALUE FUND), INVESCO LEISURE FUND, INVESCO MID-CAP GROWTH FUND, INVESCO MULTI-SECTOR FUND, AIM INVESCO S&P 500 INDEX FUND, INVESCO SMALL COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, INVESCO TOTAL RETURN FUND, INVESCO UTILITIES FUND, AIM MONEY MARKET FUND, AIM INVESCO TAX-FREE MONEY FUND, AIM INVESCO TREASURER'S MONEY MARKET RESERVE FUND, AIM INVESCO TREASURER'S TAX-EXEMPT RESERVE FUND, AIM INVESCO U.S. GOVERNMENT MONEY FUND, INVESCO ADVANTAGE FUND, INVESCO BALANCED FUND, INVESCO EUROPEAN FUND, INVESCO
GROWTH FUND, INVESCO HIGH YIELD FUND, INVESCO GROWTH & INCOME FUND, INVESCO
REAL ESTATE OPPORTUNITY FUND, INVESCO SELECT INCOME FUND, INVESCO TAX-FREE
BOND FUND, INVESCO TELECOMMUNICATIONS FUND, INVESCO U.S. GOVERNMENT
SECURITIES FUND, INVESCO VALUE FUND, INVESCO, INVESCO LATIN AMERICAN GROWTH
FUND (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS"), AIM STOCK FUNDS, AIM
COUNSELOR SERIES TRUST, AIM SECTOR FUNDS INC., AIM BOND FUNDS INC., AIM
COMBINATION STOCK AND BOND FUNDS INC., AIM MONEY MARKET FUNDS INC., AIM
INTERNATIONAL FUNDS INC. (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS
REGISTRANTS"), AMVESCAP PLC, INVESCO FUNDS GROUP INC., TIMOTHY MILLER,
RAYMOND CUNNINGHAM, THOMAS KOLBE, EDWARD STERN, AMERICAN SKANDIA INC.,
BREAN MURRAY & CO., INC., CANARY CAPITAL PARTNERS, LLC, CANARY INVESTMENT
MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., AND JOHN DOES 1-100, in the
United States District Court, District of Colorado (Civil Action No.
03-F-2456), filed on December 4, 2003. This claim alleges violations of:
Sections 11 and 15 of Securities Act; Sections 10(b) and 20(a) of the
Exchange Act; Rule 10b-5 under the Exchange Act; and Section 206 of the
Investment Advisers Act of 1940, as amended (the "Advisers Act"). The
plaintiffs in this case are seeking: compensatory damages; rescission;
return of fees paid; accounting for wrongfully gotten gains, profits and
compensation; restitution and disgorgement; and other costs and expenses,
including counsel fees and expert fees.
EDWARD LOWINGER AND SHARON LOWINGER, INDIVIDUALLY AND ON BEHALF OF ALL
OTHERS SIMILARLY SITUATED, V. INVESCO ADVANTAGE HEALTH SCIENCES FUND,
INVESCO CORE EQUITY FUND, INVESCO DYNAMICS FUND, INVESCO ENERGY FUND,
INVESCO FINANCIAL SERVICES FUND, INVESCO GOLD & PRECIOUS METALS FUND,
INVESCO HEALTH SCIENCES FUND, INVESCO INTERNATIONAL CORE EQUITY FUND
(FORMERLY KNOWN AS INTERNATIONAL BLUE CHIP VALUE FUND), INVESCO LEISURE
FUND, INVESCO MID-CAP GROWTH FUND, INVESCO MULTI-SECTOR FUND, AIM INVESCO
S&P 500 INDEX FUND, INVESCO SMALL COMPANY GROWTH FUND, INVESCO TECHNOLOGY
FUND, INVESCO TOTAL RETURN FUND, INVESCO UTILITIES FUND, AIM MONEY MARKET
FUND, AIM INVESCO TAX-FREE MONEY FUND, AIM INVESCO TREASURER'S MONEY MARKET
RESERVE FUND, AIM INVESCO TREASURER'S TAX-EXEMPT RESERVE FUND, AIM INVESCO
U.S. GOVERNMENT MONEY FUND, INVESCO ADVANTAGE FUND, INVESCO BALANCED FUND,
INVESCO EUROPEAN FUND, INVESCO GROWTH FUND, INVESCO HIGH-YIELD FUND,
INVESCO GROWTH & INCOME FUND, INVESCO REAL ESTATE OPPORTUNITY FUND, INVESCO
SELECT INCOME FUND, INVESCO TAX-FREE BOND FUND, INVESCO TELECOMMUNICATIONS
FUND, INVESCO U.S. GOVERNMENT SECURITIES FUND, INVESCO VALUE FUND, INVESCO;
INVESCO LATIN AMERICAN GROWTH FUND (COLLECTIVELY KNOWN AS THE "INVESCO
FUNDS"), AIM STOCK FUNDS, AIM COUNSELOR SERIES TRUST, AIM SECTOR FUNDS
INC., AIM BOND FUNDS INC., AIM COMBINATION STOCK AND BOND FUNDS INC., AIM
MONEY MARKET FUNDS INC., AIM INTERNATIONAL FUNDS INC. (COLLECTIVELY KNOWN
AS THE "INVESCO FUNDS REGISTRANTS"), AMVESCAP PLC, INVESCO FUNDS GROUP,
INC., TIMOTHY MILLER, RAYMOND CUNNINGHAM, THOMAS KOLBE, EDWARD J. STERN,
AMERICAN SKANDIA INC., BREAN MURRAY & CO., INC., CANARY CAPITAL PARTNERS,
LLC, CANARY INVESTMENT MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., AND
JOHN DOES 1-100, in the United States District Court, Southern District of
New York (Civil Action No. 03-CV-9634), filed on December 4, 2003. This
claim alleges violations of: Sections 11 and 15 of the Securities Act;
Sections 10(b) and 20(a) of the Exchange Act; Rule 10b-5 under the Exchange
Act; and Section 206 of the Advisers Act. The plaintiffs in this case are
seeking: compensatory damages; rescission; return of fees paid; accounting
for wrongfully gotten gains, profits and compensation; restitution and
disgorgement; and other costs and expenses, including counsel fees and
expert fees.
JOEL GOODMAN, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,
V. INVESCO FUNDS GROUP, INC. AND RAYMOND R. CUNNINGHAM, in the District
Court, City and County of Denver, Colorado (Case Number 03CV9268), filed on
December 5, 2003. This claim alleges common law breach of fiduciary duty
and aiding and abetting breach of fiduciary duty. The plaintiffs in this
case are seeking: injunctive relief; accounting for all damages and for all
profits and any special benefits obtained; disgorgement; restitution and
damages; costs and disbursements, including counsel fees and expert fees;
and equitable relief.
STEVEN B. EHRLICH, CUSTODIAN FOR ALEXA P. EHRLICH, UGTMA/FLORIDA, AND DENNY
P. JACOBSON, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,
V. INVESCO ADVANTAGE HEALTH SCIENCES FUND, INVESCO CORE EQUITY FUND,
INVESCO DYNAMICS FUND, INVESCO ENERGY FUND, INVESCO FINANCIAL SERVICES
FUND, INVESCO GOLD & PRECIOUS METALS FUND, INVESCO HEALTH SCIENCES FUND,
INVESCO INTERNATIONAL CORE EQUITY FUND (FORMERLY KNOWN AS INTERNATIONAL
BLUE CHIP VALUE FUND), INVESCO LEISURE FUND, INVESCO MID-CAP GROWTH FUND,
INVESCO MULTI-SECTOR FUND, AIM INVESCO S&P 500 INDEX FUND, INVESCO SMALL
COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, INVESCO TOTAL RETURN FUND,
INVESCO UTILITIES FUND, AIM MONEY MARKET FUND, AIM INVESCO TAX-FREE MONEY
FUND, AIM INVESCO TREASURERS MONEY MARKET RESERVE FUND, AIM INVESCO
TREASURERS TAX-EXEMPT RESERVE FUND, AIM INVESCO US GOVERNMENT MONEY FUND,
INVESCO ADVANTAGE FUND, INVESCO BALANCED FUND, INVESCO EUROPEAN FUND,
INVESCO GROWTH FUND, INVESCO HIGH-YIELD FUND, INVESCO GROWTH & INCOME FUND,
INVESCO REAL ESTATE OPPORTUNITY FUND, INVESCO SELECT INCOME FUND, INVESCO
TAX-FREE BOND FUND, INVESCO TELECOMMUNICATIONS FUND, INVESCO U.S.
GOVERNMENT SECURITIES FUND, INVESCO VALUE FUND, INVESCO LATIN AMERICAN
GROWTH FUND (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS"), AIM STOCK FUNDS,
AIM COUNSELOR SERIES TRUST, AIM SECTOR FUNDS INC., AIM BOND FUNDS INC., AIM
COMBINATION STOCK AND BOND FUNDS INC., AIM MONEY MARKET FUNDS INC., AIM
INTERNATIONAL FUNDS INC. (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS
REGISTRANTS"), AMVESCAP PLC, INVESCO FUNDS GROUP, INC., TIMOTHY MILLER,
RAYMOND CUNNINGHAM, THOMAS KOLBE, EDWARD J. STERN, AMERICAN SKANDIA INC.,
BREAN MURRAY & CO., INC., CANARY CAPITAL PARTNERS, LLC, CANARY INVESTMENT
MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., AND JOHN DOES 1-100, in the
United States District Court, District of Colorado (Civil Action No.
03-N-2559), filed on December 17, 2003. This claim alleges violations of:
Sections 11 and 15 of the Securities Act; Sections 10(b) and 20(a) of the
Exchange Act; Rule 10b-5 under the Exchange Act; and Section 206 of the
Advisers Act. The plaintiffs in this case are seeking: compensatory
damages; rescission; return of fees paid; accounting for wrongfully gotten
gains, profits and compensation; restitution and disgorgement; and other
costs and expenses, including counsel fees and expert fees.
JOSEPH R. RUSSO, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. INVESCO ADVANTAGE HEALTH SCIENCES FUND, INVESCO CORE EQUITY FUND, INVESCO DYNAMICS FUND, INVESCO ENERGY FUND, INVESCO FINANCIAL SERVICES FUND, INVESCO GOLD & PRECIOUS METALS FUND, INVESCO HEALTH SCIENCES FUND, INVESCO INTERNATIONAL CORE EQUITY FUND (FORMERLY KNOWN AS INTERNATIONAL BLUE CHIP VALUE FUND), INVESCO LEISURE FUND, INVESCO MID-CAP GROWTH FUND, INVESCO MULTI-SECTOR FUND, AIM INVESCO S&P 500 INDEX FUND, INVESCO SMALL COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, INVESCO TOTAL RETURN FUND, INVESCO UTILITIES FUND, AIM MONEY MARKET FUND, AIM INVESCO TAX-FREE MONEY FUND, AIM INVESCO TREASURERS MONEY MARKET RESERVE FUND,
AIM INVESCO TREASURERS TAX-EXEMPT RESERVE FUND, AIM INVESCO US GOVERNMENT
MONEY FUND, INVESCO ADVANTAGE FUND, INVESCO BALANCED FUND, INVESCO EUROPEAN
FUND, INVESCO GROWTH FUND, INVESCO HIGH-YIELD FUND, INVESCO GROWTH & INCOME
FUND, INVESCO REAL ESTATE OPPORTUNITY FUND, INVESCO SELECT INCOME FUND,
INVESCO TAX-FREE BOND FUND, INVESCO TELECOMMUNICATIONS FUND, INVESCO U.S.
GOVERNMENT SECURITIES FUND, INVESCO VALUE FUND, INVESCO LATIN AMERICAN
GROWTH FUND (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS"), AIM STOCK FUNDS,
AIM COUNSELOR SERIES TRUST, AIM SECTOR FUNDS INC., AIM BOND FUNDS INC., AIM
COMBINATION STOCK AND BOND FUNDS INC., AIM MONEY MARKET FUNDS INC., AIM
INTERNATIONAL FUNDS INC. (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS
REGISTRANTS"), AMVESCAP PLC, INVESCO FUNDS GROUP, INC., TIMOTHY MILLER,
RAYMOND CUNNINGHAM, THOMAS KOLBE, EDWARD J. STERN, AMERICAN SKANDIA INC.,
BREAN MURRAY & CO., INC., CANARY CAPITAL PARTNERS, LLC, CANARY INVESTMENT
MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., AND JOHN DOES 1-100, in the
United States District Court, Southern District of New York (Civil Action
No. 03-CV-10045), filed on December 18, 2003. This claim alleges violations
of: Sections 11 and 15 of the Securities Act; Sections 10(b) and 20(a) of
the Exchange Act; Rule 10b-5 under the Exchange Act; and Section 206 of the
Advisers Act. The plaintiffs in this case are seeking: compensatory
damages; rescission; return of fees paid; accounting for wrongfully gotten
gains, profits and compensation; restitution and disgorgement; and other
costs and expenses, including counsel fees and expert fees.
MIRIAM CALDERON, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY
SITUATED, V. AMVESCAP PLC, AVZ, INC., AMVESCAP RETIREMENT, INC., AMVESCAP
NATIONAL TRUST COMPANY, ROBERT F. MCCULLOUGH, GORDON NEBEKER, JEFFREY G.
CALLAHAN, INVESCO FUNDS GROUP, INC., RAYMOND R. CUNNINGHAM, AND DOES 1-100,
in the United States District Court, District of Colorado (Civil Action No.
03-M-2604), filed on December 24, 2003. This claim alleges violations of
Sections 404, 405 and 406B of the Employee Retirement Income Security Act
("ERISA"). The plaintiffs in this case are seeking: declarations that the
defendants breached their ERISA fiduciary duties and that they are not
entitled to the protection of Section 404(c)(1)(B) of ERISA; an order
compelling the defendants to make good all losses to a particular
retirement plan described in this case (the "Retirement Plan") resulting
from the defendants' breaches of their fiduciary duties, including losses
to the Retirement Plan resulting from imprudent investment of the
Retirement Plan's assets, and to restore to the Retirement Plan all profits
the defendants made through use of the Retirement Plan's assets, and to
restore to the Retirement Plan all profits which the participants would
have made if the defendants had fulfilled their fiduciary obligations;
damages on behalf of the Retirement Plan; imposition of a constructive
trust, injunctive relief, damages suffered by the Retirement Plan, to be
allocated proportionately to the participants in the Retirement Plan;
restitution and other costs and expenses, including counsel fees and expert
fees.
PAT B. GORSUCH AND GEORGE L. GORSUCH V. INVESCO FUNDS GROUP, INC. AND AIM
ADVISER, INC., in the United States District Court, District of Colorado
(Civil Action No. 03-MK-2612), filed on December 24, 2003. This claim
alleges violations of Sections 15(a), 20(a) and 36(b) of the Investment
Company Act. The plaintiffs in this case are seeking: rescission and/or
voiding of the investment advisory agreements; return of fees paid;
damages; and other costs and expenses, including counsel fees and expert
fees.
LORI WEINRIB, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. INVESCO FUNDS GROUP, INC., AIM STOCK FUNDS, AIM COUNSELOR SERIES TRUST, AIM SECTOR FUNDS INC., AIM BOND FUNDS INC., AIM COMBINATION
STOCK AND BOND FUNDS INC., AIM MONEY MARKET FUNDS INC., AIM INTERNATIONAL
FUNDS INC., AMVESCAP PLC, TIMOTHY MILLER, RAYMOND CUNNINGHAM, THOMAS KOLBE,
EDWARD J. STERN, AMERICAN SKANDIA INC., BREAN MURRAY & CO., INC., CANARY
CAPITAL PARTNERS, LLC, CANARY INVESTMENT MANAGEMENT, LLC, CANARY CAPITAL
PARTNERS, LTD., AND JOHN DOES 1-100, in the United States District Court,
Southern District of New York (Civil Action No. 04-CV-00492), filed on
January 21, 2004. This claim alleges violations of: Sections 11 and 15 of
the 1933 Act; Sections 10(b) and 20(a) of the Exchange Act; Rule 10b-5
under the Exchange Act; and Section 206 of the Advisers Act. The plaintiffs
in this case are seeking: compensatory damages; rescission; return of fees
paid; accounting for wrongfully gotten gains, profits and compensation;
restitution and disgorgement; and other costs and expenses, including
counsel fees and expert fees.
ROBERT S. BALLAGH, JR., INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY
SITUATED, V. INVESCO FUNDS GROUP, INC., INVESCO STOCK FUNDS, INC., AIM
MANAGEMENT GROUP, INC., AIM STOCK FUNDS, AIM STOCK FUNDS, INC., AMVESCAP
PLC, INVESCO ADVANTAGE HEALTH SCIENCES FUND, INVESCO CORE EQUITY FUND,
INVESCO DYNAMICS FUND, INVESCO ENERGY FUND, INVESCO FINANCIAL SERVICES
FUND, INVESCO GOLD & PRECIOUS METALS FUND, INVESCO HEALTH SCIENCES FUND,
INVESCO INTERNATIONAL CORE EQUITY FUND, INVESCO LEISURE FUND, INVESCO
MID-CAP GROWTH FUND, INVESCO MULTI-SECTOR FUND, INVESCO S&P 500 INDEX FUND,
INVESCO SMALL COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, INVESCO TOTAL
RETURN FUND, INVESCO UTILITIES FUND, INVESCO ADVANTAGE FUND, INVESCO
BALANCED FUND, INVESCO EUROPEAN FUND, INVESCO GROWTH FUND, INVESCO HIGH
YIELD FUND, INVESCO GROWTH & INCOME FUND, INVESCO INTERNATIONAL BLUE CHIP
VALUE FUND, INVESCO REAL ESTATE OPPORTUNITY FUND, INVESCO SELECT FUND,
INVESCO TAX-FREE BOND FUND, INVESCO TELECOMMUNICATIONS FUND, INVESCO U.S.
GOVERNMENT SECURITIES FUND, INVESCO VALUE FUND, EDWARD J. STERN, CANARY
INVESTMENT MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., CANARY CAPITAL
PARTNERS, LLC, AND DOES 1-100, in the United States District Court,
District of Colorado (Civil Action No. 04-MK-0152), filed on January 28,
2004. This claim alleges violations of: Sections 11 and 15 of the
Securities Act; Sections 10(b) and 20(a) of the Exchange Act; Rule 10b-5
under the Exchange Act; and Sections 34(b), 36(a) and 36(b) of the
Investment Company Act. The claim also alleges common law breach of
fiduciary duty. The plaintiffs in this case are seeking: damages;
pre-judgment and post-judgment interest; counsel fees and expert fees; and
other relief.
JONATHAN GALLO, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. INVESCO FUNDS GROUP, INC., INVESCO STOCK FUNDS, INC., AIM MANAGEMENT GROUP, INC., AIM STOCK FUNDS, AIM STOCK FUNDS, INC., AMVESCAP PLC, INVESCO ADVANTAGE HEALTH SCIENCES FUND, INVESCO CORE EQUITY FUND, INVESCO DYNAMICS FUND, INVESCO ENERGY FUND, INVESCO FINANCIAL SERVICES FUND, INVESCO GOLD & PRECIOUS METALS FUND, INVESCO HEALTH SCIENCES FUND, INVESCO INTERNATIONAL CORE EQUITY FUND, INVESCO LEISURE FUND, INVESCO MID-CAP GROWTH FUND, INVESCO MULTI-SECTOR FUND, INVESCO S&P 500 INDEX FUND, INVESCO SMALL COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, INVESCO TOTAL RETURN FUND, INVESCO UTILITIES FUND, INVESCO ADVANTAGE FUND, INVESCO BALANCED FUND, INVESCO EUROPEAN FUND, INVESCO GROWTH FUND, INVESCO HIGH YIELD FUND, INVESCO GROWTH & INCOME FUND, INVESCO INTERNATIONAL BLUE CHIP VALUE FUND, INVESCO REAL ESTATE OPPORTUNITY FUND, INVESCO SELECT FUND, INVESCO TAX-FREE BOND FUND, INVESCO TELECOMMUNICATIONS FUND, INVESCO U.S. GOVERNMENT SECURITIES FUND, INVESCO VALUE FUND, EDWARD J. STERN, CANARY
INVESTMENT MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., CANARY CAPITAL
PARTNERS, LLC, AND DOES 1-100, in the United States District Court,
District of Colorado (Civil Action No. 04-MK-0151), filed on January 28,
2004. This claim alleges violations of: Sections 11 and 15 of the
Securities Act; Sections 10(b) and 20(a) of the Exchange Act; Rule 10b-5
under the Exchange Act; and Sections 34(b), 36(a) and 36(b) of the
Investment Company Act. The claim also alleges common law breach of
fiduciary duty. The plaintiffs in this case are seeking: damages;
pre-judgment and post-judgment interest; counsel fees and expert fees; and
other relief.
EILEEN CLANCY, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,
V. INVESCO ADVANTAGE HEALTH SCIENCES FUND, INVESCO CORE EQUITY FUND,
INVESCO DYNAMICS FUND, INVESCO ENERGY FUND, INVESCO FINANCIAL SERVICES
FUND, INVESCO GOLD & PRECIOUS METALS FUND, INVESCO HEALTH SCIENCES FUND,
INVESCO INTERNATIONAL CORE EQUITY FUND (FORMERLY KNOWN AS INTERNATIONAL
BLUE CHIP VALUE FUND), INVESCO LEISURE FUND, INVESCO MID-CAP GROWTH FUND,
INVESCO MULTI-SECTOR FUND, AIM INVESCO S&P 500 INDEX FUND, INVESCO SMALL
COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, INVESCO TOTAL RETURN FUND,
INVESCO UTILITIES FUND, AIM MONEY MARKET FUND, AIM INVESCO TAX-FREE MONEY
FUND, AIM INVESCO TREASURER'S MONEY MARKET RESERVE FUND, AIM INVESCO
TREASURER'S TAX-EXEMPT RESERVE FUND, AIM INVESCO US GOVERNMENT MONEY FUND,
INVESCO ADVANTAGE FUND, INVESCO BALANCED FUND, INVESCO EUROPEAN FUND,
INVESCO GROWTH FUND, INVESCO HIGH-YIELD FUND, INVESCO GROWTH & INCOME FUND,
INVESCO REAL ESTATE OPPORTUNITY FUND, INVESCO SELECT INCOME FUND, INVESCO
TAX-FREE BOND FUND, INVESCO TELECOMMUNICATIONS FUND, INVESCO U.S.
GOVERNMENT SECURITIES FUND, INVESCO VALUE FUND, INVESCO, INVESCO LATIN
AMERICAN GROWTH FUND (COLLECTIVELY KNOWN AS THE "INVESCO FUNDS"), AIM STOCK
FUNDS, AIM COUNSELOR SERIES TRUST, AIM SECTOR FUNDS INC., AIM BOND FUNDS
INC., AIM COMBINATION STOCK AND BOND FUNDS INC., AIM MONEY MARKET FUNDS
INC., AIM INTERNATIONAL FUNDS INC. (COLLECTIVELY KNOWN AS THE "INVESCO
FUNDS REGISTRANTS"), AMVESCAP PLC, INVESCO FUNDS GROUP, INC., TIMOTHY
MILLER, RAYMOND CUNNINGHAM AND THOMAS KOLBE, in the United States District
Court, Southern District of New York (Civil Action No. 04-CV-0713), filed
on January 30, 2004. This claim alleges violations of Sections 11 and 15 of
the Securities Act. The plaintiffs in this case are seeking: compensatory
damages, rescission; return of fees paid; and other costs and expenses,
including counsel fees and expert fees.
SCOTT WALDMAN, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, V.
INVESCO FUNDS GROUP, INC., INVESCO DYNAMICS FUND, INVESCO EUROPEAN FUND,
INVESCO SMALL COMPANY GROWTH FUND, INVESCO TECHNOLOGY FUND, AIM STOCK
FUNDS, AIM COUNSELOR SERIES TRUST, AIM SECTOR FUNDS INC., AIM BOND FUNDS
INC., AIM COMBINATION STOCK AND BOND FUNDS INC., AIM MONEY MARKET FUNDS
INC., AIM INTERNATIONAL FUNDS INC., AMVESCAP PLC, AND RAYMOND CUNNINGHAM,
in the United States District Court, Southern District of New York (Civil
Action No. 04-CV-00915), filed on February 3, 2004. This claim alleges
violations of Sections 11 and 15 of the Securities Act and common law
breach of fiduciary duty. The plaintiffs in this case are seeking
compensatory damages; injunctive relief; and costs and expenses, including
counsel fees and expert fees.
CARL E. VONDER HAAR AND MARILYN P. MARTIN, ON BEHALF OF THEMSELVES AND ALL
OTHERS SIMILARLY SITUATED, V. INVESCO FUNDS GROUP, INC., INVESCO STOCK
FUNDS, INC. AND DOE DEFENDANTS 1-100, in the United States District Court,
District of Colorado (Civil Action No. 04-CV-812), filed on February 5,
2004. This claim
alleges: common law breach of fiduciary duty; breach of contract; and tortious interference with contract. The plaintiffs in this case are seeking: injunctive relief; damages; disgorgement; and costs and expenses, including counsel fees and expert fees.
HENRY KRAMER, DERIVATIVELY ON BEHALF OF INVESCO ENERGY FUND, INVESCO STOCK
FUNDS, INC., AND INVESCO MUTUAL FUNDS V. AMVESCAP, PLC, INVESCO FUNDS
GROUP, INC., CANARY CAPITAL PARTNERS, LLC, CANARY INVESTMENT MANAGEMENT,
LLC, AND CANARY CAPITAL PARTNERS, LTD., DEFENDANTS, AND INVESCO ENERGY
FUND, INVESCO STOCK FUNDS, INC., AND INVESCO MUTUAL FUNDS, NOMINAL
DEFENDANTS, in the United States District Court, District of Colorado
(Civil Action No. 04-MK-0397), filed on March 4, 2004. This claim alleges
violations of Section 36(b) of the Investment Company Act and common law
breach of fiduciary duty. The plaintiff in this case is seeking damages and
costs and expenses, including counsel fees and expert fees.
CYNTHIA L. ESSENMACHER, DERIVATIVELY ON BEHALF OF THE INVESCO DYNAMICS FUND
AND THE REMAINING "INVESCO FUNDS" V. INVESCO FUNDS GROUPS, INC., AMVESCAP
PLC, AIM MANAGEMENT GROUP, INC., RAYMOND CUNNINGHAM, TIMOTHY MILLER, THOMAS
KOLBE AND MICHAEL LEGOSKI, DEFENDANTS, AND INVESCO DYNAMICS FUND AND THE
"INVESCO FUNDS", NOMINAL DEFENDANTS, in the United States District Court,
District of Delaware (Civil Action No. 04-CV-188), filed on March 29, 2004.
This claim alleges: violations of Section 36(b) of the Investment Company
Act; violations of Section 206 of the Advisers Act; common law breach of
fiduciary duty; and civil conspiracy. The plaintiff in this case is
seeking: damages; injunctive relief; and costs and expenses, including
counsel fees and expert fees.
ANNE G. PERENTESIS (WIDOW) V. AIM INVESTMENTS, ET AL (INVESCO FUNDS GROUP,
INC.), in the District Court of Maryland for Baltimore County (Case No.
080400228152005), filed on July 21, 2005. This claim alleges financial
losses, mental anguish and emotional distress as a result of unlawful
market timing and related activity by the defendants. The plaintiff in this
case is seeking damages and costs and expenses.
Pursuant to an Order of the MDL Court, plaintiffs in the above lawsuits (with the exception of Carl E. Vonder Haar, et al. v. INVESCO Funds Group, Inc. et al. and Mike Sayegh v. Janus Capital Corporation, et al.) consolidated their claims for pre-trial purposes into three amended complaints against various AIM- and IFG-related parties: (i) a Consolidated Amended Class Action Complaint purportedly brought on behalf of shareholders of the AIM Funds (the Lepera lawsuit discussed below); (ii) a Consolidated Amended Fund Derivative Complaint purportedly brought on behalf of the AIM Funds and fund registrants (the Essenmacher lawsuit discussed below); and (iii) an Amended Class Action Complaint for Violations of the Employee Retirement Income Securities Act ("ERISA") purportedly brought on behalf of participants in INVESCO's 401(k) plan (the Calderon lawsuit discussed below). The plaintiffs in the Vonder Haar and Sayegh lawsuits continue to seek remand of their lawsuits to state court. Set forth below is detailed information about these three amended complaints.
RICHARD LEPERA, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED (LEAD PLAINTIFF: CITY OF CHICAGO DEFERRED COMPENSATION PLAN), V. INVESCO FUNDS GROUP, INC., AMVESCAP, PLC, AIM INVESTMENTS, AIM ADVISORS, INC., INVESCO INSTITUTIONAL (N.A.), INC., INVESCO ASSETS MANAGEMENT LIMITED, INVESCO GLOBAL ASSETS MANAGEMENT (N.A.), AIM STOCK FUNDS, AIM MUTUAL FUNDS, AIM COMBINATION STOCK & BOND FUNDS, AIM SECTOR FUNDS, AIM TREASURER'S SERIES TRUST, INVESCO DISTRIBUTORS, INC., AIM DISTRIBUTORS, INC., RAYMOND R. CUNNINGHAM, TIMOTHY J. MILLER, THOMAS A. KOLBE, MICHAEL D. LEGOSKI, MICHAEL K.
BRUGMAN, MARK WILLIAMSON, EDWARD J. STERN, CANARY CAPITAL PARTNERS, LLC,
CANARY INVESTMENT MANAGEMENT, LLC, CANARY CAPITAL PARTNERS, LTD., RYAN
GOLDBERG, MICHAEL GRADY, CITIGROUP, INC., CITIGROUP GLOBAL MARKETS
HOLDINGS, INC., SALOMON SMITH BARNEY, INC., MORGAN STANLEY DW, ANNA
BRUGMAN, ANB CONSULTING, LLC, KAPLAN & CO. SECURITIES INC., SECURITY TRUST
COMPANY, N.A., GRANT D. SEEGER, JB OXFORD HOLDINGS, INC., NATIONAL CLEARING
CORPORATION, JAMES G. LEWIS, KRAIG L. KIBBLE, JAMES Y. LIN, BANK OF AMERICA
CORPORATION, BANC OF AMERICA SECURITIES LLC, THEODORE C. SIHPOL, III, BEAR
STEARNS & CO., INC., BEAR STEARNS SECURITIES CORP., CHARLES SCHWAB & CO.,
CREDIT SUISSE FIRST BOSTON (USA) INC., PRUDENTIAL FINANCIAL, INC.,
PRUDENTIAL SECURITIES, INC., CANADIAN IMPERIAL BANK OF COMMERCE, JP MORGAN
CHASE AND CO., AND JOHN DOE DEFENDANTS 1-100, in the MDL Court (Case No.
04-MD-15864; No. 04-CV-00814-JFM) (originally in the United States District
Court for the District of Colorado), filed on September 29, 2004. This
lawsuit alleges violations of Sections 11, 12(a) (2), and 15 of the
Securities Act; Section 10(b) of the Exchange Act and Rule 10b-5
promulgated thereunder; Section 20(a) of the Exchange Act; Sections 34(b),
36(a), 36(b) and 48(a) of the Investment Company Act; breach of fiduciary
duty/constructive fraud; aiding and abetting breach of fiduciary duty; and
unjust enrichment. The plaintiffs in this lawsuit are seeking: compensatory
damages, including interest; and other costs and expenses, including
counsel and expert fees.
CYNTHIA ESSENMACHER, SILVANA G. DELLA CAMERA, FELICIA BERNSTEIN AS CUSTODIAN FOR DANIELLE BROOKE BERNSTEIN, EDWARD CASEY, TINA CASEY, SIMON DENENBERG, GEORGE L. GORSUCH, PAT B. GORSUCH, L. SCOTT KARLIN, HENRY KRAMER, JOHN E. MORRISEY, HARRY SCHIPPER, BERTY KREISLER, GERSON SMITH, CYNTHIA PULEO, ZACHARY ALAN STARR, JOSHUA GUTTMAN, AND AMY SUGIN, DERIVATIVELY ON BEHALF OF THE MUTUAL FUNDS, TRUSTS AND CORPORATIONS COMPRISING THE INVESCO AND AIM FAMILY OF MUTUAL FUNDS V. AMVESCAP, PLC, INVESCO FUNDS GROUP, INC., INVESCO DISTRIBUTORS, INC., INVESCO INSTITUTIONAL (N.A.), INC., INVESCO ASSETS MANAGEMENT LIMITED, INVESCO GLOBAL ASSETS MANAGEMENT (N.A.), AIM MANAGEMENT GROUP, INC., AIM ADVISERS, INC., AIM INVESTMENT SERVICES, INC., AIM DISTRIBUTORS, INC., FUND
MANAGEMENT COMPANY, MARK H. WILLIAMSON, RAYMOND R. CUNNINGHAM, TIMOTHY
MILLER, THOMAS KOLBE, MICHAEL LEGOSKI, MICHAEL BRUGMAN, FRED A. DEERING,
VICTOR L. ANDREWS, BOB R. BAKER, LAWRENCE H. BUDNER, JAMES T. BUNCH, GERALD
J. LEWIS, JOHN W. MCINTYRE, LARRY SOLL, RONALD L. GROOMS, WILLIAM J.
GALVIN, JR., ROBERT H. GRAHAM, FRANK S. BAYLEY, BRUCE L. CROCKETT, ALBERT
R. DOWDEN, EDWARD K. DUNN, JACK M. FIELDS, CARL FRISCHILING, PREMA
MATHAI-DAVIS, LEWIS F. PENNOCK, RUTH H. QUIGLEY, LOUIS S. SKLAR, OWEN DALY
II, AURUM SECURITIES CORP., AURUM CAPITAL MANAGEMENT CORP., GOLDEN GATE
FINANCIAL GROUP, LLC, BANK OF AMERICA CORP., BANC OF AMERICA SECURITIES
LLC, BANK OF AMERICA, N.A., BEAR STEARNS & CO., INC., CANARY CAPITAL
PARTNERS, LLC, CANARY CAPITAL PARTNERS, LTD., CANARY INVESTMENT MANAGEMENT,
LLC, EDWARD J. STERN, CANADIAN IMPERIAL BANK OF COMMERCE, CIRCLE TRUST
COMPANY, RYAN GOLDBERG, MICHAEL GRADY, KAPLAN & CO. SECURITIES, INC., JP
MORGAN CHASE & CO., OPPENHEIMER & CO., INC., PRITCHARD CAPITAL PARTNERS
LLC, TIJA MANAGEMENT, TRAUTMAN WASSERMAN & COMPANY, INC., DEFENDANTS, AND
THE INVESCO FUNDS AND THE AIM FUNDS AND ALL TRUSTS AND CORPORATIONS THAT
COMPRISE THE INVESCO FUNDS AND AIM FUNDS THAT WERE MANAGED BY INVESCO AND
AIM, NOMINAL DEFENDANTS, in the MDL Court (Case No. 04-MD-15864-FPS; No.
04-819), filed on September 29, 2004. This lawsuit alleges violations of
Sections 206 and 215 of the Investment Advisers Act; Sections
36(a), 36(b) and 47 of the Investment Company Act; control person liability under Section 48 of the Investment Company Act; breach of fiduciary duty; aiding and abetting breach of fiduciary duty; breach of contract; unjust enrichment; interference with contract; and civil conspiracy. The plaintiffs in this lawsuit are seeking: removal of director defendants; removal of adviser, sub-adviser and distributor defendants; rescission of management and other contracts between the Funds and defendants; rescission of 12b-1 plans; disgorgement of management fees and other compensation/profits paid to adviser defendants; compensatory and punitive damages; and fees and expenses, including attorney and expert fees.
MIRIAM CALDERON, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. AVZ, INC., AMVESCAP RETIREMENT, INC., AMVESCAP NATIONAL TRUST COMPANY, INVESCO FUNDS GROUP, INC., AMVESCAP, ROBERT F. MCCULLOUGH, GORDON NEBEKER, JEFFREY G. CALLAHAN, AND RAYMOND R. CUNNINGHAM, in the MDL Court (Case No. 1:04-MD-15864-FPS), filed on September 29, 2004. This lawsuit alleges violations of ERISA Sections 404, 405 and 406. The plaintiffs in this lawsuit are seeking: declaratory judgment; restoration of losses suffered by the plan; disgorgement of profits; imposition of a constructive trust; injunctive relief; compensatory damages; costs and attorneys' fees; and equitable restitution.
On March 1, 2006, the MDL Court entered orders on Defendants' Motions to dismiss in the derivative (Essenmacher) and class action (Lepera) lawsuits. The MDL Court dismissed all derivative causes of action in the Essenmacher lawsuit but two: (i) the excessive fee claim under Section 36(b) of the Investment Company Act of 1940 (the "1940 Act"); and (ii) the "control person liability" claim under Section 48 of the 1940 Act. The MDL Court dismissed all claims asserted in the Lepera class action lawsuit but three: (i) the securities fraud claims under Section 10(b) of the Securities Exchange Act of 1934; (ii) the excessive fee claim under Section 36(b) of the 1940 Act (which survived only insofar as plaintiffs seek recovery of fees associated with the assets involved in market timing); and (iii) the "control person liability" claim under Section 48 of the 1940 Act. On June 14, 2006, the MDL Court entered an order dismissing the Section 48 claim in the derivative (Essenmacher) lawsuit. Based on the MDL Court's March 1, 2006 and June 14, 2006 orders, all claims asserted against the Funds that have been transferred to the MDL Court have been dismissed, although certain Funds remain nominal defendants in the derivative (Essenmacher) lawsuit. Defendants filed their Original Answer in the class action (Lepera) lawsuit on March 31, 2006. The MDL Court has indefinitely deferred Defendants' obligation to answer the derivative (Essenmacher) lawsuit. The Plaintiffs in the class action (Lepera) lawsuit stipulated that their claims against AIM, ADI and AIM Investment Services, Inc. ("AIS") are based solely on successor liability for alleged timing in the AIM Funds formerly advised by IFG and that they are not making any claims based on alleged timing in the other AIM Funds. Based upon this stipulation, AIM withdrew its pending Motion to Dismiss the claims against AIM, ADI and AIS. On July 3, 2007, the Defendants filed an Omnibus Motion to Dismiss in both the class action (Lepera) and derivative (Essenmacher) lawsuits based on Plaintiffs' lack of standing to sue for injuries to funds the Plaintiffs do not own.
On September 15, 2006, Judge Motz for the MDL Court granted the INVESCO Defendants' motion to dismiss the ERISA (Calderon) lawsuit and dismissed such lawsuit. The Plaintiff has commenced an appeal from Judge Motz's decision.
APPENDIX P-2
PENDING LITIGATION ALLEGING INADEQUATELY EMPLOYED FAIR VALUE PRICING
The following civil class action lawsuits involve, depending on the lawsuit, one or more AIM Funds, IFG and/or AIM and allege that the defendants inadequately employed fair value pricing. These lawsuits either have been served or have had service of process waived.
T.K. PARTHASARATHY, EDMUND WOODBURY, STUART ALLEN SMITH AND SHARON SMITH,
INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, V. T. ROWE
PRICE INTERNATIONAL FUNDS, INC., T. ROWE PRICE INTERNATIONAL, INC., ARTISAN
FUNDS, INC., ARTISAN PARTNERS LIMITED PARTNERSHIP, AIM INTERNATIONAL FUNDS,
INC. AND AIM ADVISORS, INC., in the Third Judicial Circuit Court for
Madison County, Illinois (Case No. 2003-L-001253), filed on September 23,
2003. This claim alleges: common law breach of duty and common law
negligence and gross negligence. The plaintiffs in these cases are seeking:
compensatory and punitive damages; interest; and attorneys' fees and costs.
The Third Judicial Circuit Court for Madison County, Illinois has issued an
order severing the claims of plaintiff Parthasarathy from the claims of the
other plaintiffs against AIM and other defendants. As a result, AIM is a
defendant in the following severed action: EDMUND WOODBURY, STUART ALLEN
SMITH and SHARON SMITH, Individually and On Behalf of All Others Similarly
Situated, v. AIM INTERNATIONAL FUNDS, INC., ET AL., in the Third Judicial
Circuit Court for Madison County, Illinois (Case No. 03-L-1253A). The
claims made by Plaintiffs and the relief sought in the Woodbury lawsuit are
identical to those in the Parthasarathy lawsuit. Based on a recent Federal
appellate court decision (the "Kircher" case), AIM and the other defendants
in the Woodbury lawsuit removed the action to Federal District Court (U.S.
District Court, Southern District of Illinois, Cause No. 05-CV-302-DRH) on
April 22, 2005. On June 10, 2005, the Court dismissed the Woodbury lawsuit
based upon the Kircher ruling and ordered the court clerk to close this
case. On August 27, 2005, Plaintiffs filed their Notice of Appeal. On
September 2, 2005, the Federal Appellate Court consolidated the nine cases
on this subject matter, including the case against AIM. AIM has submitted a
statement to the Federal Appellate Court asserting that the U.S. Supreme
Court's holding in the Dabit case mandates the dismissal of the Plaintiffs'
appeals. The appeals were vacated and the suit remanded back to Illinois
state court. The Defendants removed the suit to Federal District Court and
the parties are contesting whether the proper venue for this action is the
Federal District Court or the Illinois state court. On July 17, 2007, the
Court lifted the Stay and ordered this case remanded back to Illinois State
Court. On August 10, 2007, the Defendants filed their Motion to Dismiss
this suit in the Illinois State Court.
JOHN BILSKI, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,
V. AIM INTERNATIONAL FUNDS, INC., AIM ADVISORS, INC., INVESCO INTERNATIONAL
FUNDS, INC., INVESCO FUNDS GROUP, INC., T. ROWE PRICE INTERNATIONAL FUNDS,
INC. AND T. ROWE PRICE INTERNATIONAL, INC., in the United States District
Court, Southern District of Illinois (East St. Louis) (Case No. 03-772),
filed on November 19, 2003. This claim alleges: violations of Sections
36(a) and 36(b) of the Investment Company Act of 1940; common law breach of
duty; and common law negligence and gross negligence. The plaintiff in this
case is seeking: compensatory and punitive damages; interest; and
attorneys' fees and costs. This lawsuit has been transferred to the MDL
Court by order of the United States District Court, Southern District of
Illinois (East St. Louis).
PART C
OTHER INFORMATION
Item 23. Exhibits
a (1) - (a) Second Amended and Restated Agreement and Declaration of Trust of Registrant dated December 6, 2005.(9)
- (b) Amendment No. 1, dated January 9, 2006, to the Second Amended and Restated Agreement and Declaration of Trust of Registrant.(11)
- (c) Amendment No. 2, dated May 24, 2006, to the Second Amended and Restated Agreement and Declaration of Trust of Registrant.(15)
- (d) Amendment No. 3, dated July 5, 2006, to the Second Amended and Restated Agreement and Declaration of Trust of Registrant.(15)
- (e) Amendment No. 4, dated September 19, 2006, to the Second Amended and Restated Agreement and Declaration of Trust of Registrant.(15)
- (f) Amendment No. 5, dated April 23, 2007, to the Second Amended and Restated Agreement and Declaration of Trust of Registrant.(19)
- (g) Amendment No. 6, dated October 16, 2007, to the Second Amended and Restated Agreement and Declaration of Trust of Registrant.(19)
b (1) - (a) Amended and Restated Bylaws of Registrant, adopted effective September 14, 2005.(8)
- (b) Amendment to Amended and Restated Bylaws of Registrant, adopted effective August 1, 2006.(15)
- (c) Amendment No. 2 to Amended and Restated Bylaws of Registrant, adopted effective March 23, 2007.(19)
c - Articles II, VI, VII, VIII and IX of the Second Amended and Restated
Agreement and Declaration of Trust, as amended, and Articles IV, V and
VI of the Amended and Restated Bylaws, as amended, of the define
rights of holders of shares.
d (1) - (a) Master Investment Advisory Agreement dated November 25, 2003
between Registrant and A I M Advisors, Inc.(6)
- (b) Amendment No. 1, dated October 15, 2004, to the Master Investment
Advisory Agreement between the Registrant and A I M Advisors, Inc.(7)
- (c) Amendment No. 2, dated March 31, 2006, to the Master Investment
Advisory Agreement between the Registrant and A I M Advisors,
Inc.(14)
- (d) Amendment No. 3, dated April 14, 2006, to the Master Investment
Advisory Agreement between the Registrant and A I M Advisors, Inc.(15)
- (e) Amendment No. 4, dated March 9, 2007, to the Master Investment
Advisory Agreement between the Registrant and A I M Advisors,
Inc.(19)
|
- (f) Amendment No. 5, dated April 23, 2007, to the Master Investment Advisory Agreement between the Registrant and A I M Advisors, Inc.(19)
- (g) Amendment No. 6, dated July 1, 2007, to the Master Investment Advisory Agreement between the Registrant and A I M Advisors, Inc.(19)
(2) - (a) Master Intergroup Sub-Advisory Contract for Mutual Funds, dated
March 31, 2006, between A I M Advisors, Inc. and INVESCO Institutional
(N.A.), Inc. on behalf of AIM Structured Core Fund, AIM Structured
Growth Fund and AIM Structured Value Fund.(14)
|
- (b) Amendment No. 1, dated March 9, 2007, to the Master Intergroup Sub-Advisory Contract for Mutual Funds between A I M Advisors, Inc. and INVESCO Institutional (N.A.), Inc. on behalf of AIM Select Real Estate Income Fund, AIM Structured Core Fund, AIM Structured Growth Fund and AIM Structured Value Fund. (19)
(3) - (a) Master Intergroup Sub-Advisory Contract for Mutual Funds, dated
April 14, 2006 between A I M Advisors, Inc. and INVESCO Senior Secured
Management, Inc. on behalf of AIM Floating Rate Fund.(15)
|
e (1) - (a) First Restated Master Distribution Agreement (all classes of
shares except Class B shares), dated August 18, 2003, as subsequently
amended and as restated September 20, 2006, between Registrant and A I
M Distributors, Inc.(16)
|
- (b) Amendment No. 1, dated December 8, 2006, to the First Restated Master Distribution Agreement (all classes of shares except Class B shares) between Registrant and A I M Distributors, Inc.(18)
- (c) Amendment No. 2, dated January 31, 2007, to the First Restated Master Distribution Agreement (all classes of shares except Class B shares) between Registrant and A I M Distributors, Inc.(18)
- (d) Amendment No. 3, dated February 28, 2007, to the First Restated Master Distribution Agreement (all classes of shares except Class B shares) between Registrant and A I M Distributors, Inc.(18)
- (e) Amendment No. 4, dated March 9, 2007, to the First Restated Master Distribution Agreement (all classes of shares except Class B shares) between Registrant and A I M Distributors, Inc.(19)
- (f) Amendment No. 5, dated April 23, 2007, to the First Restated Master Distribution Agreement (all classes of shares except Class B shares) between Registrant and A I M Distributors, Inc.(19)
- (g) Amendment No. 6, dated September 28, 2007, to the First Restated Master Distribution Agreement (all classes of shares except Class B shares) between Registrant and A I M Distributors, Inc.(19)
- (h) Form of Amendment No. 7 dated ____________, to the First Restated Master Distribution Agreement (all classes of shares except Class B shares) between Registrant and A I M Distributors, Inc.(19)
(2) - (a) First Restated Master Distribution Agreement (Class B shares),
dated August 18, 2003, as subsequently amended and restated September
20, 2006, between Registrant and A I M Distributors, Inc.(16)
|
- (b) Amendment No. 1, dated January 31, 2007, to the First Restated Master Distribution Agreement (Class B shares) between Registrant and A I M Distributors, Inc.(18)
- (c) Amendment No. 2, dated February 28, 2007, to the First Restated Master Distribution Agreement (Class B shares) between Registrant and A I M Distributors, Inc.(18)
- (d) Amendment No. 3 to the First Restated Master Distribution Agreement (Class B shares), dated March 9, 2007, between Registrant and A I M Distributors, Inc.(19)
- (e) Amendment No. 4 to the First Restated Master Distribution Agreement (Class B shares), dated April 23, 2007, between Registrant and A I M Distributors, Inc.(19)
(3) - Form of Selected Dealer Agreement between A I M Distributors, Inc. and
selected dealers.(10)
(4) - Form of Bank Selling Group Agreement between A I M Distributors, Inc.
and banks.(10)
f (1) - AIM Funds Retirement Plan for Eligible Directors/Trustees, as restated
January 1, 2005.(17)
(2) - (a) Form of AIM Funds Director Deferred Compensation Agreement for
Registrant's Non-Affiliated Directors, as amended September 26,
2002.(19)
|
- (b) Form of supplement to Deferred Compensation Plans, dated January 1, 2005 with Registrant and AIM Funds.(19)
g (1) - (a) Master Custodian Agreement between Registrant and State Street
Bank and Trust Company dated May 8, 2001.(2)
- (b) Amendment No. 1, dated May 10, 2002 to the Master Custodian
Agreement between Registrant and State Street Bank and Trust
Company.(2)
- (c) Amendment No. 2, dated December 8, 2003 to the Master Custodian
Agreement between Registrant and State Street Bank and Trust
Company.(7)
- (d) Amendment No. 3, dated April 30, 2004 to the Master Custodian
Agreement between Registrant and State Street Bank and Trust
Company.(7)
- (e) Amendment No. 4, dated September 8, 2004 to the Master Custodian
Agreement between Registrant and State Street Bank and Trust
Company.(7)
- (f) Amendment No. 5, dated February 8, 2006 to the Master Custodian
Agreement between Registrant and State Street Bank and Trust
Company.(12)
- (g) Amendment, dated as of January 31, 2007, to Master Custodian
Agreement
|
between Registrant and State Street Bank and Trust Company.(18)
h (1) - (a) Third Amended and Restated Transfer Agency and Service Agreement between Registrant and AIM Investment Services, Inc.(15)
- (b) Amendment No. 1, dated as of July 1, 2007, to Third Amended and Restated Transfer Agency and Service Agreement between Registrant and AIM Investment Services, Inc.(19)
(2) - (a) Second Amended and Restated Master Administrative Services
Agreement, dated July 1, 2006, between Registrant and A I M Advisors,
Inc.(15)
- (b) Amendment No. 1, dated March 9, 2007, to the Second Amended and
Restated Master Administrative Services Agreement.(19)
|
- (c) Amendment No. 2, dated April 23, 2007, to the Second Amended and Restated Master Administrative Services Agreement.(19)
(3) - (a) Second Amended and Restated Memorandum of Agreement regarding
securities lending waiver, dated March 9, 2007, between Registrant and
A I M Advisors, Inc.(19)
|
- (b) Third Amended and Restated Memorandum of Agreement regarding securities lending waiver, dated July 1, 2007, between Registrant and and A I M Advisors, Inc.(19)
(4) - (a) Memorandum of Agreement dated April 1, 2007, regarding expense
limits between Registrant and A I M Advisors, Inc. with respect to AIM
Floating Rate Fund, AIM Structured Core Fund, AIM Structured Growth
Fund and AIM Structured Value Fund.(19)
|
- (b) Memorandum of Agreement dated July 1, 2007, regarding expense limits between Registrant and A I M Advisors, Inc. with respect to AIM Floating Rate Fund, AIM Structured Core Fund, AIM Structured Growth Fund and AIM Structured Value Fund.(19)
(5) - Third Amended and Restated Interfund Loan Agreement, dated December 30, 2005, between Registrant and A I M Advisors, Inc.(17)
(6) - Memorandum of Agreement regarding Affiliated Money Market Fund Waiver, dated July 1, 2007, between Registrant and A I M Advisors, Inc.(19)
(7) - Agreement and Plan of Reorganization, dated September 19, 2006 for AIM Select Real Estate Income Fund.(19)
(8) - Agreement and Plan of Reorganization, dated November 8, 2006 for AIM Advantage Health Sciences Fund.(19)
(9) - Agreement and Plan of Reorganization, dated December 6, 2005, for AIM Floating
Rate Fund.(19)
i - Opinion and Consent of Ballard, Spahr, Andrews & Ingersoll, LLP.(19)
j (1) - Opinion of Ballard, Spahr, Andrews & Ingersoll, LLP concerning federal
income tax consequences of the reorganization of AIM Advantage Health
Sciences Fund(19)
(2) - Opinion of Ballard, Spahr, Andrews & Ingersoll, LLP concerning federal
income tax consequences of the reorganization of AIM Select Real
Estate Income Fund(19)
|
k - Omitted Financial Statements - None.
l (1) - (a) Agreement Concerning Initial Capitalization of Registrant's AIM
Structured Core Fund, AIM Structured Growth Fund and AIM Structured
Value Fund dated March 29, 2006.(14)
|
- (b) Agreement Concerning Initial Capitalization of Registrant's AIM Select Real Estate Income Fund dated March 8, 2007.(19)
- (c) Form of Agreement Concerning Initial Capitalization of Investor Class shares of Registrant's AIM Structured Core Fund dated December 20, 2007.(19)
m (1) - (a) First Restated Master Distribution Plan (Class A shares) effective
as of August 18, 2003, as subsequently amended.(15)
- (b) Amendment No. 1, dated January 31, 2007, to the Registrant's First
Restated Master Distribution Plan (Class A shares).(18)
- (c) Amendment No. 2, dated February 28, 2007, to the Registrant's
First Restated Master Distribution Plan (Class A shares).(18)
- (d) Amendment No. 3, dated March 9, 2007, to the Registrant's First
Restated Master Distribution Plan (Class A shares).(19)
|
- (e) Amendment No. 4, dated April 23, 2007, to the Registrant's First Restated Master Distribution Plan (Class A shares).(19)
(2) - (a) First Restated Master Distribution Plan (Class B shares) effective
August 18, 2003.(15)
- (b) Amendment No. 1, dated January 31, 2007, to the Registrant's First
Restated Master Distribution Plan (Class B shares).(18)
- (c) Amendment No. 2, dated February 28, 2007, to the Registrant's
First Restated Master Distribution Plan (Class B shares).(18)
- (d) Amendment No. 3, dated March 9, 2007, to the Registrant's First
Restated Master Distribution Plan (Class B shares).(19)
|
- (e) Amendment No. 4, dated April 23, 2007, to the Registrant's First Restated Master Distribution Plan (Class B shares).(19)
(3) - (a) First Restated Master Distribution Plan (Class C shares) effective
as of August 18, 2003 and as subsequently amended.(15)
- (b) Amendment No. 1, dated January 31, 2007, to the Registrant's First
Restated Master Distribution Plan (Class C shares).(18)
- (c) Amendment No. 2, dated February 28, 2007, to the Registrant's
First Restated Master Distribution Plan (Class C shares).(18)
- (d) Amendment No. 3, dated March 9, 2007, to the Registrant's First
Restated Master Distribution Plan (Class C shares).(19)
|
- (e) Amendment No. 4, dated April 23, 2007, to the Registrant's First Restated Master Distribution Plan (Class C shares).(19)
(4) - (a) First Restated Master Distribution Plan (Class R shares) effective
as of August 18, 2003 and as subsequently amended.(15)
- (b) Amendment No. 1, dated January 31, 2007, to the Registrant's First
Restated Master Distribution Plan (Class R shares).(18)
- (c) Amendment No. 2, dated February 28, 2007, to the Registrant's
First Restated Master Distribution Plan (Class R shares).(18)
(5) - (a) First Restated Master Distribution Plan (Compensation) between AIM
Structured Core Fund (Investor Class Shares) and A I M Distributors,
Inc., effective July 1, 2004 and as subsequently amended.(19)
|
- (b) Form of Amendment No. 1 dated ___, to the Registrant's First Restated Master Distribution Plan (Compensation) between AIM Structured Core Fund (Investor Class Shares) and A I M Distributors, Inc., effective July 1, 2004 and as subsequently amended.(19)
(6) - Master Related Agreement to First Restated Master Distribution Plan
(Class A shares).(16)
(7) - Master Related Agreement to First Restated Master Distribution Plan
(Class C shares).(16)
(8) - Master Related Agreement to First Restated Master Distribution Plan
(Class R shares).(16)
(9) - Form of Master Related Agreement to First Restated Master Distribution
Plan (Compensation) (Investor Class Shares).(19)
n - Eleventh Amended and Restated Multiple Class Plan of The AIM Family of
Funds(R), effective December 12, 2001, as amended and restated
December 8, 2006.(17)
o - Reserved.
|
p (1) - AIM Funds, A I M Management Group Inc. Code of Ethics, adopted May 1,
1981, as last amended February 16, 2006, relating to A I M Management
Group, Inc., A I M Advisors, Inc., A I M Capital Management, Inc., AIM
Private Asset Management, Inc., A I M Distributors, Inc., Fund
Management Company and all of their wholly owned and indirect
subsidiaries.(16)
(2) - INVESCO Institutional (N.A.), Inc. Code of Ethics dated May 19,
2006.(15)
q - Powers of Attorney for Baker, Bayley, Bunch, Crockett, Dowden, Fields,
Flanagan, Frischling, Mathai-Davis, Pennock, Quigley, Soll, Stickel
and Taylor.(19)
----------
|
(1) Previously filed with PEA No. 13 to the Registration Statement on August 28, 2003 and incorporated by reference herein.
(2) Previously filed with PEA No. 38 to the Registration Statement of INVESCO Sector Funds, Inc. on July 15, 2003 and incorporated herein by reference (Identical except for the name of the Registrant (AIM Counselor Series Trust) and the date).
(3) Previously filed with the Registration Statement on Form N-14 of AIM Special Opportunities Funds on August 13, 2003 and incorporated herein by reference.
(4) Previously filed with PEA No. 77 to the Registration Statement of AIM Equity Funds filed on July 7, 2003 and incorporated by reference herein.
(5) Previously filed with PEA No. 15 to the Registration Statement of Registrant filed on November 25, 2003 and incorporated by reference herein.
(6) Previously filed with PEA No. 16 to the Registration Statement of Registrant filed on March 1, 2004 and incorporated by reference herein.
(7) Previously filed with PEA No. 17 to the Registration Statement of Registrant filed on November 30, 2004 and incorporated by reference herein.
(8) Previously filed with PEA No. 18 to the Registration Statement of Registrant filed on October 19, 2005 and incorporated by reference herein.
(9) Previously filed with PEA No. 19 to the Registration Statement of Registrant filed on December 7, 2005 and incorporated by reference herein.
(10) Previously filed with PEA No. 20 to the Registration Statement of Registrant filed on December 20, 2005 and incorporated by reference herein.
(11) Previously filed with PEA No. 21 to the Registration Statement of Registrant filed on January 13, 2006 and incorporated by reference herein.
(12) Previously filed with PEA No. 22 to the Registration Statement of Registrant filed on February 17, 2006 and incorporated by reference herein.
(13) Previously filed with PEA No. 23 to the Registration Statement of Registrant filed on March 24, 2006 and incorporated by reference herein.
(14) Previously filed with PEA No. 24 to the Registration Statement of Registrant filed on April 13, 2006 and incorporated by reference herein.
(15) Previously filed with PEA No. 25 to the Registration Statement of Registrant filed on September 22, 2006 and incorporated by reference herein.
(16) Previously filed with PEA No. 26 to the Registration Statement of Registrant filed on October 13, 2006 and incorporated by reference herein.
(17) Previously filed with PEA No. 28 to the Registration Statement of Registrant filed on December 28, 2006 and incorporated by reference herein.
(18) Previously filed with PEA No. 29 to the Registration Statement of Registrant filed on March 12, 2007 and incorporated by reference herein.
(19) Filed herewith electronically.
Item 24. Persons Controlled by or Under Common Control With the Fund
None
Item 25. Indemnification
Indemnification provisions for officers, trustees and employees of the
Registrant are set forth in Article VIII of the Registrant's Second
Agreement and Declaration of Trust and Article VIII of its Amended and
Restated Bylaws, and are hereby incorporated by reference. See Item
23(a) and (b) above. Under the Second Amended and Restated Agreement
and Declaration of Trust dated December 6, 2005, as amended (i)
Trustees or officers, when acting in such capacity, shall not be
personally liable for any act, omission or obligation of the
Registrant or any Trustee or officer except by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office with the Trust; (ii)
every Trustee, officer, employee or agent of the Registrant shall be
indemnified to the fullest extent permitted under the Delaware
Statutory Trust act, the Registrant's Bylaws and other applicable law;
(iii) in case any shareholder or former shareholder of the Registrant
shall be held to be personally liable solely by reason of his being or
having been a shareholder of the Registrant or any portfolio or class
and not because of his acts or omissions or for some other reason, the
shareholder or former shareholder (or his heirs, executors,
administrators or other legal representatives, or, in the case of a
corporation or other entity, its corporate or general successor) shall
be entitled, out of the assets belonging to the applicable portfolio
(or allocable to the applicable class), to be held harmless from and
indemnified against all loss and expense arising from such liability
in accordance with the Bylaws and applicable law. The Registrant, on
behalf of the affected portfolio (or class), shall upon request by the
shareholder, assume the defense of any such claim made against the
shareholder for any act or obligation of that portfolio (or class).
The Registrant and other investment companies and their respective officers and trustees are insured under a joint Mutual Fund Directors and Officers Liability Policy, issued by ICI Mutual Insurance Company and certain other domestic insurers, with limits up to $60,000,000 (plus an additional $20,000,000 limit that applies to independent directors/trustees only).
Section 16 of the Master Investment Advisory Agreement between the Registrant and AIM provides that in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of AIM or any of its officers, directors or employees, that AIM shall not be subject to liability to the Registrant or to any series of the Registrant, or to any shareholder of any series of the Registrant 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 AIM to any series of the Registrant shall not automatically impart liability on the part of AIM to any other series of the Registrant. No series of the Registrant shall be liable for the obligations of any other series of the Registrant.
Section 7 of the Master Intergroup Sub-Advisory Contract for Mutual Funds (the "Sub-Advisory Contract") between AIM and INVESCO Institutional (N.A.), Inc. and between AIM and INVESCO Senior Management, Inc. provides that the Sub-advisor shall not be liable for any costs or liabilities arising from any error of judgment or mistake of law or any loss suffered by any series of the Registrant or the Registrant in connection with the matters to which the Sub-Advisory Contract relates except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Sub-advisor in the performance by the Sub-advisor of its duties or from reckless disregard by the Sub-advisor of its obligations and duties under the Sub-Advisory Contract.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") 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 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the securities being registered, 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 Act and will be governed by the final adjudication of such issue.
Item 26. Business and Other Connections of the Investment Advisor
The only employment of a substantial nature of the Advisor's directors and officers is with the Advisor and its affiliated companies. See "Fund Management" in the Funds' Prospectuses and "Management of the Funds" in the Statement of Additional Information for information regarding the business of the investment advisor. For information as to the business, profession, vocation or employment of a substantial nature of each of the officers and directors of INVESCO Institutional (N.A.), Inc. and INVESCO Senior Secured Management, Inc. reference is made to Form ADV filed under the Investment Advisers Act of 1940 by INVESCO Institutional (N.A.), Inc. and INVESCO Senior Secured Management, Inc. herein incorporated by reference.
Item 27. Principal Underwriters
(a) A I M Distributors, Inc., the Registrant's principal underwriter, also acts as principal underwriter to the following investment companies:
AIM Core Allocation Portfolio Series
AIM Equity Funds
AIM Funds Group
AIM Growth Series
AIM International Mutual Funds
AIM Investment Funds
AIM Investment Securities Funds
AIM Sector Funds
AIM Stock Funds
AIM Summit Fund
AIM Tax-Exempt Funds
AIM Treasurer's Series Trust (with respect to its Investor Class Shares) AIM Variable Insurance Funds
PowerShares Exchange Traded Fund Trust
PowerShares Global Exchange Traded Fund Trust
(b) The following table sets forth information with respect to each director, officer or partner of A I M Distributors, Inc.
Name and Principal
Business Address* Position and Offices with Underwriter Positions and Offices with Registrant
---------------------- ------------------------------------- -------------------------------------
Philip A. Taylor Director Trustee, Principal Executive Officer
& President
John S. Cooper Chief Executive Officer & President None
Gary K. Wendler Senior Vice President & Director None
John M. Zerr Senior Vice President, Secretary & Senior Vice President, Secretary &
Director Chief Legal Officer
Brian Lee Executive Vice President None
Michael A. Bredlau Senior Vice President None
Lawrence E. Manierre Senior Vice President None
Ivy B. McLemore Senior Vice President None
David J. Nardecchia Senior Vice President None
Margaret A. Vinson Senior Vice President None
Scott B. Widder Senior Vice President None
David A. Hartley Treasurer & Chief Financial Officer None
Rebecca Starling-Klatt Chief Compliance Officer & Assistant None
Vice President
Lance A. Rejsek Anti-Money Laundering Compliance Anti-Money Laundering Compliance
Officer Officer
|
Not applicable.
Item 28. Location of Accounts and Records
A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, maintains physical possession of each such account, book or other document of the Registrant at its principal executive offices, except for those relating to certain transactions in portfolio securities that are 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, AIM Investment Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739.
Item 29. Management Services
None
Item 30. Undertakings
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Houston, Texas on the 18th day of October, 2007.
REGISTRANT: AIM COUNSELOR SERIES TRUST
By: /s/ Philip A. Taylor
------------------------------------
Philip A. Taylor, 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/ Philip A. Taylor Trustee & President October 18, 2007
------------------------------------- (Principal Executive Officer)
(Philip A. Taylor)
/s/ Bob R. Baker* Trustee October 18, 2007
-------------------------------------
(Bob R. Baker)
/s/ Frank S. Bayley* Trustee October 18, 2007
-------------------------------------
(Frank S. Bayley)
/s/ James T. Bunch* Trustee October 18, 2007
-------------------------------------
(James T. Bunch)
/s/ Bruce L. Crockett* Chair & Trustee October 18, 2007
-------------------------------------
(Bruce L. Crockett)
/s/ Albert R. Dowden* Trustee October 18, 2007
-------------------------------------
(Albert R. Dowden)
/s/ Jack M. Fields* Trustee October 18, 2007
-------------------------------------
(Jack M. Fields)
/s/ Martin L. Flanagan* Trustee October 18, 2007
-------------------------------------
(Martin L. Flanagan)
/s/ Carl Frischling* Trustee October 18, 2007
-------------------------------------
(Carl Frischling)
/s/ Prema Mathai-Davis* Trustee October 18, 2007
-------------------------------------
(Prema Mathai-Davis)
|
/s/ Lewis F. Pennock* Trustee October 18, 2007 ------------------------------------- (Lewis F. Pennock) /s/ Ruth H. Quigley* Trustee October 18, 2007 ------------------------------------- (Ruth H. Quigley) /s/ Larry Soll* Trustee October 18, 2007 ------------------------------------- (Larry Soll) /s/ Raymond Stickel, Jr.* Trustee October 18, 2007 ------------------------------------- (Raymond Stickel, Jr.) /s/ Sidney M. Dilgren Vice President & Treasurer October 18, 2007 ------------------------------------- (Principal Financial and (Sidney M. Dilgren) Accounting Officer) |
*By /s/ Philip A. Taylor
---------------------------------
Philip A. Taylor
Attorney-in-Fact
|
* Philip A. Taylor, pursuant to powers of attorney dated April 23, 2007, filed herewith.
INDEX
Exhibit
Number Description
------ -----------
a(1)(f) Amendment No. 5, dated April 23, 2007, to the Second Amended and
Restated Agreement and Declaration of Trust of Registrant.
a(1)(g) Amendment No. 6, dated October 16, 2007, to the Second Amended and
Restated Agreement and Declaration of Trust of Registrant.
b(1)(c) Amendment No. 2 to Amended and Restated Bylaws of Registrant, adopted
effective March 23, 2007.
d(1)(e) Amendment No. 4, dated March 9, 2007, to the Master Investment
Advisory Agreement between the Registrant and A I M Advisors, Inc.
d(1)(f) Amendment No. 5, dated April 23, 2007, to the Master Investment
Advisory Agreement between the Registrant and A I M Advisors, Inc.
d(1)(g) Amendment No. 6, dated July 1, 2007, to the Master Investment Advisory
Agreement between the Registrant and A I M Advisors, Inc.
d(2)(b) Amendment No. 1, dated March 9, 2007, to the Master Intergroup
Sub-Advisory Contract for Mutual Funds between A I M Advisors, Inc.
and INVESCO Institutional (N.A.), Inc. on behalf of AIM Select Real
Estate Income Fund, AIM Structured Core Fund, AIM Structured Growth
Fund and AIM Structured Value Fund.
e(1)(e) Amendment No. 4, dated March 9, 2007, to the First Restated Master
Distribution Agreement (all classes of shares except Class B shares)
between Registrant and A I M Distributors, Inc.
e(1)(f) Amendment No. 5, dated April 23, 2007, to the First Restated Master
Distribution Agreement (all classes of shares except Class B shares)
between Registrant and A I M Distributors, Inc.
e(1)(g) Amendment No. 6, dated September 28, 2007, to the First Restated
Master Distribution Agreement (all classes of shares except Class B
shares) between Registrant and A I M Distributors, Inc.
e(1)(h) Form of Amendment No. 7 dated __________, to the First Restated Master
Distribution Agreement (all classes of shares except Class B shares)
between Registrant and A I M Distributors, Inc.
e(2)(d) Amendment No. 3 to the First Restated Master Distribution Agreement
(Class B shares), dated March 9, 2007, between Registrant and A I M
Distributors, Inc.
e(2)(e) Amendment No. 4 to the First Restated Master Distribution Agreement
(Class B shares), dated April 23, 2007, between Registrant and A I M
Distributors, Inc.
f(2)(a) Form of AIM Funds Director Deferred Compensation Agreement for
Registrant's Non-Affiliated Directors, as amended September 26, 2002.
f(2)(b) Form of supplement to Deferred Compensation Plans, dated January 1,
2005 with Registrant and AIM Funds.
|
h(1)(b) Amendment No. 1, dated as of July 1, 2007, to Third Amended and
Restated Transfer Agency and Service Agreement between Registrant and
AIM Investments Services, Inc.
h(2)(b) Amendment No. 1, dated March 9, 2007, to the Second Amended and
Restated Master Administrative Services Agreement.
h(2)(c) Amendment No. 2, dated April 23, 2007, to the Second Amended and
Restated Master Administrative Services Agreement.
h(3)(a) Second Amended and Restated Memorandum of Agreement regarding
securities lending waiver, dated March 9, 2007, between Registrant and
A I M Advisors, Inc. regarding Securities Lending, between Registrant
with respect to AIM Advantage Health Sciences Fund, AIM Multi-Sector
Fund, AIM Structured Core Fund, AIM Structured Growth Fund and AIM
Structured Value Fund, and A I M Advisors, Inc.
h(3)(b) Third Amended and Restated Memorandum of Agreement regarding
securities lending waiver, dated July 1, 2007, between Registrant and
A I M Advisors, Inc. regarding Securities Lending, between Registrant
with respect to AIM Advantage Health Sciences Fund, AIM Multi-Sector
Fund, AIM Structured Core Fund, AIM Structured Growth Fund and AIM
Structured Value Fund, and A I M Advisors, Inc.
h(4)(a) Memorandum of Agreement dated April 1, 2007, regarding expense limits
between Registrant and A I M Advisors, Inc.
h(4)(b) Memorandum of Agreement dated July 1, 2007, regarding expense limits
between Registrant and A I M Advisors, Inc. with respect to AIM
Floating Rate Fund, AIM Structured Core Fund, AIM Structured Growth
Fund and AIM Structured Value Fund.
h(6) Memorandum of Agreement regarding Affiliated Money Market Fund Waiver,
dated July 1, 2007, between Registrant and A I M Advisors, Inc.
h(7) Agreement and Plan of Reorganization, dated September 19, 2006 for AIM
Select Real Estate Income Fund.
h(8) Agreement and Plan of Reorganization, dated November 8, 2006 for AIM
Advantage Health Sciences Fund.
h(9) Agreement and Plan of Reorganization, dated December 6,2005, for AIM
Floating Rate Fund.
(i) Opinion and Consent of Ballard, Spahr, Andrews & Ingersoll, LLP.
j(1) Opinion of Ballard, Spahr, Andrews & Ingersoll, LLP concerning federal
income tax consequences of the reorganization of AIM Advantage Health
Sciences Fund.
j(2) Opinion of Ballard, Spahr, Andrews & Ingersoll, LLP concerning federal
income tax consequences of the reorganization of AIM Select Real
Estate Income Fund.
l(1)(b) Agreement Concerning Initial Capitalization of Registrant's AIM Select
Real Estate Income Fund dated March 8, 2007.
|
l(1)(c) Form of Agreement Concerning Initial Capitalization of Investor Class
shares of Registrant's AIM Structured Core Fund dated December 20,
2007.
m(1)(d) Amendment No. 3, dated March 9, 2007, to the Registrant's First
Restated Master Distribution Plan (Class A shares).
m(1)(e) Amendment No. 4, dated April 23, 2007, to the Registrant's First
Restated Master Distribution Plan (Class A shares).
m(2)(d) Amendment No. 3, dated March 9, 2007, to the Registrant's First
Restated Master Distribution Plan (Class B shares)
m(2)(e) Amendment No. 4, dated April 23, 2007, to the Registrant's First
Restated Master Distribution Plan (Class B shares).
m(3)(d) Amendment No. 3, dated March 9, 2007, to the Registrant's First
Restated Master Distribution Plan (Class C shares).
m(3)(e) Amendment No. 4, dated April 23, 2007, to the Registrant's First
Restated Master Distribution Plan (Class C shares).
m(5)(a) First Restated Master Distribution Plan (Compensation) between AIM
Structured Core Fund (Investor Class Shares) and A I M Distributors,
Inc., effective July 1, 2004 and as subsequently amended.
m(5)(b) Form of Amendment No. 1 dated ___, to the Registrant's First Restated
Master Distribution Plan (Compensation) between AIM Structured Core
Fund (Investor Class Shares) and A I M Distributors, Inc., effective
July 1, 2004 and as subsequently amended.
m(9) Form of Master Related Agreement to First Restated Master Distribution
Plan (Compensation) (Investor Class Shares).
q Powers of Attorney for Baker, Bayley, Bunch, Crockett, Dowden, Fields,
Flanagan, Frischling, Mathai-Davis, Pennock, Quigley, Soll, Stickel
and Taylor.
|
AMENDMENT NO. 5
TO THE
SECOND AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST OF
AIM COUNSELOR SERIES TRUST
This Amendment No. 5 ("Amendment") to the Second Amended and Restated Agreement and Declaration of Trust of AIM Counselor Series Trust amends, effective as of April 23, 2007, the Second Amended and Restated Agreement and Declaration of Trust of AIM Counselor Series Trust (the "Trust") dated as of December 6, 2005, as amended, (the "Agreement").
Under Section 9.7 of the Agreement, a duly authorized officer of the Trust may execute this Amendment.
WHEREAS, the Trust desires to amend the Agreement to delete a portfolio - AIM Advantage Health Sciences Fund;
NOW, THEREFORE, the Agreement is hereby amended as follows:
1. Schedule A of the Agreement is amended and restated to read in its entirety as set forth on Exhibit 1 to the Amendment.
2. All references in the Agreement to "this Agreement" shall mean the Agreement as amended by this Amendment.
3. 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 April 23, 2007.
By: /s/ John M. Zerr
------------------------------------
Name: John M. Zerr
Title: Senior Vice President
|
EXHIBIT 1 TO AMENDMENT NO. 5
TO
SECOND AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF AIM COUNSELOR SERIES TRUST
"SCHEDULE A
AIM COUNSELOR SERIES TRUST
PORTFOLIOS AND CLASSES THEREOF
PORTFOLIO CLASSES OF EACH PORTFOLIO
--------- -------------------------
AIM Floating Rate Fund Class A Shares
Class C Shares
Class R Shares
Institutional Class Shares
AIM Multi-Sector Fund Class A Shares
Class B Shares
Class C Shares
Institutional Class Shares
AIM Select Real Estate Income Fund Class A Shares
Class B Shares
Class C Shares
Institutional Class Shares
AIM Structured Core Fund Class A Shares
Class B Shares
Class C Shares
Class R Shares
Institutional Class Shares
AIM Structured Growth Fund Class A Shares
Class B Shares
Class C Shares
Class R Shares
Institutional Class Shares
AIM Structured Value Fund Class A Shares
Class B Shares
Class C Shares
Class R Shares
Institutional Class Shares"
|
AMENDMENT NO. 6
TO THE
SECOND AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST OF
AIM COUNSELOR SERIES TRUST
This Amendment No. 6 ("Amendment") to the Second Amended and Restated Agreement and Declaration of Trust of AIM Counselor Series Trust amends, effective as of October 16, 2007, the Second Amended and Restated Agreement and Declaration of Trust of AIM Counselor Series Trust (the "Trust") dated as of December 6, 2005, as amended, (the "Agreement").
Under Section 9.7 of the Agreement, a duly authorized officer of the Trust may execute this Amendment.
WHEREAS, the Trust desires to amend the Agreement to reflect the addition of Investor Class Share of AIM Structured Core Fund;
NOW, THEREFORE, the Agreement is hereby amended as follows:
1. Schedule A of the Agreement is amended and restated to read in its entirety as set forth on Exhibit 1 to the Amendment.
2. All references in the Agreement to "this Agreement" shall mean the Agreement as amended by this Amendment.
3. 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 October 16, 2007.
By: /s/ John M. Zerr
------------------------------------
Name: John M. Zerr
Title: Senior Vice President
|
EXHIBIT 1 TO AMENDMENT NO. 6
TO
SECOND AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF AIM COUNSELOR SERIES TRUST
"SCHEDULE A
AIM COUNSELOR SERIES TRUST
PORTFOLIOS AND CLASSES THEREOF
PORTFOLIO CLASSES OF EACH PORTFOLIO
--------- ---------------------------
AIM Floating Rate Fund Class A Shares
Class C Shares
Class R Shares
Institutional Class Shares
AIM Multi-Sector Fund Class A Shares
Class B Shares
Class C Shares
Institutional Class Shares
AIM Select Real Estate Income Fund Class A Shares
Class B Shares
Class C Shares
Institutional Class Shares
AIM Structured Core Fund Class A Shares
Class B Shares
Class C Shares
Class R Shares
Institutional Class Shares
Investor Class Shares
AIM Structured Growth Fund Class A Shares
Class B Shares
Class C Shares
Class R Shares
Institutional Class Shares
AIM Structured Value Fund Class A Shares
Class B Shares
Class C Shares
Class R Shares
Institutional Class Shares"
|
AMENDMENT NO. 2 TO
AMENDED AND RESTATED BYLAWS
OF AIM COUNSELOR SERIES TRUST
Adopted effective March 23, 2007
The Amended and Restated Bylaws of AIM Counselor Series Trust (the "Trust"), adopted effective September 14, 2005, (the "Bylaws"), are hereby amended as follows:
1. Article III, Section 14 is hereby amended and restated to read in its entirety as follows:
"Section 14. Authorized Signatories. Unless a specific officer is otherwise designated in these Bylaws or in a resolution adopted by the Board of Trustees, the proper officers of the Trust for executing agreements, documents and instruments other than Internal Revenue Service forms shall be the Principal Executive Officer, the President, any Vice President, the Principal Financial Officer, the Chief Legal Officer, the Chief Compliance Officer, the Senior Officer, the Treasurer, the Secretary, the Anti-Money Laundering Compliance Officer, any Assistant Vice President, any Assistant Treasurer or any Assistant Secretary. Unless a specific officer is otherwise designated in these Bylaws or in a resolution adopted by the Board of Trustees, the proper officers of the Trust for executing any and all Internal Revenue Service forms shall be the Principal Executive Officer, the President, any Vice President, the Principal Financial Officer, the Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary."
AMENDMENT NO. 4
TO
MASTER INVESTMENT ADVISORY AGREEMENT
This Amendment dated as of March 9, 2007, amends the Master Investment Advisory Agreement (the "Agreement"), dated November 25, 2003, between AIM Counselor Series Trust, a Delaware statutory trust, and A I M Advisors, Inc., a Delaware corporation.
WITNESSETH:
WHEREAS, the parties desire to amend the Agreement to add a new portfolio, AIM Select Real Estate Income Fund;
NOW, THEREFORE, the parties agree as follows;
1. Appendix A and Appendix B to the Agreement are hereby deleted in their entirety and replaced with the following:
"APPENDIX A
FUNDS AND EFFECTIVE DATES
NAME OF FUND EFFECTIVE DATE OF ADVISORY AGREEMENT ------------ ------------------------------------ AIM Advantage Health Sciences Fund November 25, 2003 AIM Multi-Sector Fund November 25, 2003 AIM Floating Rate Fund April 14, 2006 AIM Select Real Estate Income Fund March 12, 2007 AIM Structured Core Fund March 31, 2006 AIM Structured Growth Fund March 31, 2006 AIM Structured Value Fund March 31, 2006 |
APPENDIX B
COMPENSATION TO THE ADVISOR
The Trust shall pay the Advisor, out of the assets of each Fund except for AIM Advantage Health Science Fund, as full compensation for all services rendered, an advisory fee for such Funds as set forth below. Such fee shall be calculated by applying the following annual rates to the average daily net assets of such Funds for the calendar year computed in the manner used for the determination of the net asset value of shares of such Funds.
AIM FLOATING RATE FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $500 million................................................ 0.65% Next $4.5 billion................................................. 0.60% Next $5 billion................................................... 0.575% Over $10 billion.................................................. 0.55% |
AIM MULTI-SECTOR FUND
NET ASSETS ANNUAL RATE ---------- ----------- All Assets........................................................ 0.75% |
AIM SELECT REAL ESTATE INCOME FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $250 million................................................ 0.75% Next $250 million................................................. 0.74% Next $500 million................................................. 0.73% Next $1.5 billion................................................. 0.72% Next $2.5 billion................................................. 0.71% Next $2.5 billion................................................. 0.70% Next $2.5 billion................................................. 0.69% Amount over $10 billion........................................... 0.68% |
AIM STRUCTURED CORE FUND
AIM STRUCTURED GROWTH FUND
AIM STRUCTURED VALUE FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $250 million................................................ 0.60% Next $250 million................................................. 0.575% Next $500 million................................................. 0.55% Next $1.5 billion................................................. 0.525% Next $2.5 billion................................................. 0.50% Next $2.5 billion................................................. 0.475% Next $2.5 billion................................................. 0.45% Over $10 billion.................................................. 0.425% |
AIM ADVANTAGE HEALTH SCIENCES FUND
For the services to be rendered and the charges and expenses to be assumed by
the Advisor hereunder, the Trust shall pay to the Advisor an advisory fee which
will be computed daily and paid as of the last day of each month, using for each
daily calculation the most recently determined net asset value of the AIM
Advantage Health Sciences Fund, (the "Portfolio"), as determined by valuations
made in accordance with the Portfolio's procedures for calculating its net asset
value as described in the Portfolio's current Prospectus and/or Statement of
Additional Information. The advisory fee to the Advisor shall be computed at an
annual rate of 1.50% of the Portfolio's daily average net assets (the "Base
Fee"). This Base Fee will be adjusted, on a monthly basis (i) upward at the rate
of 0.20%, on a pro rata basis, for each percentage point by which the investment
performance of the Portfolio exceeds the sum of 2.00% and the investment record
of the Morgan Stanley Health Care Product Index (the "Index" or "Indexes"), or
(ii) downward at the rate of 0.20%, on a pro rata basis, for each percentage
point by which the investment record of the applicable Index less 2.00% exceeds
the investment performance of the Portfolio. The maximum or minimum adjustment,
if any, will be 1.00% annually. Therefore, the maximum annual fee payable to the
Advisor will be 2.50% of average daily net assets and the minimum annual fee
will be 0.50% of average daily net assets. During the first twelve months of
operation, the management fee will be charged at the base fee of 1.50% with no
performance adjustment. During any period when the determination of the
Portfolio's net asset value is suspended by the Trustees of the Trust, the net
asset value of a share of the Portfolio as of the last business day prior to
such suspension shall be deemed to be the net asset value at the close of each
succeeding business day until it is again determined.
In determining the fee adjustment, if any, applicable during any month, the
Advisor will compare the investment performance of the Class A Shares of the
Portfolio for the twelve-month period ending on the last day of the prior month
(the "Performance Period") to the investment record of the applicable Index
during the Performance Period. The investment performance of the Portfolio will
be determined by adding together (i) the change in the net asset value of the
Class A Shares during the Performance Period, (ii) the value of cash
distributions made by the Portfolio to holders of Class A Shares to the end of
the Performance Period, and (iii) the value of capital gains per share, if any,
paid on undistributed realized long-term capital gains accumulated to the end of
the Performance Period, and will be expressed as a percentage of the net asset
value per share of the Class A Shares at the beginning of the Performance
Period. The investment record of the Index will be determined by adding together
(i) the change in the level of the Index during the Performance Period and (ii)
the value, computed consistently with the Index, of cash distributions made by
companies whose securities comprise the Index accumulated to the end of the
Performance Period, and will be expressed as a percentage of the Index at the
beginning of such Period.
After it determines any fee adjustment, the Advisor will determine the dollar amount of additional fees or fee reductions to be accrued for each day of a month by multiplying the fee adjustment by the average daily net assets of the Class A Shares of the Portfolio during the Performance Period and dividing that number by the number of days in the Performance Period. The management fee, as adjusted, is accrued daily and paid monthly.
If the Trustees determine at some future date that another securities index is more representative of the composition of the Index for the Portfolio, the Trustees may change the securities index used to compute the fee adjustment. If the Trustees do so, the new securities index (the "New Index") will be applied prospectively to determine the amount of the fee adjustment. The Index will continue to
be used to determine the amount of the fee adjustment for that part of the Performance Period prior to the effective date of the New Index. A change in the Index will be submitted to shareholders for their approval unless the SEC determines that shareholder approval is not required.
However, no such fee shall be paid to the Advisor with respect to any assets of the Portfolio which may be invested in any other investment company for which the Advisor serves as investment advisor. The fee provided for hereunder shall be prorated in any month in which this Agreement is not in effect for the entire month.
Interest, taxes and extraordinary items such as litigation costs are not deemed expenses for purposes of this section and shall be borne by the Portfolio in any event. Expenditures, including costs incurred in connection with the purchase or sale of portfolio securities, which are capitalized in accordance with generally accepted accounting principles applicable to investment companies, are accounted for as capital items and shall not be deemed to be expenses for purposes of this section."
2. In all other respects, the Agreement is hereby confirmed and remains in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers on the date first written above.
AIM COUNSELOR SERIES TRUST
Attest: /s/ Stephen R. Rimes By: /s/ John M. Zerr
----------------------------- ----------------------------------------
Assistant Secretary John M. Zerr
Senior Vice President
|
(SEAL)
A I M ADVISORS, INC.
Attest: /s/ Stephen R. Rimes By: /s/ John M. Zerr
----------------------------- ------------------------------------
Assistant Secretary John M. Zerr
Senior Vice President
|
(SEAL)
AMENDMENT NO. 5
TO
MASTER INVESTMENT ADVISORY AGREEMENT
This Amendment dated as of April 23, 2007, amends the Master Investment Advisory Agreement (the "Agreement"), dated November 25, 2003, between AIM Counselor Series Trust, a Delaware statutory trust, and A I M Advisors, Inc., a Delaware corporation.
WITNESSETH:
WHEREAS, the parties desire to amend the Agreement to delete a portfolio, AIM Advantage Health Sciences Fund;
NOW, THEREFORE, the parties agree as follows;
1. Appendix A and Appendix B to the Agreement are hereby deleted in their entirety and replaced with the following:
"APPENDIX A
FUNDS AND EFFECTIVE DATES
NAME OF FUND EFFECTIVE DATE OF ADVISORY AGREEMENT ------------ ------------------------------------ AIM Multi-Sector Fund November 25, 2003 AIM Floating Rate Fund April 14, 2006 AIM Select Real Estate Income Fund March 12, 2007 AIM Structured Core Fund March 31, 2006 AIM Structured Growth Fund March 31, 2006 AIM Structured Value Fund March 31, 2006 |
APPENDIX B
COMPENSATION TO THE ADVISOR
The Trust shall pay the Advisor, out of the assets of each Fund, as full compensation for all services rendered, an advisory fee for such Funds as set forth below. Such fee shall be calculated by applying the following annual rates to the average daily net assets of such Funds for the calendar year computed in the manner used for the determination of the net asset value of shares of such Funds.
AIM FLOATING RATE FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $500 million................................................ 0.65% Next $4.5 billion................................................. 0.60% Next $5 billion................................................... 0.575% Over $10 billion.................................................. 0.55% |
AIM MULTI-SECTOR FUND
NET ASSETS ANNUAL RATE ---------- ----------- All Assets........................................................ 0.75% |
AIM SELECT REAL ESTATE INCOME FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $250 million................................................ 0.75% Next $250 million................................................. 0.74% Next $500 million................................................. 0.73% Next $1.5 billion................................................. 0.72% Next $2.5 billion................................................. 0.71% Next $2.5 billion................................................. 0.70% Next $2.5 billion................................................. 0.69% Amount over $10 billion........................................... 0.68% |
AIM STRUCTURED CORE FUND
AIM STRUCTURED GROWTH FUND
AIM STRUCTURED VALUE FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $250 million................................................ 0.60% Next $250 million................................................. 0.575% Next $500 million................................................. 0.55% Next $1.5 billion................................................. 0.525% Next $2.5 billion................................................. 0.50% Next $2.5 billion................................................. 0.475% Next $2.5 billion................................................. 0.45% Over $10 billion.................................................. 0.425% |
2. In all other respects, the Agreement is hereby confirmed and remains in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers on the date first written above.
AIM COUNSELOR SERIES TRUST
Attest: /s/ P. Michelle Grace By: /s/ John M. Zerr
---------------------------- ----------------------------
Assistant Secretary John M. Zerr
Senior Vice President
|
(SEAL)
A I M ADVISORS, INC.
Attest: /s/ P. Michelle Grace By: /s/ John M. Zerr
---------------------------- ----------------------------
Assistant Secretary John M. Zerr
Senior Vice President
|
(SEAL)
AMENDMENT NO. 6
TO
MASTER INVESTMENT ADVISORY AGREEMENT
This Amendment dated as of July 1, 2007, amends the Master Investment Advisory Agreement (the "Agreement"), dated November 25, 2003, between AIM Counselor Series Trust, a Delaware statutory trust, and A I M Advisors, Inc., a Delaware corporation.
WITNESSETH:
WHEREAS, the parties desire to amend the Agreement to permanently reduce the advisory fee payable by AIM Multi-Sector Fund effective July 1, 2007;
NOW, THEREFORE, the parties agree as follows;
1. Appendix A and Appendix B to the Agreement are hereby deleted in their entirety and replaced with the following:
"APPENDIX A
FUNDS AND EFFECTIVE DATES
NAME OF FUND EFFECTIVE DATE OF ADVISORY AGREEMENT ------------ ------------------------------------ AIM Floating Rate Fund April 14, 2006 AIM Multi-Sector Fund November 25, 2003 AIM Select Real Estate Income Fund March 12, 2007 AIM Structured Core Fund March 31, 2006 AIM Structured Growth Fund March 31, 2006 AIM Structured Value Fund March 31, 2006 |
APPENDIX B
COMPENSATION TO THE ADVISOR
The Trust shall pay the Advisor, out of the assets of each Fund, as full compensation for all services rendered, an advisory fee for such Funds as set forth below. Such fee shall be calculated by applying the following annual rates to the average daily net assets of such Funds for the calendar year computed in the manner used for the determination of the net asset value of shares of such Funds.
AIM FLOATING RATE FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $500 million................................................ 0.65% Next $4.5 billion................................................. 0.60% Next $5 billion................................................... 0.575% Over $10 billion.................................................. 0.55% |
AIM MULTI-SECTOR FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $250 million................................................ 0.695% Next $250 million................................................. 0.67% Next $500 million................................................. 0.645% Next $1.5 billion................................................. 0.62% Next $2.5 billion................................................. 0.595% Next $2.5 billion................................................. 0.57% Next $2.5 billion................................................. 0.545% Amount over $10 billion........................................... 0.52% |
AIM SELECT REAL ESTATE INCOME FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $250 million................................................ 0.75% Next $250 million................................................. 0.74% Next $500 million................................................. 0.73% Next $1.5 billion................................................. 0.72% Next $2.5 billion................................................. 0.71% Next $2.5 billion................................................. 0.70% Next $2.5 billion................................................. 0.69% Amount over $10 billion........................................... 0.68% |
AIM STRUCTURED CORE FUND
AIM STRUCTURED GROWTH FUND
AIM STRUCTURED VALUE FUND
NET ASSETS ANNUAL RATE ---------- ----------- First $250 million................................................ 0.60% Next $250 million................................................. 0.575% Next $500 million................................................. 0.55% Next $1.5 billion................................................. 0.525% Next $2.5 billion................................................. 0.50% Next $2.5 billion................................................. 0.475% Next $2.5 billion................................................. 0.45% Over $10 billion.................................................. 0.425%" |
2. In all other respects, the Agreement is hereby confirmed and remains in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers on the date first written above.
AIM COUNSELOR SERIES TRUST
Attest: /s/ Stephen R. Rimes By: /s/ John M. Zerr
---------------------------- ----------------------------
Assistant Secretary John M. Zerr
Senior Vice President
|
(SEAL)
A I M ADVISORS, INC.
Attest: /s/ Stephen R. Rimes By: /s/ John M. Zerr
---------------------------- ----------------------------
Assistant Secretary John M. Zerr
Senior Vice President
|
(SEAL)
AMENDMENT NO. 1
TO
MASTER INTERGROUP SUB-ADVISORY CONTRACT FOR MUTUAL FUNDS
This Amendment dated as of March 9, 2007, amends the Master Intergroup Sub-Advisory Contract for Mutual Funds (the "Agreement"), dated March 31, 2006, between A I M Advisors, Inc. and INVESCO Institutional (N.A.), Inc.
WITNESSETH:
WHEREAS, the parties desire to amend the Agreement to add a new portfolio, AIM Select Real Estate Income Fund;
NOW, THEREFORE, the parties agree as follows;
1. Exhibit A to the Agreement is hereby deleted in its entirety and replaced with the following:
"EXHIBIT A
TO
MASTER INTERGROUP SUB-ADVISORY CONTRACT FOR MUTUAL FUNDS
AIM COUNSELOR SERIES TRUST
AIM Select Real Estate Income Fund
AIM Structured Core Fund
AIM Structured Growth Fund
AIM Structured Value Fund"
2. In all other respects, the Agreement is hereby confirmed and remains in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers on the date first written above.
A I M ADVISORS, INC. INVESCO INSTITUTIONAL (N.A.), INC.
By: /s/ John M. Zerr By: /s/ Jeff Kupor
-------------------------------- ------------------------------------
John M. Zerr Name:
|
Senior Vice President Title:
AMENDMENT NO. 4
TO THE
FIRST RESTATED
MASTER DISTRIBUTION AGREEMENT
(ALL CLASSES OF SHARES EXCEPT CLASS B SHARES)
The First Restated Master Distribution Agreement (all Classes of shares except Class B Shares) (the "Agreement") made as of the 18th day of August, 2003, as subsequently amended, and as restated the 20th day of September, 2006, by and between each registered investment company set forth on Schedule A to the Agreement (each individually referred to as "Fund", or collectively, "Funds"), severally, on behalf of each of its series of beneficial interest set forth on Schedule A to the Agreement, (each, a "Portfolio"), with respect to each class of shares except Class B Shares (the "Shares") of each Portfolio, and A I M DISTRIBUTORS, INC., a Delaware corporation (the "Distributor"), is hereby amended to reflect the addition of AIM Select Real Estate Income Fund.
Schedule A of the Agreement is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
FIRST RESTATED
MASTER DISTRIBUTION AGREEMENT
(ALL CLASSES OF SHARES EXCEPT CLASS B SHARES)
AIM COUNSELOR SERIES TRUST
AIM Advantage Health Sciences Fund - Class A
Class C
AIM Floating Rate Fund - Class A
Class C
Class R
Institutional Class
AIM Multi-Sector Fund - Class A
Class C
Institutional Class
AIM Select Real Estate Income Fund - Class A
Class C
Institutional Class
AIM Structured Core Fund - Class A
Class C
Class R
Institutional Class
AIM Structured Growth Fund - Class A
Class C
Class R
Institutional Class
|
AIM Structured Value Fund - Class A
Class C
Class R
Institutional Class
AIM EQUITY FUNDS
AIM Capital Development Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Charter Fund - Class A
Class C
Class R
Institutional Class
AIM Constellation Fund - Class A
Class C
Class R
Institutional Class
AIM Diversified Dividend Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Large Cap Basic Value Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Large Cap Growth Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM FUNDS GROUP
AIM Basic Balanced Fund - Class A
Class C
Class R
Institutional Class
Investor Class
|
AIM European Small Company Fund - Class A
Class C
AIM Global Value Fund - Class A
Class C
Institutional Class
AIM International Small Company Fund - Class A
Class C
Institutional Class
AIM Mid Cap Basic Value Fund - Class A
Class C
Class R
Institutional Class
AIM Select Equity Fund - Class A
Class C
AIM Small Cap Equity Fund - Class A
Class C
Class R
Institutional Class
AIM GROWTH SERIES
AIM Basic Value Fund - Class A
Class C
Class R
Institutional Class
AIM Conservative Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Global Equity Fund - Class A
Class C
Class R
Institutional Class
AIM Growth Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Income Allocation Fund - Class A
Class C
Class R
Institutional Class
|
AIM Independence Now Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2010 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2020 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2030 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2040 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2050 Fund- Class A
Class C
Class R
Institutional Class
AIM International Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Mid Cap Core Equity Fund - Class A
Class C
Class R
Institutional Class
AIM Moderate Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Moderate Growth Allocation Fund - Class A
Class C
Class R
Institutional Class
|
AIM Moderately Conservative Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Small Cap Growth Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM INTERNATIONAL MUTUAL FUNDS
AIM Asia Pacific Growth Fund - Class A
Class C
AIM European Growth Fund - Class A
Class C
Class R
Investor Class
AIM Global Aggressive Growth Fund - Class A
Class C
AIM Global Growth Fund - Class A
Class C
AIM International Core Equity Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM International Growth Fund - Class A
Class C
Class R
Institutional Class
AIM INVESTMENT FUNDS
AIM China Fund - Class A
Class C
Institutional Class
AIM Developing Markets Fund - Class A
Class C
Institutional Class
AIM Global Health Care Fund - Class A
Class C
Institutional Class
|
AIM International Total Return Fund - Class A
Class C
Investor Class
AIM Japan Fund - Class A
Class C
Institutional Class
AIM LIBOR Alpha Fund - Class A
Class C
Class R
Institutional Class
AIM Trimark Endeavor Fund - Class A
Class C
Class R
Institutional Class
AIM Trimark Fund - Class A
Class C
Class R
Institutional Class
AIM Trimark Small Companies Fund - Class A
Class C
Class R
Institutional Class
AIM INVESTMENT SECURITIES FUNDS
AIM Global Real Estate Fund - Class A
Class C
Class R
Institutional Class
AIM High Yield Fund - Class A
Class C
Institutional Class
Investor Class
AIM Income Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Intermediate Government Fund - Class A
Class C
Class R
Institutional Class
Investor Class
|
AIM Limited Maturity Treasury Fund - Class A
Class A3
Institutional Class
AIM Money Market Fund - AIM Cash Reserve Shares
Class C
Class R
Institutional Class
Investor Class
AIM Municipal Bond Fund - Class A
Class C
Investor Class
AIM Real Estate Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Short Term Bond Fund - Class A
Class C
Class R
Institutional Class
AIM Total Return Bond Fund - Class A
Class C
Class R
Institutional Class
AIM SECTOR FUNDS
AIM Energy Fund - Class A
Class C
Institutional Class
Investor Class
AIM Financial Services Fund - Class A
Class C
Investor Class
AIM Gold & Precious Metals Fund - Class A
Class C
Investor Class
AIM Leisure Fund - Class A
Class C
Class R
Investor Class
|
AIM Technology Fund - Class A
Class C
Institutional Class
Investor Class
AIM Utilities Fund - Class A
Class C
Institutional Class
Investor Class
AIM SPECIAL OPPORTUNITIES FUNDS
AIM Opportunities I Fund - Class A
Class C
AIM Opportunities II Fund - Class A
Class C
AIM Opportunities III Fund - Class A
Class C
AIM STOCK FUNDS
AIM Dynamics Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM S&P 500 Index Fund - Institutional Class
Investor Class
AIM SUMMIT FUND Class A
Class C
Class P
AIM TAX-EXEMPT FUNDS
AIM High Income Municipal Fund - Class A
Class C
Institutional Class
AIM Tax-Exempt Cash Fund - Class A
Investor Class
AIM Tax-Free Intermediate Fund - Class A
Class A3
Institutional Class
AIM TREASURER'S SERIES TRUST
Premier Portfolio Investor Class
Premier Tax-Exempt Portfolio Investor Class
Premier U.S. Government Money Portfolio Investor Class"
|
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: March 9, 2007
AIM COUNSELOR SERIES TRUST
AIM EQUITY FUNDS
AIM FUNDS GROUP
AIM GROWTH SERIES
AIM INTERNATIONAL MUTUAL FUNDS
AIM INVESTMENT FUNDS
AIM INVESTMENT SECURITIES FUNDS
AIM SECTOR FUNDS
AIM SPECIAL OPPORTUNITIES FUNDS
AIM STOCK FUNDS
AIM TAX-EXEMPT FUNDS
on behalf of the Shares of each
Portfolio listed on Schedule A
By: /s/ John M. Zerr
------------------------------------
John M. Zerr
Senior Vice President
|
AIM TREASURER'S SERIES TRUST on behalf
of the Shares of each Portfolio listed
on Schedule A
By: /s/ Karen Dunn Kelley
------------------------------------
Karen Dunn Kelley
President
|
A I M DISTRIBUTORS, INC.
By: /s/ Gene L. Needles
------------------------------------
Gene L. Needles
President
|
AMENDMENT NO. 5
TO THE
FIRST RESTATED
MASTER DISTRIBUTION AGREEMENT
(ALL CLASSES OF SHARES EXCEPT CLASS B SHARES)
The First Restated Master Distribution Agreement (all Classes of shares except Class B Shares) (the "Agreement") made as of the 18th day of August, 2003, as subsequently amended, and as restated the 20th day of September, 2006, by and between each registered investment company set forth on Schedule A to the Agreement (each individually referred to as "Fund", or collectively, "Funds"), severally, on behalf of each of its series of beneficial interest set forth on Schedule A to the Agreement, (each, a "Portfolio"), with respect to each class of shares except Class B Shares (the "Shares") of each Portfolio, and A I M DISTRIBUTORS, INC., a Delaware corporation (the "Distributor"), is hereby amended to delete AIM Advantage Health Sciences Fund, AIM Opportunities I Fund, AIM Opportunities II Fund and AIM Opportunities III Fund.
Schedule A of the Agreement is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
FIRST RESTATED
MASTER DISTRIBUTION AGREEMENT
(ALL CLASSES OF SHARES EXCEPT CLASS B SHARES)
AIM COUNSELOR SERIES TRUST
AIM Floating Rate Fund - Class A
Class C
Class R
Institutional Class
AIM Multi-Sector Fund - Class A
Class C
Institutional Class
AIM Select Real Estate Income Fund - Class A
Class C
Institutional Class
AIM Structured Core Fund - Class A
Class C
Class R
Institutional Class
AIM Structured Growth Fund - Class A
Class C
Class R
Institutional Class
|
AIM Structured Value Fund - Class A
Class C
Class R
Institutional Class
AIM EQUITY FUNDS
AIM Capital Development Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Charter Fund - Class A
Class C
Class R
Institutional Class
AIM Constellation Fund - Class A
Class C
Class R
Institutional Class
AIM Diversified Dividend Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Large Cap Basic Value Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Large Cap Growth Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM FUNDS GROUP
AIM Basic Balanced Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM European Small Company Fund - Class A
Class C
|
AIM Global Value Fund - Class A
Class C
Institutional Class
AIM International Small Company Fund - Class A
Class C
Institutional Class
AIM Mid Cap Basic Value Fund - Class A
Class C
Class R
Institutional Class
AIM Select Equity Fund - Class A
Class C
AIM Small Cap Equity Fund - Class A
Class C
Class R
Institutional Class
AIM GROWTH SERIES
AIM Basic Value Fund - Class A
Class C
Class R
Institutional Class
AIM Conservative Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Global Equity Fund - Class A
Class C
Class R
Institutional Class
AIM Growth Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Income Allocation Fund - Class A
Class C
Class R
Institutional Class
|
AIM Independence Now Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2010 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2020 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2030 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2040 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2050 Fund- Class A
Class C
Class R
Institutional Class
AIM International Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Mid Cap Core Equity Fund - Class A
Class C
Class R
Institutional Class
AIM Moderate Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Moderate Growth Allocation Fund - Class A
Class C
Class R
Institutional Class
|
AIM Moderately Conservative Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Small Cap Growth Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM INTERNATIONAL MUTUAL FUNDS
AIM Asia Pacific Growth Fund - Class A
Class C
AIM European Growth Fund - Class A
Class C
Class R
Investor Class
AIM Global Aggressive Growth Fund - Class A
Class C
AIM Global Growth Fund - Class A
Class C
AIM International Core Equity Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM International Growth Fund - Class A
Class C
Class R
Institutional Class
AIM INVESTMENT FUNDS
AIM China Fund - Class A
Class C
Institutional Class
AIM Developing Markets Fund - Class A
Class C
Institutional Class
AIM Global Health Care Fund - Class A
Class C
Institutional Class
|
AIM International Total Return Fund - Class A
Class C
Investor Class
AIM Japan Fund - Class A
Class C
Institutional Class
AIM LIBOR Alpha Fund - Class A
Class C
Class R
Institutional Class
AIM Trimark Endeavor Fund - Class A
Class C
Class R
Institutional Class
AIM Trimark Fund - Class A
Class C
Class R
Institutional Class
AIM Trimark Small Companies Fund - Class A
Class C
Class R
Institutional Class
AIM INVESTMENT SECURITIES FUNDS
AIM Global Real Estate Fund - Class A
Class C
Class R
Institutional Class
AIM High Yield Fund - Class A
Class C
Institutional Class
Investor Class
AIM Income Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Intermediate Government Fund - Class A
Class C
Class R
Institutional Class
Investor Class
|
AIM Limited Maturity Treasury Fund - Class A
Class A3
Institutional Class
AIM Money Market Fund - AIM Cash Reserve Shares
Class C
Class R
Institutional Class
Investor Class
AIM Municipal Bond Fund - Class A
Class C
Investor Class
AIM Real Estate Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Short Term Bond Fund - Class A
Class C
Class R
Institutional Class
AIM Total Return Bond Fund - Class A
Class C
Class R
Institutional Class
AIM SECTOR FUNDS
AIM Energy Fund - Class A
Class C
Institutional Class
Investor Class
AIM Financial Services Fund - Class A
Class C
Investor Class
AIM Gold & Precious Metals Fund - Class A
Class C
Investor Class
AIM Leisure Fund - Class A
Class C
Class R
Investor Class
|
AIM Technology Fund - Class A
Class C
Institutional Class
Investor Class
AIM Utilities Fund - Class A
Class C
Institutional Class
Investor Class
AIM STOCK FUNDS
AIM Dynamics Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM S&P 500 Index Fund - Institutional Class
Investor Class
AIM SUMMIT FUND Class A
Class C
Class P
AIM TAX-EXEMPT FUNDS
AIM High Income Municipal Fund - Class A
Class C
Institutional Class
AIM Tax-Exempt Cash Fund - Class A
Investor Class
AIM Tax-Free Intermediate Fund - Class A
Class A3
Institutional Class
AIM TREASURER'S SERIES TRUST
Premier Portfolio Investor Class
Premier Tax-Exempt Portfolio Investor Class
Premier U.S. Government Money Portfolio Investor Class"
|
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: April 23, 2007
AIM COUNSELOR SERIES TRUST
AIM EQUITY FUNDS
AIM FUNDS GROUP
AIM GROWTH SERIES
AIM INTERNATIONAL MUTUAL FUNDS
AIM INVESTMENT FUNDS
AIM INVESTMENT SECURITIES FUNDS
AIM SECTOR FUNDS
AIM SPECIAL OPPORTUNITIES FUNDS
AIM STOCK FUNDS
AIM TAX-EXEMPT FUNDS
on behalf of the Shares of each Portfolio
listed on Schedule A
By: /s/ John M. Zerr
-------------------------------------
John M. Zerr
Senior Vice President
|
AIM TREASURER'S SERIES TRUST
on behalf of the Shares of each Portfolio
listed on Schedule A
By: /s/ Karen Dunn Kelley
-------------------------------------
Karen Dunn Kelley
President
|
A I M DISTRIBUTORS, INC.
By: /s/ Gene L. Needles
-------------------------------------
Gene L. Needles
President
|
AMENDMENT NO. 6
TO THE
FIRST RESTATED
MASTER DISTRIBUTION AGREEMENT
(ALL CLASSES OF SHARES EXCEPT CLASS B SHARES)
The First Restated Master Distribution Agreement (all Classes of shares except Class B Shares) (the "Agreement") made as of the 18th day of August, 2003, as subsequently amended, and as restated the 20th day of September, 2006, by and between each registered investment company set forth on Schedule A to the Agreement (each individually referred to as "Fund", or collectively, "Funds"), severally, on behalf of each of its series of beneficial interest set forth on Schedule A to the Agreement, (each, a "Portfolio"), with respect to each class of shares except Class B Shares (the "Shares") of each Portfolio, and A I M DISTRIBUTORS, INC., a Delaware corporation (the "Distributor"), is hereby amended to reflect the addition of Institutional Class shares of AIM Global Aggressive Growth Fund and AIM Global Growth Fund.
Schedule A of the Agreement is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
FIRST RESTATED
MASTER DISTRIBUTION AGREEMENT
(ALL CLASSES OF SHARES EXCEPT CLASS B SHARES)
AIM COUNSELOR SERIES TRUST
AIM Floating Rate Fund - Class A
Class C
Class R
Institutional Class
AIM Multi-Sector Fund - Class A
Class C
Institutional Class
AIM Select Real Estate Income Fund - Class A
Class C
Institutional Class
AIM Structured Core Fund - Class A
Class C
Class R
Institutional Class
AIM Structured Growth Fund - Class A
Class C
Class R
Institutional Class
|
AIM Structured Value Fund - Class A
Class C
Class R
Institutional Class
AIM EQUITY FUNDS
AIM Capital Development Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Charter Fund - Class A
Class C
Class R
Institutional Class
AIM Constellation Fund - Class A
Class C
Class R
Institutional Class
AIM Diversified Dividend Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Large Cap Basic Value Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Large Cap Growth Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM FUNDS GROUP
AIM Basic Balanced Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM European Small Company Fund - Class A
Class C
|
AIM Global Value Fund - Class A
Class C
Institutional Class
AIM International Small Company Fund - Class A
Class C
Institutional Class
AIM Mid Cap Basic Value Fund - Class A
Class C
Class R
Institutional Class
AIM Select Equity Fund - Class A
Class C
AIM Small Cap Equity Fund - Class A
Class C
Class R
Institutional Class
AIM GROWTH SERIES
AIM Basic Value Fund - Class A
Class C
Class R
Institutional Class
AIM Conservative Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Global Equity Fund - Class A
Class C
Class R
Institutional Class
AIM Growth Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Income Allocation Fund - Class A
Class C
Class R
Institutional Class
|
AIM Independence Now Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2010 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2020 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2030 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2040 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2050 Fund- Class A
Class C
Class R
Institutional Class
AIM International Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Mid Cap Core Equity Fund - Class A
Class C
Class R
Institutional Class
AIM Moderate Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Moderate Growth Allocation Fund - Class A
Class C
Class R
Institutional Class
|
AIM Moderately Conservative Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Small Cap Growth Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM INTERNATIONAL MUTUAL FUNDS
AIM Asia Pacific Growth Fund - Class A
Class C
AIM European Growth Fund - Class A
Class C
Class R
Investor Class
AIM Global Aggressive Growth Fund - Class A
Class C
Institutional Class
AIM Global Growth Fund - Class A
Class C
Institutional Class
AIM International Core Equity Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM International Growth Fund - Class A
Class C
Class R
Institutional Class
AIM INVESTMENT FUNDS
AIM China Fund - Class A
Class C
Institutional Class
AIM Developing Markets Fund - Class A
Class C
Institutional Class
AIM Global Health Care Fund - Class A
Class C
Investor Class
|
AIM International Total Return Fund - Class A
Class C
Institutional Class
AIM Japan Fund - Class A
Class C
Institutional Class
AIM LIBOR Alpha Fund - Class A
Class C
Class R
Institutional Class
AIM Trimark Endeavor Fund - Class A
Class C
Class R
Institutional Class
AIM Trimark Fund - Class A
Class C
Class R
Institutional Class
AIM Trimark Small Companies Fund - Class A
Class C
Class R
Institutional Class
AIM INVESTMENT SECURITIES FUNDS
AIM Global Real Estate Fund - Class A
Class C
Class R
Institutional Class
AIM High Yield Fund - Class A
Class C
Institutional Class
Investor Class
AIM Income Fund - Class A
Class C
Class R
Institutional Class
Investor Class
|
AIM Intermediate Government Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Limited Maturity Treasury Fund - Class A
Class A3
Institutional Class
AIM Money Market Fund - AIM Cash Reserve Shares
Class C
Class R
Institutional Class
Investor Class
AIM Municipal Bond Fund - Class A
Class C
Investor Class
AIM Real Estate Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Short Term Bond Fund - Class A
Class C
Class R
Institutional Class
AIM Total Return Bond Fund - Class A
Class C
Class R
Institutional Class
AIM SECTOR FUNDS
AIM Energy Fund - Class A
Class C
Institutional Class
Investor Class
AIM Financial Services Fund - Class A
Class C
Investor Class
AIM Gold & Precious Metals Fund - Class A
Class C
Investor Class
|
AIM Leisure Fund - Class A
Class C
Class R
Investor Class
AIM Technology Fund - Class A
Class C
Institutional Class
Investor Class
AIM Utilities Fund - Class A
Class C
Institutional Class
Investor Class
AIM STOCK FUNDS
AIM Dynamics Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM S&P 500 Index Fund - Institutional Class
Investor Class
AIM SUMMIT FUND Class A
Class C
Class P
AIM TAX-EXEMPT FUNDS
AIM High Income Municipal Fund - Class A
Class C
Institutional Class
AIM Tax-Exempt Cash Fund - Class A
Investor Class
AIM Tax-Free Intermediate Fund - Class A
Class A3
Institutional Class
AIM TREASURER'S SERIES TRUST
Premier Portfolio - Investor Class
Premier Tax-Exempt Portfolio - Investor Class
Premier U.S. Government Money Portfolio - Investor Class
|
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: September 28, 2007
AIM COUNSELOR SERIES TRUST
AIM EQUITY FUNDS
AIM FUNDS GROUP
AIM GROWTH SERIES
AIM INTERNATIONAL MUTUAL FUNDS
AIM INVESTMENT FUNDS
AIM INVESTMENT SECURITIES FUNDS
AIM SECTOR FUNDS
AIM STOCK FUNDS
AIM SUMMIT FUND
AIM TAX-EXEMPT FUNDS
on behalf of the Shares of each
Portfolio listed on Schedule A
By: /s/ John M. Zerr
------------------------------------
John M. Zerr
Senior Vice President
|
AIM TREASURER'S SERIES TRUST
on behalf of the Shares of each
Portfolio listed on Schedule A
By: /s/ Karen Dunn Kelley
------------------------------------
Karen Dunn Kelley
President
|
A I M DISTRIBUTORS, INC.
By: /s/ John S. Cooper
------------------------------------
John S. Cooper
Executive Vice President
|
AMENDMENT NO. 7
TO THE
FIRST RESTATED
MASTER DISTRIBUTION AGREEMENT
(ALL CLASSES OF SHARES EXCEPT CLASS B SHARES)
The First Restated Master Distribution Agreement (all Classes of shares except Class B Shares) (the "Agreement") made as of the 18th day of August, 2003, as subsequently amended, and as restated the 20th day of September, 2006, by and between each registered investment company set forth on Schedule A to the Agreement (each individually referred to as "Fund", or collectively, "Funds"), severally, on behalf of each of its series of beneficial interest set forth on Schedule A to the Agreement, (each, a "Portfolio"), with respect to each class of shares except Class B Shares (the "Shares") of each Portfolio, and A I M DISTRIBUTORS, INC., a Delaware corporation (the "Distributor"), is hereby amended to reflect the addition of Investor Class shares of AIM Structured Core Fund.
Schedule A of the Agreement is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
FIRST RESTATED
MASTER DISTRIBUTION AGREEMENT
(ALL CLASSES OF SHARES EXCEPT CLASS B SHARES)
AIM COUNSELOR SERIES TRUST
AIM Floating Rate Fund - Class A
Class C
Class R
Institutional Class
AIM Multi-Sector Fund - Class A
Class C
Institutional Class
AIM Select Real Estate Income Fund - Class A
Class C
Institutional Class
AIM Structured Core Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Structured Growth Fund - Class A
Class C
Class R
Institutional Class
|
AIM Structured Value Fund - Class A
Class C
Class R
Institutional Class
AIM EQUITY FUNDS
AIM Capital Development Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Charter Fund - Class A
Class C
Class R
Institutional Class
AIM Constellation Fund - Class A
Class C
Class R
Institutional Class
AIM Diversified Dividend Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Large Cap Basic Value Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Large Cap Growth Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM FUNDS GROUP
AIM Basic Balanced Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM European Small Company Fund - Class A
Class C
|
AIM Global Value Fund - Class A
Class C
Institutional Class
AIM International Small Company Fund - Class A
Class C
Institutional Class
AIM Mid Cap Basic Value Fund - Class A
Class C
Class R
Institutional Class
AIM Select Equity Fund - Class A
Class C
AIM Small Cap Equity Fund - Class A
Class C
Class R
Institutional Class
AIM GROWTH SERIES
AIM Basic Value Fund - Class A
Class C
Class R
Institutional Class
AIM Conservative Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Global Equity Fund - Class A
Class C
Class R
Institutional Class
AIM Growth Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Income Allocation Fund - Class A
Class C
Class R
Institutional Class
|
AIM Independence Now Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2010 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2020 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2030 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2040 Fund- Class A
Class C
Class R
Institutional Class
AIM Independence 2050 Fund- Class A
Class C
Class R
Institutional Class
AIM International Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Mid Cap Core Equity Fund - Class A
Class C
Class R
Institutional Class
AIM Moderate Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Moderate Growth Allocation Fund - Class A
Class C
Class R
Institutional Class
|
AIM Moderately Conservative Allocation Fund - Class A
Class C
Class R
Institutional Class
AIM Small Cap Growth Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM INTERNATIONAL MUTUAL FUNDS
AIM Asia Pacific Growth Fund - Class A
Class C
AIM European Growth Fund - Class A
Class C
Class R
Investor Class
AIM Global Aggressive Growth Fund - Class A
Class C
Institutional Class
AIM Global Growth Fund - Class A
Class C
Institutional Class
AIM International Core Equity Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM International Growth Fund - Class A
Class C
Class R
Institutional Class
AIM INVESTMENT FUNDS
AIM China Fund - Class A
Class C
Institutional Class
AIM Developing Markets Fund - Class A
Class C
Institutional Class
AIM Global Health Care Fund - Class A
Class C
Investor Class
|
AIM International Total Return Fund - Class A
Class C
Institutional Class
AIM Japan Fund - Class A
Class C
Institutional Class
AIM LIBOR Alpha Fund - Class A
Class C
Class R
Institutional Class
AIM Trimark Endeavor Fund - Class A
Class C
Class R
Institutional Class
AIM Trimark Fund - Class A
Class C
Class R
Institutional Class
AIM Trimark Small Companies Fund - Class A
Class C
Class R
Institutional Class
AIM INVESTMENT SECURITIES FUNDS
AIM Global Real Estate Fund - Class A
Class C
Class R
Institutional Class
AIM High Yield Fund - Class A
Class C
Institutional Class
Investor Class
AIM Income Fund - Class A
Class C
Class R
Institutional Class
Investor Class
|
AIM Intermediate Government Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Limited Maturity Treasury Fund - Class A
Class A3
Institutional Class
AIM Money Market Fund - AIM Cash Reserve Shares
Class C
Class R
Institutional Class
Investor Class
AIM Municipal Bond Fund - Class A
Class C
Investor Class
AIM Real Estate Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM Short Term Bond Fund - Class A
Class C
Class R
Institutional Class
AIM Total Return Bond Fund - Class A
Class C
Class R
Institutional Class
AIM SECTOR FUNDS
AIM Energy Fund - Class A
Class C
Institutional Class
Investor Class
AIM Financial Services Fund - Class A
Class C
Investor Class
AIM Gold & Precious Metals Fund - Class A
Class C
Investor Class
|
AIM Leisure Fund - Class A
Class C
Class R
Investor Class
AIM Technology Fund - Class A
Class C
Institutional Class
Investor Class
AIM Utilities Fund - Class A
Class C
Institutional Class
Investor Class
AIM STOCK FUNDS
AIM Dynamics Fund - Class A
Class C
Class R
Institutional Class
Investor Class
AIM S&P 500 Index Fund - Institutional Class
Investor Class
AIM SUMMIT FUND Class A
Class C
Class P
AIM TAX-EXEMPT FUNDS
AIM High Income Municipal Fund - Class A
Class C
Institutional Class
AIM Tax-Exempt Cash Fund - Class A
Investor Class
AIM Tax-Free Intermediate Fund - Class A
Class A3
Institutional Class
AIM TREASURER'S SERIES TRUST
Premier Portfolio - Investor Class
Premier Tax-Exempt Portfolio - Investor Class
Premier U.S. Government Money Portfolio - Investor Class"
|
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: December 20, 2007
AIM COUNSELOR SERIES TRUST
AIM EQUITY FUNDS
AIM FUNDS GROUP
AIM GROWTH SERIES
AIM INTERNATIONAL MUTUAL FUNDS
AIM INVESTMENT FUNDS
AIM INVESTMENT SECURITIES FUNDS
AIM SECTOR FUNDS
AIM STOCK FUNDS
AIM SUMMIT FUND
AIM TAX-EXEMPT FUNDS
on behalf of the Shares of each
Portfolio listed on Schedule A
AIM TREASURER'S SERIES TRUST
on behalf of the Shares of each
Portfolio listed on Schedule A
A I M DISTRIBUTORS, INC.
AMENDMENT NO. 3
TO
FIRST RESTATED
MASTER DISTRIBUTION AGREEMENT
(CLASS B SHARES)
The First Restated Master Distribution Agreement (Class B Shares) (the "Agreement") made as of the 18th day of August, 2003, as subsequently amended, and as restated the 20th day of September, 2006, by and between each registered investment company set forth on Schedule A-1 and Schedule A-2 to the Agreement (each individually referred to as the "Fund", or collectively, the "Funds"), severally, on behalf of each of its series of common stock or beneficial interest, as the case may be, set forth on Schedule A-1 and Schedule A-2 to the Agreement (each, a "Portfolio"), with respect to the Class B Shares (the "Shares") of each Portfolio, and A I M DISTRIBUTORS, INC., a Delaware corporation (the "Distributor"), is hereby amended as follows:
WHEREAS, the parties desire to amend the Agreement to reflect the addition of AIM Select Real Estate Income Fund;
NOW, THEREFORE, Schedule A-1 and Schedule A-2 to the Agreement are hereby deleted in their entirety and replaced with Schedule A-1 and Schedule A-2 attached to this amendment.
All other terms and provisions of the Agreement not amended hereby shall remain in full force and effect.
Dated: March 9, 2007
EACH FUND LISTED ON SCHEDULE A-1 ON
BEHALF OF THE SHARES OF EACH PORTFOLIO
LISTED ON SCHEDULE A-1
By: /s/ John M. Zerr
------------------------------------
Name: John M. Zerr
Title: Senior Vice President
|
EACH FUND LISTED ON SCHEDULE A-2 ON
BEHALF OF THE SHARES OF EACH PORTFOLIO
LISTED ON SCHEDULE A-2
By: /s/ John M. Zerr
------------------------------------
Name: John M. Zerr
Title: Senior Vice President
|
A I M DISTRIBUTORS, INC.
By: /s/ Gene Needles
------------------------------------
Name: Gene Needles
Title: President
|
"SCHEDULE A-1
TO
AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
(CLASS B SHARES)
AIM EQUITY FUNDS
PORTFOLIOS
AIM Capital Development Fund
AIM Charter Fund
AIM Constellation Fund
AIM Diversified Dividend Fund
AIM Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM FUNDS GROUP
PORTFOLIOS
AIM Basic Balanced Fund
AIM European Small Company Fund
AIM Global Value Fund
AIM International Small Company Fund
AIM Mid Cap Basic Value Fund
AIM Select Equity Fund
AIM Small Cap Equity Fund
AIM GROWTH SERIES
PORTFOLIOS
AIM Basic Value Fund
AIM Conservative Allocation Fund
AIM Global Equity Fund
AIM Growth Allocation Fund
AIM Income Allocation Fund
AIM Independence Now Fund
AIM Independence 2010 Fund
AIM Independence 2020 Fund
AIM Independence 2030 Fund
AIM Independence 2040 Fund
AIM Independence 2050 Fund
AIM International Allocation Fund
AIM Mid Cap Core Equity Fund
AIM Moderate Allocation Fund
AIM Moderate Growth Allocation Fund
AIM Moderately Conservative Allocation Fund
AIM Small Cap Growth Fund
AIM INTERNATIONAL MUTUAL FUNDS
PORTFOLIOS
AIM Asia Pacific Growth Fund
AIM European Growth Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM International Core Equity Fund
AIM International Growth Fund
AIM INVESTMENT FUNDS
PORTFOLIOS
AIM China Fund
AIM Developing Markets Fund
AIM Global Health Care Fund
AIM International Total Return Fund
AIM Japan Fund
AIM Trimark Fund
AIM Trimark Endeavor Fund
AIM Trimark Small Companies Fund
AIM INVESTMENT SECURITIES FUNDS
PORTFOLIOS
AIM Global Real Estate Fund
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Real Estate Fund
AIM Total Return Bond Fund
AIM SPECIAL OPPORTUNITIES FUNDS
PORTFOLIOS
AIM Opportunities I Fund
AIM Opportunities II Fund
AIM Opportunities III Fund
AIM SUMMIT FUND
AIM TAX-EXEMPT FUNDS
PORTFOLIO
AIM High Income Municipal Fund"
"SCHEDULE A-2
TO
AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
(CLASS B SHARES)
AIM COUNSELOR SERIES TRUST
PORTFOLIOS
AIM Advantage Health Sciences Fund
AIM Multi-Sector Fund
AIM Select Real Estate Income Fund
AIM Structured Core Fund
AIM Structured Growth Fund
AIM Structured Value Fund
AIM SECTOR FUNDS
PORTFOLIOS
AIM Energy Fund
AIM Financial Services Fund
AIM Gold & Precious Metals Fund
AIM Leisure Fund
AIM Technology Fund
AIM Utilities Fund
AIM STOCK FUNDS
AIM Dynamics Fund"
AMENDMENT NO. 4
TO
FIRST RESTATED
MASTER DISTRIBUTION AGREEMENT
(CLASS B SHARES)
The First Restated Master Distribution Agreement (Class B Shares) (the "Agreement") made as of the 18th day of August, 2003, as subsequently amended, and as restated the 20th day of September, 2006, by and between each registered investment company set forth on Schedule A-1 and Schedule A-2 to the Agreement (each individually referred to as the "Fund", or collectively, the "Funds"), severally, on behalf of each of its series of common stock or beneficial interest, as the case may be, set forth on Schedule A-1 and Schedule A-2 to the Agreement (each, a "Portfolio"), with respect to the Class B Shares (the "Shares") of each Portfolio, and A I M DISTRIBUTORS, INC., a Delaware corporation (the "Distributor"), is hereby amended as follows:
WHEREAS, the parties desire to amend the Agreement to delete AIM Advantage Health Sciences Fund, AIM Opportunities I Fund, AIM Opportunities II Fund and AIM Opportunities III Fund;
NOW, THEREFORE, Schedule A-1 and Schedule A-2 to the Agreement are hereby deleted in their entirety and replaced with Schedule A-1 and Schedule A-2 attached to this amendment.
All other terms and provisions of the Agreement not amended hereby shall remain in full force and effect.
Dated: April 23, 2007
EACH FUND LISTED ON SCHEDULE A-1 ON
BEHALF OF THE SHARES OF EACH
PORTFOLIO LISTED ON SCHEDULE A-1
By: /s/ John M. Zerr
------------------------------------
Name: John M. Zerr
Title: Senior Vice President
|
EACH FUND LISTED ON SCHEDULE A-2 ON
BEHALF OF THE SHARES OF EACH PORTFOLIO
LISTED ON SCHEDULE A-2
By: /s/ John M. Zerr
------------------------------------
Name: John M. Zerr
Title: Senior Vice President
|
A I M DISTRIBUTORS, INC.
By: /s/ Gene Needles
------------------------------------
Name: Gene Needles
Title: President
|
"SCHEDULE A-1
TO
AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
(CLASS B SHARES)
AIM EQUITY FUNDS
PORTFOLIOS
AIM Capital Development Fund
AIM Charter Fund
AIM Constellation Fund
AIM Diversified Dividend Fund
AIM Large Cap Basic Value Fund
AIM Large Cap Growth Fund
AIM FUNDS GROUP
PORTFOLIOS
AIM Basic Balanced Fund
AIM European Small Company Fund
AIM Global Value Fund
AIM International Small Company Fund
AIM Mid Cap Basic Value Fund
AIM Select Equity Fund
AIM Small Cap Equity Fund
AIM GROWTH SERIES
PORTFOLIOS
AIM Basic Value Fund
AIM Conservative Allocation Fund
AIM Global Equity Fund
AIM Growth Allocation Fund
AIM Income Allocation Fund
AIM Independence Now Fund
AIM Independence 2010 Fund
AIM Independence 2020 Fund
AIM Independence 2030 Fund
AIM Independence 2040 Fund
AIM Independence 2050 Fund
AIM International Allocation Fund
AIM Mid Cap Core Equity Fund
AIM Moderate Allocation Fund
AIM Moderate Growth Allocation Fund
AIM Moderately Conservative Allocation Fund
AIM Small Cap Growth Fund
AIM INTERNATIONAL MUTUAL FUNDS
PORTFOLIOS
AIM Asia Pacific Growth Fund
AIM European Growth Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM International Core Equity Fund
AIM International Growth Fund
AIM INVESTMENT FUNDS
PORTFOLIOS
AIM China Fund
AIM Developing Markets Fund
AIM Global Health Care Fund
AIM International Total Return Fund
AIM Japan Fund
AIM Trimark Fund
AIM Trimark Endeavor Fund
AIM Trimark Small Companies Fund
AIM INVESTMENT SECURITIES FUNDS
PORTFOLIOS
AIM Global Real Estate Fund
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Real Estate Fund
AIM Total Return Bond Fund
AIM SUMMIT FUND
AIM TAX-EXEMPT FUNDS
PORTFOLIO
AIM High Income Municipal Fund"
"SCHEDULE A-2
TO
AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
(CLASS B SHARES)
AIM COUNSELOR SERIES TRUST
PORTFOLIOS
AIM Multi-Sector Fund
AIM Select Real Estate Income Fund
AIM Structured Core Fund
AIM Structured Growth Fund
AIM Structured Value Fund
AIM SECTOR FUNDS
PORTFOLIOS
AIM Energy Fund
AIM Financial Services Fund
AIM Gold & Precious Metals Fund
AIM Leisure Fund
AIM Technology Fund
AIM Utilities Fund
AIM STOCK FUNDS
AIM Dynamics Fund"
AIM FUNDS
DIRECTOR DEFERRED COMPENSATION AGREEMENT
As Amended March 7, 2000, September 28, 2001 and September 26, 2002
AIM FUNDS
DIRECTOR DEFERRED COMPENSATION AGREEMENT
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. DEFINITION OF TERMS AND CONSTRUCTION
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. PERIOD DURING WHICH COMPENSATION DEFERRALS ARE PERMITTED
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.
3. COMPENSATION DEFERRALS
3.1 Compensation Deferral Elections.
(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.
3.2 Valuation of Deferral Account.
(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.
3.3 Investment of Deferral Account Balances.
(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.
4. DISTRIBUTIONS FROM DEFERRAL ACCOUNTS
4.1 Payment Date and Methods.
(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.
5. AMENDMENTS AND TERMINATION
5.1 Amendments.
(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.
6. MISCELLANEOUS.
6.1 Rights of Creditors.
(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
|
DEFERRED COMPENSATION AGREEMENT
DEFERRAL ELECTION FORM
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:
Deferral of Compensation
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.
Payment Date
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.
Payment Method
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:
------------------------
|
DEFERRED COMPENSATION AGREEMENT
INVESTMENT DIRECTION FORM
TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation Agreement (the
|
"Agreement") by and between the undersigned and the AIM Funds, I hereby elect that my Deferral Account under the Agreement be considered to be invested as follows (in multiples of 10%):
NAME OF FUND %
------------ ---
%
----------------------------------- --
%
----------------------------------- --
%
----------------------------------- --
%
----------------------------------- --
%
----------------------------------- --
%
----------------------------------- --
|
I acknowledge that I may amend this Investment Agreement in the manner, and at such time, as permitted under the Agreement. Furthermore, I acknowledge that, pursuant to Section 3.3(b) of the Agreement, the Fund has reserved the right to disregard the elections made above to consider my Deferral Account to be deemed to be invested in a fund of its choosing.
WITNESS: DIRECTOR:
------------------------- ------------------------------
WITNESS: RECEIVED:
------------------------- AIM Funds
By:
---------------------------
Date:
-------------------------
|
DEFERRED COMPENSATION AGREEMENT
BENEFICIARY DESIGNATION FORM
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. Primary Beneficiary
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 |
II. Secondary Beneficiary |
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:
-------------------------
|
PAYMENT DATE ELECTION FORM
FOR PREVIOUSLY DEFERRED COMPENSATION
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,
Payment Date Change:
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.
Payment Method Change
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:
-------------------------
|
DEFERRED COMPENSATION AGREEMENT
SUMMARY
Your Deferred Compensation Agreement (the "Agreement") allows you to defer some or all of your annual trustee's fees otherwise payable by the Funds. Deferred fees are deemed invested in certain mutual funds selected by you. The deferral is pre-tax, and the deferred amount and the credited gains, losses and income are not subject to tax until paid out to you.
Your deferrals (and investment experience) are posted to a bookkeeping account maintained by the Funds in your name. In order for you to enjoy the tax deferral, the payments due under the Agreement will be paid from the Funds' general assets, and you are considered a general unsecured creditor of the Funds; you may not transfer your right to receive payments under the Agreement to any other person, nor may you pledge that right to secure any debt or other obligation; finally, an election to defer must be made in writing before the first day of the calendar year for which the fees are earned (the "Election Date") and elections can be changed only prospectively, effective for the next calendar year.
An important change has been made to your Agreement to give you greater flexibility to select the time and method of payment of amounts that you defer: for amounts previously deferred and for future elections you now designate a specific Payment Date and payment method which generally may be changed with at least one year's advance notice.
PAYMENT DATE ELECTION
Deferred fees (and the income, gains and losses credited during the deferral period) generally will be paid out as elected by you in installments or a single sum in cash within 30 days of the Payment Date elected. (For payments in connection with your termination of service as a trustee, see below.)
Deferrals must be for a minimum two year period (unless your retirement date under the Retirement Plan is earlier). Thus, the Payment Date may be the first day of any calendar quarter that follows the second anniversary of the applicable Election Date or your retirement date. Thus, fees previously deferred and fees payable for the calendar year beginning January 1, 1997 may be deferred to the first day of any calendar quarter in any year from 1999.
EXTENDING A PAYMENT DATE
At least one year prior to any Payment Date, you may extend that Date, provided that the additional period of deferral is at least two years. You may make this change in Payment Date only once.
PAYMENT METHOD
The value of your deferrals (based on your election as to how your deferral account is to be considered invested) will be paid in cash, in one lump sum or in annual
installments (over a period not to exceed 10 years) as you select at the time you select your Payment Date. You may change this election, but the change will not be given effect unless it is made at least one year before your Payment Date or your ceasing to be a trustee (whichever occurs first). This one year requirement is waived in the case of your death (see Termination of Service, below).
TERMINATION OF SERVICE
Upon your death, your account under the Agreement will be paid out as elected by you in installments or in a single sum in cash as soon as practicable. Payment will be made to your designated Beneficiary or Beneficiaries or to your estate if there is no surviving Beneficiary.
Upon termination of your service as trustee for any reason other than death or your retirement (as defined in the Retirement Plan), your account will be paid to you as a single sum (or in installments if you had timely elected that method) in cash within three months following the end of the fiscal year in which you terminate, regardless of the Payment Dates you elected.
As revised September 26, 2002
APPENDIX A
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 ADVISOR FUNDS
AIM EQUITY FUNDS
AIM FUNDS GROUP
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
SHORT-TERM INVESTMENTS CO.
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS CO.
AIM FUNDS
SUPPLEMENT TO DEFERRED COMPENSATION PLANS WITH RESPECT TO AIM FUNDS
PURPOSE: This Supplement incorporates the special election rules adopted by the Directors/Trustees of the AIM Funds for the Deferred Compensation Plans and Agreements entered into by the AIM Funds (or their predecessors in interest) with respect to Directors/ Trustees of the AIM Funds (the AIM Funds Deferred Compensation Plan for Independent Directors, and agreements pursuant thereto) or the heritage INVESCO Funds (the INVESCO Funds Deferred Compensation Plan, and agreements pursuant thereto) (collectively, the "Plans") pursuant to Treasury Department Notice 2005-1.
EFFECTIVE DATE: The effective date of this Supplement is January 1, 2005.
SPECIAL ELECTIONS: Notwithstanding any other provisions of the Agreements to the contrary, the Agreements are hereby amended and supplemented as follows, and each Director/ Trustee may make the election described below:
1. In accordance with the Description, Special Transition Election Form and Distribution Election Confirmation Form, substantially as in the form attached hereto as EXHIBIT 1, any Director/Trustee may change certain prior elections concerning the payment date of previously deferred amounts in accordance with the transition rules published by the Treasury Department concerning Section 409A of the Internal Revenue Code of 1986 as amended; such new election being applicable either to (a) all deferrals under any agreement pursuant to each Plan or (b) to such deferred amounts not identified by the participating Director/Trustee by December 31, 2005.
2. Pursuant to current Internal Revenue Service regulations, which constitute guidance subject to change, to the extent that each Plan permits the election for payment in a series of installment payments, each such series of installment payments shall be treated as a series of separate payments and not as a single payment.
3. To the extent that each Plan, or any agreement pursuant to each Plan, permits a Director to make a subsequent deferral election, such Plan is amended to conform such subsequent deferral elections to regulations adopted pursuant to Section 409A (including Treasury Department Notice 2005-1), requiring that (i) the election to defer a payment be made at least 12 months prior to the date the payment is scheduled to be made and (ii) the payment with respect to which such election to defer is made be deferred for a period of not less than 5 years from the date such payment would otherwise have been paid.
Adopted by Consent: December 30, 2005
EXHIBIT 1
AIM FUNDS DEFERRED COMPENSATION PLAN FOR INDEPENDENT DIRECTORS
INVESCO FUNDS DEFERRED COMPENSATION PLAN
SPECIAL TRANSITION ELECTION
The AIM Funds Deferred Compensation Plan for Independent Directors,
and agreements thereunder, and the INVESCO Funds Deferred Compensation Plan, and
agreements thereunder (each a "Plan", and collectively, the "Plan") allowed
eligible trustees of the AIM Funds and the heritage INVESCO Funds to defer some
or all of their annual trustee's/director's fees otherwise payable by the AIM
Funds or the INVESCO Funds. The Plans are now subject to Section 409A of the
Internal Revenue Code, which sets forth new, much stricter, rules related to the
deferral of compensation and the payment of already deferred compensation. The
Treasury Department has issued proposed regulations under Section 409A which
include transition rules that permit participants in deferred compensation
arrangements to make limited changes to their existing deferral elections
without being considered in violation of Section 409A. Accordingly, you are
being given a one-time opportunity to change the payment date and form of
payment for your existing deferrals under the Plan, by submitting the attached
Special Payment Election Form to Susan J. Penry Williams no later than December
31, 2005. NOTE: TO THE EXTENT THE PLAN CONTAINED PROVISIONS THAT OVERRODE YOUR
DESIGNATED PAYMENT DATE WHEN YOU TERMINATED YOUR SERVICE AS A TRUSTEE, THESE
OVERRIDE PROVISIONS WILL NO LONGER APPLY, AND ONLY YOUR NEW ELECTION WILL GOVERN
THE FORM AND TIMING OF YOUR PAYMENT.
You may make any change to your payment election that conforms with the following:
As to PAYMENT DATE, you have a choice of any of the following:
- January 1 of any specified year after 2005; or
- The first day of the first calendar quarter commencing after your termination of service as a Trustee; or
- The LATER of the events described in the first two choices; or
- The EARLIER of the events described in the first two choices.
As to PAYMENT FORM, you can choose from the following:
- A lump sum payment, or
- Quarterly installments (payable January 1, April 1, July 1 and October 1) for a specified period of either 5, 10 or 15 years.
Any new election you make in accordance with the rules set forth above
will apply to all of your existing deferrals, unless you submit a separate
Distribution Election Confirmation Form. IN FUTURE YEARS, SUBSEQUENT DEFERRAL
ELECTIONS - A DECISION TO CHANGE THE PAYMENT DATE OF AMOUNTS ALREADY DEFERRED
UNDER A PLAN - MUST BE MADE AT LEAST 12 MONTHS BEFORE THE SCHEDULED PAYMENT DATE
AND MUST DEFER PAYMENT FOR AT LEAST FIVE YEARS AFTER THE AMOUNT WOULD OTHERWISE
HAVE BEEN PAID.
Exhibit 1
AIM FUNDS DEFERRED COMPENSATION PLAN FOR INDEPENDENT DIRECTORS
INVESCO FUNDS DEFERRED COMPENSATION PLAN
SPECIAL TRANSITION ELECTION FORM
YOU MUST FILL OUT EITHER (A) I AND II, OR (B) III AND
RETURN THE FORM ON OR BEFORE DECEMBER 31, 2005.
I. PAYMENT DATE
I hereby designate one of the following as my new Payment Date for amounts deferred under the Plan prior to 2006 [place an "X" preceding your choice and fill in the missing information, as applicable]:
_______ (a) ___________ 1, ___________ [Select the first month in any calendar quarter, and insert any year after 2005].
_______ (b) The first day of the quarter commencing after the termination of my services as a Trustee.
_______ (c) The LATER of (a) ___________ 1, ___________ [fill in month and year from (a) above - must be after 2005] or (b) the first day of the quarter following the termination of my services as a Trustee.
_______ (d) The EARLIER of (a) ___________ 1, ___________ [fill in month and year from (a) above - must be after 2005] or (b) the first day of the quarter following the termination of my services as a Trustee.
[Note: administrative delays in making the actual payment will not affect the Payment Date. The "first day of the quarter" means the first day of the first calendar quarter commencing after December 31, 2005 following the termination of services.]
II. PAYMENT FORM
I hereby designate one of the following as my new payment form for amounts deferred under the Agreement prior to 2006. [Place an "X" preceding your choice and fill in the missing information, as applicable.]
_______ A lump sum payment.
_______ Quarterly installments for a period of ___________ [pick either 5, 10 or 15] years.
III. NO NEW ELECTION
_______ I want all of my previously deferred compensation to be paid in accordance with the Distribution Election Confirmation Form.
I understand that the foregoing choices have been designed to comply with transition rules published in proposed regulations under Section 409A of the Internal Revenue Code which are subject to clarification, and that any choice I have made on this Special Payment Election Form is subject to cancellation or modification as the Plan Administrator deems necessary to comply with Section 409A.
------------------------------------- ----------------------------------------
Date Signature
Name:
----------------------------------
SSN:
-----------------------------------
|
Exhibit 1
Page 3 of 5
|
AIM FUNDS DEFERRED COMPENSATION PLAN FOR INDEPENDENT DIRECTORS
INVESCO FUNDS DEFERRED COMPENSATION PLAN
DISTRIBUTION ELECTION CONFIRMATION FORM
FILL OUT AND RETURN THIS FORM ONLY IF YOU WANT TO CONFIRM A PRIOR DISTRIBUTION ELECTION.
This form only pertains to amounts deferred prior to 2006 under the following plans:
- AIM Funds Deferred Compensation Plan for Independent Directors
- INVESCO Funds Deferred Compensation Plan
I hereby confirm that I want my existing distribution election schedule to apply to all of the amounts deferred under the plans listed below:
[check plans for which you would like prior distribution elections to apply]
_______ AIM Funds Deferred Compensation Plan for Independent Directors
_______ INVESCO Funds Deferred Compensation Plan
I understand that if I do not confirm a prior election, all amounts deferred under the foregoing plan(s) will be paid in accordance with the Special Transition Election Form I submitted on or before December 31, 2005.
I understand that the foregoing choices have been designed to comply with transition rules published in proposed regulations under Section 409A of the Internal Revenue Code which are subject to clarification, and that any choice I have made on this Deferred Election Confirmation Form is subject to cancellation or modification as the Plan Administrator deems necessary to comply with Section 409A.
------------------------------------- ----------------------------------------
Date Signature
Print Name and Social Security Number
----------------------------------------
----------------------------------------
|
Exhibit 1
AIM FUNDS DEFERRED COMPENSATION PLAN FOR INDEPENDENT DIRECTORS
CONFIRMATION OF DEFERRAL AND PAYMENT FORM
YOU MUST FILL OUT THIS FORM TO EITHER (I) CONFIRM YOUR PRIOR ELECTIONS WITH RESPECT TO AMOUNTS TO BE DEFERRED IN 2006 OR LATER, OR (II) MAKE NEW ELECTIONS WITH RESPECT TO AMOUNTS TO BE DEFERRED IN 2006 OR LATER.
[EVERY TRUSTEE DEFERRING PAYMENTS IN 2006 MUST COMPLETE THIS SECTION.]
I. FEE DEFERRAL [place an "X" preceding your choice and fill in the blank, if applicable]
_______ I hereby confirm that I want my existing election and distribution schedule, as to (i) percentage of fees deferred; (ii) time of payment of deferred amounts; and (iii) form of payment of deferred amounts, under the AIM Funds Deferred Compensation Plan for Independent Directors and my Director Deferred Compensation Agreement thereunder (collectively, the "Plan") to apply to deferrals of any fees that become payable to in respect of fiscal years beginning on or after January 1, 2006.
_______ I hereby elect to defer, under the AIM Funds Deferred Compensation Plan for Independent Directors and my Director Deferred Compensation Agreement thereunder (collectively, the "Plan"), _____ % of any fees that become payable to me in respect of the fiscal year beginning January 1, 2006.
II. PAYMENT DATE. [Complete this section if you are changing your elections as to time an form of payment]
I hereby designate one of the following as my Payment Date (place an "X" preceding your choice and fill in the missing information, as applicable]:
_______ (a) __________ 1, __________. [Select the first month in any calendar quarter, and insert any year at least two years after this election is made]
_______ (b) The first day of the quarter following the termination of my services as a Trustee.
_______ (c) The LATER of (a) __________ 1, __________ [fill in month and year from (a) above] or (b) the first day of the quarter following the termination of my services as a Trustee.
_______ (d) The EARLIER of (a) __________ 1, __________ [fill in month and year from (a) above] or (b) the first day of the quarter following the termination of my services as a Trustee.
[Note: administrative delays in making the actual payment will not affect the Payment Date.]
Exhibit 1
III. PAYMENT FORM. [Complete this section if you are changing your choices from your Director Deferred Compensation Agreement]
I wish to receive the deferred fees in the form designated below [place an "X" preceding your choice and fill in the missing information, if applicable]:
_____ A lump sum payment.
_____ Quarterly installments for a period of _____ [pick either 5, 10 or 15] years.
[EVERY TRUSTEE DEFERRING PAYMENTS IN 2006 MUST COMPLETE THIS SECTION.]
IV. ACKNOWLEDGMENTS. INITIAL BOTH OF THE FOLLOWING STATEMENTS.
_____ I UNDERSTAND THAT THIS ELECTION WILL REMAIN IN EFFECT WITH RESPECT TO FEES
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 fees earned in the fiscal
year that begins after the change is received by the Plan Administrator.
_____ I have read the documents governing the Plan and my deferrals thereunder and agree to be bound by the Plan's terms. I understand that amounts credited to my account under the Plan by the Funds remain the general assets of the Funds and that, with respect to the payment of such amounts, I am only a general creditor of the Funds. I may not sell, transfer, encumber, pledge, assign or otherwise alienate the amounts held under Plan.
------------------------------------- ----------------------------------------
Date Signature
Name:
----------------------------------
SSN:
-----------------------------------
|
AMENDMENT NUMBER 1 TO THE THIRD AMENDED AND RESTATED
TRANSFER AGENCY AND SERVICE AGREEMENT
This Amendment, dated as of July 1, 2007, is made to the Third Amended and Restated Transfer Agency and Service Agreement dated July 1, 2006, (the "Agreement") between AIM Counselor Series Trust (the "Fund") and AIM Investment Services, Inc. ("AIS") pursuant to Article 11 of the Agreement.
WITNESSETH:
WHEREAS, the parties desire to amend Schedule A of the Agreement to include out-of-pocket expenses that may be associated with the administration of the Fund's Rule 22c-2 compliance program:
NOW, THEREFORE, the parties, intending to be legally bound, hereby agree as follows;
Item 4 of Schedule A of the Agreement is hereby amended to include the
following:
"(u) Fees and expenses assessed by third-party service providers in connection with the compilation and delivery of shareholder transaction data requested by the Transfer Agent in connection with its administration of the Fund's Rule 22c-2 compliance program."
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
AIM COUNSELOR SERIES TRUST
By: /s/ John M. Zerr
------------------------------------
Senior Vice President
ATTEST:
/s/ Stephen R. Rimes
-------------------------------------
Assistant Secretary
|
AIM INVESTMENT SERVICES, INC.
By: /s/ illegible
------------------------------------
President
ATTEST:
/s/ Stephen R. Rimes
-------------------------------------
Assistant Secretary
|
AMENDMENT NO. 1
SECOND AMENDED AND RESTATED MASTER ADMINISTRATIVE SERVICES AGREEMENT
The Second Amended and Restated Master Administrative Services Agreement (the "Agreement"), dated July 1, 2006, by and between A I M ADVISORS, INC., a Delaware corporation, and AIM COUNSELOR SERIES TRUST, a Delaware business trust, is hereby amended as follows:
WHEREAS, the parties desire to amend the Agreement to add a new portfolio, AIM Select Real Estate Income Fund;
Appendix A of the Agreement is hereby deleted in its entirety and replaced with the following:
"APPENDIX A
FEE SCHEDULE TO
SECOND AMENDED AND RESTATED MASTER ADMINISTRATIVE SERVICES AGREEMENT
OF
AIM COUNSELOR SERIES TRUST
PORTFOLIOS EFFECTIVE DATE OF AGREEMENT ---------- --------------------------- AIM Advantage Health Sciences Fund July 1, 2006 AIM Multi-Sector Fund July 1, 2006 AIM Floating Rate Fund July 1, 2006 AIM Select Real Estate Income Fund March 12, 2007 AIM Structured Core Fund July 1, 2006 AIM Structured Growth Fund July 1, 2006 AIM Structured Value Fund July 1, 2006 |
The Administrator may receive from each Portfolio reimbursement for costs or reasonable compensation for such services as follows:
Rate* Net Assets ----- ---------- 0.023% First $1.5 billion 0.013% Next $1.5 billion 0.003% Over $3 billion |
* Annual minimum fee is $50,000. An additional $10,000 per class of shares is charged for each class other than the initial class. The $10,000 class fee is waived for any of the above Portfolios with insufficient assets to result in the payment of more than the minimum fee of $50,000."
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: March 9, 2007
A I M ADVISORS, INC.
Attest: /s/ P. Michelle Grace By: /s/ John M. Zerr
----------------------------- ------------------------------------
Assistant Secretary John M. Zerr
Senior Vice President
|
(SEAL)
AIM COUNSELOR SERIES TRUST
Attest: /s/ P. Michelle Grace By: /s/ John M. Zerr
----------------------------- ------------------------------------
Assistant Secretary John M. Zerr
Senior Vice President
|
(SEAL)
AMENDMENT NO. 2
SECOND AMENDED AND RESTATED MASTER ADMINISTRATIVE SERVICES AGREEMENT
The Second Amended and Restated Master Administrative Services Agreement (the "Agreement"), dated July 1, 2006, by and between A I M ADVISORS, INC., a Delaware corporation, and AIM COUNSELOR SERIES TRUST, a Delaware business trust, is hereby amended as follows:
WHEREAS, the parties desire to amend the Agreement to delete a portfolio, AIM Advantage Health Sciences Fund;
Appendix A of the Agreement is hereby deleted in its entirety and replaced with the following:
"APPENDIX A
FEE SCHEDULE TO
SECOND AMENDED AND RESTATED MASTER ADMINISTRATIVE SERVICES AGREEMENT
OF
AIM COUNSELOR SERIES TRUST
PORTFOLIOS EFFECTIVE DATE OF AGREEMENT ---------- --------------------------- AIM Multi-Sector Fund July 1, 2006 AIM Floating Rate Fund July 1, 2006 AIM Select Real Estate Income Fund March 12, 2007 AIM Structured Core Fund July 1, 2006 AIM Structured Growth Fund July 1, 2006 AIM Structured Value Fund July 1, 2006 |
The Administrator may receive from each Portfolio reimbursement for costs or reasonable compensation for such services as follows:
Rate* Net Assets ----- ---------- 0.023% First $1.5 billion 0.013% Next $1.5 billion 0.003% Over $3 billion |
* Annual minimum fee is $50,000. An additional $10,000 per class of shares is charged for each class other than the initial class. The $10,000 class fee is waived for any of the above Portfolios with insufficient assets to result in the payment of more than the minimum fee of $50,000."
All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.
Dated: April 23, 2007
A I M ADVISORS, INC.
Attest: /s/ P. Michelle Grace By: /s/ John M. Zerr
----------------------------- ------------------------------------
Assistant Secretary John M. Zerr
Senior Vice President
|
(SEAL)
AIM COUNSELOR SERIES TRUST
Attest: /s/ P. Michelle Grace By: /s/ John M. Zerr
----------------------------- ------------------------------------
Assistant Secretary John M. Zerr
Senior Vice President
|
(SEAL)
SECOND AMENDED AND RESTATED
MEMORANDUM OF AGREEMENT
This Second Amended and Restated Memorandum of Agreement is entered into as of the dates indicated on Exhibit "A" between AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust (each a "Fund" and collectively, the "Funds"), on behalf of the portfolios listed on Exhibit "A" to this Memorandum of Agreement (the "Portfolios"), and A I M Advisors, Inc. ("AIM"). This Memorandum of Agreement restates the Memorandum of Agreement previously in effect prior to March 9, 2007 and entered into as of the effective dates indicated on Exhibit "A" between AIM Equity Funds, AIM Floating Rate Fund, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Select Real Estate Income Fund, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust, on behalf of the portfolios listed on Exhibit "A" to this Memorandum of Agreement, and 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 Funds and AIM agree as follows:
1. Each Fund, for itself and its Portfolios, 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 Portfolio's advisory agreement in connection with securities lending activities.
2. Neither a Fund nor AIM may remove or amend the fee waivers to a Fund's detriment prior to requesting and receiving the approval of the Portfolio'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 Fund, by vote of its Board of Trustees, or AIM terminates the fee waiver, or a Fund and AIM are unable to reach an agreement on the amount of the fee waiver to which the Fund and AIM desire to be bound, the fee waiver will continue indefinitely with respect to such Fund. Exhibit "A" will be amended to reflect the new date through which a Fund and AIM agree to be bound.
Nothing in this Memorandum of Agreement is intended to affect any other memorandum of agreement executed by any Fund or AIM with respect to any other fee waivers, expense reimbursements and/or expense limitations.
IN WITNESS WHEREOF, each Fund, on behalf of itself and its Portfolios listed in Exhibit "A" to this Memorandum of Agreement, and AIM have entered into this Memorandum of Agreement as of the dates indicated on Exhibit "A".
AIM COUNSELOR SERIES TRUST
AIM EQUITY FUNDS
AIM FUNDS GROUP
AIM GROWTH SERIES
AIM INTERNATIONAL MUTUAL FUNDS
AIM INVESTMENT FUNDS
AIM INVESTMENT SECURITIES FUNDS
AIM SECTOR FUNDS
AIM STOCK FUNDS
AIM SUMMIT FUND
AIM TAX-EXEMPT FUNDS
AIM VARIABLE INSURANCE FUNDS
By: /s/ John M. Zerr
------------------------------------
Title: Senior Vice President
|
AIM TREASURER'S SERIES TRUST
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS TRUST
By: /s/ Karen Dunn Kelley
------------------------------------
Title: President
|
A I M ADVISORS, INC.
By: /s/ John M. Zerr
------------------------------------
Title: Senior Vice President
|
EXHIBIT "A"
AIM COUNSELOR SERIES TRUST
PORTFOLIO EFFECTIVE DATE COMMITTED UNTIL* --------- ------------------ ---------------- AIM Advantage Health Sciences Fund November 25, 2003 AIM Floating Rate Fund April 14, 2006 AIM Multi-Sector Fund November 25, 2003 AIM Select Real Estate Income Fund March 9, 2007 AIM Structured Core Fund March 31, 2006 AIM Structured Growth Fund March 31, 2006 AIM Structured Value Fund March 31, 2006 |
AIM EQUITY FUNDS
PORTFOLIO EFFECTIVE DATE COMMITTED UNTIL* --------- ------------------ ---------------- AIM Capital Development Fund June 21, 2000 AIM Charter Fund June 21, 2000 AIM Constellation Fund June 21, 2000 AIM Diversified Dividend Fund December 28, 2001 AIM Large Cap Basic Value Fund June 21, 2000 AIM Large Cap Growth Fund June 21, 2000 |
AIM FUNDS GROUP
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ --------------- AIM Basic Balanced Fund September 28, 2001 AIM European Small Company Fund August 30, 2000 AIM Global Value Fund December 27, 2000 AIM International Small Company Fund August 30, 2000 AIM Mid Cap Basic Value Fund December 27, 2001 AIM Select Equity Fund June 1, 2000 AIM Small Cap Equity Fund August 30, 2000 |
AIM GROWTH SERIES
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ --------------- AIM Basic Value Fund June 5, 2000 AIM Global Equity Fund September 1, 2001 AIM Mid Cap Core Equity Fund September 1, 2001 AIM Small Cap Growth Fund September 11, 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
** Effective March 9, 2007, AIM Select Real Estate Income Fund, formerly the sole series of AIM Select Real Estate Income Fund, was restructured as a series of AIM Counselor Series Trust.
AIM INTERNATIONAL MUTUAL FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ --------------- AIM Asia Pacific Growth Fund June 21, 2000 AIM European Growth Fund June 21, 2000 AIM Global Aggressive Growth Fund June 21, 2000 AIM Global Growth Fund June 21, 2000 AIM International Growth Fund June 21, 2000 AIM International Core Equity Fund November 25, 2003 |
AIM INVESTMENT FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ --------------- AIM China Fund March 31, 2006 AIM Developing Markets Fund September 1, 2001 AIM Global Health Care Fund September 1, 2001 AIM International Total Return Fund March 31, 2006 AIM Japan Fund March 31, 2006 AIM LIBOR Alpha Fund March 31, 2006 AIM Trimark Endeavor Fund November 4, 2003 AIM Trimark Fund November 4, 2003 AIM Trimark Small Companies Fund November 4, 2003 |
AIM INVESTMENT SECURITIES FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ --------------- AIM Global Real Estate Fund April 29, 2005 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 Real Estate Fund September 11, 2000 AIM Short Term Bond Fund August 29, 2002 AIM Total Return Bond Fund December 28, 2001 |
* 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 SECTOR FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ --------------- AIM Energy Fund November 25, 2003 AIM Financial Services Fund November 25, 2003 AIM Gold & Precious Metals Fund November 25, 2003 AIM Leisure Fund November 25, 2003 AIM Technology Fund November 25, 2003 AIM Utilities Fund November 25, 2003 |
AIM STOCK FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ --------------- AIM Dynamics Fund November 25, 2003 AIM S&P 500 Index Fund November 25, 2003 |
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 Cash Fund June 1, 2000 AIM Tax-Free Intermediate Fund June 1, 2000 |
AIM TREASURER'S SERIES TRUST
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ --------------- Premier Portfolio November 25, 2003 Premier Tax-Exempt Portfolio November 25, 2003 Premier U.S. Government Money November 25, 2003 Portfolio |
* 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 VARIABLE INSURANCE FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ --------------- AIM V.I. Basic Balanced Fund May 1, 2000 AIM V.I. Basic Value Fund September 10, 2001 AIM V.I. Capital Appreciation Fund May 1, 2000 AIM V.I. Capital Development Fund May 1, 2000 AIM V.I. Core Equity Fund May 1, 2000 AIM V.I. Diversified Income Fund May 1, 2000 AIM V.I. Dynamics Fund April 30, 2004 AIM V.I. Financial Services Fund April 30, 2004 AIM V.I. Global Health Care Fund April 30, 2004 AIM V.I. Global Real Estate Fund April 30, 2004 AIM V.I. Government Securities Fund May 1, 2000 AIM V.I. High Yield Fund May 1, 2000 AIM V.I. International Growth Fund May 1, 2000 AIM V.I. Large Cap Growth Fund September 1, 2003 AIM V.I. Leisure Fund April 30, 2004 AIM V.I. Mid Cap Core Equity Fund September 10, 2001 AIM V.I. Money Market Fund May 1, 2000 AIM V.I. Small Cap Equity Fund September 1, 2003 AIM V.I. Small Cap Growth Fund April 30, 2004 AIM V.I. Technology Fund April 30, 2004 AIM V.I. Utilities Fund April 30, 2004 |
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 Liquid Assets Portfolio June 1, 2000 STIC Prime Portfolio June 1, 2000 |
TAX-FREE INVESTMENTS TRUST
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ --------------- Tax-Free 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.
THIRD AMENDED AND RESTATED
MEMORANDUM OF AGREEMENT
(SECURITIES LENDING WAIVER)
This Third Amended and Restated Memorandum of Agreement is entered into as of the dates indicated on Exhibit "A" between AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust (each a "Fund" and collectively, the "Funds"), on behalf of the portfolios listed on Exhibit "A" to this Memorandum of Agreement (the "Portfolios"), and A I M Advisors, Inc. ("AIM"). This Memorandum of Agreement restates the Memorandum of Agreement previously in effect prior to July 1, 2007 and entered into as of the effective dates indicated on Exhibit "A" between AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Variable Insurance Funds, AIM Treasurer's Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust, on behalf of the portfolios and 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 Funds and AIM agree as follows:
1. Each Fund, for itself and its Portfolios, 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 has agreed that it will not charge any administrative fee under each Portfolio's advisory agreement in connection with securities lending activities without prior approval from the Portfolio's Board (such agreement is referred to as the "Waiver").
2. Neither a Fund nor AIM may remove or amend the Waiver to a Fund's detriment prior to requesting and receiving the approval of the Portfolio's Board to remove or amend the Waiver. AIM will not have any right to reimbursement of any amount so waived.
Unless a Fund, by vote of its Board of Trustees terminates the Waiver, or a Fund and AIM are unable to reach an agreement on the amount of the Waiver to which the Fund and AIM desire to be bound, the Waiver will continue indefinitely with respect to such Fund. Exhibit "A" will be amended to reflect the new date through which a Fund and AIM agree to be bound.
Nothing in this Memorandum of Agreement is intended to affect any other memorandum of agreement executed by any Fund or AIM with respect to any other fee waivers, expense reimbursements and/or expense limitations.
IN WITNESS WHEREOF, each Fund, on behalf of itself and its Portfolios listed in Exhibit "A" to this Memorandum of Agreement, and AIM have entered into this Memorandum of Agreement as of the dates indicated on Exhibit "A".
AIM COUNSELOR SERIES TRUST
AIM EQUITY FUNDS
AIM FUNDS GROUP
AIM GROWTH SERIES
AIM INTERNATIONAL MUTUAL FUNDS
AIM INVESTMENT FUNDS
AIM INVESTMENT SECURITIES FUNDS
AIM SECTOR FUNDS
AIM STOCK FUNDS
AIM SUMMIT FUND
AIM TAX-EXEMPT FUNDS
AIM VARIABLE INSURANCE FUNDS
By: /s/ John M. Zerr
------------------------------------
Title: Senior Vice President
|
AIM TREASURER'S SERIES TRUST
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS TRUST
By: /s/ Karen Dunn Kelley
------------------------------------
Title: President
|
A I M ADVISORS, INC.
By: /s/ John M. Zerr
------------------------------------
Title: Senior Vice President
|
EXHIBIT "A"
AIM COUNSELOR SERIES TRUST
PORTFOLIO EFFECTIVE DATE COMMITTED UNTIL* --------- ------------------ ---------------- AIM Floating Rate Fund April 14, 2006 AIM Multi-Sector Fund November 25, 2003 AIM Select Real Estate Income Fund March 9, 2007 AIM Structured Core Fund March 31, 2006 AIM Structured Growth Fund March 31, 2006 AIM Structured Value Fund March 31, 2006 |
AIM EQUITY FUNDS
PORTFOLIO EFFECTIVE DATE COMMITTED UNTIL* --------- ------------------ ---------------- AIM Capital Development Fund June 21, 2000 AIM Charter Fund June 21, 2000 AIM Constellation Fund June 21, 2000 AIM Diversified Dividend Fund December 28, 2001 AIM Large Cap Basic Value Fund June 21, 2000 AIM Large Cap Growth Fund June 21, 2000 |
AIM FUNDS GROUP
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ ---------------- AIM Basic Balanced Fund September 28, 2001 AIM European Small Company Fund August 30, 2000 AIM Global Value Fund December 27, 2000 AIM International Small Company Fund August 30, 2000 AIM Mid Cap Basic Value Fund December 27, 2001 AIM Select Equity Fund June 1, 2000 AIM Small Cap Equity Fund August 30, 2000 |
AIM GROWTH SERIES
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ ---------------- AIM Basic Value Fund June 5, 2000 AIM Global Equity Fund September 1, 2001 AIM Mid Cap Core Equity Fund September 1, 2001 AIM Small Cap Growth Fund September 11, 2000 |
* Committed until the Fund or AIM requests and receives the approval of the Fund's Board to remove or amend such fee waiver. Such commitments are evergreen until amended and apply to each Portfolio of a Fund.
AIM INTERNATIONAL MUTUAL FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ ---------------- AIM Asia Pacific Growth Fund June 21, 2000 AIM European Growth Fund June 21, 2000 AIM Global Aggressive Growth Fund June 21, 2000 AIM Global Growth Fund June 21, 2000 AIM International Growth Fund June 21, 2000 AIM International Core Equity Fund November 25, 2003 |
AIM INVESTMENT FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ ---------------- AIM China Fund March 31, 2006 AIM Developing Markets Fund September 1, 2001 AIM Global Health Care Fund September 1, 2001 AIM International Total Return Fund March 31, 2006 AIM Japan Fund March 31, 2006 AIM LIBOR Alpha Fund March 31, 2006 AIM Trimark Endeavor Fund November 4, 2003 AIM Trimark Fund November 4, 2003 AIM Trimark Small Companies Fund November 4, 2003 |
AIM INVESTMENT SECURITIES FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ ---------------- AIM Global Real Estate Fund April 29, 2005 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 Real Estate Fund September 11, 2000 AIM Short Term Bond Fund August 29, 2002 AIM Total Return Bond Fund December 28, 2001 |
* Committed until the Fund or AIM requests and receives the approval of the Fund's Board to remove or amend such fee waiver. Such commitments are evergreen until amended and apply to each Portfolio of a Fund.
AIM SECTOR FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ ---------------- AIM Energy Fund November 25, 2003 AIM Financial Services Fund November 25, 2003 AIM Gold & Precious Metals Fund November 25, 2003 AIM Leisure Fund November 25, 2003 AIM Technology Fund November 25, 2003 AIM Utilities Fund November 25, 2003 |
AIM STOCK FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ ---------------- AIM Dynamics Fund November 25, 2003 AIM S&P 500 Index Fund November 25, 2003 |
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 Cash Fund June 1, 2000 AIM Tax-Free Intermediate Fund June 1, 2000 |
AIM TREASURER'S SERIES TRUST
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ ---------------- Premier Portfolio November 25, 2003 Premier Tax-Exempt Portfolio November 25, 2003 Premier U.S. Government Money November 25, 2003 Portfolio |
* Committed until the Fund or AIM requests and receives the approval of the Fund's Board to remove or amend such fee waiver. Such commitments are evergreen until amended and apply to each Portfolio of a Fund.
AIM VARIABLE INSURANCE FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ ---------------- AIM V.I. Basic Balanced Fund May 1, 2000 AIM V.I. Basic Value Fund September 10, 2001 AIM V.I. Capital Appreciation Fund May 1, 2000 AIM V.I. Capital Development Fund May 1, 2000 AIM V.I. Core Equity Fund May 1, 2000 AIM V.I. Diversified Income Fund May 1, 2000 AIM V.I. Dynamics Fund April 30, 2004 AIM V.I. Financial Services Fund April 30, 2004 AIM V.I. Global Health Care Fund April 30, 2004 AIM V.I. Global Real Estate Fund April 30, 2004 AIM V.I. Government Securities Fund May 1, 2000 AIM V.I. High Yield Fund May 1, 2000 AIM V.I. International Growth Fund May 1, 2000 AIM V.I. Large Cap Growth Fund September 1, 2003 AIM V.I. Leisure Fund April 30, 2004 AIM V.I. Mid Cap Core Equity Fund September 10, 2001 AIM V.I. Money Market Fund May 1, 2000 AIM V.I. Small Cap Equity Fund September 1, 2003 AIM V.I. Technology Fund April 30, 2004 AIM V.I. Utilities Fund April 30, 2004 |
SHORT-TERM INVESTMENTS TRUST
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ ---------------- Government & Agency Portfolio June 1, 2000 Government TaxAdvantage Portfolio June 1, 2000 Liquid Assets Portfolio June 1, 2000 STIC Prime Portfolio June 1, 2000 Treasury Portfolio June 1, 2000 |
TAX-FREE INVESTMENTS TRUST
FUND EFFECTIVE DATE COMMITTED UNTIL* ---- ------------------ ---------------- Tax-Free Cash Reserve Portfolio June 1, 2000 |
* Committed until the Fund or AIM requests and receives the approval of the Fund's Board to remove or amend such fee waiver. Such commitments are evergreen until amended and apply to each Portfolio of a Fund.
MEMORANDUM OF AGREEMENT
(EXPENSE LIMITATIONS)
This Memorandum of Agreement is entered into as of the Effective Date on the attached exhibits (the "Exhibits"), between AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Stock Funds, AIM Tax-Exempt Funds, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust (each a "Trust" or, collectively, the "Trusts"), on behalf of the funds listed on the Exhibits to this Memorandum of Agreement (the "Funds"), and A I M Advisors, Inc. ("AIM"). This Memorandum of Agreement restates the Memorandum of Agreement dated January 31, 2007 between AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Stock Funds, AIM Tax-Exempt Funds, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust. AIM shall and hereby agrees to waive fees or reimburse expenses of each Fund, on behalf of its respective classes as applicable, severally and not jointly, as indicated in the attached Exhibits.
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 Trusts and AIM agree as follows:
For the Contractual Limits (listed in Exhibits A - E), the Trusts and AIM
agree until at least the date set forth on the attached Exhibits A - E (the
"Expiration Date") that AIM will waive its fees or reimburse expenses to the
extent that expenses of a class of a Fund (excluding (i) interest; (ii) taxes;
(iii) dividend expense on short sales; (iv) extraordinary items; (v) expenses
related to a merger or reorganization, as approved by the Funds' Board of
Trustees; and (vi) expenses that each Fund has incurred but did not actually pay
because of an expense offset arrangement, if applicable) exceed the rate, on an
annualized basis, set forth on the Exhibits of the average daily net assets
allocable to such class. With regard to the Contractual Limits, the Board of
Trustees and AIM may terminate or modify this Memorandum of Agreement prior to
the Expiration Date only by mutual written consent. AIM will not have any right
to reimbursement of any amount so waived or reimbursed.
For the Contractual Limits, each of the Trusts and AIM agree to review the then-current expense limitations for each class of each Fund listed on the Exhibits on a date prior to the Expiration Date to determine whether such limitations should be amended, continued or terminated. The expense limitations will expire upon the Expiration Date unless the Trust and AIM have agreed to continue them. The Exhibits will be amended to reflect any such agreement.
For the Voluntary Limits (listed in Exhibits A - E), the Trusts and AIM agree that these are not contractual in nature and that AIM may establish, amend and/or terminate such expense limitations at any time in its sole discretion after consultation with the Funds' Board of Trustees. Any delay or failure by AIM to update this Memorandum of Agreement with regards to the terminations, extensions, or expirations of the Voluntary Limits shall have no effect on the term of such Voluntary Limitations; the Voluntary Limitations are listed herein for informational purposes only.
It is expressly agreed that the obligations of each Trust hereunder shall not be binding upon any of the Trustees, shareholders, nominees, officers, agents or employees of the Trusts personally, but shall only bind the assets and property of each Fund, as provided in each Trust's Agreement and Declaration of Trust. The execution and delivery of this Memorandum of Agreement have been authorized by the Trustees of the Trusts, and this Memorandum of Agreement has been executed and delivered by an authorized officer of the Trusts acting as such; neither such authorization by such Trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the assets and property of the Funds, as provided in each Trust's Agreement and Declaration of Trust.
IN WITNESS WHEREOF, each of the Trusts and AIM have entered into this Memorandum of Agreement as of the Effective Date on the attached Exhibits.
AIM COUNSELOR SERIES TRUST
AIM EQUITY FUNDS
AIM FUNDS GROUP
AIM GROWTH SERIES
AIM INVESTMENT FUNDS
AIM INVESTMENT SECURITIES FUNDS
AIM SECTOR FUNDS
AIM STOCK FUNDS
AIM TAX-EXEMPT FUNDS
AIM VARIABLE INSURANCE FUNDS
on behalf of the Funds listed in the
Exhibits to this Memorandum of Agreement
By: /s/ John M. Zerr
------------------------------------
Title: Senior Vice President
|
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS TRUST
on behalf of the Funds listed in the
Exhibits to this Memorandum of Agreement
By: /s/ Karen Dunn Kelley
------------------------------------
Title: President
|
A I M Advisors, Inc.
By: /s/ John M. Zerr
------------------------------------
Title: Senior Vice President
|
as of April 1, 2007
EXHIBIT "A" - RETAIL FUNDS(1)
FUNDS WITH FISCAL YEAR END OF MARCH 31
AIM SECTOR FUNDS
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ----------------- -------------
AIM Energy Fund
Class A Shares Voluntary 1.55% July 1, 2005 N/A(2)
Class B Shares Voluntary 2.30% August 12, 2003 N/A(2)
Class C Shares Voluntary 2.30% August 12, 2003 N/A(2)
Investor Class Shares Voluntary 1.55% April 1, 2005 N/A(2)
Institutional Class Shares Voluntary 1.30% January 31, 2006 N/A(2)
AIM Financial Services Fund
Class A Shares Voluntary 1.30% July 1, 2005 N/A(2)
Class B Shares Voluntary 2.05% August 12, 2003 N/A(2)
Class C Shares Voluntary 2.05% April 1, 2005 N/A(2)
Investor Class Shares Voluntary 1.30% April 1, 2005 N/A(2)
AIM Leisure Fund
Class A Shares Voluntary 1.40% July 1, 2005 N/A(2)
Class B Shares Voluntary 2.15% August 12, 2003 N/A(2)
Class C Shares Voluntary 2.15% April 1, 2005 N/A(2)
Class R Shares Voluntary 1.65% October 25, 2005 N/A(2)
Investor Class Shares Voluntary 1.40% April 1, 2005 N/A(2)
AIM Technology Fund
Class A Shares Contractual 1.55% July 1, 2005 June 30, 2007
Class B Shares Contractual 2.30% July 1, 2005 June 30, 2007
Class C Shares Contractual 2.30% July 1, 2005 June 30, 2007
Investor Class Shares Contractual 1.55% July 1, 2005 June 30, 2007
Institutional Class Shares Contractual 1.30% July 1, 2005 June 30, 2007
AIM Utilities Fund
Class A Shares Contractual 1.30% April 1, 2006 June 30, 2007
Class B Shares Contractual 2.05% April 1, 2006 June 30, 2007
Class C Shares Contractual 2.05% April 1, 2006 June 30, 2007
Investor Class Shares Contractual 1.30% April 1, 2006 June 30, 2007
Institutional Class Shares Contractual 1.05% April 1, 2006 June 30, 2007
|
AIM TAX-EXEMPT FUNDS
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ----------------- -------------
AIM High Income Municipal
Fund
Class A Shares Voluntary 0.70% April 1, 2007 N/A(2)
Class B Shares Voluntary 1.45% April 1, 2007 N/A(2)
Class C Shares Voluntary 1.45% April 1, 2007 N/A(2)
Institutional Class Shares Voluntary 0.45% April 1, 2007 N/A(2)
|
See page 8 for footnotes to Exhibit A.
as of April 1, 2007
FUNDS WITH FISCAL YEAR END OF JULY 31
AIM INVESTMENT SECURITIES FUNDS
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ----------------- -------------
AIM Global Real Estate Fund
Class A Shares Contractual 1.40% July 1, 2005 June 30, 2007
Class B Shares Contractual 2.15% April 29, 2005 June 30, 2007
Class C Shares Contractual 2.15% April 29, 2005 June 30, 2007
Class R Shares Contractual 1.65% April 29, 2005 June 30, 2007
Institutional Class Shares Contractual 1.15% April 29, 2005 June 30, 2007
AIM Short Term Bond Fund
Class A Shares Contractual 0.85% July 1, 2005 June 30, 2007
Class C Shares Contractual 1.10%(3) February 1, 2006 June 30, 2007
Class R Shares Contractual 1.10% August 30, 2002 June 30, 2007
Institutional Class Shares Contractual 0.60% August 30, 2002 June 30, 2007
AIM Total Return Bond Fund
Class A Shares Contractual 1.15% July 1, 2005 June 30, 2007
Class B Shares Contractual 1.90% July 1, 2002 June 30, 2007
Class C Shares Contractual 1.90% July 1, 2002 June 30, 2007
Class R Shares Contractual 1.40% July 1, 2002 June 30, 2007
Institutional Class Shares Contractual 0.90% July 1, 2002 June 30, 2007
AIM Total Return Bond Fund
Class A Shares Voluntary 1.00% July 1, 2002 N/A(2)
Class B Shares Voluntary 1.75% July 1, 2002 N/A(2)
Class C Shares Voluntary 1.75% July 1, 2002 N/A(2)
Class R Shares Voluntary 1.25% April 30, 2004 N/A(2)
Institutional Class Shares Voluntary 0.75% April 30, 2004 N/A(2)
|
AIM STOCK FUNDS
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ----------------- -------------
AIM Dynamics Fund
Class A Shares Voluntary 1.20% July 1, 2005 N/A(2)
Class B Shares Voluntary 1.95% August 12, 2003 N/A(2)
Class C Shares Voluntary 1.95% August 12, 2003 N/A(2)
Class R Shares Voluntary 1.45% October 25, 2005 N/A(2)
Investor Class Shares Voluntary 1.20% August 12, 2003 N/A(2)
Institutional Class Shares Voluntary 0.95% August 12, 2003 N/A(2)
AIM S&P 500 Index Fund
Investor Class Shares Contractual 0.60% August 1, 2005 June 30, 2007
Institutional Class Shares Contractual 0.35% August 12, 2003 June 30, 2007
|
See page 8 for footnotes to Exhibit A.
as of April 1, 2007
FUNDS WITH FISCAL YEAR END OF AUGUST 31
AIM COUNSELOR SERIES TRUST
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ----------------- -------------
AIM Floating Rate Fund
Class A Shares Voluntary 1.50% April 14, 2006 N/A(2)
Class B1 Shares Voluntary 1.50% May 1, 1997 N/A(2)
Class C Shares Voluntary 2.00% April 14, 2006 N/A(2)
Class R Shares Voluntary 1.75% April 14, 2006 N/A(2)
Institutional Class Shares Voluntary 1.25% April 14, 2006 N/A(2)
AIM Structured Core Fund
Class A Contractual 1.00% March 31, 2006 June 30, 2007
Class B Contractual 1.75% March 31, 2006 June 30, 2007
Class C Contractual 1.75% March 31, 2006 June 30, 2007
Class R Contractual 1.25% March 31, 2006 June 30, 2007
Institutional Class Contractual 0.75% March 31, 2006 June 30, 2007
AIM Structured Growth Fund
Class A Contractual 1.00% March 31, 2006 June 30, 2007
Class B Contractual 1.75% March 31, 2006 June 30, 2007
Class C Contractual 1.75% March 31, 2006 June 30, 2007
Class R Contractual 1.25% March 31, 2006 June 30, 2007
Institutional Class Contractual 0.75% March 31, 2006 June 30, 2007
AIM Structured Value Fund
Class A Contractual 1.00% March 31, 2006 June 30, 2007
Class B Contractual 1.75% March 31, 2006 June 30, 2007
Class C Contractual 1.75% March 31, 2006 June 30, 2007
Class R Contractual 1.25% March 31, 2006 June 30, 2007
Institutional Class Contractual 0.75% March 31, 2006 June 30, 2007
|
FUNDS WITH FISCAL YEAR END OF OCTOBER 31
AIM EQUITY FUNDS
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ----------------- -------------
AIM Capital Development Fund
Class A Shares Voluntary 1.55% July 18, 2005 N/A(2)
Class B Shares Voluntary 2.30% July 18, 2005 N/A(2)
Class C Shares Voluntary 2.30% July 18, 2005 N/A(2)
Class R Shares Voluntary 1.80% July 18, 2005 N/A(2)
Investor Class Shares Voluntary 1.55% July 18, 2005 N/A(2)
Institutional Class Shares Voluntary 1.30% July 18, 2005 N/A(2)
AIM Diversified Dividend Fund
Class A Shares Contractual 1.40% July 1, 2005 June 30, 2007
Class B Shares Contractual 2.15% May 2, 2003 June 30, 2007
Class C Shares Contractual 2.15% May 2, 2003 June 30, 2007
Class R Shares Contractual 1.65% October 25, 2005 June 30, 2007
Investor Class Shares Contractual 1.40% July 15, 2005 June 30, 2007
Institutional Class Shares Contractual 1.15% October 25, 2005 June 30, 2007
|
See page 8 for footnotes to Exhibit A.
as of April 1, 2007
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ----------------- -------------
AIM Diversified Dividend Fund
Class A Shares Voluntary 1.00% May 2, 2003 N/A(2)
Class B Shares Voluntary 1.65% May 2, 2003 N/A(2)
Class C Shares Voluntary 1.65% May 2, 2003 N/A(2)
Class R Shares Voluntary 1.25% October 25, 2005 N/A(2)
Investor Class Shares Voluntary 1.00% July 15, 2005 N/A(2)
Institutional Class Shares Voluntary 0.75% October 25, 2005 N/A(2)
AIM Large Cap Basic Value Fund
Class A Shares Contractual 1.22% July 1, 2005 June 30, 2007
Class B Shares Contractual 1.97% July 1, 2005 June 30, 2007
Class C Shares Contractual 1.97% July 1, 2005 June 30, 2007
Class R Shares Contractual 1.47% July 1, 2005 June 30, 2007
Investor Class Shares Contractual 1.22% July 1, 2005 June 30, 2007
Institutional Class Shares Contractual 0.97% July 1, 2005 June 30, 2007
AIM Large Cap Growth Fund
Class A Shares Contractual 1.32% July 1, 2005 June 30, 2007
Class B Shares Contractual 2.07% July 1, 2005 June 30, 2007
Class C Shares Contractual 2.07% July 1, 2005 June 30, 2007
Class R Shares Contractual 1.57% July 1, 2005 June 30, 2007
Investor Class Shares Contractual 1.32% July 1, 2005 June 30, 2007
Institutional Class Shares Contractual 1.07% July 1, 2005 June 30, 2007
|
AIM INVESTMENT FUNDS
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ----------------- -------------
AIM China Fund
Class A Shares Contractual 2.05% March 31, 2006 June 30, 2007
Class B Shares Contractual 2.80% March 31, 2006 June 30, 2007
Class C Shares Contractual 2.80% March 31, 2006 June 30, 2007
Institutional Class Shares Contractual 1.80% March 31, 2006 June 30, 2007
|
See page 8 for footnotes to Exhibit A.
as of April 1, 2007
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ -------------
AIM Developing Markets Fund
Class A Shares Contractual 1.75% July 1, 2005 June 30, 2007
Class B Shares Contractual 2.50% July 1, 2002 June 30, 2007
Class C Shares Contractual 2.50% July 1, 2002 June 30, 2007
Institutional Class Shares Contractual 1.50% October 25, 2005 June 30, 2007
AIM Global Health Care Fund
Class A Shares Voluntary 1.30% July 18, 2005 N/A(2)
Class B Shares Voluntary 2.05% July 18, 2005 N/A(2)
Class C Shares Voluntary 2.05% July 18, 2005 N/A(2)
Investor Class Shares Voluntary 1.30% July 18, 2005 N/A(2)
AIM International Total
Return Fund
Class A Shares Contractual 1.10% March 31, 2006 June 30, 2007
Class B Shares Contractual 1.85% March 31, 2006 June 30, 2007
Class C Shares Contractual 1.85% March 31, 2006 June 30, 2007
Institutional Class Shares Contractual 0.85% March 31, 2006 June 30, 2007
AIM Japan Fund
Class A Shares Contractual 1.70% March 31, 2006 June 30, 2007
Class B Shares Contractual 2.45% March 31, 2006 June 30, 2007
Class C Shares Contractual 2.45% March 31, 2006 June 30, 2007
Institutional Class Shares Contractual 1.45% March 31, 2006 June 30, 2007
AIM LIBOR Alpha Fund
Class A Shares Contractual 0.85% March 31, 2006 June 30, 2007
Class C Shares Contractual 1.10%(3) March 31, 2006 June 30, 2007
Class R Shares Contractual 1.10% March 31, 2006 June 30, 2007
Institutional Class Shares Contractual 0.60% March 31, 2006 June 30, 2007
AIM Trimark Endeavor Fund
Class A Shares Contractual 1.90% July 1, 2005 June 30, 2007
Class B Shares Contractual 2.65% November 1, 2004 June 30, 2007
Class C Shares Contractual 2.65% November 1, 2004 June 30, 2007
Class R Shares Contractual 2.15% November 1, 2004 June 30, 2007
Institutional Class Shares Contractual 1.65% November 1, 2004 June 30, 2007
AIM Trimark Fund
Class A Shares Contractual 2.15% July 1, 2005 June 30, 2007
Class B Shares Contractual 2.90% November 1, 2004 June 30, 2007
Class C Shares Contractual 2.90% November 1, 2004 June 30, 2007
Class R Shares Contractual 2.40% November 1, 2004 June 30, 2007
Institutional Class Shares Contractual 1.90% November 1, 2004 June 30, 2007
AIM Trimark Small Companies
Fund
Class A Shares Contractual 1.50% September 30, 2005 June 30, 2007
Class B Shares Contractual 2.25% September 30, 2005 June 30, 2007
Class C Shares Contractual 2.25% September 30, 2005 June 30, 2007
Class R Shares Contractual 1.75% September 30, 2005 June 30, 2007
Institutional Class Shares Contractual 1.25% September 30, 2005 June 30, 2007
|
See page 8 for footnotes to Exhibit A.
as of April 1, 2007
FUNDS WITH FISCAL YEAR END OF DECEMBER 31
AIM FUNDS GROUP
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ -------------
AIM Basic Balanced Fund
Class A Shares Voluntary 1.25% July 18, 2005 N/A(2)
Class B Shares Voluntary 2.00% July 18, 2005 N/A(2)
Class C Shares Voluntary 2.00% July 18, 2005 N/A(2)
Class R. Shares Voluntary 1.50% July 18, 2005 N/A(2)
Investor Class Shares Voluntary 1.25% July 18, 2005 N/A(2)
Institutional Class Shares Voluntary 1.00% July 18, 2005 N/A(2)
AIM European Small Company
Fund
Class A Shares Contractual 1.90% July 1, 2005 June 30, 2007
Class B Shares Contractual 2.65% May 1, 2002 June 30, 2007
Class C Shares Contractual 2.65% May 1, 2002 June 30, 2007
AIM Global Value Fund
Class A Shares Contractual 1.90% July 1, 2005 June 30, 2007
Class B Shares Contractual 2.65% May 1, 2002 June 30, 2007
Class C Shares Contractual 2.65% May 1, 2002 June 30, 2007
Institutional Class Shares Contractual 1.65% May 1, 2002 June 30, 2007
AIM Mid Cap Basic Value Fund
Class A Shares Voluntary 1.70% July 1, 2005 N/A(2)
Class B Shares Voluntary 2.45% December 31, 2001 N/A(2)
Class C Shares Voluntary 2.45% December 31, 2001 N/A(2)
Class R Shares Voluntary 1.95% December 31, 2001 N/A(2)
Institutional Class Shares Voluntary 1.45% December 31, 2001 N/A(2)
|
AIM GROWTH SERIES
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ -------------
AIM Small Cap Growth Fund
Class A Shares Voluntary 1.50% April 10, 2006 N/A(2)
Class B Shares Voluntary 2.25% April 10, 2006 N/A(2)
Class C Shares Voluntary 2.25% April 10, 2006 N/A(2)
Class R Shares Voluntary 1.75% April 10, 2006 N/A(2)
Investor Class Shares Voluntary 1.50% April 10, 2006 N/A(2)
Institutional Class Shares Voluntary 1.25% April 10, 2006 N/A(2)
AIM Global Equity Fund
Class A Shares Contractual 1.75% July 1, 2005 June 30, 2007
Class B Shares Contractual 2.50% August 27, 1999 June 30, 2007
Class C Shares Contractual 2.50% August 27, 1999 June 30, 2007
Class R Shares Contractual 2.00% August 27, 1999 June 30, 2007
Institutional Class Shares Contractual 1.50% August 27, 1999 June 30, 2007
|
(1) The total operating expenses of any class of shares established after the date of this Memorandum of Agreement will be limited to the amount established for Class A Shares plus the difference between the new class 12b-1 rate and the Class A 12b-1 rate.
(2) AIM may establish, amend or terminate voluntary waivers at any time in its sole discretion after consultation with the Trust.
(3) The expense limit shown is the expense limit after Rule 12b-1 fee waivers by A I M Distributors, Inc.
as of April 1, 2007
EXHIBIT "B" - ASSET ALLOCATION FUNDS(1)
AIM GROWTH SERIES
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION(2) CURRENT LIMIT DATE
---- ------------ -------------------------- ----------------- -------------
AIM Conservative Allocation
Fund
Class A Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.23% of average daily net
assets
Class B Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.23% of average daily net
assets
Class C Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.23% of average daily net
assets
Class R Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.23% of average daily net
assets
Institutional Class Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.23% of average daily net
assets
AIM Growth Allocation Fund
Class A Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.21% of average daily net
assets
Class B Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.21% of average daily net
assets
Class C Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.21% of average daily net
assets
Class R Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.21% of average daily net
assets
Institutional Class Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.21% of average daily net
assets
AIM Income Allocation Fund
Class A Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.03% of average daily net
assets
Class B Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.03% of average daily net
assets
Class C Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.03% of average daily net
assets
Class R Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.03% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.03% of average daily net
assets
|
See page 13 for footnotes to Exhibit B.
as of April 1, 2007
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION(2) CURRENT LIMIT DATE
---- ------------ -------------------------- ----------------- -------------
AIM Independence Now Fund
Class A Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.16% of average daily net
assets
Class B Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.16% of average daily net
assets
Class C Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.16% of average daily net
assets
Class R Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.16% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.16% of average daily net
assets
AIM Independence 2010 Fund
Class A Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.17% of average daily net
assets
Class B Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.17% of average daily net
assets
Class C Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.17% of average daily net
assets
Class R Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.17% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.17% of average daily net
assets
AIM Independence 2020 Fund
Class A Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Class B Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Class C Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Class R Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
|
See page 13 for footnotes to Exhibit B.
as of April 1, 2007
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION(2) CURRENT LIMIT DATE
---- ------------ -------------------------- ----------------- -------------
AIM Independence 2030 Fund
Class A Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Class B Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Class C Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Class R Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
AIM Independence 2040 Fund
Class A Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Class B Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Class C Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Class R Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
AIM Independence 2050 Fund
Class A Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Class B Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Class C Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Class R Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
|
See page 13 for footnotes to Exhibit B.
as of April 1, 2007
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION(2) CURRENT LIMIT DATE
---- ------------ -------------------------- ----------------- -------------
AIM International Allocation
Fund
Class A Contractual Limit Other Expenses to October 31, 2005 June 30, 2007
0.18% of average daily net
assets
Class B Contractual Limit Other Expenses to October 31, 2005 June 30, 2007
0.18% of average daily net
assets
Class C Contractual Limit Other Expenses to October 31, 2005 June 30, 2007
0.18% of average daily net
assets
Class R Contractual Limit Other Expenses to October 31, 2005 June 30, 2007
0.18% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to October 31, 2005 June 30, 2007
0.18% of average daily net
assets
AIM Moderate Allocation Fund
Class A Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.12% of average daily net
assets
Class B Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.12% of average daily net
assets
Class C Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.12% of average daily net
assets
Class R Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.12% of average daily net
assets
Institutional Class Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2007
0.12% of average daily net
assets
AIM Moderate Growth Allocation
Fund
Class A Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2007
0.12% of average daily net
assets
Class B Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2007
0.12% of average daily net
assets
Class C Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2007
0.12% of average daily net
assets
Class R Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2007
0.12% of average daily net
assets
Institutional Class Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2007
0.12% of average daily net
assets
|
See page 13 for footnotes to Exhibit B.
as of April 1, 2007
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION(2) CURRENT LIMIT DATE
---- ------------ -------------------------- ----------------- -------------
AIM Moderately Conservative
Allocation Fund
Class A Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2007
0.14% of average daily net
assets
Class B Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2007
0.14% of average daily net
assets
Class C Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2007
0.14% of average daily net
assets
Class R Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2007
0.14% of average daily net
assets
Institutional Class Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2007
0.14% of average daily net
assets
|
(1) Other expenses of any class of shares established after the date of this Memorandum of Agreement will be limited to the same amount established for Class A shares.
(2) Other Expenses are defined as all normal operating expenses of the fund, excluding management fees and 12b-1 expenses, if any. The expense limitation is subject to the exclusions as listed in the Memorandum of Agreement.
as of April 1, 2007
EXHIBIT "C" - INSTITUTIONAL MONEY MARKET FUNDS(1,2)
FUNDS WITH FISCAL YEAR END OF MARCH 31
TAX-FREE INVESTMENTS TRUST
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ----------------- -------------
Tax-Free Cash Reserve
Portfolio(3)
Cash Management Class Contractual 0.22% June 30, 2005 June 30, 2007
Corporate Class Contractual 0.22% June 30, 2005 June 30, 2007
Institutional Class Contractual 0.22% June 30, 2005 June 30, 2007
Personal Investment Class Contractual 0.22% June 30, 2005 June 30, 2007
Private Investment Class Contractual 0.22% June 30, 2005 June 30, 2007
Reserve Class Contractual 0.22% June 30, 2005 June 30, 2007
Resource Class Contractual 0.22% June 30, 2005 June 30, 2007
|
FUNDS WITH FISCAL YEAR END OF AUGUST 31
SHORT-TERM INVESTMENTS TRUST
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ----------------- -------------
Government & Agency Portfolio
Cash Management Class Contractual 0.12% June 30, 2005 June 30, 2007
Corporate Class Contractual 0.12% June 30, 2005 June 30, 2007
Institutional Class Contractual 0.12% June 30, 2005 June 30, 2007
Personal Investment Class Contractual 0.12% June 30, 2005 June 30, 2007
Private Investment Class Contractual 0.12% June 30, 2005 June 30, 2007
Reserve Class Contractual 0.12% June 30, 2005 June 30, 2007
Resource Class Contractual 0.12% June 30, 2005 June 30, 2007
Government TaxAdvantage
Portfolio
Cash Management Class Contractual 0.12% June 30, 2005 June 30, 2007
Corporate Class Contractual 0.12% June 30, 2005 June 30, 2007
Institutional Class Contractual 0.12% June 30, 2005 June 30, 2007
Personal Investment Class Contractual 0.12% June 30, 2005 June 30, 2007
Private Investment Class Contractual 0.12% June 30, 2005 June 30, 2007
Reserve Class Contractual 0.12% June 30, 2005 June 30, 2007
Resource Class Contractual 0.12% June 30, 2005 June 30, 2007
Liquid Assets Portfolio
Cash Management Class Contractual 0.12% June 30, 2005 June 30, 2007
Corporate Class Contractual 0.12% June 30, 2005 June 30, 2007
Institutional Class Contractual 0.12% June 30, 2005 June 30, 2007
Personal Investment Class Contractual 0.12% June 30, 2005 June 30, 2007
Private Investment Class Contractual 0.12% June 30, 2005 June 30, 2007
Reserve Class Contractual 0.12% June 30, 2005 June 30, 2007
Resource Class Contractual 0.12% June 30, 2005 June 30, 2007
|
See page 15 for footnotes to Exhibit C.
as of April 1, 2007
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ----------------- -------------
STIC Prime Portfolio
Cash Management Class Contractual 0.12% June 30, 2005 June 30, 2007
Corporate Class Contractual 0.12% June 30, 2005 June 30, 2007
Institutional Class Contractual 0.12% June 30, 2005 June 30, 2007
Personal Investment Class Contractual 0.12% June 30, 2005 June 30, 2007
Private Investment Class Contractual 0.12% June 30, 2005 June 30, 2007
Reserve Class Contractual 0.12% June 30, 2005 June 30, 2007
Resource Class Contractual 0.12% June 30, 2005 June 30, 2007
Treasury Portfolio
Cash Management Class Contractual 0.12% June 30, 2005 June 30, 2007
Corporate Class Contractual 0.12% June 30, 2005 June 30, 2007
Institutional Class Contractual 0.12% June 30, 2005 June 30, 2007
Personal Investment Class Contractual 0.12% June 30, 2005 June 30, 2007
Private Investment Class Contractual 0.12% June 30, 2005 June 30, 2007
Reserve Class Contractual 0.12% June 30, 2005 June 30, 2007
Resource Class Contractual 0.12% June 30, 2005 June 30, 2007
|
(1) The expense limit shown excludes Rule 12b-1 fees.
(2) The expense rate excluding 12b-1 fees of any class of shares established after the date of this Memorandum of Agreement will be the same as existing classes.
(3) The expense limitation also excludes Trustees' fees and federal registration expenses.
as of April 1, 2007
EXHIBIT "D" - VARIABLE INSURANCE FUNDS
AIM VARIABLE INSURANCE FUNDS
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ --------------
AIM V.I. Basic Balanced Fund
Series I Shares Contractual 0.91% July 1, 2005 April 30, 2008
Series II Shares Contractual 1.16% July 1, 2005 April 30, 2008
AIM V.I. Basic Value Fund
Series I Shares Contractual 1.30% January 1, 2005 April 30, 2008
Series II Shares Contractual 1.45% January 1, 2005 April 30, 2008
AIM V.I. Capital Appreciation
Fund
Series I Shares Contractual 1.30% January 1, 2005 April 30, 2008
Series II Shares Contractual 1.45% January 1, 2005 April 30, 2008
AIM V.I. Capital Development
Fund
Series I Shares Contractual 1.30% January 1, 2005 April 30, 2008
Series II Shares Contractual 1.45% January 1, 2005 April 30, 2008
AIM V.I. Core Equity Fund
Series I Shares Contractual 1.30% January 1, 2005 April 30, 2008
Series II Shares Contractual 1.45% January 1, 2005 April 30, 2008
AIM V.I. Diversified Income
Fund
Series I Shares Contractual 0.75% July 1, 2005 April 30, 2008
Series II Shares Contractual 1.00% July 1, 2005 April 30, 2008
AIM V.I. Dynamics Fund
Series I Shares Contractual 1.30% April 30, 2004 April 30, 2008
Series II Shares Contractual 1.45% April 30, 2004 April 30, 2008
AIM V.I. Financial Services
Fund
Series I Shares Contractual 1.30% April 30, 2004 April 30, 2008
Series II Shares Contractual 1.45% April 30, 2004 April 30, 2008
AIM V.I. Global Health Care
Fund
Series I Shares Contractual 1.30% April 30, 2004 April 30, 2008
Series II Shares Contractual 1.45% April 30, 2004 April 30, 2008
AIM V.I. Global Real Estate
Fund
Series I Shares Contractual 1.30% April 30, 2004 April 30, 2008
Series II Shares Contractual 1.45% April 30, 2004 April 30, 2008
AIM V.I. Government
Securities Fund
Series I Shares Contractual 0.73% July 1, 2005 April 30, 2008
Series II Shares Contractual 0.98% July 1, 2005 April 30, 2008
AIM V.I. High Yield Fund
Series I Shares Contractual 0.95% July 1, 2005 April 30, 2008
|
as of April 1, 2007
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ --------------
Series II Shares Contractual 1.20% April 30, 2004 April 30, 2008
AIM V.I. International Growth
Fund
Series I Shares Contractual 1.30% January 1, 2005 April 30, 2008
Series II Shares Contractual 1.45% January 1, 2005 April 30, 2008
AIM V.I. Large Cap Growth
Fund
Series I Shares Contractual 1.01% July 1, 2005 April 30, 2008
Series II Shares Contractual 1.26% July 1, 2005 April 30, 2008
AIM V.I. Leisure Fund
Series I Shares Contractual 1.01% April 30, 2004 April 30, 2008
Series II Shares Contractual 1.26% April 30, 2004 April 30, 2008
AIM V.I. Mid Cap Core Equity
Fund
Series I Shares Contractual 1.30% September 10, 2001 April 30, 2008
Series II Shares Contractual 1.45% September 10, 2001 April 30, 2008
AIM V.I. Money Market Fund
Series I Shares Contractual 1.30% January 1, 2005 April 30, 2008
Series II Shares Contractual 1.45% January 1, 2005 April 30, 2008
AIM V.I. Small Cap Equity
Fund
Series I Shares Contractual 1.15% July 1, 2005 April 30, 2008
Series II Shares Contractual 1.40% July 1, 2005 April 30, 2008
AIM V.I. Small Cap Growth
Fund
Series I Shares Contractual 1.20% July 1, 2005 April 30, 2008
Series II Shares Contractual 1.45% April 30, 2004 April 30, 2008
AIM V.I. Technology Fund
Series I Shares Contractual 1.30% April 30, 2004 April 30, 2008
Series II Shares Contractual 1.45% April 30, 2004 April 30, 2008
AIM V.I. Utilities Fund
Series I Shares Contractual 0.93% September 23, 2005 April 30, 2008
Series II Shares Contractual 1.18% September 23, 2005 April 30, 2008
|
MEMORANDUM OF AGREEMENT
(EXPENSE LIMITATIONS)
This Memorandum of Agreement is entered into as of the Effective Date on the attached exhibits (the "Exhibits"), between AIM Counselor Series Trust, AIM Equity Funds, AIM Growth Series, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Stock Funds, AIM Tax-Exempt Funds, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust (each a "Trust" or, collectively, the "Trusts"), on behalf of the funds listed on the Exhibits to this Memorandum of Agreement (the "Funds"), and A I M Advisors, Inc. ("AIM"). This Memorandum of Agreement restates the Memorandum of Agreement dated April 1, 2007 between AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Stock Funds, AIM Tax-Exempt Funds, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust. AIM shall and hereby agrees to waive fees or reimburse expenses of each Fund, on behalf of its respective classes as applicable, severally and not jointly, as indicated in the attached Exhibits.
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 Trusts and AIM agree as follows:
For the Contractual Limits (listed in Exhibits A - D), the Trusts and AIM agree until at least the expiration date set forth on the attached Exhibits A - D (the "Expiration Date") that AIM will waive its fees or reimburse expenses to the extent that expenses of a class of a Fund (excluding (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items; (v) expenses related to a merger or reorganization, as approved by the Funds' Boards of Trustees; (vi) expenses of the underlying funds that are paid indirectly as a result of share ownership of the underlying funds, and (vii) expenses that each Fund has incurred but did not actually pay because of an expense offset arrangement, if applicable) exceed the rate, on an annualized basis, set forth on the Exhibits of the average daily net assets allocable to such class. Acquired fund fees and expenses are not fees or expenses incurred by a fund directly but are expenses of the investment companies in which a fund invests. These fees and expenses are incurred indirectly through the valuation of a fund's investment in these investment companies. Acquired fund fees and expenses are required to be disclosed and included in the total annual fund operating expenses in the prospectus fee table. As a result, the net total annual fund operating expenses shown in the prospectus fee table may exceed the expense limits reflected in Exhibits A-D. With regard to the Contractual Limits, the Board of Trustees of the Trust and AIM may terminate or modify this Memorandum of Agreement prior to the Expiration Date only by mutual written consent. AIM will not have any right to reimbursement of any amount so waived or reimbursed.
For the Contractual Limits, each of the Trusts and AIM agree to review the then-current expense limitations for each class of each Fund listed on the Exhibits on a date prior to the Expiration Date to determine whether such limitations should be amended, continued or terminated. The expense limitations will expire upon the Expiration Date unless the Trusts and AIM have agreed to continue them. The Exhibits will be amended to reflect any such agreement.
For the Voluntary Limits (listed in Exhibits A - D), the Trusts and AIM agree that these are not contractual in nature and that AIM may establish, amend and/or terminate such expense limitations at any time in its sole discretion after consultation with the Funds' Boards of Trustees. Any delay or failure by AIM to update this Memorandum of Agreement with regards to the terminations, extensions, or expirations of the Voluntary Limits shall have no effect on the term of such Voluntary Limitations; the Voluntary Limitations are listed herein for informational purposes only.
It is expressly agreed that the obligations of each Trust hereunder shall not be binding upon any of the Trustees, shareholders, nominees, officers, agents or employees of the Trusts personally, but shall only bind the assets and property of each Fund, as provided in each Trust's Agreement and Declaration of Trust. The execution and delivery of this Memorandum of Agreement have been authorized by the Trustees of the Trusts, and this Memorandum of Agreement has been executed and delivered by an authorized officer of the Trusts acting as such; neither such authorization by such Trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, but shall bind only the assets and property of the Funds, as provided in each Trust's Agreement and Declaration of Trust.
IN WITNESS WHEREOF, each of the Trusts and AIM have entered into this Memorandum of Agreement as of the Effective Dates on the attached Exhibits.
AIM COUNSELOR SERIES TRUST
AIM EQUITY FUNDS
AIM GROWTH SERIES
AIM INVESTMENT FUNDS
AIM INVESTMENT SECURITIES FUNDS
AIM SECTOR FUNDS
AIM STOCK FUNDS
AIM TAX-EXEMPT FUNDS
AIM VARIABLE INSURANCE FUNDS
on behalf of the Funds listed in the
Exhibits to this Memorandum of Agreement
By: /s/ John M. Zerr
------------------------------------
Title: Senior Vice President
|
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS TRUST
on behalf of the Funds listed in the
Exhibits to this Memorandum of Agreement
By: /s/ Karen Dunn Kelley
------------------------------------
Title: President
|
A I M Advisors, Inc.
By: /s/ John M. Zerr
------------------------------------
Title: Senior Vice President
|
as of July 1, 2007
EXHIBIT "A" - RETAIL FUNDS(1)
FUNDS WITH FISCAL YEAR END OF MARCH 31
AIM SECTOR FUNDS
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ -------------
AIM Technology Fund
Class A Shares Contractual 1.55% July 1, 2005 June 30, 2008
Class B Shares Contractual 2.30% July 1, 2005 June 30, 2008
Class C Shares Contractual 2.30% July 1, 2005 June 30, 2008
Investor Class Shares Contractual 1.55% July 1, 2005 June 30, 2008
Institutional Class Shares Contractual 1.30% July 1, 2005 June 30, 2008
AIM Utilities Fund
Class A Shares Contractual 1.30% April 1, 2006 June 30, 2008
Class B Shares Contractual 2.05% April 1, 2006 June 30, 2008
Class C Shares Contractual 2.05% April 1, 2006 June 30, 2008
Investor Class Shares Contractual 1.30% April 1, 2006 June 30, 2008
Institutional Class Shares Contractual 1.05% April 1, 2006 June 30, 2008
|
AIM TAX-EXEMPT FUNDS
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT Date
---- ------------ ---------- ------------------ -------------
AIM High Income Municipal
Fund
Class A Shares Voluntary 0.70% April 1, 2007 N/A(2)
Class B Shares Voluntary 1.45% April 1, 2007 N/A(2)
Class C Shares Voluntary 1.45% April 1, 2007 N/A(2)
Institutional Class Shares Voluntary 0.45% April 1, 2007 N/A(2)
|
See page 8 for footnotes to Exhibit A.
as of July 1, 2007
FUNDS WITH FISCAL YEAR END OF JULY 31
AIM INVESTMENT SECURITIES FUNDS
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ -------------
AIM Global Real Estate Fund
Class A Shares Contractual 1.40% July 1, 2005 June 30, 2008
Class B Shares Contractual 2.15% April 29, 2005 June 30, 2008
Class C Shares Contractual 2.15% April 29, 2005 June 30, 2008
Class R Shares Contractual 1.65% April 29, 2005 June 30, 2008
Institutional Class Shares Contractual 1.15% April 29, 2005 June 30, 2008
AIM Short Term Bond Fund
Class A Shares Contractual 0.85% July 1, 2005 June 30, 2008
Class C Shares Contractual 1.10%(3) February 1, 2006 June 30, 2008
Class R Shares Contractual 1.10% August 30, 2002 June 30, 2008
Institutional Class Shares Contractual 0.60% August 30, 2002 June 30, 2008
AIM Total Return Bond Fund
Class A Shares Contractual 1.00% July 1, 2005 June 30, 2008
Class B Shares Contractual 1.75% July 1, 2002 June 30, 2008
Class C Shares Contractual 1.75% July 1, 2002 June 30, 2008
Class R Shares Contractual 1.25% April 30, 2004 June 30, 2008
Institutional Class Shares Contractual 0.75% April 30, 2004 June 30, 2008
|
AIM STOCK FUNDS
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ -------------
AIM Dynamics Fund
Class A Shares Contractual 1.20% July 1, 2005 June 30, 2008
Class B Shares Contractual 1.95% August 12, 2003 June 30, 2008
Class C Shares Contractual 1.95% August 12, 2003 June 30, 2008
Class R Shares Contractual 1.45% October 25, 2005 June 30, 2008
Investor Class Shares Contractual 1.20% August 12, 2003 June 30, 2008
Institutional Class Shares Contractual 0.95% August 12, 2003 June 30, 2008
AIM S&P 500 Index Fund
Investor Class Shares Contractual 0.60% August 1, 2005 June 30, 2008
Institutional Class Shares Contractual 0.35% August 12, 2003 June 30, 2008
|
See page 8 for footnotes to Exhibit A.
as of July 1, 2007
FUNDS WITH FISCAL YEAR END OF AUGUST 31
AIM COUNSELOR SERIES TRUST
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ -------------
AIM Floating Rate Fund
Class A Shares Contractual 1.50% April 14, 2006 June 30, 2008
Class C Shares Contractual 2.00% April 14, 2006 June 30, 2008
Class R Shares Contractual 1.75% April 14, 2006 June 30, 2008
Institutional Class Shares Contractual 1.25% April 14, 2006 June 30, 2008
AIM Structured Core Fund
Class A Contractual 1.00% March 31, 2006 June 30, 2008
Class B Contractual 1.75% March 31, 2006 June 30, 2008
Class C Contractual 1.75% March 31, 2006 June 30, 2008
Class R Contractual 1.25% March 31, 2006 June 30, 2008
Institutional Class Contractual 0.75% March 31, 2006 June 30, 2008
AIM Structured Growth Fund
Class A Contractual 1.00% March 31, 2006 June 30, 2008
Class B Contractual 1.75% March 31, 2006 June 30, 2008
Class C Contractual 1.75% March 31, 2006 June 30, 2008
Class R Contractual 1.25% March 31, 2006 June 30, 2008
Institutional Class Contractual 0.75% March 31, 2006 June 30, 2008
AIM Structured Value Fund
Class A Contractual 1.00% March 31, 2006 June 30, 2008
Class B Contractual 1.75% March 31, 2006 June 30, 2008
Class C Contractual 1.75% March 31, 2006 June 30, 2008
Class R Contractual 1.25% March 31, 2006 June 30, 2008
Institutional Class Contractual 0.75% March 31, 2006 June 30, 2008
|
FUNDS WITH FISCAL YEAR END OF OCTOBER 31
AIM EQUITY FUNDS
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ -------------
AIM Diversified Dividend Fund
Class A Shares Contractual 1.00% July 1, 2005 June 30, 2008
Class B Shares Contractual 1.65% May 2, 2003 June 30, 2008
Class C Shares Contractual 1.65% May 2, 2003 June 30, 2008
Class R Shares Contractual 1.25% October 25, 2005 June 30, 2008
Investor Class Shares Contractual 1.00% July 15, 2005 June 30, 2008
Institutional Class Shares Contractual 0.75% October 25, 2005 June 30, 2008
AIM Large Cap Basic Value
Fund
Class A Shares Contractual 1.22% July 1, 2005 June 30, 2008
Class B Shares Contractual 1.97% July 1, 2005 June 30, 2008
Class C Shares Contractual 1.97% July 1, 2005 June 30, 2008
Class R Shares Contractual 1.47% July 1, 2005 June 30, 2008
Investor Class Shares Contractual 1.22% July 1, 2005 June 30, 2008
Institutional Class Shares Contractual 0.97% July 1, 2005 June 30, 2008
AIM Large Cap Growth Fund
Class A Shares Contractual 1.32% July 1, 2005 June 30, 2008
Class B Shares Contractual 2.07% July 1, 2005 June 30, 2008
Class C Shares Contractual 2.07% July 1, 2005 June 30, 2008
Class R Shares Contractual 1.57% July 1, 2005 June 30, 2008
Investor Class Shares Contractual 1.32% July 1, 2005 June 30, 2008
Institutional Class Shares Contractual 1.07% July 1, 2005 June 30, 2008
|
as of July 1, 2007
AIM INVESTMENT FUNDS
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ -------------
AIM China Fund
Class A Shares Contractual 2.05% March 31, 2006 June 30, 2008
Class B Shares Contractual 2.80% March 31, 2006 June 30, 2008
Class C Shares Contractual 2.80% March 31, 2006 June 30, 2008
Institutional Class Shares Contractual 1.80% March 31, 2006 June 30, 2008
AIM Developing Markets Fund
Class A Shares Contractual 1.75% July 1, 2005 June 30, 2008
Class B Shares Contractual 2.50% July 1, 2002 June 30, 2008
Class C Shares Contractual 2.50% July 1, 2002 June 30, 2008
Institutional Class Shares Contractual 1.50% October 25, 2005 June 30, 2008
AIM Global Health Care Fund
Class A Shares Contractual 1.30% July 18, 2005 June 30, 2008
Class B Shares Contractual 2.05% July 18, 2005 June 30, 2008
Class C Shares Contractual 2.05% July 18, 2005 June 30, 2008
Investor Class Shares Contractual 1.30% July 18, 2005 June 30, 2008
AIM International Total
Return Fund
Class A Shares Contractual 1.10% March 31, 2006 June 30, 2008
Class B Shares Contractual 1.85% March 31, 2006 June 30, 2008
Class C Shares Contractual 1.85% March 31, 2006 June 30, 2008
Institutional Class Shares Contractual 0.85% March 31, 2006 June 30, 2008
AIM Japan Fund
Class A Shares Contractual 1.70% March 31, 2006 June 30, 2008
Class B Shares Contractual 2.45% March 31, 2006 June 30, 2008
Class C Shares Contractual 2.45% March 31, 2006 June 30, 2008
Institutional Class Shares Contractual 1.45% March 31, 2006 June 30, 2008
AIM LIBOR Alpha Fund
Class A Shares Contractual 0.85% March 31, 2006 June 30, 2008
Class C Shares Contractual 1.10%(3) March 31, 2006 June 30, 2008
Class R Shares Contractual 1.10% March 31, 2006 June 30, 2008
Institutional Class Shares Contractual 0.60% March 31, 2006 June 30, 2008
AIM Trimark Fund
Class A Shares Contractual 2.15% July 1, 2005 June 30, 2008
Class B Shares Contractual 2.90% November 1, 2004 June 30, 2008
Class C Shares Contractual 2.90% November 1, 2004 June 30, 2008
Class R Shares Contractual 2.40% November 1, 2004 June 30, 2008
Institutional Class Shares Contractual 1.90% November 1, 2004 June 30, 2008
AIM Trimark Small Companies
Fund
Class A Shares Contractual 1.50% September 30, 2005 June 30, 2008
Class B Shares Contractual 2.25% September 30, 2005 June 30, 2008
Class C Shares Contractual 2.25% September 30, 2005 June 30, 2008
Class R Shares Contractual 1.75% September 30, 2005 June 30, 2008
Institutional Class Shares Contractual 1.25% September 30, 2005 June 30, 2008
|
See page 8 for footnotes to Exhibit A.
as of July 1, 2007
FUNDS WITH FISCAL YEAR END OF DECEMBER 31
AIM GROWTH SERIES
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ -------------
AIM Small Cap Growth Fund
Class A Shares Contractual 1.50% April 10, 2006 June 30, 2008
Class B Shares Contractual 2.25% April 10, 2006 June 30, 2008
Class C Shares Contractual 2.25% April 10, 2006 June 30, 2008
Class R Shares Contractual 1.75% April 10, 2006 June 30, 2008
Investor Class Shares Contractual 1.50% April 10, 2006 June 30, 2008
Institutional Class Shares Contractual 1.25% April 10, 2006 June 30, 2008
|
(1) The total operating expenses of any class of shares established after the date of this Memorandum of Agreement will be limited to the amount established for Class A Shares plus the difference between the new class 12b-1 rate and the Class A 12b-1 rate.
(2) AIM may establish, amend or terminate voluntary waivers at any time in its sole discretion after consultation with the Trust.
(3) The expense limit shown is the expense limit after Rule 12b-1 fee waivers by A I M Distributors, Inc.
as of July 1, 2007
EXHIBIT "B" - ASSET ALLOCATION FUNDS(1)
AIM GROWTH SERIES
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION(2) CURRENT LIMIT DATE
---- ------------ -------------------------- ----------------- -------------
AIM Conservative Allocation
Fund
Class A Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.23% of average daily net
assets
Class B Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.23% of average daily net
assets
Class C Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.23% of average daily net
assets
Class R Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.23% of average daily net
assets
Institutional Class Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.23% of average daily net
assets
AIM Growth Allocation Fund
Class A Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.21% of average daily net
assets
Class B Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.21% of average daily net
assets
Class C Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.21% of average daily net
assets
Class R Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.21% of average daily net
assets
Institutional Class Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.21% of average daily net
assets
AIM Income Allocation Fund
Class A Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.03% of average daily net
assets
Class B Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.03% of average daily net
assets
Class C Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.03% of average daily net
assets
Class R Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.03% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.03% of average daily net
assets
|
See page 13 for footnotes to Exhibit B.
as of July 1, 2007
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION(2) CURRENT LIMIT DATE
---- ------------ -------------------------- ----------------- -------------
AIM Independence Now Fund
Class A Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.16% of average daily net
assets
Class B Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.16% of average daily net
assets
Class C Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.16% of average daily net
assets
Class R Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.16% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.16% of average daily net
assets
AIM Independence 2010 Fund
Class A Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.17% of average daily net
assets
Class B Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.17% of average daily net
assets
Class C Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.17% of average daily net
assets
Class R Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.17% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.17% of average daily net
assets
AIM Independence 2020 Fund
Class A Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Class B Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Class C Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Class R Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
|
See page 13 for footnotes to Exhibit B.
as of July 1, 2007
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION(2) CURRENT LIMIT DATE
---- ------------ -------------------------- ----------------- -------------
AIM Independence 2030 Fund
Class A Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Class B Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Class C Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Class R Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.24% of average daily net
assets
AIM Independence 2040 Fund
Class A Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Class B Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Class C Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Class R Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
AIM Independence 2050 Fund
Class A Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Class B Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Class C Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Class R Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to January 31, 2007 June 30, 2008
0.28% of average daily net
assets
|
See page 13 for footnotes to Exhibit B.
as of July 1, 2007
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION(2) CURRENT LIMIT DATE
---- ------------ -------------------------- ----------------- -------------
AIM International Allocation
Fund
Class A Contractual Limit Other Expenses to October 31, 2005 June 30, 2008
0.18% of average daily net
assets
Class B Contractual Limit Other Expenses to October 31, 2005 June 30, 2008
0.18% of average daily net
assets
Class C Contractual Limit Other Expenses to October 31, 2005 June 30, 2008
0.18% of average daily net
assets
Class R Contractual Limit Other Expenses to October 31, 2005 June 30, 2008
0.18% of average daily net
assets
Institutional Class Contractual Limit Other Expenses to October 31, 2005 June 30, 2008
0.18% of average daily net
assets
AIM Moderate Allocation Fund
Class A Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.12% of average daily net
assets
Class B Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.12% of average daily net
assets
Class C Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.12% of average daily net
assets
Class R Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.12% of average daily net
assets
Institutional Class Shares Contractual Limit Other Expenses to January 1, 2006 June 30, 2008
0.12% of average daily net
assets
AIM Moderate Growth
Allocation Fund
Class A Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2008
0.12% of average daily net
assets
Class B Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2008
0.12% of average daily net
assets
Class C Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2008
0.12% of average daily net
assets
Class R Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2008
0.12% of average daily net
assets
Institutional Class Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2008
0.12% of average daily net
assets
|
See page 13 for footnotes to Exhibit B.
as of July 1, 2007
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION(2) CURRENT LIMIT DATE
---- ------------ -------------------------- ----------------- -------------
AIM Moderately Conservative
Allocation Fund
Class A Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2008
0.14% of average daily net
assets
Class B Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2008
0.14% of average daily net
assets
Class C Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2008
0.14% of average daily net
assets
Class R Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2008
0.14% of average daily net
assets
Institutional Class Shares Contractual Limit Other Expenses to April 29, 2005 June 30, 2008
0.14% of average daily net
assets
|
(1) Other expenses of any class of shares established after the date of this Memorandum of Agreement will be limited to the same amount established for Class A shares.
(2) Other Expenses are defined as all normal operating expenses of the fund, excluding management fees and 12b-1 expenses, if any. The expense limitation is subject to the exclusions as listed in the Memorandum of Agreement.
as of July 1, 2007
EXHIBIT "C" - INSTITUTIONAL MONEY MARKET FUNDS(1,2)
FUNDS WITH FISCAL YEAR END OF MARCH 31
TAX-FREE INVESTMENTS TRUST
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ -------------
Tax-Free Cash Reserve
Portfolio(3)
Cash Management Class Contractual 0.22% June 30, 2005 June 30, 2008
Corporate Class Contractual 0.22% June 30, 2005 June 30, 2008
Institutional Class Contractual 0.22% June 30, 2005 June 30, 2008
Personal Investment Class Contractual 0.22% June 30, 2005 June 30, 2008
Private Investment Class Contractual 0.22% June 30, 2005 June 30, 2008
Reserve Class Contractual 0.22% June 30, 2005 June 30, 2008
Resource Class Contractual 0.22% June 30, 2005 June 30, 2008
|
FUNDS WITH FISCAL YEAR END OF AUGUST 31
SHORT-TERM INVESTMENTS TRUST
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ -------------
Government & Agency Portfolio
Cash Management Class Contractual 0.12% June 30, 2005 June 30, 2008
Corporate Class Contractual 0.12% June 30, 2005 June 30, 2008
Institutional Class Contractual 0.12% June 30, 2005 June 30, 2008
Personal Investment Class Contractual 0.12% June 30, 2005 June 30, 2008
Private Investment Class Contractual 0.12% June 30, 2005 June 30, 2008
Reserve Class Contractual 0.12% June 30, 2005 June 30, 2008
Resource Class Contractual 0.12% June 30, 2005 June 30, 2008
Government TaxAdvantage
Portfolio
Cash Management Class Contractual 0.12% June 30, 2005 June 30, 2008
Corporate Class Contractual 0.12% June 30, 2005 June 30, 2008
Institutional Class Contractual 0.12% June 30, 2005 June 30, 2008
Personal Investment Class Contractual 0.12% June 30, 2005 June 30, 2008
Private Investment Class Contractual 0.12% June 30, 2005 June 30, 2008
Reserve Class Contractual 0.12% June 30, 2005 June 30, 2008
Resource Class Contractual 0.12% June 30, 2005 June 30, 2008
Liquid Assets Portfolio
Cash Management Class Contractual 0.12% June 30, 2005 June 30, 2008
Corporate Class Contractual 0.12% June 30, 2005 June 30, 2008
Institutional Class Contractual 0.12% June 30, 2005 June 30, 2008
Personal Investment Class Contractual 0.12% June 30, 2005 June 30, 2008
Private Investment Class Contractual 0.12% June 30, 2005 June 30, 2008
Reserve Class Contractual 0.12% June 30, 2005 June 30, 2008
Resource Class Contractual 0.12% June 30, 2005 June 30, 2008
|
See page 15 for footnotes to Exhibit C.
as of July 1, 2007
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ -------------
STIC Prime Portfolio
Cash Management Class Contractual 0.12% June 30, 2005 June 30, 2008
Corporate Class Contractual 0.12% June 30, 2005 June 30, 2008
Institutional Class Contractual 0.12% June 30, 2005 June 30, 2008
Personal Investment Class Contractual 0.12% June 30, 2005 June 30, 2008
Private Investment Class Contractual 0.12% June 30, 2005 June 30, 2008
Reserve Class Contractual 0.12% June 30, 2005 June 30, 2008
Resource Class Contractual 0.12% June 30, 2005 June 30, 2008
Treasury Portfolio
Cash Management Class Contractual 0.12% June 30, 2005 June 30, 2008
Corporate Class Contractual 0.12% June 30, 2005 June 30, 2008
Institutional Class Contractual 0.12% June 30, 2005 June 30, 2008
Personal Investment Class Contractual 0.12% June 30, 2005 June 30, 2008
Private Investment Class Contractual 0.12% June 30, 2005 June 30, 2008
Reserve Class Contractual 0.12% June 30, 2005 June 30, 2008
Resource Class Contractual 0.12% June 30, 2005 June 30, 2008
|
(1) The expense limit shown excludes Rule 12b-1 fees.
(2) The expense rate excluding 12b-1 fees of any class of shares established after the date of this Memorandum of Agreement will be the same as existing classes.
(3) The expense limitation also excludes Trustees' fees and federal registration expenses.
as of July 1, 2007
EXHIBIT "D" - VARIABLE INSURANCE FUNDS
AIM VARIABLE INSURANCE FUNDS
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ -------------
AIM V.I. Basic Balanced Fund
Series I Shares Contractual 0.91% July 1, 2005 April 30, 2009
Series II Shares Contractual 1.16% July 1, 2005 April 30, 2009
AIM V.I. Basic Value Fund
Series I Shares Contractual 1.30% January 1, 2005 April 30, 2009
Series II Shares Contractual 1.45% January 1, 2005 April 30, 2009
AIM V.I. Capital Appreciation
Fund
Series I Shares Contractual 1.30% January 1, 2005 April 30, 2009
Series II Shares Contractual 1.45% January 1, 2005 April 30, 2009
AIM V.I. Capital Development
Fund
Series I Shares Contractual 1.30% January 1, 2005 April 30, 2009
Series II Shares Contractual 1.45% January 1, 2005 April 30, 2009
AIM V.I. Core Equity Fund
Series I Shares Contractual 1.30% January 1, 2005 April 30, 2009
Series II Shares Contractual 1.45% January 1, 2005 April 30, 2009
AIM V.I. Diversified Income
Fund
Series I Shares Contractual 0.75% July 1, 2005 April 30, 2009
Series II Shares Contractual 1.00% July 1, 2005 April 30, 2009
AIM V.I. Dynamics Fund
Series I Shares Contractual 1.30% April 30, 2004 April 30, 2009
Series II Shares Contractual 1.45% April 30, 2004 April 30, 2009
AIM V.I. Financial Services
Fund
Series I Shares Contractual 1.30% April 30, 2004 April 30, 2009
Series II Shares Contractual 1.45% April 30, 2004 April 30, 2009
AIM V.I. Global Health Care
Fund
Series I Shares Contractual 1.30% April 30, 2004 April 30, 2009
Series II Shares Contractual 1.45% April 30, 2004 April 30, 2009
AIM V.I. Global Real Estate
Fund
Series I Shares Contractual 1.30% April 30, 2004 April 30, 2009
Series II Shares Contractual 1.45% April 30, 2004 April 30, 2009
AIM V.I. Government
Securities Fund
Series I Shares Contractual 0.73% July 1, 2005 April 30, 2009
Series II Shares Contractual 0.98% July 1, 2005 April 30, 2009
|
as of July 1, 2007
CONTRACTUAL/ EXPENSE EFFECTIVE DATE OF EXPIRATION
FUND VOLUNTARY LIMITATION CURRENT LIMIT DATE
---- ------------ ---------- ------------------ -------------
AIM V.I. High Yield Fund
Series II Shares Contractual 0.95% July 1, 2005 April 30, 2009
Series II Shares Contractual 1.20% April 30, 2004 April 30, 2009
AIM V.I. International Growth
Fund
Series I Shares Contractual 1.30% January 1, 2005 April 30, 2009
Series II Shares Contractual 1.45% January 1, 2005 April 30, 2009
AIM V.I. Large Cap Growth
Fund
Series I Shares Contractual 1.01% July 1, 2005 April 30, 2009
Series II Shares Contractual 1.26% July 1, 2005 April 30, 2009
AIM V.I. Leisure Fund
Series I Shares Contractual 1.01% April 30, 2004 April 30, 2009
Series II Shares Contractual 1.26% April 30, 2004 April 30, 2009
AIM V.I. Mid Cap Core Equity
Fund
Series I Shares Contractual 1.30% September 10, 2001 April 30, 2009
Series II Shares Contractual 1.45% September 10, 2001 April 30, 2009
AIM V.I. Money Market Fund
Series I Shares Contractual 1.30% January 1, 2005 April 30, 2009
Series II Shares Contractual 1.45% January 1, 2005 April 30, 2009
AIM V.I. Small Cap Equity
Fund
Series I Shares Contractual 1.15% July 1, 2005 April 30, 2009
Series II Shares Contractual 1.40% July 1, 2005 April 30, 2009
AIM V.I. Technology Fund
Series I Shares Contractual 1.30% April 30, 2004 April 30, 2009
Series II Shares Contractual 1.45% April 30, 2004 April 30, 2009
AIM V.I. Utilities Fund
Series I Shares Contractual 0.93% September 23, 2005 April 30, 2009
Series II Shares Contractual 1.18% September 23, 2005 April 30, 2009
|
MEMORANDUM OF AGREEMENT
(AFFILIATED MONEY MARKET FUND WAIVER)
This Memorandum of Agreement is entered into as of the dates indicated on Exhibit "A" between AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Variable Insurance Fundsand Short-Term Investments Trust (each a "Fund" and collectively, the "Funds"), on behalf of the portfolios listed on Exhibit "A" to this Memorandum of Agreement (the "Portfolios"), 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 Funds and AIM agree as follows:
1. Each Fund, for itself and its Portfolios, 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 waive advisory fees payable by an Investing Fund in an amount equal to 100% of the net advisory fee AIM receives on the Uninvested Cash (defined below) from the Affiliated Money Market Fund (defined below) in which the Investing Fund invests (the "Waiver").
i. AIM's Fund Accounting Group will calculate, and apply, the Waiver monthly, based upon the average investment of Uninvested Cash made by the Investing Fund during the previous month in an Affiliated Money Market Fund.
ii. The Waiver will not apply to those investing Funds that do not charge an advisory fee, either due to the terms of their advisory agreement, or as a result of contractual or voluntary fee waivers.
iii. The Waiver will not apply to cash collateral for securities lending.
For purposes of the paragraph above, the following terms shall have the following meanings:
(a) "Affiliated Money Market Fund" - any existing or future Fund that holds itself out as a money market fund and complies with Rule 2a-7 under the Investment Company Act of 1940, as amended; and
(b) "Uninvested Cash" - cash available and uninvested by a Fund that may result from a variety of sources, including dividends or interest received on portfolio securities, unsettled securities transactions, strategic reserves, matured investments, proceeds from liquidation of investment securities, dividend payments, or new investor capital.
2. Neither a Fund nor AIM may remove or amend the Waiver to a Fund's detriment prior to requesting and receiving the approval of the Portfolio's Board of Trustee to remove or amend such Waiver. AIM will not have any right to reimbursement of any amount so waived.
Subject to the foregoing paragraphs, each of the Funds and AIM agree to review the then-current waivers for each class of the Funds listed on the Exhibit on a date prior to the Expiration Date to determine whether such waivers should be amended, continued or terminated. The waivers will expire upon the Expiration Date unless the Funds and AIM have agreed to continue them. The Exhibit will be amended to reflect any such agreement.
Nothing in this Memorandum of Agreement is intended to affect any other memorandum of agreement executed by any Fund or AIM with respect to any other fee waivers, expense reimbursements and/or expense limitations.
IN WITNESS WHEREOF, each Fund, on behalf of itself and its Portfolios listed in Exhibit "A" to this Memorandum of Agreement, and AIM have entered into this Memorandum of Agreement as of the dates indicated on Exhibit "A".
AIM COUNSELOR SERIES TRUST
AIM EQUITY FUNDS
AIM FUNDS GROUP
AIM GROWTH SERIES
AIM INTERNATIONAL MUTUAL FUNDS
AIM INVESTMENT FUNDS
AIM INVESTMENT SECURITIES FUNDS
AIM SECTOR FUNDS
AIM STOCK FUNDS
AIM SUMMIT FUND
AIM TAX-EXEMPT FUNDS
AIM VARIABLE INSURANCE FUNDS
By: /s/ John M. Zerr
------------------------------------
Title: Senior Vice President
|
SHORT-TERM INVESTMENTS TRUST
By: /s/ Karen Dunn Kelley
------------------------------------
Title: President
|
A I M ADVISORS, INC.
By: /s/ John M. Zerr
------------------------------------
Title: Senior Vice President
|
EXHIBIT "A"
AIM COUNSELOR SERIES TRUST
PORTFOLIO EFFECTIVE DATE COMMITTED UNTIL --------- -------------- --------------- AIM Floating Rate Fund July 1, 2007 June 30, 2008 AIM Multi-Sector Fund July 1, 2007 June 30, 2008 AIM Select Real Estate Income Fund July 1, 2007 June 30, 2008 AIM Structured Core Fund July 1, 2007 June 30, 2008 AIM Structured Growth Fund July 1, 2007 June 30, 2008 AIM Structured Value Fund July 1, 2007 June 30, 2008 |
AIM EQUITY FUNDS
PORTFOLIO EFFECTIVE DATE COMMITTED UNTIL --------- -------------- --------------- AIM Capital Development Fund July 1, 2007 June 30, 2008 AIM Charter Fund July 1, 2007 June 30, 2008 AIM Constellation Fund July 1, 2007 June 30, 2008 AIM Diversified Dividend Fund July 1, 2007 June 30, 2008 AIM Large Cap Basic Value Fund July 1, 2007 June 30, 2008 AIM Large Cap Growth Fund July 1, 2007 June 30, 2008 |
AIM FUNDS GROUP
FUND EFFECTIVE DATE COMMITTED UNTIL ---- -------------- --------------- AIM Basic Balanced Fund July 1, 2007 June 30, 2008 AIM European Small Company Fund July 1, 2007 June 30, 2008 AIM Global Value Fund July 1, 2007 June 30, 2008 AIM International Small Company Fund July 1, 2007 June 30, 2008 AIM Mid Cap Basic Value Fund July 1, 2007 June 30, 2008 AIM Select Equity Fund July 1, 2007 June 30, 2008 AIM Small Cap Equity Fund July 1, 2007 June 30, 2008 |
AIM GROWTH SERIES
FUND EFFECTIVE DATE COMMITTED UNTIL ---- -------------- --------------- AIM Basic Value Fund July 1, 2007 June 30, 2008 AIM Global Equity Fund July 1, 2007 June 30, 2008 AIM Mid Cap Core Equity Fund July 1, 2007 June 30, 2008 AIM Small Cap Growth Fund July 1, 2007 June 30, 2008 |
AIM INTERNATIONAL MUTUAL FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL ---- -------------- --------------- AIM Asia Pacific Growth Fund July 1, 2007 June 30, 2008 AIM European Growth Fund July 1, 2007 June 30, 2008 AIM Global Aggressive Growth Fund July 1, 2007 June 30, 2008 AIM Global Growth Fund July 1, 2007 June 30, 2008 AIM International Core Equity Fund July 1, 2007 June 30, 2008 AIM International Growth Fund July 1, 2007 June 30, 2008 |
AIM INVESTMENT FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL ---- -------------- --------------- AIM China Fund July 1, 2007 June 30, 2008 AIM Developing Markets Fund July 1, 2007 June 30, 2008 AIM Global Health Care Fund July 1, 2007 June 30, 2008 AIM International Total Return Fund July 1, 2007 June 30, 2008 AIM LIBOR Alpha Fund July 1, 2007 June 30, 2008 AIM Japan Fund July 1, 2007 June 30, 2008 AIM Trimark Endeavor Fund July 1, 2007 June 30, 2008 AIM Trimark Fund July 1, 2007 June 30, 2008 AIM Trimark Small Companies Fund July 1, 2007 June 30, 2008 |
AIM INVESTMENT SECURITIES FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL ---- -------------- --------------- AIM Global Real Estate Fund July 1, 2007 June 30, 2008 AIM High Yield Fund July 1, 2007 June 30, 2008 AIM Income Fund July 1, 2007 June 30, 2008 AIM Intermediate Government Fund July 1, 2007 June 30, 2008 AIM Limited Maturity Treasury Fund July 1, 2007 June 30, 2008 AIM Money Market Fund July 1, 2007 June 30, 2008 AIM Municipal Bond Fund July 1, 2007 June 30, 2008 AIM Real Estate Fund July 1, 2007 June 30, 2008 AIM Short Term Bond Fund July 1, 2007 June 30, 2008 AIM Total Return Bond Fund July 1, 2007 June 30, 2008 |
AIM SECTOR FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL ---- -------------- --------------- AIM Energy Fund July 1, 2007 June 30, 2008 AIM Financial Services Fund July 1, 2007 June 30, 2008 AIM Gold & Precious Metals Fund July 1, 2007 June 30, 2008 AIM Leisure Fund July 1, 2007 June 30, 2008 AIM Technology Fund July 1, 2007 June 30, 2008 AIM Utilities Fund July 1, 2007 June 30, 2008 |
AIM STOCK FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL ---- -------------- --------------- AIM Dynamics Fund July 1, 2007 June 30, 2008 AIM S&P 500 Index Fund July 1, 2007 June 30, 2008 |
AIM SUMMIT FUND
FUND EFFECTIVE DATE COMMITTED UNTIL ---- -------------- --------------- AIM Summit Fund July 1, 2007 June 30, 2008 |
AIM TAX-EXEMPT FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL ---- -------------- --------------- AIM High Income Municipal Fund July 1, 2007 June 30, 2008 AIM Tax-Exempt Cash Fund July 1, 2007 June 30, 2008 AIM Tax-Free Intermediate Fund July 1, 2007 June 30, 2008 |
AIM VARIABLE INSURANCE FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL ---- -------------- --------------- AIM V.I. Basic Balanced Fund July 1, 2007 April 30, 2009 AIM V.I. Basic Value Fund July 1, 2007 April 30, 2009 AIM V.I. Capital Appreciation Fund July 1, 2007 April 30, 2009 AIM V.I. Capital Development Fund July 1, 2007 April 30, 2009 AIM V.I. Core Equity Fund July 1, 2007 April 30, 2009 AIM V.I. Diversified Income Fund July 1, 2007 April 30, 2009 AIM V.I. Dynamics Fund July 1, 2007 April 30, 2009 AIM V.I. Financial Services Fund July 1, 2007 April 30, 2009 AIM V.I. Global Health Care Fund July 1, 2007 April 30, 2009 AIM V.I. Global Real Estate Fund July 1, 2007 April 30, 2009 AIM V.I. Government Securities Fund July 1, 2007 April 30, 2009 AIM V.I. High Yield Fund July 1, 2007 April 30, 2009 AIM V.I. International Growth Fund July 1, 2007 April 30, 2009 AIM V.I. Large Cap Growth Fund July 1, 2007 April 30, 2009 AIM V.I. Leisure Fund July 1, 2007 April 30, 2009 AIM V.I. Mid Cap Core Equity Fund July 1, 2007 April 30, 2009 AIM V.I. Money Market Fund July 1, 2007 April 30, 2009 AIM V.I. Small Cap Equity Fund July 1, 2007 April 30, 2009 AIM V.I. Technology Fund July 1, 2007 April 30, 2009 AIM V.I. Utilities Fund July 1, 2007 April 30, 2009 |
SHORT-TERM INVESTMENTS TRUST
FUND EFFECTIVE DATE COMMITTED UNTIL ---- -------------- --------------- Government TaxAdvantage Portfolio July 1, 2007 June 30, 2008 STIC Prime Portfolio July 1, 2007 June 30, 2008 Treasury Portfolio July 1, 2007 June 30, 2008 |
AIM SELECT REAL ESTATE INCOME FUND
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of September 19, 2006, by and between AIM Select Real Estate Income Fund, a Delaware statutory trust ("ASREIF"), acting on its own behalf and on behalf of its series portfolio AIM Select Real Estate Income Fund, and AIM Counselor Series Trust, a Delaware statutory trust (the "Trust"), acting on its own behalf and on behalf of its series portfolio AIM Select Real Estate Income Fund.
BACKGROUND
ASREIF is organized as a series management investment company and is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended. ASREIF currently publicly offers shares of beneficial interest representing interests in its single series portfolio which has been designated as AIM Select Real Estate Income Fund and is referred to in this Agreement as the "Current Fund."
The Board of Trustees of ASREIF has designated multiple classes of shares of beneficial interest that represent interests in the Current Fund. Each of these classes that is currently outstanding is listed on Schedule A to this Agreement and is referred to in this Agreement as a "Current Fund Class."
The Board of Trustees of ASREIF has determined that it would be in the best interests of the holders of the Current Fund's Common Shares (the "Shareholders") for the Current Fund to reorganize as an investment portfolio of the Trust for the sole purpose of converting the Current Fund from a closed-end investment company to an open-end investment company. In anticipation of such reorganization, the Board of Trustees of the Trust has established an additional series portfolio corresponding to the Current Fund and designated such series portfolio as AIM Select Real Estate Income Fund (the "New Fund"), and has designated multiple classes of shares of beneficial interest in the New Fund (each a "New Fund Class"). Schedule A lists the New Fund Classes.
The Current Fund desires to provide for its reorganization (the "Reorganization") through the transfer of all of its assets to the New Fund in exchange for the assumption by the New Fund of the liabilities of the Current Fund and the issuance by the Trust to the Current Fund of shares of beneficial interest in the New Fund ("New Fund Shares"). New Fund Shares received by the Current Fund will have an aggregate net asset value equal to the aggregate net asset value of the shares of the Current Fund immediately prior to the Reorganization (the "Current Fund Shares"). The Current Fund will then distribute the New Fund Shares it has received to the Shareholders.
The Reorganization is subject to, and shall be effected in accordance with, the terms of this Agreement. This Agreement is intended to be and is adopted by ASREIF, on its own behalf and on behalf of the Current Fund, and by the Trust, on its own behalf and on behalf of the New Fund, as a Plan of Reorganization within the meaning of the regulations under Section 368(a) of the Internal Revenue Code of 1986, as amended.
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
1. DEFINITIONS.
Any capitalized terms used herein and not otherwise defined shall have the meanings set forth in the preamble or background to this Agreement. In addition, the following terms shall have the following meanings:
1.1 "Assets" shall mean all assets including, without limitation, all cash, cash equivalents, securities, receivables (including interest and dividends receivable), claims and rights of action, rights to register shares under applicable securities laws, books and records, deferred and prepaid expenses shown as assets on the Current Fund's books, and other property owned by the Current Fund at the Effective Time.
1.2 "Closing" shall mean the consummation of the transfer of Assets, assumption of Liabilities and issuance of shares described in Sections 2.1 and 2.2 of this Agreement, together with the related acts necessary to consummate the Reorganization, to occur on the date set forth in Section 3.1.
1.3 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.4 "Current Fund" shall mean the single series portfolio of ASREIF established as AIM Select Real Estate Income Fund.
1.5 "Current Fund Class" shall mean each class of shares of beneficial interest in the Current Fund as shown on Schedule A.
1.6 "Current Fund Shares" shall mean the shares of the Current Fund outstanding immediately prior to the Reorganization.
1.7 "Effective Time" shall have the meaning set forth in Section 3.1.
1.8 "Liabilities" shall mean all liabilities of the Current Fund including, without limitation, all debts, obligations, and duties of whatever kind or nature, whether absolute, accrued, contingent, or otherwise, whether or not determinable at the Effective Time, and whether or not specifically referred to herein.
1.9 "New Fund" shall mean the series portfolio of the Trust established as AIM Select Real Estate Income Fund.
1.10 "New Fund Class" shall mean each class of shares of beneficial interest in the New Fund as set forth on Schedule A, certain of which shall correspond to the existing Current Fund Classes as shown on Schedule B.
1.11 "New Fund Shares" shall mean those shares of beneficial interest in the New Fund issued to the Current Fund hereunder.
1.12 "RIC" shall mean a "regulated investment company" (as defined under Subchapter M of the Code).
1.13 "SEC" shall mean the Securities and Exchange Commission.
1.14 "Securities Act" shall mean the Securities Act of 1933, as amended.
1.15 "Shareholder(s)" shall mean the Current Fund's shareholder(s) of record, determined as of the Effective Time.
1.16 "Shareholders Meeting" shall have the meaning set forth in Section 5.1.
1.17 "Transfer Agent" shall have the meaning set forth in Section 2.2.
1.18 "1940 Act" shall mean the Investment Company Act of 1940, as amended.
2. PLAN OF REORGANIZATION.
2.1 ASREIF agrees, on behalf of the Current Fund, to assign, sell, convey, transfer and deliver all of the Assets of the Current Fund to the New Fund. The Trust, on behalf of the New Fund, agrees in exchange therefor:
(a) to issue and deliver to the Current Fund the number of full and fractional (rounded to the third decimal place) New Fund Shares of each New Fund Class designated on Schedule B equal to the number of full and fractional Current Fund Shares of each Current Fund Class designated on Schedule B; and
(b) to assume all of the Current Fund's Liabilities.
Such transactions shall take place at the Closing.
2.2 At the Effective Time (or as soon thereafter as is reasonably
practicable), (a) the New Fund Shares issued pursuant to Section 5.2 shall be
redeemed by the New Fund at the New Fund's then-current net asset value and (b)
the Current Fund shall distribute the New Fund Shares received by it pursuant to
Section 2.1 to the Shareholders in exchange for such Shareholders' Current Fund
Shares. Such distribution shall be accomplished through opening accounts, by the
transfer agent for the Trust (the "Transfer Agent"), on the New Fund's share
transfer books in the Shareholders' names and transferring New Fund Shares to
such accounts. Each Shareholder's account shall be credited with the respective
pro rata number of full and fractional (rounded to the third decimal place) New
Fund Shares of each New Fund Class due that Shareholder. All outstanding Current
Fund Shares, including those represented by certificates, shall simultaneously
be canceled on the Current Fund's share transfer books. The Trust shall not
issue certificates representing the New Fund Shares in connection with the
Reorganization. However, certificates representing Current Fund Shares shall
represent New Fund Shares after the Reorganization.
2.3 Following receipt of the required shareholder vote and as soon as reasonably practicable after the Closing, the status of the Current Fund as a designated series of ASREIF shall be terminated.
2.4 Following receipt of the required shareholder vote and as soon as
reasonably practicable after distribution of the New Fund Shares pursuant to
Section 2.2, ASREIF shall cause a Form N-8F to be filed with the SEC to
deregister ASREIF as a registered investment company and, following the filing
of Form N-8F and the issuance by the SEC of an order declaring that ASREIF has
ceased to be an investment company, ASREIF shall file Certificate of
Cancellation with the Secretary of State of the State of Delaware to dissolve
ASREIF as a Delaware statutory trust; provided, however, that the filing of Form
N-8F and Certificate of Cancellation as aforesaid shall not be required if the
Reorganization shall not have been consummated.
2.5 Any transfer taxes payable on issuance of New Fund Shares in a name other than that of the registered holder of the Current Fund Shares exchanged therefor shall be paid by the person to whom such New Fund Shares are to be issued, as a condition of such transfer.
2.6 Any reporting responsibility of ASREIF or the Current Fund to a public authority is and shall remain its responsibility up to and including the date on which it is terminated.
3. CLOSING.
3.1 The Closing shall occur at the principal office of ASREIF on March 12, 2007, or on such other date and at such other place upon which the parties may agree. All acts taking place at the Closing shall be deemed to take place simultaneously as of ASREIF's and the Trust's close of business on the date of the Closing or at such other time as the parties may agree (the "Effective Time").
3.2 ASREIF or its fund accounting agent shall deliver to the Trust at the Closing, a certificate of an authorized officer verifying that the information (including adjusted basis and holding period, by lot) concerning the Assets, including all portfolio securities, transferred by the Current Fund to the New Fund, as reflected on the New Fund's books immediately following the Closing, does or will conform to such information on the Current Fund's books immediately before the Closing. ASREIF shall cause the custodian for the Current Fund to deliver at the Closing a certificate of an authorized officer of the custodian stating that (a) the Assets held by the custodian will be transferred to the New Fund at the Effective Time, and (b) all necessary taxes in conjunction with the delivery of the Assets, including all applicable federal and state stock transfer stamps, if any, have been paid or provision for payment has been made.
3.3 ASREIF shall deliver to the Trust at the Closing a list of the names and addresses of each registered Shareholder of the Current Fund and the number of outstanding Current Fund Shares of each Current Fund Class owned by each registered Shareholder, all as of the Effective Time, certified by ASREIF's Secretary or Assistant Secretary. The Trust shall cause the Transfer Agent to deliver at the Closing a certificate as to the opening on the New Fund's share transfer books of accounts in the registered Shareholders' names. The Trust shall issue and deliver a confirmation to ASREIF evidencing the New Fund Shares to be credited to the Current
Fund at the Effective Time or provide evidence satisfactory to ASREIF that such shares have been credited to the Current Fund's account on such books. At the Closing, each party shall deliver to the other such bills of sale, checks, assignments, stock certificates, receipts, or other documents as the other party or its counsel may reasonably request.
3.4 ASREIF and the Trust shall deliver to the other at the Closing a certificate executed in its name by its President or a Vice President in form and substance satisfactory to the recipient and dated the Effective Time, to the effect that the representations and warranties it made in this Agreement are true and correct at the Effective Time except as they may be affected by the transactions contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES.
4.1 ASREIF represents and warrants on its own behalf and on behalf of the Current Fund as follows:
(a) ASREIF is a statutory trust duly organized, validly existing, and in good standing under the laws of the State of Delaware, and its Certificate of Trust has been duly filed in the Office of the Secretary of State of Delaware;
(b) ASREIF is duly registered as a closed-end series management investment company under the 1940 Act, and such registration is in full force and effect;
(c) The Current Fund is a duly established and designated series of ASREIF;
(d) The prospectus and statement of additional information for Current Fund as of the date on which they were issued did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(e) At the Closing, the Current Fund will have good and marketable title to its Assets and full right, power, and authority to sell, assign, transfer, and deliver its Assets free of any liens or other encumbrances; and upon delivery and payment for the Assets, the New Fund will acquire good and marketable title to the Assets;
(f) The New Fund Shares are not being acquired for the purpose of making any distribution thereof, other than in accordance with the terms hereof;
(g) The Current Fund is a "regulated investment company" as defined in
Section 851(a) of the Code; the Current Fund qualified for treatment as a
RIC for each taxable year since it commenced operations that has ended (or
will end) before the Closing and will continue to meet all the requirements
for such qualification for its current taxable year (and the Assets will be
invested at all times through the Effective Time in a manner that ensures
compliance with the foregoing); the Current Fund has no earnings and
profits accumulated in any taxable year in which the provisions of
Subchapter M did not apply to it; and the Current Fund has made all
distributions for each calendar year that has ended (or will end) before
the Closing that are necessary to
avoid the imposition of federal income or excise tax or has paid or provided for the payment of any excise tax imposed for any such calendar year;
(h) During the five-year period ending on the date of the Reorganization, neither ASREIF nor any person related to ASREIF (as defined in Section 1.368-1(e)(3) of the Federal income tax regulations adopted pursuant to the Code without regard to Section 1.368-1(e)(3)(i)(A)) will have directly or through any transaction, agreement, or arrangement with any other person, acquired shares of the Current Fund for consideration other than shares of the Current Fund, except for the repurchases by the Current Fund of its Common Shares on or before July 18, 2006 in the ordinary course of the Current Fund's business as a closed-end investment company (which business shall be deemed to include the Current Fund's repurchases of its Common Shares from time to time in accordance with Rule 10b-18 of the Securities Act of 1934, as amended) and the redemptions of series of Auction Rate Preferred Shares of the Current Fund in accordance with the terms of such series on or before November 10, 2006. There is no plan or intention of the Shareholders who individually own 5% or more of any Current Fund Shares and, to the best of ASREIF's knowledge, there is no plan or intention of the remaining Shareholders to redeem or otherwise dispose of any New Fund Shares to be received by them in the Reorganization other than pursuant to individual investment decisions to redeem New Fund Shares made by such Shareholders as shareholders of an open-end investment company operating in accordance with the requirements of Section 22(e) of the 1940 Act. Consequently, ASREIF is not aware of any plan that would cause the percentage of Shareholder interests, if any, that will be disposed of as a result of or at the time of the Reorganization to be one percent (1%) or more of the shares of the Current Fund outstanding as of the Effective Time, insofar as such individual investment decisions by Shareholders would not be construed to be part of a plan;
(i) ASREIF is not under the jurisdiction of a court in a proceeding under Title 11 of the United States Code or similar case within the meaning of Section 368(a)(3)(A) of the Code;
(j) As of the Effective Time, the Current Fund will not have outstanding any warrants, options, convertible securities, or any other type of rights pursuant to which any person could acquire shares of Current Fund;
(k) At the Effective Time, the performance of this Agreement with respect to the Current Fund shall have been duly authorized by all necessary action by the Shareholders;
(l) The fair market value of the Assets of the Current Fund transferred to the New Fund will equal or exceed the sum of the Liabilities assumed by the New Fund plus the amount of Liabilities, if any, to which the transferred Assets are subject; and
(m) The Liabilities to be assumed by the New Fund and the liabilities, if any, to which the Assets are subject, were incurred by the Current Fund in the ordinary course of its business and are associated with the transferred Assets.
4.2 The Trust represents and warrants on its own behalf and on behalf of the New Fund as follows:
(a) The Trust is a statutory trust duly organized, validly existing, and in good standing under the laws of the State of Delaware, and its Certificate of Trust has been duly filed in the office of the Secretary of State of Delaware;
(b) The Trust is duly registered as an open-end management investment company under the 1940 Act. At the Effective Time, the New Fund Shares to be issued pursuant to Section 2.1 of this Agreement shall be duly registered under the Securities Act by a Registration Statement on Form N-14 filed with the SEC;
(c) At the Effective Time, the New Fund will be a duly established and designated series of the Trust;
(d) The New Fund has not commenced operations nor will it commence operations until after the Closing;
(e) Prior to the Effective Time, there will be no issued and outstanding shares in the New Fund or any other securities issued by the Trust on behalf of the New Fund, except as provided in Section 5.2;
(f) No consideration other than New Fund Shares (and the New Fund's assumption of the Liabilities) will be issued in exchange for the Assets in the Reorganization;
(g) The New Fund Shares to be issued and delivered to the Current Fund hereunder will, at the Effective Time, have been duly authorized and, when issued and delivered as provided herein, will be duly and validly issued and outstanding shares of the New Fund, fully paid and nonassessable and will conform to the description thereof contained in the Trust's Registration Statement on Form N-14 then in effect;
(h) The combined proxy statement/prospectus (the "Combined Proxy Statement/Prospectus"), which forms a part of the Trust's Registration Statement on Form N-14, shall be furnished to the Shareholders entitled to vote at the Shareholders Meeting in accordance with normal market practice for such transactions. The Combined Proxy Statement/Prospectus and related Statement of Additional Information of the New Fund, when they become effective, shall conform in all material respects to the applicable requirements of the Securities Act and the 1940 Act and shall not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not materially misleading.
(i) The New Fund will be a "fund" as defined in Section 851(g)(2) of the Code and will meet all the requirements to qualify for treatment as a RIC for its taxable year in which the Reorganization occurs;
(j) The Trust, on behalf of the New Fund, has no plan or intention to issue additional New Fund Shares following the Reorganization except for shares issued in the ordinary course of its business as an open-end investment company; nor does the Trust, on behalf of the New Fund, have any plan or intention to redeem or otherwise reacquire any New Fund Shares issued pursuant to the Reorganization, other than in the ordinary course of such business or to the extent necessary to comply with its legal obligation under Section 22(e) of the 1940 Act;
(k) The New Fund does not have any plan or intention to sell or otherwise dispose of any of the Assets, except for dispositions made in the ordinary course of its business or dispositions necessary to maintain its qualification as a RIC, although in the ordinary course of its business the New Fund will continuously review its investment portfolio (as the Current Fund did before the Reorganization) to determine whether to retain or dispose of particular stocks or securities, including those included in the Assets; and
(l) There is no plan or intention for the New Fund to be dissolved or merged into another corporation or statutory trust or "fund" thereof (within the meaning of Section 851(g)(2) of the Code) following the Reorganization.
4.3 Each of ASREIF and the Trust, on its own behalf and on behalf of the Current Fund or the New Fund, as appropriate, represents and warrants as follows:
(a) The fair market value of the New Fund Shares of the New Fund received by each Shareholder will be equal to the fair market value of the Current Fund Shares of the Current Fund surrendered in exchange therefor;
(b) Immediately following consummation of the Reorganization, the Shareholders will own all the New Fund Shares of the New Fund and will own such shares solely by reason of their ownership of the Current Fund Shares of the Current Fund immediately before the Reorganization;
(c) Each of the Current Fund and the New Fund shall bear all of its costs and expenses in connection with the Reorganization without any reimbursement therefore by the investment advisor of the Current Fund and the New Fund or by any other person; provided, however, that the investment advisor of the Current Fund and the New Fund or any other person may agree to pay the costs and expenses of the Current Fund and the New Fund if such expenses are solely and directly related to the Reorganization. Neither the Current Fund nor the New Fund (nor any person related to the Current Fund or the New Fund) will pay or assume any expenses of the Shareholders;
(d) There is no intercompany indebtedness between the Current Fund and the New Fund that was issued or acquired, or will be settled, at a discount; and
(e) Immediately following consummation of the Reorganization, the New Fund will hold the same assets, except for assets distributed to shareholders in the ordinary course of its business as a series of an open-end investment company and assets used to pay expenses incurred in connection with the Reorganization, and be subject to
the same liabilities that the Current Fund held or was subject to
immediately prior to the Reorganization. Assets used to pay (i) expenses,
(ii) all redemptions (other than the redemptions of series of Auction Rate
Preferred Shares of the Current Fund in accordance with the terms of such
series on or before November 10, 2006), and (iii) all distributions (other
than regular, normal distributions), made by the Current Fund after the
date of this Agreement will, in the aggregate, constitute less than one
percent (1%) of its net assets.
5. COVENANTS.
5.1 As soon as practicable after the date of this Agreement, ASREIF shall call a meeting of the Shareholders (the "Shareholders Meeting") to consider and act on this Agreement and, in connection therewith, the sale of the Current Fund's assets and the termination of the Current Fund as a designated series of ASREIF. The Board of Trustees of ASREIF shall recommend that the Shareholders approve this Agreement and, in connection therewith, the sale of the Current Fund's assets and the termination of the Current Fund as a designated series of ASREIF. Approval of this Agreement by the Shareholders will authorize ASREIF, and ASREIF hereby agrees, to vote on the matters referred to in Sections 5.2 and 5.3 for the New Fund.
5.2 Prior to the Closing, ASREIF shall acquire one New Fund Share in each New Fund Class of the New Fund for the purpose of enabling ASREIF to ratify the selection of the Trust's independent accountants, and to vote on the matters referred to in Section 5.3.
5.3 Prior to the Closing, the Trust (on its own behalf and with respect to the New Fund or each New Fund Class, as appropriate) shall enter into a Master Investment Advisory Agreement, a Master Sub-Advisory Agreement, a Master Administrative Services Agreement, Master Distribution Agreement, a Custodian Agreement, and a Transfer Agency and Servicing Agreement; shall adopt plans of distribution pursuant to Rule 12b-l of the 1940 Act, a multiple class plan pursuant to Rule 18f-3 of the 1940 Act; and shall enter into or adopt, as appropriate, such other agreements and plans as are necessary for the New Fund's operation as a series of an open-end investment company. Each such agreement and plan shall have been approved by the Trust's trustees and, to the extent required by law, by such of those trustees who are not "interested persons" of the Trust (as defined in the 1940 Act) and by ASREIF as the sole shareholder of the New Fund.
5.4 The Trust shall file with the SEC one or more post-effective amendments to the Trust's Registration Statement on Form N-lA under the Securities Act, and the 1940 Act, which will contain such amendments to such Registration Statement on Form N-1A as are determined by the Trust to be necessary and appropriate to effect the Reorganization, and shall use its best efforts to have such post-effective amendment or amendments to the Registration Statement become effective prior to the Closing.
5.5 The Trust shall file with the SEC a Registration Statement on Form N-14 under the Securities Act, and the 1940 Act, (i) which will contain such amendments to such Registration Statement on Form N-14 as are determined by the Trust to be necessary and appropriate to effect the Reorganization, and (ii) will register the New Fund Shares to be issued pursuant to Section 2.1 of this Agreement, and shall use its best efforts to have such post-
effective amendment or amendments to the Registration Statement become effective prior to the Closing.
6. CONDITIONS PRECEDENT.
The obligations of ASREIF, on its own behalf and on behalf of the Current Fund, and the Trust, on its own behalf and on behalf of the New Fund, will be subject to (a) performance by the other party of all its obligations to be performed hereunder at or before the Effective Time, (b) all representations and warranties of the other party contained herein being true and correct in all material respects as of the date hereof and, except as they may be affected by the transactions contemplated hereby, as of the Effective Time, with the same force and effect as if made on and as of the Effective Time, and (c) the further conditions that, at or before the Effective Time:
6.1 The Shareholders have approved this Agreement and the transactions contemplated by this Agreement in accordance with applicable law.
6.2 All necessary filings shall have been made with the SEC and state securities authorities, and no order or directive shall have been received that any other or further action is required to permit the parties to carry out the transactions contemplated hereby. All consents, orders, and permits of federal, state, and local regulatory authorities (including the SEC and state securities authorities) deemed necessary by either ASREIF or the Trust to permit consummation, in all material respects, of the transactions contemplated hereby shall have been obtained, except where failure to obtain such consults, orders, and permits would not involve a risk of a material adverse effect on the assets or properties of either the Current Fund or the New Fund, provided that either ASREIF or the Trust may for itself waive any of such conditions.
6.3 The Registration Statement on Form N-14 filed by the Trust with respect to New Fund Shares to be issued to the Shareholders in connection with the Reorganization shall have become effective under the Securities Act and shall include an undertaking therein to file the opinion referenced in Section 6.4 in a post-effective amendment to such Registration Statement after the Closing Date, and no stop order suspending the effectiveness thereof shall have been issued and, to the best knowledge of the parties hereto, no investigation or proceeding for that purpose shall have been instituted or be pending, threatened or contemplated under the Securities Act.
6.4 Each of ASREIF and the Trust shall have received an opinion from Ballard Spahr Andrews & Ingersoll, LLP as to the federal income tax consequences mentioned below. In rendering such opinion, such counsel may rely as to factual matters, exclusively and without independent verification, on the representations made in this Agreement (or in separate letters of representation that ASREIF and the Trust shall use their best efforts to deliver to such counsel) and the certificates delivered pursuant to Section 3.4. Such opinion shall be substantially to the effect that, based on the facts and assumptions stated therein and conditioned on consummation of the Reorganization in accordance with this Agreement, for federal income tax purposes:
(a) The Reorganization will constitute a "reorganization" within the meaning of section 368(a) of the Code, and the Current Fund and the New Fund will each be "a party to a reorganization" within the meaning of section 368(b) of the Code;
(b) No gain or loss will be recognized to the Current Fund on the transfer of its Assets to the New Fund in exchange solely for the New Fund Shares and the New Fund's assumption of the Liabilities or on the subsequent distribution of the New Fund Shares to the Shareholders, in constructive exchange for the Current Fund Shares, in liquidation of the Current Fund;
(c) No gain or loss will be recognized by the New Fund on its receipt of the Assets in exchange for New Fund Shares and its assumption of the Liabilities;
(d) The New Fund's basis for the Assets will be the same as the basis thereof in the Current Fund's hands immediately before the Reorganization, and the New Fund's holding period for those Assets will include the Current Fund's holding period therefor;
(e) A Shareholder will recognize no gain or loss on the constructive exchange of Current Fund Shares solely for New Fund Shares pursuant to the Reorganization; and
(f) A Shareholder's basis for the New Fund Shares to be received in the Reorganization will be the same as the basis for the Current Fund Shares to be constructively surrendered in exchange therefor, and a Shareholder's holding period for such New Fund Shares will include its holding period for such Current Fund Shares, provided that such Current Fund Shares are held as capital assets by the Shareholder at the Effective Time.
6.5 No stop-order suspending the effectiveness of the Registration Statement on Form N-1A shall have been issued, and no proceeding for that purpose shall have been initiated or threatened by the SEC (and not withdrawn or terminated).
At any time prior to the Closing, any of the foregoing conditions (except those set forth in Sections 6.1, 6.3 and 6.4) may be waived by the trustees of either ASREIF or the Trust if, in their judgment, such waiver will not have a material adverse effect on the interests of the Shareholders.
7. EXPENSES.
Except as otherwise provided in Section 4.3(c), all expenses incurred in connection with the transactions contemplated by this Agreement (regardless of whether they are consummated) will be borne by the parties as they mutually agree.
8. ENTIRE AGREEMENT.
Neither party has made any representation, warranty, or covenant not set forth herein, and this Agreement constitutes the entire agreement between the parties.
9. AMENDMENT.
This Agreement may be amended, modified, or supplemented at any time, notwithstanding its approval with respect to the Current Fund by the Shareholders, in such
manner as may be mutually agreed upon in writing by the parties; provided that following such approval no such amendment shall have a material adverse effect on the Shareholders' interests.
10. TERMINATION.
This Agreement may be terminated with respect to the Current Fund at any time at or prior to the Effective Time, whether before or after approval by the Shareholders:
10.1 By either ASREIF or the Trust (a) in the event of the other party's material breach of any representation, warranty, or covenant contained herein to be performed at or prior to the Effective Time, (b) if a condition to its obligations has not been met and it reasonably appears that such condition will not or cannot be met, or (c) if the Closing has not occurred on or before June 30, 2007; or
10.2 By the parties' mutual agreement.
Except as otherwise provided in Section 7, in the event of termination under Sections 10.1(c) or 10.2, there shall be no liability for damages on the part of either ASREIF or the Trust or the Current Fund or the New Fund, to the other.
11. MISCELLANEOUS.
11.1 This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware; provided that, in the case of any conflict between such laws and the federal securities laws, the latter shall govern.
11.2 Nothing expressed or implied herein is intended or shall be construed to confer upon or give any person, firm, trust, or corporation other than the parties and their respective successors and assigns any rights or remedies under or by reason of this Agreement.
11.3 The execution and delivery of this Agreement have been authorized by the Trust's trustees, and this Agreement has been executed and delivered by a duly authorized officer of the Trust in his or her capacity as an officer of the Trust intending to bind the Trust as provided herein, and no officer, trustee or shareholder of the Trust shall be personally liable for the liabilities or obligations of the Trust incurred hereunder. The liabilities and obligations of the Trust pursuant to this Agreement shall be enforceable against the assets of the New Fund only and not against the assets of the Trust generally.
11.4 The execution and delivery of this Agreement have been authorized by the ASREIF's trustees, and this Agreement has been executed and delivered by a duly authorized officer of ASREIF in his or her capacity as an officer of ASREIF intending to bind ASREIF as provided herein, and no officer, trustee or shareholder of ASREIF shall be personally liable for the liabilities or obligations of ASREIF incurred hereunder. The liabilities and obligations of ASREIF pursuant to this Agreement shall be enforceable against the assets of the Current Fund only and not against the assets of ASREIF generally.
IN WITNESS WHEREOF, each party has caused this Agreement to be executed and delivered by its duly authorized officers as of the day and year first written above.
Attest: AIM SELECT REAL ESTATE INCOME FUND,
on behalf of its single series
portfolio AIM Select Real Estate
Income Fund
/s/ Stephen R. Rimes By: /s/ Philip A. Taylor
------------------------------------- -----------------------------------
Title: President
Attest: AIM COUNSELOR SERIES TRUST,
on behalf of its series portfolio AIM
Select Real Estate Income Fund
/s/ Stephen R. Rimes By: /s/ Philip A. Taylor
------------------------------------- -----------------------------------
Title: President
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SCHEDULE A
Classes of Shares of the Current Fund
Common Shares
Auction Rate Preferred Shares, Series M
(to be redeemed on or before October 24, 2006)
Auction Rate Preferred Shares, Series W
(to be redeemed on or before November 2, 2006)
Auction Rate Preferred Shares, Series R
(to be redeemed on or before November 10, 2006)
Auction Rate Preferred Shares, Series F
(to be redeemed on or before October 30, 2006)
Classes of Shares of the New Fund
Class A Shares
Class B Shares
Class C Shares
Institutional Class Shares
SCHEDULE B
CLASSES OF THE CURRENT FUND CORRESPONDING CLASSES OF THE NEW FUND
--------------------------- -------------------------------------
Common Shares Class A Shares
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AGREEMENT
AND
PLAN OF REORGANIZATION
FOR
AIM ADVANTAGE HEALTH SCIENCES FUND,
A SEPARATE PORTFOLIO OF
AIM COUNSELOR SERIES TRUST
NOVEMBER 8, 2006
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS.................................................... 1
SECTION 1.1. Definitions............................................. 1
ARTICLE 2 TRANSFER OF ASSETS............................................. 5
SECTION 2.1. Reorganization of Selling Fund.......................... 5
SECTION 2.2. Computation of Net Asset Value.......................... 5
SECTION 2.3. Valuation Date.......................................... 6
SECTION 2.4. Delivery................................................ 6
SECTION 2.5. Termination of Series and Redemption of Selling Fund
Shares.................................................. 6
SECTION 2.6. Issuance of Buying Fund Shares.......................... 6
SECTION 2.7. Investment Securities................................... 7
SECTION 2.8. Liabilities............................................. 7
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER....................... 7
SECTION 3.1. Organization; Authority................................. 7
SECTION 3.2. Registration and Regulation of Seller................... 7
SECTION 3.3. Financial Statements.................................... 8
SECTION 3.4. No Material Adverse Changes; Contingent Liabilities..... 8
SECTION 3.5. Selling Fund Shares; Business Operations................ 8
SECTION 3.6. Accountants............................................. 9
SECTION 3.7. Binding Obligation...................................... 9
SECTION 3.8. No Breaches or Defaults................................. 9
SECTION 3.9. Authorizations or Consents.............................. 9
SECTION 3.10. Permits................................................. 10
SECTION 3.11. No Actions, Suits or Proceedings........................ 10
SECTION 3.12. Contracts............................................... 10
SECTION 3.13. Properties and Assets................................... 10
SECTION 3.14. Taxes................................................... 10
SECTION 3.15. Benefit and Employment Obligations...................... 11
SECTION 3.16. Brokers................................................. 11
SECTION 3.17. Voting Requirements..................................... 11
SECTION 3.18. State Takeover Statutes................................. 12
SECTION 3.19. Books and Records....................................... 12
SECTION 3.20. Prospectus and Statement of Additional Information...... 12
SECTION 3.21. No Distribution......................................... 12
SECTION 3.22. Liabilities of Selling Fund............................. 12
SECTION 3.23. Value of Shares......................................... 12
SECTION 3.24. Intercompany Indebtedness; Consideration................ 12
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER........................ 13
SECTION 4.1. Organization; Authority................................. 13
SECTION 4.2. Registration and Regulation of Buyer.................... 13
SECTION 4.3. Financial Statements.................................... 13
SECTION 4.4. No Material Adverse Changes; Contingent Liabilities..... 13
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SECTION 4.5. Registration of Buying Fund Shares...................... 13 SECTION 4.6. Accountants............................................. 14 SECTION 4.7. Binding Obligation...................................... 14 SECTION 4.8. No Breaches or Defaults................................. 15 SECTION 4.9. Authorizations or Consents.............................. 15 SECTION 4.10. Permits................................................. 15 SECTION 4.11. No Actions, Suits or Proceedings........................ 15 SECTION 4.12. Taxes................................................... 16 SECTION 4.13. Brokers................................................. 16 SECTION 4.14. Representations Concerning the Reorganization........... 16 SECTION 4.15. Prospectus and Statement of Additional Information...... 17 SECTION 4.16. Value of Shares......................................... 17 SECTION 4.17. Intercompany Indebtedness; Consideration................ 17 ARTICLE 5 COVENANTS...................................................... 18 SECTION 5.1. Conduct of Business..................................... 18 SECTION 5.2. Expenses................................................ 18 SECTION 5.3. Further Assurances...................................... 18 SECTION 5.4. Notice of Events........................................ 19 SECTION 5.5. Consents, Approvals and Filings......................... 19 SECTION 5.6. Submission of Agreement to Shareholders................. 19 ARTICLE 6 CONDITIONS PRECEDENT TO THE REORGANIZATION..................... 19 SECTION 6.1. Conditions Precedent of Buyer........................... 19 SECTION 6.2. Mutual Conditions....................................... 20 SECTION 6.3. Conditions Precedent of Seller.......................... 21 ARTICLE 7 TERMINATION OF AGREEMENT....................................... 22 SECTION 7.1. Termination............................................. 22 SECTION 7.2. Survival After Termination.............................. 22 ARTICLE 8 MISCELLANEOUS.................................................. 22 SECTION 8.1. Survival of Representations, Warranties and Covenants... 22 SECTION 8.2. Governing Law........................................... 22 SECTION 8.3. Binding Effect, Persons Benefiting, No Assignment....... 22 SECTION 8.4. Obligations of Buyer and Seller......................... 23 SECTION 8.5. Amendments.............................................. 23 SECTION 8.6. Enforcement............................................. 23 SECTION 8.7. Interpretation.......................................... 23 SECTION 8.8. Counterparts............................................ 24 SECTION 8.9. Entire Agreement; Exhibits and Schedules................ 24 SECTION 8.10. Notices................................................. 24 SECTION 8.11. Representations by Investment Adviser................... 25 SECTION 8.12. Successors and Assigns; Assignment...................... 25 |
EXHIBIT A Excluded Liabilities of Selling Fund
SCHEDULE 2.1 Classes of Shares of Selling Fund and Corresponding Classes of
Shares of Buying Fund
SCHEDULE 3.4 Certain Contingent Liabilities of Selling Fund
SCHEDULE 4.4 Certain Contingent Liabilities of Buying Fund
SCHEDULE 4.5(a) Classes of Shares of Buying Fund
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SCHEDULE 4.14(b) Permitted Reorganizations of Funds SCHEDULE 6.2(f) Tax Opinions
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, dated as of November 8, 2006 (this "Agreement"), by and among AIM Counselor Series Trust, a Delaware statutory trust ("Seller"), acting on behalf of AIM Advantage Health Sciences Fund ("Selling Fund"), a separate series of Seller, AIM Investment Funds, a Delaware statutory trust ("Buyer"), acting on behalf of AIM Global Health Care Fund ("Buying Fund"), a separate series of Buyer, and A I M Advisors, Inc., a Delaware corporation.
WITNESSETH
WHEREAS, Seller is a management investment company registered with the SEC (as defined below) under the Investment Company Act (as defined below) that offers separate series of its shares representing interests in its investment portfolios, including Selling Fund, for sale to the public; and
WHEREAS, Buyer is a management investment company registered with the SEC under the Investment Company Act that offers separate series of its shares representing interests in investment portfolios, including Buying Fund, for sale to the public; and
WHEREAS, Seller desires to provide for the reorganization of Selling Fund through the transfer of all of its assets to Buying Fund in exchange for the assumption by Buying Fund of all of the Liabilities (as defined below) of Selling Fund and the issuance by Buyer of shares of Buying Fund in the manner set forth in this Agreement; and
WHEREAS, the Investment Adviser (as defined below) serves as the investment advisor to both Buying Fund and Selling Fund and is making certain representations, warranties and agreements set forth in this Agreement;
WHEREAS, this Agreement is intended to be and is adopted by the parties
hereto as a Plan of Reorganization within the meaning of the regulations under
Section 368(a) of the Code (as defined below).
NOW, THEREFORE, in consideration of the foregoing premises and the agreements and undertakings contained in this Agreement, Seller and Buyer agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. For all purposes in this Agreement, the following terms shall have the respective meanings set forth in this Section 1.1 (such definitions to be equally applicable to both the singular and plural forms of the terms herein defined):
"Advisers Act" means the Investment Advisers Act of 1940, as amended, and all rules and regulations of the SEC adopted pursuant thereto.
"Affiliated Person" means an affiliated person as defined in Section 2(a)(3) of the Investment Company Act.
"Agreement" means this Agreement and Plan of Reorganization, together with all exhibits and schedules attached hereto and all amendments hereto and thereof.
"Applicable Law" means the applicable laws of the state of Delaware and shall include the Delaware Statutory Trust Act.
"Benefit Plan" means any material "employee benefit plan" (as defined in
Section 3(3) of ERISA) and any material bonus, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
vacation, retirement, profit sharing, welfare plans or other plan, arrangement
or understanding maintained or contributed to by Seller on behalf of Selling
Fund, or otherwise providing benefits to any current or former employee, officer
or director/trustee of Seller.
"Buyer" means AIM Investment Funds, a Delaware statutory trust.
"Buyer Counsel" means Ballard Spahr Andrews & Ingersoll, LLP.
"Buyer Custodian" means State Street Bank and Trust Company acting in its capacity as custodian for the assets of Buying Fund.
"Buyer Registration Statement" means the registration statement on Form N-1A of Buyer, as amended, 1940 Act Registration No. 811-01540.
"Buying Fund" means AIM Global Health Care Fund, a separate series of Buyer.
"Buying Fund Auditors" means PricewaterhouseCoopers LLP.
"Buying Fund Financial Statements" means the audited financial statements of Buying Fund for the fiscal year ended October 31, 2006.
"Buying Fund Shares" means shares of each class of Buying Fund issued pursuant to Section 2.6 of this Agreement.
"Closing" means the transfer of the assets of Selling Fund to Buying Fund, the assumption of all of Selling Fund's Liabilities by Buying Fund and the issuance of Buying Fund Shares directly to Selling Fund Shareholders as described in Section 2.1 of this Agreement.
"Closing Date" means March 16, 2007, or such other date as the parties may mutually agree upon.
"Code" means the Internal Revenue Code of 1986, as amended, and all rules and regulations adopted pursuant thereto.
"Corresponding" means, when used with respect to a class of shares of Selling Fund or Buying Fund, the classes of their shares set forth opposite each other on Schedule 2.1.
"Effective Time" means 8:00 a.m. Eastern Time on the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and all rules or regulations adopted pursuant thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and all rules and regulations adopted pursuant thereto.
"Governing Documents" means the organic documents which govern the business and operations of each of Buyer and Seller and shall include, as applicable, Amended and Restated Agreement and Declaration of Trust, Amended and Restated Bylaws and Bylaws.
"Governmental Authority" means any foreign, United States or state government, government agency, department, board, commission (including the SEC) or instrumentality, and any court, tribunal or arbitrator of competent jurisdiction, and any governmental or non-governmental self-regulatory organization, agency or authority (including the NASD Regulation, Inc., the Commodity Futures Trading Commission, the National Futures Association, the Investment Management Regulatory Organization Limited and the Office of Fair Trading).
"Investment Adviser" means A I M Advisors, Inc.
"Investment Company Act" means the Investment Company Act of 1940, as amended, and all rules and regulations adopted pursuant thereto.
"Liabilities" means all of the liabilities of any kind of Selling Fund, including without limitation all liabilities included in the calculation of the net asset value per share of each class of Selling Fund Shares on the Closing Date, but not including the excluded liabilities set forth on Exhibit A.
"Lien" means any pledge, lien, security interest, charge, claim or encumbrance of any kind.
"Material Adverse Effect" means an effect that would cause a change in the condition (financial or otherwise), properties, assets or prospects of an entity having an adverse monetary effect in an amount equal to or greater than $50,000.
"NYSE" means the New York Stock Exchange.
"Permits" shall have the meaning set forth in Section 3.10 of this Agreement.
"Person" means an individual or a corporation, partnership, joint venture, association, trust, unincorporated organization or other entity.
"Reorganization" means the acquisition of the assets of Selling Fund by Buying Fund in consideration of the assumption by Buying Fund of all of the Liabilities of Selling Fund and the issuance by Buyer of Buying Fund Shares directly to Selling Fund Shareholders as described in this Agreement, and the termination of Selling Fund's status as a designated series of shares of Seller.
"Required Shareholder Vote" means, if a quorum is present, a 1940 Act Majority, which is the lesser of (a) the affirmative vote of 67% or more of the voting securities of Selling Fund present or represented by proxy at the Special Meeting, if the holders of more than 50% of the outstanding voting securities of such Selling Fund are present or represented by proxy, or (b) the affirmative vote of more than 50% of the outstanding voting securities of such Selling Fund.
"Return" means any return, report or form or any attachment thereto required to be filed with any taxing authority.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and all rules and regulations adopted pursuant thereto.
"Seller" means AIM Counselor Series Trust, a Delaware statutory trust.
"Seller Custodian" means State Street Bank and Trust acting in its capacity as custodian for the assets of Selling Fund.
"Seller Registration Statement" means the registration statement on Form N-1A of Seller, as amended, 1940 Act Registration No. 811-05426.
"Selling Fund" means AIM Advantage Health Sciences Fund, a separate series of Seller.
"Selling Fund Auditors" means PricewaterhouseCoopers LLP.
"Selling Fund Financial Statements" means the audited financial statements of Selling Fund for the fiscal year ended August 31, 2006.
"Selling Fund Shareholders" means the holders of record of the outstanding shares of each class of Selling Fund as of the close of regular trading on the NYSE on the Valuation Date.
"Selling Fund Shares" means the outstanding shares of each class of Selling Fund.
"Shareholders Meeting" means a meeting of the shareholders of Selling Fund convened in accordance with Applicable Law and the Governing Documents of Seller to consider and vote upon the approval of this Agreement.
"Tax" means any tax or similar governmental charge, impost or levy (including income taxes (including alternative minimum tax and estimated tax), franchise taxes, transfer taxes or fees, sales taxes, use taxes, gross receipts taxes, value added taxes, employment taxes, excise taxes, ad valorem taxes, property taxes, withholding taxes, payroll taxes, minimum taxes, or windfall profit taxes), together with any related penalties, fines, additions to tax or interest, imposed by the United States or any state, county, local or foreign government or subdivision or agency thereof.
"Termination Date" means September 30, 2007, or such later date as the parties may mutually agree upon.
"Treasury Regulations" means the Federal income tax regulations adopted pursuant to the Code.
"Trustee Benefit Plans" means the Deferred Compensation Agreement for the Directors/Trustees of the AIM Funds, the AIM Funds Retirement Plan for Eligible Directors/Trustees, the Deferred Fee Agreement, the INVESCO Funds Retirement Plan for Independent Directors and the Deferred Retirement Plan Account Agreement.
"Valuation Date" shall have the meaning set forth in Section 2.2 of this Agreement.
ARTICLE 2
TRANSFER OF ASSETS
SECTION 2.1. Reorganization of Selling Fund. At the Effective Time, all of the assets of Selling Fund shall be delivered to Buyer Custodian for the account of Buying Fund in exchange for the assumption by Buying Fund of all of the Liabilities of Selling Fund and delivery by Buyer directly to the holders of record as of the Effective Time of the issued and outstanding shares of each class of Selling Fund of a number of shares of each corresponding class of Buying Fund, as set forth on Schedule 2.1 (including, if applicable, fractional shares rounded to the nearest thousandth), having an aggregate net asset value equal to the value of the net assets of Selling Fund so transferred, assigned and delivered, all determined and adjusted as provided in Section 2.2 below. Upon delivery of such assets, Buying Fund will receive good and marketable title to such assets free and clear of all Liens.
SECTION 2.2. Computation of Net Asset Value.
(a) The net asset value per share of each class of Buying Fund Shares, and the value of the assets and the amount of the Liabilities of Selling Fund, shall, in each case, be determined as of the close of regular trading on the NYSE on the business day next preceding the Closing Date (the "Valuation Date").
(b) The net asset value per share of each class of Buying Fund Shares shall be computed in accordance with the policies and procedures of Buying Fund as described in the Buyer Registration Statement.
(c) The value of the assets and the amount of the Liabilities of Selling Fund to be transferred to Buying Fund pursuant to this Agreement shall be computed in accordance with the policies and procedures of Selling Fund as described in the Seller Registration Statement.
(d) Subject to Sections 2.2(b) and (c) above, all computations of value regarding the assets and Liabilities of Selling Fund and the net asset value per share of each class of Buying Fund Shares to be issued pursuant to this Agreement shall be made by agreement of Seller and Buyer. The parties agree to use commercially reasonable efforts to resolve any material pricing differences between the prices of portfolio securities determined in accordance with their respective pricing policies and procedures.
SECTION 2.3. Valuation Date. The share transfer books of Selling Fund will be permanently closed as of the close of business on the Valuation Date and only requests for the redemption of shares of Selling Fund received in proper form prior to the close of regular trading on the NYSE on the Valuation Date shall be accepted by Selling Fund. Redemption requests thereafter received by Selling Fund shall be deemed to be redemption requests for Buying Fund Shares of the corresponding class (assuming that the transactions contemplated by this Agreement have been consummated), to be distributed to Selling Fund Shareholders under this Agreement.
SECTION 2.4. Delivery.
(a) No later than three (3) business days preceding the Closing Date, Seller shall instruct Seller Custodian to transfer all assets held by Selling Fund to the account of Buying Fund maintained at Buyer Custodian. Such assets shall be delivered by Seller to Buyer Custodian on the Closing Date. The assets so delivered shall be duly endorsed in proper form for transfer in such condition as to constitute a good delivery thereof, in accordance with the custom of brokers, and shall be accompanied by all necessary state stock transfer stamps, if any, or a check for the appropriate purchase price thereof. Cash held by Selling Fund shall be delivered on the Closing Date and shall be in the form of currency or wire transfer in Federal funds, payable to the order of the account of Buying Fund at Buyer Custodian.
(b) If, on the Closing Date, Selling Fund is unable to make delivery in the manner contemplated by Section 2.4(a) of securities held by Selling Fund for the reason that any of such securities purchased prior to the Closing Date have not yet been delivered to Selling Fund or its broker, then Buyer shall waive the delivery requirements of Section 2.4(a) with respect to said undelivered securities if Selling Fund has delivered to Buyer Custodian by or on the Closing Date, and with respect to said undelivered securities, executed copies of an agreement of assignment and escrow and due bills executed on behalf of said broker or brokers, together with such other documents as may be required by Buyer or Buyer Custodian, including brokers' confirmation slips.
SECTION 2.5. Termination of Series and Redemption of Selling Fund Shares. Following receipt of the Required Shareholder Vote and as soon as reasonably practicable after the Closing, the status of Selling Fund as a designated series of Seller shall be terminated and Seller shall redeem the outstanding shares of Selling Fund from Selling Fund Shareholders in accordance with its Governing Documents and all issued and outstanding shares of Selling Fund shall thereupon be canceled on the books of Seller.
SECTION 2.6. Issuance of Buying Fund Shares. At the Effective Time, Selling Fund Shareholders holding shares of a class of Selling Fund shall be issued that number of full and fractional shares of the corresponding class of Buying Fund having a net asset value equal to the net asset value of such shares of such class of Selling Fund held by Selling Fund Shareholders on the Valuation Date in accordance with Sections 2.1 and 2.2. Seller shall provide instructions to the transfer agent of Buyer with respect to the shares of each class of Buying Fund to be issued to Selling Fund Shareholders. Buyer shall have no obligation to inquire as to the validity, propriety or correctness of any such instruction, but shall, in each case, assume that such instruction is valid, proper and correct. Buyer shall record on its books the ownership of the
shares of each class of Buying Fund by Selling Fund Shareholders and shall forward a confirmation of such ownership to Selling Fund Shareholders. No redemption or repurchase of such shares credited to former Selling Fund Shareholders in respect of Selling Fund Shares represented by unsurrendered share certificates shall be permitted until such certificates have been surrendered to Buyer for cancellation, or if such certificates are lost or misplaced, until lost certificate affidavits have been executed and delivered to Buyer.
SECTION 2.7. Investment Securities. On or prior to the Valuation Date, Seller shall deliver a list setting forth the securities Selling Fund then owned together with the respective Federal income tax bases thereof and holding periods therefor. Seller shall provide to Buyer on or before the Valuation Date detailed tax basis accounting records for each security to be transferred to it pursuant to this Agreement. Such records shall be prepared in accordance with the requirements for specific identification tax lot accounting and clearly reflect the bases used for determination of gain and loss realized on the sale of any security transferred to Buying Fund hereunder. Such records shall be made available by Seller prior to the Valuation Date for inspection by the Treasurer (or his or her designee) or Buying Fund Auditors upon reasonable request.
SECTION 2.8. Liabilities. Selling Fund shall use reasonable best efforts to discharge all of its known liabilities, so far as may be possible, prior to the Closing Date.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller, on behalf of Selling Fund, represents and warrants to Buyer as follows:
SECTION 3.1. Organization; Authority. Seller is duly organized, validly existing and in good standing under Applicable Law, with all requisite trust power and authority to enter into this Agreement and perform its obligations hereunder.
SECTION 3.2. Registration and Regulation of Seller. Seller is duly registered with the SEC as an investment company under the Investment Company Act and all Selling Fund Shares which have been or are being offered for sale have been duly registered under the Securities Act and have been duly registered, qualified or are exempt from registration or qualification under the securities laws of each state or other jurisdiction in which such shares have been or are being offered for sale, and no action has been taken by Seller to revoke or rescind any such registration or qualification. Selling Fund is in compliance in all material respects with all applicable laws, rules and regulations, including, without limitation, the Investment Company Act, the Securities Act, the Exchange Act and all applicable state securities laws. Selling Fund is in compliance in all material respects with the investment policies and restrictions applicable to it set forth in the Seller Registration Statement. The value of the net assets of Selling Fund is determined using portfolio valuation methods that comply in all material respects with the requirements of the Investment Company Act and the policies of Selling Fund and all purchases and redemptions of Selling Fund Shares have been effected at the net asset value per share calculated in such manner.
SECTION 3.3. Financial Statements. The books of account and related records of Selling Fund fairly reflect in reasonable detail its assets, liabilities and transactions in accordance with generally accepted accounting principles applied on a consistent basis. The Selling Fund Financial Statements previously delivered to Buyer present fairly in all material respects the financial position of Selling Fund as of the dates indicated and the results of operations and changes in net assets for the periods then ended in accordance with generally accepted accounting principles applied on a consistent basis for the periods then ended.
SECTION 3.4. No Material Adverse Changes; Contingent Liabilities. Since the date of the Selling Fund Financial Statements, no material adverse change has occurred in the financial condition, results of operations, business, assets or liabilities of Selling Fund or the status of Selling Fund as a regulated investment company under the Code, other than changes resulting from any change in general conditions in the financial or securities markets or the performance of any investments made by Selling Fund or occurring in the ordinary course of business of Selling Fund or Seller. Except as set forth on Schedule 3.4, there are no contingent liabilities of Selling Fund not disclosed in the Selling Fund Financial Statements and no contingent liabilities of Selling Fund have arisen since the date of the most recent financial statements included in the Selling Fund Financial Statements.
SECTION 3.5. Selling Fund Shares; Business Operations.
(a) Selling Fund Shares have been duly authorized and validly issued and are fully paid and non-assessable.
(b) During the five-year period ending on the date of the
Reorganization, neither Selling Fund nor any person related to Selling Fund (as
defined in Section 1.368-1(e)(3) of the Treasury Regulations without regard to
Section 1.368-1(e)(3)(i)(A)) will have directly or through any transaction,
agreement, or arrangement with any other person, (i) acquired shares of Selling
Fund for consideration other than shares of Selling Fund, except for shares
redeemed in the ordinary course of Selling Fund's business as an open-end
investment company as required by the Investment Company Act, or (ii) made
distributions with respect to Selling Fund's shares, except for (a)
distributions necessary to satisfy the requirements of Sections 852 and 4982 of
the Code for qualification as a regulated investment company and avoidance of
excise tax liability and (b) additional distributions, to the extent such
additional distributions do not exceed 50 percent of the value (without giving
effect to such distributions) of the proprietary interest in Selling Fund on the
Effective Date.
(c) At the time of its Reorganization, Selling Fund shall not have outstanding any warrants, options, convertible securities or any other type of right pursuant to which any Person could acquire Selling Fund Shares, except for the right of investors to acquire Selling Fund Shares at net asset value in the normal course of its business as a series of an open-end management investment company operating under the Investment Company Act.
(d) From the date it commenced operations and ending on the Closing Date, Selling Fund will have conducted its historic business within the meaning of Section 1.368-1(d)(2) of the Treasury Regulations in a substantially unchanged manner. In anticipation of its Reorganization, Selling Fund will not dispose of assets that, in the aggregate, will result in less
than fifty percent (50%) of its historic business assets (within the meaning of
Section 1.368-1(d)(3) of the Treasury Regulations) being transferred to Buying
Fund. As of the Closing Date, at least 33-1/3% of Selling Fund's portfolio
assets will meet the investment objectives, strategies, policies, risks and
restrictions of Buying Fund. Selling Fund did not alter its portfolio in
anticipation of the Reorganization to meet the 33-1/3% threshold
(e) Except for the Senior Officer Seller is required to employ pursuant to the Assurance of Discontinuance entered into by the Investment Adviser with the Attorney General of the State of New York on or about October 7, 2004, Seller does not have, and has not had during the six (6) months prior to the date of this Agreement, any employees, and shall not hire any employees from and after the date of this Agreement through the Closing Date.
SECTION 3.6. Accountants. Selling Fund Auditors, which have reported upon the Selling Fund Financial Statements for the fiscal year ending October 31, 2006, are independent registered public accountants as required by the Securities Act and the Exchange Act.
SECTION 3.7. Binding Obligation. This Agreement has been duly authorized, executed and delivered by Seller on behalf of Selling Fund and, assuming this Agreement has been duly executed and delivered by Buyer and approved by the shareholders of Selling Fund, constitutes the legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms from and with respect to the revenues and assets of Selling Fund, except as the enforceability hereof may be limited by bankruptcy, insolvency, reorganization or similar laws relating to or affecting creditors rights generally, or by general equity principles (whether applied in a court of law or a court of equity and including limitations on the availability of specific performance or other equitable remedies).
SECTION 3.8. No Breaches or Defaults. The execution and delivery of this
Agreement by Seller on behalf of Selling Fund and performance by Seller of its
obligations hereunder has been duly authorized by all necessary trust action on
the part of Seller, other than approval by the shareholders of Selling Fund, and
(i) do not, and on the Closing Date will not, result in any violation of the
Governing Documents of Seller and (ii) do not, and on the Closing Date will not,
result in a breach of any of the terms or provisions of, or constitute (with or
without the giving of notice or the lapse of time or both) a default under, or
give rise to a right of termination, cancellation or acceleration of any
obligation or to the loss of a material benefit under, or result in the creation
or imposition of any Lien upon any property or assets of Selling Fund (except
for such breaches or defaults or Liens that would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect) under (A)
any indenture, mortgage or loan agreement or any other material agreement or
instrument to which Seller is a party or by which it may be bound and which
relates to the assets of Selling Fund or to which any property of Selling Fund
may be subject; (B) any Permit (as defined below); or (C) any existing
applicable law, rule, regulation, judgment, order or decree of any Governmental
Authority having jurisdiction over Seller or any property of Selling Fund.
Seller is not under the jurisdiction of a court in a proceeding under Title 11
of the United States Code or similar case within the meaning of Section
368(a)(3)(A) of the Code.
SECTION 3.9. Authorizations or Consents. Other than those which shall have been obtained or made on or prior to the Closing Date and those that must be made after the Closing
Date to comply with Section 2.5 of this Agreement, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority will be required to be obtained or made by Seller in connection with the due execution and delivery by Seller of this Agreement and the consummation by Seller of the transactions contemplated hereby.
SECTION 3.10. Permits. Except for the absence of, or default under, Permits (as defined below) that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, Seller has in full force and effect all approvals, consents, authorizations, certificates, filings, franchises, licenses, notices, permits and rights of Governmental Authorities (collectively, "Permits") necessary for it to conduct its business as presently conducted as it relates to Selling Fund. To the knowledge of Seller there are no proceedings relating to the suspension, revocation or modification of any Permit, except for such that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
SECTION 3.11. No Actions, Suits or Proceedings.
(a) There is no pending action, suit or proceeding, nor, to the knowledge of Seller, has any litigation been overtly threatened in writing or, if probable of assertion, orally, against Seller before any Governmental Authority which questions the validity or legality of this Agreement or of the actions contemplated hereby or which seeks to prevent the consummation of the transactions contemplated hereby, including the Reorganization.
(b) There are no judicial, administrative or arbitration actions, suits, or proceedings instituted or pending or, to the knowledge of Seller, threatened in writing or, if probable of assertion, orally, against Seller affecting any property, asset, interest or right of Selling Fund, that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to Selling Fund. There are not in existence on the date hereof any plea agreements, judgments, injunctions, consents, decrees, exceptions or orders that were entered by, filed with or issued by any Governmental Authority relating to Seller's conduct of the business of Selling Fund affecting in any significant respect the conduct of such business. Seller is not, and has not been, to the knowledge of Seller, the target of any investigation by the SEC or any state securities administrator with respect to its conduct of the business of Selling Fund, other than as has been disclosed to Seller's Board of Trustees.
SECTION 3.12. Contracts. Seller is not in default under any contract, agreement, commitment, arrangement, lease, insurance policy or other instrument to which it is a party and which involves or affects the assets of Selling Fund, by which the assets, business, or operations of Selling Fund may be bound or affected, or under which it or the assets, business or operations of Selling Fund receives benefits, and which default could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, and, to the knowledge of Seller there has not occurred any event that, with the lapse of time or the giving of notice or both, would constitute such a default.
SECTION 3.13. Properties and Assets. Selling Fund has good and marketable title to all properties and assets reflected in the Selling Fund Financial Statements as owned by it, free and clear of all Liens, except as described in the Selling Fund Financial Statements.
SECTION 3.14. Taxes.
(a) Selling Fund has elected to be a regulated investment company under Subchapter M of the Code and is a fund that is treated as a separate corporation under Section 851(g) of the Code. Since inception, Selling Fund has qualified for treatment as a regulated investment company for each taxable year that has ended prior to the Closing Date and will have satisfied the requirements of Part I of Subchapter M of the Code to maintain such qualification for the period beginning on the first day of its current taxable year and ending on the Closing Date. Selling Fund has no earnings and profits accumulated in any taxable year in which the provisions of Subchapter M of the Code did not apply to it. In order to (i) ensure continued qualification of Selling Fund for treatment as a "regulated investment company" for tax purposes and (ii) eliminate any tax liability of Selling Fund arising by reason of undistributed investment company taxable income or net capital gain, Seller will declare on or prior to the Valuation Date to the shareholders of Selling Fund a dividend or dividends that, together with all previous such dividends, shall have the effect of distributing (A) all of Selling Fund's investment company taxable income (determined without regard to any deductions for dividends paid) for the taxable year ended August 31, 2006 and for the short taxable year beginning on September 1, 2006 and ending on the Closing Date and (B) all of Selling Fund's net capital gain recognized in its taxable year ended August 31, 2006 and in such short taxable year (after reduction for any capital loss carryover).
(b) Selling Fund has timely filed all Returns required to be filed by it and all Taxes with respect thereto have been paid, except where the failure so to file or so to pay, would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Adequate provision has been made in the Selling Fund Financial Statements for all Taxes in respect of all periods ended on or before the date of such financial statements, except where the failure to make such provisions would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. No deficiencies for any Taxes have been proposed, assessed or asserted in writing by any taxing authority against Selling Fund, and no deficiency has been proposed, assessed or asserted, in writing, where such deficiency would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. No waivers of the time to assess any such Taxes are outstanding nor are any written requests for such waivers pending and no Return of Selling Fund is currently being or has been audited with respect to income taxes or other Taxes by any Federal, state, local or foreign Tax authority.
SECTION 3.15. Benefit and Employment Obligations. Except for any obligations under the Trustee Benefit Plans and the Amended and Restated AIM Funds' Incentive/Retention Bonus Plan, Selling Fund has no obligation to provide any post-retirement or post-employment benefit to any Person, including but not limited to, under any Benefit Plan, and has no obligation to provide unfunded deferred compensation or other unfunded or self-funded benefits to any Person.
SECTION 3.16. Brokers. No broker, finder or similar intermediary has acted for or on behalf of Seller in connection with this Agreement or the transactions contemplated hereby, and no broker, finder, agent or similar intermediary is entitled to any broker's, finder's or similar fee or other commission in connection therewith based on any agreement, arrangement or understanding with Seller or any action taken by it.
SECTION 3.17. Voting Requirements. The Required Shareholder Vote is the only vote of the holders of any class of shares of Selling Fund necessary to approve this Agreement.
SECTION 3.18. State Takeover Statutes. No state takeover statute or similar statute or regulation applies or purports to apply to this Agreement or any of the transactions contemplated by this Agreement.
SECTION 3.19. Books and Records. The books and records of Seller relating to Selling Fund, reflecting, among other things, the purchase and sale of Selling Fund Shares, the number of issued and outstanding shares owned by each Selling Fund Shareholder and the state or other jurisdiction in which such shares were offered and sold, are complete and accurate in all material respects.
SECTION 3.20. Prospectus and Statement of Additional Information. The current prospectus and statement of additional information for Selling Fund as of the date on which they were issued did not contain, and as supplemented by any supplement thereto dated prior to or on the Closing Date do not contain, any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
SECTION 3.21. No Distribution. Buying Fund Shares are not being acquired for the purpose of any distribution thereof, other than in accordance with the terms of this Agreement.
SECTION 3.22. Liabilities of Selling Fund. The Liabilities of Selling Fund that are to be assumed by Buying Fund in connection with the Reorganization, or to which the assets of Selling Fund to be transferred in the Reorganization are subject, were incurred by Selling Fund in the ordinary course of its business. The fair market value of the assets of Selling Fund to be transferred to Buying Fund in the Reorganization will equal or exceed the sum of the Liabilities to be assumed by Buying Fund, plus the amount of Liabilities, if any, to which such transferred assets will be subject.
SECTION 3.23. Value of Shares. The fair market value of the shares of each class of Buying Fund received by Selling Fund Shareholders in the Reorganization will be approximately equal, as of the Effective Time, to the fair market value of the shares of each corresponding class of Selling Fund to be constructively surrendered in exchange therefor.
SECTION 3.24. Intercompany Indebtedness; Consideration. There is no intercompany indebtedness between Seller and Buyer that was issued or acquired, or will be settled, at a discount. No consideration other than Buying Fund Shares (and Buying Fund's assumption of Selling Fund's Liabilities, including for this purpose any liabilities to which the assets of Selling Fund are subject) will be given in exchange for the assets of Selling Fund acquired by Buying Fund in connection with the Reorganization.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer, on behalf of Buying Fund, represents and warrants to Seller as follows:
SECTION 4.1. Organization; Authority. Buyer is duly organized, validly existing and in good standing under Applicable Law, with all requisite corporate or trust power, as applicable, and authority to enter into this Agreement and perform its obligations hereunder.
SECTION 4.2. Registration and Regulation of Buyer. Buyer is duly registered with the SEC as an investment company under the Investment Company Act. Buying Fund is in compliance in all material respects with all applicable laws, rules and regulations, including, without limitation, the Investment Company Act, the Securities Act, the Exchange Act and all applicable state securities laws. Buying Fund is in compliance in all material respects with the applicable investment policies and restrictions set forth in the Buyer Registration Statement. The value of the net assets of Buying Fund is determined using portfolio valuation methods that comply in all material respects with the requirements of the Investment Company Act and the policies of Buying Fund and all purchases and redemptions of Buying Fund Shares have been effected at the net asset value per share calculated in such manner.
SECTION 4.3. Financial Statements. The books of account and related records of Buying Fund fairly reflect in reasonable detail its assets, liabilities and transactions in accordance with generally accepted accounting principles applied on a consistent basis. The Buying Fund Financial Statements previously delivered to Seller present fairly in all material respects the financial position of Buying Fund as of the dates indicated and the results of operations and changes in net assets for the periods then ended in accordance with generally accepted accounting principles applied on a consistent basis for the periods then ended.
SECTION 4.4. No Material Adverse Changes; Contingent Liabilities. Since the date of the Buying Fund Financial Statements, no material adverse change has occurred in the financial condition, results of operations, business, assets or liabilities of Buying Fund or the status of Buying Fund as a regulated investment company under the Code, other than changes resulting from any change in general conditions in the financial or securities markets or the performance of any investments made by Buying Fund or occurring in the ordinary course of business of Buying Fund or Buyer. There are no contingent liabilities of Buying Fund not disclosed in the Buying Fund Financial Statements which are required to be disclosed in accordance with generally accepted accounting principles. Except as set forth on Schedule 4.4, no contingent liabilities of Buying Fund have arisen since the date of the most recent financial statements included in the Buying Fund Financial Statements which are required to be disclosed in accordance with generally accepted accounting principles.
SECTION 4.5. Registration of Buying Fund Shares.
(a) Buying Fund currently has those classes of shares that are set forth on Schedule 4.5(a). Under its Governing Documents, Buyer is authorized to issue an unlimited number of shares of each such class.
(b) Buying Fund Shares to be issued pursuant to Section 2.6 shall on the Closing Date be duly registered under the Securities Act by a Registration Statement on Form N-14 of Buyer then in effect.
(c) Buying Fund Shares to be issued pursuant to Section 2.6 are duly authorized and on the Closing Date will be validly issued and fully paid and non-assessable and will conform to the description thereof contained in the Registration Statement on Form N-14 then in effect. At the time of its Reorganization, Buying Fund shall not have outstanding any warrants, options, convertible securities or any other type of right pursuant to which any Person could acquire shares of Buying Fund, except for the right of investors to acquire shares of Buying Fund at net asset value in the normal course of its business as a series of an open-end management investment company operating under the Investment Company Act.
(d) The combined proxy statement/prospectus (the "Combined Proxy Statement/Prospectus"), which forms a part of Buyer's Registration Statement on Form N-14, shall be furnished to the shareholders of Selling Fund entitled to vote at the Shareholders Meeting in accordance with normal market practice for such transactions. The Combined Proxy Statement/Prospectus and related Statement of Additional Information of Buying Fund, when they become effective, shall conform in all material respects to the applicable requirements of the Securities Act and the Investment Company Act and shall not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not materially misleading.
(e) The shares of Buying Fund which have been or are being offered for sale (other than the Buying Fund Shares to be issued in connection with the Reorganization) have been duly registered under the Securities Act by the Buyer Registration Statement and have been duly registered, qualified or are exempt from registration or qualification under the securities laws of each state or other jurisdiction in which such shares have been or are being offered for sale, and no action has been taken by Buyer to revoke or rescind any such registration or qualification.
SECTION 4.6. Accountants. Buying Fund Auditors, which have reported upon the Buying Fund Financial Statements for the fiscal year ending August 31, 2006, are independent registered public accountants as required by the Securities Act and the Exchange Act.
SECTION 4.7. Binding Obligation. This Agreement has been duly authorized, executed and delivered by Buyer on behalf of Buying Fund and, assuming this Agreement has been duly executed and delivered by Seller, constitutes the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms from and with respect to the revenues and assets of Buying Fund, except as the enforceability hereof may be limited by bankruptcy, insolvency, reorganization or similar laws relating to or affecting creditors' rights generally, or by general equity principles (whether applied in a court of law or a court of equity and including limitations on the availability of specific performance or other equitable remedies).
SECTION 4.8. No Breaches or Defaults. The execution and delivery of this Agreement by Buyer on behalf of Buying Fund and performance by Buyer of its obligations hereunder have been duly authorized by all necessary trust action on the part of Buyer and (i) do not, and on the
Closing Date will not, result in any violation of the Governing Documents of Buyer and (ii) do not, and on the Closing Date will not, result in a breach of any of the terms or provisions of, or constitute (with or without the giving of notice or the lapse of time or both) a default under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a material benefit under, or result in the creation or imposition of any Lien upon any property or assets of Buying Fund (except for such breaches or defaults or Liens that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect) under (A) any indenture, mortgage or loan agreement or any other material agreement or instrument to which Buyer is a party or by which it may be bound and which relates to the assets of Buying Fund or to which any properties of Buying Fund may be subject; (B) any Permit; or (C) any existing applicable law, rule, regulation, judgment, order or decree of any Governmental Authority having jurisdiction over Buyer or any property of Buying Fund. Buyer is not under the jurisdiction of a court in a proceeding under Title 11 of the United States Code or similar case within the meaning of Section 368(a)(3)(A) of the Code.
SECTION 4.9. Authorizations or Consents. Other than those which shall have been obtained or made on or prior to the Closing Date, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority will be required to be obtained or made by Buyer in connection with the due execution and delivery by Buyer of this Agreement and the consummation by Buyer of the transactions contemplated hereby.
SECTION 4.10. Permits. Except for the absence of, or default under, Permits that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, Buyer has in full force and effect all Permits necessary for it to conduct its business as presently conducted as it relates to Buying Fund. To the knowledge of Buyer there are no proceedings relating to the suspension, revocation or modification of any Permit, except for such that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
SECTION 4.11. No Actions, Suits or Proceedings.
(a) There is no pending action, suit or proceeding, nor, to the knowledge of Buyer, has any litigation been overtly threatened in writing or, if probable of assertion, orally, against Buyer before any Governmental Authority which questions the validity or legality of this Agreement or of the transactions contemplated hereby, or which seeks to prevent the consummation of the transactions contemplated hereby, including the Reorganization.
(b) There are no judicial, administrative or arbitration actions, suits, or proceedings instituted or pending or, to the knowledge of Buyer, threatened in writing or, if probable of assertion, orally, against Buyer, affecting any property, asset, interest or right of Buying Fund, that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to Buying Fund. There are not in existence on the date hereof any plea agreements, judgments, injunctions, consents, decrees, exceptions or orders that were entered by, filed with or issued by any Governmental Authority relating to Buyer's conduct of the business of Buying Fund affecting in any significant respect the conduct of such business. Buyer is not, and has not been, to the knowledge of Buyer, the target of any investigation by the SEC or any state
securities administrator with respect to its conduct of the business of Buying Fund, other than as has been disclosed to Buyer's Board of Trustees.
SECTION 4.12. Taxes.
(a) Buying Fund has elected to be a regulated investment company under Subchapter M of the Code and is a fund that is treated as a separate corporation under Section 851(g) of the Code. Since inception, Buying Fund has qualified for treatment as a regulated investment company for each taxable year that has ended prior to the Closing Date and will satisfy the requirements of Part I of Subchapter M of the Code to maintain such qualification for its current taxable year. Buying Fund has no earnings or profits accumulated in any taxable year in which the provisions of Subchapter M of the Code did not apply to it.
(b) Buying Fund has timely filed all Returns required to be filed by it and all Taxes with respect thereto have been paid, except where the failure so to file or so to pay, would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Adequate provision has been made in the Buying Fund Financial Statements for all Taxes in respect of all periods ending on or before the date of such financial statements, except where the failure to make such provisions would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. No deficiencies for any Taxes have been proposed, assessed or asserted in writing by any taxing authority against Buying Fund, and no deficiency has been proposed, assessed or asserted, in writing, where such deficiency would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. No waivers of the time to assess any such Taxes are outstanding nor are any written requests for such waivers pending and no Return of Buying Fund is currently being or has been audited with respect to income taxes or other Taxes by any Federal, state, local or foreign Tax authority.
SECTION 4.13. Brokers. No broker, finder or similar intermediary has acted for or on behalf of Buyer in connection with this Agreement or the transactions contemplated hereby, and no broker, finder, agent or similar intermediary is entitled to any broker's, finder's or similar fee or other commission in connection therewith based on any agreement, arrangement or understanding with Buyer or any action taken by it.
SECTION 4.14. Representations Concerning the Reorganization.
(a) There is no plan or intention by Buyer or any person related to Buyer to acquire or redeem any Buying Fund Shares issued in the Reorganization, either directly or through any transaction, agreement, or arrangement with any other person, except to the extent that Buying Fund is required by the Investment Company Act to redeem any of its shares presented for redemption at net asset value in the ordinary course of its business as an open-end, management investment company as required by the Investment Company Act.
(b) Buying Fund has no plan or intention to sell or otherwise dispose of any of the assets of Selling Fund acquired in the Reorganization, other than in the ordinary course of its business and to the extent necessary to maintain its status as a "regulated investment company" under the Code; provided, however, that this Section 4.14(b) shall not preclude any of the reorganizations of funds set forth on Schedule 4.14(b).
(c) Following the Reorganization, Buying Fund will continue an "historic business" of Selling Fund or use a significant portion of Selling Fund's "historic business assets" in a business. For purposes of this representation, the terms "historic business" and "historic business assets" shall have the meanings ascribed to them in Section 1.368-1(d) of the Treasury Regulations; provided, however, that this Section 4.14(c) shall not preclude any of the reorganizations of funds set forth on Schedule 4.14(b).
(d) Prior to or in the Reorganization, neither Buying Fund nor any
person related to Buying Fund (for purposes of this paragraph as defined in
Section 1.368-1(e)(3) of the Treasury Regulations) will have acquired directly
or through any transaction, agreement or arrangement with any other person,
shares of Selling Fund with consideration other than shares of Buying Fund.
SECTION 4.15. Prospectus and Statement of Additional Information. The current prospectus and statement of additional information for Buying Fund as of the date on which it was issued does not contain, and as supplemented by any supplement thereto dated prior to or on the Closing Date does not contain, any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
SECTION 4.16. Value of Shares. The fair market value of the shares of each class of Buying Fund received by Selling Fund Shareholders in the Reorganization will be approximately equal, as of the Effective Time, to the fair market value of the shares of each corresponding class of Selling Fund to be constructively surrendered in exchange therefor. The fair market value of the assets of Buying Fund will exceed the amount of its liabilities immediately after the exchange.
SECTION 4.17. Intercompany Indebtedness; Consideration. There is no intercompany indebtedness between Seller and Buyer that was issued or acquired, or will be settled, at a discount. No consideration other than Buying Fund Shares (and Buying Fund's assumption of Selling Fund's Liabilities, including for this purpose any liabilities to which the assets of Selling Fund are subject) will be given in exchange for the assets of Selling Fund acquired by Buying Fund in connection with the Reorganization. The fair market value of the assets of Selling Fund transferred to Buying Fund in the Reorganization will equal or exceed the sum of the Liabilities assumed by Buying Fund, plus the amount of liabilities, if any, to which such transferred assets are subject.
ARTICLE 5
COVENANTS
SECTION 5.1. Conduct of Business.
(a) From the date of this Agreement up to and including the Closing Date (or, if earlier, the date upon which this Agreement is terminated pursuant to Article 7), Seller shall conduct the business of Selling Fund only in the ordinary course and substantially in accordance with past practices, and shall use its reasonable best efforts to preserve intact its business
organization and material assets and maintain the rights, franchises and business and customer relations necessary to conduct the business operations of Selling Fund in the ordinary course in all material respects; provided, however, that this Section 5.1(a) shall not preclude any of the reorganizations of funds set forth on Schedule 4.14(b).
(b) From the date of this Agreement up to and including the Closing Date (or, if earlier, the date upon which this Agreement is terminated pursuant to Article 7), Buyer shall conduct the business of Buying Fund only in the ordinary course and substantially in accordance with past practices, and shall use its reasonable best efforts to preserve intact its business organization and material assets and maintain the rights, franchises and business and customer relations necessary to conduct the business operations of Buying Fund in the ordinary course in all material respects; provided, however, that this Section 5.1(b) shall not preclude any of the reorganizations of funds set forth on Schedule 4.14(b).
SECTION 5.2. Expenses. Buying Fund shall bear all of its costs and expenses incurred in connection with this Agreement and the Reorganization without any reimbursement therefor. Prior to the submission of the Agreement to the Boards of Trustees of Buyer and Seller for approval, the Investment Adviser, in the ordinary course of its business as a registered investment advisor operating under the Advisors Act, agreed to bear all of the costs and expenses of Selling Fund incurred in connection with this Agreement and the Reorganization and other transactions contemplated hereby; provided that any such expenses incurred by Selling Fund shall not be reimbursed or paid for by the Investment Advisor unless those expenses are solely and directly related to the Reorganization. Except as provided in the preceding sentence, Selling Fund shall bear all of its costs and expenses incurred in connection with this Agreement and the Reorganization without any reimbursement therefor. Neither Selling Fund nor Buying Fund (nor any Person related to Selling Fund or Buying Fund) will pay or assume any expenses of the Selling Fund Shareholders (including, but not limited to, any expenses of Selling Fund Shareholders that are solely and directly related to the Reorganization).
SECTION 5.3. Further Assurances. Each of the parties hereto shall execute such documents and other papers and perform such further acts as may be reasonably required to carry out the provisions hereof and the transactions contemplated hereby. Each such party shall, on or prior to the Closing Date, use its reasonable best efforts to fulfill or obtain the fulfillment of the conditions precedent to the consummation of the Reorganization, including the execution and delivery of any documents, certificates, instruments or other papers that are reasonably required for the consummation of the Reorganization.
SECTION 5.4. Notice of Events. Buyer shall give prompt notice to Seller,
and Seller shall give prompt notice to Buyer, of (a) the occurrence or
non-occurrence of any event which to the knowledge of Buyer or to the knowledge
of Seller would be likely to result in any of the conditions specified in (i) in
the case of Seller, Sections 6.1 and 6.2 or (ii) in the case of Buyer, Sections
6.2 and 6.3, not being satisfied so as to permit the consummation of the
Reorganization and (b) any material failure on its part, or on the part of the
other party hereto of which it has knowledge, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 5.5 shall not limit or otherwise affect the remedies available hereunder
to any party.
SECTION 5.5. Consents, Approvals and Filings. Each of Seller and Buyer shall make all necessary filings, as soon as reasonably practicable, including, without limitation, those required under the Securities Act, the Exchange Act, the Investment Company Act and the Advisers Act, in order to facilitate prompt consummation of the Reorganization and the other transactions contemplated by this Agreement. In addition, each of Seller and Buyer shall use its reasonable best efforts, and shall cooperate fully with each other (i) to comply as promptly as reasonably practicable with all requirements of Governmental Authorities applicable to the Reorganization and the other transactions contemplated herein and (ii) to obtain as promptly as reasonably practicable all necessary permits, orders or other consents of Governmental Authorities and consents of all third parties necessary for the consummation of the Reorganization and the other transactions contemplated herein. Each of Seller and Buyer shall use reasonable efforts to provide such information and communications
SECTION 5.6. Submission of Agreement to Shareholders. Seller shall take all action necessary in accordance with applicable law and its Governing Documents to convene the Shareholders Meeting. Seller shall, through its Board of Trustees, recommend to the shareholders of Selling Fund approval of this Agreement. Seller shall use its reasonable best efforts to hold a Shareholders Meeting as soon as practicable and advisable after the date hereof.
ARTICLE 6
CONDITIONS PRECEDENT TO THE REORGANIZATION
SECTION 6.1. Conditions Precedent of Buyer. The obligation of Buyer to consummate the Reorganization is subject to the satisfaction, at or prior to the Closing Date, of all of the following conditions, any one or more of which may be waived in writing by Buyer.
(a) The representations and warranties of Seller on behalf of Selling Fund set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date with the same effect as though all such representations and warranties had been made as of the Closing Date.
(b) Seller shall have complied with and satisfied in all material respects all agreements and conditions relating to Selling Fund set forth herein on its part to be performed or satisfied at or prior to the Closing Date.
(c) Buyer shall have received at the Closing Date (i) a certificate, dated as of the Closing Date, from an officer of Seller, in such individual's capacity as an officer of Seller and not as an individual, to the effect that the conditions specified in Sections 6.1(a) and (b) have been satisfied and (ii) a certificate, dated as of the Closing Date, from the Secretary or Assistant Secretary (in such capacity) of Seller certifying as to the accuracy and completeness of the attached Governing Documents of Seller, and resolutions, consents and authorizations of or regarding Seller with respect to the execution and delivery of this Agreement and the transactions contemplated hereby.
(d) The dividend or dividends described in the last sentence of
Section 3.14(a) shall have been declared.
(e) Buyer shall have received from Seller confirmations or other adequate evidence as to the tax costs and holding periods of the assets and property of Selling Fund transferred to Buying Fund in accordance with the terms of this Agreement.
(f) To the extent applicable, the Investment Adviser shall have terminated or waived, in either case in writing, any rights to reimbursement from Selling Fund to which it is entitled for fees and expenses absorbed by the Investment Adviser pursuant to voluntary and contractual fee waiver or expense limitation commitments between the Investment Adviser and Selling Fund.
SECTION 6.2. Mutual Conditions. The obligations of Seller and Buyer to consummate the Reorganization are subject to the satisfaction, at or prior to the Closing Date, of all of the following further conditions, any one or more of which may be waived in writing by Seller and Buyer, but only if and to the extent that such waiver is mutual.
(a) All filings required to be made prior to the Closing Date with, and all consents, approvals, permits and authorizations required to be obtained on or prior to the Closing Date from, Governmental Authorities in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated herein by Seller and Buyer shall have been made or obtained, as the case may be; provided, however, that such consents, approvals, permits and authorizations may be subject to conditions that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(b) This Agreement, the Reorganization of Selling Fund and related matters shall have been approved and adopted at the Shareholders Meeting by the shareholders of Selling Fund on the record date by the Required Shareholder Vote.
(c) The assets of Selling Fund to be acquired by Buying Fund shall constitute at least 90% of the fair market value of the net assets and at least 70% of the fair market value of the gross assets held by Selling Fund immediately prior to the Reorganization. For purposes of this Section 6.2(c), assets used by Selling Fund to pay the expenses it incurs in connection with this Agreement and the Reorganization and to effect all shareholder redemptions and distributions (other than regular, normal dividends and regular, normal redemptions pursuant to the Investment Company Act, and not in excess of the requirements of Section 852 of the Code, occurring in the ordinary course of Selling Fund's business as a series of an open-end management investment company) after the date of this Agreement shall be included as assets of Selling Fund held immediately prior to the Reorganization.
(d) No temporary restraining order, preliminary or permanent injunction or other order issued by any Governmental Authority preventing the consummation of the Reorganization on the Closing Date shall be in effect; provided, however, that the party or parties invoking this condition shall use reasonable efforts to have any such order or injunction vacated.
(e) The Registration Statement on Form N-14 filed by Buyer with respect to Buying Fund Shares to be issued to Selling Fund Shareholders in connection with the Reorganization shall have become effective under the Securities Act and shall include an undertaking therein to file the opinion referenced in Section 6.2(f) as a post-effective amendment
to such Registration Statement after the Closing Date, and no stop order suspending the effectiveness thereof shall have been issued and, to the best knowledge of the parties hereto, no investigation or proceeding for that purpose shall have been instituted or be pending, threatened or contemplated under the Securities Act.
(f) Seller and Buyer shall have received on or before the Closing Date an opinion of Buyer Counsel in form and substance reasonably acceptable to Seller and Buyer, as to the matters set forth on Schedule 6.2(f). In rendering such opinion, Buyer Counsel may request and rely upon representations contained in certificates of officers of Seller, Buyer and others, and the officers of Seller and Buyer shall use their best efforts to make available such truthful certificates.
SECTION 6.3. Conditions Precedent of Seller. The obligation of Seller to consummate the Reorganization is subject to the satisfaction, at or prior to the Closing Date, of all of the following conditions, any one or more of which may be waived in writing by Seller.
(a) The representations and warranties of Buyer on behalf of Buying Fund set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date with the same effect as though all such representations and warranties had been made as of the Closing Date.
(b) Buyer shall have complied with and satisfied in all material respects all agreements and conditions relating to Buying Fund set forth herein on its part to be performed or satisfied at or prior to the Closing Date.
(c) Seller shall have received on the Closing Date (i) a certificate, dated as of the Closing Date, from an officer of Buyer, in such individual's capacity as an officer of Buyer and not as an individual, to the effect that the conditions specified in Sections 6.3(a) and (b) have been satisfied and (ii) a certificate, dated as of the Closing Date, from the Secretary or Assistant Secretary of Buyer (in such capacity) certifying as to the accuracy and completeness of the attached Governing Documents of Buyer and resolutions, consents and authorizations of or regarding Buyer with respect to the execution and delivery of this Agreement and the transactions contemplated hereby.
ARTICLE 7
TERMINATION OF AGREEMENT
SECTION 7.1. Termination. This Agreement may be terminated on or prior to the Closing Date as follows:
(a) by mutual written consent of Seller and Buyer; or
(b) at the election of Seller or Buyer, to be effectuated by the delivery by the terminating party to the other party of a written notice of such termination:
(i) if the Closing Date shall not be on or before the Termination Date, unless the failure to consummate the Reorganization is the result of a willful and material breach of this Agreement by the party seeking to terminate this Agreement;
(ii) if, upon a vote at the Shareholders Meeting or any final adjournment thereof, the Required Shareholder Vote shall not have been obtained as contemplated by Section 5.8; or
(iii) if any Governmental Authority shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the Reorganization and such order, decree, ruling or other action shall have become final and nonappealable.
SECTION 7.2. Survival After Termination. If this Agreement is terminated in accordance with Section 7.1 hereof and the Reorganization of Selling Fund is not consummated, this Agreement shall become void and of no further force and effect with respect to the Reorganization and Selling Fund, except for the provisions of Section 5.3.
ARTICLE 8
MISCELLANEOUS
SECTION 8.1. Survival of Representations, Warranties and Covenants. The representations and warranties in this Agreement, and the covenants in this Agreement that are required to be performed at or prior to the Closing Date, shall terminate upon the consummation of the transactions contemplated hereunder. The covenants in this Agreement that are required to be performed in whole or in part subsequent to the Closing Date shall survive the consummation of the transactions contemplated hereunder for a period of one (1) year following the Closing Date.
SECTION 8.2. Governing Law. This Agreement shall be construed and interpreted according to the laws of the State of Delaware applicable to contracts made and to be performed wholly within such state.
SECTION 8.3. Binding Effect, Persons Benefiting, No Assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and the respective successors and assigns of the parties and such Persons. Nothing in this Agreement is intended or shall be construed to confer upon any entity or Person other than the parties hereto and their respective successors and permitted assigns any right, remedy or claim under or by reason of this Agreement or any part hereof. Without the prior written consent of the parties hereto, this Agreement may not be assigned by any of the parties hereto.
SECTION 8.4. Obligations of Buyer and Seller.
(a) Seller and Buyer hereby acknowledge and agree that Buying Fund is a separate investment portfolio of Buyer, that Buyer is executing this Agreement on behalf of Buying Fund, and that any amounts payable by Buyer under or in connection with this Agreement shall be payable solely from the revenues and assets of Buying Fund. Seller further acknowledges and agrees that this Agreement has been executed by a duly authorized officer of Buyer in his or her capacity as an officer of Buyer intending to bind Buyer as provided herein, and that no officer, trustee or shareholder of Buyer shall be personally liable for the liabilities or obligations of Buyer incurred hereunder. Finally, Seller acknowledges and agrees that the liabilities and obligations of Buying Fund pursuant to this Agreement shall be enforceable against the assets of Buying Fund only and not against the assets of Buyer generally or assets belonging to any other series of Buyer.
(b) Seller and Buyer hereby acknowledge and agree that Selling Fund is a separate investment portfolio of Seller, that Seller is executing this Agreement on behalf of Selling Fund and that any amounts payable by Seller under or in connection with this Agreement shall be payable solely from the revenues and assets of Selling Fund. Buyer further acknowledges and agrees that this Agreement has been executed by a duly authorized officer of Seller in his or her capacity as an officer of Seller intending to bind Seller as provided herein, and that no officer, trustee or shareholder of Seller shall be personally liable for the liabilities or obligations of Seller incurred hereunder. Finally, Buyer acknowledges and agrees that the liabilities and obligations of Selling Fund pursuant to this Agreement shall be enforceable against the assets of Selling Fund only and not against the assets of Seller generally or assets belonging to any other series of Seller.
SECTION 8.5. Amendments. This Agreement may not be amended, altered or modified except by a written instrument executed by Seller and Buyer.
SECTION 8.6. Enforcement. The parties agree irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States or any state having jurisdiction, in addition to any other remedy to which they are entitled at law or in equity.
SECTION 8.7. Interpretation. When a reference is made in this Agreement to a Section, Exhibit or Schedule, such reference shall be to a Section of, or an Exhibit or a Schedule to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." Each representation and warranty contained in Article 3 or 4 that relates to a general category of a subject matter shall be deemed superseded by a specific representation and warranty relating to a subcategory thereof to the extent of such specific representation or warranty.
SECTION 8.8. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and each of which shall constitute one and the same instrument.
SECTION 8.9. Entire Agreement; Exhibits and Schedules. This Agreement, including the Exhibits, Schedules, certificates and lists referred to herein, and any documents executed by the parties simultaneously herewith or pursuant thereto, constitute the entire understanding and agreement of the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, written or oral, between the parties with respect to such subject matter.
SECTION 8.10. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand or by overnight courier, two days after being sent by registered mail, return receipt requested, or when sent by telecopier (with receipt confirmed), provided, in the case of a telecopied notice, a copy is also sent by registered mail, return receipt requested, or by courier, addressed as follows (or to such other address as a party may designate by notice to the other):
(a) If to Seller:
AIM Counselor Series Trust
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
Attn: John M. Zerr
with a copy to:
Ballard Spahr Andrews & Ingersoll, LLP 1735 Market Street, 51st Floor Philadelphia, PA 19103-7599 Attn: Martha J. Hays
(b) If to Buyer:
AIM Investment Funds
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
Attn: John M. Zerr
with a copy to:
Ballard Spahr Andrews & Ingersoll, LLP 1735 Market Street, 51st Floor Philadelphia, PA 19103-7599 Attn: Martha J. Hays
SECTION 8.11. Representations by Investment Adviser.
(a) In its capacity as investment adviser to Seller, the Investment Adviser represents to Buyer that to the best of its knowledge the representations and warranties of Seller and Selling Fund contained in this Agreement are true and correct as of the date of this Agreement. For purposes of this Section 8.11(a), the best knowledge standard shall be deemed to mean that the officers of the Investment Adviser who have substantive responsibility for the provision of investment advisory services to Seller do not have actual knowledge to the contrary after due inquiry.
(b) In its capacity as investment adviser to Buyer, the Investment Adviser represents to Seller that to the best of its knowledge the representations and warranties of Buyer
and Buying Fund contained in this Agreement are true and correct as of the date of this Agreement. For purposes of this Section 8.11(b), the best knowledge standard shall be deemed to mean that the officers of the Investment Adviser who have substantive responsibility for the provision of investment advisory services to Buyer do not have actual knowledge to the contrary after due inquiry.
SECTION 8.12. Successors and Assigns; Assignment. This Agreement shall be binding upon and inure to the benefit of Seller, on behalf of Selling Fund, and Buyer, on behalf of Buying Fund, and their respective successors and permitted assigns. The parties hereto expressly acknowledge and agree that this Agreement shall be binding upon and inure to the benefit of those Delaware statutory trusts that are the resulting entities in the permitted reorganizations of funds set forth on Schedule 4.14(b).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
AIM COUNSELOR SERIES TRUST, acting on
behalf of AIM ADVANTAGE HEALTH
SCIENCES FUND
By: /s/ Philip A. Taylor
------------------------------------
Name: Philip A. Taylor
Title: Principal Executive Officer
|
AIM INVESTMENT FUNDS, acting on behalf
of AIM GLOBAL HEALTH CARE FUND
By: /s/ Philip A. Taylor
------------------------------------
Name: Philip A. Taylor
Title: Principal Executive Officer
|
A I M ADVISORS, INC.
By: /s/ Philip A. Taylor
------------------------------------
Name: Philip A. Taylor
Title: President
|
EXHIBIT A
EXCLUDED LIABILITIES OF SELLING FUND
None.
SCHEDULE 2.1
CLASSES OF SHARES OF SELLING FUND AND CORRESPONDING CLASSES OF SHARES OF BUYING
FUND
Corresponding Classes of
Classes of Shares of Selling Fund Shares of Buying Fund
--------------------------------- ---------------------------
AIM Advantage Health Sciences Fund AIM Global Health Care Fund
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
|
SCHEDULE 3.4
CERTAIN CONTINGENT LIABILITIES OF SELLING FUND
None.
SCHEDULE 4.4
CERTAIN CONTINGENT LIABILITIES OF BUYING FUND
None.
SCHEDULE 4.5(A)
CLASSES OF SHARES OF BUYING FUND
Classes of Shares of Buying Fund
Class A Shares
Class B Shares
Class C Shares
SCHEDULE 4.14(B)
PERMITTED REORGANIZATIONS OF FUNDS
AIM Opportunities I Fund into AIM Small Cap Equity Fund
AIM Opportunities II Fund into AIM Select Equity Fund
AIM Opportunities III Fund into AIM Select Equity Fund
SCHEDULE 6.2(F)
TAX OPINIONS
(i) The transfer of the assets of Selling Fund to Buying Fund in exchange solely for Buying Fund Shares distributed directly to Selling Fund Shareholders and Buying Fund's assumption of the Liabilities, as provided in the Agreement, will constitute a "reorganization" within the meaning of Section 368(a) of the Code and Selling Fund and Buying Fund will each be "a party to a reorganization" within the meaning of Section 368(b) of the Code.
(ii) In accordance with Section 361(a) and Section 361(c)(1) of the Code, no gain or loss will be recognized by Selling Fund on the transfer of its assets to Buying Fund solely in exchange for Buying Fund Shares and Buying Fund's assumption of the Liabilities or on the distribution of Buying Fund Shares to Selling Fund Shareholders.
(iii) In accordance with Section 1032 of the Code, no gain or loss will be recognized by Buying Fund upon the receipt of assets of Selling Fund in exchange for Buying Fund Shares issued directly to Selling Fund Shareholders.
(iv) In accordance with Section 354(a)(1) of the Code, no gain or loss will be recognized by Selling Fund Shareholders on the receipt of Buying Fund Shares in exchange for Selling Fund Shares.
(v) In accordance with Section 362(b) of the Code, the basis to Buying Fund of the assets of Selling Fund will be the same as the basis of such assets in the hands of Selling Fund immediately prior to the Reorganization.
(vi) In accordance with Section 358(a) of the Code, a Selling Fund Shareholder's basis for Buying Fund Shares received by the Selling Fund Shareholder will be the same as his or her basis for Selling Fund Shares exchanged therefor.
(vii) In accordance with Section 1223(1) of the Code, a Selling Fund Shareholder's holding period for Buying Fund Shares will be determined by including such Selling Fund Shareholder's holding period for Selling Fund Shares exchanged therefor, provided that such Selling Fund Shareholder held such Selling Fund Shares as a capital asset.
(viii) In accordance with Section 1223(2) of the Code, the holding period with respect to the assets of Selling Fund transferred to Buying Fund in the Reorganization will include the holding period for such assets in the hands of Selling Fund.
(ix) In accordance with Section 381(a)(2) of the Code, Buying Fund will succeed to and take into account the items of Selling Fund described in Section 381(c) of the Code, subject to the conditions and limitations specified in Sections 381 through 384 of the Code and the Treasury Regulations thereunder.
AIM FLOATING RATE FUND
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of December 6, 2005, by and between AIM Floating Rate Fund, a Delaware statutory trust ("AFRF"), acting on its own behalf and on behalf of AIM Floating Rate Fund and AIM Counselor Series Trust, a Delaware statutory trust (the "Trust"), acting on its own behalf and on behalf of its series portfolio AIM Floating Rate Fund.
BACKGROUND
AFRF is organized as a series management investment company and is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended. AFRF currently publicly offers shares of beneficial interest representing interests in its single series portfolio which has been designated as AIM Floating Rate Fund and is referred to in this Agreement as the "Current Fund."
The Board of Trustees of AFRF has designated multiple classes of shares of beneficial interest that represent interests in the Current Fund. Each of these classes is listed on Schedule A to this Agreement and is referred to in this Agreement as a "Current Fund Class."
The Board of Trustees of AFRF has determined that it would be in the best interests of the shareholders of the Current Fund for the Current Fund to reorganize as an investment portfolio of the Trust for the sole purpose of converting the Current Fund from a closed-end investment company to an open-end investment company. In anticipation of such reorganization, the Board of Trustees of the Trust has established an additional series portfolio corresponding to the Current Fund and designated such series portfolio as AIM Floating Rate Fund (the "New Fund"), and has designated multiple classes of shares of beneficial interest in the New Fund (each a "New Fund Class"). Schedule A lists the New Fund Classes.
The Current Fund desires to provide for its reorganization (the "Reorganization") through the transfer of all of its assets to the New Fund in exchange for the assumption by the New Fund of the liabilities of the Current Fund and the issuance by the Trust to the Current Fund of shares of beneficial interest in the New Fund ("New Fund Shares"). New Fund Shares received by the Current Fund will have an aggregate net asset value equal to the aggregate net asset value of the shares of the Current Fund immediately prior to the Reorganization (the "Current Fund Shares"). The Current Fund will then distribute the New Fund Shares it has received to its shareholders.
The Reorganization is subject to, and shall be effected in accordance with, the terms of this Agreement. This Agreement is intended to be and is adopted by AFRF, on its own behalf and on behalf of the Current Fund, and by the Trust, on its own behalf and on behalf of the New Fund, as a Plan of Reorganization within the meaning of the regulations under Section 368(a) of the Internal Revenue Code of 1986, as amended.
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
1. DEFINITIONS.
Any capitalized terms used herein and not otherwise defined shall have the meanings set forth in the preamble or background to this Agreement. In addition, the following terms shall have the following meanings:
1.1 "Assets" shall mean all assets including, without limitation, all cash, cash equivalents, securities, receivables (including interest and dividends receivable), claims and rights of action, rights to register shares under applicable securities laws, books and records, deferred and prepaid expenses shown as assets on the Current Fund's books, and other property owned by the Current Fund at the Effective Time.
1.2 "Closing" shall mean the consummation of the transfer of Assets, assumption of Liabilities and issuance of shares described in Sections 2.1 and 2.2 of this Agreement, together with the related acts necessary to consummate the Reorganization, to occur on the date set forth in Section 3.1.
1.3 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.4 "Current Fund" shall mean the single series portfolio of AFRF established as AIM Floating Rate Fund.
1.5 "Current Fund Class" shall mean each class of shares of beneficial interest in the Current Fund as shown on Schedule A.
1.6 "Current Fund Shares" shall mean the shares of the Current Fund outstanding immediately prior to the Reorganization.
1.7 "Effective Time" shall have the meaning set forth in Section 3.1.
1.8 "Liabilities" shall mean all liabilities of the Current Fund including, without limitation, all debts, obligations, and duties of whatever kind or nature, whether absolute, accrued, contingent, or otherwise, whether or not determinable at the Effective Time, and whether or not specifically referred to herein.
1.9 "New Fund" shall mean the series portfolio of the Trust established as AIM Floating Rate Fund.
1.10 "New Fund Class" shall mean each class of shares of beneficial interest in the New Fund as set forth on Schedule A, certain of which shall correspond to the existing Current Fund Classes as shown on Schedule B.
1.11 "New Fund Shares" shall mean those shares of beneficial interest in the New Fund issued to the Current Fund hereunder.
1.12 "RIC" shall mean a "regulated investment company" (as defined under Subchapter M of the Code).
1.13 "SEC" shall mean the Securities and Exchange Commission.
1.14 "Securities Act" shall mean the Securities Act of 1933, as amended.
1.15 "Shareholder(s)" shall mean the Current Fund's shareholder(s) of record, determined as of the Effective Time.
1.16 "Shareholders Meeting" shall have the meaning set forth in Section 5.1.
1.17 "Transfer Agent" shall have the meaning set forth in Section 2.2.
1.18 "1940 Act" shall mean the Investment Company Act of 1940, as amended.
2. PLAN OF REORGANIZATION.
2.1 AFRF agrees, on behalf of the Current Fund, to assign, sell, convey, transfer and deliver all of the Assets of the Current Fund to the New Fund. The Trust, on behalf of the New Fund, agrees in exchange therefor:
(a) to issue and deliver to the Current Fund the number of full and fractional (rounded to the third decimal place) New Fund Shares of each New Fund Class designated on Schedule B equal to the number of full and fractional Current Fund Shares of each Current Fund Class designated on Schedule B; and
(b) to assume all of the Current Fund's Liabilities.
Such transactions shall take place at the Closing.
2.2 At the Effective Time (or as soon thereafter as is reasonably
practicable), (a) the New Fund Shares issued pursuant to Section 5.2 shall be
redeemed by the New Fund at a redemption price equal to $10.00 per share and (b)
the Current Fund shall distribute the New Fund Shares received by it pursuant to
Section 2.1 to the Current Fund's Shareholders in exchange for such
Shareholders' Current Fund Shares. Such distribution shall be accomplished
through opening accounts, by the transfer agent for the Trust (the "Transfer
Agent"), on the New Fund's share transfer books in the Shareholders' names and
transferring New Fund Shares to such accounts. Each Shareholder's account shall
be credited with the respective pro rata number of full and fractional (rounded
to the third decimal place) New Fund Shares of each New Fund Class due that
Shareholder. All outstanding Current Fund Shares, including those represented by
certificates, shall simultaneously be canceled on the Current Fund's share
transfer books. The Trust shall not issue certificates representing the New Fund
Shares in connection with the Reorganization. However, certificates representing
Current Fund Shares shall represent New Fund Shares after the Reorganization.
2.3 Following receipt of the required shareholder vote and as soon as reasonably practicable after the Closing, the status of the Current Fund as a designated series of AFRF shall be terminated.
2.4 Following receipt of the required shareholder vote and as soon as
reasonably practicable after distribution of the New Fund Shares pursuant to
Section 2.2, AFRF shall cause a Form N-8F to be filed with the SEC to deregister
AFRF as a registered investment company and, following the filing of Form N-8F
and the issuance by the SEC of an order declaring that AFRF has ceased to be an
investment company, AFRF shall file Certificate of Cancellation with the
Secretary of State of the State of Delaware to dissolve AFRF as a Delaware
statutory trust; provided, however, that the filing of Form N-8F and Certificate
of Cancellation as aforesaid shall not be required if the Reorganization shall
not have been consummated.
2.5 Any transfer taxes payable on issuance of New Fund Shares in a name other than that of the registered holder of the Current Fund Shares exchanged therefor shall be paid by the person to whom such New Fund Shares are to be issued, as a condition of such transfer.
2.6 Any reporting responsibility of AFRF or the Current Fund to a public authority is and shall remain its responsibility up to and including the date on which it is terminated.
3. CLOSING.
3.1 The Closing shall occur at the principal office of AFRF on April 13, 2006, or on such other date and at such other place upon which the parties may agree. All acts taking place at the Closing shall be deemed to take place simultaneously as of AFRF's and the Trust's close of business on the date of the Closing or at such other time as the parties may agree (the "Effective Time").
3.2 AFRF or its fund accounting agent shall deliver to the Trust at the Closing, a certificate of an authorized officer verifying that the information (including adjusted basis and holding period, by lot) concerning the Assets, including all portfolio securities, transferred by the Current Fund to the New Fund, as reflected on the New Fund's books immediately following the Closing, does or will conform to such information on the Current Fund's books immediately before the Closing. AFRF shall cause the custodian for the Current Fund to deliver at the Closing a certificate of an authorized officer of the custodian stating that (a) the Assets held by the custodian will be transferred to the New Fund at the Effective Time, and (b) all necessary taxes in conjunction with the delivery of the Assets, including all applicable federal and state stock transfer stamps, if any, have been paid or provision for payment has been made.
3.3 AFRF shall deliver to the Trust at the Closing a list of the names and addresses of each Shareholder of the Current Fund and the number of outstanding Current Fund Shares of each Current Fund Class owned by each Shareholder, all as of the Effective Time, certified by AFRF's Secretary or Assistant Secretary. The Trust shall cause the Transfer Agent to deliver at the Closing a certificate as to the opening on the New Fund's share transfer books of accounts in the Shareholders' names. The Trust shall issue and deliver a confirmation to AFRF evidencing the New Fund Shares to be credited to the Current Fund at the Effective Time or provide evidence satisfactory to AFRF that such shares have been credited to the Current Fund's account on such books. At the Closing, each party shall deliver to the other such bills of sale, checks, assignments, stock certificates, receipts, or other documents as the other party or its counsel may reasonably request.
3.4 AFRF and the Trust shall deliver to the other at the Closing a certificate executed in its name by its President or a Vice President in form and substance satisfactory to the recipient and dated the Effective Time, to the effect that the representations and warranties it made in this Agreement are true and correct at the Effective Time except as they may be affected by the transactions contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES.
4.1 AFRF represents and warrants on its own behalf and on behalf of the Current Fund as follows:
(a) AFRF is a statutory trust duly organized, validly existing, and in good standing under the laws of the State of Delaware, and its Amended and Restated Certificate of Trust has been duly filed in the Office of the Secretary of State of Delaware;
(b) AFRF is duly registered as a closed-end series management investment company under the 1940 Act, and such registration is in full force and effect;
(c) The Current Fund is a duly established and designated series of AFRF;
(d) The current prospectus and statement of additional information for Current Fund as of the date on which they were issued did not contain, and as supplemented by any supplement thereto dated prior to or on the Effective Time do not contain, any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(e) At the Closing, the Current Fund will have good and marketable title to its Assets and full right, power, and authority to sell, assign, transfer, and deliver its Assets free of any liens or other encumbrances; and upon delivery and payment for the Assets, the New Fund will acquire good and marketable title to the Assets;
(f) The New Fund Shares are not being acquired for the purpose of making any distribution thereof, other than in accordance with the terms hereof;
(g) The Current Fund is a "fund" as defined in Section 851(g)(2) of the Code; the Current Fund qualified for treatment as a RIC for each taxable year since it commenced operations that has ended (or will end) before the Closing and will continue to meet all the requirements for such qualification for its current taxable year (and the Assets will be invested at all times through the Effective Time in a manner that ensures compliance with the foregoing); the Current Fund has no earnings and profits accumulated in any taxable year in which the provisions of Subchapter M did not apply to it; and the Current Fund has made all distributions for each calendar year that has ended (or will end) before the Closing that are necessary to avoid the imposition of federal excise tax or has paid or provided for the payment of any excise tax imposed for any such calendar year;
(h) During the five-year period ending on the date of the
Reorganization, neither AFRF nor any person related to AFRF (as defined in
Section 1.368-1(e)(3) of the Federal income tax regulations adopted
pursuant to the Code without regard to Section 1.368-1(e)(3)(i)(A)) will
have directly or through any transaction, agreement, or arrangement with
any other person, acquired shares of the Current Fund for consideration
other than shares of the Current Fund, except for shares redeemed in the
ordinary course of the Current Fund's business as a closed-end investment
company (which business shall be deemed to include the Current Fund's
acquisition of shares pursuant to periodic repurchase offers made to its
shareholders in accordance with Rule 23c-3 of the 1940 Act). There is no
plan or intention of the Shareholders who individually own 5% or more of
any Current Fund Shares and, to the best of AFRF's knowledge, there is no
plan or intention of the remaining Shareholders to redeem or otherwise
dispose of any New Fund Shares to be received by them in the
Reorganization. AFRF does not anticipate dispositions of Current Fund
Shares or New Fund Shares at the time of or soon after the Reorganization
to exceed the usual rate and frequency of redemptions of shares of the New
Fund as a series of an open-end investment company. Consequently, AFRF is
not aware of any plan that would cause the percentage of Shareholder
interests, if any, that will be disposed of as a result of or at the time
of the Reorganization to be one percent (1%) or more of the shares of the
Current Fund outstanding as of the Effective Time;
(i) The Liabilities were incurred by the Current Fund in the ordinary course of its business and are associated with the Assets;
(j) AFRF is not under the jurisdiction of a court in a proceeding under Title 11 of the United States Code or similar case within the meaning of Section 368(a)(3)(A) of the Code;
(k) As of the Effective Time, the Current Fund will not have outstanding any warrants, options, convertible securities, or any other type of rights pursuant to which any person could acquire Current Fund Shares except for the right of investors to acquire its shares at net asset value in the normal course of its business as a series of a closed-end non-diversified management investment company operating under the 1940 Act;
(l) At the Effective Time, the performance of this Agreement with respect to the Current Fund shall have been duly authorized by all necessary action by the Current Fund's shareholders;
(m) The fair market value of the Assets of the Current Fund transferred to the New Fund will equal or exceed the sum of the Liabilities assumed by the New Fund plus the amount of Liabilities, if any, to which the transferred Assets are subject; and
(n) The Liabilities to be assumed by the New Fund and the Liabilities, if any, to which the transferred Assets are subject, were incurred by the Current Fund in the ordinary course of its business and are associated with the transferred Assets.
4.2 The Trust represents and warrants on its own behalf and on behalf of the New Fund as follows:
(a) The Trust is a statutory trust duly organized, validly existing, and in good standing under the laws of the State of Delaware, and its Certificate of Trust has been duly filed in the office of the Secretary of State of Delaware;
(b) The Trust is duly registered as an open-end management investment company under the 1940 Act. At the Effective Time, the New Fund Shares to be issued pursuant to Section 2.1 of this Agreement shall be duly registered under the Securities Act by a Registration Statement on Form N-14 filed with the SEC;
(c) At the Effective Time, the New Fund will be a duly established and designated series of the Trust;
(d) The New Fund has not commenced operations nor will it commence operations until after the Closing;
(e) Prior to the Effective Time, there will be no issued and outstanding shares in the New Fund or any other securities issued by the Trust on behalf of the New Fund, except as provided in Section 5.2;
(f) No consideration other than New Fund Shares (and the New Fund's assumption of the Liabilities) will be issued in exchange for the Assets in the Reorganization;
(g) The New Fund Shares to be issued and delivered to the Current Fund hereunder will, at the Effective Time, have been duly authorized and, when issued and delivered as provided herein, will be duly and validly issued and outstanding shares of the New Fund, fully paid and nonassessable and will conform to the description thereof contained in the Trust's Registration Statement on Form N-14 then in effect;
(h) The combined proxy statement/prospectus (the "Combined Proxy Statement/Prospectus"), which forms a part of the Trust's Registration Statement on Form N-14, shall be furnished to the shareholders of the Current Fund entitled to vote at the Shareholders Meeting in accordance with normal market practice for such transactions. The Combined Proxy Statement/Prospectus and related Statement of Additional Information of the New Fund, when they become effective, shall conform in all material respects to the applicable requirements of the Securities Act and the 1940 Act and shall not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not materially misleading.
(i) The New Fund will be a "fund" as defined in Section 851(g)(2) of the Code and will meet all the requirements to qualify for treatment as a RIC for its taxable year in which the Reorganization occurs;
(j) The Trust, on behalf of the New Fund, has no plan or intention to issue additional New Fund Shares following the Reorganization except for shares issued in the ordinary course of its business as an open-end investment company; nor does the Trust, on behalf of the New Fund, have any plan or intention to redeem or otherwise reacquire
any New Fund Shares issued pursuant to the Reorganization, other than in the ordinary course of such business or to the extent necessary to comply with its legal obligation under Section 22(e) of the 1940 Act;
(k) The New Fund does not have any plan or intention to sell or otherwise dispose of any of the Assets, except for dispositions made in the ordinary course of its business or dispositions necessary to maintain its qualification as a RIC, although in the ordinary course of its business the New Fund will continuously review its investment portfolio (as the Current Fund did before the Reorganization) to determine whether to retain or dispose of particular stocks or securities, including those included in the Assets; and
(l) There is no plan or intention for the New Fund to be dissolved or merged into another corporation or statutory trust or "fund" thereof (within the meaning of Section 851(g)(2) of the Code) following the Reorganization.
4.3 Each of AFRF and the Trust, on its own behalf and on behalf of the Current Fund or the New Fund, as appropriate, represents and warrants as follows:
(a) The fair market value of the New Fund Shares of the New Fund received by each Shareholder will be equal to the fair market value of the Current Fund Shares of the Current Fund surrendered in exchange therefor;
(b) Immediately following consummation of the Reorganization, the Shareholders will own all the New Fund Shares of the New Fund and will own such shares solely by reason of their ownership of the Current Fund Shares of the Current Fund immediately before the Reorganization;
(c) The Shareholders will pay their own expenses, if any, incurred in connection with the Reorganization;
(d) There is no intercompany indebtedness between the Current Fund and the New Fund that was issued or acquired, or will be settled, at a discount; and
(e) Immediately following consummation of the Reorganization, the New
Fund will hold the same assets, except for assets distributed to
shareholders in the course of its business as a RIC and assets used to pay
expenses incurred in connection with the Reorganization, and be subject to
the same liabilities that the Current Fund held or was subject to
immediately prior to the Reorganization. Assets used to pay (i) expenses,
(ii) all redemptions (other than redemptions at the usual rate and
frequency of the Current Fund as a series of an closed-end investment
company, which redemptions shall be deemed to include the Current Fund's
acquisition of shares pursuant to periodic repurchase offers made to its
shareholders in accordance with Rule 23c-3 of the 1940 Act), and (iii)
distributions (other than regular, normal distributions), made by the
Current Fund after the date of this Agreement will, in the aggregate,
constitute less than one percent (1%) of its net assets.
5. COVENANTS.
5.1 As soon as practicable after the date of this Agreement, AFRF shall call a meeting of the shareholders of the Current Fund (the "Shareholders Meeting") to consider and act on this Agreement and, in connection therewith, the sale of the Current Fund's assets and the termination of the Current Fund as a designated series of AFRF. The Board of Trustees of AFRF shall recommend that shareholders approve this Agreement and, in connection therewith, the sale of the Current Fund's assets and the termination of the Current Fund as a designated series of AFRF. Approval of this Agreement by the shareholders of the Current Fund will authorize AFRF, and AFRF hereby agrees, to vote on the matters referred to in Sections 5.2 and 5.3 for the New Fund.
5.2 Prior to the Closing, AFRF shall acquire one New Fund Share in each New Fund Class of the New Fund for the purpose of enabling AFRF to ratify the selection of the Trust's independent accountants, and to vote on the matters referred to in Section 5.3.
5.3 Immediately prior to the Closing, the Trust (on its own behalf and with respect to the New Fund or each New Fund Class, as appropriate) shall enter into a Master Investment Advisory Agreement, a Master Sub-Advisory Agreement, a Master Administrative Services Agreement, Master Distribution Agreement, a Custodian Agreement, and a Transfer Agency and Servicing Agreement; shall adopt plans of distribution pursuant to Rule 12b-l of the 1940 Act, a multiple class plan pursuant to Rule 18f-3 of the 1940 Act; and shall enter into or adopt, as appropriate, such other agreements and plans as are necessary for the New Fund's operation as a series of an open-end investment company. Each such agreement and plan shall have been approved by the Trust's trustees and, to the extent required by law, by such of those trustees who are not "interested persons" of the Trust (as defined in the 1940 Act) and by AFRF as the sole shareholder of the New Fund.
5.4 The Trust shall file with the SEC one or more post-effective amendments to the Trust's Registration Statement on Form N-lA under the Securities Act, and the 1940 Act, which will contain such amendments to such Registration Statement on Form N-1A as are determined by the Trust to be necessary and appropriate to effect the Reorganization, and shall use its best efforts to have such post-effective amendment or amendments to the Registration Statement become effective prior to the Closing.
5.5 The Trust shall file with the SEC a Registration Statement on Form N-14 under the Securities Act, and the 1940 Act, (i) which will contain such amendments to such Registration Statement on Form N-14 as are determined by the Trust to be necessary and appropriate to effect the Reorganization, and (ii) will register the New Fund Shares to be issued pursuant to Section 2.1 of this Agreement, and shall use its best efforts to have such post-effective amendment or amendments to the Registration Statement become effective prior to the Closing.
6. CONDITIONS PRECEDENT.
The obligations of AFRF, on its own behalf and on behalf of the Current Fund, and the Trust, on its own behalf and on behalf of the New Fund, will be subject to (a) performance by the
other party of all its obligations to be performed hereunder at or before the Effective Time, (b) all representations and warranties of the other party contained herein being true and correct in all material respects as of the date hereof and, except as they may be affected by the transactions contemplated hereby, as of the Effective Time, with the same force and effect as if made on and as of the Effective Time, and (c) the further conditions that, at or before the Effective Time:
6.1 The shareholders of the Current Fund shall have approved this Agreement and the transactions contemplated by this Agreement in accordance with applicable law.
6.2 All necessary filings shall have been made with the SEC and state securities authorities, and no order or directive shall have been received that any other or further action is required to permit the parties to carry out the transactions contemplated hereby. All consents, orders, and permits of federal, state, and local regulatory authorities (including the SEC and state securities authorities) deemed necessary by either AFRF or the Trust to permit consummation, in all material respects, of the transactions contemplated hereby shall have been obtained, except where failure to obtain such consults, orders, and permits would not involve a risk of a material adverse effect on the assets or properties of either the Current Fund or the New Fund, provided that either AFRF or the Trust may for itself waive any of such conditions.
6.3 The Registration Statement on Form N-14 filed by the Trust with respect to New Fund Shares to be issued to Current Fund Shareholders in connection with the Reorganization shall have become effective under the Securities Act and shall include an undertaking therein to file the opinion referenced in Section 6.4 in a post-effective amendment to such Registration Statement after the Closing Date, and no stop order suspending the effectiveness thereof shall have been issued and, to the best knowledge of the parties hereto, no investigation or proceeding for that purpose shall have been instituted or be pending, threatened or contemplated under the Securities Act.
6.4 Each of AFRF and the Trust shall have received an opinion from Ballard Spahr Andrews & Ingersoll, LLP as to the federal income tax consequences mentioned below. In rendering such opinion, such counsel may rely as to factual matters, exclusively and without independent verification, on the representations made in this Agreement (or in separate letters of representation that AFRF and the Trust shall use their best efforts to deliver to such counsel) and the certificates delivered pursuant to Section 3.4. Such opinion shall be substantially to the effect that, based on the facts and assumptions stated therein and conditioned on consummation of the Reorganization in accordance with this Agreement, for federal income tax purposes:
(a) The Reorganization will constitute a "reorganization" within the meaning of section 368(a) of the Code, and the Current Fund and the New Fund will each be "a party to a reorganization" within the meaning of section 368(b) of the Code;
(b) No gain or loss will be recognized to the Current Fund on the transfer of its Assets to the New Fund in exchange solely for the New Fund's New Fund Shares and the New Fund's assumption of the Current Fund's Liabilities or on the subsequent distribution of those New Fund Shares to its Shareholders, in constructive exchange for their Current Fund Shares, in liquidation of the Current Fund;
(c) No gain or loss will be recognized to the New Fund on its receipt of the Current Fund's Assets in exchange for New Fund Shares and its assumption of the Current Fund's Liabilities;
(d) The New Fund's basis for the Current Fund's Assets will be the same as the basis thereof in the Current Fund's hands immediately before the Reorganization, and the New Fund's holding period for those Assets will include the Current Fund's holding period therefor;
(e) A Shareholder will recognize no gain or loss on the constructive exchange of Current Fund Shares solely for New Fund Shares pursuant to the Reorganization; and
(f) A Shareholder's basis for the New Fund Shares of the New Fund to be received in the Reorganization will be the same as the basis for the Current Fund Shares of the Current Fund to be constructively surrendered in exchange for such New Fund Shares, and a Shareholder's holding period for such New Fund Shares will include its holding period for such Current Fund Shares, provided that such Current Fund Shares are held as capital assets by the Shareholder at the Effective Time.
6.5 No stop-order suspending the effectiveness of the Registration Statement on Form N-1A shall have been issued, and no proceeding for that purpose shall have been initiated or threatened by the SEC (and not withdrawn or terminated).
At any time prior to the Closing, any of the foregoing conditions (except those set forth in Sections 6.1, 6.3 and 6.4) may be waived by the trustees of either AFRF or the Trust if, in their judgment, such waiver will not have a material adverse effect on the interests of the Current Fund's Shareholders.
7. EXPENSES.
Except as otherwise provided in Section 4.3(c), all expenses incurred in connection with the transactions contemplated by this Agreement (regardless of whether they are consummated) will be borne by the parties as they mutually agree.
8. ENTIRE AGREEMENT.
Neither party has made any representation, warranty, or covenant not set forth herein, and this Agreement constitutes the entire agreement between the parties.
9. AMENDMENT.
This Agreement may be amended, modified, or supplemented at any time, notwithstanding its approval with respect to the Current Fund by the shareholders of the Current Fund, in such manner as may be mutually agreed upon in writing by the parties; provided that following such approval no such amendment shall have a material adverse effect on the Shareholders' interests.
10. TERMINATION.
This Agreement may be terminated with respect to the Current Fund at any time at or prior to the Effective Time, whether before or after approval by the shareholders of the Current Fund:
10.1 By either AFRF or the Trust (a) in the event of the other party's material breach of any representation, warranty, or covenant contained herein to be performed at or prior to the Effective Time, (b) if a condition to its obligations has not been met and it reasonably appears that such condition will not or cannot be met, or (c) if the Closing has not occurred on or before December 31, 2006; or
10.2 By the parties' mutual agreement.
Except as otherwise provided in Section 7, in the event of termination under Sections 10.1(c) or 10.2, there shall be no liability for damages on the part of either AFRF or the Trust or the Current Fund or the New Fund, to the other.
11. MISCELLANEOUS.
11.1 This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware; provided that, in the case of any conflict between such laws and the federal securities laws, the latter shall govern.
11.2 Nothing expressed or implied herein is intended or shall be construed to confer upon or give any person, firm, trust, or corporation other than the parties and their respective successors and assigns any rights or remedies under or by reason of this Agreement.
11.3 The execution and delivery of this Agreement have been authorized by the Trust's trustees, and this Agreement has been executed and delivered by a duly authorized officer of the Trust in his or her capacity as an officer of the Trust intending to bind the Trust as provided herein, and no officer, trustee or shareholder of the Trust shall be personally liable for the liabilities or obligations of the Trust incurred hereunder. The liabilities and obligations of the Trust pursuant to this Agreement shall be enforceable against the assets of the New Fund only and not against the assets of the Trust generally.
11.4 The execution and delivery of this Agreement have been authorized by the AFRF's trustees, and this Agreement has been executed and delivered by a duly authorized officer of AFRF in his or her capacity as an officer of AFRF intending to bind AFRF as provided herein, and no officer, trustee or shareholder of AFRF shall be personally liable for the liabilities or obligations of AFRF incurred hereunder. The liabilities and obligations of AFRF pursuant to this Agreement shall be enforceable against the assets of the Current Fund only and not against the assets of AFRF generally.
IN WITNESS WHEREOF, each party has caused this Agreement to be executed and delivered by its duly authorized officers as of the day and year first written above.
Attest: AIM FLOATING RATE FUND, on behalf of its
single series portfolio AIM Floating
Rate Fund
/s/ Ofelia M. Mayo By: /s/ Robert H. Graham
------------------------------------- ------------------------------------
Title: President
Attest: AIM COUNSELOR SERIES TRUST, on behalf of
its series portfolio AIM Floating Rate
Fund
/s/ Ofelia M. Mayo By: /s/ Robert H. Graham
------------------------------------- ------------------------------------
Title: President
|
SCHEDULE A
Classes of Shares of the Current Fund
Class B Shares
Class C Shares
Classes of Shares of the New Fund
Class A Shares
Class B1 Shares
Class C Shares
Class R Shares
Institutional Class Shares
SCHEDULE B
CLASSES OF THE CURRENT FUND CORRESPONDING CLASSES OF THE NEW FUND --------------------------- ------------------------------------- Class B Shares that are not subject Class A Shares to an Early Withdrawal Charge as of the Effective Time Class B Shares that are subject to Class B-1 Shares an Early Withdrawal Charge as of the Effective Time Class C Shares Class C Shares |
October 17, 2007
AIM Counselor Series Trust
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
Ladies and Gentlemen:
We have acted as counsel to AIM Counselor Series Trust, a statutory trust organized under the laws of the State of Delaware (the "Trust") and registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end, series management investment company.
This opinion is given in connection with the filing by the Trust of Post-Effective Amendment No. 30 to the Registration Statement on Form N-1A under the Securities Act of 1933, as amended, and Amendment No. 31 to such Registration Statement under the 1940 Act (collectively, the "Registration Statement") relating to the registration of an indefinite number of Investor Class shares of beneficial interest, par value $0.01 per share (the "Shares"), of AIM Structured Core Fund (the "Fund").
In connection with our giving this opinion, we have examined copies of the Trust's Amended and Restated Certificate of Trust, Second Amended and Restated Agreement and Declaration of Trust, as amended (the "Trust Agreement"), and resolutions of the Board of Trustees adopted October 16, 2007, and originals or copies, certified or otherwise identified to our satisfaction, of such other documents, records and other instruments as we have deemed necessary or advisable for purposes of this opinion. We have also examined the prospectus for the Fund, which is included in the Registration Statement, substantially in the form in which it is to be filed (the "Prospectus"). As to various questions of fact material to our opinion, we have relied upon information provided by officers of the Trust.
The Prospectus provides for issuance of the Shares from time to time at the net asset value thereof. In connection with our giving this opinion, we assume that upon sale of the Shares the Trust will receive the net asset value thereof.
AIM Counselor Series Trust
October 17, 2007
Based on the foregoing, we are of the opinion that the Shares to be offered for sale pursuant to the Prospectus are duly authorized and, when sold, issued and paid for as described in the Prospectus, will be validly issued, fully paid and nonassessable.
We express no opinion concerning the laws of any jurisdiction other than the federal laws of the United States of America and the Delaware Statutory Trust Act.
Both the Delaware Statutory Trust Act and the Trust Agreement provide that shareholders of the Trust shall be entitled to the same limitation on personal liability as is extended under the Delaware General Corporation Law to stockholders of private corporations for profit. There is a remote possibility, however, that, under certain circumstances, shareholders of a Delaware statutory trust may be held personally liable for that trust's obligations to the extent that the courts of another state which does not recognize such limited liability were to apply the laws of such state to a controversy involving such obligations. The Trust Agreement also provides for indemnification out of property of each Fund for all loss and expense of any shareholder held personally liable for the obligations of such Fund. Therefore, the risk of any shareholder incurring financial loss beyond his investment due to shareholder liability is limited to circumstances in which a Fund is unable to meet its obligations and the express limitation of shareholder liabilities is determined not to be effective.
We consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name and to the reference to our firm under the caption "Investment Advisory and Other Services -- Other Service Providers -- Counsel to the Trust" in the Statement of Additional Information for the Fund, which is included in the Registration Statement.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll, LLP |
April 23, 2007
AIM Counselor Series Trust
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
AIM Investment Funds
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
Re: Federal Income Tax Consequences of the Reorganization of AIM Advantage Health Sciences Fund
Ladies and Gentlemen:
You have requested our opinion regarding certain United States federal income tax consequences in connection with the transfer of the property and assets of AIM Advantage Health Sciences Fund ("Selling Fund"), an investment portfolio of AIM Counselor Series Trust ("Seller"), a Delaware statutory trust, to AIM Global Health Care Fund ("Buying Fund"), an investment portfolio of AIM Investment Funds ("Buyer"), a Delaware statutory trust, in exchange for shares of beneficial interest of Buying Fund ("Buying Fund Shares") issued by Buyer directly to Selling Fund Shareholders, and Buying Fund's assumption of Selling Fund's liabilities, and the termination of Selling Fund as a designated series of shares of Seller, all pursuant to the Agreement and Plan of Reorganization that was adopted by the Boards of Trustees of Seller and Buyer as of November 8, 2006 (the "Agreement") (the transaction in its entirety being hereinafter referred to as the "Reorganization"). Capitalized terms used in this letter without definition shall have the meanings given them in the Agreement.
For purposes of this opinion, we have examined and relied upon the accuracy and completeness of the facts, information, covenants, statements and representations contained in originals or copies of the Agreement, the exhibits attached thereto, the Registration Statement on Form N-14 filed by Buyer on February 2, 2007 with the Securities and Exchange Commission, and such other documents and instruments as we have deemed necessary or appropriate. In our examination of the foregoing materials, we have assumed the genuineness of all signatures, legal capacity of natural persons, the authenticity of all documents submitted to us as originals and the conformity to the original documents of all documents submitted to us as copies. We have assumed that such documents reflect all the material facts relating to the Reorganization. In addition, we have assumed that the Reorganization will be consummated in accordance with the terms of such documents and that none of the material terms and conditions contained therein will have been waived or modified prior to the consummation of the Reorganization.
In rendering this opinion, we are relying upon the representations, warranties and covenants made by Seller and Buyer in the Agreement as well as on letters of representation of even date hereto that we have received from officers of Seller and Buyer, copies of which are attached as Exhibits A and B hereto. We have not been asked to, nor have we undertaken to, verify the accuracy of these and other representations made to us. In this regard, we have assumed that any representation made "to the best of the knowledge," "to the knowledge" or similarly
April 23, 2007
qualified is correct without such qualifications. As to all matters in which a person making a representation has represented that such person either is not a party to, does not have, or is not aware of, any plan or intention, understanding or agreement, we have likewise assumed that there is in fact no such plan, intention, understanding or agreement.
Based upon and subject to the foregoing, it is our opinion that, for federal income tax purposes:
1. The transfer of the assets of Selling Fund to Buying Fund in exchange solely for Buying Fund Shares distributed directly to Selling Fund Shareholders and Buying Fund's assumption of the Liabilities, as provided in the Agreement, will constitute a "reorganization" within the meaning of Section 368(a) of the Code, and Selling Fund and Buying Fund each will be "a party to a reorganization" within the meaning of Section 368(b) of the Code.
2. In accordance with Sections 357(a), 361(a) and 361(c)(1) of the Code, no gain or loss will be recognized by Selling Fund on the transfer of its assets to Buying Fund solely in exchange for Buying Fund Shares and Buying Fund's assumption of the Liabilities, or on the distribution of Buying Fund Shares to Selling Fund Shareholders.
3. In accordance with Section 1032 of the Code, no gain or loss will be recognized by Buying Fund upon the receipt of assets of Selling Fund in exchange for Buying Fund Shares issued directly to Selling Fund Shareholders.
4. In accordance with Section 354(a)(1) of the Code, no gain or loss will be recognized by Selling Fund Shareholders on the receipt of Buying Fund Shares in exchange for their shares of Selling Fund.
5. In accordance with Section 362(b) of the Code, the basis to Buying Fund of the assets of Selling Fund will be the same as the basis of such assets in the hands of Selling Fund immediately prior to the Reorganization.
6. In accordance with Section 358(a) of the Code, a Selling Fund Shareholder's basis for Buying Fund Shares received by the Selling Fund Shareholder will be the same as his or her basis for Selling Fund Shares exchanged therefor.
7. In accordance with Section 1223(1) of the Code, a Selling Fund Shareholder's holding period for Buying Fund Shares will be determined by including such Selling Fund Shareholder's holding period for the shares of Selling Fund exchanged therefor, provided that the Selling Fund Shareholder held such Selling Fund Shares as a capital asset.
8. In accordance with Section 1223(2) of the Code, the holding period with respect to the assets of Selling Fund transferred to Buying Fund in the Reorganization will include the holding period for such assets in the hands of Selling.
9. In accordance with Sections 381(a)(2) of the Code, Buying Fund will succeed to and take into account the items of Selling Fund described in Section 381(c) of the Code, subject to the conditions and limitations specified in Sections 381 through 384 of the Code and the Treasury Regulations thereunder.
We express no opinion as to the tax consequences of the Reorganization except as expressly set forth above, or as to any transaction except the Reorganization. We also note that certain Selling Fund Shareholders may be
April 23, 2007
subject to special rules because of their particular federal income tax status and that the tax consequences of the Reorganization to such Selling Fund Shareholders may accordingly differ from the ones of general application that are described above. This opinion is intended to satisfy the mutual condition precedent to the Reorganization set forth in Section 6.2(f) of the Agreement, is being furnished to you solely for that purpose, and may not be relied upon by any other person without our express written consent. We expressly authorize Buyer to file this opinion with the Securities and Exchange Commission as a post-effective amendment to the Registration Statement as required by the Agreement.
Our opinion is based upon the Code, Treasury regulations (proposed, temporary and final) promulgated thereunder, judicial decisions, interpretative rulings of the Internal Revenue Service and such other authorities as we have considered relevant, all as in effect on the data hereof. All such legal authorities are subject to change, either prospectively or retroactively. We are not undertaking hereby any obligation to advise you of any changes in the applicable law subsequent to the date hereof, even if such changes materially affect the tax consequences of the Reorganization that are set forth above.
If any of the facts, assumptions or representations on which our opinion is based are incorrect, we expect you to advise us so that we may consider the effect, if any, on our opinion.
Our opinion has no binding effect on the Internal Revenue Service or the courts of any jurisdiction. No assurance can accordingly be given that, if the matter were contested, a court would agree with the legal conclusions set forth above.
Sincerely,
/s/Ballard Spahr Andrews & Ingersoll, LLP |
March 12, 2007
AIM Select Real Estate Income Fund AIM Counselor Series Trust 11 Greenway Plaza 11 Greenway Plaza Suite 100 Suite 100 Houston, Texas 77046-1173 Houston, Texas 77046-1173
Ladies and Gentlemen:
You have requested our opinion regarding certain United States federal income tax consequences in connection with the transfer of the property and assets of AIM Select Real Estate Income Fund (the "Current Fund"), a series portfolio of AIM Select Real Estate Income Fund ("Seller"), a Delaware statutory trust, to AIM Select Real Estate Investment Fund (the "New Fund"), a series portfolio of AIM Counselor Series Trust ("Buyer"), a Delaware statutory trust, in exchange solely for shares of beneficial interest of New Fund ("New Fund Shares") and New Fund's assumption of Current Fund's liabilities, and the termination of Current Fund as a designated series of shares of Seller, all pursuant to the Agreement and Plan of Reorganization dated as of September 19, 2006 entered into by Seller and Buyer (the "Agreement") (the transaction in its entirety being hereinafter referred to as the "Reorganization"). Capitalized terms used in this letter without definition shall have the meanings given them in the Agreement.
For purposes of this opinion, we have examined and relied upon the accuracy and completeness of the facts, information, covenants, statements and representations contained in originals or copies of the Agreement, the exhibits attached thereto, the Proxy Statement filed by Seller on November 13, 2006 with the Securities and Exchange Commission, and such other documents and instruments as we have deemed necessary or appropriate. In our examination of the foregoing materials, we have assumed the genuineness of all signatures, legal capacity of natural persons, the authenticity of all documents submitted to us as originals and the conformity to the original documents of all documents submitted to us as copies. We have assumed that such documents reflect all the material facts relating to the Reorganization. In addition, we have assumed that the Reorganization will be consummated in accordance with the terms of such documents and that none of the material terms and conditions contained therein will have been waived or modified prior to the consummation of the Reorganization.
AIM Investment Securities Funds
AIM Counselor Series Trust
March 12, 2007
In rendering this opinion, we are relying upon the representations, warranties and covenants made by Seller and Buyer in the Agreement as well as on letters of representation of even date that we have received from the officers of Seller and Buyer, copies of which are attached as Exhibit A hereto. We have not been asked to, nor have we undertaken to, verify the accuracy of these and other representations made to us. In this regard, we have assumed that any representation made "to the best of knowledge," "to the knowledge" or similarly qualified is correct without such qualification. As to all matters in which a person making a representation has represented that such person either is not a party to, does not have, or is not aware of, any plan or intention, understanding or agreement, we have likewise assumed that there is in fact no such plan, intention, understanding, or agreement.
Based upon and subject to the foregoing, it is our opinion that, for federal income tax purposes:
1. The transfer of the assets of Current Fund to New Fund in exchange solely for New Fund Shares issued directly to the Shareholders and New Fund's assumption of liabilities of Current Fund, as provided in the Agreement, will constitute a "reorganization" within the meaning of Section 368(a) of the Code, and Current Fund and New Fund will each be "a party to a reorganization" within the meaning of Section 368(b) of the Code.
2. In accordance with Section 357(a), 361(a) and 361(c)(1) of the Code, no gain or loss will be recognized by Current Fund on the transfer of its assets to New Fund solely in exchange for New Fund Shares and New Fund's assumption of the liabilities of Current Fund or on the distribution of New Fund Shares to the Shareholders, in constructive exchange for their Current Fund Shares and in liquidation of Current Fund.
3. In accordance with Section 1032 of the Code, no gain or loss will be recognized by New Fund upon the receipt of assets of Current Fund in exchange for New Fund Shares issued directly to the Shareholders.
4. In accordance with Section 354(a)(1) of the Code, no gain or loss will be recognized by the Shareholders on the constructive exchange of Current Fund Shares for New Fund Shares pursuant to the Reorganization.
5. In accordance with Section 362(b) of the Code, the basis to New Fund of the assets of Current Fund will be the same as the basis of such assets in the hands of Current Fund immediately prior to the Reorganization.
6. In accordance with Section 358(a) of the Code, a Shareholder's basis for New Fund Shares received by the Shareholder in the Reorganization will be the same as his basis for the Current Fund Shares constructively exchanged therefor.
7. In accordance with Section 1223(1) of the Code, each Shareholder's holding
AIM Investment Securities Funds
AIM Counselor Series Trust
March 12, 2007
period for New Fund Shares will be determined by including such Shareholder's holding period for the Current Fund Shares exchanged therefor, provided that the Shareholder held such Current Fund Shares as a capital asset as of the Effective Time.
8. In accordance with Section 1223(2) of the Code, the holding period with respect to the assets of Current Fund transferred to New Fund in the Reorganization will include the holding period for such assets in the hands of Current Fund immediately prior to the Reorganization.
We express no opinion as to the tax consequences of the Reorganization except as expressly set forth above, or as to any transaction except the Reorganization. We also note that certain Current Fund Shareholders may be subject to special rules because of their particular federal income tax status and that the tax consequences of the Reorganization to such Current Fund Shareholders may accordingly differ from the ones of general application that are described above. This opinion is intended to satisfy the mutual condition precedent to the Reorganization set forth in Section 6.4 of the Agreement, is being furnished to you solely for that purpose, and may not be relied upon by any other person without our express written consent. We expressly authorize New Fund to file this opinion with the Securities and Exchange Commission as a post-effective amendment to the Registration Statement as required by the Agreement.
Our opinion is based upon the Code, Treasury Regulations (proposed, temporary and final) promulgated thereunder, judicial decisions, interpretative rulings of the Internal Revenue Service and such other authorities as we have considered relevant, all as in effect on the date hereof. All such legal authorities are subject to change, either prospectively or retroactively. We are not undertaking hereby any obligation to advise you of any changes in the applicable law subsequent to the date hereof, even if such changes materially affect the tax consequences of the Reorganization that are set forth above.
If any of the facts, assumptions or representations on which our opinion is based are incorrect, we expect you to advise us so that we may consider the effect, if any, on our opinion.
Our opinion has no binding effect on the Internal Revenue Service or the courts of any jurisdiction. No assurance can accordingly be given that, if the matter were contested, a court would agree with the legal conclusions set forth above.
Sincerely,
/s/ Ballard Spahr Andrews & Ingersoll, LLP |
March 8, 2007
Board of Trustees
AIM Counselor Series Trust
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Re: Initial Capital Investment In New Portfolio Of AIM Counselor Series Trust (The "Fund")
Ladies and Gentlemen:
We are purchasing shares of the Fund for the purpose of providing initial investment for the new investment portfolio of the Fund. The purpose of this letter is to set out our understanding of the conditions of and our promises and representations concerning this investment.
We hereby agree to purchase shares equal to the following dollar amount for the portfolio:
FUND AMOUNT DATE ---- ------- ------------- SEED MONEY AIM Select Real Estate Income Fund - Class B Shares $10,000 March 8, 2007 AIM Select Real Estate Income Fund - Class C Shares $10,000 March 8, 2007 AIM Select Real Estate Income Fund - Institutional Class Shares $10,000 March 8, 2007 |
We understand that the initial net asset value per share for the portfolio named above will be $17.25.
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.
/s/ John M. Zerr ------------------------------------ John M. Zerr Senior Vice President |
December 20, 2007
Board of Trustees
AIM Counselor Series Trust
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Re: Initial Capital Investment In New Investor Class Shares of AIM Structured Core Fund (the " Fund") of AIM Counselor Series Trust (the "Trust")
Ladies and Gentlemen:
We shall and hereby agree to purchase shares equal to the following dollar amount for the Fund.
FUND AND CLASS AMOUNT DATE -------------- ---------- ----------------- AIM Structured Core Fund - Investor Class Shares $10,000.00 December 19, 2007 |
We understand that the price per shares for the Investor Class Share of the Fund will be equal to the next determined net asset value per share of the Class A Shares of the Fund.
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 Trust.
We further agree to provide the Trust with at least three business day's advance written notice of any intended redemption and agree that we will work with the Trust with respect to the amount of such redemption so as not to place a burden on the Trust and to facilitate normal portfolio management of the Fund.
Sincerely yours,
A I M ADVISORS, INC.
cc: Mark Gregson
Gary Trappe
AMENDMENT NO. 3
TO THE FIRST RESTATED
MASTER DISTRIBUTION PLAN
(CLASS A SHARES)
The First Restated Master Distribution Plan (the "Plan"), dated as of August 18, 2003, and as subsequently amended, and as restated the 20th day of September, 2006, pursuant to Rule 12b-1, is hereby amended, effective March 9, 2007, as follows:
WHEREAS, the parties desire to amend the Plan to reflect the addition of AIM Select Real Estate Income Fund
NOW THEREFORE, Schedule A to the Plan is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
THE AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
(CLASS A SHARES)
(DISTRIBUTION AND SERVICE FEES)
The Fund shall pay the Distributor as full compensation for all services rendered and all facilities furnished under the Distribution Plan for the Class A Shares of each Portfolio designated below, a Distribution Fee* and a Service Fee determined by applying the annual rate set forth below as to the Class A Shares of each Portfolio to the average daily net assets of the Class A Shares of the Portfolio for the plan year. Average daily net assets shall be computed in a manner used for the determination of the offering price of the Class A Shares of the Portfolio.
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM COUNSELOR SERIES TRUST CHARGE FEE FEE
-------------------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Advantage Health Sciences Fund 0.00% 0.25% 0.25%
AIM Floating Rate Fund 0.00% 0.25% 0.25%
AIM Multi-Sector Fund 0.00% 0.25% 0.25%
AIM Select Real Estate Income Fund 0.00% 0.25% 0.25%
AIM Structured Core Fund 0.00% 0.25% 0.25%
AIM Structured Growth Fund 0.00% 0.25% 0.25%
AIM Structured Value Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM EQUITY FUNDS CHARGE FEE FEE
---------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Capital Development Fund 0.00% 0.25% 0.25%
AIM Charter Fund 0.00% 0.25% 0.25%
AIM Constellation Fund 0.00% 0.25% 0.25%
AIM Diversified Dividend Fund 0.00% 0.25% 0.25%
AIM Large Cap Basic Value Fund 0.00% 0.25% 0.25%
AIM Large Cap Growth Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM FUNDS GROUP CHARGE FEE FEE
--------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Basic Balanced Fund 0.00% 0.25% 0.25%
AIM European Small Company Fund 0.00% 0.25% 0.25%
AIM Global Value Fund 0.00% 0.25% 0.25%
AIM International Small Company Fund 0.00% 0.25% 0.25%
AIM Mid Cap Basic Value Fund 0.00% 0.25% 0.25%
AIM Select Equity Fund 0.00% 0.25% 0.25%
AIM Small Cap Equity Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM GROWTH SERIES CHARGE FEE FEE
----------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Basic Value Fund 0.00% 0.25% 0.25%
AIM Conservative Allocation Fund 0.00% 0.25% 0.25%
AIM Global Equity Fund 0.00% 0.25% 0.25%
AIM Growth Allocation Fund 0.00% 0.25% 0.25%
AIM Income Allocation Fund 0.00% 0.25% 0.25%
AIM Independence Now Fund 0.00% 0.25% 0.25%
AIM Independence 2010 Fund 0.00% 0.25% 0.25%
AIM Independence 2020 Fund 0.00% 0.25% 0.25%
AIM Independence 2030 Fund 0.00% 0.25% 0.25%
AIM Independence 2040 Fund 0.00% 0.25% 0.25%
AIM Independence 2050 Fund 0.00% 0.25% 0.25%
AIM International Allocation Fund 0.00% 0.25% 0.25%
AIM Mid Cap Core Equity Fund 0.00% 0.25% 0.25%
AIM Moderate Allocation Fund 0.00% 0.25% 0.25%
AIM Moderate Growth Allocation Fund 0.00% 0.25% 0.25%
AIM Moderately Conservative Allocation Fund 0.00% 0.25% 0.25%
AIM Small Cap Growth Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INTERNATIONAL MUTUAL FUNDS CHARGE FEE FEE
------------------------------ ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Asia Pacific Growth Fund 0.00% 0.25% 0.25%
AIM European Growth Fund 0.00% 0.25% 0.25%
AIM Global Aggressive Growth Fund 0.00% 0.25% 0.25%
AIM Global Growth Fund 0.00% 0.25% 0.25%
AIM International Core Equity Fund 0.00% 0.25% 0.25%
AIM International Growth Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INVESTMENT FUNDS CHARGE FEE FEE
-------------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM China Fund 0.00% 0.25% 0.25%
AIM Developing Markets Fund 0.00% 0.25% 0.25%
AIM Global Health Care Fund 0.00% 0.25% 0.25%
AIM International Total Return Fund 0.00% 0.25% 0.25%
AIM Japan Fund 0.00% 0.25% 0.25%
AIM LIBOR Alpha Fund 0.00% 0.25% 0.25%
AIM Trimark Endeavor Fund 0.00% 0.25% 0.25%
AIM Trimark Fund 0.00% 0.25% 0.25%
AIM Trimark Small Companies Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INVESTMENT SECURITIES FUNDS CHARGE FEE FEE
------------------------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Global Real Estate Fund 0.00% 0.25% 0.25%
AIM High Yield Fund 0.00% 0.25% 0.25%
AIM Income Fund 0.00% 0.25% 0.25%
AIM Intermediate Government Fund 0.00% 0.25% 0.25%
AIM Limited Maturity Treasury Fund 0.00% 0.15% 0.15%
AIM Municipal Bond Fund 0.00% 0.25% 0.25%
AIM Real Estate Fund 0.00% 0.25% 0.25%
AIM Short Term Bond Fund 0.00% 0.25% 0.25%
AIM Total Return Bond Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SECTOR FUNDS CHARGE FEE FEE
---------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Energy Fund 0.00% 0.25% 0.25%
AIM Financial Services Fund 0.00% 0.25% 0.25%
AIM Gold & Precious Metals Fund 0.00% 0.25% 0.25%
AIM Leisure Fund 0.00% 0.25% 0.25%
AIM Technology Fund 0.00% 0.25% 0.25%
AIM Utilities Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SPECIAL OPPORTUNITIES FUNDS CHARGE FEE FEE
------------------------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Opportunities I Fund 0.00% 0.25% 0.25%
AIM Opportunities II Fund 0.00% 0.25% 0.25%
AIM Opportunities III Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM STOCK FUNDS CHARGE FEE FEE
--------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Dynamics Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SUMMIT FUND CHARGE FEE FEE
--------------- ------- ------- ---------
Class A Shares 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM TAX-EXEMPT FUNDS CHARGE FEE FEE
-------------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM High Income Municipal Fund 0.00% 0.25% 0.25%
AIM Tax-Exempt Cash Fund 0.00% 0.25% 0.25%
|
* The Distribution Fee is payable apart from the sales charge, if any, as stated in the current prospectus for the applicable Portfolio (or Class thereof)."
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: March 9, 2007
AMENDMENT NO. 4
TO THE FIRST RESTATED
MASTER DISTRIBUTION PLAN
(CLASS A SHARES)
The First Restated Master Distribution Plan (the "Plan"), dated as of August 18, 2003, and as subsequently amended, and as restated the 20th day of September, 2006, pursuant to Rule 12b-1, is hereby amended, effective April 23, 2007, as follows:
WHEREAS, the parties desire to amend the Plan to delete AIM Advantage Health Sciences Fund, AIM Opportunities I Fund, AIM Opportunities II Fund and AIM Opportunities III Fund;
NOW THEREFORE, Schedule A to the Plan is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
THE AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
(CLASS A SHARES)
(DISTRIBUTION AND SERVICE FEES)
The Fund shall pay the Distributor as full compensation for all services rendered and all facilities furnished under the Distribution Plan for the Class A Shares of each Portfolio designated below, a Distribution Fee* and a Service Fee determined by applying the annual rate set forth below as to the Class A Shares of each Portfolio to the average daily net assets of the Class A Shares of the Portfolio for the plan year. Average daily net assets shall be computed in a manner used for the determination of the offering price of the Class A Shares of the Portfolio.
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM COUNSELOR SERIES TRUST CHARGE FEE FEE
-------------------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Floating Rate Fund 0.00% 0.25% 0.25%
AIM Multi-Sector Fund 0.00% 0.25% 0.25%
AIM Select Real Estate Income Fund 0.00% 0.25% 0.25%
AIM Structured Core Fund 0.00% 0.25% 0.25%
AIM Structured Growth Fund 0.00% 0.25% 0.25%
AIM Structured Value Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM EQUITY FUNDS CHARGE FEE FEE
---------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Capital Development Fund 0.00% 0.25% 0.25%
AIM Charter Fund 0.00% 0.25% 0.25%
AIM Constellation Fund 0.00% 0.25% 0.25%
AIM Diversified Dividend Fund 0.00% 0.25% 0.25%
AIM Large Cap Basic Value Fund 0.00% 0.25% 0.25%
AIM Large Cap Growth Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM FUNDS GROUP CHARGE FEE FEE
--------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Basic Balanced Fund 0.00% 0.25% 0.25%
AIM European Small Company Fund 0.00% 0.25% 0.25%
AIM Global Value Fund 0.00% 0.25% 0.25%
AIM International Small Company Fund 0.00% 0.25% 0.25%
AIM Mid Cap Basic Value Fund 0.00% 0.25% 0.25%
AIM Select Equity Fund 0.00% 0.25% 0.25%
AIM Small Cap Equity Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM GROWTH SERIES CHARGE FEE FEE
----------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Basic Value Fund 0.00% 0.25% 0.25%
AIM Conservative Allocation Fund 0.00% 0.25% 0.25%
AIM Global Equity Fund 0.00% 0.25% 0.25%
AIM Growth Allocation Fund 0.00% 0.25% 0.25%
AIM Income Allocation Fund 0.00% 0.25% 0.25%
AIM Independence Now Fund 0.00% 0.25% 0.25%
AIM Independence 2010 Fund 0.00% 0.25% 0.25%
AIM Independence 2020 Fund 0.00% 0.25% 0.25%
AIM Independence 2030 Fund 0.00% 0.25% 0.25%
AIM Independence 2040 Fund 0.00% 0.25% 0.25%
AIM Independence 2050 Fund 0.00% 0.25% 0.25%
AIM International Allocation Fund 0.00% 0.25% 0.25%
AIM Mid Cap Core Equity Fund 0.00% 0.25% 0.25%
AIM Moderate Allocation Fund 0.00% 0.25% 0.25%
AIM Moderate Growth Allocation Fund 0.00% 0.25% 0.25%
AIM Moderately Conservative Allocation Fund 0.00% 0.25% 0.25%
AIM Small Cap Growth Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INTERNATIONAL MUTUAL FUNDS CHARGE FEE FEE
------------------------------ ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Asia Pacific Growth Fund 0.00% 0.25% 0.25%
AIM European Growth Fund 0.00% 0.25% 0.25%
AIM Global Aggressive Growth Fund 0.00% 0.25% 0.25%
AIM Global Growth Fund 0.00% 0.25% 0.25%
AIM International Core Equity Fund 0.00% 0.25% 0.25%
AIM International Growth Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INVESTMENT FUNDS CHARGE FEE FEE
-------------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM China Fund 0.00% 0.25% 0.25%
AIM Developing Markets Fund 0.00% 0.25% 0.25%
AIM Global Health Care Fund 0.00% 0.25% 0.25%
AIM International Total Return Fund 0.00% 0.25% 0.25%
AIM Japan Fund 0.00% 0.25% 0.25%
AIM LIBOR Alpha Fund 0.00% 0.25% 0.25%
AIM Trimark Endeavor Fund 0.00% 0.25% 0.25%
AIM Trimark Fund 0.00% 0.25% 0.25%
AIM Trimark Small Companies Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INVESTMENT SECURITIES FUNDS CHARGE FEE FEE
------------------------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Global Real Estate Fund 0.00% 0.25% 0.25%
AIM High Yield Fund 0.00% 0.25% 0.25%
AIM Income Fund 0.00% 0.25% 0.25%
AIM Intermediate Government Fund 0.00% 0.25% 0.25%
AIM Limited Maturity Treasury Fund 0.00% 0.15% 0.15%
AIM Municipal Bond Fund 0.00% 0.25% 0.25%
AIM Real Estate Fund 0.00% 0.25% 0.25%
AIM Short Term Bond Fund 0.00% 0.25% 0.25%
AIM Total Return Bond Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SECTOR FUNDS CHARGE FEE FEE
---------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Energy Fund 0.00% 0.25% 0.25%
AIM Financial Services Fund 0.00% 0.25% 0.25%
AIM Gold & Precious Metals Fund 0.00% 0.25% 0.25%
AIM Leisure Fund 0.00% 0.25% 0.25%
AIM Technology Fund 0.00% 0.25% 0.25%
AIM Utilities Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM STOCK FUNDS CHARGE FEE FEE
--------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM Dynamics Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SUMMIT FUND CHARGE FEE FEE
--------------- ------- ------- ---------
Class A Shares 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM TAX-EXEMPT FUNDS CHARGE FEE FEE
-------------------- ------- ------- ---------
PORTFOLIO - CLASS A SHARES
AIM High Income Municipal Fund 0.00% 0.25% 0.25%
AIM Tax-Exempt Cash Fund 0.00% 0.25% 0.25%
|
* The Distribution Fee is payable apart from the sales charge, if any, as stated in the current prospectus for the applicable Portfolio (or Class thereof)."
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: April 23, 2007
AMENDMENT NO. 3
TO
FIRST RESTATED MASTER DISTRIBUTION PLAN
(CLASS B SHARES)
(SECURITIZATION FEATURE)
The First Restated Master Distribution Plan (the "Plan"), dated as of August 18, 2003, as subsequently amended, and as restated the 20th day of September, 2006, pursuant to Rule 12b-1, is hereby amended, effective March 9, 2007, as follows:
WHEREAS, the parties desire to amend the Plan to reflect the addition of AIM Select Real Estate Income Fund;
NOW THEREFORE, Schedule A to the Plan is hereby deleted and replaced in its entirety with Schedule A attached hereto.
All other terms and provisions of the Plan not amended hereby shall remain in full force and effect.
"SCHEDULE A
AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
(CLASS B SHARES)
DISTRIBUTION AND SERVICE FEES
The Fund shall pay the Distributor or the Assignee as full compensation for all services rendered and all facilities furnished under the Distribution Plan for the Class B Shares of each Portfolio designated below, a Distribution Fee and a Service Fee determined by applying the annual rate set forth below to the average daily net assets of the Class B Shares of the Portfolio. Average daily net assets shall be computed in a manner used for the determination of the offering price of Class B Shares of the Portfolio.
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM EQUITY FUNDS CHARGE FEE FEE
---------------- -------- ------- ---------
PORTFOLIOS
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 Diversified Dividend 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%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM FUNDS GROUP CHARGE FEE FEE
--------------- -------- ------- ---------
PORTFOLIOS
AIM Basic Balanced Fund 0.75% 0.25% 1.00%
AIM European Small Company Fund 0.75% 0.25% 1.00%
AIM Global Value Fund 0.75% 0.25% 1.00%
AIM International Small Company Fund 0.75% 0.25% 1.00%
AIM Mid Cap Basic Value Fund 0.75% 0.25% 1.00%
AIM Select Equity Fund 0.75% 0.25% 1.00%
AIM Small Cap Equity Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM GROWTH SERIES CHARGE FEE FEE
----------------- -------- ------- ---------
PORTFOLIOS
AIM Basic Value Fund 0.75% 0.25% 1.00%
AIM Conservative Allocation Fund 0.75% 0.25% 1.00%
AIM Global Equity Fund 0.75% 0.25% 1.00%
AIM Growth Allocation Fund 0.75% 0.25% 1.00%
AIM Income Allocation Fund 0.75% 0.25% 1.00%
AIM Independence Now Fund 0.75% 0.25% 1.00%
AIM Independence 2010 Fund 0.75% 0.25% 1.00%
AIM Independence 2020 Fund 0.75% 0.25% 1.00%
AIM Independence 2030 Fund 0.75% 0.25% 1.00%
AIM Independence 2040 Fund 0.75% 0.25% 1.00%
AIM Independence 2050 Fund 0.75% 0.25% 1.00%
AIM International Allocation Fund 0.75% 0.25% 1.00%
AIM Mid Cap Core Equity Fund 0.75% 0.25% 1.00%
AIM Moderate Allocation Fund 0.75% 0.25% 1.00%
AIM Moderate Growth Allocation Fund 0.75% 0.25% 1.00%
AIM Moderately Conservative Allocation Fund 0.75% 0.25% 1.00%
AIM Small Cap Growth Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INTERNATIONAL MUTUAL FUNDS CHARGE FEE FEE
------------------------------ -------- ------- ---------
PORTFOLIOS
AIM Asia Pacific Growth Fund 0.75% 0.25% 1.00%
AIM European Growth Fund 0.75% 0.25% 1.00%
AIM Global Aggressive Growth Fund 0.75% 0.25% 1.00%
AIM Global Growth Fund 0.75% 0.25% 1.00%
AIM International Core Equity Fund 0.75% 0.25% 1.00%
AIM International Growth Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INVESTMENT FUNDS CHARGE FEE FEE
-------------------- -------- ------- ---------
PORTFOLIOS
AIM China Fund 0.75% 0.25% 1.00%
AIM Developing Markets Fund 0.75% 0.25% 1.00%
AIM Global Health Care Fund 0.75% 0.25% 1.00%
AIM International Total Return Fund 0.75% 0.25% 1.00%
AIM Japan Fund 0.75% 0.25% 1.00%
AIM Trimark Fund 0.75% 0.25% 1.00%
AIM Trimark Endeavor Fund 0.75% 0.25% 1.00%
AIM Trimark Small Companies Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INVESTMENT SECURITIES FUNDS CHARGE FEE FEE
------------------------------- -------- ------- ---------
PORTFOLIOS
AIM Global Real Estate Fund 0.75% 0.25% 1.00%
AIM High Yield Fund 0.75% 0.25% 1.00%
AIM Income Fund 0.75% 0.25% 1.00%
AIM Intermediate Government Fund 0.75% 0.25% 1.00%
AIM Money Market Fund 0.75% 0.25% 1.00%
AIM Municipal Bond Fund 0.75% 0.25% 1.00%
AIM Real Estate Fund 0.75% 0.25% 1.00%
AIM Total Return Bond Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SPECIAL OPPORTUNITIES FUNDS CHARGE FEE FEE
------------------------------- -------- ------- ---------
PORTFOLIOS
AIM Opportunities I Fund 0.75% 0.25% 1.00%
AIM Opportunities II Fund 0.75% 0.25% 1.00%
AIM Opportunities III Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SUMMIT FUND CHARGE FEE FEE
--------------- -------- ------- ---------
Class B Shares 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM TAX-EXEMPT FUNDS CHARGE FEE FEE
-------------------- -------- ------- ---------
PORTFOLIO
AIM High Income Municipal Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM COUNSELOR SERIES TRUST CHARGE FEE FEE
-------------------------- -------- ------- ---------
PORTFOLIO
AIM Advantage Health Sciences Fund 0.75% 0.25% 1.00%
AIM Multi-Sector Fund 0.75% 0.25% 1.00%
AIM Select Real Estate Income Fund 0.75% 0.25% 1.00%
|
AIM Structured Core Fund 0.75% 0.25% 1.00% AIM Structured Growth Fund 0.75% 0.25% 1.00% AIM Structured Value Fund 0.75% 0.25% 1.00% |
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SECTOR FUNDS CHARGE FEE FEE
---------------- -------- ------- ---------
PORTFOLIO
AIM Energy Fund 0.75% 0.25% 1.00%
AIM Financial Services Fund 0.75% 0.25% 1.00%
AIM Gold & Precious Metals Fund 0.75% 0.25% 1.00%
AIM Leisure Fund 0.75% 0.25% 1.00%
AIM Technology Fund 0.75% 0.25% 1.00%
AIM Utilities Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM STOCK FUNDS CHARGE FEE FEE
--------------- -------- ------- ---------
PORTFOLIO
AIM Dynamics Fund 0.75% 0.25% 1.00%"
|
AMENDMENT NO. 4
TO
FIRST RESTATED MASTER DISTRIBUTION PLAN
(CLASS B SHARES)
(SECURITIZATION FEATURE)
The First Restated Master Distribution Plan (the "Plan"), dated as of August 18, 2003, as subsequently amended, and as restated the 20th day of September, 2006, pursuant to Rule 12b-1, is hereby amended, effective April 23, 2007, as follows:
WHEREAS, the parties desire to amend the Plan to delete AIM Advantage Health Sciences Fund, AIM Opportunities I Fund, AIM Opportunities II Fund and AIM Opportunities III Fund;
NOW THEREFORE, Schedule A to the Plan is hereby deleted and replaced in its entirety with Schedule A attached hereto.
All other terms and provisions of the Plan not amended hereby shall remain in full force and effect.
"SCHEDULE A
AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
(CLASS B SHARES)
DISTRIBUTION AND SERVICE FEES
The Fund shall pay the Distributor or the Assignee as full compensation for all services rendered and all facilities furnished under the Distribution Plan for the Class B Shares of each Portfolio designated below, a Distribution Fee and a Service Fee determined by applying the annual rate set forth below to the average daily net assets of the Class B Shares of the Portfolio. Average daily net assets shall be computed in a manner used for the determination of the offering price of Class B Shares of the Portfolio.
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM EQUITY FUNDS CHARGE FEE FEE
---------------- ------- ------- ---------
PORTFOLIOS
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 Diversified Dividend 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%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM FUNDS GROUP CHARGE FEE FEE
--------------- ------- ------- ---------
PORTFOLIOS
AIM Basic Balanced Fund 0.75% 0.25% 1.00%
AIM European Small Company Fund 0.75% 0.25% 1.00%
AIM Global Value Fund 0.75% 0.25% 1.00%
AIM International Small Company Fund 0.75% 0.25% 1.00%
AIM Mid Cap Basic Value Fund 0.75% 0.25% 1.00%
AIM Select Equity Fund 0.75% 0.25% 1.00%
AIM Small Cap Equity Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM GROWTH SERIES CHARGE FEE FEE
----------------- ------- ------- ---------
PORTFOLIOS
AIM Basic Value Fund 0.75% 0.25% 1.00%
AIM Conservative Allocation Fund 0.75% 0.25% 1.00%
AIM Global Equity Fund 0.75% 0.25% 1.00%
AIM Growth Allocation Fund 0.75% 0.25% 1.00%
AIM Income Allocation Fund 0.75% 0.25% 1.00%
AIM Independence Now Fund 0.75% 0.25% 1.00%
AIM Independence 2010 Fund 0.75% 0.25% 1.00%
AIM Independence 2020 Fund 0.75% 0.25% 1.00%
AIM Independence 2030 Fund 0.75% 0.25% 1.00%
AIM Independence 2040 Fund 0.75% 0.25% 1.00%
AIM Independence 2050 Fund 0.75% 0.25% 1.00%
AIM International Allocation Fund 0.75% 0.25% 1.00%
AIM Mid Cap Core Equity Fund 0.75% 0.25% 1.00%
AIM Moderate Allocation Fund 0.75% 0.25% 1.00%
AIM Moderate Growth Allocation Fund 0.75% 0.25% 1.00%
AIM Moderately Conservative Allocation Fund 0.75% 0.25% 1.00%
AIM Small Cap Growth Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INTERNATIONAL MUTUAL FUNDS CHARGE FEE FEE
------------------------------ ------- ------- ---------
PORTFOLIOS
AIM Asia Pacific Growth Fund 0.75% 0.25% 1.00%
AIM European Growth Fund 0.75% 0.25% 1.00%
AIM Global Aggressive Growth Fund 0.75% 0.25% 1.00%
AIM Global Growth Fund 0.75% 0.25% 1.00%
AIM International Core Equity Fund 0.75% 0.25% 1.00%
AIM International Growth Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INVESTMENT FUNDS CHARGE FEE FEE
-------------------- ------- ------- ---------
PORTFOLIOS
AIM China Fund 0.75% 0.25% 1.00%
AIM Developing Markets Fund 0.75% 0.25% 1.00%
AIM Global Health Care Fund 0.75% 0.25% 1.00%
AIM International Total Return Fund 0.75% 0.25% 1.00%
AIM Japan Fund 0.75% 0.25% 1.00%
AIM Trimark Fund 0.75% 0.25% 1.00%
AIM Trimark Endeavor Fund 0.75% 0.25% 1.00%
AIM Trimark Small Companies Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INVESTMENT SECURITIES FUNDS CHARGE FEE FEE
------------------------------- ------- ------- ---------
PORTFOLIOS
AIM Global Real Estate Fund 0.75% 0.25% 1.00%
AIM High Yield Fund 0.75% 0.25% 1.00%
AIM Income Fund 0.75% 0.25% 1.00%
AIM Intermediate Government Fund 0.75% 0.25% 1.00%
AIM Money Market Fund 0.75% 0.25% 1.00%
AIM Municipal Bond Fund 0.75% 0.25% 1.00%
AIM Real Estate Fund 0.75% 0.25% 1.00%
AIM Total Return Bond Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SUMMIT FUND CHARGE FEE FEE
--------------- ------- ------- ---------
Class B Shares 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM TAX-EXEMPT FUNDS CHARGE FEE FEE
-------------------- ------- ------- ---------
PORTFOLIO
AIM High Income Municipal Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM COUNSELOR SERIES TRUST CHARGE FEE FEE
-------------------------- ------- ------- ---------
PORTFOLIO
AIM Multi-Sector Fund 0.75% 0.25% 1.00%
AIM Select Real Estate Income Fund 0.75% 0.25% 1.00%
AIM Structured Core Fund 0.75% 0.25% 1.00%
AIM Structured Growth Fund 0.75% 0.25% 1.00%
AIM Structured Value Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SECTOR FUNDS CHARGE FEE FEE
---------------- ------- ------- ---------
PORTFOLIO
AIM Energy Fund 0.75% 0.25% 1.00%
AIM Financial Services Fund 0.75% 0.25% 1.00%
AIM Gold & Precious Metals Fund 0.75% 0.25% 1.00%
AIM Leisure Fund 0.75% 0.25% 1.00%
AIM Technology Fund 0.75% 0.25% 1.00%
AIM Utilities Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM STOCK FUNDS CHARGE FEE FEE
--------------- ------- ------- ---------
PORTFOLIO
AIM Dynamics Fund 0.75% 0.25% 1.00%"
|
AMENDMENT NO. 3
TO THE FIRST RESTATED
MASTER DISTRIBUTION PLAN
(CLASS C SHARES)
The First Restated Master Distribution Plan (the "Plan"), dated as of August 18, 2003, and as subsequently amended, and as restated the 20th day of September, 2006, pursuant to Rule 12b-1, is hereby amended, effective March 9, 2007, as follows:
WHEREAS, the parties desire to amend the Plan to reflect the addition of AIM Select Real Estate Income Fund;
NOW THEREFORE, Schedule A to the Plan is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
THE AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
(CLASS C SHARES)
(DISTRIBUTION AND SERVICE FEES)
The Fund shall pay the Distributor as full compensation for all services rendered and all facilities furnished under the Distribution Plan for the Class C Shares of each Portfolio designated below, a Distribution Fee* and a Service Fee determined by applying the annual rate set forth below as to the Class C Shares of each Portfolio to the average daily net assets of the Class C Shares of the Portfolio for the plan year. Average daily net assets shall be computed in a manner used for the determination of the offering price of the Class C Shares of the Portfolio.
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM COUNSELOR SERIES TRUST CHARGE FEE FEE
-------------------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM Advantage Health Sciences Fund 0.75% 0.25% 1.00%
AIM Floating Rate Fund 0.50% 0.25% 0.75%
AIM Multi-Sector Fund 0.75% 0.25% 1.00%
AIM Select Real Estate Income Fund 0.75% 0.25% 1.00%
AIM Structured Core Fund 0.75% 0.25% 1.00%
AIM Structured Growth Fund 0.75% 0.25% 1.00%
AIM Structured Value Fund 0.75% 0.25% 1.00%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM EQUITY FUNDS CHARGE FEE FEE
---------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
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 Diversified Dividend 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%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM FUNDS GROUP CHARGE FEE FEE
--------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM Basic Balanced Fund 0.75% 0.25% 1.00%
AIM European Small Company Fund 0.75% 0.25% 1.00%
AIM Global Value Fund 0.75% 0.25% 1.00%
AIM International Small Company Fund 0.75% 0.25% 1.00%
AIM Mid Cap Basic Value Fund 0.75% 0.25% 1.00%
AIM Select Equity Fund 0.75% 0.25% 1.00%
AIM Small Cap Equity Fund 0.75% 0.25% 1.00%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM GROWTH SERIES CHARGE FEE FEE
----------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM Basic Value Fund 0.75% 0.25% 1.00%
AIM Conservative Allocation Fund 0.75% 0.25% 1.00%
AIM Global Equity Fund 0.75% 0.25% 1.00%
AIM Growth Allocation Fund 0.75% 0.25% 1.00%
AIM Income Allocation Fund 0.75% 0.25% 1.00%
AIM Independence Now Fund 0.75% 0.25% 1.00%
AIM Independence 2010 Fund 0.75% 0.25% 1.00%
AIM Independence 2020 Fund 0.75% 0.25% 1.00%
AIM Independence 2030 Fund 0.75% 0.25% 1.00%
AIM Independence 2040 Fund 0.75% 0.25% 1.00%
AIM Independence 2050 Fund 0.75% 0.25% 1.00%
AIM International Allocation Fund 0.75% 0.25% 1.00%
AIM Mid Cap Core Equity Fund 0.75% 0.25% 1.00%
AIM Moderate Allocation Fund 0.75% 0.25% 1.00%
AIM Moderate Growth Allocation Fund 0.75% 0.25% 1.00%
AIM Moderately Conservative Allocation Fund 0.75% 0.25% 1.00%
AIM Small Cap Growth Fund 0.75% 0.25% 1.00%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INTERNATIONAL MUTUAL FUNDS CHARGE FEE FEE
------------------------------ ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM Asia Pacific Growth Fund 0.75% 0.25% 1.00%
AIM European Growth Fund 0.75% 0.25% 1.00%
AIM Global Aggressive Growth Fund 0.75% 0.25% 1.00%
AIM Global Growth Fund 0.75% 0.25% 1.00%
AIM International Core Equity Fund 0.75% 0.25% 1.00%
AIM International Growth Fund 0.75% 0.25% 1.00%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INVESTMENT FUNDS CHARGE FEE FEE
-------------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM China Fund 0.75% 0.25% 1.00%
AIM Developing Markets Fund 0.75% 0.25% 1.00%
AIM Global Health Care Fund 0.75% 0.25% 1.00%
AIM International Total Return Fund 0.75% 0.25% 1.00%
AIM Japan Fund 0.75% 0.25% 1.00%
AIM Enhanced Short Bond Fund 0.75% 0.25% 1.00%
AIM Trimark Endeavor Fund 0.75% 0.25% 1.00%
AIM Trimark Fund 0.75% 0.25% 1.00%
AIM Trimark Small Companies Fund 0.75% 0.25% 1.00%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INVESTMENT SECURITIES FUNDS CHARGE FEE FEE
------------------------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM Global Real Estate Fund 0.75% 0.25% 1.00%
AIM High Yield Fund 0.75% 0.25% 1.00%
AIM Income Fund 0.75% 0.25% 1.00%
AIM Intermediate Government Fund 0.75% 0.25% 1.00%
AIM Money Market Fund 0.75% 0.25% 1.00%
AIM Municipal Bond Fund 0.75% 0.25% 1.00%
AIM Real Estate Fund 0.75% 0.25% 1.00%
AIM Short Term Bond Fund 0.75% 0.25% 1.00%
AIM Total Return Bond Fund 0.75% 0.25% 1.00%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SECTOR FUNDS CHARGE FEE FEE
---------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM Energy Fund 0.75% 0.25% 1.00%
AIM Financial Services Fund 0.75% 0.25% 1.00%
AIM Gold & Precious Metals Fund 0.75% 0.25% 1.00%
AIM Leisure Fund 0.75% 0.25% 1.00%
AIM Technology Fund 0.75% 0.25% 1.00%
AIM Utilities Fund 0.75% 0.25% 1.00%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SPECIAL OPPORTUNITIES FUNDS CHARGE FEE FEE
------------------------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM Opportunities I Fund 0.75% 0.25% 1.00%
AIM Opportunities II Fund 0.75% 0.25% 1.00%
AIM Opportunities III Fund 0.75% 0.25% 1.00%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM STOCK FUNDS CHARGE FEE FEE
--------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM Dynamics Fund 0.75% 0.25% 1.00%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SUMMIT FUND CHARGE FEE FEE
--------------- ------- ------- ---------
Class C Shares 0.75% 0.25% 1.00%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM TAX-EXEMPT FUNDS CHARGE FEE FEE
-------------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM High Income Municipal Fund 0.75% 0.25% 1.00%
|
* The Distribution Fee is payable apart from the sales charge, if any, as stated in the current prospectus for the applicable Portfolio (or Class thereof)."
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: March 9, 2007
AMENDMENT NO. 4
TO THE FIRST RESTATED
MASTER DISTRIBUTION PLAN
(CLASS C SHARES)
The First Restated Master Distribution Plan (the "Plan"), dated as of August 18, 2003, and as subsequently amended, and as restated the 20th day of September, 2006, pursuant to Rule 12b-1, is hereby amended, effective April 23, 2007, as follows:
WHEREAS, the parties desire to amend the Plan to delete AIM Advantage Health Sciences Fund, AIM Opportunities I Fund, AIM Opportunities II Fund and AIM Opportunities III Fund;
NOW THEREFORE, Schedule A to the Plan is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
THE AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
(CLASS C SHARES)
(DISTRIBUTION AND SERVICE FEES)
The Fund shall pay the Distributor as full compensation for all services rendered and all facilities furnished under the Distribution Plan for the Class C Shares of each Portfolio designated below, a Distribution Fee* and a Service Fee determined by applying the annual rate set forth below as to the Class C Shares of each Portfolio to the average daily net assets of the Class C Shares of the Portfolio for the plan year. Average daily net assets shall be computed in a manner used for the determination of the offering price of the Class C Shares of the Portfolio.
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM COUNSELOR SERIES TRUST CHARGE FEE FEE
-------------------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM Floating Rate Fund 0.50% 0.25% 0.75%
AIM Multi-Sector Fund 0.75% 0.25% 1.00%
AIM Select Real Estate Income Fund 0.75% 0.25% 1.00%
AIM Structured Core Fund 0.75% 0.25% 1.00%
AIM Structured Growth Fund 0.75% 0.25% 1.00%
AIM Structured Value Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM EQUITY FUNDS CHARGE FEE FEE
---------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
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 Diversified Dividend 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%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM FUNDS GROUP CHARGE FEE FEE
--------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM Basic Balanced Fund 0.75% 0.25% 1.00%
AIM European Small Company Fund 0.75% 0.25% 1.00%
AIM Global Value Fund 0.75% 0.25% 1.00%
AIM International Small Company Fund 0.75% 0.25% 1.00%
AIM Mid Cap Basic Value Fund 0.75% 0.25% 1.00%
AIM Select Equity Fund 0.75% 0.25% 1.00%
AIM Small Cap Equity Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM GROWTH SERIES CHARGE FEE FEE
----------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM Basic Value Fund 0.75% 0.25% 1.00%
AIM Conservative Allocation Fund 0.75% 0.25% 1.00%
AIM Global Equity Fund 0.75% 0.25% 1.00%
AIM Growth Allocation Fund 0.75% 0.25% 1.00%
AIM Income Allocation Fund 0.75% 0.25% 1.00%
AIM Independence Now Fund 0.75% 0.25% 1.00%
AIM Independence 2010 Fund 0.75% 0.25% 1.00%
AIM Independence 2020 Fund 0.75% 0.25% 1.00%
AIM Independence 2030 Fund 0.75% 0.25% 1.00%
AIM Independence 2040 Fund 0.75% 0.25% 1.00%
AIM Independence 2050 Fund 0.75% 0.25% 1.00%
AIM International Allocation Fund 0.75% 0.25% 1.00%
AIM Mid Cap Core Equity Fund 0.75% 0.25% 1.00%
AIM Moderate Allocation Fund 0.75% 0.25% 1.00%
AIM Moderate Growth Allocation Fund 0.75% 0.25% 1.00%
AIM Moderately Conservative Allocation Fund 0.75% 0.25% 1.00%
AIM Small Cap Growth Fund 0.75% 0.25% 1.00%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INTERNATIONAL MUTUAL FUNDS CHARGE FEE FEE
------------------------------ ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM Asia Pacific Growth Fund 0.75% 0.25% 1.00%
AIM European Growth Fund 0.75% 0.25% 1.00%
AIM Global Aggressive Growth Fund 0.75% 0.25% 1.00%
AIM Global Growth Fund 0.75% 0.25% 1.00%
AIM International Core Equity Fund 0.75% 0.25% 1.00%
AIM International Growth Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INVESTMENT FUNDS CHARGE FEE FEE
-------------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM China Fund 0.75% 0.25% 1.00%
AIM Developing Markets Fund 0.75% 0.25% 1.00%
AIM Global Health Care Fund 0.75% 0.25% 1.00%
AIM International Total Return Fund 0.75% 0.25% 1.00%
AIM Japan Fund 0.75% 0.25% 1.00%
AIM Enhanced Short Bond Fund 0.75% 0.25% 1.00%
AIM Trimark Endeavor Fund 0.75% 0.25% 1.00%
AIM Trimark Fund 0.75% 0.25% 1.00%
AIM Trimark Small Companies Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INVESTMENT SECURITIES FUNDS CHARGE FEE FEE
------------------------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM Global Real Estate Fund 0.75% 0.25% 1.00%
AIM High Yield Fund 0.75% 0.25% 1.00%
AIM Income Fund 0.75% 0.25% 1.00%
AIM Intermediate Government Fund 0.75% 0.25% 1.00%
AIM Money Market Fund 0.75% 0.25% 1.00%
AIM Municipal Bond Fund 0.75% 0.25% 1.00%
AIM Real Estate Fund 0.75% 0.25% 1.00%
AIM Short Term Bond Fund 0.75% 0.25% 1.00%
AIM Total Return Bond Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SECTOR FUNDS CHARGE FEE FEE
---------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM Energy Fund 0.75% 0.25% 1.00%
AIM Financial Services Fund 0.75% 0.25% 1.00%
AIM Gold & Precious Metals Fund 0.75% 0.25% 1.00%
AIM Leisure Fund 0.75% 0.25% 1.00%
AIM Technology Fund 0.75% 0.25% 1.00%
AIM Utilities Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM STOCK FUNDS CHARGE FEE FEE
--------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM Dynamics Fund 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SUMMIT FUND CHARGE FEE FEE
--------------- ------- ------- ---------
Class C Shares 0.75% 0.25% 1.00%
|
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM TAX-EXEMPT FUNDS CHARGE FEE FEE
-------------------- ------- ------- ---------
PORTFOLIO - CLASS C SHARES
AIM High Income Municipal Fund 0.75% 0.25% 1.00%
|
* The Distribution Fee is payable apart from the sales charge, if any, as stated in the current prospectus for the applicable Portfolio (or Class thereof)."
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: April 23, 2007
FIRST RESTATED
MASTER DISTRIBUTION PLAN
(INVESTOR CLASS SHARES)
(EFFECTIVE JULY 1, 2004, AND AS SUBSEQUENTLY AMENDED)
SECTION 1. Each registered investment company, as described in Schedule A to this plan (each individually referred to as "Fund", or collectively, "Funds"), severally, on behalf of each of its series of beneficial interest set forth in Schedule A to this plan (each, a "Portfolio"), may act as a distributor of the Investor Class Shares of such Portfolio (the "Shares") of which such Fund is the issuer, pursuant to Rule12b-1 under the Investment Company Act of 1940 (the "1940 Act"), according to the terms of this First Restated Master Distribution Plan (the "Plan").
SECTION 2. The Fund may incur expenses pursuant to this Plan on behalf of a Portfolio at the applicable annual rate set forth on Schedule A under "Maximum Aggregate Fee" of the average daily net assets of the Portfolio attributable to the Shares.
Expenses incurred pursuant to this Plan shall be subject to any applicable limitations imposed from time to time by the applicable rules of NASD Inc. ("NASD").
SECTION 3. The Fund may expend amounts under this Plan to finance distribution-related services for the Shares of each Portfolio. Distribution-related services shall mean any activity which is primarily intended to result in the sale of the Shares, including, but not limited to, organizing and conducting sales seminars, implementing advertising programs, engaging finders and paying finders fees, printing prospectuses and statements of additional information (and supplements thereto) and annual and semi-annual reports for other than existing shareholders, preparing and distributing advertising material and sales literature, making supplemental payments to dealers and other institutions as asset-based sales charges, and administering this Plan.
The Fund has selected A I M Distributors, Inc. ("Distributors") to provide distribution-related services on behalf of and for the Shares of each Portfolio. Distributors may provide such distribution-related services either directly or through third parties.
The specific activities and services to be provided by Distributors hereunder shall include one or more of the following: (a) the payment of compensation (including trail commissions and incentive compensation) to securities dealers, financial institutions and other organizations, which may include Distributors-affiliated companies, that render distribution and administrative services in connection with the distribution of the Fund's Investor Class Shares; (b) the printing and distribution of reports and prospectuses for the use of potential investors in the Fund; (c) the preparing and distributing of sales literature; (d) the providing of advertising and engaging in other promotional activities, including direct mail solicitation, and television, radio, newspaper and other media advertisements; and (e) the providing of such other services and activities as may from time to time be agreed upon by the Fund.
SECTION 4. The Fund may also expend amounts under this Plan to finance payments of service fees under arrangements for personal continuing shareholder services. Personal continuing shareholder services may include, but shall not be limited to, the following: (i) distributing sales literature to customers; (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 in any of several retirement plans offered in connection with the purchase of
Shares; (iv) assisting customers in the establishment and maintenance of customer accounts and records, and in the placement of purchase and redemption transactions; (v) assisting customers in 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.
Distributors may implement these arrangements either directly or through third parties.
SECTION 5. All amounts expended pursuant to this Plan shall be paid to Distributors pursuant to the related agreement to this Plan attached hereto as Exhibit A and are the legal obligation of the Fund and not of Distributors. The maximum service fee payable by the Fund on behalf of a Portfolio for personal continuing shareholder services 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 Portfolio attributable to the Shares owned by the customers of entity providing such shareholder services.
No provision of this Plan shall be interpreted to prohibit any payments by the Fund with respect to the Shares of a Portfolio during periods when the Fund has suspended or otherwise limited sales of such Shares.
SECTION 6. Distributors shall provide to the Fund's Board of Trustees ("Board of Trustees") and the Board of Trustees shall review, at least quarterly, a written report of the amounts expended under this Plan and the purposes for which such expenditures were made.
SECTION 7. This Plan and any agreement related to this Plan shall become effective immediately, with respect to any Portfolio, upon the receipt by the applicable 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 ("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 agreement.
SECTION 8. Any material amendments to this Plan must be approved, with respect to any Portfolio, by both (a) the affirmative vote of a majority of the Board of Trustees of the applicable Fund, and (b) the affirmative vote of a majority of the Dis-interested Trustees, cast in person at a meeting called for the purpose of voting on the amendment. In addition, this Plan may not be amended with respect to the Shares of any Portfolio to increase materially the amount to be spent for distribution provided for in Section 2 hereof unless such amendment is approved by a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the Shares of such Portfolio.
SECTION 9. Unless sooner terminated pursuant to Section 10, this Plan and any related agreement shall continue in effect for the Shares of each Portfolio until June 30, 2007 and thereafter each 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 7.
SECTION 10. 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 of the applicable Fund, or by vote of a majority of the outstanding Shares of such Portfolio. If this Plan is terminated with respect to a Portfolio, the obligation of the Fund to make payments pursuant to this Plan with respect to such Portfolio will also cease and the Fund will not be required to make any payments with respect to such Portfolio beyond the termination date.
SECTION 11. Any agreement related to this Plan shall be made in writing, and shall provide:
(a) that such agreement may be terminated at any time, with respect to the Shares of any Portfolio, without payment of any penalty, by vote of a majority of the Dis-interested Trustees of the applicable Fund or by a vote 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.
SCHEDULE A
TO
FIRST RESTATED
MASTER DISTRIBUTION PLAN
(INVESTOR CLASS SHARES)
(DISTRIBUTION AND SERVICE FEES)
The Fund shall pay the Distributor as full compensation for all services rendered and all facilities furnished under the Distribution Plan for the Investor Class Shares of each Portfolio designated below, a Distribution Fee and a Service Fee determined by applying the annual rate set forth below as to the Investor Class Shares of each Portfolio to the average daily net assets of the Investor Class Shares of the Portfolio for the plan year. Average daily net assets shall be computed in a manner used for the determination of the offering price of the Investor Class Shares of the Portfolio.
AIM EQUITY FUNDS
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
PORTFOLIO - INVESTOR CLASS SHARES CHARGE FEE FEE
--------------------------------- ------- ------- ---------
AIM Capital Development Fund 0.00% 0.25% 0.25%
AIM Large Cap Basic Value Fund 0.00% 0.25% 0.25%
|
AIM INTERNATIONAL MUTUAL FUNDS
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
PORTFOLIO - INVESTOR CLASS SHARES CHARGE FEE FEE
--------------------------------- ------- ------- ---------
AIM International Core Equity Fund 0.00% 0.25% 0.25%
|
AIM INVESTMENT FUNDS
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
PORTFOLIO - INVESTOR CLASS SHARES CHARGE FEE FEE
--------------------------------- ------- ------- ---------
AIM Global Health Care Fund 0.00% 0.25% 0.25%
|
AIM SECTOR FUNDS
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
PORTFOLIO - INVESTOR CLASS SHARES CHARGE FEE FEE
--------------------------------- ------- ------- ---------
AIM Energy Fund 0.00% 0.25% 0.25%
AIM Financial Services Fund 0.00% 0.25% 0.25%
AIM Gold & Precious Metals Fund 0.00% 0.25% 0.25%
AIM Leisure Fund 0.00% 0.25% 0.25%
AIM Utilities Fund 0.00% 0.25% 0.25%
|
AIM STOCK FUNDS
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
PORTFOLIO - INVESTOR CLASS SHARES CHARGE FEE FEE
--------------------------------- ------- ------- ---------
AIM S&P 500 Index Fund 0.00% 0.25% 0.25%
|
AMENDMENT NO. 1
TO THE FIRST RESTATED
MASTER DISTRIBUTION PLAN
(INVESTOR CLASS SHARES)
The First Restated Master Distribution Plan (the "Plan"), effective as of July 1, 2004, and as subsequently amended, pursuant to Rule 12b-1, is hereby amended, effective December 20, 2007, as follows:
WHEREAS, the parties desire to amend the Plan to reflect the addition of Investor Class Shares of AIM Structured Core Fund;
NOW THEREFORE, Schedule A to the Plan is hereby deleted in its entirety and replaced with the following:
"SCHEDULE A
TO
THE FIRST RESTATED
MASTER DISTRIBUTION PLAN
(INVESTOR CLASS SHARES)
(DISTRIBUTION AND SERVICE FEES)
The Fund shall pay the Distributor as full compensation for all services rendered and all facilities furnished under the Distribution Plan for the Investor Class Shares of each Portfolio designated below, a Distribution Fee and a Service Fee determined by applying the annual rate set forth below as to the Investor Class Shares of each Portfolio to the average daily net assets of the Investor Class Shares of the Portfolio for the plan year. Average daily net assets shall be computed in a manner used for the determination of the offering price of the Investor Class Shares of the Portfolio.
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM COUNSELOR SERIES TRUST CHARGE FEE FEE
-------------------------- ------- ------- ---------
PORTFOLIO - INVESTOR CLASS SHARES
AIM Structured Core Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM EQUITY FUNDS CHARGE FEE FEE
---------------- ------- ------- ---------
PORTFOLIO - INVESTOR CLASS SHARES
AIM Capital Development Fund 0.00% 0.25% 0.25%
AIM Large Cap Basic Value Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INTERNATIONAL MUTUAL FUNDS CHARGE FEE FEE
------------------------------ ------- ------- ---------
PORTFOLIO - INVESTOR CLASS SHARES
AIM International Core Equity Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM INVESTMENT FUNDS CHARGE FEE FEE
-------------------- ------- ------- ---------
PORTFOLIO - INVESTOR CLASS SHARES
AIM Global Health Care Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM SECTOR FUNDS CHARGE FEE FEE
---------------- ------- ------- ---------
PORTFOLIO - INVESTOR CLASS SHARES
AIM Energy Fund 0.00% 0.25% 0.25%
AIM Financial Services Fund 0.00% 0.25% 0.25%
AIM Gold & Precious Metals Fund 0.00% 0.25% 0.25%
AIM Leisure Fund 0.00% 0.25% 0.25%
AIM Utilities Fund 0.00% 0.25% 0.25%
|
MINIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
AIM STOCK FUNDS CHARGE FEE FEE
--------------- ------- ------- ---------
PORTFOLIO - INVESTOR CLASS SHARES
AIM S&P 500 Index Fund 0.00% 0.25% 0.25%"
|
All other terms and provisions of the Plan not amended herein shall remain in full force and effect.
Dated: December 20, 2007
MASTER RELATED AGREEMENT TO
FIRST RESTATED
MASTER DISTRIBUTION PLAN
(COMPENSATION)
(AIM INVESTMENTS(R) LOGO) (INVESTOR CLASS SHARES)
This Master Related Agreement (the "Agreement") is entered into in accordance with Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940 Act") by each registered investment company, listed in Schedule A to this Agreement (each individually referred to as a "Fund", or collectively, "Funds"), severally, on behalf of each of the series of common stock or beneficial interest, as the case may be, set forth in Schedule A to this Agreement (each, a "Portfolio" ), with respect to the Investor Class Shares of each such Portfolio listed on Schedule A. This Agreement, being made between A I M Distributors, Inc. ("Distributors") and each Fund, on behalf of each applicable Portfolio, defines the services to be provided by Distributors, or its designees, for which it is to receive payments pursuant to the First Restated Master Distribution Plan (Investor Class Shares) (the "Plan") adopted by each of the Funds. The Plan has been approved by a majority of the directors/trustees ("Trustees") of each of the Funds, including a majority of the Trustees who have no direct or indirect financial interest in the operation of the Plan or this Agreement (the "Dis-Interested Trustees"), by votes cast in person at a meeting called for the purpose of voting on the Plan.
1. a. Distributors may use payments received pursuant to Paragraph 2 of this Agreement to provide continuing personal shareholder services to customers who may, from time to time, directly or beneficially own shares of the Funds. Continuing personal shareholder services may include but are not limited to, distributing sales literature to customers, answering routine customer inquiries regarding the Funds, assisting customers in changing dividend options, account designations and addresses, and in enrolling in any of several special investment plans offered in connection with the purchase of the Funds' shares, assisting customers in the establishment and maintenance of customer accounts and records and in the placement of purchase and redemption transactions, assisting customers in investing dividends and capital gains distributions automatically in shares, and providing such other services as the Funds or the customer may reasonably request and Distributors agrees to provide. Distributors will not be obligated to provide services which are provided by a transfer agent for a Fund with respect to a Portfolio.
b. Distributors may also use the payments received pursuant to Paragraph 2 of this Agreement for distribution-related services. As used in this Agreement, "distribution-related services" shall mean any activity which is primarily intended to result in the sale of the Shares, including, but not limited to, organizing and conducting sales seminars, implementing advertising programs, engaging finders and paying finders fees, printing prospectuses and statements of additional information (and supplements thereto) and annual and semi-annual reports for other than existing shareholders, preparing and distributing advertising material and sales literature, making supplemental payments to dealers and other institutions as asset-based sales charges, and administering the Plan.
c. Distributors may provide the services described in paragraphs a. and b. above either directly or through third parties (its "designees").
2. For the services provided by Distributors or its designees pursuant to this Agreement, each Fund shall pay Distributors a fee, calculated at the end of each month at the annual rate set forth in Schedule A, or such lesser rate as shall be agreed to by Distributors, as applied to the average net asset value of the shares of such Fund purchased or acquired through exchange on or after the Plan Calculation Date shown for such Fund on Schedule A.
3. The total of the fees calculated for all of the Funds listed on Schedule A for any period with respect to which calculations are made shall be paid to Distributors within10 days after the close of each month.
4. Distributors shall furnish the Funds with such information as shall reasonably be requested by the Trustees of the Funds with respect to the fees paid to Distributors pursuant to this Agreement.
5. Distributors shall furnish the Trustees of the Funds, for their review on a quarterly basis, a written report of the amounts expended under the Plan and the purposes for which such expenditures were made.
6. Distributors may enter into other similar Master Related Agreements with any other investment company without a Fund's consent.
7. This Agreement shall become effective immediately upon its approval by a majority of the Trustees of each of the Funds, including a majority of the Dis-Interested Trustees, by votes cast in person at a meeting called for the purpose of voting on the Plan and this Agreement.
8. This Agreement shall continue in full force and effect as long as the continuance of the Plan and this Agreement are approved at least annually by a vote of the Trustees, including a majority of the Dis-Interested Trustees, cast in person at a meeting called for the purpose of voting thereon.
9. 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 Trustees of such Fund who are Dis-interested Trustees or by a vote of a majority of the Fund's outstanding shares, on sixty (60) days' written notice. It will be terminated by any act which terminates the Fund's Plan, and in any event, it shall terminate automatically in the event of its assignment as that term is defined in the 1940 Act.
10. This Agreement may be amended by mutual written agreement of the parties.
11. All communications should be sent to the address of each signor as shown at the bottom of this Agreement.
12. This Agreement shall be construed in accordance with the laws of the State of Texas.
A I M DISTRIBUTORS, INC.
By: /s/ Gene L. Needles
------------------------------------
Name: Gene L. Needles
Title: President
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Attn: President
|
EFFECTIVE SEPTEMBER 20, 2006
FUND (LISTED IN SCHEDULE A)
on behalf of the Investor Class Shares
of each Portfolio listed on Schedule A
By: /s/ Philip A. Taylor
------------------------------------
Name: Philip A. Taylor
Title: President
|
SCHEDULE "A" TO
RELATED AGREEMENT
Maximum Aggregate
Fund Fee Rate Plan Calculation Date
---- ----------------- ---------------------
AIM EQUITY FUNDS
AIM Capital Development Fund Investor Shares 0.25 November 30, 2004
AIM Large Cap Basic Value Fund Investor Shares 0.25 September 30, 2003
AIM INTERNATIONAL MUTUAL FUNDS
AIM International Core Equity Fund Investor Shares 0.25 June 1, 2000
AIM INVESTMENT FUNDS
AIM Global Health Care Fund Investor Shares 0.25 July 18, 2005
AIM SECTOR FUNDS
AIM Energy Fund Investor Shares 0.25 June 1, 2000
AIM Financial Services Fund Investor Shares 0.25 June 1, 2000
AIM Gold & Precious Metals Fund Investor Shares 0.25 June 1, 2000
AIM Leisure Fund Investor Shares 0.25 June 1, 2000
AIM Utilities Fund Investor Shares 0.25 June 1, 2000
AIM STOCK FUNDS
AIM S&P 500 Index Fund Investor Shares 0.25 June 1, 2000
|
POWER OF ATTORNEY
I appoint Philip A. Taylor and John M. Zerr, and each of them separately, to act as my attorneys-in-fact and agents, in my capacity as a trustee of the Funds listed below to:
(1) sign on my behalf any and all Registration Statements under the Securities Act of 1933, and the Investment Company Act of 1940, and any pre- and post-effective amendments and supplements to such Registration Statements, and to file the same, including all exhibits to such Registration Statements, and other documents filed in connection with such Registration Statements including prospectuses and statements of additional information included in such Registration Statements and supplements to such prospectuses and statements of additional information, with the Securities and Exchange Commission and any other applicable state and federal regulatory authorities, and
(2) sign any and all applications for exemptive relief from state or federal securities regulations, and amendments to such applications, and to file the same with the applicable regulatory authority,
I grant Philip A. Taylor and John M. Zerr, and each of them separately, as attorneys-in-fact and agents the power of substitution and resubstitution in his name and stead, and the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with the foregoing appointments.
As used in this Power of Attorney, "Funds" shall mean: AIM Core Allocation Portfolio Series, AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Special Opportunities Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust, each a Delaware statutory trust.
I ratify and confirm any and all acts that Philip A. Taylor and/or John M. Zerr lawfully takes as my attorneys-in-fact and agents by virtue of this appointment.
DATED this 23rd day of April, 2007.
/s/ Bob R. Baker ----------------------------------------- Bob R. Baker |
POWER OF ATTORNEY
I appoint Philip A. Taylor and John M. Zerr, and each of them separately, to act as my attorneys-in-fact and agents, in my capacity as a trustee of the Funds listed below to:
(1) sign on my behalf any and all Registration Statements under the Securities Act of 1933, and the Investment Company Act of 1940, and any pre- and post-effective amendments and supplements to such Registration Statements, and to file the same, including all exhibits to such Registration Statements, and other documents filed in connection with such Registration Statements including prospectuses and statements of additional information included in such Registration Statements and supplements to such prospectuses and statements of additional information, with the Securities and Exchange Commission and any other applicable state and federal regulatory authorities, and
(2) sign any and all applications for exemptive relief from state or federal securities regulations, and amendments to such applications, and to file the same with the applicable regulatory authority,
I grant Philip A. Taylor and John M. Zerr, and each of them separately, as attorneys-in-fact and agents the power of substitution and resubstitution in his name and stead, and the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with the foregoing appointments.
As used in this Power of Attorney, "Funds" shall mean: AIM Core Allocation Portfolio Series, AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Special Opportunities Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust, each a Delaware statutory trust.
I ratify and confirm any and all acts that Philip A. Taylor and/or John M. Zerr lawfully takes as my attorneys-in-fact and agents by virtue of this appointment.
DATED this 23rd day of April, 2007.
/s/ Frank S. Bayley ----------------------------------------- Frank S. Bayley |
POWER OF ATTORNEY
I appoint Philip A. Taylor and John M. Zerr, and each of them separately, to act as my attorneys-in-fact and agents, in my capacity as a trustee of the Funds listed below to:
(1) sign on my behalf any and all Registration Statements under the Securities Act of 1933, and the Investment Company Act of 1940, and any pre- and post-effective amendments and supplements to such Registration Statements, and to file the same, including all exhibits to such Registration Statements, and other documents filed in connection with such Registration Statements including prospectuses and statements of additional information included in such Registration Statements and supplements to such prospectuses and statements of additional information, with the Securities and Exchange Commission and any other applicable state and federal regulatory authorities, and
(2) sign any and all applications for exemptive relief from state or federal securities regulations, and amendments to such applications, and to file the same with the applicable regulatory authority,
I grant Philip A. Taylor and John M. Zerr, and each of them separately, as attorneys-in-fact and agents the power of substitution and resubstitution in his name and stead, and the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with the foregoing appointments.
As used in this Power of Attorney, "Funds" shall mean: AIM Core Allocation Portfolio Series, AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Special Opportunities Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust, each a Delaware statutory trust.
I ratify and confirm any and all acts that Philip A. Taylor and/or John M. Zerr lawfully takes as my attorneys-in-fact and agents by virtue of this appointment.
DATED this 23rd day of April, 2007.
/s/ James T. Bunch ----------------------------------------- James T. Bunch |
POWER OF ATTORNEY
I appoint Philip A. Taylor and John M. Zerr, and each of them separately, to act as my attorneys-in-fact and agents, in my capacity as a trustee of the Funds listed below to:
(1) sign on my behalf any and all Registration Statements under the Securities Act of 1933, and the Investment Company Act of 1940, and any pre- and post-effective amendments and supplements to such Registration Statements, and to file the same, including all exhibits to such Registration Statements, and other documents filed in connection with such Registration Statements including prospectuses and statements of additional information included in such Registration Statements and supplements to such prospectuses and statements of additional information, with the Securities and Exchange Commission and any other applicable state and federal regulatory authorities, and
(2) sign any and all applications for exemptive relief from state or federal securities regulations, and amendments to such applications, and to file the same with the applicable regulatory authority,
I grant Philip A. Taylor and John M. Zerr, and each of them separately, as attorneys-in-fact and agents the power of substitution and resubstitution in his name and stead, and the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with the foregoing appointments.
As used in this Power of Attorney, "Funds" shall mean: AIM Core Allocation Portfolio Series, AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Special Opportunities Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust, each a Delaware statutory trust.
I ratify and confirm any and all acts that Philip A. Taylor and/or John M. Zerr lawfully takes as my attorneys-in-fact and agents by virtue of this appointment.
DATED this 23rd day of April, 2007.
/s/ Bruce L. Crockett ----------------------------------------- Bruce L. Crockett |
POWER OF ATTORNEY
I appoint Philip A. Taylor and John M. Zerr, and each of them separately, to act as my attorneys-in-fact and agents, in my capacity as a trustee of the Funds listed below to:
(1) sign on my behalf any and all Registration Statements under the Securities Act of 1933, and the Investment Company Act of 1940, and any pre- and post-effective amendments and supplements to such Registration Statements, and to file the same, including all exhibits to such Registration Statements, and other documents filed in connection with such Registration Statements including prospectuses and statements of additional information included in such Registration Statements and supplements to such prospectuses and statements of additional information, with the Securities and Exchange Commission and any other applicable state and federal regulatory authorities, and
(2) sign any and all applications for exemptive relief from state or federal securities regulations, and amendments to such applications, and to file the same with the applicable regulatory authority,
I grant Philip A. Taylor and John M. Zerr, and each of them separately, as attorneys-in-fact and agents the power of substitution and resubstitution in his name and stead, and the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with the foregoing appointments.
As used in this Power of Attorney, "Funds" shall mean: AIM Core Allocation Portfolio Series, AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Special Opportunities Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust, each a Delaware statutory trust.
I ratify and confirm any and all acts that Philip A. Taylor and/or John M. Zerr lawfully takes as my attorneys-in-fact and agents by virtue of this appointment.
DATED this 23rd day of April, 2007.
/s/ Albert R. Dowden ----------------------------------------- Albert R. Dowden |
POWER OF ATTORNEY
I appoint Philip A. Taylor and John M. Zerr, and each of them separately, to act as my attorneys-in-fact and agents, in my capacity as a trustee of the Funds listed below to:
(1) sign on my behalf any and all Registration Statements under the Securities Act of 1933, and the Investment Company Act of 1940, and any pre- and post-effective amendments and supplements to such Registration Statements, and to file the same, including all exhibits to such Registration Statements, and other documents filed in connection with such Registration Statements including prospectuses and statements of additional information included in such Registration Statements and supplements to such prospectuses and statements of additional information, with the Securities and Exchange Commission and any other applicable state and federal regulatory authorities, and
(2) sign any and all applications for exemptive relief from state or federal securities regulations, and amendments to such applications, and to file the same with the applicable regulatory authority,
I grant Philip A. Taylor and John M. Zerr, and each of them separately, as attorneys-in-fact and agents the power of substitution and resubstitution in his name and stead, and the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with the foregoing appointments.
As used in this Power of Attorney, "Funds" shall mean: AIM Core Allocation Portfolio Series, AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Special Opportunities Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust, each a Delaware statutory trust.
I ratify and confirm any and all acts that Philip A. Taylor and/or John M. Zerr lawfully takes as my attorneys-in-fact and agents by virtue of this appointment.
DATED this 23rd day of April, 2007.
/s/ Jack M. Fields ----------------------------------------- Jack M. Fields |
POWER OF ATTORNEY
I appoint Philip A. Taylor and John M. Zerr, and each of them separately, to act as my attorneys-in-fact and agents, in my capacity as a trustee of the Funds listed below to:
(1) sign on my behalf any and all Registration Statements under the Securities Act of 1933, and the Investment Company Act of 1940, and any pre- and post-effective amendments and supplements to such Registration Statements, and to file the same, including all exhibits to such Registration Statements, and other documents filed in connection with such Registration Statements including prospectuses and statements of additional information included in such Registration Statements and supplements to such prospectuses and statements of additional information, with the Securities and Exchange Commission and any other applicable state and federal regulatory authorities, and
(2) sign any and all applications for exemptive relief from state or federal securities regulations, and amendments to such applications, and to file the same with the applicable regulatory authority,
I grant Philip A. Taylor and John M. Zerr, and each of them separately, as attorneys-in-fact and agents the power of substitution and resubstitution in his name and stead, and the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with the foregoing appointments.
As used in this Power of Attorney, "Funds" shall mean: AIM Core Allocation Portfolio Series, AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Special Opportunities Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust, each a Delaware statutory trust.
I ratify and confirm any and all acts that Philip A. Taylor and/or John M. Zerr lawfully takes as my attorneys-in-fact and agents by virtue of this appointment.
DATED this 23rd day of April, 2007.
/s/ Martin L. Flanagan ----------------------------------------- Martin L. Flanagan |
POWER OF ATTORNEY
I appoint Philip A. Taylor and John M. Zerr, and each of them separately, to act as my attorneys-in-fact and agents, in my capacity as a trustee of the Funds listed below to:
(1) sign on my behalf any and all Registration Statements under the Securities Act of 1933, and the Investment Company Act of 1940, and any pre- and post-effective amendments and supplements to such Registration Statements, and to file the same, including all exhibits to such Registration Statements, and other documents filed in connection with such Registration Statements including prospectuses and statements of additional information included in such Registration Statements and supplements to such prospectuses and statements of additional information, with the Securities and Exchange Commission and any other applicable state and federal regulatory authorities, and
(2) sign any and all applications for exemptive relief from state or federal securities regulations, and amendments to such applications, and to file the same with the applicable regulatory authority,
I grant Philip A. Taylor and John M. Zerr, and each of them separately, as attorneys-in-fact and agents the power of substitution and resubstitution in his name and stead, and the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with the foregoing appointments.
As used in this Power of Attorney, "Funds" shall mean: AIM Core Allocation Portfolio Series, AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Special Opportunities Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust, each a Delaware statutory trust.
I ratify and confirm any and all acts that Philip A. Taylor and/or John M. Zerr lawfully takes as my attorneys-in-fact and agents by virtue of this appointment.
DATED this 23rd day of April, 2007.
/s/ Carl Frischling ----------------------------------------- Carl Frischling |
POWER OF ATTORNEY
I appoint Philip A. Taylor and John M. Zerr, and each of them separately, to act as my attorneys-in-fact and agents, in my capacity as a trustee of the Funds listed below to:
(1) sign on my behalf any and all Registration Statements under the Securities Act of 1933, and the Investment Company Act of 1940, and any pre- and post-effective amendments and supplements to such Registration Statements, and to file the same, including all exhibits to such Registration Statements, and other documents filed in connection with such Registration Statements including prospectuses and statements of additional information included in such Registration Statements and supplements to such prospectuses and statements of additional information, with the Securities and Exchange Commission and any other applicable state and federal regulatory authorities, and
(2) sign any and all applications for exemptive relief from state or federal securities regulations, and amendments to such applications, and to file the same with the applicable regulatory authority,
I grant Philip A. Taylor and John M. Zerr, and each of them separately, as attorneys-in-fact and agents the power of substitution and resubstitution in his name and stead, and the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with the foregoing appointments.
As used in this Power of Attorney, "Funds" shall mean: AIM Core Allocation Portfolio Series, AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Special Opportunities Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust, each a Delaware statutory trust.
I ratify and confirm any and all acts that Philip A. Taylor and/or John M. Zerr lawfully takes as my attorneys-in-fact and agents by virtue of this appointment.
DATED this 23rd day of April, 2007.
/s/ Prema Mathai-Davis ----------------------------------------- Prema Mathai-Davis |
POWER OF ATTORNEY
I appoint Philip A. Taylor and John M. Zerr, and each of them separately, to act as my attorneys-in-fact and agents, in my capacity as a trustee of the Funds listed below to:
(1) sign on my behalf any and all Registration Statements under the Securities Act of 1933, and the Investment Company Act of 1940, and any pre- and post-effective amendments and supplements to such Registration Statements, and to file the same, including all exhibits to such Registration Statements, and other documents filed in connection with such Registration Statements including prospectuses and statements of additional information included in such Registration Statements and supplements to such prospectuses and statements of additional information, with the Securities and Exchange Commission and any other applicable state and federal regulatory authorities, and
(2) sign any and all applications for exemptive relief from state or federal securities regulations, and amendments to such applications, and to file the same with the applicable regulatory authority,
I grant Philip A. Taylor and John M. Zerr, and each of them separately, as attorneys-in-fact and agents the power of substitution and resubstitution in his name and stead, and the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with the foregoing appointments.
As used in this Power of Attorney, "Funds" shall mean: AIM Core Allocation Portfolio Series, AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Special Opportunities Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust, each a Delaware statutory trust.
I ratify and confirm any and all acts that Philip A. Taylor and/or John M. Zerr lawfully takes as my attorneys-in-fact and agents by virtue of this appointment.
DATED this 23rd day of April, 2007.
/s/ Lewis F. Pennock ----------------------------------------- Lewis F. Pennock |
POWER OF ATTORNEY
I appoint Philip A. Taylor and John M. Zerr, and each of them separately, to act as my attorneys-in-fact and agents, in my capacity as a trustee of the Funds listed below to:
(1) sign on my behalf any and all Registration Statements under the Securities Act of 1933, and the Investment Company Act of 1940, and any pre- and post-effective amendments and supplements to such Registration Statements, and to file the same, including all exhibits to such Registration Statements, and other documents filed in connection with such Registration Statements including prospectuses and statements of additional information included in such Registration Statements and supplements to such prospectuses and statements of additional information, with the Securities and Exchange Commission and any other applicable state and federal regulatory authorities, and
(2) sign any and all applications for exemptive relief from state or federal securities regulations, and amendments to such applications, and to file the same with the applicable regulatory authority,
I grant Philip A. Taylor and John M. Zerr, and each of them separately, as attorneys-in-fact and agents the power of substitution and resubstitution in his name and stead, and the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with the foregoing appointments.
As used in this Power of Attorney, "Funds" shall mean: AIM Core Allocation Portfolio Series, AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Special Opportunities Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust, each a Delaware statutory trust.
I ratify and confirm any and all acts that Philip A. Taylor and/or John M. Zerr lawfully takes as my attorneys-in-fact and agents by virtue of this appointment.
DATED this 23rd day of April, 2007.
/s/ Ruth H. Quigley ----------------------------------------- Ruth H. Quigley |
POWER OF ATTORNEY
I appoint Philip A. Taylor and John M. Zerr, and each of them separately, to act as my attorneys-in-fact and agents, in my capacity as a trustee of the Funds listed below to:
(1) sign on my behalf any and all Registration Statements under the Securities Act of 1933, and the Investment Company Act of 1940, and any pre- and post-effective amendments and supplements to such Registration Statements, and to file the same, including all exhibits to such Registration Statements, and other documents filed in connection with such Registration Statements including prospectuses and statements of additional information included in such Registration Statements and supplements to such prospectuses and statements of additional information, with the Securities and Exchange Commission and any other applicable state and federal regulatory authorities, and
(2) sign any and all applications for exemptive relief from state or federal securities regulations, and amendments to such applications, and to file the same with the applicable regulatory authority,
I grant Philip A. Taylor and John M. Zerr, and each of them separately, as attorneys-in-fact and agents the power of substitution and resubstitution in his name and stead, and the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with the foregoing appointments.
As used in this Power of Attorney, "Funds" shall mean: AIM Core Allocation Portfolio Series, AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Special Opportunities Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust, each a Delaware statutory trust.
I ratify and confirm any and all acts that Philip A. Taylor and/or John M. Zerr lawfully takes as my attorneys-in-fact and agents by virtue of this appointment.
DATED this 23rd day of April, 2007.
/s/ Larry Soll ----------------------------------------- Larry Soll |
POWER OF ATTORNEY
I appoint Philip A. Taylor and John M. Zerr, and each of them separately, to act as my attorneys-in-fact and agents, in my capacity as a trustee of the Funds listed below to:
(1) sign on my behalf any and all Registration Statements under the Securities Act of 1933, and the Investment Company Act of 1940, and any pre- and post-effective amendments and supplements to such Registration Statements, and to file the same, including all exhibits to such Registration Statements, and other documents filed in connection with such Registration Statements including prospectuses and statements of additional information included in such Registration Statements and supplements to such prospectuses and statements of additional information, with the Securities and Exchange Commission and any other applicable state and federal regulatory authorities, and
(2) sign any and all applications for exemptive relief from state or federal securities regulations, and amendments to such applications, and to file the same with the applicable regulatory authority,
I grant Philip A. Taylor and John M. Zerr, and each of them separately, as attorneys-in-fact and agents the power of substitution and resubstitution in his name and stead, and the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with the foregoing appointments.
As used in this Power of Attorney, "Funds" shall mean: AIM Core Allocation Portfolio Series, AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Special Opportunities Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust, each a Delaware statutory trust.
I ratify and confirm any and all acts that Philip A. Taylor and/or John M. Zerr lawfully takes as my attorneys-in-fact and agents by virtue of this appointment.
DATED this 23rd day of April, 2007.
/s/ Raymond Stickel, Jr. ----------------------------------------- Raymond Stickel, Jr. |
POWER OF ATTORNEY
I appoint John M. Zerr, to act as my attorney-in-fact and agent, in my capacity as a trustee of the Funds listed below to:
(1) sign on my behalf any and all Registration Statements under the Securities Act of 1933, and the Investment Company Act of 1940, and any pre- and post-effective amendments and supplements to such Registration Statements, and to file the same, including all exhibits to such Registration Statements, and other documents filed in connection with such Registration Statements including prospectuses and statements of additional information included in such Registration Statements and supplements to such prospectuses and statements of additional information, with the Securities and Exchange Commission and any other applicable state and federal regulatory authorities, and
(2) sign any and all applications for exemptive relief from state or federal securities regulations, and amendments to such applications, and to file the same with the applicable regulatory authority,
I grant John M. Zerr, as attorney-in-fact and agent the power of substitution and resubstitution in his name and stead, and the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with the foregoing appointments.
As used in this Power of Attorney, "Funds" shall mean: AIM Core Allocation Portfolio Series, AIM Counselor Series Trust, AIM Equity Funds, AIM Funds Group, AIM Growth Series, AIM International Mutual Funds, AIM Investment Funds, AIM Investment Securities Funds, AIM Sector Funds, AIM Special Opportunities Funds, AIM Stock Funds, AIM Summit Fund, AIM Tax-Exempt Funds, AIM Treasurer's Series Trust, AIM Variable Insurance Funds, Short-Term Investments Trust and Tax-Free Investments Trust, each a Delaware statutory trust.
I ratify and confirm any and all acts that John M. Zerr lawfully takes as my attorney-in-fact and agent by virtue of this appointment.
DATED this 23rd day of April, 2007.
/s/ Philip A. Taylor ----------------------------------------- Philip A. Taylor |