-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IyAxaY7v0geMQ5raIsHG5fsLJroHzwl+HzBl21wgqLG/lVMGgY1J7ps4pZHGN1dN PPy+p2CpOBiRlV41h1uDWQ== 0000950129-97-005305.txt : 19971218 0000950129-97-005305.hdr.sgml : 19971218 ACCESSION NUMBER: 0000950129-97-005305 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 22 FILED AS OF DATE: 19971217 EFFECTIVENESS DATE: 19971217 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHORT TERM INVESTMENTS TRUST CENTRAL INDEX KEY: 0000205007 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 741093914 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 002-58287 FILM NUMBER: 97739971 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 811-02729 FILM NUMBER: 97739972 BUSINESS ADDRESS: STREET 1: C/O AIM ADVISORS INC STREET 2: 11 GREENWAY PLAZA SUITE 1919 CITY: HOUSTON STATE: TX ZIP: 77046 BUSINESS PHONE: 7136261919 MAIL ADDRESS: STREET 1: C/O AIM ADVISORS INC STREET 2: 11 GREENWAY PLAZA, SUITE 1919 CITY: HOUSTON STATE: TX ZIP: 77046 FORMER COMPANY: FORMER CONFORMED NAME: SHORT TERM INVESTMENTS CO DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: AIM BOND SHARES INC DATE OF NAME CHANGE: 19800909 485BPOS 1 SHORT-TERM INVESTMENTS TRUST - P.E. AMEND. #30 1 As filed with the Securities and Exchange Commission on December 17, 1997 Registration No. 2-58287 Investment Co. Act No. 811-2729 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------ Pre-Effective Amendment No. ------- ------ Post-Effective Amendment No. 30 X ------ ------ and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 ------ Amendment No. 31 X ------- ------ (Check appropriate box or boxes.) SHORT-TERM INVESTMENTS TRUST -------------------------------------------------- (Exact Name of Registrant as Specified in Charter) 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173 ----------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code (713) 626-1919 ---------------- Charles T. Bauer 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173 ------------------------------------------------------- (Name and Address of Agent for Service) Copy to: Stephen I. Winer, Esquire Martha J. Hays, Esquire A I M Advisors, Inc. Ballard Spahr Andrews & Ingersoll 11 Greenway Plaza, Suite 100 1735 Market Street, 51st Floor Houston, Texas 77046-1173 Philadelphia, Pennsylvania 19103-7599 Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of this Amendment It is proposed that this filing will become effective (check appropriate box) X immediately upon filing pursuant to paragraph (b) - ----- on (date) pursuant to paragraph (b) - ----- 60 days after filing pursuant to paragraph (a)(1) - ----- on (date) pursuant to paragraph (a)(1) - ----- 75 days after filing pursuant to paragraph (a)(2) - ----- on (date) pursuant to paragraph (a)(2) of rule 485. - ----- If appropriate, check the following box: This post-effective amendment designates a new effective date for a previously filed post-effective amendment. - ----- Title of Securities Being Registered: Shares of Beneficial Interest - ----- 2 SHORT-TERM INVESTMENTS TRUST Registration Statement on Form N-1A CROSS REFERENCE SHEET (as required by Rule 495) Note: The Registrant currently offers two portfolios of investments, the Treasury Portfolio and the Treasury TaxAdvantage Portfolio. The Treasury Portfolio is comprised of five classes of shares - the Cash Management Class, the Institutional Class, the Personal Investment Class, the Private Investment Class, and the Resource Class. Each class of shares of the Treasury Portfolio is offered to customers of certain institutions pursuant to separate Prospectuses and a combined Statement of Additional Information. The Treasury TaxAdvantage Portfolio is comprised of two classes of shares. Each class of shares of the Treasury TaxAdvantage Portfolio is offered to customers of certain institutions pursuant to separate Prospectuses and a combined Statement of Additional Information. Form N-1A Item Number I. TREASURY PORTFOLIO -CASH MANAGEMENT CLASS Part A - Prospectus
Item No. Prospectus Location - -------- ------------------- 1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page 2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses 3. Condensed Financial Information . . . . . . . . . . . Financial Highlights 4. General Description of Registrant . . . . . . . . . . Cover Page; Investment Program; General Information 5. Management of the Fund . . . . . . . . . . . . . . . Management; General Information 5A. Management's Discussion of Fund Performance . . . . . [included in annual report] 6. Capital Stock and Other Securities . . . . . . . . . General Information; Dividends; Taxes 7. Purchase of Securities Being Offered . . . . . . . . Purchase of Shares; Net Asset Value 8. Redemption or Repurchase . . . . . . . . . . . . . . Redemption of Shares 9. Pending Legal Proceedings . . . . . . . . . . . . . . Not Applicable
1 3 II. TREASURY PORTFOLIO - INSTITUTIONAL CLASS Part A - Prospectus
Item No. Prospectus Location - -------- ------------------- 1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page 2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses 3. Condensed Financial Information . . . . . . . . . . . Financial Highlights 4. General Description of Registrant . . . . . . . . . . Cover Page; Investment Program; General Information 5. Management of the Fund . . . . . . . . . . . . . . . Management of the Trust; General Information 5A. Management's Discussion of Fund Performance . . . . . [included in annual report] 6. Capital Stock and Other Securities . . . . . . . . . General Information; Dividends; Taxes 7. Purchase of Securities Being Offered . . . . . . . . Purchase of Shares; Net Asset Value; Management of the Fund - Distribution Plan 8. Redemption or Repurchase . . . . . . . . . . . . . . Redemption of Shares 9. Pending Legal Proceedings . . . . . . . . . . . . . . Not Applicable
III. TREASURY PORTFOLIO - PERSONAL INVESTMENT CLASS Part A - Prospectus
Item No. Prospectus Location - -------- ------------------- 1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page 2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses 3. Condensed Financial Information . . . . . . . . . . Financial Highlights 4. General Description of Registrant . . . . . . . . . . Cover Page; Investment Program; General Information 5. Management of the Fund . . . . . . . . . . . . . . . Management of the Trust; General Information 5A. Management's Discussion of Fund Performance . . . . . [included in annual report] 6. Capital Stock and Other Securities . . . . . . . . . General Information; Dividends; Taxes
2 4 7. Purchase of Securities Being Offered . . . . . . . . Purchase of Shares; Net Asset Value; Management of the Fund - Distribution Plan 8. Redemption or Repurchase . . . . . . . . . . . . . . Redemption of Shares 9. Pending Legal Proceedings . . . . . . . . . . . . . . Not Applicable
IV. TREASURY PORTFOLIO - PRIVATE INVESTMENT CLASS Part A - Prospectus
Item No. Prospectus Location - -------- ------------------- 1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page 2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses 3. Condensed Financial Information . . . . . . . . . . . Financial Highlights 4. General Description of Registrant . . . . . . . . . . Cover Page; Summary; Investment Program; General Information 5. Management of the Fund . . . . . . . . . . . . . . . Management of the Trust; General Information 5A. Management's Discussion of Fund Performance . . . . . [included in annual report] 6. Capital Stock and Other Securities . . . . . . . . . General Information; Dividends; Taxes 7. Purchase of Securities Being Offered . . . . . . . . Purchase of Shares; Net Asset Value; Management of the Fund - Distribution Plan 8. Redemption or Repurchase . . . . . . . . . . . . . . Redemption of Shares 9. Pending Legal Proceedings . . . . . . . . . . . . . . Not Applicable
V. TREASURY PORTFOLIO - RESOURCE CLASS Part A - Prospectus
Item No. Prospectus Location - -------- ------------------- 1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page 2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses 3. Condensed Financial Information . . . . . . . . . . . Not Applicable 4. General Description of Registrant . . . . . . . . . . Cover Page; Summary; Investment Program; General Information
3 5 5. Management of the Fund . . . . . . . . . . . . . . . Management of the Trust; General Information 5A. Management's Discussion of Fund Performance . . . . . [included in annual report] 6. Capital Stock and Other Securities . . . . . . . . . General Information; Dividends; Taxes 7. Purchase of Securities Being Offered . . . . . . . . Purchase of Shares; Net Asset Value; Management of the Fund - Distribution Plan 8. Redemption or Repurchase . . . . . . . . . . . . . . Redemption of Shares 9. Pending Legal Proceedings . . . . . . . . . . . . . . Not Applicable
VI. TREASURY PORTFOLIO - CASH MANAGEMENT CLASS, INSTITUTIONAL CLASS, PERSONAL INVESTMENT CLASS, PRIVATE INVESTMENT CLASS, RESOURCE CLASS Part B - Statement of Additional Information
Item No. Statement of Additional - -------- ----------------------- Information Location -------------------- 10. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page 11. Table of Contents . . . . . . . . . . . . . . . . . . Table of Contents 12. General Information and History . . . . . . . . . . . General Information About the Trust 13. Investment Objectives and Policies . . . . . . . . . Investment Program and Restrictions 14. Management of the Fund . . . . . . . . . . . . . . . General Information About the Trust - Trustees and Officers 15. Control Persons and Principal Holders of Securities . . . . . . . . . . . . . . . . . . . . General Information About the Trust - Principal Holders of Securities 16. Investment Advisory and Other Services . . . . . . . General Information About the Trust - Investment Advisor 17. Brokerage Allocation and Other Practices . . . . . . Portfolio Transactions 18. Capital Stock and Other Securities . . . . . . . . . General Information About the Trust - The Trust and its Shares 19. Purchase, Redemption and Pricing of Securities Being Offered . . . . . . . . . . . . . . Purchases and Redemptions 20. Tax Status . . . . . . . . . . . . . . . . . . . . . Tax Matters 21. Underwriters . . . . . . . . . . . . . . . . . . . . Purchases and Redemptions; Distribution Agreement
4 6 22. Calculation of Performance Data . . . . . . . . . . . Performance Information 23. Financial Statements . . . . . . . . . . . . . . . . Not Applicable
VII. TREASURY TAXADVANTAGE PORTFOLIO - INSTITUTIONAL CLASS Part A - Prospectus
Item No. Prospectus Location - -------- ------------------- 1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page 2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses 3. Condensed Financial Information . . . . . . . . . . . Financial Highlights 4. General Description of Registrant . . . . . . . . . . Cover Page; Summary; Investment Program; General Information 5. Management of the Fund . . . . . . . . . . . . . . . Management of the Trust; General Information 5A. Management's Discussion of Fund Performance . . . . . [included in annual report] 6. Capital Stock and Other Securities . . . . . . . . . General Information; Dividends; Taxes 7. Purchase of Securities Being Offered . . . . . . . . Purchase of Shares; Net Asset Value; Suitability for Investors 8. Redemption or Repurchase . . . . . . . . . . . . . . Redemption of Shares 9. Pending Legal Proceedings . . . . . . . . . . . . . . Not Applicable
VIII. TREASURY TAXADVANTAGE PORTFOLIO - PRIVATE INVESTMENT CLASS Part A - Prospectus
Item No. Prospectus Location - -------- ------------------- 1. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page 2. Synopsis . . . . . . . . . . . . . . . . . . . . . . Summary; Table of Fees and Expenses 3. Condensed Financial Information . . . . . . . . . . Financial Highlights 4. General Description of Registrant . . . . . . . . . . Cover Page; Investment Program; General Information 5. Management of the Fund . . . . . . . . . . . . . . . Management of the Trust; General Information
5 7 5A. Management's Discussion of Fund Performance . . . . . [included in annual report] 6. Capital Stock and Other Securities . . . . . . . . . General Information; Dividends; Taxes 7. Purchase of Securities Being Offered . . . . . . . . Purchase of Shares; Net Asset Value; Management of the Trust - Distribution Plan 8. Redemption or Repurchase . . . . . . . . . . . . . . Redemption of Shares 9. Pending Legal Proceedings . . . . . . . . . . . . . . Not Applicable
IX. TREASURY TAXADVANTAGE PORTFOLIO - INSTITUTIONAL CLASS AND PERSONAL INVESTMENT CLASS Part B - Statement of Additional Information
Item No. Statement of Additional - -------- ----------------------- Information Location -------------------- 10. Cover Page . . . . . . . . . . . . . . . . . . . . . Cover Page 11. Table of Contents . . . . . . . . . . . . . . . . . . Table of Contents 12. General Information and History . . . . . . . . . . . General Information About the Trust 13. Investment Objectives and Policies . . . . . . . . . Investment Program and Restrictions 14. Management of the Fund . . . . . . . . . . . . . . . General Information About the Trust - Trustees and Officers 15. Control Persons and Principal Holders of Securities . . . . . . . . . . . . . . . . . . . . General Information About the Trust - Principal Holders of Securities 16. Investment Advisory and Other Services . . . . . . . General Information About the Trust - Investment Advisor 17. Brokerage Allocation and Other Practices . . . . . . Portfolio Transactions 18. Capital Stock and Other Securities . . . . . . . . . General Information About the Trust - The Trust and its Shares 19. Purchase, Redemption and Pricing of Securities Being Offered . . . . . . . . . . . . . . Purchases and Redemptions 20. Tax Status . . . . . . . . . . . . . . . . . . . . . Dividends and Tax Matters 21. Underwriters . . . . . . . . . . . . . . . . . . . . Purchases and Redemptions; Distribution Agreement; Distribution Plan 22. Calculation of Performance Data . . . . . . . . . . . Performance Information 23. Financial Statements . . . . . . . . . . . . . . . . Financial Statements
6 8 X. ALL CLASSES OF REGISTRANT Part C Information required to be included in Part C is set forth under the appropriate item, so numbered, in Part C to this Registration Statement. 7 9 SHORT-TERM INVESTMENTS TRUST Prospectus - -------------------------------------------------------------------------------- TREASURY The Treasury Portfolio is a money market fund PORTFOLIO whose investment objective is the maximization of current income to the extent consistent with the CASH preservation of capital and the maintenance of MANAGEMENT liquidity. The Treasury Portfolio seeks to achieve its CLASS objective by investing in direct obligations of the U.S. Treasury and repurchase agreements secured by such obligations. The instruments purchased by the Treasury Portfolio will have maturities of 397 days or less. The Treasury Portfolio is a series portfolio of Short-Term Investments Trust (the "Trust"), an open- end, diversified, series management investment company. DECEMBER 17, 1997 This Prospectus relates solely to the Cash Manage- ment Class of the Treasury Portfolio, a class of shares designed to be a convenient vehicle in which institutional customers of banks, certain broker-dealers and other financial institutions can invest in a diversified money market fund. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS SETS FORTH BASIC INFORMATION THAT A PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING IN SHARES OF THE CASH MANAGEMENT CLASS OF THE TREASURY PORTFOLIO AND SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 17, 1997, HAS BEEN FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC") AND IS HEREBY INCORPORATED BY REFERENCE. FOR A COPY OF THE STATEMENT OF ADDITIONAL INFORMATION WITHOUT CHARGE, WRITE TO THE ADDRESS BELOW OR CALL (800) 877-7745. THE SEC MAINTAINS A WEB SITE AT HTTP://WWW.SEC.GOV THAT CONTAINS THE STATEMENT OF ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER INFORMATION REGARDING THE TRUST. THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND THE TRUST'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. THERE CAN BE NO ASSURANCE THAT THE TREASURY PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. SHARES OF THE TRUST INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. [LOGO APPEARS HERE] Fund Management Company 11 Greenway Plaza Suite 100 Houston, Texas 77046-1173 (800) 877-7745 10 SUMMARY THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE The Trust is an open-end diversified series management investment company. This Prospectus relates to the Cash Management Class (the "Class") of the Treasury Portfolio (the "Portfolio"). The Portfolio is a money market fund which invests in direct obligations of the U.S. Treasury and repurchase agreements secured by such obligations. The instruments purchased by the Portfolio will have maturities of 397 days or less. The investment objective of the Portfolio is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. Pursuant to separate prospectuses, the Trust also offers shares of other classes of shares of beneficial interest of the Portfolio: the Institutional Class, Private Investment Class, Personal Investment Class and Resource Class, representing an interest in the Portfolio. Such classes have different distribution arrangements and are designed for institutional and other categories of investors. The Trust also offers shares of two classes of another portfolio, the Treasury TaxAdvantage Portfolio, each pursuant to separate prospectuses. Such classes have different distribution arrangements and are designed for institutional and other categories of investors. The portfolios of the Trust are referred to collectively as the "Portfolios." Because the Trust declares dividends on a daily basis, shares of each class of the Portfolio have the same net asset value (proportionate interest in the net assets of the Portfolio) and bear equally those expenses, such as the advisory fee, that are allocated to the Portfolio as a whole. All classes of the Portfolio share a common investment objective and portfolio of investments. However, different classes of the Portfolio have different shareholder qualifications and are separately allocated certain class expenses, such as those associated with the distribution of their shares. Therefore, each class will have a different dividend payment and a different yield. INVESTORS IN THE CLASS The Class is designed to be a convenient vehicle in which institutional customers of banks, certain broker-dealers and other financial institutions can invest in a diversified open-end money market fund. PURCHASE OF SHARES Shares of the Class that are offered hereby are sold at net asset value. The minimum initial investment in the Class is $1,000,000. There is no minimum amount for subsequent investments. Payment for shares of the Class purchased must be in funds immediately available to the Portfolio. See "Purchase of Shares." REDEMPTION OF SHARES Redemptions may be made without charge at net asset value. Payment for redeemed shares of the Class for which redemption orders are received prior to 4:00 p.m. Eastern Time will normally be made on the same day. See "Redemption of Shares." DIVIDENDS The net income of the Portfolio is declared as a dividend daily to shareholders of record immediately after 4:00 p.m. Eastern Time. Dividends are paid monthly by check or wire transfer unless the shareholder has previously elected to have such dividends automatically reinvested in additional shares of the Class. Information concerning the amount of the dividends declared on any particular day will normally be available by 5:00 p.m. Eastern Time on that day. See "Dividends." NET ASSET VALUE The Trust uses the amortized cost method of valuing the securities of the Portfolio and rounds the per share net asset value to the nearest whole cent. Accordingly, the net asset value per share of the Portfolio will normally remain constant at $1.00. AN INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE IS NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE. See "Net Asset Value." INVESTMENT ADVISOR A I M Advisors, Inc. ("AIM") serves as the Portfolio's investment advisor and receives a fee based on the Portfolio's average daily net assets. During the fiscal year ended August 31, 1997, the Trust paid AIM advisory fees with respect to the Portfolio which represented 0.06% of the average daily net assets of the Portfolio. AIM is primarily engaged in the business of acting as manager or advisor to investment companies. Under a separate Administrative Services Agreement, AIM may be reimbursed by the Trust for its costs of performing certain accounting and other administrative services for the Fund. See "Management of the Trust -- Investment Advisor" and "-- Administrative Services." Under a Transfer Agency and Service Agreement, A I M Insti- 2 11 tutional Fund Services, Inc. ("Transfer Agent"), AIM's wholly owned subsidiary and a registered transfer agent, receives a fee for its provision of transfer agency, dividend distribution and disbursement, and shareholder services to the Trust. It is currently anticipated that, effective on or about December 29, 1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a registered transfer agent, will become the transfer agent to the Trust. See "General Information -- Transfer Agent and Custodian." DISTRIBUTOR AND DISTRIBUTION PLAN Fund Management Company ("FMC") acts as the exclusive distributor of the shares of the Class. Pursuant to a plan of distribution adopted by the Trust's Board of Trustees, FMC receives a fee from the Trust of up to 0.10% of the average daily net assets of the Portfolio attributable to the shares of the Class as compensation for distribution-related services pursuant to plans of distribution adopted by the Trust's Board of Trustees. The Trust may also make payments pursuant to such distribution plans to certain broker-dealers or other financial institutions for distribution-related services. See "Purchase of Shares" and "Distribution Plan." SPECIAL RISK CONSIDERATIONS The Portfolio may borrow money and enter into reverse repurchase agreements. The Portfolio may invest in repurchase agreements and purchase securities for delayed delivery. Accordingly, an investment in the Portfolio may entail somewhat different risks from an investment in an investment company that does not engage in such practices. There can be no assurance that the Portfolio will be able to maintain a stable net asset value of $1.00 per share. See "Investment Program." The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM Logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, La Familia AIM de Fondos and La Familia AIM de Fondos and Design are registered service marks and aimfunds.com and Invest With Discipline are service marks of A I M Management Group Inc. 3 12 TABLE OF FEES AND EXPENSES SHAREHOLDER TRANSACTION EXPENSES* Maximum sales load imposed on purchases (as a percentage of offering price).................... None Maximum sales load on reinvested dividends (as a percentage of offering price).................... None Deferred sales load (as a percentage of original purchase price or redemption proceeds, as applicable)............................... None Redemption fees (as a percentage of amount redeemed, if applicable)............................... None Exchange fee.............................................. None ANNUAL PORTFOLIO OPERATING EXPENSES -- CASH MANAGEMENT CLASS (AS A PERCENTAGE OF AVERAGE NET ASSETS) Management fees........................................... 0.06% 12b-1 fees (after fee waivers)**.......................... 0.08% Other expenses: Custodian fees......................................... 0.01% Other.................................................. 0.02% ------ Total other expenses.............................. 0.03% ------ Total portfolio operating expenses -- Cash Management Class**................................................ 0.17% ======
- --------------- * Beneficial owners of shares of the Class should consider the effect of any charges imposed by their bank, broker-dealer or other financial institution for various services. ** If there were no fee waivers, 12b-1 fees and Total portfolio operating expenses would have been 0.10% and 0.19%, respectively. EXAMPLE An investor in the Class would pay the following expenses on a $1,000 investment, assuming (1) a 5% annual return and (2) redemption at the end of each time period. 1 year..................................................... $ 2 3 years.................................................... $ 5 5 years.................................................... $10 10 years.................................................... $22
The Table of Fees and Expenses is designed to assist an investor in understanding the various costs and expenses that an investor in the Class will bear directly or indirectly. (For more complete descriptions of the various costs and expenses, see "Management of the Trust" below.) The expense figures are based upon actual costs and fees charged to the Class for the fiscal year ended August 31, 1997. The Table of Fees and Expenses reflects a voluntary waiver of 12b-1 fees for the Class. Future waivers of fees (if any) may vary from the figures reflected in the Table of Fees and Expenses. To the extent any service providers assume expenses of the Class, such assumption of expenses will have the effect of lowering the Class's overall expense ratio and increasing its yield to investors. Beneficial owners of shares of the Class should also consider the effect of any charges imposed by the institution maintaining their accounts. The example in the Table of Fees and Expenses assumes that all dividends and distributions are reinvested and that the amounts listed under "Annual Portfolio Operating Expenses -- Cash Management Class" remain the same in the years shown. The example shown in the above table is based on the amounts listed under "Annual Portfolio Operating Expenses." THE EXAMPLE SHOULD NOT BE CONSIDERED TO BE AN ACCURATE REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 4 13 FINANCIAL HIGHLIGHTS Shown below are the per share data, ratios and supplemental data (collectively, "data") for the four-year period ended August 31, 1997 and the period August 17, 1993 (date operations commenced) through August 31, 1993. The data has been audited by KPMG Peat Marwick LLP, independent auditors, whose unqualified report on the financial statements and the related notes appears in the Statement of Additional Information.
1997 1996 1995 1994 1993 -------- -------- -------- -------- -------- Net asset value, beginning of period.......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations: Net investment income........... 0.05 0.05 0.05 0.03 0.001 ------- ------- ------ ------ ------ Less distributions: Dividends from net investment income........................ (0.05) (0.05) (0.05) (0.03) (0.001) ------- ------- ------ ------ ------ Net asset value, end of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ------- ------- ------ ------ ------ Total return...................... 5.39% 5.48% 5.57% 3.44% 2.91%(a) ======= ======= ====== ====== ====== Ratios/supplemental data: Net assets, end of period (000s omitted)...................... $829,243 $789,627 $81,219 $73,619 $8,681 ======= ======= ====== ====== ====== Ratio of expenses to average net assets(b)..................... 0.17%(c) 0.17% 0.18% 0.16% 0.16%(a) ======= ======= ====== ====== ====== Ratio of net investment income to average net assets(d)...... 5.25%(c) 5.25% 5.42% 3.48% 3.00%(a) ======= ======= ====== ====== ======
- --------------- (a) Annualized. (b) After fee waivers and/or expense reimbursements. Ratios of expenses to average net assets prior to fee waivers and/or expense reimbursements were 0.19%, 0.19%, 0.20%, 0.21% and 0.18% (annualized) for the periods 1997-1993, respectively . (c) Ratios are based on average net assets of $781,320,880. (d) After fee waivers and/or expense reimbursements. Ratios of net investment income to average net assets prior to fee waivers and/or expense reimbursements were 5.24%, 5.23%, 5.40%, 3.43% and 2.98% (annualized) for the periods 1997-1993, respectively. SUITABILITY FOR INVESTORS The shares of the Class are intended for use primarily by institutional customers of banks, certain broker-dealers and other financial institutions who seek a convenient vehicle in which to invest in an open-end diversified money market fund. It is expected that the shares of the Class may be particularly suitable investments for corporate cash managers, municipalities or other public entities. The minimum initial investment is $1,000,000. Investors in the shares of the Class have the opportunity to receive a somewhat higher yield than might be obtainable through direct investment in money market instruments, and enjoy the benefits of diversification, economies of scale and same-day liquidity. Generally, higher interest rates can be obtained on the purchase of very large blocks of money market instruments. Of course, any such relative increase in interest rates may be offset to some extent by the operating expenses of the shares of the Class. INVESTMENT PROGRAM INVESTMENT OBJECTIVE The investment objective of the Portfolio is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. The Portfolio seeks to achieve its objective by investing in direct obligations of the U.S. Treasury and repurchase agreements secured by such obligations. The money market instruments in which the Portfolio invests are considered to carry very little risk and accordingly may not have as high a yield as that available on money market instruments of lesser quality. The Portfolio consists exclusively of money market instruments which have maturities of 397 days or less from the date of purchase (except that securities subject to repurchase agreements may have longer maturities). INVESTMENT POLICIES The Portfolio invests exclusively in direct obligations of the U.S. Treasury, which include Treasury bills, notes and bonds, and repurchase agreements relating to such securities. The Portfolio may also engage in the investment practices described below. 5 14 The market values of the money market instruments held by the Portfolio will be affected by changes in the yields available on similar securities. If yields have increased since a security was purchased, the market value of such security will generally have decreased. Conversely, if yields have decreased, the market value of such security will generally have increased. REPURCHASE AGREEMENTS. The Portfolio intends to invest in repurchase agreements with banks and broker-dealers pertaining to the securities described above and which at the date of purchase are "First Tier" securities as defined in Rule 2a-7 under the 1940 Act, as such Rule may be amended from time to time. Generally, "First Tier" securities are securities that are rated in the highest rating category by two nationally recognized statistical rating organizations ("NRSROs") or, if only rated by one NRSRO, are rated in the highest rating category by that NRSRO or, if unrated, are determined by AIM (under the supervision of and pursuant to guidelines established by the Trust's Board of Trustees) to be of comparable quality to a rated security that meets the foregoing quality standards. A repurchase agreement is an instrument under which the Portfolio acquires ownership of a debt security and the seller agrees, at the time of the sale, to repurchase the obligation at a mutually agreed-upon time and price, thereby determining the yield during the Portfolio's holding period. Repurchase transactions are limited to a term not to exceed 365 days. The Portfolio may enter into repurchase agreements only with institutions believed by the Trust's Board of Trustees to present minimal credit risk. With regard to repurchase transactions, in the event of a bankruptcy or other default of a seller of a repurchase agreement (such as the seller's failure to repurchase the obligation in accordance with the terms of the agreement), the Portfolio could experience both delays in liquidating the underlying securities and losses, including: (a) a possible decline in the value of the underlying security during the period while the Portfolio seeks to enforce its rights thereto, (b) possible subnormal levels of income and lack of access to income during this period, and (c) expenses of enforcing its rights. Repurchase agreements are considered to be loans under the 1940 Act. BORROWING MONEY/REVERSE REPURCHASE AGREEMENTS. The Portfolio may borrow money and enter into reverse repurchase agreements with respect to its portfolio securities in amounts up to 10% of the value of its total assets at the time of borrowing or entering into a reverse repurchase agreement. Reverse repurchase agreements involve the sale by the Portfolio of a portfolio security at an agreed-upon price, date and interest payment. The Portfolio will borrow money or enter into reverse repurchase agreements solely for temporary or defensive purposes, such as to facilitate the orderly sale of portfolio securities or to accommodate abnormally heavy redemption requests should they occur. Reverse repurchase transactions are limited to a term not to exceed 92 days. The Portfolio will use reverse repurchase agreements when the interest income to be earned from the securities that would otherwise have to be liquidated to meet redemption requests is greater than the interest expense of the reverse repurchase transaction. Reverse repurchase agreements involve the risk that the market value of securities retained by the Portfolio in lieu of liquidation may decline below the repurchase price of the securities sold by the Portfolio which it is obligated to repurchase. The risk, if encountered, could cause a reduction in the net asset value of the Portfolio's shares. Reverse repurchase agreements are considered to be borrowings by the Portfolio under the 1940 Act. LENDING OF PORTFOLIO SECURITIES. The Portfolio may also lend its portfolio securities in amounts up to 33-1/3% of its total assets to financial institutions in accordance with the investment restrictions of the Portfolio. Such loans would involve risks of delay in receiving additional collateral in the event the value of the collateral decreased below the value of the securities loaned or of delay in recovering the securities loaned or even loss of rights in the collateral should the borrower of the securities fail financially. However, loans will be made only to borrowers deemed by AIM to be of good standing and only when, in AIM's judgment, the income to be earned from the loans justifies the attendant risks. PURCHASING DELAYED DELIVERY SECURITIES. In managing the Portfolio's investments, AIM may indicate to dealers or issuers its interest in acquiring certain securities for the Portfolio for settlement beyond a customary settlement date. In some cases, the Portfolio may agree to purchase such securities at stated prices and yields. In such cases, such securities are considered "delayed delivery" securities when traded in the secondary market. Since this is done to facilitate the acquisition of portfolio securities and is not for the purpose of investment leverage, the amount of delayed delivery securities involved may not exceed the estimated amount of funds available for investment on the settlement date. Until the settlement date, liquid assets of the Portfolio with a dollar value sufficient at all times to make payment for the delayed delivery securities will be segregated. The total amount of segregated liquid assets may not exceed 25% of the Portfolio's total assets. The delayed delivery securities, which will not begin to accrue interest until the settlement date, will be recorded as an asset of the Portfolio and will be subject to the risks of market value fluctuations. The purchase price of the delayed delivery securities will be recorded as a liability of the Portfolio until settlement. Absent extraordinary circumstances, the Portfolio's right to acquire delayed delivery securities will not be divested prior to the settlement date. ILLIQUID SECURITIES. The Portfolio will invest no more than 10% of its net assets in illiquid securities. PORTFOLIO TRANSACTIONS. The Portfolio does not seek profits through short-term trading and will generally hold portfolio securities to maturity, but AIM may seek to enhance the yield of the Portfolio by taking advantage of yield disparities or other factors that occur in the money markets. For example, market conditions frequently result in similar securities trading at different prices. AIM may dispose of any portfolio security prior to its maturity if such disposition and reinvestment of proceeds are 6 15 expected to enhance yield consistent with AIM's judgment as to desirable portfolio maturity structure or if such disposition is believed to be advisable due to other circumstances or conditions. Securities held by the Portfolio will be disposed of prior to maturity if an earlier disposition is deemed desirable by AIM to meet redemption requests. In addition, AIM will continually monitor the creditworthiness of issuers whose securities are held by the Portfolio, and securities held by the Portfolio may be disposed of prior to maturity as a result of a revised credit evaluation of the issuer or other circumstances or considerations. The Portfolio's policy of investing in securities with maturities of 397 days or less will result in high portfolio turnover. Since brokerage commissions are not normally paid on investments of the type made by the Portfolio, the high turnover rate should not adversely affect the Portfolio's net income. INVESTMENT IN OTHER INVESTMENT COMPANIES. The Trust is permitted to invest in other investment companies to the extent permitted by the 1940 Act, and rules and regulations thereunder, and, if applicable, exemptive orders granted by the SEC. The investment policies described above may be changed by the Board of Trustees without the affirmative vote of a majority of the outstanding shares of beneficial interest of the Trust. INVESTMENT RESTRICTIONS The Portfolio's investment program is subject to a number of investment restrictions which reflect self-imposed standards as well as federal and state regulatory limitations. These restrictions are designed to minimize certain risks associated with investing in specified types of securities or engaging in certain transactions and to limit the amount of the Portfolio's assets which may be concentrated in any specific industry or issuer. The most significant of these restrictions provide that the Portfolio will not: (1) purchase securities of any one issuer (other than obligations of the U.S. Government, its agencies or instrumentalities) if, immediately after such purchase, more than 5% of the value of the Portfolio's total assets would be invested in such issuer, except as permitted by Rule 2a-7 under the 1940 Act, as such rule may be amended from time to time, and except that the Portfolio may purchase securities of other investment companies to the extent permitted by applicable law or exemptive order. (2) borrow money or issue senior securities except (a) for temporary or emergency purposes (e.g., in order to facilitate the orderly sale of portfolio securities or to accommodate abnormally heavy redemption requests), the Portfolio may borrow money from banks or obtain funds by entering into reverse repurchase agreements, and (b) to the extent that entering into commitments to purchase securities in accordance with the Portfolio's investment program may be considered the issuance of senior securities. The Portfolio will not purchase securities while borrowings in excess of 5% of its total assets are outstanding. The foregoing investment restrictions of the Portfolio (as well as certain others set forth in the Statement of Additional Information) are matters of fundamental policy which may not be changed without the affirmative vote of a majority of the outstanding shares of the Portfolio. In addition to the restrictions described above, the Portfolio must also comply with the requirements of Rule 2a-7 under the 1940 Act, as such Rule may be amended from time to time, which govern the operations of money market funds, and may be more restrictive than the policies described herein. A description of further investment restrictions applicable to the Portfolio is contained in the Statement of Additional Information. PURCHASE OF SHARES Shares of the Class are sold on a continuing basis at their net asset value next determined after an order has been received by the Portfolio. As discussed below, the Trust reserves the right to reject any purchase order. Although there is no sales charge imposed on the purchase of shares of the Class, banks or other institutions may charge a recordkeeping, account maintenance or other fee to their customers, and beneficial holders of the shares of the Class should consult with the institutions maintaining their accounts to obtain a schedule of applicable fees. To facilitate the investment of proceeds of purchase orders, the investors are urged to place their orders as early in the day as possible. Purchase orders will be accepted for execution on the day the order is placed, provided that the order is properly submitted and received by the Transfer Agent prior to 4:00 p.m. Eastern Time on a business day of the Portfolio. Purchase orders received after such time will be processed at the next day's net asset value. Following the initial investment, subsequent purchases of shares of the Class may also be made via AIM LINK--Registered Trademark-- Remote, a 7 16 personal computer application software product. Shares of the Class will earn the dividend declared on the effective date of purchase. A "business day of the Portfolio" is any day on which both the Federal Reserve Bank of New York and The Bank of New York, the Trust's custodian bank, are open for business. The Portfolio, however, reserves the right to change the time for which purchase and redemption requests must be submitted to the Portfolio for execution on the same day or any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holidays. It is expected that The Bank of New York and the Federal Reserve Bank of New York will be closed during the next twelve months on Saturdays and Sundays, and on the observed holidays of New Year's Day, Martin Luther King Jr.'s Birthday, Presidents' Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day. Shares of the Class are sold to institutional customers of banks, certain broker-dealers and other financial institutions (individually, an "Institution" and collectively, "Institutions"). Individuals, corporations, partnerships and other businesses that maintain qualified accounts at an Institution may invest in the shares of the Class. Each Institution will render administrative support services to its customers who are the beneficial owners of the shares of the Class. Such services may include, among other things, establishment and maintenance of shareholder accounts and records; assistance in processing purchase and redemption transactions in shares of the Class; providing periodic statements showing a customer's account balance in shares of the Class; distribution of Trust proxy statements, annual reports and other communications to shareholders whose accounts are serviced by the Institution; and such other services as the Trust may reasonably request. Institutions will be required to certify to the Trust that they comply with applicable state laws regarding registration as broker-dealers, or that they are exempt from such registration. Prior to the initial purchase of shares of the Class, an Account Application, which can be obtained from the Transfer Agent, must be completed and sent to the Transfer Agent at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Any changes made to the information provided in the Account Information and Authorization Form must be made in writing or by completing a new form and providing it to the Transfer Agent. An investor must open an account in the shares of the Class through an Institution in accordance with procedures established by such Institution. Each Institution separately determines the rules applicable to accounts in the shares of the Class opened with it, including minimum initial and subsequent investment requirements and the procedures to be followed by investors to effect purchases of shares of the Class. The minimum initial investment is $1,000,000, and there is no minimum amount of subsequent purchases of shares of the Class by an Institution on behalf of its customers. An investor who proposes to open a Portfolio account with an Institution should consult with a representative of such Institution to obtain a description of the rules governing such an account. The Institution holds shares of the Class registered in its name, as agent for the customer, on the books of the Institution. A statement with regard to the customer's shares of the Class is supplied to the customer periodically, and confirmations of all transactions for the account of the customer are provided by the Institution to the customer promptly upon request. In addition, the Institution sends to each customer proxies, periodic reports and other information with regard to the customer's shares of the Class. The customer's shares of the Class are fully assignable and subject to encumbrance by the customer. All agreements which relate to a customer's account with an Institution are with the Institution. An investor may terminate his relationship with an Institution at any time, in which case an account in the investor's name will be established directly with the Portfolio and the investor will become a shareholder of record. In such case, however, the investor will not be able to purchase additional shares of the Class directly, except through reinvestment of dividends and distributions. Orders for the purchase of shares of the Class are placed by the investor with the Institution. The Institution is responsible for the prompt transmission of the order to the Trust. The Portfolio will normally be required to make immediate settlement in federal funds (member bank deposits with a Federal Reserve Bank) for portfolio securities purchased. Accordingly, payment for shares of the Class purchased by Institutions on behalf of their customers must be in federal funds. If an investor's order to purchase shares of the Class is paid for other than in federal funds, the Institution, acting on behalf of the investor, completes the conversion into federal funds (which may take two business days), or itself advances federal funds prior to conversion, and promptly transmits the order and payment in the form of federal funds to the Transfer Agent. Subject to the conditions stated above and to the Trust's right to reject any purchase order, orders will be accepted (i) when payment for shares of the Class purchased is received by The Bank of New York, the Trust's custodian bank, in the form described above and notice of such order is provided to the Transfer Agent or (ii) at the time the order is placed, if the Portfolio is assured of payment. Shares of the Class purchased by orders which are accepted prior to 3:00 p.m. Eastern Time will earn the dividend declared on the date of purchase. Federal Reserve wires should be sent as early as possible in order to facilitate crediting to the shareholder's account. Any funds received with respect to an order which is not accepted by the Trust and any funds received for which an order has not been received will be returned to the sending Institution. An order must specify that it is for the purchase of shares of the "Cash Management Class of the Treasury Portfolio," otherwise any funds received will be returned to the sending Institution. 8 17 The Trust reserves the right in its sole discretion to withdraw all or any part of the offering made by this Prospectus or to reject any purchase order. REDEMPTION OF SHARES A shareholder may redeem any or all of its shares of the Class at the net asset value next determined after receipt of the redemption request in proper form by the Trust. Redemption requests with respect to the Class may also be made via AIM LINK--Registered Trademark--Remote. Normally, the net asset value per share of the Portfolio will remain constant at $1.00. See "Net Asset Value." Redemption requests with respect to shares of the Class are normally made through a customer's Institution. Payment for redeemed shares of the Class is normally made by Federal Reserve wire to the commercial bank account designated in the Institution's Account Application, but may be remitted by check upon request by a shareholder. If a redemption request is received by the Transfer Agent prior to 4:00 p.m. Eastern Time on a business day of the Portfolio, the redemption will be effected at the net asset value next determined on such day and the shares of the Class to be redeemed will not receive the dividend declared on the effective date of the redemption. If a redemption request is received by the Transfer Agent after 4:00 p.m. Eastern Time or on other than a business day of the Portfolio, the redemption will be effected at the net asset value of the Portfolio determined as of 4:00 p.m. Eastern Time on the next business day of the Portfolio, and the proceeds of such redemption will normally be wired on the effective day of the redemption. The Portfolio reserves the right to change the time for which redemption requests must be submitted to and received by the Transfer Agent for execution on the same day on any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holiday. A shareholder may change the bank account designated to receive redemption proceeds by written notice to the Trust. The authorized signature on the notice must be guaranteed by a commercial bank or a trust company. Additional documentation may be required when deemed appropriate by the Trust or the Transfer Agent. Shareholders may request a redemption by telephone. Neither the Transfer Agent nor FMC will be liable for any loss, expense or cost arising out of any telephone redemption request effected in accordance with the authorization set forth in the Account Application if they reasonably believe such request to be genuine but may in certain cases be liable for losses due to unauthorized or fraudulent transactions if they do not follow reasonable procedures for verification of telephone transactions. Such reasonable procedures for verification of telephone transactions may include recordings of telephone transactions (maintained for six months), and mailings of confirmations promptly after the transaction. Payment for shares of the Class redeemed by mail and payment for telephone redemptions in amounts of less than $1,000 may be made by check mailed within seven days after receipt of the redemption request in proper form. The Trust may make payment for telephone redemptions in excess of $1,000 by check when it is considered to be in the Portfolio's best interest to do so. The shares of the Class are not redeemable at the option of the Trust unless the Board of Trustees of the Trust determines in its sole discretion that failure to so redeem may have materially adverse consequences to the shareholders of the Trust. DIVIDENDS Dividends from the net income of the Portfolio are declared daily to shareholders of record of each class of the Portfolio as of immediately after 4:00 p.m. Eastern Time on the day of declaration. Net income for dividend purposes is determined daily as of 4:00 p.m. Eastern Time. The dividend accrued and paid for each class will consist of (a) income of the Portfolio, the allocation of which is based upon such class' pro rata share of the total outstanding shares representing an interest in the Portfolio, less (b) Portfolio expenses, such as custodian fees, trustees' fees, accounting and legal expenses, based upon such class' pro rata share of the net assets of the Portfolio, less (c) expenses directly attributable to such class, such as distribution expenses, if any, and transfer agency fees. Although realized gains and losses on the assets of the Portfolio are reflected in its net asset value, they are not expected to be of an amount which would affect its $1.00 per share net asset value for purposes of purchases and redemptions. See "Net Asset Value." Distributions from net realized short-term gains may be declared and paid yearly or more frequently. See "Taxes." The Portfolio does not expect to realize any long-term capital gains or losses. All dividends declared during a month will normally be paid by wire transfer. Payment will normally be made on the first business day of the following month. A shareholder may elect to have all dividends automatically reinvested in additional full and fractional Shares at the net asset value as of 4:00 p.m. Eastern Time on the last business day of the month. Such election, or any revocation thereof, must be made in writing by the Institution to the Transfer Agent at 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173 and will become effective with dividends paid after its receipt by the Transfer Agent. If a shareholder redeems all the Shares in its account at any time during the month, all dividends declared through the date of redemption are paid to the shareholder along with the proceeds of the redemption. 9 18 The Portfolio uses its best efforts to maintain its net asset value per share at $1.00 for purposes of sales and redemptions. See "Net Asset Value." Should the Trust incur or anticipate any unusual expense, loss or depreciation which could adversely affect the income or net asset value of the Portfolio, the Trust's Board of Trustees would at that time consider whether to adhere to the present dividend policy described above or to revise it in light of the then prevailing circumstances. For example, under such unusual circumstances, the Board of Trustees might reduce or suspend the daily dividend in order to prevent to the extent possible the net asset value per share of the Portfolio from being reduced below $1.00. Thus, such expenses, losses or depreciation may result in a shareholder receiving no dividends for the period during which it held its Shares and cause such a shareholder to receive upon redemption a price per share lower than the shareholder's original cost. TAXES The policy of the Portfolio is to distribute to its shareholders at least 90% of its investment company taxable income for each year and consistent therewith to meet the distribution requirements of Part I of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). The Portfolio also intends to meet the distribution requirements imposed by the Code in order to avoid the imposition of a 4% excise tax. The Portfolio intends to distribute at least 98% of its net investment income for the calendar year and at least 98% of its net realized capital gains, if any, for the period ending on October 31. The Portfolio also intends to meet the other requirements of Subchapter M, including the requirements with respect to diversification of assets and sources of income, so that the Portfolio will pay no taxes on net investment income and net realized capital gains paid to shareholders. Dividends paid by the Portfolio are subject to taxation as of the date of payment, whether received by shareholders in cash or shares of the Class. The Code provides an exception to this general rule: if the Portfolio declares a dividend in October, November or December to shareholders of record in such months and pays the dividend during January of the next year, a shareholder will be treated for tax purposes as having received the dividend on December 31 of the year in which it is declared rather than in January when it is paid. It is anticipated that no portion of distributions will be eligible for the dividends received deduction for corporations. Dividends paid by the Portfolio from its net investment income and short-term capital gains are taxable to shareholders at ordinary income tax rates. The Portfolio will be treated as a separate corporation for purposes of determining taxable income, distribution requirements and other requirements of Subchapter M. Therefore, the Portfolio may not offset its gains against the losses of the other portfolio of the Trust and each portfolio of the Trust must specifically comply with all the provisions of the Code. Distributions and transactions referred to in the preceding paragraphs may be subject to state, local or foreign taxes, and the treatment thereof may differ from the federal income tax consequences discussed herein. Shareholders are advised to consult with their own tax advisors concerning the application of state, local or foreign taxes. Foreign persons who file a United States tax return after December 31, 1996 for a U.S. tax refund and who are not eligible to obtain a social security number must apply to the Internal Revenue Service ("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 advisor or the Transfer Agent. NET ASSET VALUE The net asset value per share of the Portfolio is determined daily as of 4:00 p.m. Eastern Time on each business day of the Portfolio. Net asset value per share is determined by dividing the value of the Portfolio's securities, cash and other assets (including interest accrued but not collected) less all of its liabilities (including accrued expenses and dividends payable), by the number of shares outstanding of the Portfolio and rounding the resulting per share net asset value to the nearest one cent. The securities of the Portfolio are valued on the basis of amortized cost pursuant to rules promulgated by the SEC applicable to money market funds. This method values a security at its cost on the date of purchase and thereafter assumes a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the security. While this method provides certainty in valuation, it may result in periods during which value, as determined by amortized cost, is higher or lower than the price the Portfolio would receive if the security were sold. During such periods, the daily yield on shares of the Portfolio, computed as described in "Purchases and Redemptions -- Performance Information" in the Statement of Additional Information, may differ somewhat from an identical computation made by an investment company with identical investments utilizing available indications as to market value to value its portfolio securities. 10 19 YIELD INFORMATION Yield information for the Class can be obtained by calling the Trust at (800) 877-7745. Yields will fluctuate from time to time and are not necessarily indicative of future results. Accordingly, the yield information may not provide a basis for comparison with investments which pay a fixed rate of interest for a stated period of time. Yield is a function of the type and quality of the Portfolio's investments, the Portfolio's maturity and the operating expense ratio of the Class. A SHAREHOLDER'S INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT OR BY ANY INSTITUTION. These factors should be carefully considered by an investor before making an investment in the Portfolio. For the seven-day period ended August 31, 1997, the current yield and the effective yield of the Class (which assumes the reinvestment of dividends for a 365-day year and a return for the entire year equal to the average annualized current yield for the period) were 5.49% and 5.64%, respectively. The performance numbers for any other seven-day period may be substantially different from those quoted above. To assist banks and other institutions performing their own subaccounting, same day information as to the daily dividend per share for the Portfolio to eight decimal places and current yield normally will be available by 5:00 p.m. Eastern Time. From time to time and in its discretion, AIM or its affiliates may waive all or a portion of its advisory fees and/or assume certain expenses of the Portfolio. Such a practice will have the effect of increasing the Portfolio's yield and total return. REPORTS TO SHAREHOLDERS The Trust furnishes shareholders with semi-annual reports containing information about the Portfolio and its operations, including a list of the investments held by the Portfolio and financial statements. The annual financial statements are audited by the Trust's independent auditors. Unless otherwise requested by the shareholder, each shareholder will be provided by its Institution with a written confirmation for each transaction. Institutions establishing sub-accounts will receive a written confirmation for each transaction in a sub-account. Duplicate confirmations may be transmitted to the beneficial owner of the sub-account if requested by the Institution. The Institution will receive a periodic statement setting forth, for each sub-account, the share balance, income earned for the month, income earned for the year to date and the total current value of the account. MANAGEMENT OF THE TRUST BOARD OF TRUSTEES The overall management of the business and affairs of the Trust is vested with its Board of Trustees. The Board of Trustees approves all significant agreements between the Trust and persons or companies furnishing services to the Trust, including agreements with the Trust's investment advisor, distributor, custodian and transfer agent. The day-to-day operations of the Trust are delegated to the Trust's officers and to AIM, subject always to the objective and policies of the Trust and to the general supervision of the Trust's Board of Trustees. Information concerning the Board of Trustees may be found in the Statement of Additional Information. Certain trustees and officers of the Trust are affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the parent corporation of AIM. INVESTMENT ADVISOR A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as the investment advisor for the Portfolio pursuant to a Master Investment Advisory Agreement dated as of February 28, 1997 (the "Advisory Agreement"). AIM was organized in 1976 and, together with its affiliates, manages or advises 55 investment company portfolios. Certain of the directors and officers of AIM are also trustees or executive officers of the Trust. AIM is a wholly owned subsidiary of AIM Management. AIM Management is a holding company in the financial services business. AIM Management is an indirect, wholly owned subsidiary of AMVESCAP PLC, a publicly-traded holding company that, through its subsidiaries, engages in the business of investment management on an international basis. Pursuant to the terms of the Advisory Agreement, AIM manages the investment of the Portfolio's assets and obtains and evaluates economic, statistical and financial information to formulate and implement investment policies for the Portfolio. The Advisory Agreement requires AIM to reduce its fee to the extent required to satisfy any expense limitations imposed by the securities laws or regulations thereunder of any state in which the Portfolio's shares are qualified for sale. 11 20 For the fiscal year ended August 31, 1997, AIM received fees from the Trust, with respect to the Portfolio under the Advisory Agreement which represented 0.06% of the Portfolio's average daily net assets. During such fiscal year, the expenses of the Class, including AIM's fees, amounted to 0.17% of the Class's average daily net assets. ADMINISTRATIVE SERVICES The Trust has entered into a Master Administrative Services Agreement dated as of February 28, 1997 with AIM (the "Administrative Services Agreement"), pursuant to which AIM has agreed to provide or arrange for the provision of certain accounting and other administrative services to the Portfolio, including the services of a principal financial officer of the Trust and related staff. As compensation to AIM for its services under the Administrative Services Agreement, the Portfolio may reimburse AIM for expenses incurred by AIM in connection with such services. FEE WAIVERS AIM or its affiliates may in its discretion from time to time agree to waive voluntarily all or any portion of its advisory fee and/or assume certain expenses of the Portfolio but will retain its ability to be reimbursed for such fee or expenses prior to the end of each fiscal year. FMC may in its discretion from time to time agree to waive voluntarily its 12b-1 fee but will retain its ability to be reimbursed prior to the end of the fiscal year. AIM voluntarily reimbursed expenses of $24,200 on the Portfolio during the year ended August 31, 1997. DISTRIBUTOR The Trust has entered into a Master Distribution Agreement dated as of February 28, 1997 (the "Distribution Agreement") with FMC, a registered broker-dealer and a wholly-owned subsidiary of AIM, to act as the exclusive distributor of the shares of the Class. The address of FMC is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Certain trustees and officers of the Trust are affiliated with FMC and AIM. The Distribution Agreement provides that FMC has the exclusive right to distribute shares of the Trust either directly or through other broker-dealers. FMC is the distributor of several of the mutual funds managed or advised by AIM. FMC may, from time to time, at its expense, pay a bonus or other consideration or incentive to dealers or financial institutions who sell a minimum dollar amount of the shares of the Class during a specific period of time. In some instances, these incentives may be offered only to certain dealers or financial institutions who have sold or may sell significant amounts of shares. The total amount of such additional bonus payments or other consideration shall not exceed .05% of the net asset value of the shares of the Class sold. Any such bonus or incentive programs will not change the price paid by investors for the purchase of shares of the Class or the amount received as proceeds from such sales. Sales of the shares of the Class may not be used to qualify for any incentives to the extent that such incentives may be prohibited by the laws of any jurisdiction. DISTRIBUTION PLAN The Trust has adopted a Master Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that the Trust may compensate FMC in connection with the distribution of the shares of the Class an amount equal to 0.10% on an annualized basis of the average daily net assets of the Portfolio attributable to the Class. Such amount may be expended when and if authorized by the Board of Trustees and may be used to finance such distribution-related services as expenses of organizing and conducting sales seminars, printing of prospectuses and statements of additional information (and supplements thereto) and reports for other than existing shareholders, preparation and distribution of advertising material and sales literature and costs of administering the Plan. Of the compensation paid to FMC under the Plan, a service fee may be paid to dealers and other financial institutions that provide continuing personal shareholder services to their customers who purchase and own shares of the Class, in amounts of up to 0.10% of the average daily net assets of the Portfolio attributable to the Class which are attributable to the customers of such dealers or financial institutions. The Plan also imposes a cap on the total amount of sales charges, including asset-based sales charges, that may be paid by the Portfolio with respect to the Class. The Plan does not obligate the Trust to reimburse FMC for the actual expenses FMC may incur in fulfilling its obligations under the Plan on behalf of the Class. Thus, under the Plan, even if FMC's actual expenses exceed the fee payable to FMC thereunder at any given time, the Trust will not be obligated to pay more than that fee. If FMC's expenses are less than the fee it receives, FMC will retain the full amount of the fee. The Plan requires the officers of the Trust to provide the Board of Trustees at least quarterly with a written report of the amounts expended pursuant to the Plan and the purposes for which such expenditures were made. The Board of Trustees shall review these reports in connection with their decisions with respect to the Plan. 12 21 As required by Rule 12b-1 under the 1940 Act, the Plan was initially approved by the Board of Trustees, including a majority of the trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust and who have no direct or indirect financial interest in the operation of the Plan or in any agreements related to the Plan ("Qualified Trustees") on July 19, 1993. In approving the continuance of the Plan in accordance with the requirements of Rule 12b-1, the trustees considered various factors and determined that there is a reasonable likelihood that the Plan will benefit the Fund and the holders of the shares of the Class. The Plan may be terminated by a vote of a majority of the Qualified Trustees, or by a vote of a majority of the holders of the outstanding voting securities of the class to which the Plan relates. Any change in the Plan that would increase materially the distribution expenses paid by the Class requires shareholder approval; otherwise the Plan may be amended by the trustees, including a majority of the Qualified Trustees, by vote cast in person at a meeting called for the purpose of voting upon such amendment. As long as the Plan is in effect, the selection or nomination of the Qualified Trustees is committed to the discretion of the Qualified Trustees. PORTFOLIO TRANSACTIONS AND BROKERAGE AIM is responsible for decisions to buy and sell securities for the Portfolio, broker-dealer selection and negotiation of commission rates. Since purchases and sales of portfolio securities by the Portfolio are usually principal transactions, the Portfolio incurs little or no brokerage commissions. Portfolio securities are normally purchased directly from the issuer or from a market maker for the securities. The purchase price paid to dealers serving as market makers may include a spread between the bid and asked prices. The Portfolio may also purchase securities from underwriters at prices which include a concession paid by the issuer to the underwriter. AIM's primary consideration in effecting a security transaction is to obtain the best net price and the most favorable execution of the order. To the extent that the executions and prices offered by more than one dealer are comparable, AIM may, in its discretion, effect transactions with dealers that furnish statistical, research or other information or services which are deemed by AIM to be beneficial to the Portfolio's investment programs. Certain research services furnished by dealers may be useful to clients of AIM other than the Portfolio. Similarly, any research services received by AIM through placement of portfolio transactions of other clients may be of value to AIM in fulfilling its obligations to the Portfolio. GENERAL INFORMATION ORGANIZATION AND DESCRIPTION OF SHARES The Trust is a Delaware business trust. The Trust was originally incorporated in Maryland on January 24, 1977, but had no operations prior to November 10, 1980. Effective December 31, 1986, the Trust was reorganized as a Massachusetts business trust; and effective October 15, 1993, the Trust was reorganized as a Delaware business trust. On October 15, 1993, the Portfolio succeeded to the assets and assumed the liabilities of the Treasury Portfolio (the "Predecessor Portfolio") of Short-Term Investments Co., a Massachusetts business trust ("STIC"), pursuant to an Agreement and Plan of Reorganization between the Trust and STIC. All historical financial and other information contained in this Prospectus for periods prior to October 15, 1993 relating to the Portfolio (or a class thereof) is that of the Predecessor Portfolio (or the corresponding class thereof). Shares of beneficial interest of the Trust are divided into seven classes. Five classes, including the Class, represent interests in the Portfolio and two classes represent interests in the Treasury TaxAdvantage Portfolio. Each class of shares has a par value of $.01 per share. The other classes of the Trust may have different sales charges and other expenses which may affect performance. An investor may obtain information concerning the Trust's other classes by contacting FMC. All shares of the Trust have equal rights with respect to voting, except that the holders of shares of a particular portfolio or class will have the exclusive right to vote on matters pertaining solely to that portfolio or class. For example, holders of shares of a particular portfolio will have the exclusive right to vote on any investment advisory agreement or investment restriction that relates only to such portfolio. In addition, if a portfolio is divided into various classes, holders of shares of a particular class will have the exclusive right to vote on any matter, such as distribution arrangements, which relates solely to such class. The holders of shares of the Portfolio have distinctive rights with respect to dividends and redemption which are more fully described in this Prospectus. In the event of liquidation or termination of the Trust, holders of shares of each portfolio will receive pro rata, subject to the rights of creditors, (a) the proceeds of the sale of the assets held in the respective portfolio to which such shares relate, less (b) the liabilities of the Trust attributable or allocated to the respective portfolio based on the liquidation value of the portfolio. Fractional shares of each portfolio have the same rights as full shares to the extent of their proportionate interest. 13 22 There will not normally be annual shareholders' meetings. Shareholders may remove trustees from office by votes cast at a meeting of shareholders called solely for such purpose or by written consent. A meeting of shareholders for the sole purpose of considering removal of a trustee shall be called at the request of the holders of 10% or more of the Trust's outstanding shares. As of December 1, 1997, The Bank of New York was the owner of record of 48.53% of the outstanding shares of the Class. As long as The Bank of New York owns over 25% of such shares, it may be presumed to be in "control" of the Cash Management Class of the Treasury Portfolio, as defined in the 1940 Act. There are no preemptive or conversion rights applicable to any of the Trust's shares. The Trust's shares, when issued, will be fully paid and non-assessable. The Board of Trustees may create additional portfolios of the Trust without shareholder approval. TRANSFER AGENT AND CUSTODIAN The Bank of New York, 90 Washington Street, 11th Floor, New York, New York 10286, acts as custodian for the portfolio securities and cash of the Portfolio. A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as transfer agent for the shares of the Class. It is currently anticipated that, effective on or about December 29, 1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a registered transfer agent, will become the transfer agent to the Trust. LEGAL COUNSEL The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania, serves as counsel to the Trust and passes upon legal matters for the Trust. SHAREHOLDER INQUIRIES Shareholder inquiries concerning the status of an account should be directed to an investor's Institution, or to the Trust at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or may be made by calling (800) 877-7745. 14 23 [THIS PAGE INTENTIONALLY LEFT BLANK] 24 ================================================== =================================================== SHORT-TERM INVESTMENTS TRUST 11 Greenway Plaza, Suite 100 PROSPECTUS Houston, Texas 77046-1173 (800) 877-7745 December 17, 1997 INVESTMENT ADVISOR A I M ADVISORS, INC. 11 Greenway Plaza, Suite 100 SHORT-TERM Houston, Texas 77046-1173 INVESTMENTS TRUST (713) 626-1919 DISTRIBUTOR FUND MANAGEMENT COMPANY --------------------- 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173 TREASURY PORTFOLIO (800) 877-7745 --------------------- AUDITORS KPMG PEAT MARWICK LLP 700 Louisiana Houston, Texas 77002 CASH MANAGEMENT CLASS CUSTODIAN THE BANK OF NEW YORK 90 Washington Street, 11th Floor New York, New York 10286 TABLE OF CONTENTS TRANSFER AGENT A I M INSTITUTIONAL FUND SERVICES, INC. PAGE 11 Greenway Plaza, Suite 100 Summary...................................... 2 Houston, Texas 77046-1173 Table of Fees and Expenses................... 4 Financial Highlights......................... 5 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY Suitability for Investors.................... 5 INFORMATION OR TO MAKE ANY REPRESENTATIONS Investment Program........................... 5 NOT CONTAINED IN THIS PROSPECTUS IN Purchase of Shares........................... 7 CONNECTION WITH THE OFFERING MADE BY THIS Redemption of Shares......................... 9 PROSPECTUS, AND IF GIVEN OR MADE, SUCH Dividends.................................... 9 INFORMATION OR REPRESENTATIONS MUST NOT BE Taxes........................................ 10 RELIED UPON AS HAVING BEEN AUTHORIZED BY Net Asset Value.............................. 10 THE TRUST OR THE DISTRIBUTOR. THIS Yield Information............................ 11 PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN Reports to Shareholders...................... 11 ANY JURISDICTION TO ANY PERSON TO WHOM Management of the Trust...................... 11 SUCH OFFERING MAY NOT LAWFULLY BE MADE. General Information.......................... 13 ================================================== =====================================================
25 SHORT-TERM INVESTMENTS TRUST Prospectus - -------------------------------------------------------------------------------- The Treasury Portfolio is a money market fund TREASURY whose investment objective is the maximization of PORTFOLIO current income to the extent consistent with the INSTITUTIONAL preservation of capital and the maintenance of CLASS liquidity. The Treasury Portfolio seeks to achieve its objective by investing in direct obligations of the DECEMBER 17, 1997 U.S. Treasury and repurchase agreements secured by such obligations. The instruments purchased by the Treasury Portfolio will have maturities of 397 days or less. The Treasury Portfolio is a series portfolio of Short-Term Investments Trust (the "Trust"), an open- end diversified series management investment company. This Prospectus relates solely to the Institutional Class of the Treasury Portfolio, a class of shares designed to be a convenient vehicle in which institutions, particularly banks, acting for themselves or in a fiduciary, advisory, agency, custodial or other similar capacity can invest in a diversified money market fund. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS SETS FORTH BASIC INFORMATION THAT A PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING IN SHARES OF THE INSTITUTIONAL CLASS OF THE TREASURY PORTFOLIO AND SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 17, 1997, HAS BEEN FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION THE ("SEC") AND IS HEREBY INCORPORATED BY REFERENCE. A COPY OF THE STATEMENT OF ADDITIONAL INFORMATION IS ATTACHED HERETO. THE SEC MAINTAINS A WEB SITE AT HTTP://WWW.SEC.GOV THAT CONTAINS THE STATEMENT OF ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER INFORMATION REGARDING THE TRUST. THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND THE TRUST'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. THERE CAN BE NO ASSURANCE THAT THE TREASURY PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. SHARES OF THE TRUST INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. [LOGO APPEARS HERE] Fund Management Company 11 Greenway Plaza Suite 100 Houston, Texas 77046-1173 (800) 659-1005 26 SUMMARY THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE The Trust is an open-end diversified series management investment company. This Prospectus relates to the Institutional Class (the "Class") of the Treasury Portfolio (the "Portfolio"). The Portfolio is a money market fund which invests in direct obligations of the U.S. Treasury and repurchase agreements secured by such obligations. The instruments purchased by the Portfolio will have maturities of 397 days or less. The investment objective of the Portfolio is the maximization of current income to the extent consistent with the preservations of capital and the maintenance of liquidity. Pursuant to separate prospectuses, the Trust also offers shares of other classes of shares of beneficial interest of the Portfolio: the Personal Investment Class, Private Investment Class, Cash Management Class and Resource Class, representing an interest in the Portfolio. Such classes have different distribution arrangements and are designed for institutional and other categories of investors. The Trust also offers shares of two classes of another portfolio, the Treasury TaxAdvantage Portfolio, each pursuant to a separate prospectus. The portfolios of the Trust are referred to collectively as the "Portfolios." Because the Trust declares dividends on a daily basis, shares of each class of the Portfolio have the same net asset value (proportionate interest in the net assets of the Portfolio) and bear equally those expenses, such as the advisory fee, that are allocated to the Portfolio as a whole. All classes of the Portfolio share a common investment objective and portfolio of investments. However, different classes of the Portfolio have different shareholder qualifications and are separately allocated certain class expenses, such as those associated with the distribution of their shares. Therefore, each class will have a different dividend payment and a different yield. INVESTORS IN THE CLASS The Class is designed to be a convenient and economical vehicle in which institutions, particularly banks, acting for themselves or in a fiduciary, advisory, agency, custodial or other similar capacity can invest short-term cash reserves. Although shares of the Class may not be purchased by individuals directly, institutions may purchase shares for accounts maintained by individuals. See "Suitability for Investors." For the fiscal year ended August 31, 1997, the expenses of operation for the Class represented 0.09% of the average daily net assets of the Class. PURCHASE OF SHARES Shares of the Class are sold at net asset value without a sales charge. The minimum initial investment in the Class is $1,000,000. There is no minimum amount for subsequent investments. Payment for shares of the Class purchased must be in federal funds or other funds immediately available to the Portfolio. See "Purchase of Shares." REDEMPTION OF SHARES Redemptions may be made without charge at net asset value. Payment for redeemed shares of the Class for which redemption orders are received prior to 4:00 p.m. Eastern Time will normally be made in federal funds on the same day. See "Redemption of Shares." DIVIDENDS The net income of each Portfolio is declared as a dividend daily to shareholders of record immediately after 4:00 p.m. Eastern Time. Dividends are paid monthly by check or wire transfer unless the shareholder has previously elected to have such dividends automatically reinvested in additional shares of the Class. Information concerning the amount of the dividends declared on any particular day will normally be available by 5:00 p.m. Eastern Time on that day. See "Dividends." NET ASSET VALUE The Trust uses the amortized cost method of valuing the securities held by the Portfolio and rounds the per share net asset value to the nearest whole cent. Accordingly, the net asset value per share of the Portfolio will normally remain constant at $1.00. AN INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE IS NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE. See "Net Asset Value." INVESTMENT ADVISOR A I M Advisors, Inc. ("AIM") serves as the Portfolio's investment advisor and receives a fee based on the Portfolio's average daily net assets. During the fiscal year ended August 31, 1997, the Trust paid AIM fees with respect to the Portfolio which represented 0.06% of the average daily net assets of the Portfolio. AIM is primarily engaged in the business of acting as manager or 2 27 advisor to investment companies. Under an Administrative Services Agreement, AIM may be reimbursed by the Trust for its costs of performing certain accounting and other administrative services for the Trust. See "Management of the Trust -- Investment Advisor" and "-- Administrative Services." Under a Transfer Agency and Service Agreement, A I M Institutional Fund Services, Inc., ("Transfer Agent"), AIM's wholly owned subsidiary and a registered transfer agent, receives a fee for its provision of transfer agency, dividend distribution and disbursement, and shareholder services to the Trust. It is currently anticipated that, effective on or about December 29, 1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a registered transfer agent, will become the transfer agent to the Trust. See "General Information -- Transfer Agent and Custodian." DISTRIBUTOR Fund Management Company ("FMC") acts as the exclusive distributor of the Trust's shares. FMC does not receive any fee for distribution services from the Trust. See "Purchase of Shares." SPECIAL RISK CONSIDERATIONS The Portfolio may borrow money and enter into reverse repurchase agreements. The Portfolio may invest in repurchase agreements and purchase securities for delayed delivery. Accordingly, an investment in the Portfolio may entail somewhat different risks from an investment in an investment company that does not engage in such practices. There can be no assurance that the Portfolio will be able to maintain a stable net asset value of $1.00 per share. See "Investment Program." The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM Logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, La Familia AIM de Fondos and La Familia AIM de Fondos and Design are registered service marks and aimfunds.com and Invest With Discipline are service marks of A I M Management Group Inc. 3 28 TABLE OF FEES AND EXPENSES SHAREHOLDER TRANSACTION EXPENSES* Maximum sales load imposed on purchases (as a percentage of offering price)..................................... None Maximum sales load on reinvested dividends (as a percentage of offering price).......................... None Deferred sales load (as a percentage of original purchase price or redemption proceeds, as applicable)........... None Redemption fees (as a percentage of amount redeemed, if applicable)............................................ None Exchange fee.............................................. None ANNUAL PORTFOLIO OPERATING EXPENSES -- INSTITUTIONAL CLASS (as a percentage of average net assets) Management fees........................................... 0.06% 12b-1 fees................................................ None Other expenses: Custodian fees......................................... 0.01% Other.................................................. 0.02% ------ Total other expenses................................. 0.03% ---- Total portfolio operating expenses -- Institutional Class.................................................. 0.09% ====
- --------------- * Beneficial owners of shares of the Class should consider the effect of any charges imposed by their bank or other financial institution for various services. EXAMPLE An investor would pay the following expenses on a $1,000 investment, assuming (1) 5% annual return and (2) redemption at the end of each time period. 1 year..................................................... $ 1 3 years.................................................... $ 3 5 years.................................................... $ 5 10 years.................................................... $12
The Table of Fees and Expenses is designed to assist an investor in understanding the various costs and expenses that an investor in the Class will bear directly or indirectly. (For more complete descriptions of the various costs and expenses, see "Management of the Trust" below.) The expense figures are based upon actual costs and fees charged to the Class for the fiscal year ended August 31, 1997. To the extent any service providers assume expenses of the Class, such assumption of expenses will have the effect of lowering the Class's overall expense ratio and increasing its yield to investors. Beneficial owners of shares of the Class should also consider the effect of any charges imposed by the institution maintaining their accounts. The example in the Table of Fees and Expenses assumes that all dividends and distributions are reinvested and that the amounts listed under "Annual Portfolio Operating Expenses -- Institutional Class" remain the same in the years shown. The example shown in the above table is based on the amounts listed under "Annual Portfolio Operating Expenses." THE EXAMPLE SHOULD NOT BE CONSIDERED TO BE AN ACCURATE REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 4 29 FINANCIAL HIGHLIGHTS Shown below are the per share data, ratios and supplemental data (collectively, "data") for each of the years in the ten-year period ended August 31, 1997. The data has been audited by KPMG Peat Marwick LLP, independent auditors, whose unqualified report on the financial statements and the related notes appears in the Statement of Additional Information.
1997 1996 1995 1994 1993 1992 1991 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net asset value, beginning of period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations: Net investment income........ 0.05 0.05 0.06 0.04 0.03 0.05 0.07 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Less distributions: Dividends from net investment income..................... (0.05) (0.05) (0.06) (0.04) (0.03) (0.05) (0.07) ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net asset value, end of period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========== ========== ========== ========== ========== ========== ========== Total return.................. 5.47% 5.57% 5.66% 3.53% 3.22% 4.56% 7.04% ========== ========== ========== ========== ========== ========== ========== Ratios/supplemental data: Net assets, end of period (000s omitted)............. $3,408,010 $2,335,441 $2,669,637 $2,452,389 $3,652,672 $3,835,387 $2,437,902 ========== ========== ========== ========== ========== ========== ========== Ratio of expenses to average net assets................... 0.09%(a) 0.09% 0.10% 0.08% 0.08% 0.09% 0.10% ========== ========== ========== ========== ========== ========== ========== Ratio of net investment income to average net assets........ 5.35%(a) 5.43% 5.53% 3.39% 3.17% 4.38% 6.73% ========== ========== ========== ========== ========== ========== ========== 1990 1989 1988 ---------- ---------- ---------- Net asset value, beginning of period....................... $ 1.00 $ 1.00 $ 1.00 Income from investment operations: Net investment income........ 0.08 0.09 0.07 ---------- ---------- ---------- Less distributions: Dividends from net investment income..................... (0.08) (0.09) (0.07) ---------- ---------- ---------- Net asset value, end of period....................... $ 1.00 $ 1.00 $ 1.00 ========== ========== ========== Total return.................. 8.52% 9.03% 6.98% ========== ========== ========== Ratios/supplemental data: Net assets, end of period (000s omitted)............. $1,703,460 $1,189,822 $1,121,144 ========== ========== ========== Ratio of expenses to average net assets................... 0.12% 0.11% 0.13% ========== ========== ========== Ratio of net investment income to average net assets........ 8.19% 8.69% 6.76% ========== ========== ==========
- --------------- (a) Ratios are based on average net assets of $2,873,371,753. 5 30 SUITABILITY FOR INVESTORS The Class is intended for use primarily by institutions, particularly banks, acting for themselves or in a fiduciary, advisory, agency, custodial or other similar capacity. They are designed to be a convenient and economical vehicle in which such institutions can invest short-term cash reserves. Shares of the Class may not be purchased directly by individuals, although institutions may purchase shares for accounts maintained by individuals. Prospective investors should determine if an investment in the Class is consistent with the objectives of an account and with applicable state and federal laws and regulations. An investment in the Class may relieve the institution of many of the investment and administrative burdens encountered when investing in money market instruments directly. These include: selection of portfolio investments; surveying the market for the best price at which to buy and sell; valuation of portfolio securities; selection and scheduling of maturities; receipt, delivery and safekeeping of securities; and portfolio record keeping. It is anticipated that most investors will perform their own sub-accounting. To assist these institutions, information concerning the dividends declared by the Portfolios on any particular day will normally be available by 5:00 p.m. Eastern Time on that day. Investors in the Class have the opportunity to receive a somewhat higher yield than might be obtainable through direct investment in money market instruments and enjoy the benefits of same-day liquidity. Generally, higher interest rates can be obtained on the purchase of very large blocks of money market instruments. Of course, any such relative increase in interest rates may be offset to some extent by the operating expenses of the Class. However, these expenses are expected to be relatively small due primarily to the following factors: the Class will have a small number of shareholders who do not need many of the services provided by other money market investment companies, thereby resulting in lower transfer agent fees and costs for printing reports and proxy statements; sales of the shares of the Class to institutions acting for themselves or in a fiduciary capacity are exempt from the registration requirements of most state securities laws, thereby resulting in reduced state registration fees; and the relatively low investment advisory fee paid to AIM. INVESTMENT PROGRAM INVESTMENT OBJECTIVE The investment objective of the Portfolio is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. The Portfolio seeks to achieve its objective by investing in direct obligations of the U.S. Treasury and repurchase agreements secured by such obligations. The money market instruments in which the Portfolio invests are considered to carry very little risk and accordingly may not have as high a yield as that available on money market instruments of lesser quality. The Portfolio consists exclusively of money market instruments which have maturities of 397 days or less from the date of purchase (except that securities subject to repurchase agreements may have longer maturities). INVESTMENT POLICIES The Portfolio invests exclusively in direct obligations of the U.S. Treasury, which include Treasury bills, notes and bonds, and repurchase agreements relating to such securities. The Portfolio may also engage in certain investment practices described below. The market values of the money market instruments held by the Portfolio will be affected by changes in the yields available on similar securities. If yields have increased since a security was purchased, the market value of such security will generally have decreased. Conversely, if yields have decreased, the market value of such security will generally have increased. REPURCHASE AGREEMENTS. The Portfolio intends to invest in repurchase agreements with banks and broker-dealers pertaining to the securities described above and which at the date of purchase are "First Tier" securities as defined in Rule 2a-7 under the 1940 Act, as such Rule may be amended from time to time. Generally, "First Tier" securities are securities that are rated in the highest rating category by two nationally recognized statistical rating organizations ("NRSROs") or, if only rated by one NRSRO, are rated in the highest rating category by that NRSRO or, if unrated, are determined by AIM (under the supervision of and pursuant to guidelines established by the Trust's Board of Trustees) to be of comparable quality to a rated security that meets the foregoing quality standards. A repurchase agreement is an instrument under which the Portfolio acquires ownership of a debt security and the seller agrees, at the time of the sale, to repurchase the obligation at a mutually agreed-upon time and price, thereby determining the yield during the Portfolio's holding period. Repurchase transactions are limited to a term not to exceed 365 days. The Portfolio may enter into repurchase agreements only with institutions believed by the Trust's Board of Trustees to present minimal credit risk. With regard to repurchase transactions, in the event of a bankruptcy or other default of a seller of a repurchase agreement (such as the seller's failure to repurchase the obligation in accordance with the terms of the agreement), the Portfolio could experience both delays in liquidating the underlying securities and losses, including: (a) a possible decline in the value of the underlying security during the period while the Portfolio seeks to enforce its rights thereto, (b) possible subnormal levels of income and lack of access to income during this period, and (c) expenses of enforcing its rights. Repurchase agreements are considered to be loans under the 1940 Act. 6 31 BORROWING MONEY/REVERSE REPURCHASE AGREEMENTS. The Portfolio may borrow money and enter into reverse repurchase agreements with respect to its portfolio securities in amounts up to 10% of the value of its total assets at the time of borrowing or entering into a reverse repurchase agreement. Reverse repurchase agreements involve the sale by the Portfolio of a portfolio security at an agreed-upon price, date and interest payment. The Portfolio will borrow money or enter into reverse repurchase agreements solely for temporary or defensive purposes, such as to facilitate the orderly sale of portfolio securities or to accommodate abnormally heavy redemption requests should they occur. Reverse repurchase transactions are limited to a term not to exceed 92 days. The Portfolio will use reverse repurchase agreements when the interest income to be earned from the securities that would otherwise have to be liquidated to meet redemption requests is greater than the interest expense of the reverse repurchase transaction. Reverse repurchase agreements involve the risk that the market value of securities retained by the Portfolio in lieu of liquidation may decline below the repurchase price of the securities sold by the Portfolio which it is obligated to repurchase. The risk, if encountered, could cause a reduction in the net asset value of the Portfolio's shares. Reverse repurchase agreements are considered to be borrowings by the Portfolio under the 1940 Act. LENDING OF PORTFOLIO SECURITIES. The Portfolio may also lend its portfolio securities in amounts up to 33 1/3% of its total assets to financial institutions in accordance with the investment restrictions of the Portfolio. Such loans would involve risks of delay in receiving additional collateral in the event the value of the collateral decreased below the value of the securities loaned or of delay in recovering the securities loaned or even loss of rights in the collateral should the borrower of the securities fail financially. However, loans will be made only to borrowers deemed by AIM to be of good standing and only when, in AIM's judgment, the income to be earned from the loans justifies the attendant risks. PURCHASING DELAYED DELIVERY SECURITIES. In managing the Portfolio's investments, AIM may indicate to dealers or issuers its interest in acquiring certain securities for the Portfolio for settlement beyond a customary settlement date. In some cases, the Portfolio may agree to purchase such securities at stated prices and yields. In such cases, such securities are considered "delayed delivery" securities when traded in the secondary market. Since this is done to facilitate the acquisition of portfolio securities and is not for the purpose of investment leverage, the amount of delayed delivery securities involved may not exceed the estimated amount of funds available for investment on the settlement date. Until the settlement date, liquid assets of the Portfolio with a dollar value sufficient at all times to make payment for the delayed delivery securities will be segregated. The total amount of segregated liquid assets may not exceed 25% of the Portfolio's total assets. The delayed delivery securities, which will not begin to accrue interest until the settlement date, will be recorded as an asset of the Portfolio and will be subject to the risks of market value fluctuations. The purchase price of the delayed delivery securities will be recorded as a liability of the Portfolio until settlement. Absent extraordinary circumstances, the Portfolio's right to acquire delayed delivery securities will not be divested prior to the settlement date. ILLIQUID SECURITIES. The Portfolio will invest no more than 10% of its net assets in illiquid securities. PORTFOLIO TRANSACTIONS. The Portfolio does not seek profits through short-term trading and will generally hold portfolio securities to maturity, but AIM may seek to enhance the yield of the Portfolio by taking advantage of yield disparities or other factors that occur in the money markets. For example, market conditions frequently result in similar securities trading at different prices. AIM may dispose of any portfolio security prior to its maturity if such disposition and reinvestment of proceeds are expected to enhance yield consistent with AIM's judgment as to desirable portfolio maturity structure or if such disposition is believed to be advisable due to other circumstances or conditions. Securities held by the Portfolio will be disposed of prior to maturity if an earlier disposition is deemed desirable by AIM to meet redemption requests. In addition, AIM will continually monitor the creditworthiness of issuers whose securities are held by the Portfolio, and securities held by the Portfolio may be disposed of prior to maturity as a result of a revised credit evaluation of the issuer or other circumstances or considerations. The Portfolio's policy of investing in securities with maturities of 397 days or less will result in high portfolio turnover. Since brokerage commissions are not normally paid on investments of the type made by the Portfolio, the high turnover rate should not adversely affect the Portfolio's net income. INVESTMENT IN OTHER INVESTMENT COMPANIES. The Trust is permitted to invest in other investment companies to the extent permitted by the 1940 Act, and rules and regulations thereunder, and, if applicable, exemptive orders granted by the SEC. The investment policies described above may be changed by the Board of Trustees without the affirmative vote of a majority of the outstanding shares of beneficial interest of the Trust. 7 32 INVESTMENT RESTRICTIONS The Portfolio's investment program is subject to a number of investment restrictions which reflect self-imposed standards as well as federal and state regulatory limitations. These restrictions are designed to minimize certain risks associated with investing in specified types of securities or engaging in certain transactions and to limit the amount of the Portfolio's assets which may be concentrated in any specific industry or issuer. The most significant of these restrictions provide that the Portfolio will not: (1) purchase securities of any one issuer (other than obligations of the U.S. Government, its agencies or instrumentalities) if, immediately after such purchase, more than 5% of the value of the Portfolio's total assets would be invested in such issuer, except as permitted by Rule 2a-7 under the 1940 Act, as such rule may be amended from time to time, and except that the Portfolio may purchase securities of other investment companies to the extent permitted by applicable law or exemptive order; or (2) borrow money or issue senior securities except (a) for temporary or emergency purposes (e.g., in order to facilitate the orderly sale of portfolio securities, or to accommodate abnormally heavy redemption requests), the Portfolio may borrow money from banks or obtain funds by entering into reverse repurchase agreements, and (b) to the extent that entering into commitments to purchase securities in accordance with the Portfolio's investment program may be considered the issuance of senior securities. The Portfolio will not purchase securities while borrowings in excess of 5% of its total assets are outstanding. The foregoing investment restrictions of the Portfolio (as well as certain others set forth in the Statement of Additional Information) are matters of fundamental policy which may not be changed without the affirmative vote of a majority of the outstanding shares of the Portfolio. In addition to the restrictions described above, the Portfolio must also comply with the requirements of Rule 2a-7 under the 1940 Act, as such Rule may be amended from time to time, which govern the operations of money market funds, and may be more restrictive than the policies described herein. A description of further investment restrictions applicable to the Portfolio is contained in the Statement of Additional Information. PURCHASE OF SHARES Shares of the Class are sold on a continuing basis at their net asset value next determined after an order has been received by the Portfolio. As discussed below, the Trust reserves the right to reject any purchase order. Although there is no sales charge imposed on the purchase of shares of the Class, banks or other institutions may charge a record keeping, account maintenance or other fee to their customers, and beneficial holders of the shares of the Class should consult with the institutions maintaining their accounts to obtain a schedule of applicable fees. To facilitate the investment of proceeds of purchase orders, the investors are urged to place their orders as early in the day as possible. Purchase orders will be accepted for execution on the day the order is placed, provided that the order is properly submitted and received by the Transfer Agent prior to 4:00 p.m. Eastern Time on a business day of the Portfolio. Purchase orders received after such time will be processed at the next day's net asset value. Following the initial investment, subsequent purchases of shares of the Class may also be made via AIM LINK(R) Remote, a personal computer application software product. Shares of the Class will earn the dividend declared on the effective date of purchase. A "business day of the Portfolio" is any day on which both the Federal Reserve Bank of New York and The Bank of New York, the Trust's custodian bank, are open for business. The Portfolio, however, reserves the right to change the time for which purchase and redemption requests must be submitted to the Portfolio for execution on the same day on any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holidays. It is expected that The Bank of New York and the Federal Reserve Bank of New York will be closed during the next twelve months on Saturdays and Sundays, and on the observed holidays of New Year's Day, Martin Luther King, Jr.'s Birthday, Presidents' Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day. Subject to the conditions stated above and the Trust's right to reject any purchase order, orders will be accepted (i) when payment for shares of the Class purchased is received by The Bank of New York, the Trust's custodian bank, in the form described below and notice of such order is provided to the Transfer Agent, or (ii) at the time the order is placed, if the Portfolio is assured of payment. Shares of the Class purchased by orders which are accepted prior to 4:00 p.m. Eastern Time will earn the dividend declared on the date of purchase. Payments for shares of the Class purchased must be in the form of federal funds or other funds immediately available to the Portfolio. Federal Reserve wires should be sent as early as possible in order to facilitate crediting to the shareholder's account. 8 33 Any funds received with respect to an order which is not accepted by the Trust and any funds received for which an order has not been received will be returned to the sending institution. An order to purchase shares must specify that it is for the purchase of "Shares of the Institutional Class of the Treasury Portfolio," otherwise any funds received will be returned to the sending institution. The minimum initial investment in the Class is $1,000,000. Institutions may be requested to maintain separate Master Accounts in the shares of the Class held by the institution (i) for its own account, for the account of other institutions and for accounts for which the institution acts as a fiduciary, and (ii) for accounts for which the institution acts in some other capacity. An institution's Master Account(s) and sub-accounts in the shares of the Class may be aggregated for the purpose of the minimum investment requirement. No minimum amount is required for subsequent investments in the Portfolio nor are minimum balances required. Prior to the initial purchase of shares of the Class, an Account Application must be completed and sent to the Transfer Agent, 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Account Applications may be obtained from the Transfer Agent. Any changes made to the information provided in the Account Application must be made in writing or by completing a new form and providing it to the Transfer Agent. Banks will be required to certify to the Trust that they comply with applicable state law regarding registration as broker-dealers, or that they are exempt from such registration. The Trust reserves the right in its sole discretion to withdraw all or any part of the offering made by this Prospectus or to reject any purchase order. REDEMPTION OF SHARES A shareholder may redeem any or all of its shares of the Class at the net asset value next determined after receipt of the redemption request in proper form by the Trust. Redemption requests with respect to the Class may also be made via AIM LINK(R) Remote. Normally, the net asset value per share of the Portfolio will remain constant at $1.00. See "Net Asset Value." Redemption requests with respect to shares of the Class are normally made by calling the Trust. Payment for redeemed shares of the Class is normally made by Federal Reserve wire to the commercial bank account designated in the institution's Account Application, but may be remitted by check upon request by a shareholder. If a redemption request is received by the Transfer Agent prior to 4:00 p.m. Eastern Time on a business day of the Portfolio, the redemption will be effected at the net asset value next determined on such day and the shares of the Class to be redeemed will not receive the dividend declared on the effective date of the redemption. If a redemption request is received by the Transfer Agent after 4:00 p.m. Eastern Time or on other than a business day of the Portfolio, the redemption will be effected at the net asset value of the Portfolio determined as of 4:00 p.m. Eastern Time on the next business day of the Portfolio, and the proceeds of such redemption will normally be wired on the effective day of the redemption. The Portfolio reserves the right to change the time for which redemption requests must be submitted to and received by the Transfer Agent for execution on the same day on any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holidays. A shareholder may change the bank account designated to receive redemption proceeds by written notice to the Trust. The authorized signature on the notice must be guaranteed by a commercial bank or a trust company. Additional documentation may be required when deemed appropriate by the Trust or the Transfer Agent. Shareholders may request a redemption by telephone. Neither the Transfer Agent nor FMC will be liable for any loss, expense or cost arising out of any telephone redemption request effected in accordance with the authorization set forth in the Account Application if they reasonably believe such request to be genuine, but may in certain cases be liable for losses due to unauthorized or fraudulent transactions if they do not follow reasonable procedures for verification of telephone transactions. Such reasonable procedures for verification of telephone transactions may include recordings of telephone transactions (maintained for six months), and mailings of confirmations promptly after the transaction. Payment for shares of the Class redeemed by mail and payment for telephone redemptions in amounts of less than $1,000 may be made by check mailed within seven days after receipt of the redemption request in proper form. The Trust may make payment for telephone redemptions in excess of $1,000 by check when it is considered to be in the Portfolio's best interest to do so. The shares of the Class are not redeemable at the option of the Trust unless the Board of Trustees of the Trust determines in its sole discretion that failure to so redeem may have materially adverse consequences to the shareholders of the Trust. 9 34 DIVIDENDS Dividends from the net income of the Portfolio are declared daily to shareholders of record of each class of the Portfolio as of immediately after 4:00 p.m. Eastern Time on the day of declaration. Net income for dividend purposes is determined daily as of 4:00 p.m. Eastern Time. The dividend accrued and paid for each class will consist of (a) income of the Portfolio, the allocation of which is based upon such class's pro rata share of the total outstanding shares representing an interest in the Portfolio, less (b) Portfolio expenses, such as custodian fees, trustees' fees, accounting and legal expenses, based upon such class' pro rata share of the net assets of the Portfolio, less (c) expenses directly attributable to such class, such as distribution expenses, if any, and transfer agency fees. Although realized gains and losses on the assets of the Portfolio are reflected in its net asset value, they are not expected to be of an amount which would affect its $1.00 per share net asset value for purposes of purchases and redemptions. See "Net Asset Value." Distributions from net realized short-term gains may be declared and paid yearly or more frequently. See "Taxes." The Portfolio does not expect to realize any long-term capital gains or losses. All dividends declared during a month will normally be paid by wire transfer. Payment will normally be made on the first business day of the following month. A shareholder may elect to have all dividends automatically reinvested in additional full and fractional shares of the Class at the net asset value as of 4:00 p.m. Eastern Time on the last business day of the month. Such election, or any revocation thereof, must be made in writing by the institution to the Transfer Agent, 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173 and will become effective with dividends paid after its receipt by the Transfer Agent. If a shareholder redeems all the shares of the Class in its account at any time during the month, all dividends declared through the date of redemption are paid to the shareholder along with the proceeds of the redemption. The Portfolio uses its best efforts to maintain its net asset value per share of the Portfolio at $1.00 for purposes of sales and redemptions. See "Net Asset Value." Should the Trust incur or anticipate any unusual expense, loss or depreciation which could adversely affect the income or net asset value of the Portfolio, the Trust's Board of Trustees would at that time consider whether to adhere to the present dividend policy described above or to revise it in light of the then prevailing circumstances. For example, under such unusual circumstances, the Board of Trustees might reduce or suspend the daily dividend in order to prevent to the extent possible the net asset value per share of the Portfolio from being reduced below $1.00. Thus, such expenses, losses or depreciation may result in a shareholder receiving no dividends for the period during which it held its shares of the Class and cause such a shareholder to receive upon redemption a price per share lower than the shareholder's original cost. TAXES The policy of the Portfolio is to distribute to its shareholders at least 90% of its investment company taxable income for each year and consistent therewith to meet the distribution requirements of Part I of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). The Portfolio also intends to meet the distribution requirements imposed by the Code in order to avoid the imposition of a 4% excise tax. The Portfolio intends to distribute at least 98% of its net investment income for the calendar year and at least 98% of its net realized capital gains, if any, for the period ending on October 31. The Portfolio also intends to meet the other requirements of Subchapter M, including the requirements with respect to diversification of assets and sources of income, so that the Portfolio will pay no taxes on net investment income and net realized capital gains paid to shareholders. Dividends paid by the Portfolio are subject to taxation as of the date of payment, whether received by shareholders in cash or shares of the Class. The Code provides an exception to this general rule: if the Portfolio declares a dividend in October, November or December to shareholders of record in such months and pays the dividend during January of the next year, a shareholder will be treated for tax purposes as having received the dividend on December 31 of the year in which it is declared rather than in January when it is paid. It is anticipated that no portion of distributions will be eligible for the dividends received deduction for corporations. Dividends paid by the Portfolio from its net investment income and short-term capital gains are taxable to shareholders at ordinary income tax rates. The Portfolio will be treated as a separate corporation for purposes of determining taxable income, distribution requirements and other requirements of Subchapter M. Therefore, the Portfolio may not offset its gains against the losses of the other portfolio of the Trust and each portfolio of the Trust must specifically comply with all the provisions of the Code. Distributions and transactions referred to in the preceding paragraphs may be subject to state, local or foreign taxes, and the treatment thereof may differ from the federal income tax consequences discussed herein. Shareholders are advised to consult with their own tax advisors concerning the application of state, local or foreign taxes. Foreign persons who file a United States tax return after December 31, 1996 for a U.S. tax refund and who are not eligible to obtain a social security number must apply to the Internal Revenue Service ("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 advisor or the Transfer Agent. 10 35 NET ASSET VALUE The net asset value per share of the Portfolio is determined daily as of 4:00 p.m. Eastern Time on each business day of the Portfolio. Net asset value per share is determined by dividing the value of the Portfolio's securities, cash and other assets (including interest accrued but not collected) less all of its liabilities (including accrued expenses and dividends payable), by the number of shares outstanding of the Portfolio and rounding the resulting per share net asset value to the nearest one cent. The securities of the Portfolio are valued on the basis of amortized cost pursuant to rules promulgated by the SEC applicable to money market funds. This method values a security at its cost on the date of purchase and thereafter assumes a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the security. While this method provides certainty in valuation, it may result in periods during which value, as determined by amortized cost, is higher or lower than the price the Portfolio would receive if the security were sold. During such periods, the daily yield on shares of the Portfolio, computed as described in "Purchases and Redemptions -- Performance Information" in the Statement of Additional Information, may differ somewhat from an identical computation made by an investment company with identical investments utilizing available indications as to market value to value its portfolio securities. YIELD INFORMATION Yield information for the Class can be obtained by calling the Trust at (800) 659-1005. Yields will fluctuate from time to time and are not necessarily indicative of future results. Accordingly, the yield information may not provide a basis for comparison with investments which pay a fixed rate of interest for a stated period of time. Yield is a function of the type and quality of the Portfolio's investments, the Portfolio's maturity and the operating expense ratio of the Class. A SHAREHOLDER'S INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT OR BY ANY INSTITUTION. These factors should be carefully considered by the investor before making an investment in the Portfolio. For the seven-day period ended August 31, 1997, the current yield and the effective yield of the Class (which assumes the reinvestment of dividends for a 365-day year and a return for the entire year equal to the annualized current yield for the period) were 5.57% and 5.72%. These performance numbers are quoted for illustration purposes only. The performance numbers for any other seven-day period may be substantially different from those quoted above. To assist banks and other institutions performing their own subaccounting, same day information as to the daily dividend per share for the Portfolio to eight decimal places and current yield normally will be available by 5:00 p.m. Eastern Time. From time to time and in its discretion, AIM or its affiliates may waive all or a portion of its advisory fees and/or assume certain expenses of the Portfolio. Such a practice will have the effect of increasing the Portfolios' yield and total return. REPORTS TO SHAREHOLDERS The Trust furnishes shareholders with semi-annual reports containing information about the Portfolio and its operations, including a list of the investments held by the Portfolio and financial statements. The annual financial statements are audited by the Trust's independent auditors. Unless otherwise requested by the shareholder, each shareholder will be provided with a written confirmation for each transaction. Institutions establishing sub-accounts will receive a written confirmation for each transaction in a sub-account. Duplicate confirmations may be transmitted to the beneficial owner of the sub-account if requested by the institution. The institution will receive a periodic statement setting forth, for each sub-account, the share balance, income earned for the month, income earned for the year to date and the total current value of the account. MANAGEMENT OF THE TRUST BOARD OF TRUSTEES The overall management of the business and affairs of the Trust is vested with its Board of Trustees. The Board of Trustees approves all significant agreements between the Trust and persons or companies furnishing services to the Trust, including agreements with the Trust's investment advisor, distributor, custodian and transfer agent. The day-to-day operations of the Trust are delegated to the Trust's officers and to AIM, subject always to the objectives and policies of the Trust and to the general supervision of the Trust's Board of Trustees. Information concerning the Board of Trustees may be found in the Statement of Additional Information. Certain trustees and officers of the Trust are affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the parent corporation of AIM. 11 36 INVESTMENT ADVISOR A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as the investment advisor for the Portfolio pursuant to a Master Investment Advisory Agreement dated as of February 28, 1997 (the "Advisory Agreement"). AIM, organized in 1976, together with its affiliates, manages or advises 55 investment company portfolios. Certain of the directors and officers of AIM are also trustees or executive officers of the Fund. AIM is a wholly owned subsidiary of AIM Management. AIM Management is a holding company engaged in the financial services business. AIM Management is an indirect, wholly owned subsidiary of AMVESCAP PLC, a publicly-traded holding company that, through its subsidiaries, engages in the business of investment management on an international basis. Pursuant to the terms of the Advisory Agreement, AIM manages the investment of the Portfolio's assets and obtains and evaluates economic, statistical and financial information to formulate and implement investment policies for the Portfolio. The Advisory Agreement requires AIM to reduce its fee to the extent required to satisfy any expense limitations imposed by the securities laws or regulations thereunder of any state in which the Portfolio's shares are qualified for sale. For the fiscal year ended August 31, 1997, AIM received fees from the Trust under an advisory agreement previously in effect, which provided for the same level of compensation to AIM as the Advisory Agreement, with respect to the Portfolio which represented 0.06% of the Portfolio's average daily net assets. During such fiscal year, the expenses of the Class, including AIM's fees, amounted to 0.09% of the Class' average daily net assets. ADMINISTRATIVE SERVICES The Trust has entered into a Master Administrative Services Agreement dated as of February 28, 1997 with AIM (the "Administrative Services Agreement"), pursuant to which AIM has agreed to provide or arrange for the provision of certain accounting and other administrative services to the Portfolio, including the services of a principal financial officer of the Trust and related staff. As compensation to AIM for its services under the Administrative Services Agreement, the Portfolio may reimburse AIM for expenses incurred by AIM in connection with such services. FEE WAIVERS AIM or its affiliates may in its discretion from time to time agree to waive voluntarily all or any portion of its advisory fee and/or assume certain expenses of the Portfolio but will retain its ability to be reimbursed for such fee or expenses prior to the end of each fiscal year. AIM voluntarily reimbursed expenses of $24,200 on the Portfolio during the year ended August 31, 1997. DISTRIBUTOR The Trust has entered into a Master Distribution Agreement dated as of February 28, 1997 (the "Distribution Agreement") with FMC, a registered broker-dealer and a wholly-owned subsidiary of AIM, to act as the exclusive distributor of the shares of the Class. The address of FMC is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Certain trustees and officers of the Trust are affiliated with FMC and AIM. The Distribution Agreement provides that FMC has the exclusive right to distribute shares of the Trust either directly or through other broker-dealers. FMC is the distributor of several of the mutual funds managed or advised by AIM. PORTFOLIO TRANSACTIONS AND BROKERAGE AIM is responsible for decisions to buy and sell securities for the Portfolios, broker-dealer selection and negotiation of commission rates. Since purchases and sales of portfolio securities by the Portfolio are usually principal transactions, the Portfolio incurs little or no brokerage commissions. Portfolio securities are normally purchased directly from the issuer or from a market maker for the securities. The purchase price paid to dealers serving as market makers may include a spread between the bid and asked prices. The Portfolio may also purchase securities from underwriters at prices which include a concession paid by the issuer to the underwriter. AIM's primary consideration in effecting a security transaction is to obtain the best net price and the most favorable execution of the order. To the extent that the executions and prices offered by more than one dealer are comparable, AIM may, in its discretion, effect transactions with dealers that furnish statistical, research or other information or services which are deemed by AIM to be beneficial to the Portfolio's investment programs. Certain research services furnished by dealers may be useful to clients of AIM other than the Portfolio. Similarly, any research services received by AIM through placement of portfolio transactions of other clients may be of value to AIM in fulfilling its obligations to the Portfolio. 12 37 GENERAL INFORMATION ORGANIZATION AND DESCRIPTION OF SHARES The Trust is a Delaware business trust. The Trust was originally incorporated in Maryland on January 24, 1977, but had no operations prior to November 10, 1980. Effective December 31, 1986, the Trust was reorganized as a Massachusetts business trust; and effective October 15, 1993, the Trust was reorganized as a Delaware business trust. On October 15, 1993, the Portfolio succeeded to the assets and assumed the liabilities of the Treasury Portfolio (the " Predecessor Portfolio") of Short-Term Investments Co., a Massachusetts business trust ("STIC"), pursuant to an Agreement and Plan of Reorganization between the Trust and STIC. All historical financial and other information contained in this Prospectus for periods prior to October 15, 1993 relating to the Portfolio (or a class thereof) is that of the Predecessor Portfolio (or the corresponding class thereof). Shares of beneficial interest of the Trust are divided into seven classes of which five, including the Class, represent interests in the Portfolio and two classes represent interests in the Treasury TaxAdvantage Portfolio. Each class of shares has a par value of $.01 per share. The other classes of the Trust may have different sales charges and other expenses which may affect performance. An investor may obtain information concerning the Trust's other classes by contacting FMC. All shares of the Trust have equal rights with respect to voting, except that the holders of shares of a particular portfolio or class will have the exclusive right to vote on matters pertaining solely to that portfolio or class. For example, holders of shares of a particular portfolio will have the exclusive right to vote on any investment advisory agreement or investment restriction that relates only to such portfolio. In addition, if a portfolio is divided into various classes, holders of shares of a particular class will have the exclusive right to vote on any matter, such as distribution arrangements, which relates solely to such class. The holders of shares of the Portfolio have distinctive rights with respect to dividends and redemption which are more fully described in this Prospectus. In the event of liquidation or termination of the Trust, holders of shares of each portfolio will receive pro rata, subject to the rights of creditors, (a) the proceeds of the sale of the assets held in the respective portfolio to which such shares relate, less (b) the liabilities of the Trust attributable or allocated to the respective portfolio based on the liquidation value of the portfolio. Fractional shares of each portfolio have the same rights as full shares to the extent of their proportionate interest. There will not normally be annual shareholders' meetings. Shareholders may remove trustees from office by votes cast at a meeting of shareholders called solely for such purpose or by written consent. A meeting of shareholders for the sole purpose of considering removal of a trustee shall be called at the request of the holders of 10% or more of the Trust's outstanding shares. There are no preemptive or conversion rights applicable to any of the Trust's shares. The Trust's shares, when issued, will be fully paid and non-assessable. The Board of Trustees may create additional portfolios of the Trust without shareholder approval. TRANSFER AGENT AND CUSTODIAN The Bank of New York, 90 Washington Street, 11th Floor, New York, New York 10286, acts as custodian for the portfolio securities and cash of the Portfolio. A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as transfer agent for the shares of the Class. It is currently anticipated that, effective on or about December 29, 1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a registered transfer agent, will become the transfer agent to the Trust. LEGAL COUNSEL The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania, serves as counsel to the Trust and passes upon legal matters for the Trust. SHAREHOLDER INQUIRIES Shareholder inquiries concerning the status of an account should be directed to the Trust at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or may be made by calling (800) 659-1005. OTHER INFORMATION This Prospectus sets forth basic information that investors should know about the Trust and the Portfolio prior to investing. A Statement of Additional Information has been filed with the SEC. Copies of the Statement of Additional Information are available upon request and without charge by writing or calling the Trust or FMC. This Prospectus omits certain information contained in the registration statement filed with the SEC. Copies of the registration statement, including items omitted herein, may be obtained from the SEC by paying the charges prescribed under its rules and regulations. 13 38 [THIS PAGE INTENTIONALLY LEFT BLANK] 39 [THIS PAGE INTENTIONALLY LEFT BLANK] 40 - ------------------------------------------------------ ------------------------------------------------------ - ------------------------------------------------------ ------------------------------------------------------ SHORT-TERM INVESTMENTS TRUST PROSPECTUS 11 Greenway Plaza, Suite 100 December 17, 1997 Houston, Texas 77046-1173 SHORT-TERM (800) 659-1005 INVESTMENTS TRUST --------------------- INVESTMENT ADVISOR A I M ADVISORS, INC. TREASURY PORTFOLIO 11 Greenway Plaza, Suite 100 --------------------- Houston, Texas 77046-1173 (713) 626-1919 INSTITUTIONAL CLASS TABLE OF CONTENTS DISTRIBUTOR FUND MANAGEMENT COMPANY PAGE 11 Greenway Plaza, Suite 100 Summary.......................................... 2 Houston, Texas 77046-1173 Table of Fees and Expenses....................... 4 (800) 659-1005 Financial Highlights............................. 5 Suitability For Investors........................ 6 AUDITORS Investment Program............................... 6 KPMG PEAT MARWICK LLP Purchase of Shares............................... 8 700 Louisiana Redemption of Shares............................. 9 Houston, Texas 77002 Dividends........................................ 10 Taxes............................................ 10 CUSTODIAN Net Asset Value.................................. 11 THE BANK OF NEW YORK Yield Information................................ 11 90 Washington Street Reports to Shareholders.......................... 11 11th Floor Management of the Trust.......................... 11 New York, New York 10286 General Information.............................. 13 Appendix......................................... A-1 TRANSFER AGENT A I M INSTITUTIONAL FUND SERVICES, INC. 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING MADE BY THE PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY JURISDICTION TO ANY PERSON TO WHOM SUCH OFFERING MAY NOT LAWFULLY BE MADE. - ------------------------------------------------------ ------------------------------------------------------ - ------------------------------------------------------ ------------------------------------------------------
41 PROSPECTUS PERSONAL INVESTMENT CLASS OF THE TREASURY PORTFOLIO OF SHORT-TERM INVESTMENTS TRUST 11 GREENWAY PLAZA, SUITE 100 HOUSTON, TEXAS 77046-1173 (800) 877-4744 ------------------ The Treasury Portfolio is a money market fund whose investment objective is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. The Treasury Portfolio seeks to achieve its objective by investing in direct obligations of the U.S. Treasury and repurchase agreements secured by such obligations. The instruments purchased by the Treasury Portfolio will have maturities of 397 days or less. The Treasury Portfolio is a series portfolio of Short-Term Investments Trust (the "Trust"), an open-end, diversified, series, management investment company. This Prospectus relates solely to the Personal Investment Class of the Treasury Portfolio, a class of shares designed to be a convenient vehicle in which customers of banks, certain broker-dealers and other financial institutions can invest in a diversified money market fund. ------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------ THIS PROSPECTUS SETS FORTH BASIC INFORMATION THAT A PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING IN SHARES OF THE PERSONAL INVESTMENT CLASS OF THE TREASURY PORTFOLIO AND SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 17, 1997, HAS BEEN FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC") AND IS HEREBY INCORPORATED BY REFERENCE. FOR A COPY OF THE STATEMENT OF ADDITIONAL INFORMATION WITHOUT CHARGE, WRITE TO THE ADDRESS ABOVE OR CALL (800) 877-4744. THE SEC MAINTAINS A WEB SITE AT HTTP://WWW.SEC.GOV THAT CONTAINS THE STATEMENT OF ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER INFORMATION REGARDING THE TRUST. THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND THE TRUST'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. THERE CAN BE NO ASSURANCE THAT THE TREASURY PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. SHARES OF THE TRUST INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. PROSPECTUS DATED: DECEMBER 17, 1997 42 TABLE OF CONTENTS
PAGE PAGE ---- ---- SUMMARY........................... 2 DIVIDENDS.......................... 12 TABLE OF FEES AND EXPENSES........ 4 TAXES.............................. 12 FINANCIAL HIGHLIGHTS.............. 5 NET ASSET VALUE.................... 13 SUITABILITY FOR INVESTORS......... 6 YIELD INFORMATION.................. 14 INVESTMENT PROGRAM................ 6 REPORTS TO SHAREHOLDERS............ 14 PURCHASE OF SHARES................ 9 MANAGEMENT OF THE TRUST............ 14 REDEMPTION OF SHARES.............. 11 GENERAL INFORMATION................ 17
SUMMARY THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE The Trust is an open-end diversified series management investment company. This Prospectus relates to the Personal Investment Class (the "Class") of the Treasury Portfolio (the "Portfolio"). The Portfolio is a money market fund which invests in direct obligations of the U.S. Treasury and repurchase agreements secured by such obligations. The instruments purchased by the Portfolio will have maturities of 397 days or less. The investment objective of the Portfolio is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. Pursuant to separate prospectuses, the Trust also offers shares of other classes of shares of beneficial interest of the Portfolio: the Institutional Class, Private Investment Class, Cash Management Class and Resource Class, representing an interest in the Portfolio. Such classes have different distribution arrangements and are designed for institutional and other categories of investors. The Trust also offers shares of two classes of another portfolio, the Treasury TaxAdvantage Portfolio, each pursuant to a separate prospectus. The portfolios of the Trust are referred to collectively as the "Portfolios." Because the Trust declares dividends on a daily basis, shares of each class of the Portfolio have the same net asset value (proportionate interest in the net assets of the Portfolio) and bear equally those expenses, such as the advisory fee, that are allocated to the Portfolio as a whole. All classes of the Portfolio share a common investment objective and portfolio of investments. However, different classes of the Portfolio have different shareholder qualifications and are separately allocated certain class expenses, such as those associated with the distribution of their shares. Therefore, each class will have a different dividend payment and a different yield. INVESTORS IN THE CLASS The Class is designed to be a convenient vehicle in which customers of banks, certain broker-dealers and other financial institutions can invest in a diversified open-end money market fund. PURCHASE OF SHARES Shares of the Class that are offered hereby are sold at net asset value. The minimum initial investment in the Class is $1,000. There is no minimum amount for subsequent investments. Payment for shares purchased must be in funds immediately available to the Trust. See "Purchase of Shares." REDEMPTION OF SHARES Redemptions may be made without charge at net asset value. Payment for redeemed shares of the Class for which redemption orders are received prior to 4:00 p.m. Eastern Time will normally be made on the same day. See "Redemption of Shares." 2 43 DIVIDENDS The net income of the Portfolio is declared as a dividend daily to shareholders of record immediately after 4:00 p.m. Eastern Time. Dividends are paid monthly by check or wire transfer unless the shareholder has previously elected to have such dividends automatically reinvested in additional shares of the Class. Information concerning the amount of the dividends declared on any particular day will normally be available by 5:00 p.m. Eastern Time on that day. See "Dividends." NET ASSET VALUE The Trust uses the amortized cost method of valuing its portfolio securities and rounds its per share net asset value to the nearest whole cent. Accordingly, the net asset value per share of the Portfolio will normally remain constant at $1.00. AN INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE IS NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE. See "Net Asset Value." INVESTMENT ADVISOR A I M Advisors, Inc. ("AIM") serves as the Trust's investment advisor and receives a fee based on the Trust's average daily net assets. During the fiscal year ended August 31, 1997, AIM received advisory fees with respect to the Portfolio which represented 0.06% of the average daily net assets of the Portfolio. AIM is primarily engaged in the business of acting as manager or advisor to investment companies. Under a separate Administrative Services Agreement, AIM may be reimbursed by the Trust for its costs of performing certain accounting and other administrative services for the Trust. See "Management of the Trust -- Investment Advisor" and "-- Administrative Services." Under a Transfer Agency and Service Agreement, AIM Institutional Fund Services, Inc. ("Transfer Agent"), AIM's wholly owned subsidiary and a registered transfer agent, receives a fee for its provision of transfer agency, dividend distribution and disbursement, and shareholder services to the Trust. It is currently anticipated that, effective on or about December 29, 1997. A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a registered transfer agent will become the transfer agent to the Trust. See "General Information -- Transfer Agent and Custodian." DISTRIBUTOR AND DISTRIBUTION PLAN Fund Management Company ("FMC") acts as the exclusive distributor of shares of the Class. Pursuant to a plan of distribution adopted by the Trust's Board of Trustees, the Trust may pay to FMC as well as certain broker-dealers or other financial institutions up to 0.75% of the average daily net asset value of the Portfolio attributable to the Class. Of this amount, up to 0.25% may be for continuing personal services to shareholders provided by broker-dealers, banks or other financial institutions and the balance would be deemed an asset-based sales charge. See "Purchase of Shares" and "Distribution Plan." SPECIAL RISK CONSIDERATIONS The Portfolio may borrow money and enter into reverse repurchase agreements. The Portfolio may invest in repurchase agreements and purchase securities for delayed delivery. Accordingly, an investment in the Portfolio may entail somewhat different risks from an investment in an investment company that does not engage in such practices. There can be no assurance that the Portfolio will be able to maintain a stable net asset value of $1.00 per share. See "Investment Program." The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM Logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, La Familia AIM de Fondos and La Familia AIM de Fondos and Design are registered service marks and aimfunds.com and Invest With Discipline are service marks of A I M Management Group Inc. 3 44 TABLE OF FEES AND EXPENSES SHAREHOLDER TRANSACTION EXPENSES* Maximum sales load imposed on purchases (as a percentage of offering price).................... None Maximum sales load on reinvested dividends (as a percentage of offering price).................... None Deferred sales load (as a percentage of original purchase price or redemption proceeds, as applicable)........... None Redemption fees (as a percentage of amount redeemed, if applicable)............................... None Exchange fee.............................................. None ANNUAL PORTFOLIO OPERATING EXPENSES -- PERSONAL INVESTMENT CLASS (AS A PERCENTAGE OF AVERAGE NET ASSETS) Management fees........................................... 0.06% 12b-1 fees (after fee waivers)**.......................... 0.50%*** Other expenses: Custodian fees......................................... 0.01% Other (after expense reimbursements)**................. 0.05% ------- Total other expenses.............................. 0.04% ---- Total portfolio -- operating expenses Personal Investment Class**............................ 0.61% ====
- ------------ * Beneficial owners of shares of the Class should consider the effect of any charges imposed by their bank, broker-dealer or financial institution for various services. ** Had there been no fee waivers and no expense reimbursements, 12b-1 fees, Other expenses and Total portfolio operating expenses would have been 0.75%, 0.10% and 0.86%, respectively. *** It is possible that as a result of Rule 12b-1 fees, long-term shareholders may pay more than the economic equivalent of the maximum front-end sales charges permitted under rules of the National Association of Securities Dealers, Inc. Given the Rule 12b-1 fee of the Class, however, it is estimated that it would take a substantial number of years for a shareholder to exceed such maximum front-end sales charges. EXAMPLE An investor in the Class would pay the following expenses on a $1,000 investment, assuming (1) a 5% annual return and (2) redemption at the end of each time period. 1 year..................................................... $ 6 3 years.................................................... $20 5 years.................................................... $34 10 years.................................................... $76
The Table of Fees and Expenses is designed to assist an investor in understanding the various costs and expenses that an investor in the Class will bear directly or indirectly. (For more complete descriptions of the various costs and expenses, see "Management of the Trust" below.) The expense figures are based upon actual costs and fees charged to the Class for the fiscal year ended August 31, 1997, as stated to reflect current agreements. Future waivers of fees (if any) may vary from the figures reflected in the Table of Fees and Expenses. To the extent any service providers assume additional expenses of the Class, such assumption of 4 45 additional expenses will have the effect of lowering the Class' overall expense ratio and increasing its yield to investors. Beneficial owners of shares of the Class should also consider the effect of any charges imposed by the institution maintaining their accounts. The example in the Table of Fees and Expenses assumes that all dividends and distributions are reinvested and that the amounts listed under "Annual Portfolio Operating Expenses -- Personal Investment Class" remain the same in the years shown. The example shown in the above table is based on the amounts listed under "Annual Portfolio Operating Expenses." THE EXAMPLE SHOULD NOT BE CONSIDERED TO BE AN ACCURATE REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. FINANCIAL HIGHLIGHTS Shown below are the per share data, ratios and supplemental data (collectively "data") for each of the years in the six-year period ended August 31, 1997 and the period August 8, 1991 (date operations commenced) through August 31, 1991. The data has been audited by KPMG Peat Marwick LLP, independent auditors, whose unqualified report on the financial statements and the related notes appears in the Statement of Additional Information.
1997 1996 1995 1994 1993 1992 1991 -------- -------- -------- -------- -------- -------- ------- Net asset value, beginning of period........................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations: Net investment income............ 0.05 0.05 0.05 0.03 0.03 0.04 0.003 -------- -------- -------- ------- ------- ------ ------ Less distributions: Dividends (from net investment income)........................ (0.05) (0.05) (0.05) (0.03) (0.03) (0.04) (0.003) -------- -------- -------- ------- ------- ------- ------ Net asset value, end of period..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======= ======= ======= ====== Total return....................... 4.95% 5.04% 5.13% 3.02% 2.77% 4.07% 5.04%(a) ======== ======== ======== ======= ======= ======= ====== Ratios/supplemental data: Net assets, end of period (000s omitted)................... $322,971 $192,947 $114,527 $88,582 $69,867 $23,853 $ 330 ======== ======== ======== ======= ======= ======= ====== Ratio of expenses to average net asset(b)......................... 0.60%(c) 0.59% 0.60% 0.58% 0.53% 0.49% 0.81%(a) ======== ======== ======== ======= ======= ======= ====== Ratio of net investment income to average net assets(d)............ 4.85%(c) 4.91% 5.03% 2.99% 2.70% 3.55% 5.03%(a) ======== ======== ======== ======= ======= ======= ======
- --------------- (a) Annualized. (b) After fee waivers and/or expense reimbursements. Ratios of expenses to average net assets prior to waiver of distribution fees and/or expense reimbursements were 0.86%, 0.92%, 0.90%, 0.91%, 0.93%, 1.03% and 12.68% for the periods 1997-1991, respectively. (c) Ratios are based on average net assets of $242,057,960. (d) After fee waivers and/or expense reimbursements. Ratios of net investment income (loss) to average net assets prior to waiver of distribution fees and/or expense reimbursements were 4.59%, 4.58%, 4.73%, 2.66%, 2.29%, 3.01% and (6.84%) (annualized) for the periods 1997-1991, respectively. 5 46 SUITABILITY FOR INVESTORS The Shares of the Class are intended for use primarily by customers of banks, certain broker-dealers and other financial institutions who seek a convenient vehicle in which to invest in an open-end diversified money market fund. The minimum initial investment is $1,000. Investors in the Class have the opportunity to receive a somewhat higher yield than might be obtainable through direct investment in money market instruments, and enjoy the benefits of diversification, economies of scale and same-day liquidity. Generally, higher interest rates can be obtained on the purchase of very large blocks of money market instruments. Of course, any such relative increase in interest rates may be offset to some extent by the operating expenses of the Class. INVESTMENT PROGRAM INVESTMENT OBJECTIVE The investment objective of the Portfolio is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. The Portfolio seeks to achieve its objective by investing in direct obligations of the U.S. Treasury and repurchase agreements secured by such obligations. The money market instruments in which the Portfolio invests are considered to carry very little risk and accordingly may not have as high a yield as that available on money market instruments of lesser quality. The Portfolio consists exclusively of money market instruments which have maturities of 397 days or less from the date of purchase (except that securities subject to repurchase agreements may have longer maturities). INVESTMENT POLICIES The Portfolio invests exclusively in direct obligations of the U.S. Treasury, which include Treasury bills, notes and bonds, and repurchase agreements relating to such securities. The Portfolio may also engage in the investment practices described below. The market values of the money market instruments held by the Portfolio will be affected by changes in the yields available on similar securities. If yields have increased since a security was purchased, the market value of such security will generally have decreased. Conversely, if yields have decreased, the market value of such security will generally have increased. REPURCHASE AGREEMENTS. The Portfolio intends to invest in repurchase agreements with banks and broker-dealers pertaining to the securities described above and which at the date of purchase are "First Tier" securities as defined in Rule 2a-7 under the 1940 Act, as such Rule may be amended from time to time. Generally, "First Tier" securities are securities that are rated in the highest rating category by two nationally recognized statistical rating organizations ("NRSROs") or, if only rated by one NRSRO, are rated in the highest rating category by that NRSRO or, if unrated, are determined by AIM (under the supervision of and pursuant to guidelines established by the Trust's Board of Trustees) to be of comparable quality to a rated security that meets the foregoing quality standards. A repurchase agreement is an instrument under which the Portfolio acquires ownership of a debt security and the seller agrees, at the time of the sale, to repurchase the obligation at a mutually agreed-upon time and price, thereby determining the yield during the Portfolio's holding period. Repurchase transactions are limited to a term not to exceed 365 days. The Portfolio may enter into repurchase agreements only with institutions believed by the Trust's Board of Trustees to present minimal credit risk. With regard to repurchase transactions, in the event of a bankruptcy or other default of a seller of a repurchase agreement (such as the seller's failure to repurchase the obligation in accordance with the terms of the agreement), the Portfolio could experience both delays in liquidating the underlying securities and losses, including: (a) a possible decline in the value of the underlying security during the period while the Portfolio 6 47 seeks to enforce its rights thereto, (b) possible subnormal levels of income and lack of access to income during this period and (c) the expense of enforcing its rights. Repurchase agreements are considered to be loans under the 1940 Act. BORROWING MONEY/REVERSE REPURCHASE AGREEMENTS. The Portfolio may borrow money and enter into reverse repurchase agreements with respect to its portfolio securities in amounts up to 10% of the value of its total assets at the time of borrowing or entering into a reverse repurchase agreement. Reverse repurchase agreements involve the sale by the Portfolio of a portfolio security at an agreed-upon price, date and interest payment. The Portfolio will borrow money or enter into reverse repurchase agreements solely for temporary or defensive purposes, such as to facilitate the orderly sale of portfolio securities or to accommodate abnormally heavy redemption requests should they occur. Reverse repurchase transactions are limited to a term not to exceed 92 days. The Portfolio will use reverse repurchase agreements when the interest income to be earned from the securities that would otherwise have to be liquidated to meet redemption requests is greater than the interest expense of the reverse repurchase transaction. Reverse repurchase agreements involve the risk that the market value of securities retained by the Portfolio in lieu of liquidation may decline below the repurchase price of the securities sold by the Portfolio which it is obligated to repurchase. The risk, if encountered, could cause a reduction in the net asset value of the Portfolio's shares. Reverse repurchase agreements are considered to be borrowings under the 1940 Act. LENDING OF PORTFOLIO SECURITIES. The Portfolio may lend its portfolio securities in amounts up to 33-1/3% of its total assets to financial institutions in accordance with the investment restrictions of the Portfolio. Such loans would involve risks of delay in receiving additional collateral in the event the value of the collateral decreased below the value of the securities loaned or of delay in recovering the securities loaned or even loss of rights in the collateral should the borrower of the securities fail financially. However, loans will be made only to borrowers deemed by AIM to be of good standing and only when, in AIM's judgment, the income to be earned from the loans justifies the attendant risks. PORTFOLIO TRANSACTIONS. The Portfolio does not seek profits through short-term trading and will generally hold portfolio securities to maturity, but AIM may seek to enhance the yield of the Portfolio by taking advantage of yield disparities or other factors that occur in the money markets. For example, market conditions frequently result in similar securities trading at different prices. AIM may dispose of any portfolio security prior to its maturity if such disposition and reinvestment of proceeds are expected to enhance yield consistent with AIM's judgment as to desirable portfolio maturity structure or if such disposition is believed to be advisable due to other circumstances or conditions. Securities held by the Portfolio will be disposed of prior to maturity if an earlier disposition is deemed desirable by AIM to meet redemption requests. In addition, AIM will continually monitor the creditworthiness of issuers whose securities are held by the Portfolio, and securities held by the Portfolio may be disposed of prior to maturity as a result of a revised credit evaluation of the issuer or other circumstances or considerations. The Portfolio's policy of investing in securities with maturities of 397 days or less will result in high portfolio turnover. Since brokerage commissions are not normally paid on investments of the type made by the Portfolio, the high turnover rate should not adversely affect the Portfolio's net income. PURCHASING DELAYED DELIVERY SECURITIES. In managing the Portfolio's investments, AIM may indicate to dealers or issuers its interest in acquiring certain securities for the Portfolio for settlement beyond a customary settlement date. In some cases, the Portfolio may agree to purchase such securities at stated prices and yields. In such cases, such securities are considered "delayed delivery" securities when traded in the secondary market. Since this is done to facilitate the acquisition of portfolio securities and is not for the purpose of investment leverage, the amount of delayed delivery securities involved may not exceed the estimated amount 7 48 of funds available for investment on the settlement date. Until the settlement date, liquid assets of the Portfolio with a dollar value sufficient at all times to make payment for the delayed delivery securities will be segregated. The total amount of segregated liquid assets may not exceed 25% of the Portfolio's total assets. The delayed delivery securities, which will not begin to accrue interest until the settlement date, will be recorded as an asset of the Portfolio and will be subject to the risks of market value fluctuations. The purchase price of the delayed delivery securities will be recorded as a liability of the Portfolio until settlement. Absent extraordinary circumstances, the Portfolio's right to acquire delayed delivery securities will not be divested prior to the settlement date. ILLIQUID SECURITIES. The Portfolio will invest no more than 10% of its net assets in illiquid securities. INVESTMENT IN OTHER INVESTMENT COMPANIES. The Trust is permitted to invest in other investment companies to the extent permitted by the 1940 Act, and rules and regulations thereunder, and, if applicable, exemptive orders granted by the SEC. The investment policies above may be changed by the Board of Trustees without the affirmative vote of a majority of the outstanding shares of beneficial interest of the Trust. INVESTMENT RESTRICTIONS The Portfolio's investment program is subject to a number of investment restrictions which reflect self-imposed standards as well as federal and state regulatory limitations. These restrictions are designed to minimize certain risks associated with investing in specified types of securities or engaging in certain transactions and to limit the amount of the Portfolio's assets which may be concentrated in any specific industry or issuer. The most significant of these restrictions provide that the Portfolio will not: (1) purchase securities of any one issuer (other than obligations of the U.S. Government, its agencies or instrumentalities) if, immediately after such purchase, more than 5% of the value of the Portfolio's total assets would be invested in such issuer, except as permitted by Rule 2a-7 under the 1940 Act, as such rule may be amended from time to time, and except that the Portfolio may purchase securities of other investment companies to the extent permitted by applicable law or exemptive order; or (2) borrow money or issue senior securities except (a) for temporary or emergency purposes (e.g., in order to facilitate the orderly sale of portfolio securities or to accommodate abnormally heavy redemption requests), the Portfolio may borrow money from banks or obtain funds by entering into reverse repurchase agreements, and (b) to the extent that entering into commitments to purchase securities in accordance with the Portfolio's investment program may be considered the issuance of senior securities. The Portfolio will not purchase securities while borrowings in excess of 5% of its total assets are outstanding. The foregoing investment restrictions of the Portfolio (as well as certain others set forth in the Statement of Additional Information) are matters of fundamental policy which may not be changed without the affirmative vote of a majority of the outstanding shares of the Portfolio. 8 49 In addition to the restrictions described above, the Portfolio must also comply with the requirements of Rule 2a-7 under the 1940 Act, as such Rule may be amended from time to time, which govern the operations of money market funds, and may be more restrictive than the policies described herein. A description of further investment restrictions applicable to the Portfolio is contained in the Statement of Additional Information. PURCHASE OF SHARES Shares of the Class are sold on a continuing basis at their net asset value next determined after an order has been received by the Portfolio. As discussed below, the Trust reserves the right to reject any purchase order. Although there is no sales charge imposed on the purchase of shares of the Class, banks or other institutions may charge a recordkeeping, account maintenance or other fee to their customers, and beneficial holders of the shares should consult with the institutions maintaining their accounts to obtain a schedule of applicable fees. To facilitate the investment of proceeds of purchase orders, investors are urged to place their orders as early in the day as possible. Purchase orders will be accepted for execution on the day the order is placed, provided that the order is properly submitted and received by the Transfer Agent prior to 4:00 p.m. Eastern Time on a business day of the Portfolio. Purchase orders received after such time will be processed at the next day's net asset value. Following the initial investment, subsequent purchases of shares of the Class may also be made via AIM LINK--Registered Trademark-- Remote, a personal computer application software product. Shares of the Class will earn the dividend declared on the effective date of purchase. A "business day of the Portfolio" is any day on which both the Federal Reserve Bank of New York and The Bank of New York, the Trust's custodian bank, are open for business. The Portfolio, however, reserves the right to change the time for which purchases and redemption requests must be submitted to the Portfolio for execution on the same day or any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holidays. It is expected that The Bank of New York and the Federal Reserve Bank of New York will be closed during the next twelve months on Saturdays and Sundays, and on the observed holidays of New Year's Day, Martin Luther King Jr.'s Birthday, Presidents' Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day. Shares of the Class are sold to customers of banks, certain broker-dealers and other financial institutions (individually, an "Institution" and, collectively, "Institutions"). Individuals, corporations, partnerships and other businesses that maintain qualified accounts at an Institution may invest in the Class. Each Institution will render administrative support services to its customers who are the beneficial owners of the Class. Such services may include, among other things, establishment and maintenance of shareholder accounts and records; assistance in processing purchase and redemption transactions in shares of the Class; providing periodic statements showing a customer's account balance in shares; distribution of Trust proxy statements, annual reports and other communications to shareholders whose accounts are serviced by the Institution; and such other services as the Trust may reasonably request. Institutions will be required to certify to the Trust that they comply with applicable state laws regarding registration as broker-dealers, or that they are exempt from such registration. Prior to the initial purchase of shares of the Class, an Account Application, which can be obtained from the Transfer Agent, must be completed and sent to the Transfer Agent at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Any changes made to the information provided in the Account Application must be made in writing or by completing a new form and providing it to the Transfer Agent. An investor must open an account in the Class through an Institution in accordance with procedures established by such Institution. 9 50 Each Institution separately determines the rules applicable to accounts in the Class opened with it, including minimum initial and subsequent investment requirements and the procedures to be followed by investors to effect purchases of the Class. The minimum initial investment is $1,000, and there is no minimum amount of subsequent purchases of the Class by an Institution on behalf of its customers. An investor who proposes to open a Portfolio account with an Institution should consult with a representative of such Institution to obtain a description of the rules governing such an account. The Institution holds shares of the Class registered in its name, as agent for the customer, on the books of the Institution. A statement with regard to the customer's shares in the Class is supplied to the customer periodically, and confirmations of all transactions for the account of the customer are provided by the Institution to the customer promptly upon request. In addition, the Institution sends each customer proxies, periodic reports and other information with regard to the customer's shares. The customer's shares are fully assignable and subject to encumbrance by the customer. All agreements which relate to a customer's account with an Institution are with the Institution. An investor may terminate his relationship with an Institution at any time, in which case an account in the investor's name will be established directly with the Portfolio and the investor will become a shareholder of record. In such case, however, the investor will not be able to purchase additional shares in the Class directly, except through reinvestment of dividends and distributions. Orders for the purchase of shares in the Class are placed by the investor with the Institution. The Institution is responsible for the prompt transmission of the order to the Trust. The Portfolio will normally be required to make immediate settlement in federal funds (member bank deposits with a Federal Reserve Bank) for portfolio securities purchased. Accordingly, payment for shares purchased by Institutions on behalf of their customers must be in federal funds. If an investor's order to purchase shares is paid for other than in federal funds, the Institution, acting on behalf of the investor, completes the conversion into federal funds (which may take two business days), or itself advances federal funds prior to conversion, and promptly transmits the order and payment in the form of federal funds to the Transfer Agent. Subject to the conditions stated above and to the Trust's right to reject any purchase order, orders will be accepted (i) when payment for shares purchased is received by The Bank of New York, the Trust's custodian bank, in the form described above and notice of such order is provided to the Transfer Agent or (ii) at the time the order is placed, if the Portfolio is assured of payment. Shares purchased by orders which are accepted prior to 4:00 p.m. Eastern Time will earn the dividend declared on the date of purchase. Federal Reserve wires should be sent as early in the day as possible in order to facilitate crediting to the shareholder's account. Any funds received with respect to an order which is not accepted by the Trust and any funds received for which an order has not been received will be returned to the sending Institution. An order must specify that it is for the purchase of "Shares of the Personal Investment Class of the Treasury Portfolio," otherwise any funds received will be returned to the sending Institution. The Trust reserves the right in its sole discretion to withdraw all or any part of the offering made by this Prospectus or to reject any purchase order. 10 51 REDEMPTION OF SHARES A shareholder may redeem any or all of its shares of the Class at the net asset value next determined after receipt of the redemption request in proper form by the Trust. Redemption requests with respect to the Class may also be made via AIM LINK--Registered Trademark-- Remote. Normally, the net asset value per share of the Portfolio will remain constant at $1.00. See "Net Asset Value." Redemption requests with respect to shares are normally made through a customer's Institution. Payment for redeemed shares of the Class is normally made by Federal Reserve wire to the commercial bank account designated in the Institution's Account Application, but may be remitted by check upon request by a shareholder. If a redemption request is received by the Transfer Agent prior to 4:00 p.m. Eastern Time on a business day of the Portfolio, the redemption will be effected at the net asset value next determined on such day and the shares of the Class to be redeemed will not receive the dividend declared on the effective date of the redemption. If a redemption request is received by the Transfer Agent after 4:00 p.m. Eastern Time or on other than a business day of the Portfolio, the redemption will be effected at the net asset value of the Portfolio determined as of 4:00 p.m. Eastern Time on the next business day of the Portfolio, and the proceeds of such redemption will normally be wired on the effective day of the redemption. The Portfolio reserves the right to change the time for which redemption requests must be submitted to and received by the Transfer Agent for execution on the same day on any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holidays. A shareholder may change the bank account designated to receive redemption proceeds by written notice to the Trust. The authorized signature on the notice must be guaranteed by a commercial bank or a trust company. Additional documentation may be required when deemed appropriate by the Trust or the Transfer Agent. Shareholders may request a redemption by telephone. Neither the Transfer Agent nor FMC will be liable for any loss, expense or cost arising out of any telephone redemption request effected in accordance with the authorization set forth in the Account Application if they reasonably believe such request to be genuine but may in certain cases be liable for losses due to unauthorized or fraudulent transactions if they do not follow reasonable procedures for verification of telephone transactions. Such reasonable procedures for verification of telephone transactions may include recordings of telephone transactions (maintained for six months), and mailings of confirmations promptly after the transaction. Payment for shares of the Class redeemed by mail and payment for telephone redemptions in amounts of less than $1,000 may be made by check mailed within seven days after receipt of the redemption request in proper form. The Trust may make payment for telephone redemptions in excess of $1,000 by check when it is considered to be in the Portfolio's best interest to do so. Shares of the Class are not redeemable at the option of the Trust unless the Board of Trustees of the Trust determines in its sole discretion that failure to so redeem may have materially adverse consequences to the shareholders of the Trust. 11 52 DIVIDENDS Dividends from the net income of the Portfolio are declared daily to shareholders of record of the Class of the Portfolio as of immediately after 4:00 p.m. Eastern Time on the day of declaration. Net income for dividend purposes is determined daily as of 4:00 p.m. Eastern Time. The dividend accrued and paid for each class will consist of (a) income of the Portfolio, the allocation of which is based upon such class' pro rata share of the total outstanding shares representing an interest in the Portfolio, less (b) Portfolio expenses, such as custodian fees, trustees' fees and accounting and legal expenses, based upon such class' pro rata share of the net assets of the Portfolio, less (c) expenses directly attributable to such class, such as distribution expenses, if any, and transfer agency fees. Although realized gains and losses on the assets of the Portfolio are reflected in its net asset value, they are not expected to be of an amount which would affect its $1.00 per share net asset value for purposes of purchases and redemptions. See "Net Asset Value." Distributions from net realized short-term gains may be declared and paid yearly or more frequently. See "Taxes." The Portfolio does not expect to realize any long-term capital gains or losses in the Portfolio. All dividends declared during a month will normally be paid by wire transfer. Payment will normally be made on the first business day of the following month. A shareholder may elect to have all dividends automatically reinvested in additional full and fractional shares of the Class at the net asset value as of 4:00 p.m. Eastern Time on the last business day of the month. Such election, or any revocation thereof, must be made in writing by the Institution to the Transfer Agent, 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173 and will become effective with dividends paid after its receipt by the Transfer Agent. If a shareholder redeems all the shares in its account at any time during the month, all dividends declared through the date of redemption are paid to the shareholder along with the proceeds of the redemption. The Portfolio uses its best efforts to maintain the net asset value per share of the Portfolio at $1.00 for purposes of sales and redemptions. See "Net Asset Value." Should the Trust incur or anticipate any unusual expense, loss or depreciation which could adversely affect the income or net asset value of the Portfolio, the Trust's Board of Trustees would at that time consider whether to adhere to the present dividend policy described above or to revise it in light of the then prevailing circumstances. For example, under such unusual circumstances, the Board of Trustees might reduce or suspend the daily dividend in order to prevent to the extent possible the net asset value per share of the Portfolio from being reduced below $1.00. Thus, such expenses, losses or depreciation may result in a shareholder receiving no dividends for the period during which it held its shares of the Class and cause such a shareholder to receive upon redemption a price per share lower than the shareholder's original cost. TAXES The policy of the Portfolio is to distribute to its shareholders at least 90% of its investment company taxable income for each year and consistent therewith to meet the distribution requirements of Part I of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). The Portfolio also intends to meet the distribution requirements imposed by the Code in order to avoid the imposition of a 4% excise tax. The Portfolio intends to distribute at least 98% of its net investment income for the calendar year and at least 98% of its net realized capital gains, if any, for the period ending on October 31. The Portfolio also intends to meet the other requirements of Subchapter M, including the requirements with respect to diversification of assets and sources of income, so that the Portfolio will pay no taxes on net investment income and net realized capital gains paid to shareholders. 12 53 Dividends paid by the Portfolio are subject to taxation as of the date of payment, whether received by shareholders in cash or shares of the Class. The Code provides an exception to this general rule: if the Portfolio declares a dividend in October, November or December to shareholders of record in such months and pays the dividend during January of the next year, a shareholder will be treated for tax purposes as having received the dividend on December 31 of the year in which it is declared rather than in January when it is paid. It is anticipated that no portion of distributions will be eligible for the dividends received deduction for corporations. Dividends paid by the Portfolio from its net investment income and short-term capital gains are taxable to shareholders at ordinary income tax rates. The Portfolio will be treated as a separate corporation for purposes of determining taxable income, distribution requirements and other requirements of Subchapter M. Therefore, the Portfolio may not offset its gains against the losses of the other portfolio of the Trust and each portfolio of the Trust must specifically comply with all the provisions of the Code. Distributions and transactions referred to in the preceding paragraphs may be subject to state, local or foreign taxes, and the treatment thereof may differ from the federal income tax consequences discussed herein. Shareholders are advised to consult with their own tax advisors concerning the application of state, local or foreign taxes. Foreign persons who file a United States tax return after December 31, 1996 for a U.S. tax refund and who are not eligible to obtain a social security number must apply to the Internal Revenue Service ("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 advisor or the Transfer Agent. NET ASSET VALUE The net asset value per share of the Portfolio is determined daily as of 4:00 p.m. Eastern Time on each business day of the Portfolio. Net asset value per share is determined by dividing the value of the Portfolio's securities, cash and other assets (including interest accrued but not collected) less all its liabilities (including accrued expenses and dividends payable) by the number of shares outstanding of the Portfolio and rounding the resulting per share net asset value to the nearest one cent. The securities of the Portfolio are valued on the basis of amortized cost pursuant to rules promulgated by the SEC applicable to money market funds. This method values a security at its cost on the date of purchase and thereafter assumes a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the security. While this method provides certainty in valuation, it may result in periods during which value, as determined by amortized cost, is higher or lower than the price the Portfolio would receive if the security were sold. During such periods, the daily yield on shares of the Portfolio computed as described in "Purchases and Redemptions -- Performance Information" in the Statement of Additional Information, may differ somewhat from an identical computation made by an investment company with identical investments utilizing available indications as to market value to value its portfolio securities. 13 54 YIELD INFORMATION Yield information for the Class can be obtained by calling the Trust at (800) 877-4744. Yields will fluctuate from time to time and are not necessarily indicative of future results. Accordingly, the yield information may not provide a basis for comparison with investments which pay a fixed rate of interest for a stated period of time. Yield is a function of the type and quality of the Portfolio's investments, the Portfolio's maturity and the operating expense ratio of the Class. A SHAREHOLDER'S INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT OR BY ANY OTHER INSTITUTION. These factors should be carefully considered by the investor before investing in the Portfolio. For the seven-day period ended August 31, 1997, the current yield and the effective yield of the Class (which assumes the reinvestment of dividends for a 365-day year and a return for the entire year equal to the annualized current yield for the period) were 5.07% and 5.20%, respectively, excluding capital gains distributions. These performance numbers are quoted for illustration purposes only. The performance numbers for any other seven-day period may be substantially different from those quoted above. To assist banks and other institutions performing their own sub-accounting, same day information as to the daily dividend per share for the Portfolio to eight decimal places and current yield normally will be available by 5:00 p.m. Eastern Time. From time to time and in its discretion, AIM or its affiliates may waive all or a portion of its advisory fees and/or assume certain expenses of the Portfolio. Such a practice will have the effect of increasing the Portfolio's yield and total return. REPORTS TO SHAREHOLDERS The Trust furnishes shareholders with semi-annual reports containing information about the Portfolio and its operations, including a list of the investments held by the Portfolio and financial statements. The annual financial statements are audited by the Trust's independent auditors. Unless otherwise requested by the shareholder, each shareholder will be provided by its Institution a written confirmation for each transaction. Institutions establishing sub-accounts will receive a written confirmation for each transaction in a sub-account. Duplicate confirmations may be transmitted to the beneficial owner of the sub-account if requested by the Institution. The Institution will receive a periodic statement setting forth, for each sub-account, the share balance, income earned for the month, income earned for the year to date and the total current value of the account. MANAGEMENT OF THE TRUST BOARD OF TRUSTEES The overall management of the business and affairs of the Trust is vested with the Board of Trustees. The Board of Trustees approves all significant agreements between the Trust and persons or companies furnishing services to the Trust, including agreements with the Trust's investment advisor, distributor, custodian and transfer agent. The day-to-day operations of the Trust are delegated to the Trust's officers and to AIM, subject always to the objective and policies of the Trust and to the general supervision of the Trust's Board of Trustees. Information concerning the Board of Trustees may be found in the Statement of Additional Information. Certain trustees and officers of the Trust are affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the parent corporation of AIM. 14 55 INVESTMENT ADVISOR A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as the investment advisor for the Portfolio pursuant to a Master Investment Advisory Agreement dated as of February 28, 1997 (the "Advisory Agreement"). AIM was organized in 1976 and, together with its affiliates, manages or advises 55 investment company portfolios. Certain of the directors and officers of AIM are also trustees or executive officers of the Trust. AIM is a wholly owned subsidiary of AIM Management, a privately held corporation. AIM Management is a holding company engaged in the financial services business. AIM Management is an indirect, wholly owned subsidiary of AMVESCAP PLC, a publicly-traded holding company that, through its subsidiaries, engages in the business of investment management on an international basis. Pursuant to the terms of the Advisory Agreement, AIM manages the investment of the Portfolio's assets and obtains and evaluates economic, statistical and financial information to formulate and implement investment policies for the Portfolio. The Advisory Agreement requires AIM to reduce its fee to the extent required to satisfy any expense limitations imposed by the securities laws or regulations thereunder of any state in which the Portfolio's shares are qualified for sale. For the fiscal year ended August 31, 1997, AIM received fees with respect to the Portfolio from the Trust under an advisory agreement previously in effect, which provided for the same level of compensation to AIM as the Advisory Agreement, which represented 0.06% of the Portfolio's average daily net assets. During such fiscal year, the expenses of the Class, including AIM's fees, amounted to 0.60% of the Class' average daily net assets. ADMINISTRATIVE SERVICES The Trust has entered into a Master Administrative Services Agreement dated as of February 28, 1997 with AIM (the "Administrative Services Agreement"), pursuant to which AIM has agreed to provide or arrange for the provision of certain accounting and other administrative services to the Portfolio, including the services of a principal financial officer of the Trust and related staff. As compensation to AIM for its services under the Administrative Services Agreement, the Portfolio may reimburse AIM for expenses incurred by AIM in connection with such services. FEE WAIVERS AIM or its affiliates may in its discretion from time to time agree to waive voluntarily all or any portion of its advisory fee and/or assume certain expenses of the Portfolio but will retain its ability to be reimbursed for such fee or expenses prior to the end of the fiscal year. FMC may in its discretion from time to time voluntarily agree to waive its 12b-1 fee, but will retain its ability to be reimbursed prior to the end of each fiscal year. AIM voluntarily reimbursed expenses of $24,200 on the Portfolio during the year ended August 31, 1997. DISTRIBUTOR The Trust has entered into a Master Distribution Agreement dated as of February 28, 1997 (the "Distribution Agreement") with FMC, a registered broker-dealer and a wholly-owned subsidiary of AIM, to act as the exclusive distributor of the shares of the Class. The address of FMC is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Certain trustees and officers of the Trust are affiliated with FMC. The Distribution Agreement provides that FMC has the exclusive right to distribute shares of the Trust either directly or through other broker-dealers. FMC is the distributor of several of the mutual funds managed or advised by AIM. 15 56 FMC may, from time to time, at its expense, pay a bonus or other consideration or incentive to dealers or banks who sell a minimum dollar amount of the shares of the Class during a specific period of time. In some instances, these incentives may be offered only to certain dealers or institutions who have sold or may sell significant amounts of shares. The total amount of such additional bonus payments or other consideration shall not exceed .05% of the net asset value of the shares of the Class sold. Any such bonus or incentive programs will not change the price paid by investors for the purchase of shares of the Class or the amount received as proceeds from such sales. Sales of shares of the Class may not be used to qualify for any incentives to the extent that such incentives may be prohibited by the laws of any jurisdiction. DISTRIBUTION PLAN The Trust has adopted a Master Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that the Trust may compensate FMC in connection with the distribution of the shares of the Class an amount equal to 0.75% on an annualized basis of the average daily net assets of the Portfolio attributable to the Class. Such amounts may be expended when and if authorized by the Board of Trustees and may be used to finance such distribution-related services as expenses of organizing and conducting sales seminars, printing of prospectuses and statements of additional information (and supplements thereto) and reports for other than existing shareholders, preparation and distribution of advertising material and sales literature and costs of administering the Plan. Of the compensation paid to FMC under the Plan, payment of a service fee may be paid to dealers and other financial institutions that provide continuing personal shareholder services to their customers who purchase and own shares of the Class, in amounts of up to 0.25% of the average daily net assets of the Portfolio attributable to the Class which are attributable to the customers of such dealers or financial institutions. Payments to dealers and other financial institutions in excess of such amount and payments retained by FMC would be characterized as an asset-based sales charge pursuant to the Plan. The Plan also imposes a cap on the total amount of sales charges, including asset-based sales charges, that may be paid by the Portfolio with respect to the Class. The Plan does not obligate the Trust to reimburse FMC for the actual expenses FMC may incur in fulfilling its obligations under the Plan on behalf of the Class. Thus, under the Plan, even if FMC's actual expenses exceed the fee payable to FMC thereunder at any given time, the Trust will not be obligated to pay more than that fee. If FMC's expenses are less than the fee it receives, FMC will retain the full amount of the fee. The Plan requires the officers of the Trust to provide the Board of Trustees at least quarterly with a written report of the amounts expended pursuant to the Plan and the purposes for which such expenditures were made. The Board of Trustees shall review these reports in connection with their decisions with respect to the Plan. As required by Rule 12b-1 under the 1940 Act, the Plan was initially approved by the Trust's Board of Trustees, including a majority of the trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust and who have no direct or indirect financial interest in the operation of the Plan or in any agreements related to the Plan ("Qualified Trustees"), on July 19, 1993. In approving the continuance of the Plan in accordance with the requirements of Rule 12b-1, the trustees considered various factors and determined that there is a reasonable likelihood that the Plan will benefit the Trust and the shareholders of the shares of the Class. The Plan may be terminated by a vote of a majority of the Qualified Trustees, or by a vote of a majority of the holders of the outstanding voting securities of the Class. Any change in the Plan that would increase 16 57 materially the distribution expenses paid by the Class requires shareholder approval; otherwise the Plan may be amended by the trustees, including a majority of the Qualified Trustees, by votes cast in person at a meeting called for the purpose of voting upon such amendment. As long as the Plan is in effect, the selection or nomination of the Qualified Trustees is committed to the discretion of the Qualified Trustees. PORTFOLIO TRANSACTIONS AND BROKERAGE AIM is responsible for decisions to buy and sell securities for the Portfolio, broker-dealer selection and negotiation of commission rates. Since purchases and sales of portfolio securities by the Portfolio are usually principal transactions, the Portfolio incurs little or no brokerage commissions. Portfolio securities are normally purchased directly from the issuer or from a market maker for the securities. The purchase price paid to dealers serving as market makers may include a spread between the bid and asked prices. The Portfolio may also purchase securities from underwriters at prices which include a concession paid by the issuer to the underwriter. AIM's primary consideration in effecting a security transaction is to obtain the best net price and the most favorable execution of the order. To the extent that the executions and prices offered by more than one dealer are comparable, AIM may, in its discretion, effect transactions with dealers that furnish statistical, research or other information or services which are deemed by AIM to be beneficial to the Portfolio's investment programs. Certain research services furnished by dealers may be useful to clients of AIM other than the Portfolio. Similarly, any research services received by AIM through placement of portfolio transactions of other clients may be of value to AIM in fulfilling its obligations to the Portfolio. GENERAL INFORMATION ORGANIZATION AND DESCRIPTION OF SHARES The Trust is a Delaware business trust. The Trust was originally incorporated in Maryland on January 24, 1977, but had no operations prior to November 10, 1980. Effective December 31, 1986, the Trust was reorganized as a Massachusetts business trust; and effective October 15, 1993, the Trust was reorganized as a Delaware business trust. On October 15, 1993, the Portfolio succeeded to the assets and assumed the liabilities of the Treasury Portfolio (the "Predecessor Portfolio") of Short-Term Investments Co., a Massachusetts business trust ("STIC"), pursuant to an Agreement and Plan of Reorganization between the Trust and STIC. All historical financial and other information contained in this Prospectus for periods prior to October 15, 1993 relating to the Portfolio (or a class thereof) is that of the Predecessor Portfolio (or the corresponding class thereof). Shares of beneficial interest of the Trust are divided into seven classes. Five classes, including the Class, represent interests in the Portfolio and two classes represent interests in the Treasury TaxAdvantage Portfolio. Each class of shares has a par value of $.01 per share. The other classes of the Trust may have different sales charges and other expenses which may affect performance. An investor may obtain information concerning the Trust's other classes by contacting FMC. All shares of the Trust have equal rights with respect to voting, except that the holders of shares of a particular portfolio or class will have the exclusive right to vote on matters pertaining solely to that portfolio or class. For example, holders of shares of a particular portfolio will have the exclusive right to vote on any investment advisory agreement or investment restriction that relates only to such portfolio. In addition, if a portfolio is divided into various classes, holders of shares of a particular class will have the exclusive right to vote on any matter, such as distribution arrangements, which relates solely to such class. The holders of shares of the Portfolio have distinctive rights with respect to dividends and redemption which are more fully 17 58 described in this Prospectus. In the event of liquidation or termination of the Trust, holders of shares of each portfolio will receive pro rata, subject to the rights of creditors, (a) the proceeds of the sale of the assets held in the respective portfolio to which such shares relate, less (b) the liabilities of the Trust attributable or allocated to the respective portfolio based on the liquidation value of the portfolio. Fractional shares of each portfolio have the same rights as full shares to the extent of their proportionate interest. There will not normally be annual shareholders' meetings. Shareholders may remove trustees from office by votes cast at a meeting of shareholders called solely for such purpose or by written consent. A meeting of shareholders for the sole purpose of considering removal of a trustee shall be called at the request of the holders of 10% or more of the Trust's outstanding shares. As of December 1, 1997, Cullen/Frost Discount Brokers was the owner of record of 66.08%, and The Bank of New York was the owner of record of 27.42%, of the outstanding shares of the Class. As long as each of Cullen/Frost Discount Brokers and The Bank of New York owns over 25% of such shares, it may be presumed to be in "control" of the Personal Investment Class of the Treasury Portfolio as defined in the 1940 Act. There are no preemptive or conversion rights applicable to any of the Trust's shares. The Trust's shares, when issued, will be fully paid and non-assessable. The Board of Trustees may create additional portfolios or classes of the Trust without shareholder approval. TRANSFER AGENT AND CUSTODIAN The Bank of New York, 90 Washington Street, 11th Floor, New York, New York 10286, acts as custodian for the portfolio securities and cash of the Portfolio. A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as transfer agent for shares of the Class. It is currently anticipated that, effective on or about December 29, 1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a registered transfer agent, will become the transfer agent to the Trust. LEGAL COUNSEL The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania, serves as counsel to the Trust and passes upon legal matters for the Trust. SHAREHOLDER INQUIRIES Shareholder inquiries concerning the status of an account should be directed to the Trust at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or may be made by calling (800) 877-4744. OTHER INFORMATION This Prospectus sets forth basic information that investors should know about the Trust and the Portfolio prior to investing. A Statement of Additional Information has been filed with the SEC. Copies of the Statement of Additional Information are available upon request and without charge by writing or calling the Trust or FMC. This Prospectus omits certain information contained in the registration statement filed with the SEC. Copies of the registration statement, including items omitted herein, may be obtained from the SEC by paying the charges prescribed under its rules and regulations. 18 59 [THIS PAGE INTENTIONALLY LEFT BLANK] 60 [THIS PAGE INTENTIONALLY LEFT BLANK] 61 SHORT-TERM INVESTMENTS TRUST SHORT-TERM 11 Greenway Plaza, Suite 100 INVESTMENTS TRUST Houston, Texas 77046-1173 (800) 877-4744 PERSONAL INVESTMENT CLASS OF THE ------------------------------------------- INVESTMENT ADVISOR TREASURY PORTFOLIO PROSPECTUS A I M ADVISORS, INC. 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173 DECEMBER 17, 1997 (713) 626-1919 DISTRIBUTOR FUND MANAGEMENT COMPANY 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173 (800) 877-4744 AUDITORS KPMG PEAT MARWICK LLP 700 Louisiana Houston, Texas 77002 CUSTODIAN THE BANK OF NEW YORK 90 Washington Street 11th Floor New York, New York 10286 TRANSFER AGENT A I M INSTITUTIONAL FUND SERVICES, INC. 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY JURISDICTION TO ANY PERSON TO WHOM SUCH OFFERING MAY NOT [LOGO APPEARS HERE] LAWFULLY BE MADE. FUND MANAGEMENT COMPANY 62 PROSPECTUS PRIVATE INVESTMENT CLASS OF THE TREASURY PORTFOLIO OF SHORT-TERM INVESTMENTS TRUST 11 GREENWAY PLAZA, SUITE 100 HOUSTON, TEXAS 77046-1173 (800) 877-7748 ------------------ The Treasury Portfolio is a money market fund whose investment objective is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. The Treasury Portfolio seeks to achieve its objective by investing in direct obligations of the U.S. Treasury and repurchase agreements secured by such obligations. The instruments purchased by the Treasury Portfolio will have maturities of 397 days or less. The Treasury Portfolio is a series portfolio of Short-Term Investments Trust (the "Trust"), an open-end diversified, series, management investment company. This Prospectus relates solely to the Private Investment Class of the Treasury Portfolio, a class of shares designed to be a convenient vehicle in which customers of banks, certain broker-dealers and other financial institutions can invest short-term cash reserves. ------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------ THIS PROSPECTUS SETS FORTH BASIC INFORMATION THAT A PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING IN SHARES OF THE PRIVATE INVESTMENT CLASS OF THE TREASURY PORTFOLIO AND SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 17, 1997, HAS BEEN FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC") AND IS HEREBY INCORPORATED BY REFERENCE. FOR A COPY OF THE STATEMENT OF ADDITIONAL INFORMATION WITHOUT CHARGE, WRITE TO THE ADDRESS ABOVE OR CALL (800) 877-7748. THE SEC MAINTAINS A WEB SITE AT HTTP://WWW.SEC.GOV THAT CONTAINS THE STATEMENT OF ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER INFORMATION REGARDING THE TRUST. THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND THE TRUST'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. THERE CAN BE NO ASSURANCE THAT THE TREASURY PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. SHARES OF THE TRUST INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. PROSPECTUS DATED: DECEMBER 17, 1997 63 TABLE OF CONTENTS
PAGE PAGE ---- ---- SUMMARY.......................................... 2 DIVIDENDS........................................ 11 TABLE OF FEES AND EXPENSES....................... 4 TAXES............................................ 12 FINANCIAL HIGHLIGHTS............................. 5 NET ASSET VALUE.................................. 13 SUITABILITY FOR INVESTORS........................ 6 YIELD INFORMATION................................ 13 INVESTMENT PROGRAM............................... 6 REPORTS TO SHAREHOLDERS.......................... 14 PURCHASE OF SHARES............................... 9 MANAGEMENT OF THE TRUST.......................... 14 REDEMPTION OF SHARES............................. 10 GENERAL INFORMATION.............................. 17
SUMMARY THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE The Trust is an open-end diversified series management investment company. This Prospectus relates to the Private Investment Class (the "Class") of the Treasury Portfolio (the "Portfolio"). The Portfolio is a money market fund which invests in direct obligations of the U.S. Treasury and repurchase agreements secured by such obligations. The instruments purchased by the Portfolio will have maturities of 397 days or less. The investment objective of the Portfolio is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. Pursuant to separate prospectuses, the Trust also offers other shares of other classes of shares of beneficial interest of the Portfolio: the Institutional Class, Cash Management Class, Personal Investment Class and Resource Class, representing an interest in the Portfolio. Such classes have different distribution arrangements and are designed for institutional and other categories of investors. The Trust also offers shares of two classes of another portfolio, the Treasury TaxAdvantage Portfolio, each pursuant to a separate prospectus. The portfolios of the Trust are referred to collectively as "Portfolios." Because the Trust declares dividends on a daily basis, shares of each class of the Portfolio have the same net asset value (proportionate interest in the net assets of the Portfolio) and bear equally those expenses, such as the advisory fee, that are allocated to the Portfolio as a whole. All classes of the Portfolio share a common investment objective and portfolio of investments. However, different classes of the Portfolio have different shareholder qualifications, and are separately allocated certain class expenses, such as those associated with the distribution of their shares. Therefore, each class will have a different dividend payment and a different yield. INVESTORS IN THE CLASS The Class is designed to be a convenient vehicle in which customers of banks, certain broker-dealers and other financial institutions can invest in a diversified open-end money market fund. PURCHASE OF SHARES Shares of the Class that are offered hereby are sold at net asset value. The minimum initial investment in the Class is $10,000. There is no minimum amount for subsequent investments. Payment for shares of the Class purchased must be in funds immediately available to the Trust. See "Purchase of Shares." REDEMPTION OF SHARES Redemptions may be made without charge at net asset value. Payment for redeemed shares of the Class for which redemption orders are received prior to 4:00 p.m. Eastern Time will normally be made on the same day. See "Redemption of Shares." 2 64 DIVIDENDS The net income of the Portfolio is declared as a dividend daily to shareholders of record immediately after 4:00 p.m. Eastern Time. Dividends are paid monthly by check or wire transfer unless the shareholder has previously elected to have such dividends automatically reinvested in additional shares of the Class. Information concerning the amount of the dividends declared on any particular day will normally be available by 5:00 p.m. Eastern Time on that day. See "Dividends." NET ASSET VALUE The Trust uses the amortized cost method of valuing the securities held by the Portfolio and rounds the per share net asset value to the nearest whole cent. Accordingly, the net asset value per share of the Portfolio will normally remain constant at $1.00. AN INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE IS NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE. See "Net Asset Value." INVESTMENT ADVISOR A I M Advisors, Inc. ("AIM") serves as the Trust's investment advisor and receives a fee based on the Trust's average daily net assets. During the fiscal year ended August 31, 1997, the Trust paid AIM advisory fees with respect to the Portfolio which represented 0.06% of the average daily net assets of the Portfolio. AIM is primarily engaged in the business of acting as manager or advisor to investment companies. Under an Administrative Services Agreement, AIM may be reimbursed by the Trust for its costs of performing certain accounting and other administrative services for the Trust. See "Management of the Trust -- Investment Advisor" "-- Administrative Services." Under a Transfer Agency and Service Agreement, A I M Institutional Fund Services, Inc. ("Transfer Agent"), AIM's wholly owned subsidiary and a registered transfer agent, receives a fee for its provision of transfer agency, dividend distribution and disbursement, and shareholder services to the Trust. It is currently anticipated that, effective on or about December 29, 1997. A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a registered transfer agent will become the transfer agent to the Trust. See "General Information -- Transfer Agent and Custodian." DISTRIBUTOR AND DISTRIBUTION PLAN Fund Management Company ("FMC") acts as the exclusive distributor of the shares of the Class. Pursuant to a plan of distribution adopted by the Trust's Board of Trustees, the Trust may pay up to 0.50% of the average daily net asset value of the Portfolio attributable to the Class to FMC as well as to certain broker-dealers or other financial institutions. Of this amount, up to 0.25% may be for continuing personal services to shareholders provided by broker-dealers or institutions and the balance would be deemed an asset-based sales charge. See "Purchase of Shares" and "Distribution Plan." SPECIAL RISK CONSIDERATIONS The Portfolio may borrow money and enter into reverse repurchase agreements. The Portfolio may invest in repurchase agreements and purchase securities for delayed delivery. Accordingly, an investment in the Portfolio may entail somewhat different risks from an investment in an investment company that does not engage in such practices. There can be no assurance that the Portfolio will be able to maintain a stable net asset value of $1.00 per share. See "Investment Program." The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM Logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, La Familia AIM de Fondos and La Familia AIM de Fondos and Design are registered service marks and aimfunds.com and Invest With Discipline are service marks of A I M Management Group Inc. 3 65 TABLE OF FEES AND EXPENSES SHAREHOLDER TRANSACTION EXPENSES* Maximum sales load imposed on purchases (as a percentage of offering price)............................... None Maximum sales load on reinvested dividends (as a percentage of offering price)............................... None Deferred sales load (as a percentage of original purchase price or redemption proceeds, as applicable)...................... None Redemption fees (as a percentage of amount redeemed, if applicable).................................................... None Exchange fee......................................................... None ANNUAL PORTFOLIO OPERATING EXPENSES -- PRIVATE INVESTMENT CLASS (AS A PERCENTAGE OF AVERAGE NET ASSETS) Management fees...................................................... 0.06% 12b-1 fees (after fee waivers)**..................................... 0.30%*** Other expenses: Custodian fees.................................................... 0.01% Other............................................................. 0.02% ------ Total other expenses.......................................... 0.03% ------ Total portfolio operating expenses -- Private Investment Class**...... 0.39% ======
- --------------- * Beneficial owners of shares of the Class should consider the effect of any changes imposed by their bank, broker-dealer or other financial institution for various services. ** Had there been no fee waivers, 12b-1 fees would have been 0.50% and Total portfolio operating expenses would have been 0.59%. *** It is possible that as a result of Rule 12b-1 fees, long-term shareholders may pay more than the economic equivalent of the maximum front-end sales charges permitted under rules of the National Association of Securities Dealers, Inc. Given the Rule 12b-1 fee of the Class, however, it is estimated that it would take a substantial number of years for a shareholder to exceed such maximum front-end sales charges. EXAMPLE An investor in the Class would pay the following expenses on a $1,000 investment, assuming (1) a 5% annual return and (2) redemption at the end of each time period. 1 year..................................................... $ 4 3 years.................................................... $13 5 years.................................................... $22 10 years.................................................... $49
The Table of Fees and Expenses is designed to assist an investor in understanding the various costs and expenses that an investor in the Class will bear directly or indirectly. (For more complete descriptions of the various costs and expenses, see "Management of the Trust" below.) The expense figures are based upon actual costs and fees charged to the Class for the fiscal year ended August 31, 1997. The Table of Fees and Expenses 4 66 reflects a voluntary waiver of 12b-1 fees for the Class. Future waivers of fees (if any) may vary from the figures reflected in the Table of Fees and Expenses. To the extent any service providers assume expenses of the Class, such assumption of expenses will have the effect of lowering the Class's overall expense ratio and increasing its yield to investors. Beneficial owners of shares of the Class should also consider the effect of any charges imposed by the institution maintaining their accounts. The example in the Table of Fees and Expenses assumes that all dividends and distributions are reinvested and that the amounts listed under "Annual Portfolio Operating Expenses -- Private Investment Class" remain the same in the years shown. The example shown in the above table is based on the amounts listed under "Annual Portfolio Expenses." THE EXAMPLE SHOULD NOT BE CONSIDERED TO BE AN ACCURATE REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. FINANCIAL HIGHLIGHTS Shown below are the per share data, ratios and supplemental data for the five-year period ended August 31, 1997 and the period November 25, 1991 (date operations commenced) through August 31, 1992. The data has been audited by KPMG Peat Marwick LLP, independent auditors, whose unqualified report on the financial statements and the related notes appears in the Statement of Additional Information.
1997 1996 1995 1994 1993 1992 -------- -------- -------- -------- -------- -------- Net asset value, beginning of period...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations: Net investment income................... 0.05 0.05 0.05 0.03 0.03 0.03 -------- -------- -------- -------- -------- -------- Less distributions: Dividends from net investment income.... (0.05) (0.05) (0.05) (0.03) (0.03) (0.03) -------- -------- -------- -------- -------- -------- Net asset value, end of period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total return.............................. 5.16% 5.25% 5.34% 3.22% 2.91% 3.92%(a) ======== ======== ======== ======== ======== ======== Ratios/supplemental data: Net assets, end of period (000s omitted).............................. $463,441 $352,537 $394,585 $412,716 $204,281 $ 525 ======== ======== ======== ======== ======== ======== Ratio of expenses to average net assets(b)............................. 0.39%(c) 0.39% 0.40% 0.38% 0.38% 0.40%(a) ======== ======== ======== ======== ======== ======== Ratio of net investment income to average net assets(d)................. 5.05%(c) 5.14% 5.23% 3.26% 2.81% 3.68%(a) ======== ======== ======== ======== ======== ========
- --------------- (a) Annualized. (b) After fee waivers and/or expense reimbursements. Ratios of expenses to average net assets prior to waiver of distribution fees and/or expense reimbursements were 0.59%, 0.59%, 0.60%, 0.60%, 0.67% and 4.54% for the periods 1997-1992, respectively. (c) After fee waivers and/or expense reimbursements. Ratios are based on average net assets of $398,566,784. (d) Ratios of net investment income (loss) to average net assets prior to waiver of distribution fees and/or expense reimbursements were 4.85%, 4.94%, 5.03%, 3.05%, 2.52% and (0.47%) for the periods 1997-1992, respectively. 5 67 SUITABILITY FOR INVESTORS The Class is intended for use primarily by customers of banks, certain broker-dealers and other financial institutions who seek a convenient vehicle in which to invest in an open-end diversified money market fund. The minimum initial investment is $10,000. Investors in the Class have the opportunity to receive a somewhat higher yield than might be obtainable through direct investment in money market instruments, and enjoy the benefits of diversification, economies of scale and same-day liquidity. Generally, higher interest rates can be obtained on the purchase of very large blocks of money market instruments. Of course, any such relative increase in interest rates may be offset to some extent by the operating expenses of the Class. INVESTMENT PROGRAM INVESTMENT OBJECTIVE The investment objective of the Portfolio is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. The Portfolio seeks to achieve its objective by investing in direct obligations of the U.S. Treasury and repurchase agreements secured by such obligations. The money market instruments in which the Portfolio invests are considered to carry very little risk and accordingly may not have as high a yield as that available on money market instruments of lesser quality. The Portfolio consists exclusively of money market instruments which have maturities of 397 days or less from the date of purchase (except that securities subject to repurchase agreements may have longer maturities). INVESTMENT POLICIES The Portfolio invests exclusively in direct obligations of the U.S. Treasury, which include Treasury bills, notes and bonds, and repurchase agreements relating to such securities. The Portfolio may also engage in certain investment practices described below. The market values of the money market instruments held by the Portfolio will be affected by changes in the yields available on similar securities. If yields have increased since a security was purchased, the market value of such security will generally have decreased. Conversely, if yields have decreased, the market value of such security will generally have increased. REPURCHASE AGREEMENTS. The Portfolio intends to invest in repurchase agreements with banks and broker-dealers pertaining to the securities described above and which at the date of purchase are "First Tier" securities as defined in Rule 2a-7 under the 1940 Act, as such Rule may be amended from time to time. Generally, "First Tier" securities are securities that are rated in the highest rating category by two nationally recognized statistical rating organizations ("NRSROs") or, if only rated by one NRSRO, are rated in the highest rating category by that NRSRO or, if unrated, are determined by AIM (under the supervision of and pursuant to guidelines established by the Trust's Board of Trustees) to be of comparable quality to a rated security that meets the foregoing quality standards. A repurchase agreement is an instrument under which the Portfolio acquires ownership of a debt security and the seller agrees, at the time of the sale, to repurchase the obligation at a mutually agreed-upon time and price, thereby determining the yield during the Portfolio's holding period. Repurchase transactions are limited to a term not to exceed 365 days. The Portfolio may enter into repurchase agreements only with institutions believed by the Trust's Board of Trustees to present minimal credit risk. With regard to repurchase transactions, in the event of a bankruptcy or other default of a seller of a repurchase agreement (such as the seller's failure to repurchase the obligation in accordance with the terms of the agreement), the Portfolio could experience both delays in liquidating the underlying securities and losses, including: (a) a possible decline in the value of the underlying security during the period while the Portfolio 6 68 seeks to enforce its rights thereto, (b) possible subnormal levels of income and lack of access to income during this period, and (c) expenses of enforcing its rights. Repurchase agreements are considered to be loans by the Portfolio under the 1940 Act. BORROWING MONEY/REVERSE REPURCHASE AGREEMENTS. The Portfolio may borrow money and enter into reverse repurchase agreements with respect to its portfolio securities in amounts up to 10% of the value of its total assets at the time of borrowing or entering into a reverse repurchase agreement. Reverse repurchase agreements involve the sale by the Portfolio of a portfolio security at an agreed-upon price, date and interest payment. The Portfolio will borrow money or enter into reverse repurchase agreements solely for temporary or defensive purposes, such as to facilitate the orderly sale of portfolio securities or to accommodate abnormally heavy redemption requests should they occur. Reverse repurchase transactions are limited to a term not to exceed 92 days. The Portfolio will use reverse repurchase agreements when the interest income to be earned from the securities that would otherwise have to be liquidated to meet redemption requests is greater than the interest expense of the reverse repurchase transaction. Reverse repurchase agreements involve the risk that the market value of securities retained by the Portfolio in lieu of liquidation may decline below the repurchase price of the securities sold by the Portfolio which it is obligated to repurchase. The risk, if encountered, could cause a reduction in the net asset value of the Portfolio's shares. Reverse repurchase agreements are considered to be borrowings by the Portfolios under the 1940 Act. LENDING OF PORTFOLIO SECURITIES. The Portfolio may also lend its portfolio securities in amounts up to 33-1/3% of its total assets to financial institutions in accordance with the investment restrictions of the Portfolio. Such loans would involve risks of delay in receiving additional collateral in the event the value of the collateral decreased below the value of the securities loaned or of delay in recovering the securities loaned or even loss of rights in the collateral should the borrower of the securities fail financially. However, loans will be made only to borrowers deemed by AIM to be of good standing and only when, in AIM's judgment, the income to be earned from the loans justifies the attendant risks. PORTFOLIO TRANSACTIONS. The Portfolio does not seek profits through short-term trading and will generally hold portfolio securities to maturity, but AIM may seek to enhance the yield of the Portfolio by taking advantage of yield disparities or other factors that occur in the money markets. For example, market conditions frequently result in similar securities trading at different prices. AIM may dispose of any portfolio security prior to its maturity if such disposition and reinvestment of proceeds are expected to enhance yield consistent with AIM's judgment as to desirable portfolio maturity structure or if such disposition is believed to be advisable due to other circumstances or conditions. Securities held by the Portfolio will be disposed of prior to maturity if an earlier disposition is deemed desirable by AIM to meet redemption requests. In addition, AIM will continually monitor the creditworthiness of issuers whose securities are held by the Portfolio, and securities held by the Portfolio may be disposed of prior to maturity as a result of a revised credit evaluation of the issuer or other circumstances or considerations. The Portfolio's policy of investing in securities with maturities of 397 days or less will result in high portfolio turnover. Since brokerage commissions are not normally paid on investments of the type made by the Portfolio, the high turnover rate should not adversely affect the Portfolio's net income. PURCHASING DELAYED DELIVERY SECURITIES. In managing the Portfolio's investments, AIM may indicate to dealers or issuers its interest in acquiring certain securities for the Portfolio for settlement beyond a customary settlement date. In some cases, the Portfolio may agree to purchase such securities at stated prices and yields. In such cases, such securities are considered "delayed delivery" securities when traded in the secondary market. Since this is done to facilitate the acquisition of portfolio securities and is not for the purpose of investment leverage, the amount of delayed delivery securities involved may not exceed the estimated amount 7 69 of funds available for investment on the settlement date. Until the settlement date, liquid assets of the Portfolio with a dollar value sufficient at all times to make payment for the delayed delivery securities will be segregated. The total amount of segregated liquid assets may not exceed 25% of the Portfolio's total assets. The delayed delivery securities, which will not begin to accrue interest until the settlement date, will be recorded as an asset of the Portfolio and will be subject to the risks of market value fluctuations. The purchase price of the delayed delivery securities will be recorded as a liability of the Portfolio until settlement. Absent extraordinary circumstances, the Portfolio's right to acquire delayed delivery securities will not be divested prior to the settlement date. ILLIQUID SECURITIES. The Portfolio will invest no more than 10% of its net assets in illiquid securities. INVESTMENT IN OTHER INVESTMENT COMPANIES. The Trust is permitted to invest in other investment companies to the extent permitted by the 1940 Act, and rules and regulations thereunder, and, if applicable, exemptive orders granted by the SEC. The investment policies described above may be changed by the Board of Trustees without the affirmative vote of a majority of the outstanding shares of beneficial interest of the Trust. INVESTMENT RESTRICTIONS The Portfolio's investment program is subject to a number of investment restrictions which reflect self-imposed standards as well as federal and state regulatory limitations. These restrictions are designed to minimize certain risks associated with investing in specified types of securities or engaging in certain transactions and to limit the amount of the Portfolio's assets which may be concentrated in any specific industry or issuer. The most significant of these restrictions provide that the Portfolio will not: (1) purchase securities of any one issuer (other than obligations of the U.S. Government, its agencies or instrumentalities) if, immediately after such purchase, more than 5% of the value of the Portfolio's total assets would be invested in such issuer, except as permitted by Rule 2a-7 under the 1940 Act, as such rule may be amended from time to time, and except that the Portfolio may purchase securities of other investment companies to the extent permitted by applicable law or exemptive order; or (2) borrow money or issue senior securities except (a) for temporary or emergency purposes (e.g., in order to facilitate the orderly sale of portfolio securities to accommodate abnormally heavy redemption requests), the Portfolio may borrow money from banks or obtain funds by entering into reverse repurchase agreements, and (b) to the extent that entering into commitments to purchase securities in accordance with the Portfolio's investment program may be considered the issuance of senior securities. The Portfolio will not purchase securities while borrowings in excess of 5% of its total assets are outstanding. The foregoing investment restrictions of the Portfolio (as well as certain others set forth in the Statement of Additional Information) are matters of fundamental policy which may not be changed without the affirmative vote of a majority of the outstanding shares of the Portfolio. In addition to the restrictions described above, the Portfolio must also comply with the requirements of Rule 2a-7 under the 1940 Act, as such rule may be amended from time to time, which govern the operations of money market funds, and may be more restrictive than the policies described herein. A description of 8 70 further investment restrictions applicable to the Portfolio is contained in the Statement of Additional Information. PURCHASE OF SHARES Shares of the Class are sold on a continuing basis at their net asset value next determined after an order has been received by the Portfolio. As discussed below, the Trust reserves the right to reject any purchase order. Although there is no sales charge imposed on the purchase of shares of the Class, banks or other institutions may charge a recordkeeping, account maintenance or other fee to their customers, and beneficial holders of the shares of the Class should consult with the institutions maintaining their accounts to obtain a schedule of applicable fees. To facilitate the investment of proceeds of purchase orders, investors are urged to place their orders as early in the day as possible. Purchase orders will be accepted for execution on the day the order is placed, provided that the order is properly submitted and received by the Transfer Agent prior to 4:00 p.m. Eastern Time on a business day of the Portfolio. Purchase orders received after such time will be processed at the next day's net asset value. Following the initial investment, subsequent purchases of shares of the Class may also be made via AIM LINK--Registered Trademark-- Remote, a personal computer application software product. Shares of the Class will earn the dividend declared on the effective date of purchase. A "business day of the Portfolio" is any day on which both the Federal Reserve Bank of New York and The Bank of New York, the Trust's custodian bank, are open for business. The Portfolio, however, reserves the right to change the time for which purchase and redemption requests must be submitted to the Portfolio for execution or the same day on any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holiday. It is expected that The Bank of New York and the Federal Reserve Bank of New York will be closed during the next twelve months on Saturdays and Sundays, and on the observed holidays of New Year's Day, Martin Luther King Jr.'s Birthday, Presidents' Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day. Shares of the Class are sold to customers of banks, certain broker-dealers and other financial institutions (each, an Institution, and collectively, "Institutions"). Individuals, corporations, partnerships and other businesses that maintain qualified accounts at an Institution may invest in the shares of the Class. Each Institution will render administrative support services to its customers who are the beneficial owners of the shares of the Class. Such services may include, among other things, establishment and maintenance of shareholder accounts and records; assistance in processing purchase and redemption transactions in shares of the Class; providing periodic statements showing a customer's account balance in shares of the Class; distribution of Trust proxy statements, annual reports and other communications to shareholders whose accounts are serviced by the Institution; and such other services as the Trust may reasonably request. Institutions will be required to certify to the Trust that they comply with applicable state law regarding registration as broker-dealers, or that they are exempt from such registration. Prior to the initial purchase of shares of the Class, an Account Application, which can be obtained from the Transfer Agent, must be completed and sent to the Transfer Agent at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Any changes made to the information provided in the Account Application must be made in writing or by completing a new form and providing it to the Transfer Agent. An investor must open an account in the shares of the Class through an Institution in accordance with procedures established by such Institution. Each Institution separately determines the rules applicable to accounts in the shares of the Class opened with it, including minimum initial and subsequent investment requirements and the procedures to be followed by investors to effect purchases of shares of the Class. The minimum initial investment is $10,000, 9 71 and there is no minimum amount of subsequent purchases of shares of the Class by an Institution on behalf of its customers. An investor who proposes to open a Portfolio account with an Institution should consult with a representative of such Institution to obtain a description of the rules governing such an account. The Institution holds shares of the Class registered in its name, as agent for the customer, on the books of the Institution. A statement with regard to the customer's shares of the Class is supplied to the customer periodically, and confirmations of all transactions for the account of the customer are provided by the Institution to the customer promptly upon request. In addition, the Institution sends to each customer proxies, periodic reports and other information with regard to the customer's shares of the Class. The customer's shares of the Class are fully assignable and subject to encumbrance by the customer. All agreements which relate to a customer's account with an Institution are with the Institution. An investor may terminate his relationship with an Institution at any time, in which case an account in the investor's name will be established directly with the Portfolio and the investor will become a shareholder of record. In such case, however, the investor will not be able to purchase additional shares of the Class directly, except through reinvestment of dividends and distributions. Orders for the purchase of shares of the Class are placed by the investor with the Institution. The Institution is responsible for the prompt transmission of the order to the Trust. The Portfolio will normally be required to make immediate settlement in federal funds (member bank deposits with a Federal Reserve Bank) for portfolio securities purchased. Accordingly, payment for shares of the Class purchased by Institutions on behalf of their customers must be in federal funds. If an investor's order to purchase shares of the Class is paid for other than in federal funds, the Institution, acting on behalf of the investor, completes the conversion into federal funds (which may take two business days), or itself advances federal funds prior to conversion, and promptly transmits the order and payment in the form of federal funds to the Transfer Agent. Subject to the conditions stated above and to the Trust's right to reject any purchase order, orders will be accepted (i) when payment for shares of the Class purchased is received by The Bank of New York, the Trust's custodian bank, in the form described above and notice of such order is provided to the Transfer Agent or (ii) at the time the order is placed, if the Portfolio is assured of payment. Shares of the Class purchased by orders which are accepted prior to 4:00 p.m. Eastern Time will earn the dividend declared on the date of purchase. Federal Reserve wires should be sent as early as possible in order to facilitate crediting to the shareholder's account. Any funds received with respect to an order which is not accepted by the Trust and any funds received for which an order has not been received will be returned to the sending Institution. An order must specify that it is for the purchase of Shares of the "Private Investment Class of the Treasury Portfolio," otherwise any funds received will be returned to the sending Institution. The Trust reserves the right in its sole discretion to withdraw all or any part of the offering made by this Prospectus or to reject any purchase order. REDEMPTION OF SHARES A shareholder may redeem any or all of its shares of the Class at the net asset value next determined after receipt of the redemption request in proper form by the Trust. Redemption requests with respect to the Class may also be made via AIM LINK--Registered Trademark-- Remote. Normally, the net asset value per share of the Portfolio will remain constant at $1.00. See "Net Asset Value." Redemption requests with respect to shares of the Class are normally made through a customer's Institution. 10 72 Payment for redeemed shares of the Class is normally made by Federal Reserve wire to the commercial bank account designated in the Institution's Account Application, but may be remitted by check upon request by a shareholder. If a redemption request is received by the Transfer Agent prior to 4:00 p.m. Eastern Time on a business day of the Portfolio, the redemption will be effected at the net asset value next determined on such day and the shares of the Class to be redeemed will not receive the dividend declared on the effective date of the redemption. If a redemption request is received by the Transfer Agent after 4:00 p.m. Eastern Time or on other than a business day of the Portfolio, the redemption will be effected at the net asset value of the Portfolio determined as of 4:00 p.m. Eastern Time on the next business day of the Portfolio, and the proceeds of such redemption will normally be wired on the effective day of the redemption. The Portfolio reserves the right to change the time of which redemption requests must be submitted to and received by the Transfer Agent for execution on the same day on any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holidays. A shareholder may change the bank account designated to receive redemption proceeds by written notice to the Trust. The authorized signature on the notice must be guaranteed by a commercial bank or a trust company. Additional documentation may be required when deemed appropriate by the Trust, or the Transfer Agent. Shareholders may request a redemption by telephone. Neither the Transfer Agent nor FMC will be liable for any loss, expense or cost arising out of any telephone redemption request effected in accordance with the authorization set forth in the Account Application if they reasonably believe such request to be genuine but may in certain cases be liable for losses due to unauthorized or fraudulent transactions if they do not follow reasonable procedures for verification of telephone transactions. Such reasonable procedures for verification of telephone transactions may include recordings of telephone transactions (maintained for six months), and mailings of confirmations promptly after the transaction. Payment for shares of the Class redeemed by mail and payment for telephone redemptions in amounts of less than $1,000 may be made by check mailed within seven days after receipt of the redemption request in proper form. The Trust may make payment for telephone redemptions in excess of $1,000 by check when it is considered to be in the Portfolio's best interest to do so. In certain cases, the Trust may call for the redemption of, or refuse to transfer or issue, shares of the Class in order to comply with law or to further the purposes for which the Trust is formed. If a transfer or redemption of shares of the Class causes the value of shares of the Class in an account to be less than $500, the Trust may cause the remaining shares to be redeemed. DIVIDENDS Dividends from the net income of the Portfolio are declared daily to shareholders of record of each class of the Portfolio as of immediately after 4:00 p.m. Eastern Time on the day of declaration. Net income for dividend purposes is determined daily as of 4:00 p.m. Eastern Time. The dividend accrued and paid for each class will consist of (a) income of the Portfolio, the allocation of which is based upon such class' pro rata share of the total outstanding shares representing an interest in the Portfolio, less (b) Portfolio expenses, such as custodian fees, trustees' fees, accounting and legal expenses, based upon such class' pro rata share of the net assets of the Portfolio, less (c) expenses directly attributable to such class, such as distribution expenses, if any, and transfer agency fees. Although realized gains and losses on the assets of the Portfolio are reflected in its net asset value, they are not expected to be of an amount which would affect its $1.00 per share net asset value for purposes of purchases and redemptions. See "Net Asset Value." Distributions from net realized 11 73 short-term gains may be declared and paid yearly or more frequently. See "Taxes." The Portfolio does not expect to realize any long-term capital gains or losses. All dividends declared during a month will normally be paid by wire transfer. Payment will normally be made on the first business day of the following month. A shareholder may elect to have all dividends automatically reinvested in additional full and fractional shares of the Class at the net asset value as of 4:00 p.m. Eastern Time on the last business day of the month. Such election, or any revocation thereof, must be made in writing by the Institution to the Transfer Agent at 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173 and will become effective with dividends paid after its receipt by the Transfer Agent. If a shareholder redeems all the shares of the Class in its account at any time during the month, all dividends declared through the date of redemption are paid to the shareholder along with the proceeds of the redemption. The Portfolio uses its best efforts to maintain the net asset value per share at $1.00 for purposes of sales and redemptions. See "Net Asset Value." Should the Trust incur or anticipate any unusual expense, loss or depreciation which could adversely affect the income or net asset value of the Portfolio, the Trust's Board of Trustees would at that time consider whether to adhere to the present dividend policy described above or to revise it in light of the then prevailing circumstances. For example, under such unusual circumstances, the Board of Trustees might reduce or suspend the daily dividend in order to prevent to the extent possible the net asset value per share of the Portfolio from being reduced below $1.00. Thus, such expenses, losses or depreciation may result in a shareholder receiving no dividends for the period during which it held its shares of the Class and cause such a shareholder to receive upon redemption a price per share lower than the shareholder's original cost. TAXES The policy of the Portfolio is to distribute to its shareholders at least 90% of its investment company taxable income for each year and consistent therewith to meet the distribution requirements of Part I of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). The Portfolio also intends to meet the distribution requirements imposed by the Code in order to avoid the imposition of a 4% excise tax. The Portfolio intends to distribute at least 98% of its net investment income for the calendar year and at least 98% of its net realized capital gains, if any, for the period ending on October 31. The Portfolio also intends to meet the other requirements of Subchapter M, including the requirements with respect to diversification of assets and sources of income, so that the Portfolio will pay no taxes on net investment income and net realized capital gains paid to shareholders. Dividends paid by the Portfolio are subject to taxation as of the date of payment, whether received by shareholders in cash or shares of the Class. The Code provides an exception to this general rule: if the Portfolio declares a dividend in October, November or December to shareholders of record in such months and pays the dividend during January of the next year, a shareholder will be treated for tax purposes as having received the dividend on December 31 of the year in which it is declared rather than in January when it is paid. It is anticipated that no portion of distributions will be eligible for the dividends received deduction for corporations. Dividends paid by the Portfolio from its net investment income and short-term capital gains are taxable to shareholders at ordinary income tax rates. The Portfolio will be treated as a separate corporation for purposes of determining taxable income, distribution requirements and other requirements of Subchapter M. Therefore, the Portfolio may not offset its 12 74 gains against the losses of the other portfolio of the Trust and each portfolio of the Trust must specifically comply with all the provisions of the Code. Distributions and transactions referred to in the preceding paragraphs may be subject to state, local or foreign taxes, and the treatment thereof may differ from the federal income tax consequences discussed herein. Shareholders are advised to consult with their own tax advisors concerning the application of state, local or foreign taxes. Foreign persons who file a United States tax return after December 31, 1996 for a U.S. tax refund and who are not eligible to obtain a social security number must apply to the Internal Revenue Service ("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 advisor or the Transfer Agent. NET ASSET VALUE The net asset value per share of the Portfolio is determined daily as of 4:00 p.m. Eastern Time on each business day of the Portfolio. Net asset value per share is determined by dividing the value of the Portfolio's securities, cash and other assets (including interest accrued but not collected) less all of its liabilities (including accrued expenses and dividends payable), by the number of shares outstanding of the Portfolio and rounding the resulting per share net asset value to the nearest one cent. The securities of the Portfolio are valued on the basis of amortized cost pursuant to rules promulgated by the SEC to money market funds. This method values a security at its cost on the date of purchase and thereafter assumes a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the security. While this method provides certainty in valuation, it may result in periods during which value, as determined by amortized cost, is higher or lower than the price the Portfolio would receive if the security were sold. During such periods, the daily yield on shares of the Portfolio, computed as described in "Purchases and Redemptions -- Performance Information" in the Statement of Additional Information, may differ somewhat from an identical computation made by an investment company with identical investments utilizing available indications as to market value to value its portfolio securities. YIELD INFORMATION Yield information for the Class can be obtained by calling the Trust at (800) 877-7748. Yields will fluctuate from time to time and are not necessarily indicative of future results. Accordingly, the yield information may not provide a basis for comparison with investments which pay a fixed rate of interest for a stated period of time. Yield is a function of the type and quality of a Portfolio's investments, the Portfolio's maturity and the operating expense ratio of the Class. A SHAREHOLDER'S INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT OR BY ANY INSTITUTION. These factors should be carefully considered by the investor before making an investment in the Portfolio. For the seven-day period ended August 31, 1997, the current yield and the effective yield (which assumes the reinvestment of dividends for a 365-day year and a return for the entire year equal to the annualized current yield for the period) of the Class were 5.27% and 5.41%, respectively. These performance numbers are quoted for illustration purposes only. The performance numbers for any other seven-day period may be substantially different from those quoted above. 13 75 To assist banks and other institutions performing their own subaccounting, same day information as to the daily dividend per share for the Portfolio to eight decimal places and current yield normally will be available by 5:00 p.m. Eastern Time. From time to time and in its discretion, AIM or its affiliates may waive all or a portion of its advisory fees and/or assume certain expenses of the Portfolio. Such a practice will have the effect of increasing the Portfolio's yield and total return. REPORTS TO SHAREHOLDERS The Trust furnishes shareholders with semi-annual reports containing information about the Portfolio and its operations, including a list of the investments held in the Portfolio and financial statements. The annual financial statements are audited by the Trust's independent auditors. Unless otherwise requested by the shareholder, each shareholder will be provided with a written confirmation for each transaction by its Institution. Institutions establishing sub-accounts will receive a written confirmation for each transaction in a sub-account. Duplicate confirmations may be transmitted to the beneficial owner of the sub-account if requested by the Institution. The Institution will receive a periodic statement setting forth, for each sub-account, the share balance, income earned for the month, income earned for the year to date and the total current value of the account. MANAGEMENT OF THE TRUST BOARD OF TRUSTEES The overall management of the business and affairs of the Trust is vested with its Board of Trustees. The Board of Trustees approves all significant agreements between the Trust and persons or companies furnishing services to the Trust, including agreements with the Trust's investment advisor, distributor, custodian and transfer agent. The day-to-day operations of the Trust are delegated to the Trust's officers and to AIM, subject always to the objectives and policies of the Trust and to the general supervision of the Trust's Board of Trustees. Information concerning the Board of Trustees may be found in the Statement of Additional Information. Certain trustees and officers of the Trust are affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the parent corporation of AIM. INVESTMENT ADVISOR A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as the investment advisor for the Portfolio pursuant to a Master Investment Advisory Agreement dated as of February 28, 1997 (the "Advisory Agreement"). AIM was organized in 1976 and, together with its affiliates, manages or advises 55 investment company portfolios. Certain of the directors and officers of AIM are also trustees or executive officers of the Trust. AIM is a wholly owned subsidiary of AIM Management. AIM Management is a holding company engaged in the financial services business. AIM Management is an indirect, wholly owned subsidiary of AMVESCAP PLC, a publicly-traded holding company that, through its subsidiaries, engages in the business of investment management on an international basis. Pursuant to the terms of the Advisory Agreement, AIM manages the investment of the Portfolio's assets and obtains and evaluates economic, statistical and financial information to formulate and implement investment policies for the Portfolio. The Advisory Agreement requires AIM to reduce its fee to the extent 14 76 required to satisfy any expense limitations imposed by the securities laws or regulations thereunder of any state in which the Portfolio's shares are qualified for sale. For the fiscal year ended August 31, 1997, AIM received fees from the Trust under an advisory agreement previously in effect, which provided for the same level of compensation to AIM as the Advisory Agreement, with respect to the Portfolio which represented 0.06% of such Portfolio's average daily net assets. During such fiscal year, the expenses of the Class, including AIM's fees, amounted to 0.39% of the Class' average daily net assets. ADMINISTRATIVE SERVICES The Trust has entered into a Master Administrative Services Agreement effective February 28, 1997 with AIM (the "Administrative Services Agreement"), pursuant to which AIM has agreed to provide or arrange for the provision of certain accounting and other administrative services to the Portfolio, including the services of a principal financial officer of the Trust and related staff. As compensation to AIM for its services under the Administrative Services Agreement, the Portfolio may reimburse AIM for expenses incurred by AIM in connection with such services. FEE WAIVERS AIM or its affiliates may in its discretion from time to time agree to waive voluntarily all or any portion of its advisory fee and/or assume certain expenses of the Portfolio but will retain its ability to be reimbursed for such fee or expenses prior to the end of the fiscal year. FMC may in its discretion from time to time voluntarily agree to waive its 12b-1 fee, but will retain its ability to be reimbursed prior to the end of each fiscal year. AIM voluntarily reimbursed expenses of $24,200 on the Portfolio during the year ended August 31, 1997. DISTRIBUTOR The Trust has entered into a Master Distribution Agreement dated as of February 28, 1997 (the "Distribution Agreement") with FMC, a registered broker-dealer and a wholly-owned subsidiary of AIM, to act as the exclusive distributor of the shares of the Class. The address of FMC is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Certain trustees and officers of the Trust are affiliated with FMC and AIM. The Distribution Agreement provides that FMC has the exclusive right to distribute shares of the Class either directly or through other broker-dealers. FMC is the distributor of several of the mutual funds managed or advised by AIM. FMC may, from time to time, at its expense, pay a bonus or other consideration or incentive to dealers or banks who sell a minimum dollar amount of the shares of the Class during a specific period of time. In some instances, these incentives may be offered only to certain dealers or institutions who have sold or may sell significant amounts of shares. The total amount of such additional bonus payments or other consideration shall not exceed 0.05% of the net asset value of the shares of the Class sold. Any such bonus or incentive programs will not change the price paid by investors for the purchase of shares of the Class or the amount received as proceeds from such sales. Dealers or institutions may not use sales of the shares of the Class to qualify for any incentives to the extent that such incentives may be prohibited by the laws of any jurisdiction. DISTRIBUTION PLAN The Trust has adopted a Master Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that the Trust may compensate FMC in connection with the distribution of shares of 15 77 the Class in an amount equal to 0.50% on an annualized basis of the average daily net assets of the Portfolio attributable to the Class. Such amounts may be expended when and if authorized by the Board of Trustees and may be used to finance such distribution-related services as expenses of organizing and conducting sales seminars, printing of prospectuses and statements of additional information (and supplements thereto) and reports for other than existing shareholders, preparation and distribution of advertising material and sales literature and costs of administering the Plan. Of the compensation paid to FMC under the Plan, a service fee may be paid to dealers and other financial institutions that provide continuing personal shareholder services to their customers who purchase and own shares of the Class, in amounts of up to 0.25% of the average net assets of the Portfolio attributable to the Class which are attributable to the customers of such dealers or financial institutions. Payments to dealers and other financial institutions in excess of such amount and payments retained by FMC would be characterized as an asset-based sales charge pursuant to the Plan. The Plan also imposes a cap on the total amount of sales charges, including asset-based sales charges, that may be paid by the Portfolio with respect to the Class. The Plan does not obligate the Trust to reimburse FMC for the actual expenses FMC may incur in fulfilling its obligations under the Plan on behalf of the Class. Thus, under the Plan, even if FMC's actual expenses exceed the fee payable to FMC thereunder at any given time, the Trust will not be obligated to pay more than that fee. If FMC's expenses are less than the fee it receives, FMC will retain the full amount of the fee. The Plan requires the officers of the Trust to provide the Board of Trustees at least quarterly with a written report of the amounts expended pursuant to each Plan and the purposes for which such expenditures were made. The Board of Trustees shall review these reports in connection with their decisions with respect to the Plan. As required by Rule 12b-1 under the 1940 Act, the Plan was initially approved by the Board of Trustees, including a majority of the trustees who are not "interested persons" (as defined in the 1940 Act) of the Fund and who have no direct or indirect financial interest in the operation of the Plan or in any agreements related to the Plan ("Qualified Trustees") on July 19, 1993. In approving the continuance of the Plan in accordance with the requirements of Rule 12b-1, the trustees considered various factors and determined that there is a reasonable likelihood that the Plan will benefit the Trust and the shareholders of the Class. The Plan may be terminated by a vote of a majority of the Qualified Trustees, or by a vote of a majority of the holders of the outstanding voting securities of the shares of the Class. Any change in the Plan that would increase materially the distribution expenses paid by the Class requires shareholder approval; otherwise the Plan may be amended by the trustees, including a majority of the Qualified Trustees, by vote cast in person at a meeting called for the purpose of voting upon such amendment. As long as the Plan is in effect, the selection or nomination of the Qualified Trustees is committed to the discretion of the Qualified Trustees. PORTFOLIO TRANSACTIONS AND BROKERAGE AIM is responsible for decisions to buy and sell securities for the Portfolio, broker-dealer selection and negotiation of commission rates. Since purchases and sales of portfolio securities by the Portfolio are usually principal transactions, the Portfolio incurs little or no brokerage commissions. Portfolio securities are normally purchased directly from the issuer or from a market maker for the securities. The purchase price paid to dealers serving as market makers may include a spread between the bid and asked prices. The Portfolio may also purchase securities from underwriters at prices which include a concession paid by the issuer to the underwriter. 16 78 AIM's primary consideration in effecting a security transaction is to obtain the best net price and the most favorable execution of the order. To the extent that the executions and prices offered by more than one dealer are comparable, AIM may, in its discretion, effect transactions with dealers that furnish statistical, research or other information or services which are deemed by AIM to be beneficial to the Portfolio's investment programs. Certain research services furnished by dealers may be useful to clients of AIM other than the Portfolio. Similarly, any research services received by AIM through placement of portfolio transactions of other clients may be of value to AIM in fulfilling its obligations to the Portfolio. GENERAL INFORMATION ORGANIZATION AND DESCRIPTION OF SHARES The Trust is a Delaware business trust. The Trust was originally incorporated in Maryland on January 24, 1977, but had no operations prior to November 10, 1980. Effective December 31, 1986, the Trust was reorganized as a Massachusetts business trust; and effective October 15, 1993, the Trust was reorganized as a Delaware business trust. On October 15, 1993, the Portfolio succeeded to the assets and assumed the liabilities of the Treasury Portfolio (the "Predecessor Portfolio") of Short-Term Investments Co., a Massachusetts business trust ("STIC"), pursuant to an Agreement and Plan of Reorganization between the Trust and STIC. All historical financial and other information contained in this Prospectus for periods prior to October 15, 1993 relating to the Portfolio (or a class thereof) is that of the Predecessor Portfolio (or the corresponding class thereof). Shares of beneficial interest of the Trust are divided into seven classes. Five classes, including the Class, represent interests in the Portfolio, and two classes represent interests in the Treasury TaxAdvantage Portfolio. Each class of shares has a par value of $.01 per share. The other classes of the Trust may have different sales charges and other expenses which may affect performance. An investor may obtain information concerning the Trust's other classes by contacting FMC. All shares of the Trust have equal rights with respect to voting, except that the holders of shares of a particular portfolio or class will have the exclusive right to vote on matters pertaining solely to that portfolio or class. For example, holders of shares of a particular portfolio will have the exclusive right to vote on any investment advisory agreement or investment restriction that relates only to such portfolio. In addition, if a portfolio is divided into various classes, holders of shares of a particular class will have the exclusive right to vote on any matter, such as distribution arrangements, which relates solely to such class. The shareholders of the Class have distinctive rights with respect to dividends and redemption which are more fully described in this Prospectus. In the event of liquidation or termination of the Trust, holders of shares of each portfolio will receive pro rata, subject to the rights of creditors, (a) the proceeds of the sale of the assets held in the respective portfolio to which such shares relate, less (b) the liabilities of the Trust attributable to the respective portfolio or allocated to the respective portfolio based on the liquidation value of such portfolio. Fractional shares of each portfolio have the same rights as full shares to the extent of their proportionate interest. There will not normally be annual shareholders' meetings. Shareholders may remove trustees from office by votes cast at a meeting of shareholders called solely for such purpose or by written consent. A meeting of shareholders for the sole purpose of considering removal of a trustee shall be called at the request of the holders of 10% or more of the Trust's outstanding shares. As of December 1, 1997, Liberty Bank & Trust Company of Tulsa, N.A. was the owner of record of 50.06% of the outstanding shares of the Class. As long as Liberty Bank & Trust Company of Tulsa, N.A. owns 17 79 over 25% of such shares, it may be presumed to be in "control" of the Private Investment Class of the Treasury Portfolio, as defined in the 1940 Act. There are no preemptive or conversion rights applicable to any of the Trust's shares. The Trust's shares, when issued, will be fully paid and non-assessable. The Board of Trustees may create additional portfolios and classes of the Trust without shareholder approval. TRANSFER AGENT AND CUSTODIAN The Bank of New York, 90 Washington Street, 11th Floor, New York, New York 10286, acts as custodian for the portfolio securities and cash of the Portfolio. A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as transfer agent for the shares of the Class. It is currently anticipated that, effective on or about December 29, 1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a registered transfer agent, will become the transfer agent to the Trust. LEGAL COUNSEL The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania, serves as counsel to the Trust and passes upon legal matters for the Trust. SHAREHOLDER INQUIRIES Shareholder inquiries concerning the status of an account should be directed to an investor's Institution, or to the Trust at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or may be made by calling (800) 877-7748. OTHER INFORMATION This Prospectus sets forth basic information that investors should know about the Trust and the Portfolio prior to investing. A Statement of Additional Information has been filed with the SEC. Copies of the Statement of Additional Information are available upon request and without charge by writing or calling the Trust or FMC. This Prospectus omits certain information contained in the registration statement filed with the SEC. Copies of the registration statement, including items omitted herein, may be obtained from the SEC by paying the charges prescribed under its rules and regulations. 18 80 [THIS PAGE INTENTIONALLY LEFT BLANK] 81 SHORT-TERM INVESTMENTS TRUST SHORT-TERM 11 Greenway Plaza, Suite 100 INVESTMENTS TRUST Houston, Texas 77046-1173 (800) 877-7748 PRIVATE INVESTMENT CLASS INVESTMENT ADVISOR OF THE A I M ADVISORS, INC. ------------------------------------------------------ 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173 TREASURY PORTFOLIO PROSPECTUS (713) 626-1919 DECEMBER 17, 1997 DISTRIBUTOR FUND MANAGEMENT COMPANY 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173 (800) 877-7748 AUDITORS KPMG PEAT MARWICK LLP 700 Louisiana Houston, Texas 77002 CUSTODIAN THE BANK OF NEW YORK 90 Washington Street 11th Floor New York, New York 10286 TRANSFER AGENT A I M INSTITUTIONAL FUND SERVICES, INC. 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY JURISDICTION TO ANY PERSON TO WHOM SUCH OFFERING MAY NOT [LOGO APPEARS HERE] LAWFULLY BE MADE. FUND MANAGEMENT COMPANY
82 SHORT-TERM INVESTMENTS TRUST Prospectus - -------------------------------------------------------------------------------- TREASURY The Treasury Portfolio is a money market fund PORTFOLIO whose investment objective is the maximization of current income to the extent consistent with the RESOURCE preservation of capital and the maintenance of CLASS liquidity. The Treasury Portfolio seeks to achieve its objective by investing in direct obligations of the U.S. Treasury and repurchase agreements secured by such DECEMBER 17, 1997 obligations. The instruments purchased by the Treasury Portfolio will have maturities of 397 days or less. The Treasury Portfolio is a series portfolio of Short-Term Investments Trust (the "Trust"), an open- end, diversified, series management investment company. This Prospectus relates solely to the Resource Class of the Treasury Portfolio, a class of shares designed to be a convenient vehicle in which institutional customers of banks, certain broker-dealers and other financial institutions can invest in a diversified money market fund. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS SETS FORTH BASIC INFORMATION THAT A PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING IN SHARES OF THE RESOURCE CLASS OF THE TREASURY PORTFOLIO AND SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 17, 1997, HAS BEEN FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC") AND IS HEREBY INCORPORATED BY REFERENCE. FOR A COPY OF THE STATEMENT OF ADDITIONAL INFORMATION WITHOUT CHARGE, WRITE TO THE ADDRESS BELOW OR CALL (800) 825-6858. THE SEC MAINTAINS A WEB SITE AT HTTP://WWW.SEC.GOV THAT CONTAINS THE STATEMENT OF ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER INFORMATION REGARDING THE TRUST. THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND THE TRUST'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. THERE CAN BE NO ASSURANCE THAT THE TREASURY PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. SHARES OF THE TRUST INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. [LOGO APPEARS HERE] Fund Management Company 11 Greenway Plaza Suite 100 Houston, Texas 77046-1173 (800) 825-6858 83 SUMMARY THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE The Trust is an open-end diversified series management investment company. This Prospectus relates to the Resource Class (the "Class") of the Treasury Portfolio (the "Portfolio"). The Portfolio is a money market fund which invests in direct obligations of the U.S. Treasury and repurchase agreements secured by such obligations. The instruments purchased by the Portfolio will have maturities of 397 days or less. The investment objective of the Portfolio is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. Pursuant to separate prospectuses, the Trust also offers shares of other classes of shares of beneficial interest of the Portfolio: the Institutional Class, Private Investment Class, Personal Investment Class and Cash Management Class, representing an interest in the Portfolio. Such classes have different distribution arrangements and are designed for institutional and other categories of investors. The Trust also offers shares of two classes of another portfolio, the Treasury TaxAdvantage Portfolio, each pursuant to separate prospectuses. Such classes have different distribution arrangements and are designed for institutional and other categories of investors. The portfolios of the Trust are referred to collectively as the "Portfolios." Because the Trust declares dividends on a daily basis, shares of each class of the Portfolio have the same net asset value (proportionate interest in the net assets of the Portfolio) and bear equally those expenses, such as the advisory fee, that are allocated to the Portfolio as a whole. All classes of the Portfolio share a common investment objective and portfolio of investments. However, different classes of the Portfolio have different shareholder qualifications and are separately allocated certain class expenses, such as those associated with the distribution of their shares. Therefore, each class will have a different dividend payment and a different yield. INVESTORS IN THE CLASS The Class is designed to be a convenient vehicle in which institutional customers of banks, certain broker-dealers and other financial institutions can invest in a diversified open-end money market fund. PURCHASE OF SHARES Shares of the Class that are offered hereby are sold at net asset value. The minimum initial investment in the Class is $10,000. There is no minimum amount for subsequent investments. Payment for shares of the Class purchased must be in funds immediately available to the Portfolio. See "Purchase of Shares." REDEMPTION OF SHARES Redemptions may be made without charge at net asset value. Payment for redeemed shares of the Class for which redemption orders are received prior to 4:00 p.m. Eastern Time will normally be made on the same day. See "Redemption of Shares." DIVIDENDS The net income of the Portfolio is declared as a dividend daily to shareholders of record immediately after 4:00 p.m. Eastern Time. Dividends are paid monthly by check or wire transfer unless the shareholder has previously elected to have such dividends automatically reinvested in additional shares of the Class. Information concerning the amount of the dividends declared on any particular day will normally be available by 5:00 p.m. Eastern Time on that day. See "Dividends." NET ASSET VALUE The Trust uses the amortized cost method of valuing the securities of the Portfolio and rounds the per share net asset value to the nearest whole cent. Accordingly, the net asset value per share of the Portfolio will normally remain constant at $1.00. AN INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE IS NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE. See "Net Asset Value." INVESTMENT ADVISOR A I M Advisors, Inc. ("AIM") serves as the Portfolio's investment advisor and receives a fee based on the Portfolio's average daily net assets. During the fiscal year ended August 31, 1997, the Trust paid AIM advisory fees with respect to the Portfolio which represented 0.06% of the average daily net assets of the Portfolio. AIM is primarily engaged in the business of acting as manager or advisor to investment companies. Under a separate Administrative Services Agreement, AIM may be reimbursed by the Trust for its costs of performing certain accounting and other administrative services for the Fund. See "Management of the Trust -- Investment Advisor" and "-- Administrative Services." Under a Transfer Agency and Service Agreement, A I M Insti- 2 84 tutional Fund Services, Inc. ("Transfer Agent"), AIM's wholly owned subsidiary and a registered transfer agent, receives a fee for its provision of transfer agency, dividend distribution and disbursement, and shareholder services to the Trust. It is currently anticipated that, effective on or about December 29, 1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a registered transfer agent will become the transfer agent to the Trust. See "General Information -- Transfer Agent and Custodian." DISTRIBUTOR AND DISTRIBUTION PLAN Fund Management Company ("FMC") acts as the exclusive distributor of the shares of the Class. Pursuant to a plan of distribution adopted by the Trust's Board of Trustees, FMC receives a fee from the Trust of up to 0.20% of the average daily net assets of the Portfolio attributable to the shares of the Class as compensation for distribution-related services pursuant to plans of distribution adopted by the Trust's Board of Trustees. The Trust may also make payments pursuant to such distribution plans to certain broker-dealers or other financial institutions for distribution-related services. See "Purchase of Shares" and "Distribution Plan." SPECIAL RISK CONSIDERATIONS The Portfolio may borrow money and enter into reverse repurchase agreements. The Portfolio may invest in repurchase agreements and purchase securities for delayed delivery. Accordingly, an investment in the Portfolio may entail somewhat different risks from an investment in an investment company that does not engage in such practices. There can be no assurance that the Portfolio will be able to maintain a stable net asset value of $1.00 per share. See "Investment Program." The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM Logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, La Familia AIM de Fondos and La Familia AIM de Fondos and Design are registered service marks and aimfunds.com and Invest With Discipline are service marks of A I M Management Group Inc. 3 85 TABLE OF FEES AND EXPENSES SHAREHOLDER TRANSACTION EXPENSES* Maximum sales load imposed on purchases (as a percentage of offering price).................... None Maximum sales load on reinvested dividends (as a percentage of offering price).................... None Deferred sales load (as a percentage of original purchase price or redemption proceeds, as applicable)............................... None Redemption fees (as a percentage of amount redeemed, if applicable)............................... None Exchange fee.............................................. None ANNUAL PORTFOLIO OPERATING EXPENSES -- RESOURCE CLASS (AS A PERCENTAGE OF AVERAGE NET ASSETS) Management fees........................................... 0.06% 12b-1 fees (after fee waivers)**.......................... 0.16% Other expenses (estimated): Custodian fees......................................... 0.01% Other.................................................. 0.02% ------ Total other expenses.............................. 0.03% ------ Total portfolio operating expenses -- Resource Class**.... 0.25% ======
- --------------- * Beneficial owners of shares of the Class should consider the effect of any charges imposed by their bank, broker-dealer or other financial institution for various services. ** Had there been no fee waivers, 12b-1 fees and Total portfolio operating expenses would have been 0.20% and 0.30%, respectively. EXAMPLE An investor in the Class would pay the following expenses on a $1,000 investment, assuming (1) a 5% annual return and (2) redemption at the end of each time period. 1 year..................................................... $ 3 3 years.................................................... $ 8 5 years.................................................... $14 10 years.................................................... $32
The Table of Fees and Expenses is designed to assist an investor in understanding the various costs and expenses that an investor in the Class will bear directly or indirectly. (For more complete descriptions of the various costs and expenses, see "Management of the Trust" below.) The expense figures ended August 31, 1997. The Other Expenses and 12b-1 fees figure is based upon estimated costs and the estimated size of the Class and the Portfolio and estimated fees to be charged for the current fiscal year. Thus, actual expenses may be greater or less than such estimates. Future waivers of fees (if any) may vary from the figures reflected in the Table of Fees and Expenses. To the extent any service providers assume expenses of the Class, such assumption of expenses will have the effect of lowering the Class's overall expense ratio and increasing its yield to investors. Beneficial owners of shares of the Class should also consider the effect of any charges imposed by the institution maintaining their accounts. The example in the Table of Fees and Expenses assumes that all dividends and distributions are reinvested and that the amounts listed under "Annual Portfolio Operating Expenses -- Resource Class" remain the same in the years shown. The example shown in the above table is based on the amounts listed under "Annual Portfolio Operating Expenses." THE EXAMPLE SHOULD NOT BE CONSIDERED TO BE AN ACCURATE REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 4 86 FINANCIAL HIGHLIGHTS Shown below are the per share data, ratios and supplemental data for the fiscal year ended August 31, 1997 and for the period March 12, 1996 (date operations commenced) through August 31, 1996. The data has been audited by KPMG Peat Marwick LLP, independent auditors, whose unqualified report on the financial statements and the related notes appears in the Statement of Additional Information.
1997 1996 -------- ------- Net asset value, beginning of period........................ $ 1.00 $ 1.00 Income from investment operations: Net investment income..................................... 0.05 0.03 -------- ------- Less distributions: Dividends from net investment income...................... (0.05) (0.03) -------- ------- Net asset value, end of period............................ $ 1.00 $ 1.00 ======== ======= Total return.............................................. 5.30% 5.09%(a) ======== ======= Ratios/supplemental data: Net assets, end of period (000s omitted).................. $237,123 $33,339 ======== ======= Ratio of expenses to average net assets(b)................ 0.25%(c) 0.25%(a) ======== ======= Ratio of net investment income to average net assets(d)... 5.19%(c) 5.07%(a) ======== =======
- --------------- (a) Annualized. (b) After fee waivers and/or expense reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursement was 0.29% and 0.29% (annualized) for the periods 1997-1996, respectively. (c) Ratios are based on average net assets of $197,440,644. (d) After fee waivers and/or expense reimbursements. Ratio of net investment income to average net assets prior to fee waivers and/or expense reimbursement was 5.15% and 5.03% (annualized) for the periods 1997-1996, respectively. SUITABILITY FOR INVESTORS The shares of the Class are intended for use primarily by institutional customers of banks, certain broker-dealers and other financial institutions who seek a convenient vehicle in which to invest in an open-end diversified money market fund. It is expected that the shares of the Class may be particularly suitable investments for corporate cash managers, municipalities or other public entities. The minimum initial investment is $10,000. Investors in the shares of the Class have the opportunity to receive a somewhat higher yield than might be obtainable through direct investment in money market instruments, and enjoy the benefits of diversification, economies of scale and same-day liquidity. Generally, higher interest rates can be obtained on the purchase of very large blocks of money market instruments. Of course, any such relative increase in interest rates may be offset to some extent by the operating expenses of the shares of the Class. INVESTMENT PROGRAM INVESTMENT OBJECTIVE The investment objective of the Portfolio is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. The Portfolio seeks to achieve its objective by investing in direct obligations of the U.S. Treasury and repurchase agreements secured by such obligations. The money market instruments in which the Portfolio invests are considered to carry very little risk and accordingly may not have as high a yield as that available on money market instruments of lesser quality. The Portfolio consists exclusively of money market instruments which have maturities of 397 days or less from the date of purchase (except that securities subject to repurchase agreements may have longer maturities). 5 87 INVESTMENT POLICIES The Portfolio invests exclusively in direct obligations of the U.S. Treasury, which include Treasury bills, notes and bonds, and repurchase agreements relating to such securities. The Portfolio may also engage in the investment practices described below. The market values of the money market instruments held by the Portfolio will be affected by changes in the yields available on similar securities. If yields have increased since a security was purchased, the market value of such security will generally have decreased. Conversely, if yields have decreased, the market value of such security will generally have increased. REPURCHASE AGREEMENTS. The Portfolio intends to invest in repurchase agreements with banks and broker-dealers pertaining to the securities described above and which at the date of purchase are "First Tier" securities as defined in Rule 2a-7 under the 1940 Act, as such Rule may be amended from time to time. Generally, "First Tier" securities are securities that are rated in the highest rating category by two nationally recognized statistical rating organizations ("NRSROs") or, if only rated by one NRSRO, are rated in the highest rating category by that NRSRO or, if unrated, are determined by AIM (under the supervision of and pursuant to guidelines established by the Trust's Board of Trustees) to be of comparable quality to a rated security that meets the foregoing quality standards. A repurchase agreement is an instrument under which the Portfolio acquires ownership of a debt security and the seller agrees, at the time of the sale, to repurchase the obligation at a mutually agreed-upon time and price, thereby determining the yield during the Portfolio's holding period. Repurchase transactions are limited to a term not to exceed 365 days. The Portfolio may enter into repurchase agreements only with institutions believed by the Trust's Board of Trustees to present minimal credit risk. With regard to repurchase transactions, in the event of a bankruptcy or other default of a seller of a repurchase agreement (such as the seller's failure to repurchase the obligation in accordance with the terms of the agreement), the Portfolio could experience both delays in liquidating the underlying securities and losses, including: (a) a possible decline in the value of the underlying security during the period while the Portfolio seeks to enforce its rights thereto, (b) possible subnormal levels of income and lack of access to income during this period, and (c) expenses of enforcing its rights. Repurchase agreements are considered to be loans under the 1940 Act. BORROWING MONEY/REVERSE REPURCHASE AGREEMENTS. The Portfolio may borrow money and enter into reverse repurchase agreements with respect to its portfolio securities in amounts up to 10% of the value of its total assets at the time of borrowing or entering into a reverse repurchase agreement. Reverse repurchase agreements involve the sale by the Portfolio of a portfolio security at an agreed-upon price, date and interest payment. The Portfolio will borrow money or enter into reverse repurchase agreements solely for temporary or defensive purposes, such as to facilitate the orderly sale of portfolio securities or to accommodate abnormally heavy redemption requests should they occur. Reverse repurchase transactions are limited to a term not to exceed 92 days. The Portfolio will use reverse repurchase agreements when the interest income to be earned from the securities that would otherwise have to be liquidated to meet redemption requests is greater than the interest expense of the reverse repurchase transaction. Reverse repurchase agreements involve the risk that the market value of securities retained by the Portfolio in lieu of liquidation may decline below the repurchase price of the securities sold by the Portfolio which it is obligated to repurchase. The risk, if encountered, could cause a reduction in the net asset value of the Portfolio's shares. Reverse repurchase agreements are considered to be borrowings by the Portfolio under the 1940 Act. LENDING OF PORTFOLIO SECURITIES. The Portfolio may also lend its portfolio securities in amounts up to 33-1/3% of its total assets to financial institutions in accordance with the investment restrictions of the Portfolio. Such loans would involve risks of delay in receiving additional collateral in the event the value of the collateral decreased below the value of the securities loaned or of delay in recovering the securities loaned or even loss of rights in the collateral should the borrower of the securities fail financially. However, loans will be made only to borrowers deemed by AIM to be of good standing and only when, in AIM's judgment, the income to be earned from the loans justifies the attendant risks. PURCHASING DELAYED DELIVERY SECURITIES. In managing the Portfolio's investments, AIM may indicate to dealers or issuers its interest in acquiring certain securities for the Portfolio for settlement beyond a customary settlement date. In some cases, the Portfolio may agree to purchase such securities at stated prices and yields. In such cases, such securities are considered "delayed delivery" securities when traded in the secondary market. Since this is done to facilitate the acquisition of portfolio securities and is not for the purpose of investment leverage, the amount of delayed delivery securities involved may not exceed the estimated amount of funds available for investment on the settlement date. Until the settlement date, liquid assets of the Portfolio with a dollar value sufficient at all times to make payment for the delayed delivery securities will be segregated. The total amount of segregated liquid assets may not exceed 25% of the Portfolio's total assets. The delayed delivery securities, which will not begin to accrue interest until the settlement date, will be recorded as an asset of the Portfolio and will be subject to the risks of market value fluctuations. The purchase price of the delayed delivery securities will be recorded as a liability of the Portfolio until settlement. Absent extraordinary circumstances, the Portfolio's right to acquire delayed delivery securities will not be divested prior to the settlement date. ILLIQUID SECURITIES. The Portfolio will invest no more than 10% of its net assets in illiquid securities. 6 88 PORTFOLIO TRANSACTIONS. The Portfolio does not seek profits through short-term trading and will generally hold portfolio securities to maturity, but AIM may seek to enhance the yield of the Portfolio by taking advantage of yield disparities or other factors that occur in the money markets. For example, market conditions frequently result in similar securities trading at different prices. AIM may dispose of any portfolio security prior to its maturity if such disposition and reinvestment of proceeds are expected to enhance yield consistent with AIM's judgment as to desirable portfolio maturity structure or if such disposition is believed to be advisable due to other circumstances or conditions. Securities held by the Portfolio will be disposed of prior to maturity if an earlier disposition is deemed desirable by AIM to meet redemption requests. In addition, AIM will continually monitor the creditworthiness of issuers whose securities are held by the Portfolio, and securities held by the Portfolio may be disposed of prior to maturity as a result of a revised credit evaluation of the issuer or other circumstances or considerations. INVESTMENT IN OTHER INVESTMENT COMPANIES. The Trust permitted to invest in other investment companies to the extent permitted by the 1940 Act, and rules and regulations thereunder, and, if applicable, exemptive orders granted by the SEC. The investment policies described above may be changed by the Board of Trustees without the affirmative vote of a majority of the outstanding shares of beneficial interest of the Trust. INVESTMENT RESTRICTIONS The Portfolio's investment program is subject to a number of investment restrictions which reflect self-imposed standards as well as federal and state regulatory limitations. These restrictions are designed to minimize certain risks associated with investing in specified types of securities or engaging in certain transactions and to limit the amount of the Portfolio's assets which may be concentrated in any specific industry or issuer. The most significant of these restrictions provide that the Portfolio will not: (1) purchase securities of any one issuer (other than obligations of the U.S. Government, its agencies or instrumentalities) if, immediately after such purchase, more than 5% of the value of the Portfolio's total assets would be invested in such issuer, except as permitted by Rule 2a-7 under the 1940 Act, as such rule may be amended from time to time, and except that the Portfolio may purchase securities of other investment companies to the extent permitted by applicable law or exemptive order; or (2) borrow money or issue senior securities except (a) for temporary or emergency purposes (e.g., in order to facilitate the orderly sale of portfolio securities or to accommodate abnormally heavy redemption requests), the Portfolio may borrow money from banks or obtain funds by entering into reverse repurchase agreements, and (b) to the extent that entering into commitments to purchase securities in accordance with the Portfolio's investment program may be considered the issuance of senior securities. The Portfolio will not purchase securities while borrowings in excess of 5% of its total assets are outstanding. The foregoing investment restrictions of the Portfolio (as well as certain others set forth in the Statement of Additional Information) are matters of fundamental policy which may not be changed without the affirmative vote of a majority of the outstanding shares of the Portfolio. In addition to the restrictions described above, the Portfolio must also comply with the requirements of Rule 2a-7 under the 1940 Act, as such Rule may be amended from time to time, which govern the operations of money market funds, and may be more restrictive than the policies described herein. A description of further investment restrictions applicable to the Portfolio is contained in the Statement of Additional Information. PURCHASE OF SHARES Shares of the Class are sold on a continuing basis at their net asset value next determined after an order has been received by the Portfolio. As discussed below, the Trust reserves the right to reject any purchase order. Although there is no sales charge imposed on the purchase of shares of the Class, banks or other institutions may charge a recordkeeping, account maintenance or other fee to their customers, and beneficial holders of the shares of the Class should consult with the institutions maintaining their accounts to obtain a schedule of applicable fees. To facilitate the investment of proceeds of purchase orders, the investors are urged to place their orders as early in the day as possible. Purchase orders will be accepted for execution on the day the order is placed, provided that the order is properly submitted and received by the Transfer Agent prior to 4:00 p.m. Eastern 7 89 Time on a business day of the Portfolio. Purchase orders received after such time will be processed at the next day's net asset value. Following the initial investment, subsequent purchases of shares of the Class may also be made via AIM LINK--Registered Trademark-- Remote, a personal computer application software product. Shares of the Class will earn the dividend declared on the effective date of purchase. A "business day of the Portfolio" is any day on which both the Federal Reserve Bank of New York and The Bank of New York, the Trust's custodian bank, are open for business. The Portfolio, however, reserves the right to change the time for which purchase and redemption request must be submitted to the Portfolio for execution on the same day or any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holidays. It is expected that The Bank of New York and the Federal Reserve Bank of New York will be closed during the next twelve months on Saturdays and Sundays, and on the observed holidays of New Year's Day, Martin Luther King Jr.'s Birthday, Presidents' Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day. Shares of the Class are sold to institutional customers of banks, certain broker-dealers and other financial institutions (individually, an "Institution" and collectively, "Institutions"). Individuals, corporations, partnerships and other businesses that maintain qualified accounts at an Institution may invest in the shares of the Class. Each Institution will render administrative support services to its customers who are the beneficial owners of the shares of the Class. Such services may include, among other things, establishment and maintenance of shareholder accounts and records; assistance in processing purchase and redemption transactions in shares of the Class; providing periodic statements showing a customer's account balance in shares of the Class; distribution of Trust proxy statements, annual reports and other communications to shareholders whose accounts are serviced by the Institution; and such other services as the Trust may reasonably request. Institutions will be required to certify to the Trust that they comply with applicable state laws regarding registration as broker-dealers, or that they are exempt from such registration. Prior to the initial purchase of shares of the Class, an Account Application, which can be obtained from the Transfer Agent, must be completed and sent to the Transfer Agent at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Any changes made to the information provided in the Account Application must be made in writing or by completing a new form and providing it to the Transfer Agent. An investor must open an account in the shares of the Class through an Institution in accordance with procedures established by such Institution. Each Institution separately determines the rules applicable to accounts in the shares of the Class opened with it, including minimum initial and subsequent investment requirements and the procedures to be followed by investors to effect purchases of shares of the Class. The minimum initial investment is $10,000, and there is no minimum amount of subsequent purchases of shares of the Class by an Institution on behalf of its customers. An investor who proposes to open a Portfolio account with an Institution should consult with a representative of such Institution to obtain a description of the rules governing such an account. The Institution holds shares of the Class registered in its name, as agent for the customer, on the books of the Institution. A statement with regard to the customer's shares of the Class is supplied to the customer periodically, and confirmations of all transactions for the account of the customer are provided by the Institution to the customer promptly upon request. In addition, the Institution sends to each customer proxies, periodic reports and other information with regard to the customer's shares of the Class. The customer's shares of the Class are fully assignable and subject to encumbrance by the customer. All agreements which relate to a customer's account with an Institution are with the Institution. An investor may terminate his relationship with an Institution at any time, in which case an account in the investor's name will be established directly with the Portfolio and the investor will become a shareholder of record. In such case, however, the investor will not be able to purchase additional shares of the Class directly, except through reinvestment of dividends and distributions. Orders for the purchase of shares of the Class are placed by the investor with the Institution. The Institution is responsible for the prompt transmission of the order to the Trust. The Portfolio will normally be required to make immediate settlement in federal funds (member bank deposits with a Federal Reserve Bank) for portfolio securities purchased. Accordingly, payment for shares of the Class purchased by Institutions on behalf of their customers must be in federal funds. If an investor's order to purchase shares of the Class is paid for other than in federal funds, the Institution, acting on behalf of the investor, completes the conversion into federal funds (which may take two business days), or itself advances federal funds prior to conversion, and promptly transmits the order and payment in the form of federal funds to the Transfer Agent. Subject to the conditions stated above and to the Trust's right to reject any purchase order, orders will be accepted (i) when payment for shares of the Class purchased is received by The Bank of New York, the Trust's custodian bank, in the form described above and notice of such order is provided to the Transfer Agent or (ii) at the time the order is placed, if the Portfolio is assured of payment. Shares of the Class purchased by orders which are accepted prior to 3:00 p.m. Eastern Time will earn the dividend declared on the date of purchase. Federal Reserve wires should be sent as early as possible in order to facilitate crediting to the shareholder's account. Any funds received with respect to an order which is not accepted by the Trust and any funds received for which an order has not 8 90 been received will be returned to the sending Institution. An order must specify that it is for the purchase of shares of the "Resource Class of the Treasury Portfolio," otherwise any funds received will be returned to the sending Institution. The Trust reserves the right in its sole discretion to withdraw all or any part of the offering made by this Prospectus or to reject any purchase order. REDEMPTION OF SHARES A shareholder may redeem any or all of its shares of the Class at the net asset value next determined after receipt of the redemption request in proper form by the Trust. Redemption requests with respect to the Class may also be made via AIM LINK--Registered Trademark-- Remote. Normally, the net asset value per share of the Portfolio will remain constant at $1.00. See "Net Asset Value." Redemption requests with respect to shares of the Class are normally made through a customer's Institution. Payment for redeemed shares of the Class is normally made by Federal Reserve wire to the commercial bank account designated in the Institution's Account Application, but may be remitted by check upon request by a shareholder. If a redemption request is received by the Transfer Agent prior to 4:00 p.m. Eastern Time on a business day of the Portfolio, the redemption will be effected at the net asset value next determined on such day and the shares of the Class to be redeemed will not receive the dividend declared on the effective date of the redemption. If a redemption request is received by the Transfer Agent after 4:00 p.m. Eastern Time or on other than a business day of the Portfolio, the redemption will be effected at the net asset value of the Portfolio determined as of 4:00 p.m. Eastern Time on the next business day of the Portfolio, and the proceeds of such redemption will normally be wired on the effective day of the redemption. The Portfolio reserves the right to change the time for which redemption requests must be submitted to and received by the Transfer Agent for execution on the same day on any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holidays. A shareholder may change the bank account designated to receive redemption proceeds by written notice to the Trust. The authorized signature on the notice must be guaranteed by a commercial bank or a trust company. Additional documentation may be required when deemed appropriate by the Trust or the Transfer Agent. Shareholders may request a redemption by telephone. Neither the Transfer Agent nor FMC will be liable for any loss, expense or cost arising out of any telephone redemption request effected in accordance with the authorization set forth in the Account Application if they reasonably believe such request to be genuine but may in certain cases be liable for losses due to unauthorized or fraudulent transactions if they do not follow reasonable procedures for verification of telephone transactions. Such reasonable procedures for verification of telephone transactions may include recordings of telephone transactions (maintained for six months), and mailings of confirmations promptly after the transaction. Payment for shares of the Class redeemed by mail and payment for telephone redemptions in amounts of less than $1,000 may be made by check mailed within seven days after receipt of the redemption request in proper form. The Trust may make payment for telephone redemptions in excess of $1,000 by check when it is considered to be in the Portfolio's best interest to do so. The shares of the Class are not redeemable at the option of the Trust unless the Board of Trustees of the Trust determines in its sole discretion that failure to so redeem may have materially adverse consequences to the shareholders of the Trust. DIVIDENDS Dividends from the net income of the Portfolio are declared daily to shareholders of record of each class of the Portfolio as of immediately after 4:00 p.m. Eastern Time on the day of declaration. Net income for dividend purposes is determined daily as of 4:00 p.m. Eastern Time. The dividend accrued and paid for each class will consist of (a) income of the Portfolio, the allocation of which is based upon such class' pro rata share of the total outstanding shares representing an interest in the Portfolio, less (b) Portfolio expenses, such as custodian fees, trustees' fees, accounting and legal expenses, based upon such class' pro rata share of the net assets of the Portfolio, less (c) expenses directly attributable to such class, such as distribution expenses, if any, and transfer agency fees. Although realized gains and losses on the assets of the Portfolio are reflected in its net asset value, they are not expected to be of an amount which would affect its $1.00 per share net asset value for purposes of purchases and redemptions. See "Net Asset Value." Distributions from net realized short-term gains may be declared and paid yearly or more frequently. See "Taxes." The Portfolio does not expect to realize any long-term capital gains or losses. All dividends declared during a month will normally be paid by wire transfer. Payment will normally be made on the first business day of the following month. A shareholder may elect to have all dividends automatically reinvested in additional full and fractional Shares at the net asset value as of 4:00 p.m. Eastern Time on the last business day of the month. Such election, or any revocation thereof, must be made in writing by the Institution to the Transfer Agent at 11 Greenway Plaza, Suite 100, Hous- 9 91 ton, TX 77046-1173 and will become effective with dividends paid after its receipt by the Transfer Agent. If a shareholder redeems all the Shares in its account at any time during the month, all dividends declared through the date of redemption are paid to the shareholder along with the proceeds of the redemption. The Portfolio uses its best efforts to maintain its net asset value per share at $1.00 for purposes of sales and redemptions. See "Net Asset Value." Should the Trust incur or anticipate any unusual expense, loss or depreciation which could adversely affect the income or net asset value of the Portfolio, the Trust's Board of Trustees would at that time consider whether to adhere to the present dividend policy described above or to revise it in light of the then prevailing circumstances. For example, under such unusual circumstances, the Board of Trustees might reduce or suspend the daily dividend in order to prevent to the extent possible the net asset value per share of the Portfolio from being reduced below $1.00. Thus, such expenses, losses or depreciation may result in a shareholder receiving no dividends for the period during which it held its Shares and cause such a shareholder to receive upon redemption a price per share lower than the shareholder's original cost. TAXES The policy of the Portfolio is to distribute to its shareholders at least 90% of its investment company taxable income for each year and consistent therewith to meet the distribution requirements of Part I of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). The Portfolio also intends to meet the distribution requirements imposed by the Code in order to avoid the imposition of a 4% excise tax. The Portfolio intends to distribute at least 98% of its net investment income for the calendar year and at least 98% of its net realized capital gains, if any, for the period ending on October 31. The Portfolio also intends to meet the other requirements of Subchapter M, including the requirements with respect to diversification of assets and sources of income, so that the Portfolio will pay no taxes on net investment income and net realized capital gains paid to shareholders. Dividends paid by the Portfolio are subject to taxation as of the date of payment, whether received by shareholders in cash or shares of the Class. The Code provides an exception to this general rule: if the Portfolio declares a dividend in October, November or December to shareholders of record in such months and pays the dividend during January of the next year, a shareholder will be treated for tax purposes as having received the dividend on December 31 of the year in which it is declared rather than in January when it is paid. It is anticipated that no portion of distributions will be eligible for the dividends received deduction for corporations. Dividends paid by the Portfolio from its net investment income and short-term capital gains are taxable to shareholders at ordinary income tax rates. The Portfolio will be treated as a separate corporation for purposes of determining taxable income, distribution requirements and other requirements of Subchapter M. Therefore, the Portfolio may not offset its gains against the losses of the other portfolio of the Trust and each portfolio of the Trust must specifically comply with all the provisions of the Code. Distributions and transactions referred to in the preceding paragraphs may be subject to state, local or foreign taxes, and the treatment thereof may differ from the federal income tax consequences discussed herein. Shareholders are advised to consult with their own tax advisors concerning the application of state, local or foreign taxes. Foreign persons who file a United States tax return after December 31, 1996 for a U.S. tax refund and who are not eligible to obtain a social security number must apply to the Internal Revenue Service ("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 advisor or the Transfer Agent. NET ASSET VALUE The net asset value per share of the Portfolio is determined daily as of 4:00 p.m. Eastern Time on each business day of the Portfolio. Net asset value per share is determined by dividing the value of the Portfolio's securities, cash and other assets (including interest accrued but not collected) less all of its liabilities (including accrued expenses and dividends payable), by the number of shares outstanding of the Portfolio and rounding the resulting per share net asset value to the nearest one cent. The securities of the Portfolio are valued on the basis of amortized cost pursuant to rules promulgated by the SEC applicable to money market funds. This method values a security at its cost on the date of purchase and thereafter assumes a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the security. While this method provides certainty in valuation, it may result in periods during which value, as determined by amortized cost, is higher or lower than the price the Portfolio would receive if the security were sold. During such periods, the daily yield on shares of the Portfolio, computed as described in "Purchases and Redemptions -- Performance Information" in the Statement of Additional Information, may differ somewhat from an identical computation made by an investment company with identical investments utilizing available indications as to market value to value its portfolio securities. 10 92 YIELD INFORMATION Yield information for the Class can be obtained by calling the Trust at (800) 825-6858. Yields will fluctuate from time to time and are not necessarily indicative of future results. Accordingly, the yield information may not provide a basis for comparison with investments which pay a fixed rate of interest for a stated period of time. Yield is a function of the type and quality of the Portfolio's investments, the Portfolio's maturity and the operating expense ratio of the Class. A SHAREHOLDER'S INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT OR BY ANY INSTITUTION. These factors should be carefully considered by an investor before making an investment in the Portfolio. For the seven day period ended August 31, 1997 the current yield and the effective yield of the Class (which assumes the reinvestment of dividends for a 365-day year and a return for the entire year equal to the annualized current yield for the period) were 5.41% and 5.56%, respectively. To assist banks and other institutions performing their own subaccounting, same day information as to the daily dividend per share for the Portfolio to eight decimal places and current yield normally will be available by 5:00 p.m. Eastern Time. From time to time and in its discretion, AIM or its affiliates may waive all or a portion of its advisory fees and/or assume certain expenses of the Portfolio. Such a practice will have the effect of increasing the Portfolio's yield and total return. REPORTS TO SHAREHOLDERS The Trust furnishes shareholders with semi-annual reports containing information about the Portfolio and its operations, including a list of the investments held by the Portfolio and financial statements. The annual financial statements are audited by the Trust's independent auditors. Unless otherwise requested by the shareholder, each shareholder will be provided by its Institution with a written confirmation for each transaction. Institutions establishing sub-accounts will receive a written confirmation for each transaction in a sub-account. Duplicate confirmations may be transmitted to the beneficial owner of the sub-account if requested by the Institution. The Institution will receive a periodic statement setting forth, for each sub-account, the share balance, income earned for the month, income earned for the year to date and the total current value of the account. MANAGEMENT OF THE TRUST BOARD OF TRUSTEES The overall management of the business and affairs of the Trust is vested with its Board of Trustees. The Board of Trustees approves all significant agreements between the Trust and persons or companies furnishing services to the Trust, including agreements with the Trust's investment advisor, distributor, custodian and transfer agent. The day-to-day operations of the Trust are delegated to the Trust's officers and to AIM, subject always to the objective and policies of the Trust and to the general supervision of the Trust's Board of Trustees. Information concerning the Board of Trustees may be found in the Statement of Additional Information. Certain trustees and officers of the Trust are affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the parent corporation of AIM. INVESTMENT ADVISOR A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as the investment advisor for the Portfolio pursuant to a Master Investment Advisory Agreement dated as of February 28, 1997 (the "Advisory Agreement"). AIM was organized in 1976 and, together with its affiliates, manages or advises 55 investment company portfolios. Certain of the directors and officers of AIM are also trustees or executive officers of the Trust. AIM is a wholly owned subsidiary of AIM Management. AIM Management is a holding company engaged in the financial services business. AIM Management is an indirect, wholly owned subsidiary of AMVESCAP PLC, a publicly-traded holding company that, through its subsidiaries, engages in the business of investment management on an international basis. Pursuant to the terms of the Advisory Agreement, AIM manages the investment of the Portfolio's assets and obtains and evaluates economic, statistical and financial information to formulate and implement investment policies for the Portfolio. The Advisory Agreement requires AIM to reduce its fee to the extent required to satisfy any expense limitations imposed by the securities laws or regulations thereunder of any state in which the Portfolio's shares are qualified for sale. For the fiscal year ended August 31, 1997, AIM received fees from the Trust, with respect to the Portfolio under the Advisory Agreement which represented 0.06% of the Portfolio's average daily net assets. During such fiscal year, the expenses of the Class, including AIM's fees, amounted to 0.25% of the Class's average daily net assets. 11 93 ADMINISTRATIVE SERVICES The Trust has entered into a Master Administrative Services Agreement dated as of February 28, 1997 with AIM (the "Administrative Services Agreement"), pursuant to which AIM has agreed to provide or arrange for the provision of certain accounting and other administrative services to the Portfolio, including the services of a principal financial officer of the Trust and related staff. As compensation to AIM for its services under the Administrative Services Agreement, the Portfolio may reimburse AIM for expenses incurred by AIM in connection with such services. FEE WAIVERS AIM or its affiliates may in its discretion from time to time agree to waive voluntarily all or any portion of its advisory fee and/or assume certain expenses of the Portfolio but will retain its ability to be reimbursed for such fee or expenses prior to the end of each fiscal year. FMC may in its discretion from time to time agree to waive voluntarily its 12b-1 fee but will retain its ability to be reimbursed prior to the end of the fiscal year. AIM voluntarily reimbursed expenses of $24,200 on the Portfolio during the year ended August 31, 1997. DISTRIBUTOR The Trust has entered into a Master Distribution Agreement dated as of February 28, 1997 (the "Distribution Agreement") with FMC, a registered broker-dealer and a wholly-owned subsidiary of AIM, to act as the exclusive distributor of the shares of the Class. The address of FMC is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Certain trustees and officers of the Trust are affiliated with FMC and AIM. The Distribution Agreement provides that FMC has the exclusive right to distribute shares of the Trust either directly or through other broker-dealers. FMC is the distributor of several of the mutual funds managed or advised by AIM. FMC may, from time to time, at its expense, pay a bonus or other consideration or incentive to dealers or financial institutions who sell a minimum dollar amount of the shares of the Class during a specific period of time. In some instances, these incentives may be offered only to certain dealers or financial institutions who have sold or may sell significant amounts of shares. The total amount of such additional bonus payments or other consideration shall not exceed .05% of the net asset value of the shares of the Class sold. Any such bonus or incentive programs will not change the price paid by investors for the purchase of shares of the Class or the amount received as proceeds from such sales. Sales of the shares of the Class may not be used to qualify for any incentives to the extent that such incentives may be prohibited by the laws of any jurisdiction. DISTRIBUTION PLAN The Trust has adopted a Master Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that the Trust may compensate FMC in connection with the distribution of the shares of the Class an amount equal to 0.20% on an annualized basis of the average daily net assets of the Portfolio attributable to the Class. Such amount may be expended when and if authorized by the Board of Trustees and may be used to finance such distribution-related services as expenses of organizing and conducting sales seminars, printing of prospectuses and statements of additional information (and supplements thereto) and reports for other than existing shareholders, preparation and distribution of advertising material and sales literature and costs of administering the Plan. Of the compensation paid to FMC under the Plan, a service fee may be paid to dealers and other financial institutions that provide continuing personal shareholder services to their customers who purchase and own shares of the Class, in amounts of up to 0.20% of the average daily net assets of the Portfolio attributable to the Class which are attributable to the customers of such dealers or financial institutions. The Plan also imposes a cap on the total amount of sales charges, including asset-based sales charges, that may be paid by the Portfolio with respect to the Class. The Plan does not obligate the Trust to reimburse FMC for the actual expenses FMC may incur in fulfilling its obligations under the Plan on behalf of the Class. Thus, under the Plan, even if FMC's actual expenses exceed the fee payable to FMC thereunder at any given time, the Trust will not be obligated to pay more than that fee. If FMC's expenses are less than the fee it receives, FMC will retain the full amount of the fee. The Plan requires the officers of the Trust to provide the Board of Trustees at least quarterly with a written report of the amounts expended pursuant to the Plan and the purposes for which such expenditures were made. The Board of Trustees shall review these reports in connection with their decisions with respect to the Plan. As required by Rule 12b-1 under the 1940 Act, the Plan was initially approved by the Board of Trustees, including a majority of the trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust and who have no direct or indirect financial interest in the operation of the Plan or in any agreements related to the Plan ("Qualified Trustees") on July 19, 1993. In approving the continuance of the Plan in accordance with the requirements of Rule 12b-1, the trustees considered various 12 94 factors and determined that there is a reasonable likelihood that the Plan will benefit the Trust and the holders of the shares of the Class. The Plan may be terminated by a vote of a majority of the Qualified Trustees, or by a vote of a majority of the holders of the outstanding voting securities of the class to which the Plan relates. Any change in the Plan that would increase materially the distribution expenses paid by the Class requires shareholder approval; otherwise the Plan may be amended by the trustees, including a majority of the Qualified Trustees, by vote cast in person at a meeting called for the purpose of voting upon such amendment. As long as the Plan is in effect, the selection or nomination of the Qualified Trustees is committed to the discretion of the Qualified Trustees. PORTFOLIO TRANSACTIONS AND BROKERAGE AIM is responsible for decisions to buy and sell securities for the Portfolio, broker-dealer selection and negotiation of commission rates. Since purchases and sales of portfolio securities by the Portfolio are usually principal transactions, the Portfolio incurs little or no brokerage commissions. Portfolio securities are normally purchased directly from the issuer or from a market maker for the securities. The purchase price paid to dealers serving as market makers may include a spread between the bid and asked prices. The Portfolio may also purchase securities from underwriters at prices which include a concession paid by the issuer to the underwriter. AIM's primary consideration in effecting a security transaction is to obtain the best net price and the most favorable execution of the order. To the extent that the executions and prices offered by more than one dealer are comparable, AIM may, in its discretion, effect transactions with dealers that furnish statistical, research or other information or services which are deemed by AIM to be beneficial to the Portfolio's investment programs. Certain research services furnished by dealers may be useful to clients of AIM other than the Portfolio. Similarly, any research services received by AIM through placement of portfolio transactions of other clients may be of value to AIM in fulfilling its obligations to the Portfolio. GENERAL INFORMATION ORGANIZATION AND DESCRIPTION OF SHARES The Trust is a Delaware business trust. The Trust was originally incorporated in Maryland on January 24, 1977, but had no operations prior to November 10, 1980. Effective December 31, 1986, the Trust was reorganized as a Massachusetts business trust; and effective October 15, 1993, the Trust was reorganized as a Delaware business trust. On October 15, 1993, the Portfolio succeeded to the assets and assumed the liabilities of the Treasury Portfolio (the "Predecessor Portfolio") of Short-Term Investments Co., a Massachusetts business trust ("STIC"), pursuant to an Agreement and Plan of Reorganization between the Trust and STIC. All historical financial and other information contained in this Prospectus for periods prior to October 15, 1993 relating to the Portfolio (or a class thereof) is that of the Predecessor Portfolio (or the corresponding class thereof). Shares of beneficial interest of the Trust are divided into seven classes. Five classes, including the Class, represent interests in the Portfolio and two classes represent interests in the Treasury TaxAdvantage Portfolio. Each class of shares has a par value of $.01 per share. The other classes of the Trust may have different sales charges and other expenses which may affect performance. An investor may obtain information concerning the Trust's other classes by contacting FMC. All shares of the Trust have equal rights with respect to voting, except that the holders of shares of a particular portfolio or class will have the exclusive right to vote on matters pertaining solely to that portfolio or class. For example, holders of shares of a particular portfolio will have the exclusive right to vote on any investment advisory agreement or investment restriction that relates only to such portfolio. In addition, if a portfolio is divided into various classes, holders of shares of a particular class will have the exclusive right to vote on any matter, such as distribution arrangements, which relates solely to such class. The holders of shares of the Portfolio have distinctive rights with respect to dividends and redemption which are more fully described in this Prospectus. In the event of liquidation or termination of the Trust, holders of shares of each portfolio will receive pro rata, subject to the rights of creditors, (a) the proceeds of the sale of the assets held in the respective portfolio to which such shares relate, less (b) the liabilities of the Trust attributable or allocated to the respective portfolio based on the liquidation value of the portfolio. Fractional shares of each portfolio have the same rights as full shares to the extent of their proportionate interest. There will not normally be annual shareholders' meetings. Shareholders may remove trustees from office by votes cast at a meeting of shareholders called solely for such purpose or by written consent. A meeting of shareholders for the sole purpose of considering removal of a trustee shall be called at the request of the holders of 10% or more of the Trust's outstanding shares. 13 95 December 1, 1997 Corestates Capital Markets was the owner of record of 80.37% of the outstanding shares of the Class. As long as Corestates Capital Markets owns over 25% of such shares, it may be presumed to be in "control" of the Resource Class of the Treasury Portfolio, as defined in the 1940 Act. There are no preemptive or conversion rights applicable to any of the Trust's shares. The Trust's shares, when issued, will be fully paid and non-assessable. The Board of Trustees may create additional portfolios of the Trust without shareholder approval. TRANSFER AGENT AND CUSTODIAN The Bank of New York, 90 Washington Street, 11th Floor, New York, New York 10286, acts as custodian for the portfolio securities and cash of the Portfolio. A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as transfer agent for the shares of the Class. It is currently anticipated that, effective on or about December 29, 1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a registered transfer agent will become the transfer agent to the Trust. LEGAL COUNSEL The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania, serves as counsel to the Trust and passes upon legal matters for the Trust. SHAREHOLDER INQUIRIES Shareholder inquiries concerning the status of an account should be directed to an investor's Institution, or to the Trust at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or may be made by calling (800) 825-6858. 14 96 [THIS PAGE INTENTIONALLY LEFT BLANK] 97 ======================================================= ======================================================= SHORT-TERM INVESTMENTS TRUST 11 Greenway Plaza, Suite 100 PROSPECTUS Houston, Texas 77046-1173 (800) 825-6858 December 17, 1997 INVESTMENT ADVISOR A I M ADVISORS, INC. 11 Greenway Plaza, Suite 100 SHORT-TERM Houston, Texas 77046-1173 INVESTMENTS TRUST (713) 626-1919 --------------------- DISTRIBUTOR FUND MANAGEMENT COMPANY TREASURY PORTFOLIO 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173 --------------------- (800) 877-7745 AUDITORS KPMG PEAT MARWICK LLP 700 Louisiana Houston, Texas 77002 CUSTODIAN THE BANK OF NEW YORK 90 Washington Street TABLE OF CONTENTS 11th Floor New York, New York 10286 PAGE ---- TRANSFER AGENT Summary........................................... 2 A I M INSTITUTIONAL FUND SERVICES, INC. Table of Fees and Expenses........................ 4 11 Greenway Plaza, Suite 100 Financial Highlights.............................. 5 Houston, Texas 77046-1173 Suitability for Investors......................... 5 Investment Program................................ 5 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION Purchase of Shares................................ 7 OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS Redemption of Shares.............................. 9 PROSPECTUS IN CONNECTION WITH THE OFFERING MADE BY THIS Dividends......................................... 9 PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR Taxes............................................. 10 REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN Net Asset Value................................... 10 AUTHORIZED BY THE TRUST OR THE DISTRIBUTOR. THIS Yield Information................................. 11 PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY Reports to Shareholders........................... 11 JURISDICTION TO ANY PERSON TO WHOM SUCH OFFERING MAY Management of the Trust........................... 11 NOT LAWFULLY BE MADE. General Information............................... 14 ======================================================= =======================================================
98 STATEMENT OF ADDITIONAL INFORMATION SHORT-TERM INVESTMENTS TRUST TREASURY PORTFOLIO (CASH MANAGEMENT CLASS) (INSTITUTIONAL CLASS) (PERSONAL INVESTMENT CLASS) (PRIVATE INVESTMENT CLASS) (RESOURCE CLASS) 11 GREENWAY PLAZA SUITE 100 HOUSTON, TEXAS 77046-1173 (800) 659-1005 --------------------- THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF EACH OF THE ABOVE NAMED FUNDS, COPIES OF WHICH MAY BE OBTAINED BY WRITING FUND MANAGEMENT COMPANY, 11 GREENWAY PLAZA, SUITE 100, HOUSTON, TEXAS 77046-1173 OR CALLING (800) 659-1005 --------------------- STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 17, 1997 RELATING TO THE PROSPECTUS OF EACH OF THE FOLLOWING CLASSES OF THE TREASURY PORTFOLIO: CASH MANAGEMENT CLASS PROSPECTUS DATED DECEMBER 17, 1997, INSTITUTIONAL CLASS PROSPECTUS DATED DECEMBER 17, 1997, PERSONAL INVESTMENT CLASS PROSPECTUS DATED DECEMBER 17, 1997, PRIVATE INVESTMENT CLASS PROSPECTUS DATED DECEMBER 17, 1997 AND RESOURCE CLASS PROSPECTUS DATED DECEMBER 17, 1997 99 TABLE OF CONTENTS
PAGE -------- Introduction................................................ 3 General Information about the Trust......................... 3 The Trust and Its Shares............................... 3 Management.................................................. 5 Trustees and Officers.................................. 5 Remuneration of Trustees............................... 8 Investment Advisor..................................... 9 Administrative Services................................ 10 Expenses............................................... 11 Banking Regulations.................................... 11 Transfer Agent and Custodian........................... 11 Reports................................................ 12 Fee Waivers............................................ 12 Principal Holders of Securities........................ 12 Purchases and Redemptions................................... 14 Net Asset Value Determination.......................... 15 Distribution Agreement................................. 15 Distribution Plan...................................... 15 Performance Information................................ 16 Investment Program and Restrictions......................... 17 Investment Program..................................... 17 Eligible Securities.................................... 17 Investment Restrictions................................ 17 Other Investment Policies.............................. 18 Portfolio Transactions...................................... 18 Tax Matters................................................. 19 Qualification as a Regulated Investment Company........ 19 Excise Tax on Regulated Investment Companies........... 20 Portfolio Distributions................................ 20 Sale or Redemption of Shares........................... 20 Foreign Shareholders................................... 21 Effect of Future Legislation; Local Tax Considerations........................................ 21 Financial Statements........................................ FS
2 100 INTRODUCTION The Treasury Portfolio (the "Portfolio") is an investment portfolio of Short-Term Investments Trust (the "Trust"), a mutual fund. The rules and regulations of the United States Securities and Exchange Commission (the "SEC") require all mutual funds to furnish prospective investors certain information concerning the activities of the fund being considered for investment. This information is included in the Cash Management Class Prospectus dated December 17, 1997, the Institutional Class Prospectus dated December 17, 1997, the Personal Investment Class Prospectus dated December 17, 1997, the Private Investment Class Prospectus dated December 17, 1997 and the Resource Class Prospectus dated December 17, 1997 (each a "Prospectus"). Additional copies of each Prospectus and this Statement of Additional Information may be obtained without charge by writing the principal distributor of the Trust's shares, Fund Management Company ("FMC"), 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or by calling (800) 659-1005. Investors must receive a Prospectus before they invest. This Statement of Additional Information is intended to furnish prospective investors with additional information concerning each class of the Portfolio. Some of the information required to be in this Statement of Additional Information is also included in each Prospectus; and, in order to avoid repetition, reference will be made to sections of the applicable Prospectus. Additionally, each Prospectus and this Statement of Additional Information omit certain information contained in the registration statement filed with the SEC. Copies of the registration statement, including items omitted from each Prospectus and this Statement of Additional Information, may be obtained from the SEC by paying the charges prescribed under its rules and regulations. GENERAL INFORMATION ABOUT THE TRUST THE TRUST AND ITS SHARES The Trust is an open-end diversified management series investment company which was originally organized as a corporation under the laws of the State of Maryland on January 24, 1977, but which had no operations prior to November 10, 1980. The Trust was reorganized as a business trust under the laws of the Commonwealth of Massachusetts on December 31, 1986. The Trust was again reorganized as a business trust under the laws of the State of Delaware on October 15, 1993. A copy of the Agreement and Declaration of Trust (the "Declaration of Trust") establishing the Trust is on file with the SEC. On October 15, 1993, the Portfolio succeeded to the assets and assumed the liabilities of the Treasury Portfolio (the "Predecessor Portfolio") of Short-Term Investments Co., a Massachusetts business trust ("STIC"), pursuant to an Agreement and Plan of Reorganization between the Trust and STIC. All historical financial and other information contained in this Statement of Additional Information for periods prior to October 15, 1993 relating to the Portfolio (or a class thereof) is that of the Predecessor Portfolio (or the corresponding class thereof). Shares of beneficial interest of the Trust are redeemable at the net asset value thereof at the option of the shareholder or at the option of the Trust in certain circumstances. For information concerning the methods of redemption and the rights of share ownership, investors should consult each Prospectus under the caption "General Information" and "Redemption of Shares." The Trust offers on a continuous basis shares representing an interest in one of two portfolios: the Portfolio and the Treasury TaxAdvantage Portfolio (together, the "Portfolios"). The Portfolio consists of the following five classes of shares: Cash Management Class, Institutional Class, Personal Investment Class, Private Investment Class and Resource Class. Each class of shares is sold pursuant to a separate Prospectus and this joint Statement of Additional Information. Each such class has different shareholder qualifications and bears expenses differently. This Statement of Additional Information relates to each class of the Portfolio. The classes of the Treasury TaxAdvantage Portfolio are offered pursuant to separate prospectuses and a separate statement of additional information. Shares of beneficial interest of the Trust will be redeemable at the net asset value thereof at the option of the shareholder or at the option of the Trust in certain circumstances. For information concerning the methods of redemption and the rights of share ownership, investors should consult the Prospectus under the captions "Redemption of Shares." As used in the Prospectus, the term "majority of the outstanding shares" of the Trust, a particular portfolio or a particular class means, respectively, the vote of the lesser of (i) 67% or more of the shares of the Trust, such portfolio or such class present at a meeting of the Trust's shareholders, if the holders of more than 50% of the outstanding shares of the Trust, such portfolio or such class are present or represented by proxy, or (ii) more than 50% of the outstanding shares of the Trust, such portfolio or such class. Shareholders of the Trust do not have cumulative voting rights. Therefore the holders of more than 50% of the outstanding shares of all series or classes voting together for election of trustees may elect all of the members of the Board of Trustees and in such event, the remaining holders cannot elect any members of the Board of Trustees. 3 101 The Declaration of Trust provides for the perpetual existence of the Trust. The Trust, either Portfolio and any class thereof, however, may be terminated at any time, upon the recommendation of the Board of Trustees, by vote of a majority of the outstanding shares of the Trust, such Portfolio and such class, respectively; provided, however, that the Board of Trustees may terminate, with such shareholder approval, the Trust, either Portfolio and any class thereof with respect to which there are fewer than 100 holders of record. The Declaration of Trust permits the trustees to issue an unlimited number of full and fractional shares, of $.01 par value, of each class of shares of beneficial interest of the Trust. The Board of Trustees may establish additional series or classes of shares from time to time without shareholder approval. Additional information concerning the rights of share ownership is set forth in the prospectus applicable to each such class or series of shares of the Trust. The assets received by the Trust for the issue or sale of shares of each class relating to a portfolio and all income, earnings, profits, losses and proceeds therefrom, subject only to the rights of creditors, will be allocated to that portfolio, and constitute the underlying assets of that portfolio. The underlying assets of each portfolio will be segregated and will be charged with the expenses with respect to that portfolio and with a share of the general expenses of the Trust. While certain expenses of the Trust will be allocated to the separate books of account of each portfolio, certain other expenses may be legally chargeable against the assets of the entire Trust. Under Delaware law, shareholders of a Delaware business trust shall be entitled to the same limitations of liability extended to shareholders of private for-profit corporations, however, there is a remote possibility that shareholders could, under certain circumstances, be held liable for the obligations of the Trust to the extent the courts of another state which does not recognize such limited liability were to apply the laws of such state to a controversy involving such obligations. However, the Declaration of Trust 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 Declaration of Trust provides for indemnification out of the Trust's property for all losses and expenses of any shareholder of the Trust 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 the Trust would be unable to meet its obligations and wherein the complaining party was held not to be bound by the disclaimer. The Declaration of Trust further provides that the trustees will not be liable for errors of judgment or mistakes of fact or law. However, nothing in the Declaration of Trust protects a trustee against any liability to which a trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office. The Declaration of Trust provides for indemnification by the Trust of the trustees and the officers of the Trust except with respect to any matter as to which any such person did not act in good faith in the reasonable belief that his action was in or not opposed to the best interests of the Trust. Such person may not be indemnified against any liability to the Trust or to the Trust's shareholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. The Declaration of Trust also authorizes the purchase of liability insurance on behalf of trustees and officers. As described in the Prospectus, the Trust will not normally hold annual shareholders' meetings. At such time as less than a majority of the trustees have been elected by the shareholders, the trustees then in office will call a shareholders' meeting for the election of trustees. In addition, trustees may be removed from office by a written consent signed by the holders of two-thirds of the outstanding shares of the Trust and filed with the Trust's custodian or by a vote of the holders of two-thirds of the outstanding shares at a meeting duly called for that purpose, which meeting shall be held upon written request of the holders of not less than 10% of the outstanding shares of the Trust. 4 102 MANAGEMENT TRUSTEES AND OFFICERS The trustees and officers of the Trust and their principal occupations during at least the last five years are set forth below.
- ----------------------------------------------------------------------------------------------------------------------- POSITIONS HELD NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS - ------------------------------------------------------------------------------------------------------------------ *CHARLES T. BAUER (78) Trustee and Chairman of the Board of Directors, A I M Management 11 Greenway Plaza, Suite 100 Chairman Group Inc., A I M Advisors, Inc., A I M Capital Houston, TX 77046 Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc., A I M Institutional Fund Services, Inc. and Fund Management Company; and Vice Chairman and Director, AMVESCAP PLC. - ------------------------------------------------------------------------------------------------------------------ BRUCE L. CROCKETT (53) Trustee Director, ACE Limited (insurance company). Formerly, 906 Frome Lane Director, President and Chief Executive Officer, McLean, VA 22102 COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company). - ------------------------------------------------------------------------------------------------------------------ OWEN DALY II (73) Trustee Director, Cortland Trust Inc. (investment company). Six Blythewood Road Formerly, Director, CF & I Steel Corp., Monumental Baltimore, MD 21210 Life Insurance Company and Monumental General Insurance Company; and Chairman of the Board of Equitable Bancorporation. - ------------------------------------------------------------------------------------------------------------------ JACK M. FIELDS (45) Trustee Formerly, Member of the U.S. House of Texana Global, Inc. Representatives. 8810 Will Clayton Parkway Jetero Plaza, Suite E Humble, TX 77338 - ------------------------------------------------------------------------------------------------------------------ **CARL FRISCHLING (60) Trustee Partner, Kramer, Levin, Naftalis & Frankel (law 919 Third Avenue firm); and Director, ERD Waste, Inc. (waste New York, NY 10022 management company), Aegis Consumer Finance (auto leasing company) and Lazard Funds, Inc. (investment companies). Formerly, Partner, Reid & Priest (law firm); and, prior thereto, Partner, Spengler Carlson Gubar Brodsky & Frischling (law firm). - ------------------------------------------------------------------------------------------------------------------ *ROBERT H. GRAHAM (51) Trustee and Director, President and Chief Executive Officer, 11 Greenway Plaza, Suite 100 President A I M Management Group Inc.; Director and President, Houston, TX 77046 A I M Advisors, Inc.; and Director and Senior Vice President, A I M Capital Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc., A I M Institutional Fund Services, Inc. and Fund Management Company; and Director, AMVESCAP PLC, Chairman of the Board of Directors, AIM Funds Group Canada Inc. - ------------------------------------------------------------------------------------------------------------------
- --------------- * A trustee who is an "interested person" of the Trust and AIM as defined in the 1940 Act. ** A trustee who is an "interested person" of the Trust as defined in the 1940 Act. 5 103
- ----------------------------------------------------------------------------------------------------------------------- POSITIONS HELD NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS - ------------------------------------------------------------------------------------------------------------------ JOHN F. KROEGER (72) Trustee Director, Flag Investors International Fund, Inc., 37 Pippins Way Flag Investors Emerging Growth Fund, Inc., Flag Morristown, NJ 07960 Investors Telephone Income Fund, Inc., Flag Investors Equity Partners Fund, Inc., Total Return U.S. Treasury Fund, Inc., Flag Investors Intermediate Term Income Fund, Inc., Managed Municipal Fund, Inc., Flag Investors Value Builder Fund, Inc., Flag Investors Maryland Intermediate Tax-Free Income Fund, Inc., Flag Investors Real Estate Securities Fund, Inc., Alex. Brown Cash Reserve Fund, Inc. and North American Government Bond Fund, Inc. (investment companies). Formerly, Consultant, Wendell & Stockel Associates, Inc. (consulting firm). - ------------------------------------------------------------------------------------------------------------------ LEWIS F. PENNOCK (55) Trustee Attorney in private practice in Houston, Texas. 6363 Woodway, Suite 825 Houston, TX 77057 - ------------------------------------------------------------------------------------------------------------------ IAN W. ROBINSON (74) Trustee Formerly, Executive Vice President and Chief 183 River Drive Financial Officer, Bell Atlantic Management Services, Tequesta, FL 33469 Inc. (provider of centralized management services to telephone companies); Executive Vice President, Bell Atlantic Corporation (parent of seven telephone companies); and Vice President and Chief Financial Officer, Bell Telephone Company of Pennsylvania and Diamond State Telephone Company. - ------------------------------------------------------------------------------------------------------------------ LOUIS S. SKLAR (58) Trustee Executive Vice President, Development and Operations, Transco Tower, 50th Floor Hines Interests Limited Partnership (real estate 2800 Post Oak Blvd. development). Houston, TX 77056 - ------------------------------------------------------------------------------------------------------------------ ***JOHN J. ARTHUR (53) Senior Vice Director, Senior Vice President and Treasurer, A I M 11 Greenway Plaza, Suite 100 President and Advisors, Inc.; and Vice President and Treasurer, Houston, TX 77046 Treasurer A I M Management Group Inc., A I M Capital Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc., A I M Institutional Fund Services Inc. and Fund Management Company. - ------------------------------------------------------------------------------------------------------------------ GARY T. CRUM (50) Senior Vice Director and President, A I M Capital Management, 11 Greenway Plaza, Suite 100 President Inc.; Director and Senior Vice President, A I M Houston, TX 77046 Management Group Inc., A I M Advisors, Inc.; and Director, A I M Distributors, Inc. and AMVESCAP PLC. - ------------------------------------------------------------------------------------------------------------------ ***CAROL F. RELIHAN (43) Senior Vice Director, Senior Vice President, General Counsel and 11 Greenway Plaza, Suite 100 President and Secretary, A I M Advisors, Inc.; Vice President, Houston, TX 77046 Secretary General Counsel and Secretary, A I M Management Group Inc.; Director, Vice President and General Counsel, Fund Management Company; General Counsel and Vice President, A I M Fund Services, Inc. and A I M Institutional Fund Services, Inc.; Vice President, A I M Capital Management, Inc., A I M Distributors,Inc. - ------------------------------------------------------------------------------------------------------------------
- --------------- *** Mr. Arthur and Ms. Relihan are married to each other. 6 104
- ----------------------------------------------------------------------------------------------------------------------- POSITIONS HELD NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS - ------------------------------------------------------------------------------------------------------------------ DANA R. SUTTON (38) Vice President Vice President and Fund Controller, A I M Advisors, 11 Greenway Plaza, Suite 100 and Assistant Inc.; and Assistant Vice President and Assistant Houston, TX 77046 Treasurer Treasurer, Fund Management Company. - ------------------------------------------------------------------------------------------------------------------ MELVILLE B. COX (54) Vice President Vice President and Chief Compliance Officer, A I M 11 Greenway Plaza, Suite 100 Advisors, Inc., A I M Capital Management, Inc., A I M Houston, TX 77046 Distributors, Inc., A I M Fund Services, Inc., A I M Institutional Fund Services, Inc. and Fund Management Company. - ------------------------------------------------------------------------------------------------------------------ KAREN DUNN KELLEY (37) Vice President Senior Vice President, A I M Capital Management, 11 Greenway Plaza, Suite 100 Inc.; and Vice President, A I M Advisors, Inc. Houston, TX 77046 - ------------------------------------------------------------------------------------------------------------------ J. ABBOTT SPRAGUE (42) Vice President Director and President, Fund Management Company; 11 Greenway Plaza, Suite 100 Director and Senior Vice President, A I M Advisors, Houston, TX 77046 Inc. and A I M Institutional Fund Services, Inc.; and Senior Vice President, A I M Management Group Inc. - ------------------------------------------------------------------------------------------------------------------
The standing committees of the Board of Trustees are the Audit Committee, the Investments Committee, and the Nominating and Compensation Committee. The members of the Audit Committee are Messrs. Crockett, Daly, Fields, Frischling, Kroeger, (Chairman), Pennock, Robinson and Sklar. The Audit Committee is responsible for meeting with the Trust's auditors to review audit procedures and results and to consider any matters arising from an audit to be brought to the attention of the trustees as a whole with respect to the Trust's fund accounting or its internal accounting controls, or for considering such matters as may from time to time be set forth in a charter adopted by the Board of Trustees and such committee. The members of the Investments Committee are Messrs. Bauer, Crockett, Daly (Chairman), Fields, Frischling, Kroeger, Pennock, Robinson and Sklar. The Investments Committee is responsible for reviewing portfolio compliance, brokerage allocation, portfolio investment pricing issues, interim dividend and distribution issues, or considering such matters as may from time to time be set forth in a charter adopted by the Board of Trustees and such committee. 7 105 The members of the Nominating and Compensation Committee are Messrs. Crockett, Daly, Fields, Kroeger, Pennock (Chairman), Robinson and Sklar. The Nominating and Compensation Committee is responsible for considering and nominating individuals to stand for election as trustees who are not interested persons as long as the Trust maintains a distribution plan pursuant to Rule 12b-1 under the 1940 Act, reviewing from time to time the compensation payable to the disinterested trustees, or considering such matters as may from time to time be set forth in a charter adopted by the Board of Trustees and such committee. All of the Trust's trustees also serve as directors or trustees of some or all of the other investment companies managed or advised by A I M Advisors, Inc. ("AIM") or distributed and administered by FMC. Most of the Trust's executive officers hold similar offices with some or all of such investment companies. REMUNERATION OF TRUSTEES Each trustee is reimbursed for expenses incurred in connection with each meeting of the Board of Trustees or any committee thereof. Each trustee who is not an officer of the Trust is compensated for his services according to a fee schedule which recognizes the fact that such trustee also serves as a director or trustee of other regulated investment companies managed, administered or distributed by AIM or its affiliates (the "AIM Funds"). Each such trustee receives a fee, allocated among the AIM Funds for which he serves as a director or trustee, which consists of an annual retainer component and a meeting fee component. Set forth below is information regarding compensation paid or accrued for each trustee of the Trust:
RETIREMENT AGGREGATE BENEFITS TOTAL COMPENSATION ACCRUED COMPENSATION FROM BY ALL FROM ALL TRUSTEE TRUST(1) AIM FUNDS(2) AIM FUNDS(3) ------- ------------ ------------ ------------ Charles T. Bauer.................................. $ 0 $ 0 $ 0 Bruce L. Crockett................................. 4,880 38,621 68,000 Owen Daly II...................................... 4,879 82,607 68,000 Jack Fields(4).................................... 2,466 0 0 Carl Frischling................................... 4,880 56,683 68,000(5) Robert H. Graham.................................. 0 0 0 John F. Kroeger................................... 4,879 83,654 66,000 Lewis F. Pennock.................................. 4,879 33,702 67,000 Ian W. Robinson................................... 4,880 64,973 68,000 Louis S. Sklar.................................... 4,815 47,593 66,500
- --------------- (1) The total amount of compensation deferred by all Trustees of the Trust during the fiscal year ended August 31, 1997, including interest earned thereon, was $23,027 (2) During the fiscal year ended August 31, 1997, the total amount of expenses allocated to the Trust in respect of such retirement benefits was $30,214. Data reflects compensation for the calendar year ended December 31, 1996. (3) Each serves as a Director or Trustee of a total of 11 registered investment companies advised by AIM (comprised of 47 portfolios). Data reflects total compensation for the calendar year ended December 31, 1996. (4) Mr. Fields was not serving as a Director during the calendar year ending December 31, 1996. (5) See also page 12 regarding fees earned by Mr. Frischling's law firm. AIM Funds Retirement Plan for Eligible Directors/Trustees Under the terms of the AIM Funds Retirement Plan for Eligible Directors/Trustees (the "Plan"), each trustee (who is not an employee of any of the AIM Funds, A I M Management Group Inc. or any of their affiliates) may be entitled to certain benefits upon retirement from the Board of Trustees. Pursuant to the Plan, the normal retirement date is the date on which the eligible trustee has attained age 65 and has completed at least five years of continuous service with one or more of the AIM Funds. Each eligible trustee is entitled to receive an annual benefit from the AIM Funds commencing on the first day of the calendar quarter coincident with or following his date of retirement equal to 75% of the retainer paid or accrued by the AIM Funds for such trustee during the twelve-month period immediately preceding the trustee's retirement (including amounts deferred under a separate agreement between the AIM Funds and the trustee) for the number of such trustee's years of service (not in excess of 10 years of service) completed with respect to any of the AIM Funds. Such benefit is payable to each eligible trustee in quarterly installments. If an eligible trustee dies after attaining the normal retirement date but before receipt of any benefits under the Plan commences, the trustee's surviving spouse (if any) shall receive a quarterly survivor's benefit equal to 50% of the amount 8 106 payable to the deceased trustee, for no more than ten years beginning the first day of the calendar quarter following the date of the trustee's death. Payments under the Plan are not secured or funded by any AIM Fund. Set forth below is a table that shows the estimated annual benefits payable to an eligible trustee upon retirement assuming a specified level of compensation and years of service classifications. The estimated credited years of service for Messrs. Crockett, Daly, Fields, Frischling, Kroeger, Pennock, Robinson and Sklar are 10, 10, 0, 20, 19, 15, 10 and 7 years, respectively. ANNUAL RETAINER UPON RETIREMENT
- ------------------------------------------------------------------------------------ NUMBER OF YEARS OF SERVICE WITH ANNUAL RETAINER PAID BY ALL AIM FUNDS THE AIM FUNDS $80,000 - -------------------------------------------------------------------------- 10 $60,000 - -------------------------------------------------------------------------- 9 $54,000 - -------------------------------------------------------------------------- 8 $48,000 - -------------------------------------------------------------------------- 7 $42,000 - -------------------------------------------------------------------------- 6 $36,000 - -------------------------------------------------------------------------- 5 $30,000 - --------------------------------------------------------------------------
Deferred Compensation Agreements Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of this paragraph only, the "deferring trustees") have each executed a Deferred Compensation Agreement (collectively, the "Agreements"). Pursuant to the Agreements, the deferring trustees may elect to defer receipt of up to 100% of their compensation payable by the Trust, and such amounts are placed into a deferral account. Currently, the deferring trustees may select various AIM Funds in which all or part of their deferral accounts shall be deemed to be invested. Distributions from the deferring trustees' deferral accounts will be paid in cash, generally in equal quarterly installments over a period of five (5) or ten (10) years (depending on the Agreement) beginning on the date the deferring trustee's retirement benefits commence under the Plan. The Trust's Board of Trustees, in its sole discretion, may accelerate or extend the distribution of such deferral accounts after the deferring trustee's termination of service as a trustee of the Trust. If a deferring trustee dies prior to the distribution of amounts in his deferral account, the balance of the deferral account will be distributed to his designated beneficiary in a single lump sum payment as soon as practicable after such deferring trustee's death. The 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. The Portfolio paid legal fees of $13,565 for the year ended August 31, 1997 for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the Board of Trustees. Carl Frischling, a trustee of the Trust, is a member of that firm. INVESTMENT ADVISOR A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as the investment advisor of the Portfolio pursuant to a Master Investment Advisory Agreement dated as of February 28, 1997 (the "Advisory Agreement"). AIM was organized in 1976, and together with its affiliates advises or manages 55 investment company portfolios. Pursuant to the terms of the Advisory Agreement, AIM manages the investment of the assets of the Portfolio. AIM obtains and evaluates economic, statistical and financial information to formulate and implement investment policies for the Portfolio. Any investment program undertaken by AIM will at all times be subject to the policies and control of the Trust's Board of Trustees. AIM shall not be liable to the Trust or to its shareholders for any act or omission by AIM or for any loss sustained by the Trust or its shareholders except in the case of willful misfeasance, bad faith, gross negligence or reckless disregard of duty. AIM and the Trust have adopted a Code of Ethics which requires investment personnel (a) to pre-clear all personal securities transactions, (b) to file reports regarding such transactions, and (c) to refrain from personally engaging in (i) short-term trading of a security, (ii) transactions involving a security within seven days of an AIM Fund transaction involving the same security, and (iii) transactions involving securities being considered for investment by an AIM Fund. The Code also prohibits investment personnel from purchasing securities in an initial public offering. Personal trading reports are reviewed periodically by AIM, and the Board of Trustees reviews annually such reports (including information on any substantial violations of the Code). Violations of the Code may result in censure, monetary penalties, suspension or termination of employment. 9 107 As compensation for its services with respect to the Portfolio, AIM receives a monthly fee which is calculated by applying the following annual rates to the average daily net assets of the Portfolio:
NET ASSETS RATE ---------- ---- First $300 million.......................................... .15% Over $300 million to $1.5 billion........................... .06% Over $1.5 billion........................................... .05%
The Advisory Agreement requires AIM to reduce its fee to the extent required to satisfy any expense limitations imposed by the securities laws or regulations thereunder of any state in which the Trust's shares are qualified for sale. The Advisory Agreement provides that, upon the request of the Board of Trustees, AIM may perform or arrange for the performance of certain additional services on behalf of the Portfolio which are not required by the Advisory Agreement. AIM may receive reimbursement or reasonable compensation for such additional services, as may be agreed upon by AIM and the Board of Trustees, based upon a finding by the Board of Trustees that the provision of such services would be in the best interest of the Portfolio and its shareholders. The Board of Trustees has made such a finding and, accordingly, has entered into a Master Administrative Services Agreement under which AIM will provide the additional services described below under the caption "Administrative Services." Pursuant to the Advisory Agreement between the Trust and AIM, currently in effect, AIM received fees from the Trust for the fiscal years ended August 31, 1997, 1996 and 1995 with respect to the Portfolio in the amounts of $2,666,379, $2,227,788 and $1,925,198, respectively. For the fiscal years ended August 31, 1997, 1996 and 1995, AIM waived no advisory fees with respect to the Portfolio. The Advisory Agreement was approved for its initial term by the Board of Trustees on July 19, 1993. The Advisory Agreement will continue in effect until February 28, 1999, and from year to year thereafter, provided that it is specifically approved at least annually by the Trust's Board of Trustees and the affirmative vote of a majority of the trustees who are not parties to the Advisory Agreement or "interested persons" of any such party by votes cast in person at a meeting called for such purpose. The Trust or AIM may terminate the Advisory Agreement on 60 days' notice without penalty. The Advisory Agreement terminates automatically in the event of its assignment, as defined in the 1940 Act. AIM is a wholly owned subsidiary of A I M Management Group Inc. ("AIM Management"), 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. AIM Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire Square, London EC2M 4YR, United Kingdom. AMVESCAP PLC and its subsidiaries are an independent investment management group engaged in institutional investment management and retail fund business in the United States, Europe and the Pacific Region. Certain of the directors and officers of AIM are also executive officers of the Trust and their affiliations are shown under "Trustees and Officers." The address of each director and officer of AIM is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. FMC is a registered broker-dealer and wholly owned subsidiary of AIM. FMC acts as distributor of the Shares. ADMINISTRATIVE SERVICES AIM also acts as the Portfolio's administrator pursuant to a Master Administrative Services Agreement dated as of February 28, 1997 between AIM and the Trust (the "Administrative Services Agreement"). Under the Administrative Services Agreement, AIM performs accounting and other administrative services for the Portfolio. As full compensation for the performance of such services, AIM is reimbursed for any personnel and other costs (including applicable office space, facilities and equipment) of furnishing the services of a principal financial officer of the Trust and of persons working under his supervision for maintaining the financial accounts and books and records of the Trust, including calculation of the Portfolio's daily net asset value, and preparing tax returns and financial statements for the Portfolio. The method of calculating such reimbursements must be annually approved, and the amounts paid will be periodically reviewed, by the Trust's Board of Trustees. Under the Administrative Services Agreement, AIM was reimbursed for the fiscal years ended August 31, 1997, 1996 and 1995, $99,273, $86,796 and $135,387, respectively, for fund accounting services for the Portfolio. Under the terms of a Transfer Agency and Service Agreement, dated September 16, 1994, as amended, between the Trust and A I M Institutional Fund Services, Inc. ("AIFS"), a registered transfer agent and wholly owned subsidiary of AIM, as well as under previous agreements, AIFS received $414,190, $256,535 and $114,179, for the fiscal years ended August 31, 1997, 1996 and 1995 respectively, for the provision of certain shareholder services for the Portfolio. 10 108 EXPENSES In addition to fees paid to AIM pursuant to the Agreement and the expenses reimbursed to AIM under the Administrative Services Agreement, the Trust also pays or causes to be paid all other expenses of the Trust, including, without limitation: the charges and expenses of any registrar, any custodian or depository appointed by the Trust for the safekeeping of its cash, portfolio securities and other property, and any transfer, dividend or accounting agent or agents appointed by the Trust; brokers' commissions chargeable to the Trust in connection with portfolio securities transactions to which the Trust is a party; all taxes, including securities issuance and transfer taxes, and fees payable by the Trust to federal, state or other governmental agencies; the costs and expenses of engraving or printing of certificates representing shares of the Trust; all costs and expenses in connection with the registration and maintenance of registration of the Trust and its shares with the SEC and various states and other jurisdictions (including filing and legal fees and disbursements of counsel); the costs and expenses of printing, including typesetting, and distributing prospectuses and statements of additional information of the Trust and supplements thereto to the Trust's shareholders; all expenses of shareholders' and trustees' meetings and of preparing, printing and mailing of prospectuses, proxy statements and reports to shareholders; fees and travel expenses of trustees and trustee members of any advisory board or committee; all expenses incident to the payment of any dividend, distribution, withdrawal or redemption, whether in shares or in cash; charges and expenses of any outside service used for pricing of the Trust's shares; charges and expenses of legal counsel, including counsel to the trustees of the Trust who are not "interested persons" (as defined in the 1940 Act) of the Trust or AIM, and of independent accountants in connection with any matter relating to the Trust; membership dues of industry associations; interest payable on Trust borrowings; postage; insurance premiums on property or personnel (including officers and trustees) of the Trust which inure to its benefit; and extraordinary expenses (including, but not limited to, legal claims and liabilities and litigation costs and any indemnification related thereto). FMC bears the expenses of printing and distributing prospectuses and statements of additional information (other than those prospectuses and statements of additional information distributed to existing shareholders of the Trust) and any other promotional or sales literature used by FMC or furnished by FMC to purchasers or dealers in connection with the public offering of the Trust's shares. Expenses of the Trust which are not directly attributable to the operations of any class of shares or portfolio of the Trust are prorated among all classes of the Trust. Expenses of the Trust except those listed in the next sentence are prorated among all classes of such Portfolio. Expenses of the Trust which are directly attributable to a specific class of shares are charged against the income available for distribution as dividends to the holders of such shares. BANKING REGULATIONS The Glass-Steagall Act and other applicable laws, among other things, generally prohibit federally chartered or supervised banks from engaging in the business of underwriting, selling or distributing securities, but permit banks to make shares of mutual funds available to their customers and to perform administrative and shareholder servicing functions. However, judicial or administrative decisions or interpretations of such laws, as well as changes in either federal or state statutes or regulations relating to the permissible activities of banks or their subsidiaries or affiliates, could prevent a bank from continuing to perform all or a part of its servicing activities. If a bank were prohibited from so acting, shareholder clients of such bank would be permitted to remain shareholders of the Trust and alternate means for continuing the servicing of such shareholders would be sought. In such event, changes in the operation of the Trust might occur and shareholders serviced by such bank might no longer be able to avail themselves of any automatic investment or other services then being provided by such bank. It is not expected that shareholders would suffer any adverse financial consequences as a result of any of these occurrences. In addition, state securities laws on this issue may differ from the interpretations of federal law expressed herein and certain banks and financial institutions may be required to register as dealers pursuant to state law. TRANSFER AGENT AND CUSTODIAN The Bank of New York ("BONY") acts as custodian for the portfolio securities and cash of the Portfolio. BONY receives such compensation from the Trust for its services in such capacity as is agreed to from time to time by BONY and the Trust. The address of BONY is 90 Washington Street, 11th Floor, New York, New York 10286. A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as transfer agent for the shares of each class of the Portfolio and receives an annual fee from the Trust for its services in such capacity in the amount of .009% of average daily net assets of the Trust, payable monthly. Such compensation may be changed from time to time as is agreed to by A I M Institutional Fund Services, Inc. and the Trust. It is currently anticipated that, effective on or about December 29, 1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a registered transfer agent, will become the transfer agent to the Fund. 11 109 REPORTS The Trust furnishes shareholders with semi-annual reports containing information about the Trust and its operations, including a schedule of investments held in the Portfolio and its financial statements. The annual financial statements are audited by the Trust's independent auditors. The Board of Trustees has selected KPMG Peat Marwick LLP, 700 Louisiana, Houston, Texas 77002, as the independent auditors to audit the financial statements and review the tax returns of the Portfolio. FEE WAIVERS AIM or its affiliates may, from time to time, agree to waive voluntarily all or any portion of its fees or reimburse the Portfolio for certain of its expenses. Such waivers or reimbursements may be discontinued at any time. PRINCIPAL HOLDERS OF SECURITIES TREASURY PORTFOLIO To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding shares of any class of the Portfolio as of December 1, 1997, and the percentage of such shares owned by such shareholders as of such date are as follows: CASH MANAGEMENT CLASS
PERCENT NAME AND ADDRESS OWNED OF OF RECORD OWNER RECORD ONLY(a) ---------------- -------------- The Bank of New York...................................... 48.53%(b) 4 Fisher lane White Plains, NY 10603 Fund Services Associates.................................. 19.16% 11835 West Olympic Boulevard Suite 205 Los Angeles, CA 90064 Texas Commerce Bank....................................... 12.25% Mutual Fund Unit/16 Hcb 09 P.O. Box 2558 Houston, TX 77252-2558 Cullen/Frost Discount Brokers............................. 5.27% 100 W. Houston St. San Antonio, TX 78205
INSTITUTIONAL CLASS
PERCENT NAME AND ADDRESS OWNED OF OF RECORD OWNER RECORD ONLY(a) ---------------- -------------- U.S. Bank of Washington.................................. 11.39% P.O. Box 3168 Portland, OR 97208 Trust Company Bank........................................ 9.66% P.O. Box 105504 Atlanta, GA 30348 City of New York Deferred Compensation Plan............... 7.34% 40 Rector Street, 3rd Floor New York, NY 10006 Liberty Registration Co. of Oklahoma...................... 7.08% P.O. Box 25848 Oklahoma City, OK 73125
- --------------- (a) The Trust has no knowledge as to whether all or any portion of the shares owned of record only are also owned beneficially. (b) A shareholder who holds more than 25% of the outstanding shares of a class may be presumed to be in "control" of such class of shares, as defined in the 1940 Act. 12 110 PERSONAL INVESTMENT CLASS
PERCENT NAME AND ADDRESS OWNED OF OF RECORD OWNER RECORD ONLY(a) ---------------- ------------ Cullen/Frost Discount Brokers................................................ 66.08%(b) P.O. Box 2358 San Antonio, TX 78299 The Bank of New York....................................................... 27.42%(b) 4 Fisher Lane White Plains, NY 10603
PRIVATE INVESTMENT CLASS
PERCENT NAME AND ADDRESS OWNED OF OF RECORD OWNER RECORD ONLY(a) ---------------- ------------ Liberty Bank and Trust Co. of Tulsa, N.A. ................................... 50.06%(b) P.O. Box 25848 Oklahoma City, OK 73125 The Bank of New York....................................................... 13.89% 4 Fisher Lane White Plains, NY 10603 Huntington Capital Corp.................................................... 12.29% 41 S. High St., 9th Floor Columbus, Ohio 43287 First Trust/VAR & Co....................................................... 5.73% Funds Control Suite 0404 180 E. 5th Street St. Paul, MN 55101
RESOURCE CLASS
PERCENT NAME AND ADDRESS OWNED OF OF RECORD OWNER RECORD ONLY(a) ---------------- ------------ Corestates Capital Markets.................................................. 80.37%(b) 1345 Chestnut Street Philadelphia, PA 19101 Mellon Bank............................................................... 16.37% Three Mellon Center, Room 3840 Pittsburgh, PA 15259-0001
- --------------- (a) The Trust has no knowledge as to whether all or any portion of the shares owned of record only are also owned beneficially. (b) A shareholder who holds more than 25% of the outstanding shares of a class may be presumed to be in "control" of such class of shares, as defined in the 1940 Act. 13 111 TREASURY TAXADVANTAGE PORTFOLIO To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding shares of any class of the Treasury TaxAdvantage Portfolio as of December 1, 1997, and the percentage of such shares owned by such shareholders as of such date are as follows: INSTITUTIONAL CLASS
PERCENT NAME AND ADDRESS OWNED OF OF RECORD OWNER RECORD ONLY(a) ---------------- ------------ Peoples Two Ten Company.................................................. 33.84%(b) c/o Summit Bank Trust Operations, 7th Floor P.O. Box 821 Hackensack, NJ 07602 First Trust/VAR & Co. ................................................. 26.57%(b) Funds Control Suite 0404 180 East 5th Street St. Paul, MN 55101 Liberty Registration Co. of Oklahoma................................... 17.14% P.O. Box 25848 Oklahoma City, OK 73125 NationsBank............................................................ 5.16% 1401 Elm Street, 11th Floor P.O. Box 831000 Dallas, TX 75202-2911
PRIVATE INVESTMENT CLASS
PERCENT NAME AND ADDRESS OWNED OF OF RECORD OWNER RECORD ONLY(a) ---------------- ------------ The Bank of New York................................................... 37.29%(b) 4 Fisher Lane White Plains, NY 10603 Huntington Capital Corp.............................................. 27.31%(b) 41 S. High St., 9th Floor Columbus, OH 43287 First National Bank of Chicago....................................... 25.49%(b) Mail Suite 0126 Chicago, IL 60670-0126 Corestates Capital Markets........................................... 7.74% 1345 Chestnut St. FC 1-1-9-49 Philadelphia, PA 19101
- --------------- (a) The Trust has no knowledge as to whether all or any portion of the shares owned of record only are also owned beneficially. (b) A shareholder who holds more than 25% of the outstanding shares of a class may be presumed to be in "control" of such class of shares, as defined in the 1940 Act. Shares shown as beneficially owned by the above institutions are those shares for which the institutions possessed or shared voting or investment power with respect to such shares on behalf of their underlying accounts. To the best of the knowledge of the Trust, as of December 1, 1997, the trustees and officers of the Trust beneficially owned less than 1% of each class of the Trust's outstanding shares. PURCHASES AND REDEMPTIONS A complete description of the manner by which shares of a particular class may be purchased, redeemed or exchanged appears in the Prospectus under the heading "Purchase of Shares." The right of redemption may be suspended or the date of payment postponed when (a) trading on the New York Stock Exchange ("NYSE") is restricted, as determined by applicable rules and regulations of the SEC, (b) the NYSE is closed for other 14 112 than customary weekend and holiday closings, (c) the SEC has by order permitted such suspension, or (d) an emergency as determined by the SEC exists making disposition of portfolio securities or the valuation of the net assets of the Fund not reasonably practicable. A "business day" of the Portfolio is any day on which commercial banks in the New York Federal Reserve district are open for business. The Portfolio, however, reserves the right to change the time for which purchase and redemption requests must be submitted to the Portfolio for execution on the same day on any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holidays. NET ASSET VALUE DETERMINATION Shares of the Portfolio are sold at net asset value. Shareholders may at any time redeem all or a portion of their shares at net asset value. The investor's price for purchases and redemptions will be the net asset value next determined following the receipt of an order to purchase or a request to redeem shares. The valuation of the portfolio instruments based upon their amortized cost and the concomitant maintenance of the net asset value per share of $1.00 for the Portfolio is permitted in accordance with applicable rules and regulations of the SEC, including Rule 2a-7, which require the Trust to adhere to certain conditions. These rules require that the Trust maintain a dollar-weighted average portfolio maturity of 90 days or less for the Portfolio, purchase only instruments having remaining maturities of 397 days or less and invest only in securities determined by the Trust's Board of Trustees to be of high quality with minimal credit risk. The Board of Trustees is required to establish procedures designed to stabilize, to the extent reasonably practicable, the Trust's price per share at $1.00 for the Portfolio as computed for the purpose of sales and redemptions. Such procedures include review of the Portfolio's portfolio holdings by the Board of Trustees, at such intervals as they may deem appropriate, to determine whether the net asset value calculated by using available market quotations or other reputable sources for the Portfolio deviates from $1.00 per share and, if so, whether such deviation may result in material dilution or is otherwise unfair to existing holders of the Portfolio's shares. In the event the Board of Trustees determines that such a deviation exists for the Portfolio, it will take such corrective action as the Board of Trustees deems necessary and appropriate with respect to the Portfolio, including the sales of portfolio instruments prior to maturity to realize capital gains or losses or to shorten the average portfolio maturity; the withholding of dividends; redemption of shares in kind; or the establishment of a net asset value per share by using available market quotations. DISTRIBUTION AGREEMENT The Trust has entered into a Master Distribution Agreement dated as of February 28, 1997 (the "Distribution Agreement") with FMC, a registered broker-dealer and a wholly owned subsidiary of AIM, to act as the exclusive distributor of the shares of each class of the Portfolio. The address of FMC is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. See "General Information About the Trust -- Trustees and Officers" and "-- Investment Advisor" for information as to the affiliation of certain trustees and officers of the Trust with FMC, AIM and AIM Management. The Distribution Agreement provides that FMC has the exclusive right to distribute shares of each class of the Portfolio either directly or through other broker-dealers. The Distribution Agreement also provides that FMC will pay promotional expenses, including the incremental costs of printing prospectuses and statements of additional information, annual reports and other periodic reports for distribution to persons who are not shareholders of the Trust and the costs of preparing and distributing any other supplemental sales literature. FMC has not undertaken to sell any specified number of shares of the Portfolio. The Distribution Agreement will remain in effect until February 28, 1999, and it will continue in effect from year to year thereafter only if such continuation is specifically approved at least annually by the Trust's Board of Trustees and the affirmative vote of the trustees who are not parties to the Distribution Agreement or "interested persons" of any such party by votes cast in person at a meeting called for such purpose. A prior distribution agreement between the Trust and FMC, with terms substantially the same as those of the Distribution Agreement was in effect through October 15, 1993. The Trust or FMC may terminate the Distribution Agreement on 60 days' written notice without penalty. The Distribution Agreement will terminate automatically in the event of its "assignment," as defined in the 1940 Act. DISTRIBUTION PLAN The Trust has adopted a Master Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Plan, the Trust may enter into Shareholder Service Agreements ("Service Agreements") with selected broker-dealers, banks, other financial institutions or their affiliates. Such firms may receive from the Portfolio compensation for servicing investors as beneficial owners of the shares of the Cash Management Class, Personal Investment Class, Private Investment Class and Resource Class of the Portfolio. These services may include among other things: (i) answering customer inquiries regarding the shares of the class and the Portfolio; (ii) assisting customers in changing dividend options, account designations and ad- 15 113 dresses; (iii) performing sub-accounting; (iv) establishing and maintaining shareholder accounts and records; (v) processing purchase and redemption transactions; (vi) automatic investment in the shares of the class of customer cash account balances; (vii) providing periodic statements showing a customer's account balance and integrating such statements with those of other transactions and balances in the customer's other accounts serviced by such firm; (viii) arranging for bank wires; and (ix) such other services as the Trust may request on behalf of the shares of the class, to the extent such firms are permitted to engage in such services by applicable statute, rule or regulation. The Plan may only be used for the purposes specified above and as stated in the Plan. Expenses may not be carried over from year to year. For the fiscal year ended August 31, 1997, FMC received compensation pursuant to the Plan in the amount of $625,057, or an amount equal to 0.08% of the average daily net assets of the Cash Management Class, $1,210,290, or an amount equal to 0.50% of the average daily net assets of the Personal Investment Class, $1,195,700, or an amount equal to 0.30% of the average daily net assets of the Private Investment Class, and $315,905, or an amount equal to 0.16% of the average daily net assets of the Resource Class. With respect to the Cash Management Class, $623,035 of such amount (or an amount equal to 0.08% of the average daily net assets of the class) was paid to dealers and financial institutions and $1,879 (or an amount equal to 0% of the average daily net assets of the class) was retained by FMC. With respect to the Personal Investment Class, $979,963 of such amount (or an amount equal to 0.40% of the average daily net assets of the class) was paid to dealers and financial institutions and $230,044 (or an amount equal to 0.10% of the average daily net assets of the class) was retained by FMC. With respect to the Private Investment Class, $1,023,839 of such amount (or an amount equal to 0.26% of the average daily net assets of the class) was paid to dealers and financial institutions and $172,395 (or an amount equal to 0.04% of the average daily net assets of the class) was retained by FMC. With respect to the Resource Class, $315,899 of such amount (or an amount equal to 0.16% of the average daily net assets of the class) was paid to dealers and financial institutions and none of such compensation was retained by FMC. FMC is a wholly owned subsidiary of AIM, a wholly owned subsidiary of AIM Management. Charles T. Bauer, a Trustee and Chairman of the Trust, owns shares of AIM Management and Robert H. Graham, a Trustee and President of the Trust, also owns shares of AIM Management. PERFORMANCE INFORMATION As stated under the caption "Yield Information" in the Prospectus, yield information for the shares of each class of the Portfolio may be obtained by calling the Trust at (800) 659-1005. The current yield quoted will be the net average annualized yield for an identified period, such as seven days or a month. Current yield will be computed by assuming that an account was established with a single share (the "Single Share Account") on the first day of the period. To arrive at the quoted yield, the net change in the value of that Single Share Account for the period (which would include dividends accrued with respect to the share, and dividends declared on shares purchased with dividends accrued and paid, if any, but would not include realized gains and losses or unrealized appreciation or depreciation) will be multiplied by 365 and then divided by the number of days in the period, with the resulting figure carried to the nearest hundredth of one percent. The Trust may also furnish a quotation of effective yield that assumes the reinvestment of dividends for a 365-day year and a return for the entire year equal to the average annualized yield for the period, which will be computed by compounding the unannualized current yield for the period by adding 1 to the unannualized current yield, raising the sum to a power equal to 365 divided by the number of days in the period, and then subtracting 1 from the result. For the seven-day period ended August 31, 1997, the current yield and the effective yield (which assumes the reinvestment of dividends for a 365-day year and a return for the entire year equal to the annualized current yield for the period) were 5.49% and 5.64%, for the Cash Management Class, were 5.57% and 5.72%, for the Institutional Class, were 5.07% and 5.20%, for the Personal Investment Class, were 5.27% and 5.41%, for the Private Investment Class and were 5.41% and 5.56%, for the Resource Class respectively. These yields are quoted for illustration purposes only. The yields for any other seven-day period may be substantially different from the yields quoted above. The Trust may compare the performance of a class or the performance of securities in which it may invest to: - IBC/Donoghue's Money Fund Averages, which are average yields of various types of money market funds that include the effect of compounding distributions; - other mutual funds, especially those with similar investment objectives. These comparisons may be based on data published by IBC/Donoghue's Money Fund Report of Holliston, Massachusetts or by Lipper Analytical Services, Inc., a widely recognized independent service located in Summit, New Jersey, which monitors the performance of mutual funds; - yields on other money market securities or averages of other money market securities as reported by the Federal Reserve Bulletin, by TeleRate, a financial information network, or by Bloomberg, a financial information firm; and - other fixed-income investments such as Certificates of Deposit ("CDs"). 16 114 The principal value and interest rate of CDs and money market securities are fixed at the time of purchase whereas a class's yield will fluctuate. Unlike some CDs and certain other money market securities, money market mutual funds are not insured by the FDIC. Investors should give consideration to the quality and maturity of the portfolio securities of the respective investment companies when comparing investment alternatives. The Trust may reference the growth and variety of money market mutual funds and AIM's innovation and participation in the industry. INVESTMENT PROGRAM AND RESTRICTIONS INVESTMENT PROGRAM The Portfolio seeks to achieve its objective by investing in high grade money market instruments. The money market instruments in which the Portfolio invests are considered to carry very little risk and accordingly may not have as high a yield as that available on money market instruments of lesser quality. The Portfolio invests exclusively in direct obligations of the U.S. Treasury, which include Treasury bills, notes and bonds and repurchase agreements relating to such securities. The Portfolio may enter into repurchase agreements with respect to U.S. Treasury securities. The Portfolio may also borrow money and enter into reverse repurchase agreements with respect to its portfolio securities in amounts up to 10% of the value of its total assets at the time of borrowing or entering into a repurchase agreement. The Portfolio will only borrow money or enter into reverse repurchase agreements for temporary or emergency purposes to facilitate the orderly sale of portfolio securities to accommodate abnormally heavy redemption requests should they occur. ELIGIBLE SECURITIES The Trust will invest in "Eligible Securities" as defined in Rule 2a-7 under the 1940 Act, which the Trust's Board of Trustees has determined to present minimal credit risk. INVESTMENT RESTRICTIONS As a matter of fundamental policy which may not be changed without a majority vote of shareholders of the Portfolio (as that term is defined under "General Information about the Trust -- The Trust and its Shares"), the Portfolio may not: (1) concentrate more than 25% of the value of its total assets in the securities of one or more issuers conducting their principal business activities in the same industry, provided that there is no limitation with respect to investments in obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities and bank instruments, such as CDs, bankers' acceptances, time deposits and bank repurchase agreements; (2) purchase securities of any one issuer (other than obligations of the U.S. Government, its agencies or instrumentalities) if, immediately after such purchase, more than 5% of the value of the Portfolio's total assets would be invested in such issuer, except as permitted by Rule 2a-7 under the 1940 Act, as amended from time to time, and except that the Portfolio may purchase securities of other investment companies to the extent permitted by applicable law or exemptive order; or (3) borrow money or issue senior securities except (a) for temporary or emergency purposes (e.g., in order to facilitate the orderly sale of portfolio securities to accommodate abnormally heavy redemption requests), the Portfolio may borrow money from banks or obtain funds by entering into reverse repurchase agreements, and (b) to the extent that entering into commitments to purchase securities in accordance with the Portfolio's investment program may be considered the issuance of senior securities, provided that the Portfolio will not purchase portfolio securities while borrowings in excess of 5% of its total assets are outstanding; (4) mortgage, pledge or hypothecate any assets except to secure permitted borrowings and except for reverse repurchase agreements and then only in an amount up to 33-1/3% of the value of its total assets at the time of borrowing or entering into a reverse repurchase agreement; (5) make loans of money or securities other than (a) through the purchase of debt securities in accordance with the Portfolio's investment program, (b) by entering into repurchase agreements and (c) by lending portfolio securities to the extent permitted by law or regulation; (6) underwrite securities issued by any other person, except to the extent that the purchase of securities and the later disposition of such securities in accordance with the Portfolio's investment program may be deemed an underwriting; (7) invest in real estate, except that the Portfolio may purchase and sell securities secured by real estate or interests therein or issued by issuers which invest in real estate or interests therein; 17 115 (8) purchase or sell commodities or commodity futures contracts, purchase securities on margin, make short sales or invest in puts or calls; or (9) invest in any obligation not payable as to principal and interest in United States currency. OTHER INVESTMENT POLICIES The Portfolio does not intend to invest in companies for the purpose of exercising control or management, except that the Portfolio may purchase securities of other investment companies to the extent permitted by applicable law or exemptive order. The Portfolio may also lend its portfolio securities in amounts up to 33-1/3% of its total assets to financial institutions in accordance with the investment restrictions of the Portfolio. Such loans would involve risks of delay in receiving additional collateral in the event the value of the collateral decreased below the value of the securities loaned or of delay in recovering the securities loaned or even loss of rights in the collateral should the borrower of the securities fail financially. However, loans will be made only to borrowers deemed by AIM to be of good standing and only when, in AIM's judgment, the income to be earned from the loans justifies the attendant risks. None of the foregoing policies is fundamental. PORTFOLIO TRANSACTIONS AIM is responsible for decisions to buy and sell securities for the Portfolio, broker-dealer selection and negotiation of commission rates. Since purchases and sales of portfolio securities by the Portfolio are usually principal transactions, the Portfolio incurs little or no brokerage commissions. Portfolio securities are normally purchased directly from the issuer or from a market maker for the securities. The purchase price paid to dealers serving as market makers may include a spread between the bid and asked prices. The Portfolio may also purchase securities from underwriters at prices which include a commission paid by the issuer to the underwriter. The Portfolio does not seek to profit from short-term trading, and will generally (but not always) hold portfolio securities to maturity, but AIM may seek to enhance the yield of the Portfolio by taking advantage of yield disparities or other factors that occur in the money markets. For example, market conditions frequently result in similar securities trading at different prices. AIM may dispose of any portfolio security prior to its maturity if such disposition and reinvestment of proceeds are expected to enhance yield consistent with AIM's judgment as to desirable portfolio maturity structure or if such disposition is believed to be advisable due to other circumstances or conditions. The amortized cost method of valuing portfolio securities requires that the Portfolio maintain an average weighted portfolio maturity of ninety days or less. Thus, there is likely to be relatively high portfolio turnover, but since brokerage commissions are not normally paid on money market instruments, the high rate of portfolio turnover is not expected to have a material effect on the net income or expenses of the Portfolio. AIM's primary consideration in effecting a security transaction is to obtain the best net price and the most favorable execution of the order. To the extent that the execution and prices offered by more than one dealer are comparable, AIM may, in its discretion, effect transactions with dealers that furnish statistical, research or other information or services which are deemed by AIM to be beneficial to the Portfolio's investment program. Research services received from broker-dealers supplement AIM's own research (and the research of sub-advisors to other clients of AIM), and may include the following types of information: statistical and background information on the U.S. and foreign economies, industry groups and individual companies; forecasts and interpretations with respect to U.S. and foreign economies, securities, markets, specific industry groups and individual companies; information on federal, state, local and foreign political developments; portfolio management strategies, performance information on securities, indexes and investment accounts; information concerning prices of securities; and information supplied by specialized services to AIM and to the Trust's trustees with respect to the performance, investment activities and fees and expenses of other mutual funds. Such information may be communicated electronically, orally or in written form. Research services may also include the providing of equipment used to communicate research information, the providing of specialized consultations with AIM personnel with respect to computerized systems and data furnished to AIM as a component of other research services, the arranging of meetings with management of companies and the providing of access to consultants who supply research information. Certain research services furnished by dealers may be useful to AIM with respect to clients other than the Portfolio. Similarly, any research services received by AIM through placement of portfolio transactions of other clients may be of value to AIM in fulfilling its obligations to the Portfolio. AIM is of the opinion that the material received is beneficial in supplementing AIM's research and analysis; and, therefore, it may benefit the Portfolio by improving the quality of AIM's investment advice. The advisory fees paid by the Portfolio are not reduced because AIM receives such services. From time to time, the Trust may sell a security, or purchase a security from an AIM Fund or another investment account advised by AIM or A I M Capital Management, Inc. ("AIM Capital"), when such transactions comply with applicable rules and regulations and are deemed consistent with the investment objective(s) and policies of the investment accounts advised by AIM or AIM Capital. Procedures pursuant to Rule 17a-7 under the 1940 Act regarding transactions between investment accounts advised by AIM or AIM Capital have been adopted by the Boards of Directors/Trustees of the various AIM Funds, including the Trust. Although such transactions may result in custodian, tax or other related expenses, no brokerage commissions or other direct transaction costs are generated by transactions among the investment accounts advised by AIM or AIM Capital. 18 116 Provisions of the 1940 Act and rules and regulations thereunder have been construed to prohibit the Trust from purchasing securities or instruments from, or selling securities or instruments to, any holder of 5% or more of the voting securities of any investment company managed or advised by AIM. The Trust has obtained an order of exemption from the SEC which permits the Trust to engage in certain transactions with certain 5% holders, if the Trust complies with conditions and procedures designed to ensure that such transactions are executed at fair market value and present no conflicts of interest. AIM and its affiliates manage several other investment accounts, some of which may have objectives similar to the Portfolio's. It is possible that at times identical securities will be acceptable for one or more of such investment accounts. However, the position of each account in the securities of the same issue may vary and the length of time that each account may choose to hold its investment in the securities of the same issue may likewise 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 Portfolio and one or more of these accounts and is considered at or about the same time, transactions in such securities will be allocated in good faith among such accounts, in accordance with applicable laws and regulations, in order to obtain the best net price and most favorable execution. The allocation and combination of simultaneous securities purchases on behalf of the Portfolio will be made in the same way that such purchases are allocated among or combined with those of other AIM accounts. Simultaneous transactions could adversely affect the ability of the Portfolio to obtain or dispose of the full amount of a security which it seeks to purchase or sell. Under the 1940 Act, certain persons affiliated with the Trust are prohibited from dealing with the Portfolios as principal in any purchase or sale of securities unless an exemptive order allowing such transactions is obtained from the SEC. Furthermore, the 1940 Act prohibits the Trust from purchasing a security being publicly underwritten by a syndicate of which certain persons affiliated with the Trust are members except in accordance with certain conditions. These conditions may restrict the ability of the Portfolio to purchase money market obligations being publicly underwritten by such a syndicate, and the Portfolio may be required to wait until the syndicate has been terminated before buying such securities. At such time, the market price of the securities may be higher or lower than the original offering price. A person affiliated with the Trust may, from time to time, serve as placement agent or financial advisor to an issuer of money market obligations and be paid a fee by such issuer. The Portfolio may purchase such money market obligations directly from the issuer, provided that the purchase made in accordance with procedures adopted by the Trust's Board of Trustees and any such purchases are reviewed at least quarterly by the Trust's Board of Trustees and a determination is made that all such purchases were effected in compliance with such procedures, including a determination that the placement fee or other remuneration paid by the issuer to the person affiliated with the Trust was fair and reasonable in relation to the fees charged by others performing similar services. During the fiscal year ended August 31, 1997, no securities or instruments were purchased by the Portfolio from issuers who paid placement fees or other compensation to a broker affiliated with the Portfolio. TAX MATTERS The following is only a summary of certain additional tax considerations generally affecting the Portfolio and its shareholders that are not described in the Prospectus. No attempt is made to present a detailed explanation of the tax treatment of the Portfolio 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 The Portfolio has elected to be taxed as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). As a regulated investment company, the Portfolio is not subject to federal income tax on the portion of its net investment income (i.e., taxable interest, dividends and other taxable ordinary income, net of expenses) and capital gain net income (i.e., the excess of capital gains over capital losses) that it distributes to shareholders, provided that it distributes at least 90% of its investment company taxable income (i.e., net investment income and the excess of net short-term capital gain over net long-term capital loss) for the taxable year (the "Distribution Requirement"), and satisfies certain other requirements of the Code that are described below. Distributions by the Portfolio made during the taxable year or, under specified circumstances, within twelve months after the close of the taxable year, will be considered distributions of income and gains for the taxable year and can therefore satisfy the Distribution Requirement. In addition to satisfying the Distribution Requirement, a regulated investment company (1) must derive at least 90% of its gross income from dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition of stock or securities or foreign currencies (to the extent such currency gains are directly related to the regulated investment company's principal business of investing in stock or securities) and other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities or currencies (the "Income Requirement"); and (2) must satisfy an asset diversification test in order to qualify for tax purposes as a regulated investment company (the "Asset Diversification Test"). Under the Asset Diversification Test, at the close of each quarter of a fund's taxable year, at least 50% of the value of a fund's assets must consist of cash and cash items, U.S. Govern- 19 117 ment securities, securities of other regulated investment companies, and securities of other issuers (as to which a fund has not invested more than 5% of the value of a fund's total assets in securities of such issuer and as to which a 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 other issuer (other than U.S. Government securities and securities of other regulated investment companies), or in two or more issuers which a fund controls and which are engaged in the same or similar trades or businesses. If, for any taxable year the Portfolio 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 the Portfolio's current and accumulated earnings and profits. Such distributions generally will be eligible for the dividends received deduction in the case of corporate shareholders. EXCISE TAX ON REGULATED INVESTMENT COMPANIES A 4% non-deductible excise tax is imposed on a regulated investment company that fails to distribute in each calendar year an amount equal to 98% of ordinary taxable income for the calendar year and 98% of capital gain net income for the one-year period ended on October 31 of such calendar year (or, at the election of a regulated investment company having a taxable year ending November 30 or December 31, for its taxable year( a "taxable year election")). The balance of such income must be distributed during the next calendar year. For the foregoing purposes, a regulated investment company is treated as having distributed any amount on which it is subject to income tax for any taxable year ending in such calendar year. The Portfolio intends to make sufficient distributions or deemed distributions of its ordinary taxable income and capital gain net income prior to the end of each calendar year to avoid liability for the excise tax. However, investors should note that the Portfolio may in certain circumstances be required to liquidate portfolio investments to make sufficient distributions to avoid excise tax liability. PORTFOLIO DISTRIBUTIONS The Portfolio 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 not qualify for the 70% dividends received deduction for corporations. Distributions by the Portfolio will be treated in the manner described above regardless of whether such distributions are paid in cash or reinvested in additional shares of the Portfolio. Shareholders receiving a distribution in the form of additional shares will be treated as receiving a distribution in an amount equal to the fair market value of the shares received, determined as of the reinvestment date. Ordinarily, shareholders are required to take distributions by the Portfolio 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 Portfolio) 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 Internal Revenue Service. The Portfolio will be required in certain cases to withhold and remit to the U.S. Treasury 31% of the ordinary income dividends and capital gain dividends, and in certain cases, of the proceeds of redemption of shares, paid to any shareholder (1) who has provided either an incorrect tax identification number or no number at all, (2) who is subject to backup withholding by the Internal Revenue Service for failure to report the receipt of interest or dividend income properly, or (3) who has failed to certify to the Trust that it is not subject to backup withholding or that it is a corporation or other "exempt recipient." SALE OR REDEMPTION OF SHARES A shareholder will recognize gain or loss on the sale or redemption of shares of a class in an amount equal to the difference between the proceeds of the sale or redemption and the shareholder's adjusted tax basis in the shares. All or a portion of any loss so recognized may be disallowed if the shareholder purchases other shares of the class 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 class 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. However, any capital loss arising from the sale or redemption of shares held for six months or less will be treated as a long-term capital loss to the extent of the amount of capital gain dividends received on such shares. For this purpose, the special holding period rules of Code Section 246(c)(3) and (4) generally will apply in determining the holding period of shares. 20 118 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 the Portfolio is "effectively connected" with a U.S. trade or business carried on by such shareholder. If the income from the Portfolio is not effectively connected with a U.S. trade or business carried on by a foreign shareholder, dividends and distributions (other than capital gains dividends) will be subject to U.S. withholding tax at the rate of 30% (or lower treaty rate) upon the gross amount of the dividend or distribution. Such a foreign shareholder would generally be exempt from U.S. federal income tax on gains realized on the sale of shares of a class, capital gain dividends and amounts retained by the Portfolio that are designated as undistributed capital gains. If the income from the Portfolio is effectively connected with a U.S. trade or business carried on by a foreign shareholder, then ordinary income dividends, capital gain dividends and any gains realized upon the sale of shares of the Portfolio 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 noncorporate shareholders, the Portfolio may be required to withhold U.S. federal income tax at a rate of 31% on distributions that are otherwise exempt from withholding tax unless such shareholders furnish the Portfolio with proper notification of their foreign status. The tax consequences to a foreign shareholder entitled to claim the benefits of an applicable tax treaty may be different from those described herein. Foreign shareholders are urged to consult their own tax advisers with respect to the particular tax consequences to them of an investment in the Portfolio, including the applicability of foreign taxes. EFFECT OF FUTURE LEGISLATION; LOCAL TAX CONSIDERATIONS The foregoing general discussion of U.S. federal income tax consequences is based on the Code and the regulations issued thereunder as in effect on December 17, 1997. 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 dividends and capital gain dividends from regulated investment companies often differ from the rules for U.S. federal income taxation described above. Shareholders are urged to consult their tax advisers as to the consequences of these and other state and local tax rules affecting investment in the Trust. 21 119 FINANCIAL STATEMENTS FS 120 INDEPENDENT AUDITORS' REPORT To the Board of Trustees and Shareholders Short-Term Investments Trust: We have audited the accompanying statement of assets and liabilities of the Treasury Portfolio (a series portfolio of Short-Term Investments Trust), including the schedule of investments, as of August 31, 1997, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 1997 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Treasury Portfolio as of August 31, 1997, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with generally accepted accounting principles. /s/ KPMG PEAT MARWICK LLP KPMG Peat Marwick LLP Houston, Texas October 3, 1997 FS-1 121 SCHEDULE OF INVESTMENTS August 31, 1997
MATURITY PAR (000) VALUE U.S. TREASURY SECURITIES-12.94% U.S. TREASURY BILLS(a)-5.80% 5.33% 10/02/97 $ 50,000 $ 49,770,514 - ---------------------------------------------------------------------------------------- 5.325% 01/08/98 25,000 24,522,969 - ---------------------------------------------------------------------------------------- 5.28% 03/05/98 40,000 38,914,667 - ---------------------------------------------------------------------------------------- 5.665% 04/02/98 25,000 24,162,052 - ---------------------------------------------------------------------------------------- 5.53% 04/30/98 50,000 48,148,987 - ---------------------------------------------------------------------------------------- 5.52% 05/28/98 50,000 47,937,667 - ---------------------------------------------------------------------------------------- 5.235% 06/25/98 25,000 23,920,281 - ---------------------------------------------------------------------------------------- 5.215% 07/23/98 25,000 23,823,004 - ---------------------------------------------------------------------------------------- 5.245% 07/23/98 25,000 23,816,233 - ---------------------------------------------------------------------------------------- 305,016,374 - ---------------------------------------------------------------------------------------- U.S. TREASURY NOTES-7.14% 5.75% 09/30/97 50,000 50,012,312 - ---------------------------------------------------------------------------------------- 8.75% 10/15/97 50,000 50,197,174 - ---------------------------------------------------------------------------------------- 5.25% 12/31/97 50,000 49,944,119 - ---------------------------------------------------------------------------------------- 7.875% 01/15/98 75,000 75,554,919 - ---------------------------------------------------------------------------------------- 5.125% 03/31/98 50,000 49,757,722 - ---------------------------------------------------------------------------------------- 5.125% 06/30/98 50,000 49,796,720 - ---------------------------------------------------------------------------------------- 6.25% 06/30/98 25,000 25,133,372 - ---------------------------------------------------------------------------------------- 8.25% 07/15/98 25,000 25,549,378 - ---------------------------------------------------------------------------------------- 375,945,716 - ---------------------------------------------------------------------------------------- Total U.S. Treasury Securities 680,962,090 - ---------------------------------------------------------------------------------------- Total Investments (excluding Repurchase Agreements) 680,962,090 - ---------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS-87.34%(b) BT Securities Corp. 5.55%(c) 09/02/97 200,000 200,000,000 - ---------------------------------------------------------------------------------------- BZW Securities Inc. 5.57%(d) 09/02/97 200,000 200,000,000 - ---------------------------------------------------------------------------------------- Bear, Stearns & Co. Inc. 5.58%(e) -- 200,000 200,000,000 - ---------------------------------------------------------------------------------------- 5.58%(f) -- 200,000 200,000,000 - ---------------------------------------------------------------------------------------- CIBC-Wood Gundy Securities Corp. 5.56%(g) 09/02/97 200,000 200,000,000 - ---------------------------------------------------------------------------------------- CS First Boston Corp. 5.53%(h) 09/02/97 200,000 200,000,000 - ---------------------------------------------------------------------------------------- Chase Securities, Inc. 5.55%(i) 09/02/97 200,000 200,000,000 - ---------------------------------------------------------------------------------------- Deutsche Morgan Grenfell/C.J. Lawrence, Inc. 5.58%(j) -- 560,000 560,000,000 - ---------------------------------------------------------------------------------------- Goldman, Sachs & Co. 5.56%(k) 09/02/97 434,729 434,728,794 - ---------------------------------------------------------------------------------------- Greenwich Capital Markets, Inc. 5.57%(l) 09/02/97 200,000 200,000,000 - ---------------------------------------------------------------------------------------- HSBC Securities, Inc. 5.58%(m) 09/02/97 200,000 200,000,000 - ----------------------------------------------------------------------------------------
FS-2 122
MATURITY PAR (000) VALUE REPURCHASE AGREEMENTS-(continued) Merrill Lynch Government Securities Inc. 5.57%(n) 09/02/97 $200,000 $ 200,000,000 - ---------------------------------------------------------------------------------------- Morgan (J.P.) Securities Inc. 5.56%(o) 09/02/97 300,000 300,000,000 - ---------------------------------------------------------------------------------------- Morgan Stanley & Co. Inc. 5.58%(p) 09/02/97 200,000 200,000,000 - ---------------------------------------------------------------------------------------- Nesbitt Burns Securities Inc. 5.57%(q) -- 200,000 200,000,000 - ---------------------------------------------------------------------------------------- SBC Capital Markets Inc. 5.57%(r) 09/02/97 500,000 500,000,000 - ---------------------------------------------------------------------------------------- Sanwa Securities (USA) Co., L.P. 5.56%(s) 09/02/97 200,000 200,000,000 - ---------------------------------------------------------------------------------------- UBS Securities LLC 5.56%(t) -- 200,000 200,000,000 - ---------------------------------------------------------------------------------------- Total Repurchase Agreements 4,594,728,794 - ---------------------------------------------------------------------------------------- TOTAL INVESTMENTS-100.28% 5,275,690,884(u) - ---------------------------------------------------------------------------------------- OTHER ASSETS LESS LIABILITIES-(0.28)% (14,902,379) - ---------------------------------------------------------------------------------------- NET ASSETS-100.00% $5,260,788,505 ========================================================================================
NOTES TO SCHEDULE OF INVESTMENTS: (a) U.S. Treasury bills are traded on a discount basis. In such cases the interest rate shown represents the rate of discount paid or received at the time of purchase by the Portfolio. (b) Collateral on repurchase agreements, including the Portfolio's pro-rata interest in joint repurchase agreements, is taken into possession by the Portfolio upon entering into the repurchase agreement. The collateral is marked to market daily to ensure its market value as being 102% of the sales price of the repurchase agreement. The investments in some repurchase agreements are through participation in joint accounts with other mutual funds, private accounts and certain non-registered investment companies managed by the investment advisor or its affiliates. (c) Entered into 08/29/97 with a maturing value of $200,123,333. Collateralized by $163,725,000 U.S. Treasury obligations, 8.875% due 02/15/19 with a market value at 08/31/97 of $204,764,696. (d) Entered into 08/29/97 with a maturing value of $200,123,778. Collateralized by $184,335,000 U.S. Treasury obligations, 0% to 11.25% due 12/04/97 to 02/15/15 with an aggregate market value at 08/31/97 of $204,000,005. (e) Open repurchase agreement. Either party may terminate the agreement upon demand. Interest rates, par and collateral are redetermined daily. Collateralized by $821,051,000 U.S. Treasury obligations, 0% to 8.75% due 11/15/99 to 08/15/25 with an aggregate market value at 08/31/97 of $206,717,583. (f) Open repurchase agreement. Either party may terminate the agreement upon demand. Interest rates, par and collateral are redetermined daily. Collateralized by $500,628,000 U.S. Treasury obligations, 0% due 02/15/06 to 11/15/21 with an aggregate market value at 08/31/97 of $204,356,857. (g) Entered into 08/29/97 with a maturing value of $200,123,556. Collateralized by $194,543,000 U.S. Treasury obligations, 5.375% to 11.25% due 08/31/97 to 11/15/26 with an aggregate market value at 08/31/97 of $204,001,930. (h) Entered into 08/29/97 with a maturing value of $200,122,889. Collateralized by $208,810,000 U.S. Treasury obligations, 0% to 6.25% due 09/04/97 to 06/30/02 with an aggregate market value at 08/31/97 of $205,012,084. (i) Entered into 08/29/97 with a maturing value of $200,123,333. Collateralized by $193,386,000 U.S. Treasury obligations, 5.50% to 8.875% due 02/15/00 to 08/15/27 with an aggregate market value at 08/31/97 of $204,004,690. (j) Open repurchase agreement. Either party may terminate the agreement upon demand. Interest rates, par and collateral are redetermined daily. Collateralized by $537,574,000 U.S. Treasury obligations 5.25% to 7.875%, due 12/31/97 to 11/15/04 with an aggregate market value at 08/31/97 of $571,200,459. (k) Joint repurchase agreement entered into 08/29/97 with a maturing value of $750,463,333. Collateralized by $698,212,000 U.S. Treasury obligations, 4.75% to 14.00% due 02/28/98 to 08/15/25 with an aggregate market value at 08/31/97 of $765,753,716. (l) Entered into 08/29/97 with a maturing value of $200,123,778. Collateralized by $137,530,000 U.S. Treasury obligations, 11.25% due 02/15/15 with a market value at 08/31/97 of $204,003,754. (m) Entered into 08/29/97 with a maturing value of $200,124,000. Collateralized by $209,292,000 U.S. Treasury obligations, 0% due 02/19/98 to 02/26/98 with an aggregate market value at 08/31/97 of $204,003,111. (n) Entered into 08/29/97 with a maturing value of $200,123,778. Collateralized by $534,773,000 U.S. Treasury obligations, 0% to 12.00% due 11/15/97 to 02/15/27 with an aggregate market value at 08/31/97 of $204,002,655. FS-3 123 (o) Entered into 08/29/97 with a maturing value of $300,185,333. Collateralized by $293,232,000 U.S. Treasury obligations, 5.625% to 13.25% due 11/15/97 to 05/15/14 with an aggregate market value at 08/31/97 of $306,000,820. (p) Entered into 08/29/97 with a maturing value of $200,124,000. Collateralized by $192,551,000 U.S. Treasury obligations, 7.00% to 8.75% due 04/15/99 to 02/15/23 with an aggregate market value at 08/31/97 of $204,014,896. (q) Open repurchase agreement. Either party may terminate the agreement upon demand. Interest rates, par and collateral are redetermined daily. Collateralized by $598,149,000 U.S. Treasury obligations, 0% to 6.375% due 11/15/97 to 11/15/26 with an aggregate market value at 08/31/97 of $204,000,427. (r) Entered into 08/29/97 with a maturing value of $500,309,444. Collateralized by $672,387,000 U.S. Treasury obligations, 0% to 6.875% due 11/13/97 to 08/15/20 with an aggregate market value at 08/31/97 of $511,373,725. (s) Entered into 08/29/97 with a maturing value of $200,123,556. Collateralized by $195,073,000 U.S. Treasury obligations, 4.75% to 11.875% due 11/30/97 to 11/15/22 with an aggregate market value at 08/31/97 of $204,000,425. (t) Open repurchase agreement. Either party may terminate the agreement upon demand. Interest rates, par and collateral are redetermined daily. Collateralized by $196,654,000 U.S. Treasury obligations, 5.50% to 8.75% due 08/15/00 to 02/28/01 with an aggregate market value at 08/31/97 of $204,000,926. (u) Also represents cost for federal income tax purposes. See Notes to Financial Statements. FS-4 124 STATEMENT OF ASSETS AND LIABILITIES August 31, 1997 ASSETS: Investments, excluding repurchase agreements, at value (amortized cost) $ 680,962,090 - ---------------------------------------------------------------------------- Repurchase agreements 4,594,728,794 - ---------------------------------------------------------------------------- Interest receivable 8,635,412 - ---------------------------------------------------------------------------- Investment for deferred compensation plan 62,529 - ---------------------------------------------------------------------------- Other assets 139,530 - ---------------------------------------------------------------------------- Total assets 5,284,528,355 - ---------------------------------------------------------------------------- LIABILITIES: Payables for: Dividends 22,897,610 - ---------------------------------------------------------------------------- Deferred compensation 62,529 - ---------------------------------------------------------------------------- Accrued advisory fees 248,343 - ---------------------------------------------------------------------------- Accrued distribution fees 358,768 - ---------------------------------------------------------------------------- Accrued transfer agent fees 48,453 - ---------------------------------------------------------------------------- Accrued trustees' fees 5,067 - ---------------------------------------------------------------------------- Accrued administrative services fees 8,834 - ---------------------------------------------------------------------------- Accrued operating expenses 110,246 - ---------------------------------------------------------------------------- Total liabilities 23,739,850 - ---------------------------------------------------------------------------- NET ASSETS $5,260,788,505 ============================================================================ NET ASSETS: Institutional Class $3,408,009,911 - ---------------------------------------------------------------------------- Private Investment Class $ 463,440,813 - ---------------------------------------------------------------------------- Personal Investment Class $ 322,971,027 - ---------------------------------------------------------------------------- Cash Management Class $ 829,243,407 - ---------------------------------------------------------------------------- Resource Class $ 237,123,347 - ---------------------------------------------------------------------------- SHARES OF BENEFICIAL INTEREST, $.01 PAR VALUE PER SHARE: Institutional Class 3,407,493,098 - ---------------------------------------------------------------------------- Private Investment Class 463,369,076 - ---------------------------------------------------------------------------- Personal Investment Class 322,922,450 - ---------------------------------------------------------------------------- Cash Management Class 829,111,747 - ---------------------------------------------------------------------------- Resource Class 237,087,410 - ---------------------------------------------------------------------------- NET ASSET VALUE PER SHARE: Net asset value, offering and redemption price per share $ 1.00 ============================================================================
See Notes to Financial Statements. FS-5 125 STATEMENT OF OPERATIONS For the year ended August 31, 1997 INVESTMENT INCOME: Interest income $244,075,766 - ---------------------------------------------------------------------------- EXPENSES: Advisory fees 2,666,379 - ---------------------------------------------------------------------------- Custodian fees 280,405 - ---------------------------------------------------------------------------- Administrative services fees 99,273 - ---------------------------------------------------------------------------- Trustees' fees and expenses 32,668 - ---------------------------------------------------------------------------- Transfer agent fees 414,190 - ---------------------------------------------------------------------------- Distribution fees (Note 2) 4,984,471 - ---------------------------------------------------------------------------- Other 480,366 - ---------------------------------------------------------------------------- Total expenses 8,957,752 - ---------------------------------------------------------------------------- Less: Fee waivers and expense reimbursements (1,661,719) - ---------------------------------------------------------------------------- Net expenses 7,296,033 - ---------------------------------------------------------------------------- Net investment income 236,779,733 - ---------------------------------------------------------------------------- Net realized gain on sales of investments 215,978 - ---------------------------------------------------------------------------- Net increase in net assets resulting from operations $236,995,711 ============================================================================
See Notes to Financial Statements. FS-6 126 STATEMENT OF CHANGES IN NET ASSETS For the years ended August 31, 1997 and 1996
1997 1996 -------------- -------------- OPERATIONS: Net investment income $ 236,779,733 $ 193,348,214 - ---------------------------------------------------------------------------------------- Net realized gain on sales of investments 215,978 490,127 - ---------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 236,995,711 193,838,341 - ---------------------------------------------------------------------------------------- Distributions to shareholders from net investment income: Institutional Class (153,610,717) (135,680,200) - ---------------------------------------------------------------------------------------- Private Investment Class (20,120,440) (20,937,989) - ---------------------------------------------------------------------------------------- Personal Investment Class (11,733,992) (6,998,307) - ---------------------------------------------------------------------------------------- Cash Management Class (41,058,376) (28,729,956) - ---------------------------------------------------------------------------------------- Resource Class (10,256,208) (1,001,762) - ---------------------------------------------------------------------------------------- Distributions to shareholders from net realized gains (59,575) -- - ---------------------------------------------------------------------------------------- Share transactions-net 1,556,740,962 443,432,341 - ---------------------------------------------------------------------------------------- Net increase in net assets 1,556,897,365 443,922,468 - ---------------------------------------------------------------------------------------- NET ASSETS: Beginning of period 3,703,891,140 3,259,968,672 - ---------------------------------------------------------------------------------------- End of period $5,260,788,505 $3,703,891,140 ======================================================================================== NET ASSETS CONSIST OF: Shares of beneficial interest $5,259,983,781 $3,703,242,819 - ---------------------------------------------------------------------------------------- Undistributed net realized gain on sales of investments 804,724 648,321 - ---------------------------------------------------------------------------------------- $5,260,788,505 $3,703,891,140 ========================================================================================
See Notes to Financial Statements. FS-7 127 NOTES TO FINANCIAL STATEMENTS August 31, 1997 NOTE 1-SIGNIFICANT ACCOUNTING POLICIES Short-Term Investments Trust (the "Fund") is registered under the Investment Company Act of 1940, as amended, as an open-end series, diversified management investment company. The Fund is organized as a Delaware business trust consisting of two different portfolios, each of which offers separate series of shares: the Treasury Portfolio and the Treasury TaxAdvantage Portfolio. Information presented in these financial statements pertains only to the Treasury Portfolio (the "Portfolio"), with assets, liabilities and operations of each portfolio being accounted for separately. The Portfolio consists of five different classes of shares: the Institutional Class, the Private Investment Class, the Personal Investment Class, the Cash Management Class and the Resource Class. Matters affecting each class are voted on exclusively by the shareholders of each class. The Portfolio is a money market fund whose investment objective is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. The following is a summary of significant accounting policies followed by the Portfolio in the preparation of its financial statements. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. A. Security Valuations-The Portfolio invests only in securities which have maturities of 397 days or less. The securities are valued on the basis of amortized cost which approximates market value. This method values a security at its cost on the date of purchase and thereafter assumes a constant amortization to maturity of any discount or premium. B. Securities Transactions, Investment Income and Distributions-Securities transactions are accounted for on a trade date basis. Realized gains or losses are computed on the basis of specific identification of the securities sold. Interest income, adjusted for amortization of premiums and discounts on investments, is accrued daily. Dividends to shareholders are declared daily and are paid on the first business day of the following month. C. Federal Income Taxes-The Portfolio intends to comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as such, will not be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. D. Expenses-Distribution and transfer agency expenses directly attributable to a class of shares are charged to that class' operations. All other expenses are allocated among the classes. NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund has entered into a master investment advisory agreement with A I M Advisors, Inc. ("AIM"). Under the terms of the master advisory agreement, AIM receives a monthly fee with respect to the Portfolio calculated by applying a monthly rate, based upon the following annual rates, to the average daily net assets of the Portfolio: Net Assets RATE - ------------------------------------------------------------------------ First $300 million 0.15% - ------------------------------------------------------------------------ Over $300 million to $1.5 billion 0.06% - ------------------------------------------------------------------------ Over $1.5 billion 0.05% - ------------------------------------------------------------------------
During the year ended August 31, 1997, AIM voluntarily reimbursed expenses of $24,200. FS-8 128 The Portfolio, pursuant to a master administrative services agreement with AIM, has agreed to reimburse AIM for certain costs incurred in providing accounting services to the Portfolio. During the year ended August 31, 1997, the Fund reimbursed AIM $99,273 for such services. The Portfolio, pursuant to a transfer agency and service agreement, has agreed to pay A I M Institutional Fund Services, Inc. ("AIFS") a fee for providing transfer agent and shareholder services to the Portfolio. During the year ended August 31, 1997, the Portfolio paid AIFS $414,190 for such services. On September 19, 1997, the Board of Trustees of the Fund approved the appointment of A I M Fund Services, Inc. ("AFS") as transfer agent of the Fund to be effective in late 1997 or early 1998. Under the terms of a master distribution agreement between Fund Management Company ("FMC") and the Fund, FMC acts as the exclusive distributor of the Fund's shares. The Fund has adopted a master distribution plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act with respect to the Private Investment Class, the Personal Investment Class, the Cash Management Class and the Resource Class of the Portfolio. The Plan provides that the Private Investment Class, the Personal Investment Class, the Cash Management Class and the Resource Class pay up to a 0.50%, 0.75%, 0.10%, and 0.20%, respectively, maximum annual rate of the average daily net assets attributable to such class. Of this amount, the Fund may pay an asset-based sales charge to FMC and the Fund may pay a service fee of (a) 0.25% of the average daily net assets of each of the Private Investment Class and the Personal Investment Class, (b) 0.10% of the average daily net assets of the Cash Management Class and (c) 0.20% of the average daily net assets of the Resource Class, to selected banks, broker-dealers and other financial institutions who offer continuing personal shareholder services to their customers who purchase and own shares of the Private Investment Class, the Personal Investment Class, the Cash Management Class or the Resource Class. Any amounts not paid as a service fee under such Plan would constitute an asset-based sales charge. The plan also imposes a cap on the total amount of sales charges, including asset-based sales charges, that may be paid by the Portfolio with respect to each class. During the year ended August 31, 1997, the Private Investment Class, the Personal Investment Class, the Cash Management Class and the Resource Class paid $1,195,700, $1,210,290, $625,057, and $315,905, respectively, as compensation under the Plan. FMC waived fees of $1,637,519 for the same period. Certain officers and trustees of the Trust are officers of AIM, FMC, AIFS and AFS. During the year ended August 31, 1997, the Portfolio paid legal fees of $13,565 for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the Board of Trustees. A member of that firm is a trustee of the Fund. NOTE 3-TRUSTEES' FEES Trustees' fees represent remuneration paid or accrued to each trustee who is not an "interested person" of AIM. The Fund may invest trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan. FS-9 129 NOTE 4-SHARE INFORMATION Changes in shares outstanding during the years ended August 31, 1997 and 1996 were as follows:
1997 1996 --------------------------------- --------------------------------- SHARES AMOUNT SHARES AMOUNT --------------- --------------- --------------- --------------- Sold: Institutional Class 15,820,439,672 $15,820,439,672 15,527,980,642 $15,527,980,642 - ----------------------------------------------------------------------------------------------- Private Investment Class 2,377,066,232 2,377,066,232 2,472,141,697 2,472,141,697 - ----------------------------------------------------------------------------------------------- Personal Investment Class 2,585,293,225 2,585,293,225 1,088,591,830 1,088,591,830 - ----------------------------------------------------------------------------------------------- Cash Management Class 4,354,698,981 4,354,698,981 4,232,083,227 4,232,083,227 - ----------------------------------------------------------------------------------------------- Resource Class* 2,558,140,941 2,558,140,941 157,958,663 157,958,663 - ----------------------------------------------------------------------------------------------- Issued as reinvestment of dividends: Institutional Class 15,531,436 15,531,436 9,763,491 9,763,491 - ----------------------------------------------------------------------------------------------- Private Investment Class 3,858,592 3,858,592 3,211,766 3,211,766 - ----------------------------------------------------------------------------------------------- Personal Investment Class 9,897,559 9,897,559 4,455,140 4,455,140 - ----------------------------------------------------------------------------------------------- Cash Management Class 12,944,226 12,944,226 8,200,664 8,200,664 - ----------------------------------------------------------------------------------------------- Resource Class* 9,274,277 9,274,277 789,507 789,507 - ----------------------------------------------------------------------------------------------- Reacquired: Institutional Class (14,763,510,184) (14,763,510,184) (15,872,219,385) (15,872,219,385) - ----------------------------------------------------------------------------------------------- Private Investment Class (2,270,031,466) (2,270,031,466) (2,517,444,015) (2,517,444,015) - ----------------------------------------------------------------------------------------------- Personal Investment Class (2,465,181,087) (2,465,181,087) (1,014,656,105) (1,014,656,105) - ----------------------------------------------------------------------------------------------- Cash Management Class (4,328,020,236) (4,328,020,236) (3,532,010,008) (3,532,010,008) - ----------------------------------------------------------------------------------------------- Resource Class* (2,363,661,206) (2,363,661,206) (125,414,773) (125,414,773) - ----------------------------------------------------------------------------------------------- Net increase 1,556,740,962 $ 1,556,740,962 443,432,341 $ 443,432,341 ===============================================================================================
* The Resource Class commenced operations on March 12, 1996. FS-10 130 NOTE 5-FINANCIAL HIGHLIGHTS CASH MANAGEMENT CLASS: Shown below are the financial highlights for a share outstanding of the Cash Management Class during each of the years in the four-year period ended August 31, 1997 and the period August 17, 1993 (date operations commenced) through August 31, 1993.
1997 1996 1995 1994 1993 -------- -------- ------- ------- ------- Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 - ------------------------------------- -------- -------- ------- ------- ------- Income from investment operations: Net investment income 0.05 0.05 0.05 0.03 0.001 - ------------------------------------- -------- -------- ------- ------- ------- Less distributions: Dividends from net investment income (0.05) (0.05) (0.05) (0.03) (0.001) - ------------------------------------- -------- -------- ------- ------- ------- Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ===================================== ======== ======== ======= ======= ======= Total return 5.39% 5.48% 5.57% 3.44% 2.91%(a) ===================================== ======== ======== ======= ======= ======= Ratios/supplemental data: Net assets, end of period (000s omitted) $829,243 $789,627 $81,219 $73,619 $ 8,681 ===================================== ======== ======== ======= ======= ======= Ratio of expenses to average net assets(b) 0.17%(c) 0.17% 0.18% 0.16% 0.16%(a) ===================================== ======== ======== ======= ======= ======= Ratio of net investment income to average net assets(d) 5.25%(c) 5.25% 5.42% 3.48% 3.00%(a) ===================================== ======== ======== ======= ======= =======
(a) Annualized. (b) After fee waivers and/or expense reimbursements. Ratios of expenses to average net assets prior to fee waivers and/or expense reimbursements were 0.19%, 0.19%, 0.20%, 0.21% and 0.18% (annualized) for the periods 1997-1993, respectively. (c) Ratios are based on average net assets of $781,320,880. (d) After fee waivers and/or expense reimbursements. Ratios of net investment income to average net assets prior to fee waivers and/or expense reimbursements were 5.24%, 5.23%, 5.40%, 3.43% and 2.98% (annualized) for the periods 1997-1993, respectively. FS-11 131 INSTITUTIONAL CLASS: Shown below are the financial highlights for a share outstanding of the Institutional Class during each of the years in the five-year period ended August 31, 1997.
1997 1996 1995 1994 1993 ---------- ---------- ---------- ---------- ---------- Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 - ----------------------------- ---------- ---------- ---------- ---------- ---------- Income from investment operations: Net investment income 0.05 0.05 0.06 0.04 0.03 - ----------------------------- ---------- ---------- ---------- ---------- ---------- Less distributions: Dividends from net investment income (0.05) (0.05) (0.06) (0.04) (0.03) - ----------------------------- ---------- ---------- ---------- ---------- ---------- Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ============================= ========== ========== ========== ========== ========== Total return 5.47% 5.57% 5.66% 3.53% 3.22% ============================= ========== ========== ========== ========== ========== Ratios/supplemental data: Net assets, end of period (000s omitted) $3,408,010 $2,335,441 $2,669,637 $2,452,389 $3,652,672 ============================= ========== ========== ========== ========== ========== Ratio of expenses to average net assets 0.09%(a) 0.09% 0.10% 0.08% 0.08% ============================= ========== ========== ========== ========== ========== Ratio of net investment income to average net assets 5.35%(a) 5.43% 5.53% 3.39% 3.17% ============================= ========== ========== ========== ========== ==========
(a) Ratios are based on average net assets of $2,873,371,753. PERSONAL INVESTMENT CLASS: Shown below are the financial highlights for a share outstanding of the Personal Investment Class during each of the years in the five-year period ended August 31, 1997.
1997 1996 1995 1994 1993 -------- -------- -------- ------- ------- Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 - -------------------------------------- -------- -------- -------- ------- ------- Income from investment operations: Net investment income 0.05 0.05 0.05 0.03 0.03 - -------------------------------------- -------- -------- -------- ------- ------- Less distributions: Dividends from net investment income (0.05) (0.05) (0.05) (0.03) (0.03) - -------------------------------------- -------- -------- -------- ------- ------- Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ====================================== ======== ======== ======== ======= ======= Total return 4.95% 5.04% 5.13% 3.02% 2.77% ====================================== ======== ======== ======== ======= ======= Ratios/supplemental data: Net assets, end of period (000s omitted) $322,971 $192,947 $114,527 $88,582 $69,867 ====================================== ======== ======== ======== ======= ======= Ratio of expenses to average net assets(a) 0.60%(b) 0.59% 0.60% 0.58% 0.53% ====================================== ======== ======== ======== ======= ======= Ratio of net investment income to average net assets(c) 4.85%(b) 4.91% 5.03% 2.99% 2.70% ====================================== ======== ======== ======== ======= =======
(a) After fee waivers and/or expense reimbursements. Ratios of expenses to average net assets prior to fee waivers and/or expense reimbursements were 0.86%, 0.92%, 0.90%, 0.91% and 0.93% for the periods 1997-1993, respectively. (b) Ratios are based on average net assets of $242,057,960. (c) After fee waivers and/or expense reimbursements. Ratios of net investment income to average net assets prior to fee waivers and/or expense reimbursements were 4.59%, 4.58%, 4.73%, 2.66% and 2.29% for the periods 1997-1993, respectively. FS-12 132 PRIVATE INVESTMENT CLASS: Shown below are the financial highlights for a share outstanding of the Private Investment Class during each of the years in the five-year period ended August 31, 1997.
1997 1996 1995 1994 1993 -------- -------- -------- -------- -------- Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 - --------------------------------------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income 0.05 0.05 0.05 0.03 0.03 - --------------------------------------- -------- -------- -------- -------- -------- Less distributions: Dividends from net investment income (0.05) (0.05) (0.05) (0.03) (0.03) - --------------------------------------- -------- -------- -------- -------- -------- Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 - --------------------------------------- -------- -------- -------- -------- -------- Total return 5.16% 5.25% 5.34% 3.22% 2.91% ======================================= ======== ======== ======== ======== ======== Ratios/supplemental data: Net assets, end of period (000s omitted) $463,441 $352,537 $394,585 $412,716 $204,281 ======================================= ======== ======== ======== ======== ======== Ratio of expenses to average net assets(a) 0.39%(b) 0.39% 0.40% 0.38% 0.38% ======================================= ======== ======== ======== ======== ======== Ratio of net investment income to average net assets(c) 5.05%(b) 5.14% 5.23% 3.26% 2.81% ======================================= ======== ======== ======== ======== ========
(a) After fee waivers and/or expense reimbursements. Ratios of expenses to average net assets prior to fee waivers and/or expense reimbursements were 0.59%, 0.59%, 0.60%, 0.60%, and 0.67% for the periods 1997-1993, respectively. (b) Ratios are based on average net assets of $398,566,784. (c) After fee waivers and/or expense reimbursements. Ratios of net investment income to average net assets prior to fee waivers and/or expense reimbursements were 4.85%, 4.94%, 5.03%, 3.05%, and 2.52% for the periods 1997-1993, respectively. RESOURCE CLASS: Shown below are the financial highlights for a share outstanding of the Resource Class during the year ended August 31, 1997 and the period March 12, 1996 (date operations commenced) through August 31, 1996.
1997 1996 -------- -------- Net asset value, beginning of period $ 1.00 $ 1.00 - ------------------------------------------------------------ -------- -------- Income from investment operations: Net investment income 0.05 0.03 - ------------------------------------------------------------ -------- -------- Less distributions: Dividends from net investment income (0.05) (0.03) - ------------------------------------------------------------ -------- -------- Net asset value, end of period $ 1.00 $ 1.00 ============================================================ ======== ======== Total return 5.30% 5.09%(a) ============================================================ ======== ======== Ratios/supplemental data: Net assets, end of period (000s omitted) $237,123 $ 33,339 ============================================================ ======== ======== Ratio of expenses to average net assets(b) 0.25%(c) 0.25%(a) ============================================================ ======== ======== Ratio of net investment income to average net assets(d) 5.19%(c) 5.07%(a) ============================================================ ======== ========
(a) Annualized. (b) After fee waivers and/or expense reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursement was 0.29% and 0.29% (annualized) for the periods 1997-1996, respectively. (c) Ratios are based on average net assets of $197,440,644. (d) After fee waivers and/or expense reimbursements. Ratio of net investment income to average net assets prior to fee waivers and/or expense reimbursement was 5.15% and 5.03% (annualized) for the periods 1997-1996, respectively. FS-13 133 SHORT-TERM INVESTMENTS TRUST Prospectus - -------------------------------------------------------------------------------- TREASURY The Treasury TaxAdvantage Portfolio is a money TAXADVANTAGE market fund whose investment objective is the PORTFOLIO maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. The Treasury TaxAdvantage INSTITUTIONAL CLASS Portfolio seeks to achieve its objective by investing in direct obligations of the U.S. Treasury. The Treasury TaxAdvantage Portfolio's investment strategy is intended to enable the Portfolio to provide its shareholders with dividends that are exempt from state and local income taxation in certain jurisdictions. The instruments purchased by the Treasury TaxAdvantage Portfolio will have maturities of 397 days or less. The Treasury TaxAdvantage Portfolio is a series portfolio of Short-Term Investments Trust (the "Trust"), an open-end diversified series management DECEMBER 17, 1997 investment company. This prospectus relates solely to the Institutional Class of the Treasury TaxAdvantage Portfolio, a class of shares designed to be a convenient vehicle in which institutions, particularly banks, acting for themselves or in a fiduciary, advisory, agency, custodial or other similar capacity, can invest short-term cash reserves. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS SETS FORTH BASIC INFORMATION THAT A PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING IN SHARES OF THE TREASURY TAXADVANTAGE PORTFOLIO AND SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 17, 1997, HAS BEEN FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC") AND IS HEREBY INCORPORATED BY REFERENCE. A COPY OF THE STATEMENT OF ADDITIONAL INFORMATION IS ATTACHED HERETO. THE SEC MAINTAINS A WEB SITE AT HTTP://WWW.SEC.GOV THAT CONTAINS THE STATEMENT OF ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER INFORMATION REGARDING THE TRUST. THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND THE TRUST'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. THERE CAN BE NO ASSURANCE THAT THE TREASURY TAXADVANTAGE PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. SHARES OF THE TRUST INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. [LOGO APPEARS HERE] Fund Management Company 11 Greenway Plaza Suite 100 Houston, Texas 77046-1173 (800) 659-1005 134 SUMMARY THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE The Trust is an open-end diversified series management investment company. Pursuant to this Prospectus, the Trust offers shares of the Institutional Class (the "Class") of the Treasury TaxAdvantage Portfolio (the "Portfolio") without a sales charge. The investment objective of the Portfolio is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. To achieve its objective, the Portfolio will invest in direct obligations of the U.S. Treasury. The instruments purchased by the Portfolio will have maturities of 397 days or less. The Portfolio's investment strategy is intended to enable the Portfolio to provide its shareholders with dividends that are exempt from state and local income taxation in certain jurisdictions. Pursuant to a separate prospectus, the Trust offers shares of another class of shares of beneficial interest of the Portfolio: the Private Investment Class representing an interest in the Portfolio. Such class has a different distribution arrangement and is designed for another category of investors. The Trust also offers shares of several classes of the Trust representing an interest in another portfolio, the Treasury Portfolio. The portfolios of the Trust are referred to collectively as the "Portfolios." Because the Trust declares dividends on a daily basis, shares of each class of the Portfolio have the same net asset value (proportionate interest in the net assets of the Portfolio) and bear equally those expenses, such as the advisory fee, that are allocated to the Portfolio as a whole. All classes of the Portfolio share a common investment objective and portfolio of investments. However, different classes of the Portfolio have different shareholder qualifications and are separately allocated certain class expenses, such as those associated with the distribution of their shares. Therefore, each class will have a different dividend payment and a different yield. INVESTORS IN THE CLASS The Class is designed to be a convenient and economical investment vehicle in which institutions, particularly banks, acting for themselves or in a fiduciary, advisory, agency, custodial or other similar capacity, can invest short-term cash reserves. Although shares of the Class may not be purchased by individuals directly, institutions may purchase shares for accounts maintained by individuals. See "Suitability for Investors." Although there is no sales charge imposed on the purchase of shares of the Class, banks or other institutions may charge a recordkeeping, account maintenance or other fee to their customers and beneficial holders of the shares of the Class should consult with the institutions maintaining their accounts to obtain a schedule of applicable fees. PURCHASE OF SHARES The shares of the Class are sold at net asset value, without a sales charge. The minimum initial investment in the Class is $1,000,000. There is no minimum amount for subsequent investments. Payment for shares of the Class purchased must be in federal funds or other funds immediately available to the Portfolio. See "Purchase of Shares." REDEMPTION OF SHARES Redemptions may be made without charge at net asset value. Payment for redeemed shares of the Class for which redemption orders are received prior to 1:00 p.m. Eastern Time will normally be made in federal funds on the same day. See "Redemption of Shares." DIVIDENDS The net income of the Portfolio is declared as a dividend daily to shareholders of record immediately after 1:00 p.m. Eastern Time. Dividends are paid monthly by check or wire transfer unless a shareholder has previously elected to have such dividends automatically reinvested in additional shares of the Class. Information concerning the amount of the dividends declared on any particular day will normally be available by 3:30 p.m. Eastern Time on that day. See "Dividends." NET ASSET VALUE The Trust uses the amortized cost method of valuing its securities held by the Portfolio and rounds the per share net asset value to the nearest whole cent. Accordingly, the net asset value per share of the Portfolio will normally remain constant at $1.00. AN INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE IS NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE. SEE "NET ASSET VALUE." 2 135 INVESTMENT ADVISOR A I M Advisors, Inc. ("AIM") serves as the Portfolio's investment advisor and receives a fee based on the Portfolio's average daily net assets pursuant to a master investment advisory agreement. For its services, AIM receives a fee based on the average daily net assets of the Portfolio. During the fiscal year ended August 31, 1997, the Trust paid AIM fees with respect to the Portfolio which represented 0.15% of the average net assets of the Portfolio. AIM is primarily engaged in the business of acting as manager or advisor to investment companies. See "Management of the Trust -- Investment Advisor." Under a separate administrative services agreement with the Trust, AIM may receive reimbursement of its costs to perform certain accounting and other administrative services for the Portfolio. See "Management of the Trust -- Investment Advisor" and "-- Administrative Services." Under a Transfer Agency and Service Agreement, A I M Institutional Fund Services, Inc. ("Transfer Agent"), AIM's wholly owned subsidiary and a registered transfer agent, receives a fee for its provision of transfer agency, dividend distribution and disbursement, and shareholder services to the Trust. It is currently anticipated that, effective on or about December 29, 1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a registered transfer agent will become the transfer agent to the Trust. See "General Information -- Transfer Agent and Custodian." DISTRIBUTOR Fund Management Company ("FMC") acts as the exclusive distributor of the shares of the Class. FMC does not receive any fee for distribution services from the Trust. See "Purchase of Shares." SPECIAL RISK CONSIDERATIONS The Portfolio may borrow money and enter into reverse repurchase agreements for temporary or emergency purposes, and may purchase securities for delayed delivery. Accordingly, an investment in the Portfolio may entail somewhat different risks from an investment in an investment company that does not engage in such practices. There can be no assurance that the Portfolio will be able to maintain a stable net asset value of $1.00 per share. See "Investment Program." The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM Logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, La Familia AIM de Fondos and La Familia AIM de Fondos and Design are registered service marks and aimfunds.com and Invest With Discipline are service marks of A I M Management Group Inc. 3 136 TABLE OF FEES AND EXPENSES SHAREHOLDER TRANSACTION EXPENSES* Maximum sales load imposed on purchases (as a percentage of offering price).................... None Maximum sales load on reinvested dividends (as a percentage of offering price).................... None Deferred sales load (as a percentage of original purchase price or redemption proceeds, as applicable)............................................ None Redemption fees (as a percentage of amount redeemed, if applicable)............................... None Exchange fee.............................................. None ANNUAL PORTFOLIO OPERATING EXPENSES -- INSTITUTIONAL CLASS (AS A PERCENTAGE OF AVERAGE NET ASSETS) Management fees**......................................... 0.15% 12b-1 fees................................................ None Other expenses: Custodian fees......................................... 0.01% Other.................................................. 0.04% ----- Total other expenses................................. 0.05% ---- Total portfolio operating expenses -- Institutional Class**................................................ 0.20% ====
- ------------ * Beneficial owners of shares of the Class should consider the effect of any charges imposed by their bank or other financial institution for various services. ** Had there been no fee waivers, Management fees and Total portfolio operating expenses would have been 0.18% and 0.23%, respectively. EXAMPLE An investor would pay the following expenses on a $1,000 investment, assuming (1) a 5% annual return and (2) redemption at the end of each time period. 1 year..................................................... $ 2 3 years.................................................... $ 6 5 years.................................................... $11 10 years.................................................... $26
The Table of Fees and Expenses is designed to assist an investor in understanding the various costs and expenses that an investor in the Class will bear directly or indirectly. For more complete descriptions of the various costs and expenses, see "Management of the Trust" below. The expense figures are based upon actual costs and fees charged to the Class for the fiscal year ended August 31, 1997. Future waivers of fees (if any) may vary from the figures reflected in the Table of Fees and Expenses. To the extent any service providers assume expenses of the Class, such assumption of expenses will have the effect of lowering the Class' overall expense ratio and increasing its yield to investors. Beneficial owners of shares of the Class should also consider the effect of any charges imposed by the institution maintaining their accounts. The example in the Table of Fees and Expenses assumes that all dividends and distributions are reinvested and that the amounts listed under "Annual Portfolio Operating Expenses -- Institutional Class" remain the same in the years shown. The example shown in the above table is based on the amounts listed under "Annual Portfolio Operating Expenses." THE EXAMPLE SHOULD NOT BE CONSIDERED TO BE AN ACCURATE REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. 4 137 FINANCIAL HIGHLIGHTS Shown below are the per share ratios and supplemental data (collectively "data") for the years in the seven-year period ended August 31, 1997 and the period August 17, 1990 (date operations commenced)through August 31, 1990. The data has been audited by KPMG Peat Marwick LLP, independent auditors, whose unqualified report on the financial statements and the related notes appears in the Statement of Additional Information.
AUGUST 31, --------------------------------------------------------------------------------------------- 1997 1996 1995 1994 1993 1992 1991 1990 -------- -------- -------- -------- -------- -------- -------- -------- Net asset value, beginning of period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations: Net investment income.......... 0.05 0.05 0.05 0.03 0.03 0.04 0.07 0.003 -------- -------- -------- -------- -------- -------- -------- -------- Less distributions: Dividends from net investment income....................... (0.05) (0.05) (0.05) (0.03) (0.03) (0.04) (0.07) (0.003) -------- -------- -------- -------- -------- -------- -------- -------- Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== ======== ======== Total return..................... 5.13% 5.19% 5.35% 3.29% 2.96% 4.32% 6.70% 7.79%(a) ======== ======== ======== ======== ======== ======== ======== ======== Ratios/supplemental data: Net assets, end of period (000s omitted)..................... $258,251 $407,218 $394,376 $403,882 $434,693 $573,283 $403,846 $ 16,201 ======== ======== ======== ======== ======== ======== ======== ======== Ratio of expenses to average net assets(b)................ 0.20%(c) 0.20% 0.20% 0.20% 0.20% 0.17% 0.14% 0.10%(a) ======== ======== ======== ======== ======== ======== ======== ======== Ratio of net investment income to average net assets(d)..... 5.00%(c) 5.06% 5.21% 3.23% 2.93% 4.16% 6.16% 7.74%(a) ======== ======== ======== ======== ======== ======== ======== ========
- ------------ (a) Annualized. (b) Ratios of expenses to average net assets prior to waiver of advisory fees were 0.23% for the periods 1997-1994, respectively, and 0.21%, 0.25% and 1.24% for the periods 1992-1990, respectively. (c) Ratios are based on average net assets of $337,228,562. (d) Ratios of net investment income to average net assets prior to waiver of advisory fees were 4.97%, 5.04%, 5.18% and 3.20% for the periods 1997-1994, respectively, and 4.13%, 6.04% and 6.60% for the periods 1992-1990, respectively. 5 138 SUITABILITY FOR INVESTORS The Class is intended for use primarily by institutions, particularly banks, acting for themselves or in a fiduciary, advisory, agency, custodial or other similar capacity. It is designed to be a convenient and economical vehicle in which such institutions can invest short-term cash reserves. The Portfolio's investment strategy is intended to provide its shareholders with dividends that are exempt from state and local income taxation in certain jurisdictions. Shares of the Class may not be purchased directly by individuals, although institutions may purchase shares for accounts maintained by individuals. Prospective investors should determine if an investment in the Class is consistent with the objectives of an account and with applicable state and federal laws and regulations. An investment in the Class may relieve the institution of many of the investment and administrative burdens encountered when investing in money market instruments directly. These include: selection of portfolio investments; surveying the market for the best price at which to buy and sell; valuation of portfolio securities; selection and scheduling of maturities; receipt, delivery and safekeeping of securities; and portfolio record keeping. It is anticipated that most institutions will perform their own subaccounting. To assist these institutions, information concerning the dividends declared by the Portfolio on any particular day will normally be available by 3:30 p.m. Eastern Time on that day. Investors in the Class have the opportunity to receive a somewhat higher yield than might be obtainable through direct investment in money market instruments, and enjoy the benefits of same-day liquidity. Although there is no sales charge imposed on the purchase of shares of the Class, banks or other institutions may charge a record keeping, account maintenance or other fee to their customers, and beneficial holders of the shares of the Class should consult with the institutions maintaining their accounts to obtain a schedule of applicable fees. Generally, higher interest rates can be obtained on the purchase of very large blocks of money market instruments. Of course, any such relative increase in interest rates may be offset to some extent by the operating expenses of the Class. However, these expenses are expected to be relatively small due primarily to the following factors: the Class will have a small number of shareholders who do not need many of the services provided by other money market investment companies, thereby resulting in lower transfer agent fees and costs for printing reports and proxy statements; sales of the Class' shares to institutions acting for themselves or in a fiduciary capacity are exempt from the registration requirements of most state securities laws, thereby resulting in reduced state registration fees; and the relatively low investment advisory fee paid to AIM. Because the Portfolio invests in direct obligations of the U.S. Treasury it may be considered to have somewhat less risk than many other money market funds and yields on the Portfolio may be expected to be somewhat lower than many other money market funds. However, the possible exemption from state and local income taxation with respect to dividends paid by the Portfolio may enable shareholders to achieve an after-tax return comparable to or higher than that obtained from other money market funds, which may provide an advantage to some shareholders. INVESTMENT PROGRAM INVESTMENT OBJECTIVE The investment objective of the Portfolio is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. The Portfolio intends to provide its shareholders with dividends that are exempt from state and local income taxation in certain jurisdictions. The Portfolio seeks to achieve its objective by investing in direct obligations of the U. S. Treasury. The obligations in which the Portfolio invests are considered to carry very little risk and accordingly may not have as high a yield as that available on instruments of lesser quality. INVESTMENT POLICIES The Portfolio invests exclusively in direct obligations of the U.S. Treasury, which include Treasury bills, notes and bonds. The market values of the money market instruments held by the Portfolio will be affected by changes in the yields available on similar securities. If yields have increased since a security was purchased, the market value of such security will generally have decreased. Conversely, if yields have decreased, the market value of such security will generally have increased. BORROWING MONEY/REVERSE REPURCHASE AGREEMENTS. The Portfolio may borrow money and enter into reverse repurchase agreements with respect to its portfolio securities in amounts up to 10% of the value of its total assets at the time of borrowing or entering into a reverse repurchase agreement. The Portfolio will only borrow money or enter into reverse repurchase agreements for temporary or emergency purposes, such as to facilitate the orderly sale of portfolio securities to accommodate abnormally heavy redemption requests should they occur. Borrowing will not be made for leverage purposes. Reverse repurchase transactions are limited to a term not to exceed 92 days. The Portfolio will use reverse repurchase agreements when the interest income to be earned from the securities that would otherwise have to be liquidated to meet redemption requests is greater than the interest expense of the reverse repurchase transaction. Reverse repurchase agreements involve the risk that 6 139 the market value of securities retained by the Portfolio in lieu of liquidation may decline below the repurchase price of the securities sold by the Portfolio which it is obligated to repurchase. The risk, if encountered, could cause a reduction in the net asset value of the Portfolio's shares. Reverse repurchase agreements are considered to be borrowings under the 1940 Act. PURCHASING DELAYED DELIVERY SECURITIES. In managing the Portfolio's investments, AIM may indicate to dealers or issuers its interest in acquiring certain securities for the Portfolio for settlement beyond a customary settlement date. In some cases, the Portfolio may agree to purchase such securities at stated prices and yields. In such cases, such securities are considered "delayed delivery" securities when traded in the secondary market. Since this is done to facilitate the acquisition of portfolio securities and is not for the purpose of investment leverage, the amount of delayed delivery securities involved may not exceed the estimated amount of funds available for investment on the settlement date. Until the settlement date, liquid assets of the Portfolio with a dollar value sufficient at all times to make payment for the delayed delivery securities will be segregated. The total amount of segregated liquid assets may not exceed 25% of the Portfolio's total assets. The delayed delivery securities, which will not begin to accrue interest until the settlement date, will be recorded as an asset of the Portfolio and will be subject to the risks of market value fluctuations. The purchase price of the delayed delivery securities will be recorded as a liability of the Portfolio until settlement. Absent extraordinary circumstances, the Portfolio's right to acquire delayed delivery securities will not be divested prior to the settlement date. ILLIQUID SECURITIES. The Portfolio will invest no more than 10% of its net assets in illiquid securities. PORTFOLIO TRANSACTIONS. The Portfolio does not seek profits through short-term trading and will generally hold portfolio securities to maturity, but AIM may seek to enhance the yield of the Portfolio by taking advantage of yield disparities or other factors that occur in the money market. For example, market conditions frequently result in similar securities trading at different prices. AIM may dispose of any portfolio security prior to its maturity if such disposition and reinvestment of proceeds are expected to enhance yield consistent with AIM's judgment as to desirable portfolio maturity structure or if such disposition is believed to be advisable due to other circumstances or conditions. Securities held by the Portfolio will be disposed of prior to maturity if an earlier disposition is deemed desirable by AIM to meet redemption requests. The Portfolio's policy of investing in securities with maturities of 397 days or less will result in high portfolio turnover. Since brokerage commissions are not normally paid on investments of the type made by the Portfolio, however, the high turnover rate should not adversely affect the Portfolio's net income. INVESTMENT IN OTHER INVESTMENT COMPANIES. The Trust is permitted to invest in other investment companies to the extent permitted by the 1940 Act, and rules and regulations thereunder, and, if applicable, exemptive orders granted by the SEC. The investment policies described above may be changed by the Board of Trustees without the affirmative vote of a majority of the outstanding shares of beneficial interest of the Trust. INVESTMENT RESTRICTIONS The Portfolio's investment program is subject to a number of investment restrictions which reflect self-imposed standards as well as federal and state regulatory limitations. These restrictions are designed to minimize certain risks associated with investing in specified types of securities or engaging in certain transactions and to limit the amount of the Portfolio's assets which may be concentrated in any specific industry or issuer. The most significant of these restrictions provides that the Portfolio will not: borrow money or issue senior securities except (a) for temporary or emergency purposes (e.g., in order to facilitate the orderly sale of portfolio securities to accommodate abnormally heavy redemption requests), the Portfolio may borrow money from banks or obtain funds by entering into reverse repurchase agreements, and (b) to the extent that entering into commitments to purchase securities in accordance with the Portfolio's investment program may be considered the issuance of senior securities. The Portfolio will not purchase securities while borrowings in excess of 5% of its total assets are outstanding. The foregoing investment restriction of the Portfolio (as well as certain others set forth in the Statement of Additional Information) is a matter of fundamental policy which may not be changed without the affirmative vote of a majority of the outstanding shares of the Portfolio. 7 140 In addition to the restrictions described above, the Portfolio must also comply with the requirements of Rule 2a-7 under the 1940 Act, as such Rule may be amended from time to time, which governs the operations of money market funds, and may be more restrictive than the policies described herein. The SEC has proposed certain changes to Rule 2a-7. While such proposed changes may have a prospective impact on the investments of the Portfolio, the Portfolio anticipates no difficulty in complying with any proposed change if adopted by the SEC. A description of further investment restrictions applicable to the Portfolio is contained in the Statement of Additional Information. PURCHASE OF SHARES Shares of the Class are sold on a continuous basis at their net asset value next determined after an order has been received by the Portfolio. As discussed below, the Trust reserves the right to reject any purchase order. Although there is no sales charge imposed on the purchase of shares of the Class, banks or other institutions may charge a recordkeeping, account maintenance or other fee to their customers, and beneficial holders of the shares of the Class should consult with the institutions maintaining their accounts to obtain a schedule of applicable fees. To facilitate the investment of proceeds of purchase orders, investors are urged to place their orders as early in the day as possible. Purchase orders will be accepted for execution on the day the order is placed, provided that the order is properly submitted and received by the Transfer Agent prior to 1:00 p.m. Eastern Time on a business day of the Portfolio. Purchase orders received after such time will be processed at the next day's net asset value. Following the initial investment, subsequent purchases of shares of the Class may also be made via AIM LINK--Registered Trademark-- Remote, a personal computer application software product. Shares of the Class will earn the dividend declared on the effective date of purchase. A "business day of the Portfolio" is any day on which both the Federal Reserve Bank of New York and The Bank of New York, the Trust's custodian, are open for business. The Portfolio, however, reserves the right to change the time for which purchase and redemption requests must be submitted to the Portfolio for execution on the same day or any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holidays. It is expected that The Bank of New York and the Federal Reserve Bank of New York will be closed during the next twelve months on Saturdays and Sundays, and on the observed holidays of New Year's Day, Martin Luther King, Jr.'s Birthday, Presidents' Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day. Subject to the conditions stated above and the Trust's right to reject any purchase order, orders will be accepted (i) when payment for shares of the Class purchased is received by The Bank of New York, the Trust's custodian bank, in the form described below and notice of such order is provided to the Transfer Agent or (ii) at the time the order is placed, if the Trust is assured of payment. Shares of the Class purchased by orders which are accepted prior to 1:00 p.m. Eastern Time will earn the dividend declared on the date of purchase. Payments for shares purchased must be in the form of federal funds or other funds immediately available to the Portfolio. Federal Reserve wires should be sent as early as possible in order to facilitate crediting to the shareholder's account. Any funds received with respect to an order which is not accepted by the Portfolio and any funds received for which an order has not been received will be returned to the sending institution. The minimum initial investment in the Class is $1,000,000. Institutions may be requested to maintain separate Master Accounts in the Class for shares held by the institution (i) for its own account, for the account of other institutions and for accounts for which the institution acts as a fiduciary, and (ii) for accounts for which the institution acts in some other capacity. An institution's Master Account(s) and sub-accounts with the Class may be aggregated for the purpose of the minimum investment requirement. No minimum amount is required for subsequent investments in the Class nor are minimum balances required. Prior to the initial purchase of shares of the Class, an Account Application must be completed and sent to the Transfer Agent, 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Account Applications may be obtained from the Transfer Agent. Any changes made to the information provided in the Account Application must be made in writing or by completing a new form and providing it to the Transfer Agent. The Trust reserves the right in its sole discretion to withdraw all or any part of the offering made by this Prospectus or to reject any purchase order. 8 141 REDEMPTION OF SHARES A shareholder may redeem any or all of its shares of the Class at the net asset value next determined after receipt of the redemption request in proper form by the Trust. Redemption requests with respect to the Class may also be made via AIM LINK(R) Remote. Normally, the net asset value per share of the Portfolio will remain constant at $1.00 per share. See "Net Asset Value." Redemption requests with respect to shares are normally made by calling the Trust. Payment for redeemed shares is normally made by Federal Reserve wire to the commercial bank account designated in the shareholder's Account Application, but may be remitted by check upon request by a shareholder. If a redemption request is received by the Transfer Agent prior to 1:00 p.m. Eastern Time on a business day of the Portfolio, the redemption will be effected at the net asset value next determined on such day and the shares to be redeemed will not receive the dividend declared on the effective date of the redemption. If a redemption request is received by the Transfer Agent after 1:00 p.m. Eastern Time or on other than a business day of the Portfolio, the redemption will be effected at the net asset value of the Portfolio determined as of 1:00 p.m. Eastern Time on the next business day of the Portfolio, and the proceeds of such redemption will normally be wired on the effective day of the redemption. The Portfolio reserves the right to change the time for which redemption requests must be submitted to and received by the Transfer Agent for execution on the same day or any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holidays. A shareholder may change the bank account designated to receive redemption proceeds by written notice to the Trust. The authorized signature on the notice must be guaranteed by a commercial bank or a trust company. Additional documentation may be required when deemed appropriate by the Trust or the Transfer Agent. Shareholders may request a redemption by telephone. Neither the Transfer Agent nor FMC will be liable for any loss, expense or cost arising out of any telephone redemption request effected in accordance with the authorization set forth in the Account Application if they reasonably believe such request to be genuine but may in certain cases be liable for losses due to unauthorized or fraudulent transactions if they do not follow reasonable procedures for verification of telephone transactions. Such reasonable procedures for verification of telephone transactions may include recordings of telephone transactions (maintained for six months), and mailings of confirmations promptly after the transaction. Payment for shares of the Class redeemed by mail and payment for telephone redemptions in amounts under $1,000 may be made by check mailed within seven days after receipt of the redemption request in proper form. The Trust may make payment for telephone redemptions in excess of $1,000 by check when it is considered to be in the Portfolio's best interest to do so. The shares of the Class are not redeemable at the option of the Trust unless the Board of Trustees of the Trust determines in its sole discretion that failure to so redeem may have materially adverse consequences to the shareholders of the Trust. DIVIDENDS Dividends from the net income of the Portfolio are declared daily to shareholders of record of the Class as of immediately after 1:00 p.m. Eastern Time on the day of declaration. Net income for dividend purposes is determined daily as of 1 :00 p.m. Eastern Time. The dividend accrued and paid for each class will consist of (a) income of the Portfolio, the allocation of which is based upon such class' pro rata share of the total outstanding shares representing an interest in the Portfolio, less (b) Portfolio expenses, such as custodian fees, trustees' fees and accounting and legal expenses, based upon such class' pro rata share of the net assets of the Portfolio, less (c) expenses directly attributable to such class, such as distribution expenses, if any, and transfer agency fees. Although realized gains and losses on the assets of the Portfolio are reflected in its net asset value, they are not expected to be of an amount which would affect the Portfolio's net asset value of $1.00 per share for purposes of purchases and redemptions. See "Net Asset Value." Distributions from net realized short-term gains may be declared and paid yearly or more frequently. See "Taxes." The Portfolio does not expect to realize any long-term capital gains or losses. All dividends declared during a month will normally be paid by wire transfer. Payment will normally be made on the first business day of the following month. A shareholder may elect to have all dividends automatically reinvested in additional full and fractional shares of the Portfolio at the net asset value of such shares as of 1:00 p.m. Eastern Time on the last business day of the month. Such election, or any revocation thereof, must be made in writing by the shareholder to the Transfer Agent at P.O. Box 4497, Houston, Texas 77210-4497 and will become effective with dividends paid after its receipt by the Transfer Agent. If a shareholder redeems all the shares of the Portfolio in its account at any time during the month, all dividends declared through the date of redemption are paid to the shareholder along with the proceeds of the redemption. The Portfolio uses its best efforts to maintain its net asset value per share of the Portfolio at $1.00 for purposes of sales and redemptions. See "Net Asset Value." Should the Trust incur or anticipate any unusual expense, loss or depreciation which could adversely affect the income or net asset value of the Portfolio, the Trust's Board of Trustees would at that time consider whether to adhere to the present dividend policy described above or to revise it in light of the then prevailing circumstances. For exam- 9 142 ple, under such unusual circumstances the Board of Trustees might reduce or suspend the daily dividend in order to prevent to the extent possible the net asset value per share of the Portfolio from being reduced below $1.00. Thus, such expenses, losses or depreciation may result in a shareholder receiving no dividends for the period during which it held its Shares and cause such a shareholder to receive upon redemption a price per share lower than the shareholder's original cost. TAXES FEDERAL TAXATION The policy of the Portfolio is to distribute to its shareholders at least 90% of its investment company taxable income for each year and consistent therewith to meet the distribution requirements of Part I of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). The Portfolio intends to distribute at least 98% of its net investment income for the calendar year and at least 98% of its net realized capital gains, if any, for the one-year period ending on October 31 and therefore to meet the distribution requirements imposed by the Code in order to avoid the imposition of a 4% excise tax. The Portfolio also intends to meet the other requirements of Subchapter M, including the requirements with respect to diversification of assets and sources of income, so that the Portfolio will pay no federal income taxes on net investment income and net realized capital gains paid to shareholders. The Portfolio will be treated as a separate corporation for purposes of determining taxable income, distribution requirements and other requirements of Subchapter M. Therefore, the Portfolio may not offset its gains against losses of the other portfolio of the Trust and each portfolio of the Trust must specifically comply with all the provisions of the Code. Dividends paid by the Portfolio are subject to taxation as of the date of payment, whether received by shareholders in cash or shares of the Portfolio. The Code provides an exception to this general rule: if the Portfolio declares a dividend in October, November or December to shareholders of record in such months and pays the dividend during January of the next year, a shareholder will be treated for tax purposes as having received the dividend on December 31 of the year in which it is declared rather than in January of the following year when it is paid. It is anticipated that no portion of distributions will be eligible for the dividends received deduction for corporations. Dividends paid by the Portfolio from its net investment income and short-term capital gains are taxable to shareholders at ordinary income tax rates. Foreign persons who file a United States tax return after December 31, 1996 for a U.S. tax refund and who are not eligible to obtain a social security number must apply to the Internal Revenue Service ("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 advisor or AIFS. STATE AND LOCAL TAXATION Distributions and other Trust transactions referred to in the preceding paragraphs may be subject to state, local or foreign taxes, and the treatment thereof may differ from the federal income tax consequences discussed herein. The Portfolio's investment strategy is intended to provide shareholders with dividends that are exempt from state and local personal and, in some cases, corporate income taxation in as many jurisdictions as possible. The possible exemption from such taxation may enable shareholders to achieve an after-tax return comparable to or higher than that obtained from other money market funds. Shareholders should consult their own tax advisors concerning the tax impact of their investment in the Portfolio and the application of state, local or foreign taxes. NET ASSET VALUE The net asset value per share of the Portfolio is determined daily as of 1:00 p.m. Eastern Time on each business day of the Portfolio. Net asset value per share is determined by dividing the value of the Portfolio's securities, cash and other assets (including interest accrued but not collected), less all its liabilities (including accrued expenses and dividends payable), by the number of shares outstanding of the Portfolio and rounding the resulting per share net asset value to the nearest one cent. The securities of the Portfolio are valued on the basis of amortized cost pursuant to rules promulgated by the SEC applicable to money market funds. This method values a security at its cost on the date of purchase and thereafter assumes a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the security. While this method provides certainty in valuation, it may result in periods during which value, as determined by amortized cost, is higher or lower than the price the Portfolio would receive if the security were sold. During such periods, the daily yield on shares of the Portfolio, computed as described in "Purchases and Redemptions -- Performance Information" in the Statement of Additional Information, may differ somewhat from an identical computation made by an investment company with identical investments utilizing available indications as to market value to value its portfolio securities. 10 143 YIELD INFORMATION Yield information for the Class can be obtained by calling the Trust at (800) 659-1005. Yields will fluctuate from time to time and are not necessarily indicative of future results. Accordingly, the yield information may not provide a basis for comparison with investments which pay a fixed rate of interest for a stated period of time. Yield is a function of the type and quality of the Portfolio's investments, the Portfolio's maturity and the operating expense ratio of the Portfolio. A SHAREHOLDER'S INVESTMENT IN THE TRUST IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT OR BY ANY INSTITUTION. These factors should be carefully considered by the investor before making an investment in the Portfolio. For the seven-day period ended August 31, 1997, the current yield and the effective yield of the Class (which assumes the reinvestment of dividends for a 365-day year and a return for the entire year equal to the average annualized current yield for the period) were 5.10% and 5.23%, respectively. These performance numbers are quoted for illustration purposes only. The performance numbers for any other seven-day period may be substantially different from those quoted above. To assist banks and other institutions performing their own sub-accounting, same day information as to the daily dividend per share for the Class to eight decimal places and current yield normally will be available by 3:30 p.m. Eastern Time. From time to time and in its discretion, AIM or its affiliates may waive all or a portion of its advisory fees and/or assume certain expenses of the Portfolio. Such a practice will have the effect of increasing the Portfolio's yield and total return. REPORTS TO SHAREHOLDERS The Trust furnishes shareholders with semi-annual reports containing information about the Portfolio and its operations, including a list of the investments held in the Portfolio and financial statements. The annual financial statements are audited by the Trust's independent certified public accountants. A copy of the current list of the investments of the Portfolio will be sent to shareholders upon request. Unless otherwise requested by the shareholder, each shareholder will be provided with a written confirmation for each transaction. Institutions establishing sub-accounts will receive a written confirmation for each transaction in a sub-account. Duplicate confirmations may be transmitted to the beneficial owner of the sub-account if requested by the institution. The institution will receive a periodic statement setting forth, for each sub-account, the share balance, income earned for the month, income earned for the year to date and the total current value of the account. MANAGEMENT OF THE TRUST BOARD OF TRUSTEES The overall management of the business and affairs of the Trust is vested with its Board of Trustees. The Board of Trustees approves all significant agreements between the Trust and persons or companies furnishing services to the Trust, including agreements with the Trust's investment advisor, distributor, custodian and transfer agent. The day-to-day operations of the Trust are delegated to the Trust's officers and to AIM, subject always to the objective and policies of the Trust and to the general supervision of the Trust's Board of Trustees. Information concerning the Board of Trustees may be found in the Statement of Additional Information. Certain trustees and officers of the Trust are affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the parent corporation of AIM. INVESTMENT ADVISOR A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as the investment advisor for the Portfolio pursuant to a Master Investment Advisory Agreement dated as of February 28, 1997 (the "Advisory Agreement"). AIM, organized in 1976, together with its affiliates, manages or advises 55 investment company portfolios. Certain of the directors and officers of AIM are also trustees or executive officers of the Trust. AIM is a wholly owned subsidiary of AIM Management. AIM Management is a holding company in the financial services business. AIM Management is an indirect, wholly owned subsidiary of AMVESCAP PLC, a publicly-traded holding company that, through its subsidiaries, engages in the business of investment management on an international basis. Pursuant to the terms of the Advisory Agreement, AIM manages the investment of the Portfolio's assets and obtains and evaluates economic, statistical and financial information to formulate and implement investment policies for the Portfolio. The Advisory Agreement requires AIM to reduce its fee to the extent required to satisfy any expense limitations imposed by the securities laws or regulations thereunder of any state in which the Portfolio's shares are qualified for sale. 11 144 For the fiscal year ended August 31, 1997, AIM received fees from the Trust under the Advisory Agreement with respect to the Portfolio which represented 0.15% of the Portfolio's average daily net assets. During such fiscal year, the expenses of the Class, including AIM's fees, amounted to 0.20% of the Class' average daily net assets. ADMINISTRATIVE SERVICES The Trust has entered into a Master Administrative Services Agreement dated as of February 28, 1997 with AIM (the "Administrative Services Agreement"), pursuant to which AIM has agreed to provide or arrange for the provision of certain accounting and other administrative services to the Portfolio, including the services of a principal financial officer of the Trust and related staff. As compensation to AIM for its services under the Administrative Services Agreement the Portfolio may reimburse AIM for expenses incurred by AIM in connection with such services. FEE WAIVERS AIM or its affiliates may in its discretion from time to time agree to waive voluntarily all or any portion of its advisory fee and/or assume certain expenses of the Portfolio but will retain its ability to be reimbursed for such fee or expenses prior to the end of each fiscal year. AIM voluntarily waived advisory fees of $123,468 on the Portfolio and assumed expenses of $4,800. DISTRIBUTOR The Trust has entered into a Master Distribution Agreement dated as of February 28, 1997 (the "Distribution Agreement") with FMC, a registered broker-dealer and a wholly-owned subsidiary of AIM, to act as the exclusive distributor of the shares of the Portfolio. The address of FMC is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Certain trustees and officers of the Trust are affiliated with FMC and AIM. The Distribution Agreement provides that FMC has the exclusive right to distribute shares of the Trust either directly or through other broker-dealers. FMC is the distributor of several of the mutual funds managed or advised by AIM. FMC may, from time to time, at its expense, pay a bonus or other consideration or incentive to dealers, banks or other financial institutions who sell a minimum dollar amount of the shares of the Class during a specific period of time. In some instances, these incentives may be offered only to certain dealers, banks or financial institutions who have sold or may sell significant amounts of shares. The total amount of such additional bonus payments or other consideration shall not exceed .05% of the net asset value of the shares of the Class sold. Any such bonus or incentive programs will not change the price paid by investors for the purchase of shares of the Class or the amount received as proceeds from such sales. Sales of the shares of the Class may not be used to qualify for any incentives to the extent that such incentives may be prohibited by the laws of any jurisdiction. PORTFOLIO TRANSACTIONS AND BROKERAGE AIM is responsible for decisions to buy and sell securities for the Portfolio, broker-dealer selection and negotiation of commission rates. Since purchases and sales of portfolio securities by the Portfolio are usually principal transactions, the Portfolio incurs little or no brokerage commissions. Portfolio securities are normally purchased directly from the issuer or from a market maker for the securities. The purchase price paid to dealers serving as market makers may include a spread between the bid and asked prices. AIM's primary consideration in effecting a security transaction is to obtain the best net price and the most favorable execution of the order. To the extent that the executions and prices offered by more than one dealer are comparable, AIM may, in its discretion, effect transactions with dealers that furnish statistical, research or other information or services which are deemed by AIM to be beneficial to the Portfolio's investment programs. Certain research services furnished by dealers may be useful to clients of AIM with clients other than the Portfolio. Similarly, any research services received by AIM through placement of portfolio transactions of other clients may be of value to AIM in fulfilling its obligations to the Portfolio. GENERAL INFORMATION ORGANIZATION AND DESCRIPTION OF SHARES The Trust is a Delaware business trust. The Trust was originally incorporated in Maryland on January 24, 1977, but had no operations prior to November 10, 1980. Effective December 31, 1986, the Trust was reorganized as a Massachusetts business trust; and effective October 15, 1993, the Trust was reorganized as a Delaware business trust. On October 15, 1993, the Portfolio succeeded to the assets and assumed the liabilities of the Treasury TaxAdvantage Portfolio (the "Predecessor Portfolio") of Short-Term Investments Co., a Massachusetts business trust ("STIC"), pursuant to an Agreement and Plan of Reorganization between the Trust and STIC. All historical financial and other information contained in this Prospectus for periods prior to Oc- 12 145 tober 15, 1993 relating to the Portfolio (or a class thereof) is that of the Predecessor Portfolio (or the corresponding class thereof). Shares of beneficial interest of the Trust are divided into seven classes of which five represent interests in the Treasury Portfolio and two represent interests in the Portfolio. Each class of shares has a par value of $.01 per share. The other classes of the Trust may have different sales charges and other expenses which may affect performance. An investor may obtain information concerning the Trust's other classes by contacting FMC. All shares of the Trust have equal rights with respect to voting, except that the holders of shares of a particular portfolio or class will have the exclusive right to vote on matters pertaining solely to that portfolio or class. For example, holders of shares of a particular portfolio will have the exclusive right to vote on any investment advisory agreement or investment restriction that relates only to such portfolio. In addition, if a portfolio is divided into various classes, holders of shares of a particular class will have the exclusive right to vote on any matter, such as distribution arrangements, which relates solely to such class. The holders of shares of the Portfolio have distinctive rights with respect to dividends and redemption which are more fully described in this Prospectus. In the event of liquidation or termination of the Trust, holders of shares of each portfolio will receive pro rata, subject to the rights of creditors, (a) the proceeds of the sale of the assets held in the respective portfolio to which such shares relate, less(b) the liabilities of the Trust attributable or allocated to the respective portfolio based on the liquidation value of the portfolio. Fractional shares of each portfolio have the same rights as full shares to the extent of their proportionate interest. There will not normally be annual shareholders' meetings. Shareholders may remove trustees from office by votes cast at a meeting of shareholders called solely for such purpose or by written consent. A meeting of shareholders for the sole purpose of considering removal of a trustee shall be called at the request of the holders of 10% or more of the Trust's outstanding shares. As of December 1, 1997 Peoples Two Ten Company was the owner of record of 33.84% and First Trust/VAR & Co. was the owner of record of 26.57% of the outstanding shares of the Class. As long as each of Peoples Two Ten Company and First Trust/VAR & Co. owns over 25% of such shares, it may be presumed to be in "control" of the Institutional Class of the Treasury TaxAdvantage Portfolio, as defined in the 1940 Act. There are no preemptive or conversion rights applicable to any of the Trust's shares. The Trust's shares, when issued, will be fully paid and non-assessable. The Board of Trustees may create additional portfolios or classes of shares of the Trust without shareholder approval. TRANSFER AGENT AND CUSTODIAN The Bank of New York, 90 Washington Street, 11th Floor, New York, New York 10286, acts as custodian for the portfolio securities and cash of the Portfolio. A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as transfer agent for the shares of the Class. It is currently anticipated that, effective on or about December 29, 1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a registered transfer agent, will become the transfer agent to the Trust. LEGAL COUNSEL The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania, serves as counsel to the Trust and has passed upon legal matters for the Trust. SHAREHOLDER INQUIRIES Shareholder inquiries concerning the status of an account should be directed to the Trust at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or may be made by calling (800) 659-1005. OTHER INFORMATION This Prospectus sets forth basic information that investors should know about the Trust and the Portfolio prior to investing. A Statement of Additional Information has been filed with the SEC. Copies of the Statement of Additional Information are available upon request and without charge by writing or calling the Trust or FMC. This Prospectus omits certain information contained in the registration statement filed with the SEC. Copies of the registration statement, including items omitted herein, may be obtained from the SEC by paying the charges prescribed under its rules and regulations. 13 146 [THIS PAGE INTENTIONALLY LEFT BLANK] 147 ======================================================== ======================================================== SHORT-TERM INVESTMENTS TRUST PROSPECTUS 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173 (800) 659-1005 December 17, 1997 INVESTMENT ADVISOR A I M ADVISORS, INC. 11 Greenway Plaza, Suite 100 SHORT-TERM Houston, Texas 77046-1173 INVESTMENTS TRUST (713) 626-1919 DISTRIBUTOR --------------------- FUND MANAGEMENT COMPANY 11 Greenway Plaza, Suite 100 TREASURY TAXADVANTAGE Houston, Texas 77046-1173 PORTFOLIO (800) 659-1005 --------------------- AUDITORS KPMG PEAT MARWICK LLP INSTITUTIONAL CLASS 700 Louisiana Houston, Texas 77002 CUSTODIAN THE BANK OF NEW YORK 90 Washington Street 11th Floor TABLE OF CONTENTS New York, New York 10286 PAGE TRANSFER AGENT Summary.......................................... 2 A I M INSTITUTIONAL FUND SERVICES, INC. Table of Fees and Expenses....................... 4 11 Greenway Plaza, Suite 100 Financial Highlights............................. 5 Houston, Texas 77046-1173 Suitability For Investors........................ 6 Investment Program............................... 6 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY Purchase of Shares............................... 8 INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT Redemption of Shares............................. 8 CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH Dividends........................................ 9 THE OFFERING MADE BY THE PROSPECTUS, AND IF GIVEN Taxes............................................ 9 OR MADE, SUCH INFORMATION OR REPRESENTATIONS Net Asset Value.................................. 10 MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED Yield Information................................ 10 BY THE TRUST OR THE DISTRIBUTOR. THIS PROSPECTUS Reports to Shareholders.......................... 11 DOES NOT CONSTITUTE AN OFFER IN ANY JURISDICTION Management of the Trust.......................... 11 TO ANY PERSON TO WHOM SUCH OFFERING MAY NOT General Information.............................. 12 LAWFULLY BE MADE. Appendix......................................... A-1 ======================================================== ========================================================
148 PROSPECTUS PRIVATE INVESTMENT CLASS OF THE TREASURY TAXADVANTAGE PORTFOLIO OF SHORT-TERM INVESTMENTS TRUST 11 GREENWAY PLAZA, SUITE 100 HOUSTON, TEXAS 77046-1173 (800) 877-7748 ------------------ The Treasury TaxAdvantage Portfolio is a money market fund whose investment objective is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. The Treasury TaxAdvantage Portfolio seeks to achieve its objective by investing in direct obligations of the U.S. Treasury. The Treasury TaxAdvantage Portfolio's investment strategy is intended to enable the Portfolio to provide its shareholders with dividends that are exempt from state and local income taxation in certain jurisdictions. The instruments purchased by the Treasury TaxAdvantage Portfolio will have maturities of 397 days or less. The Treasury TaxAdvantage Portfolio is a series portfolio of Short-Term Investments Trust (the "Trust"), an open-end diversified, series, management investment company. This Prospectus relates solely to the Private Investment Class of the Treasury TaxAdvantage Portfolio, a class of shares designed to be a convenient vehicle in which customers of banks, certain broker-dealers and other financial institutions can invest short-term cash reserves. ------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------ THIS PROSPECTUS SETS FORTH BASIC INFORMATION THAT A PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING IN SHARES OF THE PRIVATE INVESTMENT CLASS OF THE TREASURY TAXADVANTAGE PORTFOLIO AND SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 17, 1997, HAS BEEN FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC") AND IS HEREBY INCORPORATED BY REFERENCE. FOR A COPY OF THE STATEMENT OF ADDITIONAL INFORMATION WITHOUT CHARGE, WRITE TO THE ADDRESS ABOVE OR CALL (800) 877-7748. THE SEC MAINTAINS A WEB SITE AT HTTP://WWW.SEC.GOV THAT CONTAINS THE STATEMENT OF ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER INFORMATION REGARDING THE TRUST. THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND THE TRUST'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. THERE CAN BE NO ASSURANCE THAT THE TREASURY TAXADVANTAGE PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. SHARES OF THE TRUST INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. PROSPECTUS DATED: DECEMBER 17, 1997 149 TABLE OF CONTENTS
PAGE PAGE ---- ---- SUMMARY.......................................... 2 DIVIDENDS........................................ 12 TABLE OF FEES AND EXPENSES....................... 5 TAXES............................................ 13 FINANCIAL HIGHLIGHTS............................. 6 NET ASSET VALUE.................................. 14 SUITABILITY FOR INVESTORS........................ 7 YIELD INFORMATION................................ 14 INVESTMENT PROGRAM............................... 7 REPORTS TO SHAREHOLDERS.......................... 14 PURCHASE OF SHARES............................... 9 MANAGEMENT OF THE TRUST.......................... 15 REDEMPTION OF SHARES............................. 11 GENERAL INFORMATION.............................. 18
SUMMARY THE PORTFOLIO AND ITS INVESTMENT OBJECTIVE The Trust is an open-end diversified series management investment company. This Prospectus relates to the Private Investment Class (the "Class") of the Treasury TaxAdvantage Portfolio (the "Portfolio"). The Portfolio is a money market fund which invests in direct obligations of the U.S. Treasury. The instruments purchased by the Portfolio will have maturities of 397 days or less. The investment objective of the Portfolio is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. The Portfolio's investment strategy is intended to enable the Portfolio to provide its shareholders with dividends that are exempt from state and local income taxation in certain jurisdictions. Pursuant to a separate prospectus, the Trust also offers other shares of another class of shares of beneficial interest of the Portfolio: the Institutional Class, representing an interest in the Portfolio. Such class has different distribution arrangements and is designed for institutional investors. The Trust also offers shares of several classes representing an interest in another portfolio, the Treasury Portfolio, pursuant to separate prospectuses. The portfolios of the Fund are referred to collectively as "Portfolios." Because the Trust declares dividends on a daily basis, shares of each class of the Portfolio have the same net asset value (proportionate interest in the net assets of the Portfolio) and bear equally those expenses, such as the advisory fee, that are allocated to the Portfolio as a whole. All classes of the Portfolio share a common investment objective and portfolio of investments. However, different classes of the Portfolio have different shareholder qualifications, and are separately allocated certain class expenses, such as those associated with the distribution of their shares. Therefore, each class will have a different dividend payment and a different yield. INVESTORS IN THE CLASS The Class is designed to be a convenient vehicle in which customers of banks, certain broker-dealers and other financial institutions can invest in a diversified open-end money market fund. PURCHASE OF SHARES Shares of the Class that are offered hereby are sold at net asset value. The minimum initial investment in the Class is $10,000. There is no minimum amount for subsequent investments. Payment for shares of the Class purchased must be in funds immediately available to the Trust. See "Purchase of Shares." 2 150 REDEMPTION OF SHARES Redemptions may be made without charge at net asset value. Payment for redeemed shares of the Class for which redemption orders are received prior to 1:00 p.m. Eastern Time will normally be made on the same day. See "Redemption of Shares." DIVIDENDS The net income of the Portfolio is declared as a dividend daily to shareholders of record immediately after 1:00 p.m. Eastern Time. Dividends are paid monthly by check or wire transfer unless the shareholder has previously elected to have such dividends automatically reinvested in additional shares of the Class. Information concerning the amount of the dividends declared on any particular day will normally be available by 3:30 p.m. Eastern Time on that day. See "Dividends." CONSTANT NET ASSET VALUE The Trust uses the amortized cost method of valuing the securities held by the Portfolio and rounds the per share net asset value to the nearest whole cent. Accordingly, the net asset value per share of the Portfolio will normally remain constant at $1.00. AN INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE IS NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE. See "Net Asset Value." INVESTMENT ADVISOR A I M Advisors, Inc. ("AIM") serves as the Trust's investment advisor and receives a fee based on the Trust's average daily net assets. During the fiscal year ended August 31, 1997, the Trust paid AIM advisory fees with respect to the Portfolio which represented 0.15% of the average daily net assets of the Portfolio. AIM is primarily engaged in the business of acting as manager or advisor to investment companies. Under an Administrative Services Agreement, AIM may be reimbursed by the Trust for its costs of performing certain accounting and other administrative services for the Trust. See "Management of the Trust -- Investment Advisor" "-- Administrative Services." Under a Transfer Agency and Service Agreement, A I M Institutional Fund Services, Inc., AIM's wholly owned subsidiary and a registered transfer agent, receives a fee for its provision of transfer agency, dividend distribution and disbursement, and shareholder services to the Trust. It is currently anticipated that, effective on or about December 29, 1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM and a registered transfer agent, will become the transfer agent to the Trust. See "General Information -- Transfer Agent and Custodian." DISTRIBUTOR AND DISTRIBUTION PLAN Fund Management Company ("FMC") acts as the exclusive distributor of the shares of the Class. Pursuant to a plan of distribution adopted by the Trust's Board of Trustees, the Trust may pay up to 0.50% of the average daily net asset value of the Portfolio attributable to the Class to FMC as well as to certain broker-dealers or other financial institutions. Of this amount, up to 0.25% may be for continuing personal services to shareholders provided by broker-dealers or institutions and the balance would be deemed an asset-based sales charge. See "Purchase of Shares" and "Distribution Plan." 3 151 SPECIAL RISK CONSIDERATIONS The Portfolio may borrow money and enter into reverse repurchase agreements for temporary or emergency purposes, and may purchase securities for delayed delivery. Accordingly, an investment in the Portfolio may entail somewhat different risks from an investment in an investment company that does not engage in such practices. There can be no assurance that the Portfolio will be able to maintain a stable net asset value of $1.00 per share. See "Investment Program." The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM Logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, La Familia AIM de Fondos and La Familia AIM de Fondos and Design are registered service marks and aimfunds.com and Invest With Discipline are service marks of A I M Management Group Inc. 4 152 TABLE OF FEES AND EXPENSES SHAREHOLDER TRANSACTION EXPENSES* Maximum sales load imposed on purchases (as a percentage of offering price)............................... None Maximum sales load on reinvested dividends (as a percentage of offering price)............................... None Deferred sales load (as a percentage of original purchase price or redemption proceeds, as applicable)...................... None Redemption fees (as a percentage of amount redeemed, if applicable).................................................... None Exchange fee......................................................... None ANNUAL PORTFOLIO OPERATING EXPENSES -- PRIVATE INVESTMENT CLASS (AS A PERCENTAGE OF AVERAGE NET ASSETS) Management fees (after fee waivers)**................................ 0.15% 12b-1 fees (after fee waivers)**..................................... 0.25%*** Other expenses: Custodian fees.................................................... 0.01% Other............................................................. 0.05% ------ Total other expenses......................................... 0.06% ------ Total portfolio operating expenses -- Private Investment Class** .... 0.46% ======
- --------------- * Beneficial owners of shares of the Class should consider the effect of any charges imposed by their bank, broker-dealer or financial institution for various services. ** Had there been no fee waivers, Management fees, 12b-1 fees and Total portfolio operating expenses would have been 0.18%, 0.50% and 0.74%, respectively. *** It is possible that as a result of Rule 12b-1 fees, long-term shareholders may pay more than the economic equivalent of the maximum front-end sales charges permitted under rules of the National Association of Securities Dealers, Inc. Given the Rule 12b-1 fee of the Class, however, it is estimated that it would take a substantial number of years for a shareholder to exceed such maximum front-end sales charges. EXAMPLE An investor in the Class would pay the following expenses on a $1,000 investment, assuming (1) a 5% annual return and (2) redemption at the end of each time period. 1 year..................................................... $ 5 3 years.................................................... $15 5 years.................................................... $26 10 years.................................................... $58
The Table of Fees and Expenses is designed to assist an investor in understanding the various costs and expenses that an investor in the Class will bear directly or indirectly. (For more complete descriptions of the various costs and expenses, see "Management of the Trust" below.) The expense figures are based upon actual costs and fees charged to the Class for the fiscal year ended August 31, 1997 as restated to reflect current 5 153 agreements. The Table of Fees and Expenses reflects voluntary waivers for the Class. Future waivers of fees (if any) may vary from the figures reflected in the Table of Fees and Expenses. To the extent any service providers assume additional expenses of the Class, such assumption of additional expenses will have the effect of lowering the Class's overall expense ratio and increasing its yield to investors. Beneficial owners of shares of the Class should also consider the effect of any charges imposed by the institution maintaining their accounts. The example in the Table of Fees and Expenses assumes that all dividends and distributions are reinvested and that the amounts listed under "Annual Portfolio Operating Expenses -- Private Investment Class" remain the same in the years shown. The example shown in the above table is based on the amounts listed under "Annual Portfolio Operating Expenses." THE EXAMPLE SHOULD NOT BE CONSIDERED TO BE AN ACCURATE REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. FINANCIAL HIGHLIGHTS Shown below are the per share data, ratios and supplemental data (collectively, "data") for the fiscal year ended August 31, 1997 and for the period December 21, 1994 (date operations commenced) through August 31, 1995. The data has been audited by KPMG Peat Marwick LLP, independent auditors, whose unqualified report on the financial statements and the related notes appears in the Statement of Additional Information.
1997 1996 1995 ------- ------- ------ Net asset value, beginning of period....................... $ 1.00 $ 1.00 $ 1.00 Income from investment operations: Net investment income.................................... 0.05 0.05 0.04 ------- ------- ------ Less distributions: Dividends from net investment income..................... (0.05) (0.05) (0.04) ------- ------- ------ Net asset value, end of period............................. $ 1.00 $ 1.00 $ 1.00 ======= ======= ====== Total return............................................... 4.87% 4.93% 5.32%(a) ======= ======= ====== Ratios/supplemental data: Net assets, end of period (000s omitted)................. $39,312 $49,978 $5,423 ======= ======= ====== Ratio of expenses to average net assets(b)............... 0.45%(c) 0.45% 0.45%(a) ======= ======= ====== Ratio of net investment income to average net assets(d)............................................. 4.75%(c) 4.72% 5.21%(a) ======= ======= ======
- --------------- (a) Annualized. (b) After fee waivers and/or expense reimbursements. Ratios of expenses to average net assets prior to fee waivers and/or expense reimbursements were 0.74%, 0.85% and 1.02% (annualized) for the periods 1997-1995, respectively. (c) Ratios are based on average net assets of $49,702,532. (d) After fee waivers and/or expense reimbursements. Ratios of net investment income to average net assets prior to fee waivers and/or expense reimbursements were 4.46%, 4.32% and 4.64% (annualized) for the periods 1997-1995, respectively. 6 154 SUITABILITY FOR INVESTORS The Class is intended for use primarily by customers of banks, certain broker-dealers and other financial institutions who seek a convenient vehicle in which to invest in an open-end diversified money market fund. The Portfolio's investment strategy is intended to provide its shareholders with dividends that are exempt from state and local income taxation in certain jurisdictions. The minimum initial investment is $10,000. Investors in the Class have the opportunity to receive a somewhat higher yield than might be obtainable through direct investment in money market instruments, and enjoy the benefits of diversification, economies of scale and same-day liquidity. Generally, higher interest rates can be obtained on the purchase of very large blocks of money market instruments. Of course, any such relative increase in interest rates may be offset to some extent by the operating expenses of the Class. Because the Portfolio invests in direct obligations of the U.S. Treasury it may be considered to have somewhat less risk than many other money market funds and yields on the Portfolio may be expected to be somewhat lower than many other money market funds. However, the possible exemption from state and local income taxation with respect to dividends paid by the Portfolio may enable shareholders to achieve an after-tax return comparable to or higher than that obtained from other money market funds, which may provide an advantage to some shareholders. INVESTMENT PROGRAM INVESTMENT OBJECTIVE The investment objective of the Portfolio is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. The Portfolio intends to provide its shareholders with dividends that are exempt from state and local income taxation in certain jurisdictions. The Portfolio seeks to achieve its objective by investing in direct obligations of the U.S. Treasury. The money market instruments in which the Portfolio invests are considered to carry very little risk and accordingly may not have as high a yield as that available on money market instruments of lesser quality. INVESTMENT POLICIES The Portfolio invests exclusively in direct obligations of the U.S. Treasury, which include Treasury bills, notes and bonds. The market values of the money market instruments held by the Portfolio will be affected by changes in the yields available on similar securities. If yields have increased since a security was purchased, the market value of such security will generally have decreased. Conversely, if yields have decreased, the market value of such security will generally have increased. BORROWING MONEY/REVERSE REPURCHASE AGREEMENTS. The Portfolio may borrow money and enter into reverse repurchase agreements with respect to its portfolio securities in amounts up to 10% of the value of its total assets at the time of borrowing or entering into a reverse repurchase agreement. The Portfolio will only borrow money or enter into reverse repurchase agreements for temporary or emergency purposes, such as to facilitate the orderly sale of portfolio securities to accommodate abnormally heavy redemption requests should they occur. Borrowing will not be made for leverage purposes. Reverse repurchase transactions are limited to a term not to exceed 92 days. The Portfolio will use reverse repurchase agreements when the interest income to be earned from the securities that would otherwise have to be liquidated to meet redemption requests is greater than the interest expense of the reverse repurchase transaction. Reverse repurchase agreements involve the risk that the market value of securities retained by the Portfolio in lieu of liquidation may decline below 7 155 the repurchase price of the securities sold by the Portfolio which it is obligated to repurchase. The risk, if encountered, could cause a reduction in the net asset value of the Portfolio's shares. Reverse repurchase agreements are considered to be borrowings under the 1940 Act. PURCHASING DELAYED DELIVERY SECURITIES. In managing the Portfolio's investments, AIM may indicate to dealers or issuers its interest in acquiring certain securities for the Portfolio for settlement beyond a customary settlement date. In some cases, the Portfolio may agree to purchase such securities at stated prices and yields. In such cases, such securities are considered "delayed delivery" securities when traded in the secondary market. Since this is done to facilitate the acquisition of portfolio securities and is not for the purpose of investment leverage, the amount of delayed delivery securities involved may not exceed the estimated amount of funds available for investment on the settlement date. Until the settlement date, liquid assets of the Portfolio with a dollar value sufficient at all times to make payment for the delayed delivery securities will be segregated. The total amount of segregated liquid assets may not exceed 25% of the Portfolio's total assets. The delayed delivery securities, which will not begin to accrue interest until the settlement date, will be recorded as an asset of the Portfolio and will be subject to the risks of market value fluctuations. The purchase price of the delayed delivery securities will be recorded as a liability of the Portfolio until settlement. Absent extraordinary circumstances, the Portfolio's right to acquire delayed delivery securities will not be divested prior to the settlement date. ILLIQUID SECURITIES. The Portfolio will invest no more than 10% of its net assets in illiquid securities. PORTFOLIO TRANSACTIONS. The Portfolio does not seek profits through short-term trading and will generally hold portfolio securities to maturity, but AIM may seek to enhance the yield of the Portfolio by taking advantage of yield disparities or other factors that occur in the money market. For example, market conditions frequently result in similar securities trading at different prices. AIM may dispose of any portfolio security prior to its maturity if such disposition and reinvestment of proceeds are expected to enhance yield consistent with AIM's judgment as to desirable portfolio maturity structure or if such disposition is believed to be advisable due to other circumstances or conditions. Securities held by the Portfolio will be disposed of prior to maturity if an earlier disposition is deemed desirable by AIM to meet redemption requests. The Portfolio's policy of investing in securities with maturities of 397 days or less will result in high portfolio turnover. Since brokerage commissions are not normally paid on investments of the type made by the Portfolio, however, the high turnover rate should not adversely affect the Portfolio's net income. INVESTMENT IN OTHER INVESTMENT COMPANIES. The Trust is permitted to invest in other investment companies to the extent permitted by the 1940 Act, and rules and regulations thereunder, and, if applicable, exemptive orders granted by the SEC. The investment policies described above may be changed by the Board of Trustees without the affirmative vote of a majority of the outstanding shares of beneficial interest of the Trust. 8 156 INVESTMENT RESTRICTIONS The Portfolio's investment program is subject to a number of investment restrictions which reflect self-imposed standards as well as federal and state regulatory limitations. These restrictions are designed to minimize certain risks associated with investing in specified types of securities or engaging in certain transactions and to limit the amount of the Portfolio's assets which may be concentrated in any specific industry or issuer. The most significant of these restrictions provides that the Portfolio will not: borrow money or issue senior securities except (a) for temporary or emergency purposes (e.g., in order to facilitate the orderly sale of portfolio securities to accommodate abnormally heavy redemption requests), the Portfolio may borrow money from banks or obtain funds by entering into reverse repurchase agreements, and (b) to the extent that entering into commitments to purchase securities in accordance with the Portfolio's investment program may be considered the issuance of senior securities. The Portfolio will not purchase securities while borrowings in excess of 5% of its total assets are outstanding. The foregoing investment restriction of the Portfolio (as well as certain others set forth in the Statement of Additional Information) is a matter of fundamental policy which may not be changed without the affirmative vote of a majority of the outstanding shares of the Portfolio. In addition to the restrictions described above, the Portfolio must also comply with the requirements of Rule 2a-7 under the 1940 Act, as such Rule may be amended from time to time, which governs the operations of money market funds, and may be more restrictive than the policies described herein. A description of further investment restrictions applicable to the Portfolio is contained in the Statement of Additional Information. PURCHASE OF SHARES Shares of the Class are sold on a continuing basis at their net asset value next determined after an order has been received by the Portfolio. As discussed below, the Trust reserves the right to reject any purchase order. Although there is no sales charge imposed on the purchase of shares of the Class, banks or other institutions may charge a recordkeeping, account maintenance or other fee to their customers, and beneficial holders of the shares of the Class should consult with the institutions maintaining their accounts to obtain a schedule of applicable fees. To facilitate the investment of proceeds of purchase orders, investors are urged to place their orders as early in the day as possible. Purchase orders will be accepted for execution on the day the order is placed, provided that the order is properly submitted and received by the Transfer Agent prior to 1:00 p.m. Eastern Time on a business day of the Portfolio. Purchase orders received after such time will be processed at the next day's net asset value. Following the initial investment, subsequent purchases of shares of the Class may also be made via AIM LINK--Registered Trademark-- Remote, a personal computer application software product. Shares of the Class will earn the dividend declared on the effective date of purchase. A "business day of the Portfolio" is any day on which both the Federal Reserve Bank of New York and The Bank of New York, the Trust's custodian bank, are open for business. The Portfolio, however, reserves the right to change the time for which purchase and redemption requests must be submitted to the Portfolio for execution on the same day or any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holiday. It is expected that The Bank of New York and the Federal Reserve Bank of New York will be closed during the next twelve months on Saturdays and Sundays, and on 9 157 the observed holidays of New Year's Day, Martin Luther King, Jr.'s Birthday, Presidents' Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day. Shares of the Class are sold to customers of banks, certain broker-dealers and other financial institutions (each, an Institution, and collectively, "Institutions"). Individuals, corporations, partnerships and other businesses that maintain qualified accounts at an Institution may invest in the shares of the Class. Each Institution will render administrative support services to its customers who are the beneficial owners of the shares of the Class. Such services may include, among other things, establishment and maintenance of shareholder accounts and records; assistance in processing purchase and redemption transactions in shares of the Class; providing periodic statements showing a customer's account balance in shares of the Class; distribution of Trust proxy statements, annual reports and other communications to shareholders whose accounts are serviced by the Institution; and such other services as the Trust may reasonably request. Institutions will be required to certify to the Trust that they comply with applicable state law regarding registration as broker-dealers, or that they are exempt from such registration. Prior to the initial purchase of shares of the Class, an Account Application, which can be obtained from the Transfer Agent, must be completed and sent to the Transfer Agent at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Any changes made to the information provided in the Account Application must be made in writing or by completing a new form and providing it to the Transfer Agent. An investor must open an account in the shares of the Class through an Institution in accordance with procedures established by such Institution. Each Institution separately determines the rules applicable to accounts in the shares of the Class opened with it, including minimum initial and subsequent investment requirements and the procedures to be followed by investors to effect purchases of shares of the Class. The minimum initial investment is $10,000, and there is no minimum amount of subsequent purchases of shares of the Class by an Institution on behalf of its customers. An investor who proposes to open a Portfolio account with an Institution should consult with a representative of such Institution to obtain a description of the rules governing such an account. The Institution holds shares of the Class registered in its name, as agent for the customer, on the books of the Institution. A statement with regard to the customer's shares of the Class is supplied to the customer periodically, and confirmations of all transactions for the account of the customer are provided by the Institution to the customer promptly upon request. In addition, the Institution sends to each customer proxies, periodic reports and other information with regard to the customer's shares of the Class. The customer's shares of the Class are fully assignable and subject to encumbrance by the customer. All agreements which relate to a customer's account with an Institution are with the Institution. An investor may terminate his relationship with an Institution at any time, in which case an account in the investor's name will be established directly with the Portfolio and the investor will become a shareholder of record. In such case, however, the investor will not be able to purchase additional shares of the Class directly, except through reinvestment of dividends and distributions. Orders for the purchase of shares of the Class are placed by the investor with the Institution. The Institution is responsible for the prompt transmission of the order to the Trust. The Portfolio will normally be required to make immediate settlement in federal funds (member bank deposits with a Federal Reserve Bank) for portfolio securities purchased. Accordingly, payment for shares of the Class purchased by Institutions on behalf of their customers must be in federal funds. If an investor's order to purchase shares of the Class is paid for other than in federal funds, the Institution, acting on behalf of the investor, completes the conversion into federal funds (which may take two business days), or itself advances federal funds prior to conversion, and promptly transmits the order and payment in the form of federal funds to the Transfer Agent. 10 158 Subject to the conditions stated above and to the Trust's right to reject any purchase order, orders will be accepted (i) when payment for shares of the Class purchased is received by The Bank of New York, the Trust's custodian bank, in the form described above and notice of such order is provided to the Transfer Agent or (ii) at the time the order is placed, if the Portfolio is assured of payment. Shares of the Class purchased by orders which are accepted prior to 1:00 p.m. Eastern Time will earn the dividend declared on the date of purchase. Federal Reserve wires should be sent as early as possible in order to facilitate crediting to the shareholder's account. Any funds received with respect to an order which is not accepted by the Trust and any funds received for which an order has not been received will be returned to the sending Institution. An order must specify that it is for the purchase of Shares of the "Private Investment Class of the Treasury TaxAdvantage Portfolio," otherwise any funds received will be returned to the sending Institution. The Trust reserves the right in its sole discretion to withdraw all or any part of the offering made by this Prospectus or to reject any purchase order. REDEMPTION OF SHARES A shareholder may redeem any or all of its shares of the Class at the net asset value next determined after receipt of the redemption request in proper form by the Trust. Redemption requests with respect to the Class may also be made via AIM LINK--Registered Trademark-- Remote. Normally, the net asset value per share of the Portfolio will remain constant at $1.00. See "Net Asset Value." Redemption requests with respect to shares of the Class are normally made through a customer's Institution. Payment for redeemed shares of the Class is normally made by Federal Reserve wire to the commercial bank account designated in the Institution's Account Application, but may be remitted by check upon request by a shareholder. If a redemption request is received by the Transfer Agent prior to 1:00 p.m. Eastern Time on a business day of the Portfolio, the redemption will be effected at the net asset value next determined on such day and the shares of the Class to be redeemed will not receive the dividend declared on the effective date of the redemption. If a redemption request is received by the Transfer Agent after 1:00 p.m. Eastern Time or on other than a business day of the Portfolio, the redemption will be effected at the net asset value of the Portfolio determined as of 1:00 p.m. Eastern Time on the next business day of the Portfolio, and the proceeds of such redemption will normally be wired on the effective day of the redemption. The Portfolio reserves the right to change the time for which redemption requests must be submitted to and received by the Transfer Agent for execution on the same day on any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holidays. A shareholder may change the bank account designated to receive redemption proceeds by written notice to the Trust. The authorized signature on the notice must be guaranteed by a commercial bank or a trust company. Additional documentation may be required when deemed appropriate by the Trust or the Transfer Agent. Shareholders may request a redemption by telephone. Neither the Transfer Agent nor FMC will be liable for any loss, expense or cost arising out of any telephone redemption request effected in accordance with the authorization set forth in the Account Application if they reasonably believe such request to be genuine but may in certain cases be liable for losses due to unauthorized or fraudulent transactions if they do not follow reasonable procedures for verification of telephone transactions. Such reasonable procedures for verification of 11 159 telephone transactions may include recordings of telephone transactions (maintained for six months), and mailings of confirmations promptly after the transaction. Payment for shares of the Class redeemed by mail and payment for telephone redemptions in amounts of less than $1,000 may be made by check mailed within seven days after receipt of the redemption request in proper form. The Trust may make payment for telephone redemptions in excess of $1,000 by check when it is considered to be in the Portfolio's best interest to do so. In certain cases, the Trust may call for the redemption of, or refuse to transfer or issue, shares of the Class in order to comply with the law or to further the purposes for which the Trust is formed. If a transfer or redemption of shares of the Class causes the value of shares of the Class in an account to be less than $500, the Trust may cause the remaining shares to be redeemed. DIVIDENDS Dividends from the net income of the Portfolio are declared daily to shareholders of record of each class of the Portfolio as of immediately after 1:00 p.m. Eastern Time on the day of declaration. Net income for dividend purposes is determined daily as of 1:00 p.m. Eastern Time. The dividend accrued and paid for each class will consist of (a) income of the Portfolio, the allocation of which is based upon such class's pro rata share of the total outstanding shares representing an interest in the Portfolio, less (b) Portfolio expenses, such as custodian fees, trustees' fees, accounting and legal expenses, based upon such class' pro rata share of the net assets of the Portfolio, less (c) expenses directly attributable to such class, such as distribution expenses, if any, and transfer agency fees. Although realized gains and losses on the assets of the Portfolio are reflected in its net asset value, they are not expected to be of an amount which would affect its $1.00 per share net asset value for purposes of purchases and redemptions. See "Net Asset Value." Distributions from net realized short-term gains may be declared and paid yearly or more frequently. See "Taxes." The Portfolio does not expect to realize any long-term capital gains or losses. All dividends declared during a month will normally be paid by wire transfer. Payment will normally be made on the first business day of the following month. A shareholder may elect to have all dividends automatically reinvested in additional full and fractional shares of the Class at the net asset value as of 1:00 p.m. Eastern Time on the last business day of the month. Such election, or any revocation thereof, must be made in writing by the Institution to the Transfer Agent at 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173, and will become effective with dividends paid after its receipt by the Transfer Agent. If a shareholder redeems all the shares of the Class in its account at any time during the month, all dividends declared through the date of redemption are paid to the shareholder along with the proceeds of the redemption. The Portfolio uses its best efforts to maintain the net asset value per share at $1.00 for purposes of sales and redemptions. See "Net Asset Value." Should the Trust incur or anticipate any unusual expense, loss or depreciation which could adversely affect the income or net asset value of the Portfolio, the Trust's Board of Trustees would at that time consider whether to adhere to the present dividend policy described above or to revise it in light of the then prevailing circumstances. For example, under such unusual circumstances, the Board of Trustees might reduce or suspend the daily dividend in order to prevent to the extent possible the net asset value per share of the Portfolio from being reduced below $1.00. Thus, such expenses, losses or depreciation may result in a shareholder receiving no dividends for the period during which it held its shares of the Class and cause such a shareholder to receive upon redemption a price per share lower than the shareholder's original cost. 12 160 TAXES FEDERAL TAXATION The policy of the Portfolio is to distribute to its shareholders at least 90% of its investment company taxable income for each year and consistent therewith to meet the distribution requirements of Part I of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). The Portfolio intends to distribute at least 98% of its net investment income for the calendar year and at least 98% of its net realized capital gains, if any, for the one-year period ending on October 31 and therefore to meet the distribution requirements imposed by the Code in order to avoid the imposition of a 4% excise tax. The Portfolio also intends to meet the other requirements of Subchapter M, including the requirements with respect to diversification of assets and sources of income, so that the Portfolio will pay no federal income taxes on net investment income and net realized capital gains paid to shareholders. The Portfolio will be treated as a separate corporation for purposes of determining taxable income, distribution requirements and other requirements of Subchapter M. Therefore, the Portfolio may not offset its gains against losses of the other portfolio of the Trust and each portfolio of the Trust must specifically comply with all the provisions of the Code. Dividends paid by the Portfolio are subject to taxation as of the date of payment, whether received by shareholders in cash or shares of the Portfolio. The Code provides an exception to this general rule: if the Portfolio declares a dividend in October, November or December to shareholders of record in such months and pays the dividend during January of the next year, a shareholder will be treated for tax purposes as having received the dividend on December 31 of the year in which it is declared rather than in January of the following year when it is paid. It is anticipated that no portion of distributions will be eligible for the dividends received deduction for corporations. Dividends paid by the Portfolio from its net investment income and short-term capital gains are taxable to shareholders at ordinary income tax rates. Foreign persons who file a United States tax return after December 31, 1996 for a U.S. tax refund and who are not eligible to obtain a social security number must apply to the Internal Revenue Service ("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 advisor or the Transfer Agent. STATE AND LOCAL TAXATION Distributions and other Trust transactions referred to in the preceding paragraphs may be subject to state, local or foreign taxes, and the treatment thereof may differ from the federal income tax consequences discussed herein. The Portfolio's investment strategy is intended to provide shareholders with dividends that are exempt from state and local personal and, in some cases, corporate income taxation in as many jurisdictions as possible. The possible exemption from such taxation may enable shareholders to achieve an after-tax return comparable to or higher than that obtained from other money market funds. Shareholders should consult their own tax advisors concerning the tax impact of their investment in the Portfolio and the application of state, local or foreign taxes. 13 161 NET ASSET VALUE The net asset value per share of the Portfolio is determined daily as of 1:00 p.m. Eastern Time on each business day of the Portfolio. Net asset value per share is determined by dividing the value of the Portfolio's securities, cash and other assets (including interest accrued but not collected) less all of its liabilities (including accrued expenses and dividends payable), by the number of shares outstanding of the Portfolio and rounding the resulting per share net asset value to the nearest one cent. The securities of the Portfolio are valued on the basis of amortized cost pursuant to rules promulgated by the SEC applicable to money market funds. This method values a security at its cost on the date of purchase and thereafter assumes a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the security. While this method provides certainty in valuation, it may result in periods during which value, as determined by amortized cost, is higher or lower than the price the Portfolio would receive if the security were sold. During such periods, the daily yield on shares of the Portfolio, computed as described in "Purchases and Redemptions -- Performance Information" in the Statement of Additional Information, may differ somewhat from an identical computation made by an investment company with identical investments utilizing available indications as to market value to value its portfolio securities. YIELD INFORMATION Yield information for the Class can be obtained by calling the Trust at (800) 877-7748. Yields will fluctuate from time to time and are not necessarily indicative of future results. Accordingly, the yield information may not provide a basis for comparison with investments which pay a fixed rate of interest for a stated period of time. Yield is a function of the type and quality of a Portfolio's investments, the Portfolio's maturity and the operating expense ratio of the Class. A SHAREHOLDER'S INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT OR BY ANY INSTITUTION. These factors should be carefully considered by the investor before making an investment in the Portfolio. For the seven-day period ended August 31, 1997, the current yield and the effective yield of the Class (which assumes the reinvestment of dividends for a 365-day year and a return for the entire year equal to the average annualized current yield for the period) were 4.85% and 4.97%, respectively. These performance numbers are quoted for illustration purposes only. The performance numbers for any other seven-day period may be substantially different from those quoted above. To assist banks and other institutions performing their own sub-accounting, same day information as to the daily dividend per share for the Portfolio to eight decimal places and current yield normally will be available by 4:00 p.m. Eastern Time. From time to time and in its discretion, AIM or its affiliates may waive all or a portion of its advisory fees and/or assume certain expenses of the Portfolio. Such a practice will have the effect of increasing the Portfolio's yield and total return. REPORTS TO SHAREHOLDERS The Trust furnishes shareholders with semi-annual reports containing information about the Portfolio and its operations, including a list of the investments held in the Portfolio and financial statements. The annual financial statements are audited by the Trust's independent auditors. 14 162 Unless otherwise requested by the shareholder, each shareholder will be provided with a written confirmation for each transaction by its Institution. Institutions establishing sub-accounts will receive a written confirmation for each transaction in a sub-account. Duplicate confirmations may be transmitted to the beneficial owner of the sub-account if requested by the Institution. The Institution will receive a periodic statement setting forth, for each sub-account, the share balance, income earned for the month, income earned for the year to date and the total current value of the account. MANAGEMENT OF THE TRUST BOARD OF TRUSTEES The overall management of the business and affairs of the Trust is vested with its Board of Trustees. The Board of Trustees approves all significant agreements between the Trust and persons or companies furnishing services to the Trust, including agreements with the Trust's investment advisor, distributor, custodian and transfer agent. The day-to-day operations of the Trust are delegated to the Trust's officers and to AIM, subject always to the objectives and policies of the Trust and to the general supervision of the Trust's Board of Trustees. Information concerning the Board of Trustees may be found in the Statement of Additional Information. Certain trustees and officers of the Trust are affiliated with AIM and A I M Management Group Inc. ("AIM Management"), the parent corporation of AIM. INVESTMENT ADVISOR A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as the investment advisor for the Portfolio pursuant to a Master Investment Advisory Agreement dated as of February 28, 1997 (the "Advisory Agreement"). AIM was organized in 1976 and, together with its affiliates, manages or advises 55 investment company portfolios. Certain of the directors and officers of AIM are also trustees or executive officers of the Trust. AIM is a wholly owned subsidiary of AIM Management. AIM Management is a holding company in the financial services business. AIM Management is an indirect, wholly owned subsidiary of AMVESCAP PLC, a publicly-traded holding company that, through its subsidiaries, engages in the business of investment management on an international basis. Pursuant to the terms of the Advisory Agreement, AIM manages the investment of the Portfolio's assets and obtains and evaluates economic, statistical and financial information to formulate and implement investment policies for the Portfolio. The Advisory Agreement requires AIM to reduce its fee to the extent required to satisfy any expense limitations imposed by the securities laws or regulations thereunder of any state in which the Portfolio's shares are qualified for sale. For the fiscal year ended August 31, 1997, AIM received fees from the Trust under an advisory agreement previously in effect, which provided for the same level of compensation to AIM as the Advisory Agreement, as well as received fees from the Trust under the Advisory Agreement, with respect to the Portfolio which represented 0.15% of the Portfolio's average daily net assets. During such fiscal year, the expenses of the Class, including AIM's fees, amounted to 0.45% of the Class' daily net assets. ADMINISTRATIVE SERVICES The Trust has entered into a Master Administrative Services Agreement dated as of February 28, 1997 with AIM (the "Administrative Services Agreement"), pursuant to which AIM has agreed to provide or arrange for the provision of certain accounting and other administrative services to the Portfolio, including the 15 163 services of a principal financial officer of the Trust and related staff. As compensation to AIM for its services under the Administrative Services Agreement, the Portfolio may reimburse AIM for expenses incurred by AIM in connection with such services. FEE WAIVERS AIM or its affiliates may in its discretion from time to time agree to waive voluntarily all or any portion of its advisory fee and/or assume certain expenses of the Portfolio but will retain its ability to be reimbursed such fee or expenses prior to the end of each fiscal year. FMC may in its discretion from time to time voluntarily agree to waive its 12b-1 fee, but will retain its ability to be reimbursed for such fee or expenses prior to the end of each fiscal year. AIM voluntarily waived advisory fees of $123,468 on the Portfolio and assumed expenses of $4,800. DISTRIBUTOR The Trust has entered into a Master Distribution Agreement dated as of February 28, 1997 (the "Distribution Agreement") with FMC, a registered broker-dealer and a wholly-owned subsidiary of AIM, to act as the exclusive distributor of the shares of the Class. The address of FMC is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Certain trustees and officers of the Trust are affiliated with FMC and AIM. The Distribution Agreement provides that FMC has the exclusive right to distribute shares of the Class either directly or through other broker-dealers. FMC is the distributor of several of the mutual funds managed or advised by AIM. FMC may, from time to time, at its expense, pay a bonus or other consideration or incentive to dealers or banks who sell a minimum dollar amount of the shares of the Class during a specific period of time. In some instances, these incentives may be offered only to certain dealers or institutions who have sold or may sell significant amounts of shares. The total amount of such additional bonus payments or other consideration shall not exceed 0.05% of the net asset value of the shares of the Class sold. Any such bonus or incentive programs will not change the price paid by investors for the purchase of shares of the Class or the amount received as proceeds from such sales. Dealers or institutions may not use sales of the shares of the Class to qualify for any incentives to the extent that such incentives may be prohibited by the laws of any jurisdiction. DISTRIBUTION PLAN The Trust has adopted a Master Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that the Trust may compensate FMC in connection with the distribution of shares of the Class in an amount equal to 0.50% on an annualized basis of the average daily net assets of the Portfolio attributable to the Class. Such amounts may be expended when and if authorized by the Board of Trustees and may be used to finance such distribution-related services as expenses of organizing and conducting sales seminars, printing of prospectuses and statements of additional information (and supplements thereto) and reports for other than existing shareholders, preparation and distribution of advertising material and sales literature and costs of administering the Plan. Of the compensation paid to FMC under the Plan, a service fee may be paid to dealers and other financial institutions that provide continuing personal shareholder services to their customers who purchase and own shares of the Class, in amounts of up to 0.25% of the average net assets of the Portfolio attributable to the Class which are attributable to the customers of such dealers or financial institutions. Payments to dealers and other financial institutions in excess of such amount and payments retained by FMC would be characterized 16 164 as an asset-based sales charge pursuant to the Plan. The Plan also imposes a cap on the total amount of sales charges, including asset-based sales charges, that may be paid by the Portfolio with respect to the Class. The Plan does not obligate the Trust to reimburse FMC for the actual expenses FMC may incur in fulfilling its obligations under the Plan on behalf of the Class. Thus, under the Plan, even if FMC's actual expenses exceed the fee payable to FMC thereunder at any given time, the Trust will not be obligated to pay more than that fee. If FMC's expenses are less than the fee it receives, FMC will retain the full amount of the fee. The Plan requires the officers of the Trust to provide the Board of Trustees at least quarterly with a written report of the amounts expended pursuant to each Plan and the purposes for which such expenditures were made. The Board of Trustees shall review these reports in connection with their decisions with respect to the Plan. As required by Rule 12b-1 under the 1940 Act, the Plan was approved by the Board of Trustees, including a majority of the trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust and who have no direct or indirect financial interest in the operation of the Plan or in any agreements related to the Plan ("Qualified Trustees") on December 6, 1994. In approving the Plan in accordance with the requirements of Rule 12b-1, the trustees considered various factors and determined that there is a reasonable likelihood that the Plan will benefit the Trust and the shareholders of the Class. The Plan may be terminated by a vote of a majority of the Qualified Trustees, or by a vote of a majority of the holders of the outstanding voting securities of the shares of the Class. Any change in the Plan that would increase materially the distribution expenses paid by the Class requires shareholder approval; otherwise the Plan may be amended by the trustees, including a majority of the Qualified Trustees, by vote cast in person at a meeting called for the purpose of voting upon such amendment. As long as the Plan is in effect, the selection or nomination of the Qualified Trustees is committed to the discretion of the Qualified Trustees. PORTFOLIO TRANSACTIONS AND BROKERAGE AIM is responsible for decisions to buy and sell securities for the Portfolio, broker-dealer selection and negotiation of commission rates. Since purchases and sales of portfolio securities by the Portfolio are usually principal transactions, the Portfolio incurs little or no brokerage commissions. Portfolio securities are normally purchased directly from the issuer or from a market maker for the securities. The purchase price paid to dealers serving as market makers may include a spread between the bid and asked prices. AIM's primary consideration in effecting a security transaction is to obtain the best net price and the most favorable execution of the order. To the extent that the executions and prices offered by more than one dealer are comparable, AIM may, in its discretion, effect transactions with dealers that furnish statistical, research or other information or services which are deemed by AIM to be beneficial to the Portfolio's investment programs. Certain research services furnished by dealers may be useful to clients of AIM other than the Portfolio. Similarly, any research services received by AIM through placement of portfolio transactions of other clients may be of value to AIM in fulfilling its obligations to the Portfolio. 17 165 GENERAL INFORMATION ORGANIZATION AND DESCRIPTION OF SHARES The Trust is a Delaware business trust. The Trust was originally incorporated in Maryland on January 24, 1977, but had no operations prior to November 10, 1980. Effective December 31, 1986, the Trust was reorganized as a Massachusetts business trust; and effective October 15, 1993, the Trust was reorganized as a Delaware business trust. On October 15, 1993, the Portfolio succeeded to the assets and assumed the liabilities of the Treasury TaxAdvantage Portfolio (the "Predecessor Portfolio") of Short-Term Investments Co., a Massachusetts business trust ("STIC"), pursuant to an Agreement and Plan of Reorganization between the Trust and STIC. All historical financial and other information contained in this Prospectus for periods prior to October 15, 1993 relating to the Portfolio (or a class thereof) is that of the Predecessor Portfolio (or the corresponding class thereof). Shares of beneficial interest of the Trust are divided into seven classes. Two classes, including the Class, represent interests in the Portfolio, and five classes represent interests in the Treasury Portfolio. Each class of shares has a par value of $.01 per share. The other classes of the Trust may have different sales charges and other expenses which may affect performance. An investor may obtain information concerning the Trust's other classes by contacting FMC. All shares of the Trust have equal rights with respect to voting, except that the holders of shares of a particular portfolio or class will have the exclusive right to vote on matters pertaining solely to that portfolio or class. For example, holders of shares of a particular portfolio will have the exclusive right to vote on any investment advisory agreement or investment restriction that relates only to such portfolio. In addition, if a portfolio is divided into various classes, holders of shares of a particular class will have the exclusive right to vote on any matter, such as distribution arrangements, which relates solely to such class. The shareholders of the Class have distinctive rights with respect to dividends and redemption which are more fully described in this Prospectus. In the event of liquidation or termination of the Trust, holders of shares of each portfolio will receive pro rata, subject to the rights of creditors, (a) the proceeds of the sale of the assets held in the respective portfolio to which such shares relate, less (b) the liabilities of the Trust attributable to the respective portfolio or allocated to the respective portfolio based on the liquidation value of such portfolio. Fractional shares of each portfolio have the same rights as full shares to the extent of their proportionate interest. There will not normally be annual shareholders' meetings. Shareholders may remove trustees from office by votes cast at a meeting of shareholders called solely for such purpose or by written consent. A meeting of shareholders for the sole purpose of considering removal of a trustee shall be called at the request of the holders of 10% or more of the Trust's outstanding shares. As of December 1, 1997, The Bank of New York was the owner of record of 37.29%, Huntington Capital Corp. was owner of record of 27.31% and First National Bank of Chicago was the owner of record of 25.49% of the outstanding shares of the Class. As long as each of The Bank of New York, Huntington Capital Corp. and First National Bank of Chicago owns over 25% of such shares, it may be presumed to be in "control" of the Private Investment Class of the Treasury TaxAdvantage Portfolio, as defined in the 1940 Act. There are no preemptive or conversion rights applicable to any of the Trust's shares. The Trust's shares, when issued, will be fully paid and non-assessable. The Board of Trustees may create additional portfolios and classes of the Trust without shareholder approval. 18 166 TRANSFER AGENT AND CUSTODIAN The Bank of New York, 90 Washington Street, 11th Floor, New York, New York 10286, acts as custodian for the portfolio securities and cash of the Portfolio. A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as transfer agent for the shares of the Portfolio. It is currently anticipated that, effective on or about December 29, 1997, A I M Fund Services, Inc., a wholly owned subsidiary of AIM and registered transfer agent, will become the transfer agent to the Trust. LEGAL COUNSEL The law firm of Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania, serves as counsel to the Trust and passes upon legal matters for the Trust. SHAREHOLDER INQUIRIES Shareholder inquiries concerning the status of an account should be directed to an investor's Institution, or to the Trust at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or may be made by calling (800) 877-7748. OTHER INFORMATION This Prospectus sets forth basic information that investors should know about the Trust and the Portfolio prior to investing. A Statement of Additional Information has been filed with the SEC. Copies of the Statement of Additional Information are available upon request and without charge by writing or calling the Trust or FMC. This Prospectus omits certain information contained in the registration statement filed with the SEC. Copies of the registration statement, including items omitted herein, may be obtained from the SEC by paying the charges prescribed under its rules and regulations. 19 167 [THIS PAGE INTENTIONALLY LEFT BLANK] 168 SHORT-TERM INVESTMENTS TRUST SHORT-TERM 11 Greenway Plaza, Suite 100 INVESTMENTS TRUST Houston, Texas 77046-1173 (800) 877-7748 PRIVATE INVESTMENT CLASS INVESTMENT ADVISOR OF THE A I M ADVISORS, INC. -------------------------------------------- 11 Greenway Plaza, Suite 100 TREASURY Houston, Texas 77046-1173 TAXADVANTAGE (713) 626-1919 PORTFOLIO PROSPECTUS DISTRIBUTOR FUND MANAGEMENT COMPANY 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173 (800) 877-7748 DECEMBER 17, 1997 AUDITORS KPMG PEAT MARWICK LLP 700 Louisiana Houston, Texas 77002 CUSTODIAN THE BANK OF NEW YORK 90 Washington Street 11th Floor New York, New York 10286 TRANSFER AGENT A I M INSTITUTIONAL FUND SERVICES, INC. 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY JURISDICTION TO ANY PERSON TO WHOM SUCH [LOGO APPEARS HERE] OFFERING MAY NOT LAWFULLY BE MADE. FUND MANAGEMENT COMPANY
169 STATEMENT OF ADDITIONAL INFORMATION SHORT-TERM INVESTMENTS TRUST TREASURY TAXADVANTAGE PORTFOLIO (INSTITUTIONAL CLASS) (PRIVATE INVESTMENT CLASS) 11 GREENWAY PLAZA SUITE 100 HOUSTON, TEXAS 77046-1173 (800) 659-1005 --------------------- THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF EACH OF THE ABOVE-NAMED FUNDS, COPIES OF WHICH MAY BE OBTAINED BY WRITING FUND MANAGEMENT COMPANY, 11 GREENWAY PLAZA, SUITE 100, HOUSTON, TEXAS 77046-1173 OR CALLING (800) 659-1005 --------------------- STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 17, 1997 RELATING TO THE PROSPECTUS OF EACH OF THE FOLLOWING CLASSES OF THE TREASURY TAXADVANTAGE PORTFOLIO: INSTITUTIONAL CLASS PROSPECTUS DATED DECEMBER 17, 1997 AND PRIVATE INVESTMENT CLASS PROSPECTUS DATED DECEMBER 17, 1997 170 TABLE OF CONTENTS
PAGE -------- Introduction................................................ 3 General Information about the Trust......................... 3 The Trust and Its Shares............................... 3 Management.................................................. 5 Trustees and Officers.................................. 5 Remuneration of Trustees............................... 8 Investment Advisor..................................... 9 Administrative Services................................ 10 Expenses............................................... 11 Banking Regulations.................................... 11 Transfer Agent and Custodian........................... 11 Reports................................................ 12 Fee Waivers............................................ 12 Principal Holders of Securities........................ 12 Purchases and Redemptions................................... 15 Net Asset Value Determination.......................... 15 Distribution Agreement................................. 15 Distribution Plan...................................... 16 Performance Information................................ 16 Investment Program and Restrictions......................... 17 Investment Program..................................... 17 Eligible Securities.................................... 17 Investment Restrictions................................ 17 Other Investment Policies.............................. 17 Portfolio Transactions...................................... 18 Tax Matters................................................. 19 Qualifications as a Regulated Investment Company....... 19 Excise Tax on Regulated Investment Companies........... 19 Portfolio Distributions................................ 20 Sale or Redemption of Shares........................... 20 Foreign Shareholders................................... 20 Effect of Future Legislation; State and Local Tax Considerations........................................ 21 Financial Statements........................................ FS
2 171 INTRODUCTION The Treasury TaxAdvantage Portfolio (the "Portfolio") is an investment portfolio of Short-Term Investments Trust (the "Trust"), a mutual fund. The rules and regulations of the United States Securities and Exchange Commission (the "SEC") require all mutual funds to furnish prospective investors certain information concerning the activities of the fund being considered for investment. This information is included in the Institutional Class Prospectus dated December 17, 1997 and the Private Investment Class Prospectus dated December 17, 1997 (each a "Prospectus"). Copies of each Prospectus and additional copies of this Statement of Additional Information may be obtained without charge by writing the principal distributor of the Trust's shares, Fund Management Company ("FMC"), 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling (800) 659-1005. Investors must receive a Prospectus before they invest. This Statement of Additional Information is intended to furnish prospective investors with additional information concerning each class of the Portfolio. Some of the information required to be in this Statement of Additional Information is also included in each Prospectus; and, in order to avoid repetition, reference will be made to sections of the applicable Prospectus. Additionally, each Prospectus and this Statement of Additional Information omit certain information contained in the registration statement filed with the SEC. Copies of the registration statement, including items omitted from each Prospectus and this Statement of Additional Information, may be obtained from the SEC by paying the charges prescribed under its rules and regulations. GENERAL INFORMATION ABOUT THE TRUST THE TRUST AND ITS SHARES The Trust is an open-end, diversified, management series investment company which was originally organized as a corporation under the laws of the State of Maryland on January 24, 1977, but which had no operations prior to November 10, 1980. The Trust was reorganized as a business trust under the laws of the Commonwealth of Massachusetts on December 31, 1986. The Trust was again reorganized as a business trust under the laws of the State of Delaware on October 15, 1993. A copy of the Agreement and Declaration of Trust ("Declaration of Trust") establishing the Trust is on file with the SEC. On October 15, 1993, the Portfolio succeeded to the assets and assumed the liabilities of the Treasury TaxAdvantage Portfolio (the "Predecessor Portfolio") of Short-Term Investments Co., a Massachusetts business trust ("STIC"), pursuant to an Agreement and Plan of Reorganization between the Trust and STIC. All historical financial and other information contained in this Statement of Additional Information for periods prior to October 15, 1993 relating to the Portfolio (or a class thereof) is that of the Predecessor Portfolio (or the corresponding class thereof). Shares of beneficial interest of the Trust are redeemable at the net asset value thereof at the option of the shareholder or at the option of the Trust in certain circumstances. For information concerning the methods of redemption and the rights of share ownership, investors should consult the Prospectus under the captions "General Information" and "Redemption of Shares." The Trust offers on a continuous basis shares representing an interest in one of two portfolios: the Portfolio and the Treasury Portfolio (together, the "Portfolios"). The Portfolio consists of the following two classes of shares: Institutional Class and Private Investment Class. Each class of shares is sold pursuant to a separate prospectus and this joint Statement of Additional Information. The Treasury Portfolio consists of the following five classes of shares: Cash Management Class, Institutional Class, Personal Investment Class, Private Investment Class and Resource Class. Each such class has different shareholder qualifications and bears expenses differently. This Statement of Additional Information relates to the shares of each class of the Portfolio. Shares of the five classes of the Treasury Portfolio are offered pursuant to separate prospectuses and a separate statement of additional information. Shares of beneficial interest of the Trust will be redeemable at the net asset value thereof at the option of the shareholder or at the option of the Trust in certain circumstances. For information concerning the methods of redemption and the rights of share ownership, investors should consult the Prospectus under the caption "Redemption of Shares." As used in the Prospectus, the term "majority of the outstanding shares" of the Trust, a particular portfolio or a particular class means, respectively, the vote of the lesser of (i) 67% or more of the shares of the Trust, such portfolio or such class present at a meeting of the Trust's shareholders, if the holders of more than 50% of the outstanding shares of the Trust, such portfolio or such class are present or represented by proxy, or (ii) more than 50% of the outstanding shares of the Trust, such portfolio or such class. Shareholders of the Trust do not have cumulative voting rights. Therefore the holders of more than 50% of the outstanding shares of all series or classes voting together for election of trustees may elect all of the members of the Board of Trustees and in such event, the remaining holders cannot elect any members of the Board of Trustees. The Declaration of Trust provides for the perpetual existence of the Trust. The Trust, either Portfolio and any class thereof, however, may be terminated at any time, upon the recommendation of the Board of Trustees, by vote of a majority of the out- 3 172 standing shares of the Trust, such Portfolio and such class, respectively; provided, however that the Board of Trustees may terminate, with such shareholder approval, the Trust, either Portfolio and any class thereof with respect to which there are fewer than 100 holders of record. The Declaration of Trust permits the trustees to issue an unlimited number of full and fractional shares, of $.01 par value, of each class of shares of beneficial interest of the Trust. The Board of Trustees may establish additional series or classes of shares from time to time without shareholder approval. Additional information concerning the rights of share ownership is set forth in the prospectus applicable to each such class or portfolio of shares of the Trust. The assets received by the Trust for the issue or sale of shares of each class relating to a portfolio and all income, earnings, profits, losses and proceeds therefrom, subject only to the rights of creditors, will be allocated to that portfolio, and constitute the underlying assets of that portfolio. The underlying assets of each portfolio will be segregated and will be charged with the expenses with respect to that portfolio and with a share of the general expenses of the Trust. While certain expenses of the Trust will be allocated to the separate books of account of each portfolio, certain other expenses may be legally chargeable against the assets of the entire Trust. Under Delaware law, shareholders of a Delaware business trust shall be entitled to the same limitations of liability extended to shareholders of private for-profit corporations, however, there is a remote possibility that shareholders could, under certain circumstances, be held liable for the obligations of the Trust to the extent the courts of another state which does not recognize such limited liability were to apply the laws of such state to a controversy involving such obligations. However, the Declaration of Trust 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 Declaration of Trust provides for indemnification out of the Trust's property for all losses and expenses of any shareholder of the Trust 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 the Trust would be unable to meet its obligations and wherein the complaining party was held not to be bound by the disclaimer. The Declaration of Trust further provides that the trustees will not be liable for errors of judgment or mistakes of fact or law. However, nothing in the Declaration of Trust protects a trustee against any liability to which a trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office. The Declaration of Trust provides for indemnification by the Trust of the trustees and the officers of the Trust except with respect to any matter as to which any such person did not act in good faith in the reasonable belief that his action was in or not opposed to the best interests of the Trust. Such person may not be indemnified against any liability to the Trust or to the Trust's shareholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. The Declaration of Trust also authorizes the purchase of liability insurance on behalf of trustees and officers. As described in the Prospectus, the Trust will not normally hold annual shareholders' meetings. At such time as less than a majority of the trustees have been elected by the shareholders, the trustees then in office will call a shareholders' meeting for the election of trustees. In addition, trustees may be removed from office by a written consent signed by the holders of two-thirds of the outstanding shares of the Trust and filed with the Trust's custodian or by a vote of the holders of two-thirds of the outstanding shares at a meeting duly called for the purpose, which meeting shall be held upon written request of the holders of not less than 10% of the outstanding shares of the Trust. 4 173 MANAGEMENT TRUSTEES AND OFFICERS The trustees and officers of the Trust and their principal occupations during at least the last five years are set forth below.
- -------------------------------------------------------------------------------------------------------------------------- POSITIONS HELD NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS - -------------------------------------------------------------------------------------------------------------------------- *CHARLES T. BAUER (78) Trustee and Chairman of the Board of Directors, A I M Management 11 Greenway Plaza, Suite 100 Chairman Group Inc., A I M Advisors, Inc., A I M Capital Houston, TX 77046 Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc., A I M Institutional Fund Services, Inc. and Fund Management Company; and Vice Chairman and Director, AMVESCAP PLC. - ------------------------------------------------------------------------------------------------------------------ BRUCE L. CROCKETT (53) Trustee Director, ACE Limited (insurance company). Formerly, 906 Frome Lane Director, President and Chief Executive Officer, McLean, VA 22102 COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company). - ------------------------------------------------------------------------------------------------------------------ OWEN DALY II (73) Trustee Director, Cortland Trust Inc. (investment company). Six Blythewood Road Formerly, Director, CF & I Steel Corp., Monumental Baltimore, MD 21210 Life Insurance Company and Monumental General Insurance Company; and Chairman of the Board of Equitable Bancorporation. - ------------------------------------------------------------------------------------------------------------------ JACK M. FIELDS (45) Trustee Formerly, Member of the U.S. House of Texana Global, Inc. Representatives. 8810 Will Clayton Parkway Jetero Plaza, Suite E Humble, TX 77338 - ------------------------------------------------------------------------------------------------------------------ **CARL FRISCHLING (60) Trustee Partner, Kramer, Levin, Naftalis & Frankel (law 919 Third Avenue firm); and Director, ERD Waste, Inc. (waste New York, NY 10022 management company), Aegis Consumer Finance (auto leasing company) and Lazard Funds, Inc. (investment companies). Formerly, Partner, Reid & Priest (law firm); and, prior thereto, Partner, Spengler Carlson Gubar Brodsky & Frischling (law firm). - ------------------------------------------------------------------------------------------------------------------ *ROBERT H. GRAHAM (51) Trustee and Director, President and Chief Executive Officer, 11 Greenway Plaza, Suite 100 President A I M Management Group Inc.; Director and President, Houston, TX 77046 A I M Advisors, Inc.; Director and Senior Vice President, A I M Capital Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc., A I M Institutional Fund Services, Inc. and Fund Management Company; and Director, AMVESCAP PLC; Chairman of the Board of Directors AIM Funds Group Canada Inc. - ------------------------------------------------------------------------------------------------------------------
- --------------- *A trustee who is an "interested person" of the Trust and AIM as defined in the 1940 Act. **A trustee who is an "interested person" of the Trust as defined in the 1940 Act. 5 174
- -------------------------------------------------------------------------------------------------------------------------- POSITIONS HELD NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS - -------------------------------------------------------------------------------------------------------------------------- JOHN F. KROEGER (73) Trustee Director, Flag Investors International Fund, Inc., 37 Pippins Way Flag Investors Emerging Growth Fund, Inc., Flag Morristown, NJ 07960 Investors Telephone Income Fund, Inc., Flag Investors Equity Partners Fund, Inc., Total Return U.S. Treasury Fund, Inc., Flag Investors Intermediate Term Income Fund, Inc., Managed Municipal Fund, Inc., Flag Investors Value Builder Fund, Inc., Flag Investors Maryland Intermediate Tax-Free Income Fund, Inc., Flag Investors Real Estate Securities Fund, Inc., Alex. Brown Cash Reserve Fund, Inc. and North American Government Bond Fund, Inc. (investment companies). Formerly, Consultant, Wendell & Stockel Associates, Inc. (consulting firm). - ------------------------------------------------------------------------------------------------------------------ LEWIS F. PENNOCK (55) Trustee Attorney in private practice in Houston, Texas. 6363 Woodway, Suite 825 Houston, TX 77057 - ------------------------------------------------------------------------------------------------------------------ IAN W. ROBINSON (74) Trustee Formerly, Executive Vice President and Chief 183 River Drive Financial Officer, Bell Atlantic Management Services, Tequesta, FL 33469 Inc. (provider of centralized management services to telephone companies); Executive Vice President, Bell Atlantic Corporation (parent of seven telephone companies); and Vice President and Chief Financial Officer, Bell Telephone Company of Pennsylvania and Diamond State Telephone Company. - ------------------------------------------------------------------------------------------------------------------ LOUIS S. SKLAR (58) Trustee Executive Vice President, Development and Operations, Transco Tower, 50th Floor Hines Interests Limited Partnership (real estate 2800 Post Oak Blvd. development). Houston, TX 77056 - ------------------------------------------------------------------------------------------------------------------ ***JOHN J. ARTHUR (53) Senior Vice Director, Senior Vice President and Treasurer, A I M 11 Greenway Plaza, Suite 100 President and Advisors, Inc.; and Vice President and Treasurer, Houston, TX 77046 Treasurer A I M Management Group Inc., A I M Capital Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc., A I M Institutional Fund Services, Inc. and Fund Management Company. - ------------------------------------------------------------------------------------------------------------------ GARY T. CRUM (50) Senior Vice Director and President, A I M Capital Management, 11 Greenway Plaza, Suite 100 President Inc.; Director and Senior Vice President, A I M Houston, TX 77046 Management Group Inc. and A I M Advisors, Inc.; and Director, A I M Distributors, Inc. and AMVESCAP PLC. - ------------------------------------------------------------------------------------------------------------------
- --------------- ***Mr. Arthur and Ms. Relihan are married to each other. 6 175
- -------------------------------------------------------------------------------------------------------------------------- POSITIONS HELD NAME, ADDRESS AND AGE WITH REGISTRANT PRINCIPAL OCCUPATION DURING AT LEAST THE PAST 5 YEARS - -------------------------------------------------------------------------------------------------------------------------- ***CAROL F. RELIHAN (43) Senior Vice Director, Senior Vice President, General Counsel and 11 Greenway Plaza, Suite 100 President and Secretary, A I M Advisors, Inc.; Vice President, Houston, TX 77046 Secretary General Counsel and Secretary, A I M Management Group Inc.; Director, Vice President and General Counsel, Fund Management Company; General Counsel and Vice President, A I M Fund Services, Inc. and A I M Institutional Fund Services, Inc.; Vice President, A I M Capital Management, Inc., A I M Distributors, Inc. - ------------------------------------------------------------------------------------------------------------------ DANA R. SUTTON (38) Vice President Vice President and Fund Controller, A I M Advisors, 11 Greenway Plaza, Suite 100 and Assistant Inc.; and Assistant Vice President and Assistant Houston, TX 77046 Treasurer Treasurer, Fund Management Company. - ------------------------------------------------------------------------------------------------------------------ MELVILLE B. COX (54) Vice President Vice President and Chief Compliance Officer, A I M 11 Greenway Plaza, Suite 100 Advisors, Inc., A I M Capital Management, Inc., A I M Houston, TX 77046 Distributors, Inc., A I M Fund Services, Inc., A I M Institutional Fund Services, Inc. and Fund Management Company. - ------------------------------------------------------------------------------------------------------------------ KAREN DUNN KELLEY (37) Vice President Senior Vice President, A I M Capital Management, Inc. 11 Greenway Plaza, Suite 100 and Vice President, A I M Advisors, Inc. Houston, TX 77046 - ------------------------------------------------------------------------------------------------------------------ J. ABBOTT SPRAGUE (42) Vice President Director and President, Fund Management Company; 11 Greenway Plaza, Suite 100 Director and Senior Vice President, A I M Advisors, Houston, TX 77046 Inc. and A I M Institutional Fund Services, Inc.; and Senior Vice President A I M Management Group Inc. - ------------------------------------------------------------------------------------------------------------------
- --------------- ***Mr. Arthur and Ms. Relihan are married to each other. The standing committees of the Board of Trustees are the Audit Committee, the Investments Committee, and the Nominating and Compensation Committee. The members of the Audit Committee are Messrs. Crockett, Daly, Fields, Frischling, Kroeger (Chairman), Pennock, Robinson and Sklar. The Audit Committee is responsible for meeting with the Trust's auditors to review audit procedures and results and to consider any matters arising from an audit to be brought to the attention of the trustees as a whole with respect to the Trust's fund accounting or its internal accounting controls, or for considering such matters as may from time to time be set forth in a charter adopted by the Board of Trustees and such committee. The members of the Investments Committee are Messrs. Bauer, Crockett, Daly (Chairman), Fields, Frischling, Kroeger, Pennock, Robinson and Sklar. The Investments Committee is responsible for reviewing portfolio compliance, brokerage allocation, portfolio investment pricing issues, interim dividend and distribution issues, or considering such matters as may from time to time be set forth in a charter adopted by the Board of Trustees and such committee. The members of the Nominating and Compensation Committee are Messrs. Crockett, Daly, Fields, Kroeger, Pennock (Chairman), Robinson and Sklar. The Nominating and Compensation Committee is responsible for considering and nominating individuals to stand for election as trustees who are not interested persons as long as the Trust maintains a distribution plan pursuant to Rule 12b-1 under the 1940 Act, reviewing from time to time the compensation payable to the disinterested trustees, or considering such matters as may from time to time be set forth in a charter adopted by the Board of Trustees and such committee. 7 176 All of the Trust's trustees also serve as directors or trustees of some or all of the other investment companies managed or advised by A I M Advisors, Inc. ("AIM") or distributed and administered by FMC. Most of the Trust's executive officers hold similar offices with some or all of such investment companies. REMUNERATION OF TRUSTEES Each trustee is reimbursed for expenses incurred in connection with each meeting of the Board of Trustees or any committee thereof. Each trustee who is not an officer of the Trust is compensated for his services according to a fee schedule which recognizes the fact that such trustee also serves as a director or trustee of other regulated investment companies managed, administered or distributed by AIM or its affiliates (the "AIM Funds"). Each such trustee receives a fee, allocated among the AIM Funds for which he serves as a director or trustee, which consists of an annual retainer component and a meeting fee component. Set forth below is information regarding compensation paid or accrued for each trustee of the Trust:
Retirement Benefits Total Aggregate Accrued Compensation Compensation By All from all Trustee from Trust(1) AIM Funds(2) AIM Funds(3) ------- ------------- ------------- ------------ Charles T. Bauer................................ $ -0- $ -0- $ -0- Bruce L. Crockett............................... 4,880 38,621 68,000 Owen Daly II.................................... 4,879 82,607 68,000 Jack Fields(4).................................. 2,466 -0- -0- Carl Frischling................................. 4,880 56,683 68,000(5) Robert H. Graham................................ -0- -0- -0- John F. Kroeger................................. 4,879 83,654 66,000 Lewis F. Pennock................................ 4,879 33,702 67,000 Ian W. Robinson................................. 4,880 64,973 68,000 Louis S. Sklar.................................. 4,815 47,593 66,500
- --------------- (1) The total amount of compensation deferred by all Trustees of the Trust during the fiscal year ended August 31, 1997, including interest earned thereon, was 23,027. (2) During the fiscal year ended August 31, 1997, the total amount of expenses allocated to the Trust in respect of such retirement benefits was $30,214. Data reflects compensation for the calendar year ended December 31, 1996. (3) Each serves as a Director or Trustee of a total of 11 registered investment companies advised by AIM (comprised of 47 portfolios). Data reflects total compensation for the calendar year ended December 31, 1996. (4) Mr. Fields was not serving as a Director during the calendar year ending December 31, 1996. (5) See also page 9 regarding fees earned by Mr. Frischling's law firm. AIM Funds Retirement Plan for Eligible Directors/Trustees Under the terms of the AIM Funds Retirement Plan for Eligible Directors/Trustees (the "Plan"), each trustee (who is not an employee of any of the AIM Funds, A I M Management Group Inc. or any of their affiliates) may be entitled to certain benefits upon retirement from the Board of Trustees. Pursuant to the Plan, the normal retirement date is the date on which the eligible trustee has attained age 65 and has completed at least five years of continuous service with one or more of the AIM Funds. Each eligible trustee is entitled to receive an annual benefit from the AIM Funds commencing on the first day of the calendar quarter coincident with or following his date of retirement equal to 75% of the retainer paid or accrued by the AIM Funds for such trustee during the twelve-month period immediately preceding the trustee's retirement (including amounts deferred under separate agreement between the AIM Funds and the trustee) for the number of such trustee's years of service (not in excess of 10 years of service) completed with respect to any of the AIM Funds. Such benefit is payable to each eligible trustee in quarterly installments. If an eligible trustee dies after attaining the normal retirement date but before receipt of any benefits under the Plan commences, the trustee's surviving spouse (if any) shall receive a quarterly survivor's benefit equal to 50% of the amount payable to the deceased trustee, for no more than ten years beginning the first day of the calendar quarter following the date of the trustee's death. Payments under the Plan are not secured or funded by any AIM Fund. 8 177 Set forth below is a table that shows the estimated annual benefits payable to an eligible director upon retirement assuming a specified level of compensation and years of service classifications. The estimated credited years of service for Messrs. Crockett, Daly, Fields, Frischling, Kroeger, Pennock, Robinson and Sklar are 10, 10, 0, 20, 19, 15, 10, and 7 years, respectively. ANNUAL RETAINER UPON RETIREMENT
- --------------------------------------------------------------------------- NUMBER OF YEARS OF SERVICE WITH ANNUAL RETAINER PAID BY ALL AIM FUNDS THE AIM FUNDS $80,000 - --------------------------------------------------------------------------- 10 $60,000 - --------------------------------------------------------------------------- 9 $54,000 - --------------------------------------------------------------------------- 8 $48,000 - --------------------------------------------------------------------------- 7 $42,000 - --------------------------------------------------------------------------- 6 $36,000 - --------------------------------------------------------------------------- 5 $30,000 - ---------------------------------------------------------------------------
Deferred Compensation Agreements Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of this paragraph only, the "deferring trustees") have each executed a Deferred Compensation Agreement (collectively, the "Agreements"). Pursuant to the Agreements, the deferring trustees may elect to defer receipt of up to 100% of their compensation payable by the Trust, and such amounts are placed into a deferral account. Currently, the deferring trustees may select various AIM Funds in which all or part of their deferral accounts shall be deemed to be invested. Distributions from the deferring trustees' deferral accounts will be paid in cash, generally in equal quarterly installments over a period of five (5) or ten (10) years (depending on the Agreement) beginning on the date the deferring trustee's retirement benefits commence under the Plan. The Trust's Board of Trustees, in its sole discretion, may accelerate or extend the distribution of such deferral accounts after the deferring trustee's termination of service as a trustee of the Trust. If a deferring trustee dies prior to the distribution of amounts in his deferral account, the balance of the deferral account will be distributed to his designated beneficiary in a single lump sum payment as soon as practicable after such deferring trustee's death. The 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. The Portfolio paid legal fees of $4,209 for the year ended August 31, 1997 for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the Board of Trustees. Carl Frischling, a trustee of the Trust, is a member of that firm. INVESTMENT ADVISOR A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as the investment advisor of the Portfolio pursuant to a Master Investment Advisory Agreement dated as of February 28, 1997 (the "Advisory Agreement"). AIM was organized in 1976, and together with its subsidiaries advises or manages 55 investment company portfolios. Pursuant to the terms of the Advisory Agreement, AIM manages the investment of the assets of the Portfolio. AIM obtains and evaluates economic, statistical and financial information to formulate and implement investment policies for the Portfolio. Any investment program undertaken by AIM will at all times be subject to the policies and control of the Trust's Board of Trustees. AIM shall not be liable to the Trust or to its shareholders for any act or omission by AIM or for any loss sustained by the Trust or its shareholders except in the case of willful misfeasance, bad faith, gross negligence or reckless disregard of duty. AIM and the Trust have adopted a Code of Ethics which requires investment personnel (a) to pre-clear all personal securities transactions, (b) to file reports regarding such transactions, and (c) to refrain from personally engaging in (i) short-term trading of a security, (ii) transactions involving a security within seven days of an AIM Fund transaction involving the same security, and (iii) transactions involving securities being considered for investment by an AIM Fund. The Code also prohibits investment personnel from purchasing securities in an initial public offering. Personal trading reports are reviewed periodically by AIM, and the Board of Trustees reviews annually such reports (including information on any substantial violations of the Code). Violations of the Code may result in censure, monetary penalties, suspension or termination of employment. 9 178 As compensation for its services with respect to the Portfolio, AIM receives a monthly fee which is calculated by applying the following annual rates to the average daily net assets of the Portfolio:
NET ASSETS RATE ---------- ---- First $250 million.......................................... .20% Over $250 million to $500 million........................... .15% Over $500 million........................................... .10%
The Advisory Agreement requires AIM to reduce its fee to the extent required to satisfy any expense limitations imposed by the securities laws or regulations thereunder of any state in which the Portfolio's shares are qualified for sale. Pursuant to the Advisory Agreement between the Trust and AIM currently in effect, AIM received fees (net of fee waivers, if any) from the Trust for the fiscal years ended August 31, 1997, 1996 and 1995, with respect to the Portfolio in the amounts of $705,397, $675,795 and $596,449 , respectively. For the fiscal years ended August 31, 1997, 1996 and 1995, AIM waived fees with respect to the Portfolio in the amounts of $123,468, $116,126, and $117,100, respectively. The Advisory Agreement provides, that, upon the request of the Board of Trustees, AIM may perform or arrange for the performance of certain additional services on behalf of the Portfolio which are not required by the Advisory Agreement. AIM may receive reimbursement or reasonable compensation for certain additional services, as may be agreed upon by AIM and the Board of Trustees, based upon a finding by the Board of Trustees that the provision of such services would be in the best interest of the Portfolio and its shareholders. The Board of Trustees has made such a finding and, accordingly, has entered into a Master Administrative Services Agreement under which AIM will provide the additional services described below under the caption "Administrative Services." The Advisory Agreement was approved for its initial term by the Board of Trustees on July 19, 1993. The Advisory Agreement will continue in effect until February 28, 1999 and from year to year thereafter provided that it is specifically approved at least annually by the Trust's Board of Trustees and the affirmative vote of a majority of the trustees who are not parties to the Advisory Agreement or "interested persons" of any such party by votes cast in person at a meeting called for such purpose. The Trust or AIM may terminate the Advisory Agreement on 60 days' notice without penalty. The Advisory Agreement terminates automatically in the event of its assignment, as defined in the 1940 Act. AIM is a wholly owned subsidiary of A I M Management Group Inc. ("AIM Management"), 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, a holding company that has been engaged in the financial service business since 1976. AIM Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire Square, London EC2M 4YR, United Kingdom. AMVESCAP PLC and its subsidiaries are an independent investment management group engaged in institutional investment management and retail fund business in the United States, Europe and the Pacific Region. Certain of the directors and officers of AIM are also executive officers of the Trust and their affiliations are shown under "Trustees and Officers." The address of each director and officer of AIM is 11 Greenway Plaza, Suite 100, Houston, Texas 77046. FMC is a registered broker-dealer and a wholly owned subsidiary of AIM. FMC acts as distributor of the shares of the Portfolio. ADMINISTRATIVE SERVICES AIM also provides certain services pursuant to a Master Administrative Services Agreement dated as of February 28, 1997 between AIM and the Trust (the "Administrative Services Agreement"). Under the Administrative Services Agreement, AIM performs accounting and other administrative services for the Portfolio. As full compensation for the performance of such services, AIM is reimbursed for any personnel and other costs (including applicable office space, facilities and equipment) of furnishing the services of a principal financial officer of the Trust and of persons working under his supervision for maintaining the financial accounts and books and records of the Trust, including calculation of the Portfolio's daily net asset value, and preparing tax returns and financial statements for the Portfolio. The method of calculating such reimbursements must be annually approved, and the amounts paid will be periodically reviewed, by the Trust's Board of Trustees. Under the Administrative Services Agreement, AIM was reimbursed for the fiscal years ended August 31, 1997, 1996 and 1995, in the amounts of 56,844, $30,056 and $42,823, respectively, for fund accounting services for the Portfolio. Under the terms of a Transfer Agency and Service Agreement, dated September 16, 1994, as amended, between the Trust and A I M Institutional Fund Services, Inc. ("AIFS"), a registered transfer agent and wholly owned subsidiary of AIM, as well as under previous agreements, AIFS received $35,426 and $33,534 for the fiscal years ended August 31, 1997 and 1996, respectively, for the provision of certain shareholder services for the Trust. 10 179 EXPENSES In addition to fees paid to AIM pursuant to the Agreement and the expenses reimbursed to AIM under the Administrative Services Agreement, the Trust also pays or causes to be paid all other expenses of the Trust, including, without limitation: the charges and expenses of any registrar, any custodian or depository appointed by the Trust for the safekeeping of its cash, portfolio securities and other property, and any transfer, dividend or accounting agent or agents appointed by the Trust; brokers' commissions chargeable to the Trust in connection with portfolio securities transactions to which the Trust is a party; all taxes, including securities issuance and transfer taxes, and fees payable by the Trust to federal, state or other governmental agencies; the costs and expenses of engraving or printing of certificates representing shares of the Trust; all costs and expenses in connection with the registration and maintenance of registration of the Trust and its shares with the SEC and various states and other jurisdictions (including filing and legal fees and disbursements of counsel); the costs and expenses of printing, including typesetting, and distributing prospectuses and statements of additional information of the Trust and supplements thereto to the Trust's shareholders; all expenses of shareholders' and trustees' meetings and of preparing, printing and mailing of prospectuses, proxy statements and reports to shareholders; fees and travel expenses of trustees and trustee members of any advisory board or committee; all expenses incident to the payment of any dividend, distribution, withdrawal or redemption, whether in shares or in cash; charges and expenses of any outside service used for pricing of the Trust's shares; charges and expenses of legal counsel, including counsel to the trustees of the Trust who are not "interested persons" (as defined in the 1940 Act) of the Trust or AIM, and of independent accountants in connection with any matter relating to the Trust; membership dues of industry associations; interest payable on Trust borrowings; postage; insurance premiums on property or personnel (including officers and trustees) of the Trust which inure to its benefit; and extraordinary expenses (including, but not limited to, legal claims and liabilities and litigation costs and any indemnification related thereto). FMC bears the expenses of printing and distributing prospectuses and statements of additional information (other than those prospectuses and statements of additional information distributed to existing shareholders of the Trust) and any other promotional or sales literature used by FMC or furnished by FMC to purchasers or dealers in connection with the public offering of the Trust's shares. Expenses of the Trust which are not directly attributable to the operations of any class of shares or portfolio of the Trust are prorated among all classes of the Trust. Expenses of the Trust except those listed in the next sentence are prorated among all classes of such Portfolio. Distribution and service fees, transfer agency fees and shareholder recordkeeping fees which are directly attributable to a specific class of shares are charged against the income available for distribution as dividends to the holders of such shares. BANKING REGULATIONS The Glass-Steagall Act and other applicable laws, among other things, generally prohibit federally chartered or supervised banks from engaging in the business of underwriting, selling or distributing securities, but permit banks to make shares of mutual funds available to their customers and to perform administrative and shareholder servicing functions. However, judicial or administrative decisions or interpretations of such laws, as well as changes in either federal or state statutes or regulations relating to the permissible activities of banks or their subsidiaries or affiliates, could prevent a bank from continuing to perform all or a part of its servicing activities. If a bank were prohibited from so acting, shareholder clients of such bank would be permitted to remain shareholders of the Trust and alternate means for continuing the servicing of such shareholders would be sought. In such event, changes in the operation of the Trust might occur and shareholders serviced by such bank might no longer be able to avail themselves of any automatic investment or other services then being provided by such bank. It is not expected that shareholders would suffer any adverse financial consequences as a result of any of these occurrences. In addition, state securities laws on this issue may differ from the interpretations of federal law expressed herein and certain banks and financial institutions may be required to register as dealers pursuant to state law. TRANSFER AGENT AND CUSTODIAN The Bank of New York ("BONY") acts as custodian for the portfolio securities and cash of the Portfolio. BONY receives such compensation from the Trust for its services in such capacity as is agreed to from time to time by BONY and the Trust. The address of BONY is 90 Washington Street, 11th Floor, New York, New York 10286. A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, acts as transfer agent for the shares of each class of the Portfolio and receives an annual fee from the Trust for its services in such capacity in the amount of .007% of average daily net assets of the Trust, payable monthly. Such compensation may be changed from time to time as is agreed to by A I M Institutional Fund Services, Inc. and the Trust. It is currently anticipated that, effective on or about December 29, 1997, A I M Fund Services, Inc., a wholly owned subsidiary of A I M and a registered transfer agent, will become the transfer agent to the Trust. 11 180 REPORTS The Trust furnishes shareholders with semi-annual reports containing information about the Trust and its operations, including a schedule of investments held in the Portfolio and its financial statements. The annual financial statements are audited by the Trust's independent auditors. The Board of Trustees has selected KPMG Peat Marwick LLP, 700 Louisiana, Houston, Texas 77002, as the independent auditors to audit the financial statements and review the tax returns of the Portfolio. FEE WAIVERS AIM or its affiliates may, from time to time, agree to waive voluntarily all or any portion of its fees or reimburse the Portfolio for certain of its expenses. Such waivers or reimbursements may be discontinued at any time. PRINCIPAL HOLDERS OF SECURITIES TREASURY PORTFOLIO To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding shares of any class of the Portfolio as of December 1, 1997, and the percentage of such shares owned by such shareholders as of such date are as follows: CASH MANAGEMENT CLASS
PERCENT NAME AND ADDRESS OWNED OF OF RECORD OWNER RECORD ONLY(a) ---------------- ------------ The Bank of New York...................................... 48.53%(b) 4 Fisher Lane White Plains, NY 10603 Fund Services Associates.................................. 19.16% 11835 West Olympic Boulevard Suite 205 Los Angeles, CA 90064 Texas Commerce Bank....................................... 12.25% Mutual Fund Unit/16 Hcb 09 P.O. Box 2558 Houston, TX 77252-2558 Cullen/Frost Discount Brokers............................. 5.27% 100 W. Houston St. San Antonio, TX 78205
- --------------- (a) The Trust has no knowledge as to whether all or any portion of the shares owned of record only are also owned beneficially. (b) A shareholder who holds more than 25% of the outstanding shares of a class may be presumed to be in "control" of such class of shares, as defined in the 1940 Act. 12 181 INSTITUTIONAL CLASS
PERCENT NAME AND ADDRESS OWNED OF OF RECORD OWNER RECORD ONLY(a) ---------------- ------------ U.S. Bank of Washington.................................. 11.39% P.O. Box 3168 Portland, OR 97208 Trust Company Bank........................................ 9.66% P.O. Box 105504 Atlanta, GA 30348 City of New York Deferred Compensation Plan............... 7.34% 40 Rector Street, 3rd Floor New York, NY 10006 Liberty Registration Co. of Oklahoma...................... 7.08% P.O. Box 25848 Oklahoma City, OK 73125
PERSONAL INVESTMENT CLASS
PERCENT NAME AND ADDRESS OWNED OF OF RECORD OWNER RECORD ONLY(a) ---------------- ------------ Cullen/Frost Discount Brokers................................. 66.08%(b) P.O. Box 2358 San Antonio, TX 78299 The Bank of New York........................................ 27.42%(b) 4 Fisher Lane White Plains, NY 10603
PRIVATE INVESTMENT CLASS
PERCENT NAME AND ADDRESS OWNED OF OF RECORD OWNER RECORD ONLY(a) ---------------- ------------ Liberty Bank and Trust Co. of Tulsa, N.A. .................... 50.06%(b) P.O. Box 25848 Oklahoma City, OK 73125 The Bank of New York........................................ 13.85% 4 Fisher Lane White Plains, NY 10603 Huntington Capital Corp..................................... 12.29% 41 S. High St., 9th Floor Columbus, Ohio 43287 First Trust/VAR & Co........................................ 5.73% Funds Control Suite 0404 180 E. 5th Street St. Paul, MN 55101
RESOURCE CLASS
PERCENT NAME AND ADDRESS OWNED OF OF RECORD OWNER RECORD ONLY(a) ---------------- ------------ Corestates Capital Markets.................................... 80.37%(b) 1345 Chestnut Street Philadelphia, PA 19101 Mellon Bank................................................. 16.39% Three Mellon Center, Room 3840 Pittsburgh, PA 15259-0001
- --------------- (a) The Trust has no knowledge as to whether all or any portion of the shares owned of record only are also owned beneficially. (b) A shareholder who holds more than 25% of the outstanding shares of a class may be presumed to be in "control" of such class of shares, as defined in the 1940 Act. 13 182 TREASURY TAXADVANTAGE PORTFOLIO To the best of the knowledge of the Trust, the names and addresses of the holders of 5% or more of the outstanding shares of any class of the Treasury TaxAdvantage Portfolio as of December 1, 1997, and the percentage of such shares owned by such shareholders as of such date are as follows: INSTITUTIONAL CLASS
Percent Name and Address Owned of of Record Owner Record Only(a) ---------------- -------------- Peoples Two Ten Company..................................... 33.84%(b) c/o Summit Bank Trust Operations, 7th Floor P.O. Box 821 Hackensack, NJ 07602 First Trust/VAR & Co. ...................................... 26.57%(b) 180 East 5th Street St. Paul, MN 55101 Liberty Registration Co. of Oklahoma...................... 17.14% P.O. Box 25848 Oklahoma City, OK 73125 NationsBank................................................. 5.16% 101 Elm Street, 11th Floor P.O. Box 831000 Dallas, TX 75202-2911
PRIVATE INVESTMENT CLASS
Percent Name and Address Owned of of Record Owner Record Only(a) ---------------- -------------- The Bank of New York........................................ 37.29%(b) 4 Fisher Lane White Plains, NY 10603 Huntington Capital Corp..................................... 27.31%(b) 41 S. High St., 9th Floor Columbus, OH 43287 First National Bank of Chicago.............................. 25.49%(b) Mail Suite 0126 Chicago, IL 60670-0126 Corestates Capital Markets.................................. 7.74% 1345 Chestnut St. FC 1-1-9-49 Philadelphia, PA 19101
- --------------- (a) The Trust has no knowledge as to whether all or any portion of the shares owned of record only are also owned beneficially. (b) A shareholder who holds more than 25% of the outstanding shares of a class may be presumed to be in "control" of such class of shares, as defined in the 1940 Act. 14 183 Shares shown as beneficially owned by the above institutions are those shares for which the institutions possessed or shared voting or investment power with respect to such shares on behalf of their underlying accounts. To the best of the knowledge of the Trust, as of December 1, 1997, the trustees and officers of the Trust beneficially owned less than 1% of each class of the Trust's outstanding shares. PURCHASES AND REDEMPTIONS A complete description of the manner by which shares of a particular class may be purchased, redeemed or exchanged appears in the Prospectus under the heading "Purchase of Shares." The right of redemption may be suspended or the date of payment postponed when (a) trading on the New York Stock Exchange ("NYSE") is restricted, as determined by applicable rules and regulations of the SEC, (b) the NYSE is closed for other than customary weekend and holiday closings, (c) the SEC has by order permitted such suspension, or (d) an emergency as determined by the SEC exists making disposition of portfolio securities or the valuation of the net assets of the Fund not reasonably practicable. A "business day" of the Portfolio is any day on which commercial banks in the New York Federal Reserve district are open for business. The Portfolio, however, reserves the right to change the time for which purchase and redemption requests must be submitted to the Portfolio for execution on the same day on any day when the U.S. primary broker-dealer community is closed for business or trading is restricted due to national holidays. NET ASSET VALUE DETERMINATION Shares of the Portfolio are sold at the net asset value of such shares. Shareholders may at any time redeem all or a portion of their shares at net asset value. The investor's price for purchases and redemptions will be the net asset value next determined following the receipt of an order to purchase or a request to redeem shares. The valuation of the portfolio instruments based upon their amortized cost and the concomitant maintenance of the net asset value per share of $1.00 for the Portfolio is permitted in accordance with applicable rules and regulations of the SEC, including Rule 2a-7, which require the Trust to adhere to certain conditions. These rules require that the Fund maintain a dollar-weighted average portfolio maturity of 90 days or less for the Portfolio, purchase only instruments having remaining maturities of 397 days or less and invest only in securities determined by the Board of Trustees to be of high quality with minimal credit risk. The Board of Trustees is required to establish procedures designed to stabilize, to the extent reasonably practicable, the Trust's price per share at $1.00 for the Portfolio as computed for the purpose of sales and redemptions. Such procedures include review of the Portfolio's portfolio holdings by the Board of Trustees, at such intervals as they may deem appropriate, to determine whether the net asset value calculated by using available market quotations or other reputable sources for the Portfolio deviates from $1.00 per share and, if so, whether such deviation may result in material dilution or is otherwise unfair to existing holders of the Portfolio's shares. In the event the Board of Trustees determines that such a deviation exists for the Portfolio, it will take such corrective action as the Board of Trustees deems necessary and appropriate with respect to the Portfolio, including the sale of portfolio instruments prior to maturity to realize capital gains or losses or to shorten the average portfolio maturity; the withholding of dividends; redemption of shares in kind; or the establishment of a net asset value per share by using available market quotations. DISTRIBUTION AGREEMENT The Trust has entered into a Master Distribution Agreement dated as of February 28, 1997 (the "Distribution Agreement") with FMC, a registered broker-dealer and a wholly owned subsidiary of AIM, to act as the exclusive distributor of the shares of each class of the Portfolio. The address of FMC is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. See "General Information About the Trust -- Trustees and Officers" and "-- Investment Advisor" for information as to the affiliation of certain trustees and officers of the Trust with FMC, AIM and AIM Management. The Distribution Agreement provides that FMC has the exclusive right to distribute shares of each class of the Portfolio either directly or through other broker-dealers. The Distribution Agreement also provides that FMC will pay promotional expenses, including the incremental costs of printing prospectuses and statements of additional information, annual reports and other periodic reports for distribution to persons who are not shareholders of the Trust and the costs of preparing and distributing any other supplemental sales literature. FMC has not undertaken to sell any specified number of shares of the Portfolio. FMC does not receive any fees with respect to the shares of the Institutional Class pursuant to the Distribution Agreement. The Distribution Agreement will remain in effect until February 28, 1999, and it will continue in effect from year to year thereafter only if such continuation is specifically approved at least annually by the Trust's Board of Trustees and the affirmative vote of the trustees who are not parties to the Distribution Agreement or "interested persons" of any such party by votes 15 184 cast in person at a meeting called for such purpose. A prior distribution agreement between the Trust and FMC, with terms substantially the same as those of the Distribution Agreement, was in effect through October 15, 1993. The Trust or FMC may terminate the Distribution Agreement on sixty days' written notice without penalty. The Distribution Agreement will terminate automatically in the event of its "assignment," as defined in the 1940 Act. DISTRIBUTION PLAN The Trust has adopted a Master Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Plan, the Trust may enter into Shareholder Service Agreements ("Service Agreements") with selected broker-dealers, banks, other financial institutions or their affiliates. Such firms may receive from the Portfolio compensation for servicing investors as beneficial owners of the shares of the Private Investment Class of the Portfolio. These services may include among other things: (i) answering customer inquiries regarding the shares of the class and the Portfolio; (ii) assisting customers in changing dividend options, account designations and addresses; (iii) performing sub-accounting; (iv) establishing and maintaining shareholder accounts and records; (v) processing purchase and redemption transactions; (vi) automatic investment in the shares of the class of customer cash account balances; (vii) providing periodic statements showing a customer's account balance and integrating such statements with those of other transactions and balances in the customer's other accounts serviced by such firm; (viii) arranging for bank wires; and (ix) such other services as the Trust may request on behalf of the shares of the class, to the extent such firms are permitted to engage in such services by applicable statute, rule or regulation. The Plan may only be used for the purposes specified above and as stated in the Plan. Expenses may not be carried over from year to year. For the fiscal year ended August 31, 1997, FMC received compensation pursuant to the Plan in the amount of $124,256, or an amount equal to 0.25% of the average daily net assets of the Private Investment Class. With respect to the Private Investment Class, all of such amount was paid to dealers and financial institutions and none of such compensation was retained by FMC. FMC is a wholly owned subsidiary of AIM, a wholly owned subsidiary of AIM Management. Charles T. Bauer, a Trustee and Chairman of the Trust, owns shares of AIM Management and Robert H. Graham, a Trustee and President of the Trust, also owns shares of AIM Management. PERFORMANCE INFORMATION As stated under the caption "Yield Information" in the Prospectus, yield information for the shares of each class of the Portfolio may be obtained by calling the Trust at (800) 659-1005. The current yield quoted will be the net average annualized yield for an identified period, such as seven days or a month. Current yield will be computed by assuming that an account was established with a single share (the "Single Share Account") on the first day of the period. To arrive at the quoted yield, the net change in the value of that Single Share Account for the period (which would include dividends accrued with respect to the share, and dividends declared on shares purchased with dividends accrued and paid, if any, but would not include realized gains and losses or unrealized appreciation or depreciation) will be multiplied by 365 and then divided by the number of days in the period, with the resulting figure carried to the nearest hundredth of one percent. The Trust may also furnish a quotation of effective yield that assumes the reinvestment of dividends for a 365-day year and a return for the entire year equal to the average annualized yield for the period, which will be computed by compounding the unannualized current yield for the period by adding 1 to the unannualized current yield, raising the sum to a power equal to 365 divided by the number of days in the period, and then subtracting 1 from the result. For the seven-day period ended August 31, 1997, the current yield and the effective yield (which assumes the reinvestment of dividends for a 365-day year and a return for the entire year equal to the annualized current yield for the period) for the Institutional Class were 5.10% and 5.23% and for the Private Investment Class were 4.85% and 4.97%, respectively. These performance numbers are quoted for illustration purposes only. Performance numbers for any other seven-day period may be substantially different from those quoted above. The Trust may compare the performance of a class or the performance of securities in which it may invest to: - IBC/Donoghue's Money Fund Averages, which are average yields of various types of money market funds that include the effect of compounding distributions; - other mutual funds, especially those with similar investment objectives. These comparisons may be based on data published by IBC/Donoghue's Money Fund Report of Holliston, Massachusetts or by Lipper Analytical Services, Inc., a widely recognized independent service located in Summit, New Jersey, which monitors the performance of mutual funds; - yields on other money market securities or averages of other money market securities as reported by the Federal Reserve Bulletin, by TeleRate, a financial information network, or by Bloomberg, a financial information firm; and - other fixed-income investments such as Certificates of Deposit (CDs). The principal value and interest rate of CDs and money market securities are fixed at the time of purchase whereas a class' yield will fluctuate. Unlike some CDs and certain other money market securities, money market mutual funds are not insured by 16 185 the FDIC. Investors should give consideration to the quality and maturity of the Portfolio's securities when comparing investment alternatives. The Trust may reference the growth and variety of money market mutual funds and AIM's innovation and participation in the industry. INVESTMENT PROGRAM AND RESTRICTIONS INVESTMENT PROGRAM The Portfolio seeks to achieve its objective by investing in high grade money market instruments. The money market instruments in which the Portfolio invests are considered to carry very little risk and accordingly may not have as high a yield as that available on money market instruments of lesser quality. The Portfolio invests exclusively in direct obligations of the U.S. Treasury, which include Treasury bills, notes and bonds. ELIGIBLE SECURITIES The Trust will invest in "Eligible Securities" as defined in Rule 2a-7 under the 1940 Act, which the Trust's Board of Trustees has determined to present minimal credit risk. INVESTMENT RESTRICTIONS As a matter of fundamental policy which may not be changed without a majority vote of shareholders of the Portfolio (as that term is defined under "General Information about the Trust -- The Trust and its Shares"), the Portfolio may not: (1) concentrate more than 25% of the value of its total assets in the securities of one or more issuers conducting their principal business activities in the same industry, provided that there is no limitation with respect to investments in obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities and bank instruments, such as CDs, bankers' acceptances, time deposits and bank repurchase agreements; (2) borrow money or issue senior securities except (a) for temporary or emergency purposes (e.g., in order to facilitate the orderly sale of portfolio securities or to accommodate abnormally heavy redemption requests), the Portfolio may borrow money from banks or obtain funds by entering into reverse repurchase agreements, and (b) to the extent that entering into commitments to purchase securities in accordance with the Portfolio's investment program may be considered the issuance of senior securities, provided that the Portfolio will not purchase portfolio securities while borrowings in excess of 5% of its total assets are outstanding; (3) mortgage, pledge or hypothecate any assets except to secure permitted borrowings and except for reverse repurchase agreements and then only in an amount up to 33-1/3% of the value of its total assets at the time of borrowing or entering into a reverse repurchase agreement; (4) make loans of money or securities other than (a) through the purchase of debt securities in accordance with the Portfolio's investment program, (b) by entering into repurchase agreements and (c) by lending portfolio securities to the extent permitted by law or regulation; (5) underwrite securities issued by any other person, except to the extent that the purchase of securities and the later disposition of such securities in accordance with the Portfolio's investment program may be deemed an underwriting; (6) invest in real estate, except that the Portfolio may purchase and sell securities secured by real estate or interests therein or issued by issuers which invest in real estate or interests therein; (7) purchase or sell commodities or commodity futures contracts, purchase securities on margin, make short sales or invest in puts or calls; or (8) invest in any obligation not payable as to principal and interest in United States currency. OTHER INVESTMENT POLICIES The Portfolio does not intend to invest in companies for the purpose of exercising control or management, except that the Portfolio may purchase securities of other investment companies to the extent permitted by applicable law or exemptive order. The Portfolio may also lend its portfolio securities in amounts up to 33-1/3% of its total assets to financial institutions in accordance with the investment restrictions of the Portfolio. Such loans would involve risks of delay in receiving additional collateral in the event the value of the collateral decreased below the value of the securities loaned, or of delay in recovering the securities loaned, or even loss of rights in the collateral should the borrower of the securities fail financially. However, loans will be made only to borrowers deemed by AIM to be of good standing and only when, in AIM's judgment, the income to be earned from the loans justifies the attendant risks. None of the foregoing policies is fundamental. 17 186 PORTFOLIO TRANSACTIONS AIM is responsible for decisions to buy and sell securities for the Portfolio, broker-dealer selection and negotiation of commission rates. Since purchases and sales of portfolio securities by the Portfolio are usually principal transactions, the Portfolio incurs little or no brokerage commissions. Portfolio securities are normally purchased directly from the issuer or from a market maker for the securities. The purchase price paid to dealers serving as market makers may include a spread between the bid and asked prices. The Portfolio may also purchase securities from underwriters at prices which include a commission paid by the issuer to the underwriter. The Portfolio does not seek to profit from short-term trading, and will generally (but not always) hold portfolio securities to maturity, but AIM may seek to enhance the yield of the Portfolio by taking advantage of yield disparities or other factors that occur in the money markets. For example, market conditions frequently result in similar securities trading at different prices. AIM may dispose of any portfolio security prior to its maturity if such disposition and reinvestment of proceeds are expected to enhance yield consistent with AIM's judgment as to desirable portfolio maturity structure or if such disposition is believed to be advisable due to other circumstances or conditions. The amortized cost method of valuing portfolio securities requires that the Portfolio maintain an average weighted portfolio maturity of ninety days or less. Thus, there is likely to be relatively high portfolio turnover, but since brokerage commissions are not normally paid on money market instruments, the high rate of portfolio turnover is not expected to have a material effect on the net income or expenses of the Portfolio. AIM's primary consideration in effecting a security transaction is to obtain the best net price and the most favorable execution of the order. To the extent that the execution and prices offered by more than one dealer are comparable, AIM may, in its discretion, effect transactions with dealers that furnish statistical, research or other information or services which are deemed by AIM to be beneficial to the Portfolio's investment program. Research services received from broker-dealers supplement AIM's own research (and the research of sub-advisors to other clients of AIM), and may include the following types of information: statistical and background information on the U.S. and foreign economies, industry groups and individual companies; forecasts and interpretations with respect to U.S. and foreign economies, securities, markets specific industry groups and individual companies; information on federal, state, local and foreign political developments; portfolio management strategies, performance information on securities, indexes and investment accounts; information concerning prices of securities; and information supplied by specialized services to AIM and to the Trust's trustees with respect to the performance, investment activities and fees and expenses of other mutual funds. Such information may be communicated electronically, orally or in written form. Research services may also include the providing of equipment used to communicate research information, the providing of specialized consultations with AIM personnel with respect to computerized systems and data furnished to AIM as a component of other research services, the arranging of meetings with management of companies and the providing of access to consultants who supply research information. Certain research services furnished by dealers may be useful to AIM with respect to clients other than the Portfolio. Similarly, any research services received by AIM through placement of portfolio transactions of other clients may be of value to AIM in fulfilling its obligations to the Portfolio. AIM is of the opinion that the material received is beneficial in supplementing AIM's research and analysis, and, therefore, it may benefit the Portfolio by improving the quality of AIM's investment advice. The advisory fees paid by the Portfolio are not reduced because AIM receives such services. From time to time, the Trust may sell a security, or purchase a security from an AIM Fund or another investment account advised by AIM or A I M Capital Management, Inc. ("AIM Capital") when such transactions comply with applicable rules and regulations and are deemed consistent with the investment objective(s) and policies of the investment accounts advised by AIM or AIM Capital. Procedures pursuant to Rule 17a-7 under the 1940 Act regarding transactions between investment accounts advised by AIM or AIM Capital have been adopted by the Boards of Directors/Trustees of the various AIM Funds, including the Trust. Although such transactions may result in custodian, tax or other related expenses, no brokerage commissions or other direct transaction costs are generated by transactions among the investment accounts advised by AIM or AIM Capital. Provisions of the 1940 Act and rules and regulations thereunder have been construed to prohibit the Trust from purchasing securities or instruments from, or selling securities or instruments to, any holder of 5% or more of the voting securities of any investment company managed or advised by AIM. The Trust has obtained an order of exemption from the SEC which permits the Trust to engage in certain transactions with certain 5% holders, if the Trust complies with conditions and procedures designed to ensure that such transactions are executed at fair market value and present no conflicts of interest. AIM and its affiliates manage several other investment accounts, some of which may have objectives similar to the Portfolio's. It is possible that at times identical securities will be acceptable for one or more of such investment accounts. However, the position of each account in the securities of the same issue may vary and the length of time that each account may choose to hold its investment in the securities of the same issue may likewise 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 Portfolio and one or more of these accounts and is considered at or about the same time, transactions in such securities will be allocated in good faith among such accounts, in accordance with applicable laws and regulations, in order to obtain the best net price and most favorable execution. The allocation and combination of simultaneous securities purchases on behalf of the Port- 18 187 folio will be made in the same way that such purchases are allocated among or combined with those of other AIM accounts. Simultaneous transactions could adversely affect the ability of the Portfolio to obtain or dispose of the full amount of a security which it seeks to purchase or sell. Under the 1940 Act, certain persons affiliated with the Trust are prohibited from dealing with the Portfolios as principal in any purchase or sale of securities unless an exemptive order allowing such transactions is obtained from the SEC. Furthermore, the 1940 Act prohibits the Trust from purchasing a security being publicly underwritten by a syndicate of which certain persons affiliated with the Trust are members except in accordance with certain conditions. These conditions may restrict the ability of the Portfolio to purchase money market obligations being publicly underwritten by such a syndicate, and the Portfolio may be required to wait until the syndicate has been terminated before buying such securities. At such time, the market price of the securities may be higher or lower than the original offering price. A person affiliated with the Trust may, from time to time, serve as placement agent or financial advisor to an issuer of money market obligations and be paid a fee by such issuer. The Portfolio may purchase such money market obligations directly from the issuer, provided that the purchase made in accordance with procedures adopted by the Trust's Board of Trustees and any such purchases are reviewed at least quarterly by the Trust's Board of Trustees and a determination is made that all such purchases were effected in compliance with such procedures, including a determination that the placement fee or other remuneration paid by the issuer to the person affiliated with the Trust was fair and reasonable in relation to the fees charged by others performing similar services. During the fiscal year ended August 31, 1997, no securities or instruments were purchased by the Portfolio from issuers who paid placement fees or other compensation to a broker affiliated with the Portfolio. TAX MATTERS The following is only a summary of certain additional tax considerations generally affecting the Portfolio and its shareholders that are not described in the Prospectus. No attempt is made to present a detailed explanation of the tax treatment of the Portfolio 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 The Portfolio has elected to be taxed as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). As a regulated investment company, the Portfolio is not subject to federal income tax on the portion of its net investment income (i.e., taxable interest, dividends and other taxable ordinary income, net of expenses) and capital gain net income (i.e., the excess of capital gains over capital losses) that it distributes to shareholders, provided that it distributes at least 90% of its investment company taxable income (i.e., net investment income and the excess of net short-term capital gain over net long-term capital loss) for the taxable year (the "Distribution Requirement"), and satisfies certain other requirements of the Code that are described below. Distributions by the Portfolio made during the taxable year or, under specified circumstances, within twelve months after the close of the taxable year, will be considered distributions of income and gains for the taxable year and can therefore satisfy the Distribution Requirement. In addition to satisfying the Distribution Requirement, a regulated investment company (1) must derive at least 90% of its gross income from dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition of stock or securities or foreign currencies (to the extent such currency gains are directly related to the regulated investment company's principal business of investing in stock or securities) and other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities or currencies (the "Income Requirement"); and (2) must satisfy an asset diversification test in order to qualify for tax purposes as a regulated investment company (the "Asset Diversification Test"). Under the Asset Diversification Test, at the close of each quarter of the Portfolio's taxable year, at least 50% of the value of the Portfolio'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 Portfolio has not invested more than 5% of the value of the Portfolio's total assets in securities of such issuer and as to which the Portfolio 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 other issuer (other than U.S. Government securities and securities of other regulated investment companies), or in two or more issuers which the Portfolio controls and which are engaged in the same or similar trades or businesses. If for any taxable year the Portfolio 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 the Portfolio's current and accumulated earnings and profits. Such distributions generally will be eligible for the dividends received deduction in the case of corporate shareholders. 19 188 EXCISE TAX ON REGULATED INVESTMENT COMPANIES A 4% non-deductible excise tax is imposed on a regulated investment company that fails to distribute in each calendar year an amount equal to 98% of ordinary taxable income for the calendar year and 98% of capital gain net income for the one-year period ended on October 31 of such calendar year (or, at the election of a regulated investment company having a taxable year ending November 30 or December 31, for its taxable year (a "taxable year election")). The balance of such income must be distributed during the next calendar year. For the foregoing purposes, a regulated investment company is treated as having distributed any amount on which it is subject to income tax for any taxable year ending in such calendar year in accordance with the guidance that has been provided by the Internal Revenue Service. The Portfolio intends to make sufficient distributions or deemed distributions of its ordinary taxable income and capital gain net income prior to the end of each calendar year to avoid liability for the excise tax. However, investors should note that the Portfolio may in certain circumstances be required to liquidate portfolio investments to make sufficient distributions to avoid excise tax liability. PORTFOLIO DISTRIBUTIONS The Portfolio 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 not qualify for the 70% dividends received deduction for corporations. Distributions by the Portfolio will be treated in the manner described above regardless of whether such distributions are paid in cash or reinvested in additional shares of the Portfolio. Shareholders receiving a distribution in the form of additional shares will be treated as receiving a distribution in an amount equal to the fair market value of the shares received, determined as of the reinvestment date. Ordinarily, shareholders are required to take distributions by the Portfolio into account in the year in which the distributions are made. However, distributions 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 Portfolio) on December 31 of such calendar year if such distributions are actually made 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. The Portfolio will be required in certain cases to withhold and remit to the U.S. Treasury 31% of ordinary income dividends and capital gain dividends, and the proceeds of redemption of shares, paid to any shareholder (1) who has provided either an incorrect tax identification number or no number at all, (2) who is subject to backup withholding by the Internal Revenue Service for failure to report the receipt of interest or dividend income properly, or (3) who has failed to certify to the Portfolio that it is not subject to backup withholding or that it is a corporation or other "exempt recipient." SALE OR REDEMPTION OF SHARES A shareholder will recognize gain or loss on the sale or redemption of shares of a class in an amount equal to the difference between the proceeds of the sale or redemption and the shareholder's adjusted tax basis in the shares. All or a portion of any loss so recognized may be disallowed if the shareholder purchases other shares of the class 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 class 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. However, any capital loss arising from the sale or redemption of shares held for six months or less will be treated as a long-term capital loss to the extent of the amount of capital gain dividends received on such shares. For this purpose, the special holding period rules of Code Section 246(c)(3) and (4) generally will apply in determining the holding period of shares. 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 the Portfolio is "effectively connected" with a U.S. trade or business carried on by such shareholder. If the income from the Portfolio is not effectively connected with a U.S. trade or business carried on by a foreign shareholder, dividends and distributions (other than capital gains dividends) will be subject to U.S. withholding tax at the rate of 30% (or lower treaty rate) upon the gross amount of the dividend or distribution. Such a foreign shareholder would generally be exempt from U.S. federal income tax on gains realized on the sale of shares of a class, capital gain dividends and amounts retained by the Portfolio that are designated as undistributed capital gains. If the income from the Portfolio is effectively connected with a U.S. trade or business carried on by a foreign shareholder, then ordinary income dividends, capital gain dividends and any gains realized upon the sale of shares of the Portfolio will be subject to U.S. federal income tax at the rates applicable to U.S. citizens or domestic corporations. 20 189 In the case of foreign noncorporate shareholders, the Portfolio may be required to withhold U.S. federal income tax at a rate of 31% on distributions that are otherwise exempt from withholding tax unless such shareholders furnish the Portfolio with proper notification of their foreign status. The tax consequences to a foreign shareholder entitled to claim the benefits of an applicable tax treaty may be different from those described herein. Foreign shareholders are urged to consult their own tax advisers with respect to the particular tax consequences to them of an investment in the Portfolio, including the applicability of foreign taxes. EFFECT OF FUTURE LEGISLATION; STATE AND 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 December 17, 1997. 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 dividends and capital gain dividends from regulated investment companies often differ from the rules for U.S. federal income taxation described above. It is anticipated that the ordinary income dividends paid by the Portfolio from net investment income will be exempt from state and local personal and, in some cases, corporate income taxes in many states. Shareholders are urged to consult their tax advisers as to the consequences of these and other state and local tax rules affecting their investment in the Portfolio. 21 190 FINANCIAL STATEMENTS FS 191 INDEPENDENT AUDITORS' REPORT To the Board of Trustees and Shareholders Short-Term Investments Trust: We have audited the accompanying statement of assets and liabilities of the Treasury TaxAdvantage Portfolio (a series portfolio of Short-Term Investments Trust), including the schedule of investments, as of August 31, 1997, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 1997, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Treasury TaxAdvantage Portfolio as of August 31, 1997, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with generally accepted accounting principles. /s/ KPMG Peat Marwick LLP KPMG Peat Marwick LLP Houston, Texas October 3, 1997 FS-1 192 SCHEDULE OF INVESTMENTS August 31, 1997
MATURITY PAR (000) VALUE U.S. TREASURY SECURITIES-97.50% U.S. TREASURY BILLS(a)-50.07% 5.08% 09/04/97 $ 1,260 $ 1,259,467 - ---------------------------------------------------------------------------------------- 5.10% 09/11/97 5,325 5,317,456 - ---------------------------------------------------------------------------------------- 5.12% 09/11/97 3,700 3,694,738 - ---------------------------------------------------------------------------------------- 5.27% 09/11/97 3,540 3,534,818 - ---------------------------------------------------------------------------------------- 5.39% 09/15/97 35,330 35,261,234 - ---------------------------------------------------------------------------------------- 4.985% 10/02/97 8,115 8,080,165 - ---------------------------------------------------------------------------------------- 5.10% 10/23/97 20,000 19,852,667 - ---------------------------------------------------------------------------------------- 5.145% 11/06/97 15,000 14,858,513 - ---------------------------------------------------------------------------------------- 5.16% 11/06/97 5,800 5,745,132 - ---------------------------------------------------------------------------------------- 5.155% 11/13/97 30,000 29,686,404 - ---------------------------------------------------------------------------------------- 5.05% 11/28/97 20,000 19,755,917 - ---------------------------------------------------------------------------------------- 5.08% 11/28/97 1,970 1,945,536 - ---------------------------------------------------------------------------------------- 148,992,047 - ---------------------------------------------------------------------------------------- U.S. TREASURY NOTES-47.43% 5.75% 09/30/97 28,000 28,007,430 - ---------------------------------------------------------------------------------------- 8.75% 10/15/97 30,885 31,006,112 - ---------------------------------------------------------------------------------------- 5.625% 10/31/97 32,000 32,009,268 - ---------------------------------------------------------------------------------------- 8.875% 11/15/97 19,000 19,123,626 - ---------------------------------------------------------------------------------------- 5.375% 11/30/97 31,000 30,989,280 - ---------------------------------------------------------------------------------------- 141,135,716 - ---------------------------------------------------------------------------------------- Total U.S. Treasury Securities 290,127,763 - ---------------------------------------------------------------------------------------- TOTAL INVESTMENTS-97.50% 290,127,763(b) - ---------------------------------------------------------------------------------------- OTHER ASSETS LESS LIABILITIES-2.50% 7,435,017 - ---------------------------------------------------------------------------------------- NET ASSETS-100.00% $297,562,780 ========================================================================================
(a) U.S. Treasury bills are traded on a discount basis. In such cases the interest rate shown represents the rate of discount paid or received at the time of purchase by the Portfolio. (b) Also represents cost for federal income tax purposes. See Notes to Financial Statements. FS-2 193 STATEMENT OF ASSETS AND LIABILITIES August 31, 1997 ASSETS: Investments, at value (amortized cost) $290,127,763 - ---------------------------------------------------------------------------- Cash 4,236 - ---------------------------------------------------------------------------- Receivables for: Interest 3,233,140 - ---------------------------------------------------------------------------- Investments sold 60,588,116 - ---------------------------------------------------------------------------- Investment for deferred compensation plan 19,053 - ---------------------------------------------------------------------------- Other assets 4,805 - ---------------------------------------------------------------------------- Total assets 353,977,113 - ---------------------------------------------------------------------------- LIABILITIES: Payables for: Investments purchased 55,017,151 - ---------------------------------------------------------------------------- Dividends 1,280,331 - ---------------------------------------------------------------------------- Deferred compensation 19,053 - ---------------------------------------------------------------------------- Accrued advisory fees 38,536 - ---------------------------------------------------------------------------- Accrued distribution fees 7,613 - ---------------------------------------------------------------------------- Accrued transfer agent fees 2,500 - ---------------------------------------------------------------------------- Accrued trustees' fees 684 - ---------------------------------------------------------------------------- Accrued administrative services fees 4,679 - ---------------------------------------------------------------------------- Accrued operating expenses 43,786 - ---------------------------------------------------------------------------- Total liabilities 56,414,333 - ---------------------------------------------------------------------------- NET ASSETS $297,562,780 ============================================================================ NET ASSETS: Institutional Class $258,251,179 ============================================================================ Private Investment Class $ 39,311,601 ============================================================================ SHARES OF BENEFICIAL INTEREST, $.01 PAR VALUE PER SHARE: Institutional Class 258,076,160 ============================================================================ Private Investment Class 39,285,316 ============================================================================ NET ASSET VALUE PER SHARE: Net asset value, offering and redemption price per share $ 1.00 ============================================================================
See Notes to Financial Statements. FS-3 194 STATEMENT OF OPERATIONS For the year ended August 31, 1997 INVESTMENT INCOME: Interest income $20,141,650 - ------------------------------------------------------------------------- EXPENSES: Advisory fees 705,397 - ------------------------------------------------------------------------- Custodian fees 24,390 - ------------------------------------------------------------------------- Administrative services fees 56,844 - ------------------------------------------------------------------------- Trustees' fees and expenses 9,331 - ------------------------------------------------------------------------- Transfer agent fees 35,426 - ------------------------------------------------------------------------- Distribution fees (Note 2) 248,512 - ------------------------------------------------------------------------- Other 71,762 - ------------------------------------------------------------------------- Total expenses 1,151,662 - ------------------------------------------------------------------------- Less: Fee waivers and expense reimbursements (252,524) - ------------------------------------------------------------------------- Net expenses 899,138 - ------------------------------------------------------------------------- Net investment income 19,242,512 - ------------------------------------------------------------------------- Net realized gain on sales of investments 77,371 - ------------------------------------------------------------------------- Net increase in net assets resulting from operations $19,319,883 =========================================================================
STATEMENT OF CHANGES IN NET ASSETS For the years ended August 31, 1997 and 1996
1997 1996 ------------ ------------ OPERATIONS: Net investment income $ 19,242,512 $ 22,487,304 - ----------------------------------------------------------------------------------------- Net realized gain on sales of investments 77,371 55,902 - ----------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 19,319,883 22,543,206 - ----------------------------------------------------------------------------------------- Distributions to shareholders from net investment income: Institutional Class (16,879,485) (21,490,375) - ----------------------------------------------------------------------------------------- Private Class (2,363,027) (996,929) - ----------------------------------------------------------------------------------------- Share transactions-net (159,710,741) 57,341,150 - ----------------------------------------------------------------------------------------- Net increase (decrease) in net assets (159,633,370) 57,397,052 - ----------------------------------------------------------------------------------------- NET ASSETS: Beginning of period 457,196,150 399,799,098 - ----------------------------------------------------------------------------------------- End of period $297,562,780 $457,196,150 - ----------------------------------------------------------------------------------------- NET ASSETS CONSIST OF: Shares of beneficial interest $297,361,476 $457,072,217 - ----------------------------------------------------------------------------------------- Undistributed net realized gain on sales of investments 201,304 123,933 - ----------------------------------------------------------------------------------------- $297,562,780 $457,196,150 =========================================================================================
See Notes to Financial Statements. FS-4 195 NOTES TO FINANCIAL STATEMENTS August 31, 1997 NOTE 1-SIGNIFICANT ACCOUNTING POLICIES Short-Term Investments Trust (the "Fund") is registered under the Investment Company Act of 1940, as amended, as an open-end series, diversified management investment company. The Fund is organized as a Delaware business trust consisting of two different portfolios, each of which offers separate series of shares: the Treasury Portfolio and the Treasury TaxAdvantage Portfolio. Information presented in these financial statements pertains only to the Treasury TaxAdvantage Portfolio (the "Portfolio") with assets, liabilities and operations of each portfolio accounted for separately. The Portfolio consists of two different classes of shares: the Institutional Class and the Private Investment Class. Matters affecting each class are voted on exclusively by the shareholders of each class. The Portfolio is a money market fund whose investment objective is the maximization of current income to the extent consistent with the preservation of capital and the maintenance of liquidity. The following is a summary of the significant accounting policies followed by the Portfolio in the preparation of its financial statements. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of these financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. A. Security Valuations-The Portfolio invests only in securities which have maturities of 397 days or less. The securities are valued on the basis of amortized cost which approximates market value. This method values a security at its cost on the date of purchase and thereafter assumes a constant amortization to maturity of any discount or premium. B. Securities Transactions, Investment Income and Distributions-Securities transactions are accounted for on a trade date basis. Realized gains or losses are computed on the basis of specific identification of the securities sold. Interest income, adjusted for amortization of premiums and discounts on investments, is accrued daily. Dividends to shareholders are declared daily and are paid on the first business day of the following month. C. Federal Income Taxes-The Portfolio intends to comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and, as such, will not be subject to federal income taxes on otherwise taxable income (including net realized capital gains) which is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. D. Expenses-Distribution and transfer agency expenses directly attributable to a class of shares are charged to that class' operations. All other expenses are allocated among the classes. NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund has entered into a master investment advisory agreement with A I M Advisors, Inc. ("AIM"). Under the terms of the master advisory agreement, AIM receives a monthly fee with respect to the Portfolio calculated by applying a monthly rate, based upon the following annual rates, to the average daily net assets of the Portfolio: NET ASSETS RATE - --------------------------------------------------------------------- First $250 million 0.20% - --------------------------------------------------------------------- Over $250 million to $500 million 0.15% - --------------------------------------------------------------------- Over $500 million 0.10% - ---------------------------------------------------------------------
During the year ended August 31, 1997, AIM voluntarily waived advisory fees of $123,468 and assumed expenses of $4,800. The Portfolio, pursuant to a master administrative services agreement with AIM, has agreed to reimburse AIM for certain costs incurred in providing accounting services to the Portfolio. During the year ended August 31, 1997, the Portfolio reimbursed AIM $56,844 for such services. The Portfolio, pursuant to a transfer agency and service agreement, has agreed to pay AIM Institutional Fund Services, Inc. ("AIFS") a fee for providing transfer agent and shareholder services to the Fund. FS-5 196 During the year ended August 31, 1997, the Portfolio paid AIFS $35,426 for such services. On September 19, 1997, the Board of Trustees of the Fund approved the appointment of A I M Fund Services, Inc. ("AFS") as transfer agent of the Fund to be effective in late 1997 or early 1998. Under the terms of a master distribution agreement between Fund Management Company ("FMC") and the Fund, FMC acts as the exclusive distributor of the Fund's shares. The Fund has adopted a master distribution plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act with respect to the Private Investment Class. The Plan provides that the Private Investment Class may pay up to a 0.50% maximum annual rate of the Private Investment Class' average daily net assets. Of this amount, the Fund may pay an asset-based sales charge to FMC and the Fund may pay a service fee of 0.25% of the average daily net assets of the Private Investment Class to selected banks, broker-dealers and other financial institutions who offer continuing personal shareholder services to their customers who purchase and own shares of the Private Investment Class. Any amounts not paid as a service fee under such Plan would constitute an asset- based sales charge. The Plan also imposes a cap on the total amount of sales charges, including asset-based sales charges, that may be paid by the Portfolio with respect to the Private Investment Class. During the year ended August 31, 1997, the Private Investment Class paid $124,256 as compensation under the Plan. FMC waived fees of $124,256 for the same period. Certain officers and trustees of the Trust are officers of AIM, FMC, AFS and AIFS. During the year ended August 31, 1997, the Portfolio paid legal fees of $4,209 for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the Board of Trustees. A member of that firm is a trustee of the Fund. NOTE 3-TRUSTEES' FEES Trustees' fees represent remuneration paid or accrued to each trustee who is not an "interested person" of AIM. The Fund may invest trustees' fees, if so elected by a trustee, in mutual fund shares in accordance with a deferred compensation plan. NOTE 4-SHARE INFORMATION Changes in shares outstanding for the years ended August 31, 1997, and 1996 were as follows:
1997 1996 -------------------------------- -------------------------------- SHARES AMOUNT SHARES AMOUNT -------------- --------------- -------------- --------------- Sold: Institutional Class 1,249,698,433 $ 1,249,698,433 1,931,081,349 $ 1,931,081,349 - --------------------------------------------------------------------------------------------------- Private Investment Class 274,981,089 274,981,089 173,175,235 173,175,235 - --------------------------------------------------------------------------------------------------- Issued as reinvestment of dividends: Institutional Class 425,111 425,111 279,901 279,901 - --------------------------------------------------------------------------------------------------- Private Investment Class 479,712 479,712 215,983 215,983 - --------------------------------------------------------------------------------------------------- Reacquired: Institutional Class (1,399,155,040) (1,399,155,040) (1,918,562,346) (1,918,562,346) - --------------------------------------------------------------------------------------------------- Private Investment Class (286,140,046) (286,140,046) (128,848,972) (128,848,972) - --------------------------------------------------------------------------------------------------- Net increase (decrease) (159,710,741) $ (159,710,741) 57,341,150 $ 57,341,150 ===================================================================================================
FS-6 197 NOTE 5-FINANCIAL HIGHLIGHTS INSTITUTIONAL CLASS: Shown below are the financial highlights for a share outstanding of the Institutional Class for each of the years in the five-year period ended August 31, 1997.
1997 1996 1995 1994 1993 -------- -------- -------- -------- -------- Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- Income from investment operations: Net investment income 0.05 0.05 0.05 0.03 0.03 -------- -------- -------- -------- -------- Less distributions: Dividends from net investment income (0.05) (0.05) (0.05) (0.03) (0.03) -------- -------- -------- -------- -------- Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== Total return 5.13% 5.19% 5.35% 3.29% 2.96% ======== ======== ======== ======== ======== Ratios/supplemental data: Net assets, end of period (000s omitted) $258,251 $407,218 $394,376 $403,882 $434,693 ======== ======== ======== ======== ======== Ratio of expenses to average net assets(a) 0.20%(b) 0.20% 0.20% 0.20% 0.20% ======== ======== ======== ======== ======== Ratio of net investment income to average net assets(c).... 5.00%(b) 5.06% 5.21% 3.23% 2.93% ======== ======== ======== ======== ========
(a) After fee waivers and/or expense reimbursements. Ratios of expenses to average net assets prior to fee waivers and/or expense reimbursements were 0.23% for the periods 1997-1994, respectively. (b) Ratios are based on average net assets of $337,228,562. (c) After fee waivers and/or expense reimbursements. Ratios of net investment income to average net assets prior to fee waivers and/or expense reimbursements were 4.97%, 5.04%, 5.18% and 3.20% for the periods 1997-1994, respectively. PRIVATE INVESTMENT CLASS: Shown below are the financial highlights for a share outstanding of the Private Investment Class for each of the years in the two-year period ended August 31, 1997 and the period December 21, 1994 (date operations commenced) through August 31, 1995.
1997 1996 1995 ------- ------- ------ Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 ======================================================= ======= ======= ====== Income from investment operations: Net investment income 0.05 0.05 0.04 ======================================================= ======= ======= ====== Less distributions: Dividends from net investment income (0.05) (0.05) (0.04) ======================================================= ======= ======= ====== Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 ======================================================= ======= ======= ====== Total return 4.87% 4.93% 5.32%(a) ======================================================= ======= ======= ====== Ratios/supplemental data: Net assets, end of period (000s omitted) $39,312 $49,978 $5,423 ======================================================= ======= ======= ====== Ratio of expenses to average net assets(b) 0.45%(c) 0.45% 0.45%(a) ======================================================= ======= ======= ====== Ratio of net investment income to average net assets(d) 4.75%(c) 4.72% 5.21%(a) ======================================================= ======= ======= ======
(a) Annualized. (b) After fee waivers and/or expense reimbursements. Ratios of expenses to average net assets prior to fee waivers and/or expense reimbursements were 0.74%, 0.85% and 1.02% (annualized) for the periods 1997-1995, respectively. (c) Ratios are based on average net assets of $49,702,532. (d) After fee waivers and/or expense reimbursements. Ratios of net investment income to average net assets prior to fee waivers and/or expense reimbursements were 4.46%, 4.32% and 4.64% (annualized) for the periods 1997-1995, respectively. FS-7 198 PART C OTHER INFORMATION Item 24. (a) Financial Statements 1. Treasury Portfolio - Cash Management Class In Part A: Financial Highlights as of August 31, 1997 (audited) In Part B: (1) Independent Auditors' Report (2) Financial Statements as of August 31, 1997 (audited) In Part C: None 2. Treasury Portfolio - Institutional Class In Part A: Financial Highlights as of August 31, 1997 (audited) In Part B: (1) Independent Auditors' Report (2) Financial Statements as of August 31, 1997 (audited) In Part C: None 3. Treasury Portfolio - Personal Investment Class In Part A: Financial Highlights as of August 31, 1997 (audited) In Part B: (1) Independent Auditors' Report (2) Financial Statements as of August 31, 1997 (audited) In Part C: None 4. Treasury Portfolio - Private Investment Class In Part A: Financial Highlights as of August 31, 1997 (audited) In Part B: (1) Independent Auditors' Report (2) Financial Statements as of August 31, 1997 (audited) In Part C: None 5. Treasury Portfolio - Resource Class In Part A: Financial Highlights as of August 31, 1997 (audited) In Part B: (1) Independent Auditors' Report (2) Financial Statements as of August 31, 1997 (audited) In Part C: None
1 199 6. Treasury TaxAdvantage Portfolio - Institutional Class In Part A: Financial Highlights as of August 31, 1997 (audited) In Part B: (1) Independent Auditors' Report (2) Financial Statements as of August 31, 1997 (audited) In Part C: None 7. Treasury TaxAdvantage Portfolio - Private Investment Class In Part A: Financial Highlights as of August 31, 1997 (audited) In Part B: (1) Independent Auditors' Report (2) Financial Statements as of August 31, 1997 (audited) In Part C: None
(b) Exhibits
Exhibit Number Description - ------ ------------------------------------------------------------------ (1) - (a) Certificate of Trust of Registrant was filed as an exhibit to Registrant's Post-Effective Amendment No. 26 on October 15, 1993, and is filed electronically herewith. (b) Agreement and Declaration of Trust of Registrant was filed as an exhibit to Registrant's Post-Effective Amendment No. 26 on October 15, 1993, and was filed electronically as an Exhibit to Registrant's Post-Effective Amendment No. 28 on November 13, 1995, and is hereby incorporated by reference. (c) First Amendment, dated September 11, 1993, to the Registrant's Agreement and Declaration of Trust was filed as an exhibit to Registrant's Post-Effective Amendment No. 26 on October 15, 1993, and was filed electronically as an Exhibit to Registrant's Post-Effective Amendment No. 28 on November 13, 1995, and is hereby incorporated by reference. (d) Second Amendment, dated August 4, 1994, to the Registrant's Agreement and Declaration of Trust was filed electronically as an Exhibit to Registrant's Post-Effective Amendment No. 28 on November 13, 1995, and is hereby incorporated by reference. (e) Third Amendment, dated September 19, 1995, to the Registrant's Agreement and Declaration of Trust was filed electronically as an Exhibit to Registrant's Post- Effective Amendment No. 29 on December 18, 1996, and is hereby incorporated by reference. (f) Fourth Amendment, dated June 12, 1997, to the Registrant's Agreement and Declaration of Trust, is filed herewith electronically.
2 200
Exhibit Number Description - ------ ------------------------------------------------------------------ (2) - (a) By-Laws of Registrant was filed as an exhibit to Registrant's Post-Effective Amendment No. 26 on October 15, 1993, and was filed electronically as an Exhibit to Registrant's Post-Effective Amendment No. 28 on November 13, 1995. (b) Amendment to the By-Laws of Registrant, adopted December 2, 1993, was filed electronically as an Exhibit to Registrant's Post-Effective Amendment No. 28 on November 13, 1995. (c) Second Amendment to the By-Laws of Registrant, dated March 14, 1995, was filed as an Exhibit to Registrants Post- Effective Amendment No. 29 on December 18, 1996. (d) Amended and Restated By-Laws of Registrant, dated December 11, 1996, is filed herewith electronically. (3) - Certain Voting Trust Agreements - None. (4) - (a) Form of Specimen Certificate representing shares of the Treasury TaxAdvantage Portfolio was filed as an Exhibit to Registrant's Post-Effective Amendment No. 26 on October 15, 1993, and is hereby incorporated by reference. (b) Form of Specimen Certificate representing shares of the Institutional Class of the Treasury Portfolio was filed as an Exhibit to Registrant's Post-Effective Amendment No. 26 on October 15, 1993, and is hereby incorporated by reference. (c) Form of Specimen Certificate representing shares of the Personal Investment Class of the Treasury Portfolio was filed as an Exhibit to Registrant's Post-Effective Amendment No. 26 on October 15, 1993, and is hereby incorporated by reference. (d) Form of Specimen Certificate representing shares of the Private Investment Class of the Treasury Portfolio was filed as an Exhibit to Registrant's Post-Effective Amendment No. 26 on October 15, 1993, and is hereby incorporated by reference. (e) Form of Specimen Certificate representing shares of the Cash Management Class of the Treasury Portfolio was filed as an Exhibit to Registrant's Post-Effective Amendment No. 26 on October 15, 1993, and is hereby incorporated by reference. (f) Form of Specimen Certificate representing shares of the Private Investment Class of the Treasury TaxAdvantage Portfolio was filed as an Exhibit to Registrant's Post- Effective Amendment No. 27 on November 14, 1994, and is hereby incorporated by reference. (g) Form of Specimen Certificate representing shares of the Resource Class of the Treasury Portfolio was filed electronically as an Exhibit to Registrant's Post-Effective Amendment No. 28 on November 13, 1995, and is hereby incorporated by reference.
3 201
Exhibit Number Description - ------ ------------------------------------------------------------------------ (5) - (a) Master Investment Advisory Agreement, dated October 18, 1993, between A I M Advisors, Inc. and Registrant with respect to the Treasury Portfolio and the Treasury TaxAdvantage Portfolio was filed as an Exhibit to Registrant's Post-Effective Amendment No. 27, on November 14, 1994. (b) Master Investment Advisory Agreement, dated February 28, 1997, between AIM Advisors, Inc. and Registrant with respect to the Treasury Portfolio and the Treasury TaxAdvantage Portfolio is filed herewith electronically. (6) - (a) Master Distribution Agreement, dated October 18, 1993, between Fund Management Company and Registrant with respect to the Treasury and Treasury TaxAdvantage Portfolio was filed as an Exhibit to Registrant's Post- Effective Amendment No. 27 on November 14, 1994, and was filed electronically as an Exhibit to Registrant's Post-Effective Amendment No. 28 on November 13, 1995. (b) Amendment No. 1, dated December 8, 1994, to Master Distribution Agreement, dated October 18, 1993, between Fund Management Company and Registrant was filed electronically as an Exhibit to Registrant's Post-Effective Amendment No. 28 on November 13, 1995. (c) Amendment No. 2, dated September 19, 1995, to the Master Distribution Agreement, dated October 18, 1993, between Fund Management Company and Registrant was filed electronically as an Exhibit to Registrant's Post- Effective Amendment No. 29 on December 18, 1996. (d) Master Distribution Agreement, dated February 28, 1997 between Registrant and Fund Management Company with respect to the Treasury and Treasury TaxAdvantage Portfolio is filed herewith electronically. (7) - (a) Retirement Plan for Eligible Directors/Trustees was filed as an exhibit to Registrant's Post-Effective Amendment No. 27 on November 14, 1994, and is hereby incorporated by reference. (b) Form of Deferred Compensation Agreement is filed herewith electronically. (8) - (a) Custodian Agreement, dated October 15, 1993, between The Bank of New York and Registrant, was filed as an Exhibit to Registrant's Post-Effective Amendment No. 27 on November 14, 1994 and is hereby incorporated by reference. (b) Amendment, dated July 30, 1996, to the Custodian Agreement, dated October 15, 1993, between The Bank of New York and Registrant was filed as an Exhibit to Post- Effective Amendment No. 29 on December 18, 1996 and is hereby incorporated by reference. (9) - (a) Transfer Agency and Service Agreement, dated September 16, 1994, between A I M Institutional Fund Services, Inc. and Registrant was filed electronically as an Exhibit to Registrant's Post-Effective Amendment No. 28 on November 13, 1995, and is hereby incorporated by reference.
4 202
Exhibit Number Description - ------ ------------------------------------------------------------------------ (b) Amendment No. 1, dated July 1, 1995, to the Transfer Agency and Service Agreement, dated September 16, 1994, between A I M Institutional Fund Services, Inc. and Registrant was filed electronically as an Exhibit to Registrant's Post-Effective Amendment No. 28 on November 13, 1995, and is hereby incorporated by reference. (c) Amendment No. 2, dated July 1, 1996, to the Transfer Agency and Service Agreement, dated September 16, 1994, between A I M Institutional Fund Services, Inc. and Registrant, is filed electronically herewith. (d) Amendment No. 3, dated July 1, 1997, to the Transfer Agency and Service Agreement, dated September 16, 1994 between A I M Institutional Fund Services, Inc. and Registrant, is filed electronically herewith. (e) Transfer Agency and Service Agreement, dated December 29, 1997, between AIM Fund Services, Inc. and Registrant is filed herewith electronically. (f) Master Administrative Services Agreement, dated October 18, 1993, between A I M Advisors, Inc. and Registrant was filed as an Exhibit to Registrant's Post-Effective Amendment No. 27 on November 14, 1994, and was filed electronically as an Exhibit to Registrant's Post-Effective Amendment No. 28 on November 13, 1995. (g) Amendment No. 1, dated November 2, 1995, to the Master Administrative Services Agreement, dated October 18, 1993, between A I M Advisors, Inc. and Registrant was filed as an Exhibit to Registrant's Post-Effective Amendment No. 29 on December 18, 1996. (h) Master Administrative Services Agreement, dated February 28, 1997, between A I M Advisors, Inc. and Registrant is filed herewith electronically. (10) - (a) Opinion of Ballard Spahr Andrews & Ingersoll was filed as an exhibit to Registrant's Rule 24f-2 Notice for the fiscal year ending August 31, 1996. (11) - (a) Consent of Ballard Spahr Andrews & Ingersoll is filed herewith electronically. (b) Consent of KPMG Peat Marwick LLP is filed herewith electronically. (12) - Other Financial Statements - None. (13) - Agreement Concerning Initial Capitalization - None. (14) - Retirement Plans - None. (15) - (a) Master Distribution Plan pursuant to Rule 12b-1, effective as of August 6, 1993, as amended as of December 8, 1994, as further amended as of September 19, 1995, and as further amended as of December 5, 1995, and related forms of agreement with respect to the Personal Investment Class, Private Investment Class, Resource Class and the Cash Management Class of the Treasury Portfolio and the Private Investment Class of the Treasury TaxAdvantage Portfolio was filed as an Exhibit to Post-Effective Amendment No. 29 on December 18, 1996.
5 203
Exhibit Number Description - ------ ------------------------------------------------------------------------ (b) Amended and Restated Master Distribution Plan to Rule 12b-1, effective as of June 30, 1997 and form of related agreement with respect to the Treasury and Treasury TaxAdvantage Portfolios is filed herewith electronically. (16) - Schedules of Yield and Performance Quotations were filed as an exhibit to Registrant's Post-Effective Amendment No. 14 on October 31, 1988, and are hereby incorporated by reference. (18) - (a) Multiple Class (Rule 18f-3) Plan was filed as an Exhibit to Post-Effective Amendment No. 29 on December 18, 1996. (b) Amended and Restated Multiple Class (Rule 18f-3) Plan is filed herewith electronically. (c) Second Amended and Restated Multiple Class (Rule 18f-3) Plan is filed herewith electronically. (27) - Financial Data Schedule is filed electronically herewith.
Item 25. Persons Controlled by or under Common Control with Registrant Furnish a list or diagram of all persons directly or indirectly controlled by or under common control with the Registrant and as to each such person indicate (1) if a company, the state or other sovereign power under the laws of which it is organized, and (2) the percentage of voting securities owned or other basis of control by the person, if any, immediately controlling it. None Item 26. Number of Holders of Securities State in substantially the tabular form indicated, as of a specified date within 90 days prior to the date of filing, the number of record holders of each class of securities of the Registrant.
Number of Record Holders Title Class December 1, 1997 -------------------------------- ---------------- Treasury Portfolio Cash Management Class 12 Institutional Class 91 Personal Investment Class 7 Private Investment Class 18 Resource Class 7 Treasury TaxAdvantage Portfolio Institutional Class 16 Private Investment Class 6
6 204 Item 27. Indemnification State the general effect of any contract, arrangements or statute under which any director, officer, underwriter or affiliated person of the Registrant is insured or indemnified in any manner against any liability which may be incurred in such capacity, other than insurance provided by any director, officer, affiliated person or underwriter for their own protection. Under the terms of the Registrant's Agreement and Declaration of Trust, the Registrant may indemnify any person who was or is a trustee, officer or employee of the Registrant to the maximum extent permitted by law; provided, however, that any such indemnification (unless ordered by a court) shall be made by the Registrant only as authorized in the specific case upon a determination that indemnification of such persons is proper in the circumstances. Such determination shall be made (i) by the Board of Trustees, by a majority vote of a quorum which consists of trustees who are neither "interested persons" of the Registrant, as defined in Section 2(a)(19) of the Investment Company Act of 1940, nor parties to the proceeding, or (ii) if the required quorum is not obtainable or, if a quorum of such trustees so directs, by independent legal counsel in a written opinion. No indemnification will be provided by the Registrant to any trustee or officer of the Registrant for any liability to the Registrant or shareholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of duty. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 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. Insurance coverage is provided under a joint Mutual Fund & Investment Advisory Professional and Directors & Officers Liability Policy, issued by ICI Mutual Insurance Company with a $25,000,000 limit of liability. Item 28. Business and Other Connections of Investment Advisor Describe any other business, profession, vocation or employment of a substantial nature in which each investment advisor of the Registrant, and each director, officer or partner of any such investment advisor, is or has been, at any time during the past two fiscal years, engaged for his own account or in the capacity of director, officer, employee, partner, or trustee. See each Statement of Additional Information, Part B under headings "General Information About the Trust - Investment Advisor" and "- Trustees and Officers" for information concerning A I M Advisors, Inc. Item 29. Principal Underwriters (a) Fund Management Company, the Registrant's principal underwriter of all of its shares also acts as a principal underwriter to the following investment companies: AIM Equity Funds, Inc. (Institutional Classes) 7 205 AIM Investment Securities Funds (AIM Limited Maturity Treasury Fund - Institutional Shares) Short-Term Investments Co. Tax-Free Investments Co. (b) The following table sets forth information with respect to each director, officer or partner of Fund Management Company:
Name and Principal Position and Offices Position and Offices Business Address* with Principal Underwriter with Registrant - ---------------- -------------------------- --------------- Charles T. Bauer Chairman of the Board of Chairman & Trustee Directors and Director J. Abbott Sprague President & Director Vice President Robert H. Graham Senior Vice President & Director President & Trustee Mark D. Santero Senior Vice President None John J. Arthur Vice President & Treasurer Senior Vice President & Treasurer Jesse H. Cole Vice President None Melville B. Cox Vice President & Chief Vice President Compliance Officer Carol F. Relihan Vice President, Director Senior Vice President & General Counsel & Secretary Stephen I. Winer Vice President, Assistant Secretary Assistant General Counsel & Assistant Secretary Nancy A. Beck Vice President None David E. Hessel Assistant Vice President, None Assistant Treasurer & Controller Jeffrey L. Horne Assistant Vice President None Robert Morris Assistant Vice President None Ann M. Srubar Assistant Vice President None Dana R. Sutton Assistant Vice President & Vice President & Assistant Treasurer Assistant Treasurer
- ---------------------------------- * 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173 8 206
Name and Principal Position and Offices Position and Offices Business Address* with Principal Underwriter with Registrant - ---------------- -------------------------- --------------- Nicholas D. White Assistant Vice President None Nancy L. Martin Assistant General Counsel & Assistant Secretary Assistant Secretary Ofelia M. Mayo Assistant General Counsel & Assistant Secretary Assistant Secretary Samuel D. Sirko Assistant General Counsel & Assistant Secretary Assistant Secretary Kathleen J. Pflueger Secretary Assistant Secretary
(c) Not Applicable Item 30. Location of Accounts and Records With respect to each account, book or other document required to be maintained by Section 31(a) of the 1940 Act and the Rules (17 CFR 270.31a-1 to 31a-3) promulgated thereunder, furnish the name and address of each person maintaining physical possession of each such account, book or other document. A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, will maintain physical possession of each such account, book or other document of the Registrant at its principal executive offices, except for those maintained by the Custodian, The Bank of New York, 90 Washington Street, 11th Floor, New York, New York 10286; and the Transfer Agent and Dividend Paying Agent, A I M Institutional Fund Services, Inc., 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173. Item 31. Management Services Furnish summary of the substantive provisions of management related service contract not discussed in Part I of this Form (because the contract was not believed to be material to a purchaser of securities of Registrant) under which services are provided to the Registrant, indicating the parties to the contract, the total dollars paid and by whom, for the last three fiscal years. None. Item 32. Undertakings (a) None (b) None. - -------------------- * 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173 9 207 (c) The Registrant undertakes to furnish each person to whom a prospectus is delivered with a copy of the applicable Portfolio's latest annual report to shareholders, upon request and without charge. 10 208 SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized, in the city of Houston, Texas on the 17th day of December, 1997. Registrant: SHORT-TERM INVESTMENTS TRUST By: /s/ ROBERT H. GRAHAM Robert H. Graham, President Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated:
SIGNATURES TITLE DATE ---------- ----- ---- /S/ CHARLES T. BAUER Chairman & Trustee December 17, 1997 (Charles T. Bauer) /S/ ROBERT H. GRAHAM Trustee & President December 17, 1997 (Robert H. Graham) (Principal Executive Officer) /S/ BRUCE L. CROCKETT Trustee December 17, 1997 (Bruce L. Crockett) /S/ OWEN DALY Trustee December 17, 1997 (Owen Daly II) /S/ JACK FIELDS Trustee December 17, 1997 (Jack Fields) /S/ CARL FRISCHLING Trustee December 17, 1997 (Carl Frischling) /S/ JOHN F. KROEGER Trustee December 17, 1997 (John F. Kroeger) /S/ LEWIS F. PENNOCK Trustee December 17, 1997 (Lewis F. Pennock) /S/ IAN W. ROBINSON Trustee December 17, 1997 (Ian W. Robinson) /S/ LOUIS S. SKLAR Trustee December 17, 1997 (Louis S. Sklar) Senior Vice President & /S/ JOHN J. ARTHUR Treasurer (Principal Financial December 17, 1997 (John J. Arthur) and Accounting Officer)
209 INDEX TO EXHIBITS
Exhibit Number ------ 1(f) Fourth Amendment to Agreement and Declaration of Turst, dated June 12, 1997 2(d) Amended and Restated By-Laws of Registrant, dated December 11, 1996 5(b) Master Investment Advisory Agreement, dated February 28, 1997, between Registrant and A I M Advisors, Inc. 6(d) Master Distribution Agreement, dated February 28, 1997, between Registrant and Fund Management Company 7(b) Form of Deferred Compensation Agreement 9(c) Amendment No. 2, dated July 1, 1996, to the Transfer Agency and Service Agreement, dated September 16, 1994, between Registrant and A I M Institutional Fund Services, Inc. 9(d) Amendment No. 3, dated July 1, 1997, to the Transfer Agency and Service Agreement, dated September 16, 1994, between Registrant and A I M Institutional Fund Services, Inc. 9(e) Transfer Agency and Service Agreement, dated December 29, 1997 between Registrant and AIM Fund Services, Inc. 9(h) Master Administrative Services Agreement, dated February 28, 1997, between Registrant and A I M Advisors, Inc. 11(a) Consent of Ballard Spahr Andrews & Ingersoll 11(b) Consent of KPMG Peat Marwick LLP 15(b) Amended and Restated Master Distribution Plan to Rule 12b-1, effective as of June 30, 1997 and form of related agreement 18(b) Amended and Restated Multiple Class (Rule 18f-3) Plan 18(c) Second Amended and Restated Multiple Class (Rule 18f-3) Plan 27 Financial Data Schedule
11 EX-99.B1.F 2 4TH AMEND. TO AGREEMENT AND DECLARATION OF TRUST 1 EXHIBIT 1(f) FOURTH AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST OF SHORT-TERM INVESTMENTS TRUST THIS FOURTH AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST OF SHORT-TERM INVESTMENTS TRUST (the "Amendment") is entered into the 12th day of June, 1997, among Charles T. Bauer, Bruce L. Crockett, Owen Daly II, Jack Fields, Carl Frischling, Robert H. Graham, John F. Kroeger, Lewis F. Pennock, Ian W. Robinson and Louis S. Sklar, as Trustees, and each person who became or becomes a Shareholder in accordance with the terms set forth in that certain Agreement and Declaration of Trust of AIM Investment Securities Funds entered into as of May 5, 1993, as amended (the "Agreement"). WHEREAS, Section 9.7 of the Agreement authorizes the Trustees without Shareholder vote to amend or otherwise supplement the Agreement by making an amendment; and WHEREAS, at a meeting duly called and held on the 12th day of June, 1997, the Trustees have resolved to amend the Agreement as hereinafter set forth. NOW, THEREFORE, the Trustees hereby amend the Agreement as herein set forth below: 1. Capitalized terms not specifically defined in this Amendment shall have the meanings ascribed to them in the Agreement. 2. New Section 9.9 is hereby added in full as follows: "Section 9.9. Shareholders' Right to Inspect Shareholder List. One or more persons who together and for at least six months have been Shareholders of at least five percent (5%) of the outstanding Shares of any Class may present to any officer or resident agent of the Trust a written request for a list of its Shareholders. Within twenty (20) days after such request is made, the Trust shall prepare and have available on file at its principal office a list verified under oath by one of its officers or its transfer agent or registrar which sets forth the name and address of each Shareholder and the number of Shares of each Class which the Shareholder holds. The rights provided for herein shall not extend to any person who is a beneficial owner but not also a record owner of Shares of the Trust." 3. With the exception of the amendment in the preceding paragraph 2 of this Amendment, the Agreement shall in all other respects remain in full force and effect. 4. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Amendment. 2 IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the Trust, have executed this Fourth Amendment to Agreement and Declaration of Trust of Short-Term Investments Trust as of the day first above written. /s/ CHARLES T. BAUER /s/ BRUCE L. CROCKETT - --------------------------- --------------------------- Charles T. Bauer, Trustee Bruce L. Crockett, Trustee /s/ OWEN DALY II /s/ JACK FIELDS - --------------------------- --------------------------- Owen Daly II, Trustee Jack Fields, Trustee /s/ CARL FRISCHLING /s/ ROBERT H. GRAHAM - --------------------------- --------------------------- Carl Frischling, Trustee Robert H. Graham, Trustee /s/ JOHN F. KROEGER /s/ LEWIS F. PENNOCK - --------------------------- --------------------------- John F. Kroeger, Trustee Lewis F. Pennock, Trustee /s/ IAN W. ROBINSON /s/ LOUIS S. SKLAR - --------------------------- --------------------------- Ian W. Robinson, Trustee Louis S. Sklar, Trustee [THIS IS THE SIGNATURE PAGE FOR THE FOURTH AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST OF SHORT-TERM INVESTMENTS TRUST] EX-99.B2.D 3 AMENDED AND RESTATED BY-LAWS 1 EXHIBIT 2(d) AMENDED AND RESTATED BYLAWS OF SHORT-TERM INVESTMENTS TRUST, A DELAWARE BUSINESS TRUST ADOPTED EFFECTIVE DECEMBER 11, 1996 2 TABLE OF CONTENTS ARTICLE I OFFICES ........................................... 1 Section 1. Registered Office........................................................................... 1 Section 2. Other Offices............................................................................... 1 ARTICLE II TRUSTEES ........................................... 1 Section 1. Number...................................................................................... 1 Section 2. Term........................................................................................ 1 Section 3. Vacancy..................................................................................... 2 Section 4. Delegation of Power......................................................................... 2 Section 5. Inability to Serve Full Term................................................................ 2 Section 6. Powers...................................................................................... 2 Section 7. Meetings of the Trustees.................................................................... 3 Section 8. Regular Meetings............................................................................ 3 Section 9. Notice of Regular Meeting................................................................... 3 Section 10. Notice of Special Meeting.................................................................. 3 Section 11. Quorum..................................................................................... 3 Section 12. Action Without Meeting..................................................................... 3 Section 13. Designation, Powers and Name of Committees................................................. 3 Section 14. Minutes of Committee....................................................................... 3 Section 15. Compensation of Trustees................................................................... 4 ARTICLE III OFFICERS ........................................... 4 Section 1. Executive Officers.......................................................................... 4 Section 2. Term of Office.............................................................................. 4 Section 3. President................................................................................... 4 Section 4. Chairman of the Board....................................................................... 4 Section 5. Other Officers.............................................................................. 4 Section 6. Secretary................................................................................... 5 Section 7. Treasurer................................................................................... 5 ARTICLE IV MEETINGS OF SHAREHOLDERS ................................... 5 Section 1. Purpose..................................................................................... 5 Section 2. Nominations of Trustees..................................................................... 6 Section 3. Election of Trustees........................................................................ 6 Section 4. Notice of Meeting........................................................................... 6 Section 5. Voting List................................................................................. 6 Section 6. Special Meetings............................................................................ 6 Section 7. Notice of Special Meeting................................................................... 6 Section 8. Conduct of Special Meeting.................................................................. 6 Section 9. Quorum...................................................................................... 7
i 3 Section 10. Organization of Meetings................................................................... 7 Section 11. Voting Standard............................................................................ 7 Section 12. Voting Procedure........................................................................... 7 Section 13. Action Without Meeting..................................................................... 8 ARTICLE V NOTICES ........................................... 8 Section 1. Methods of Giving Notice.................................................................... 8 Section 2. Written Waiver.............................................................................. 8 ARTICLE VI CERTIFICATES OF SHARES ................................... 9 Section 1. Issuance.................................................................................... 9 Section 2. Countersignature............................................................................ 9 Section 3. Lost Certificates........................................................................... 9 Section 4. Transfer of Shares.......................................................................... 9 Section 5. Fixing Record Date.......................................................................... 9 Section 6. Registered Shareholders.................................................................... 10 ARTICLE VII GENERAL PROVISIONS ..................................... 10 Section 1. Dividends and Distributions................................................................ 10 Section 2. Redemptions................................................................................ 10 Section 3. Indemnification............................................................................ 10 Section 4. Seal....................................................................................... 10 ARTICLE VIII AMENDMENTS.......................................... 11 Section 1. Amendments................................................................................. 11
ii 4 AMENDED AND RESTATED BYLAWS OF SHORT-TERM INVESTMENTS TRUST, A DELAWARE BUSINESS TRUST Capitalized terms not specifically defined herein shall have the meanings ascribed to them in the Agreement and Declaration of Trust. ARTICLE I OFFICES Section 1. Registered Office. The registered office of Short-Term Investments Trust (the "Trust") shall be in the County of New Castle, State of Delaware. Section 2. Other Offices. The Trust may also have offices at such other places both within and without the State of Delaware as the Trustees may from time to time determine or the business of the Trust may require. ARTICLE II TRUSTEES Section 1. Number. The number of Trustees shall initially be three, and thereafter shall be such number as shall be fixed from time to time by resolution of the Board of Trustees; provided, however, that the number of Trustees shall in no event be less than three nor more than fifteen. Section 2. Term. The Trustees shall hold office during the lifetime of the Trust, and until its termination as provided in the Agreement and Declaration of Trust; except (a) that any Trustee may resign his trusteeship or may retire by written instrument signed by him and delivered to the other Trustees, which shall take effect upon such delivery or upon such later date as is specified therein; (b) that any Trustee may be removed at any time by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal, specifying the date when such removal shall become effective; (c) that any Trustee who has died, become physically or mentally incapacitated by reason of disease or otherwise, or is otherwise unable to serve, may be retired by written instrument signed by a majority of the other Trustees, specifying the date of his retirement; and (d) that a Trustee may be removed at any meeting of the shareholders of the Trust. 1 5 Section 3. Vacancy. In case of the declination to serve, death, resignation, retirement or removal of a Trustee, or a Trustee is otherwise unable to serve, or an increase in the number of Trustees, a vacancy shall occur. Whenever a vacancy in the Trustees shall occur, until such vacancy is filled, the other Trustees shall have all the powers hereunder and the certification of the other Trustees of such vacancy shall be conclusive. In the case of an existing vacancy, the remaining Trustees may fill such vacancy by appointing such other person as they in their discretion shall see fit, or may leave such vacancy unfilled or may reduce the number of Trustees to not less than three Trustees. Such appointment shall be evidenced by a written instrument signed by a majority of the Trustees in office or by resolution of the Trustees, duly adopted, which shall be recorded in the minutes of a meeting of the Trustees, whereupon the appointment shall take effect. An appointment of a Trustee may be made by the Trustees then in office in anticipation of a vacancy to occur by reason of retirement, resignation or increase in number of Trustees effective at a later date, provided that said appointment shall become effective only at or after the effective date of said retirement, resignation or increase in number of Trustees. As soon as any Trustee appointed pursuant to Sections 2 and 3 of Article II of these Bylaws and the Agreement and Declaration of Trust shall have accepted this Trust, the trust estate shall vest in the new Trustee or Trustees, together with the continuing Trustees, without any further act or conveyance, and he shall be deemed a Trustee hereunder. Section 4. Delegation of Power. Any Trustee may, by power of attorney, delegate his power for a period not exceeding six months at any one time to any other Trustee or Trustees, provided that in no case shall less than two Trustees personally exercise the other powers hereunder except as herein otherwise expressly provided. Section 5. Inability to Serve Full Term. The declination to serve, death, resignation, retirement, removal, incapacity, or inability of the Trustees, or any one of them, shall not operate to terminate the Trust or to revoke any existing agency created pursuant to the terms of the Agreement and Declaration of Trust. Section 6. Powers. The Trustees shall have exclusive and absolute control over the trust property and over the business of the Trust to the same extent as if the Trustees were the sole owners of the trust property and business in their own right, but with such powers of delegation as may be permitted by the Agreement and Declaration of Trust. The Trustees shall have power to conduct the business of the Trust and carry on its operations in any and all of its branches and maintain offices both within and without the State of Delaware, in any and all states of the United States of America, in the District of Columbia, in any and all commonwealths, territories, dependencies, colonies, or possessions of the United States of America, and in any foreign jurisdiction and to do all such other things and execute all such instruments as they deem necessary, proper or desirable in order to promote the interests of the Trust although such things are not herein specifically mentioned. Any determination as to what is in the interests of the Trust may by the Trustees in good faith shall be conclusive. In construing the provisions of these Bylaws and the Agreement and Declaration of Trust, the presumption shall be in favor of a grant of power to the Trustees. 2 6 Section 7. Meetings of the Trustees. The Trustees of the Trust may hold meetings, both regular and special, either within or without the State of Delaware. Section 8. Regular Meetings. Regular meetings of the Board of Trustees shall be held each year, at such time and place as the Board of Trustees may determine. Section 9. Notice of Regular Meeting. Regular meetings of the Trustees may be held without notice at such time and at such place as shall from time to time be determined by the Trustees. Section 10. Notice of Special Meeting. Special meetings of the Trustees may be called by any Trustee on one day's notice to each Trustee, either personally, by telephone, by mail, by telegram or by telecopier. Section 11. Quorum. At all meetings of the Trustees one-third of the Trustees then in office (but in no event less than two Trustees) shall constitute a quorum for the transaction of business and the act of a majority of the Trustees present at any meeting at which there is a quorum shall be the act of the Board of Trustees, except as may be otherwise specifically provided by applicable law or by the Agreement and Declaration of Trust or these Bylaws. If a quorum shall not be present at any meeting of the Board of Trustees, the Trustees present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 12. Action Without Meeting. Unless otherwise restricted by the Agreement and Declaration of Trust or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Trustees or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee. Section 13. Designation, Powers and Name of Committees. The Board of Trustees may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of three or more of the Trustees of the Trust. The Board may designate one or more Trustee as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. Each committee, to the extent provided in the resolution, shall have and may exercise the powers of the Board of Trustees in the management of the business and affairs of the Trust; provided, however, that in the absence or disqualification of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not such members constitute a quorum, may unanimously appoint another member of the Board of Trustees to act at the meeting in the place of any such absent or disqualified member. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Trustees. Section 14. Minutes of Committee. Each committee shall keep regular minutes of its meetings and report the same to the Board of Trustees when required. 3 7 Section 15. Compensation of Trustees. The Trustees as such shall be entitled to reasonable compensation for their services as determined from time to time by the Board of Trustees. Nothing herein shall in any way prevent the employment of any Trustee for advisory, management, administrative, legal, accounting, investment banking, underwriting, brokerage, or investment dealer or other services and the payment for the same by the Trust. ARTICLE III OFFICERS Section 1. Executive Officers. The initial executive officers of the Trust shall be elected by the Board of Trustees as soon as practicable after the organization of the Trust. The executive officers may include a Chairman of the Board, and shall include a President, one or more Vice Presidents (the number thereof to be determined by the Board of Trustees), a Secretary and a Treasurer. The Chairman of the Board, if any, shall be selected from among the Trustees. The Board of Trustees may also in its discretion appoint Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers, and other officers, agents and employees, who shall have such authority and perform such duties as the Board may determine. The Board of Trustees may fill any vacancy which may occur in any office. Any two offices, except for those of President and Vice President, may be held by the same person, but no officer shall execute, acknowledge or verify any instrument on behalf of the Trust in more than one capacity, if such instrument is required by law or by these Bylaws to be executed, acknowledged or verified by two or more officers. Section 2. Term of Office. Unless otherwise specifically determined by the Board of Trustees, the officers shall serve at the pleasure of the Board of Trustees. If the Board of Trustees in its judgment finds that the best interests of the Trust will be served, the Board of Trustees may remove any officer of the Trust at any time with or without cause. Section 3. President. The President shall be the chief executive officer of the Trust and, subject to the Board of Trustees, shall generally manage the business and affairs of the Trust. If there is no Chairman of the Board, or if the Chairman of the Board has been appointed but is absent, the President shall, if present, preside at all meetings of the shareholders and the Board of Trustees. Section 4. Chairman of the Board. The Chairman of the Board, if any, shall preside at all meetings of the shareholders and the Board of Trustees, if the Chairman of the Board is present. The Chairman of the Board shall have such other powers and duties as shall be determined by the Board of Trustees, and shall undertake such other assignments as may be requested by the President. Section 5. Other Officers. The Chairman of the Board or one or more Vice Presidents shall have and exercise such powers and duties of the President in the absence or inability to act of the President, as may be assigned to them, respectively, by the Board of Trustees or, to the extent not so assigned, by the President. In the absence or inability to act of 4 8 the President, the powers and duties of the President not otherwise assigned by the Board of Trustees or the President shall devolve upon the Chairman of the Board, or in the Chairman's absence, the Vice Presidents in the order of their election. Section 6. Secretary. The Secretary shall (a) have custody of the seal of the Trust; (b) attend meetings of the shareholders, the Board of Trustees, and any committees of Trustees and keep the minutes of such meetings of shareholders, Board of Trustees and any committees thereof; and (c) issue all notices of the Trust. The Secretary shall have charge of the shareholder records and such other books and papers as the Board may direct, and shall perform such other duties as may be incidental to the office or which are assigned by the Board of Trustees. The Secretary shall also keep or cause to be kept a shareholder book, which may be maintained by means of computer systems, containing the names, alphabetically arranged, of all persons who are shareholders of the Trust, showing their places of residence, the number and class or series of any class of shares of beneficial interest held by them, respectively, and the dates when they became the record owners thereof, and such book shall be open for inspection as prescribed by the laws of the State of Delaware. Section 7. Treasurer. The Treasurer shall have the care and custody of the funds and securities of the Trust and shall deposit the same in the name of the Trust in such bank or banks or other depositories, subject to withdrawal in such manner as these Bylaws or the Board of Trustees may determine. The Treasurer shall, if required by the Board of Trustees, give such bond for the faithful discharge of duties in such form as the Board of Trustees may require. ARTICLE IV MEETINGS OF SHAREHOLDERS Section 1. Purpose. All meetings of the shareholders for the election of Trustees shall be held at such place as may be fixed from time to time by the Trustees, or at such other place either within or without the State of Delaware as shall be designated from time to time by the Trustees and stated in the notice indicating that a meeting has been called for such purpose. Meetings of shareholders may be held for any purpose determined by the Trustees and may be held at such time and place, within or without the State of Delaware as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. At all meetings of the shareholders, every shareholder of record entitled to vote thereat shall be entitled to vote at such meeting either in person or by written proxy signed by the shareholder or by his duly authorized attorney in fact. A shareholder may duly authorize such attorney in fact through written, electronic, telephonic, computerized, facsimile, telecommunication, telex or oral communication or by any other form of communication. Unless a proxy provides otherwise, such proxy is not valid more than eleven months after its date. A proxy with respect to shares held in the name of two or more persons shall be valid if executed by any one of them unless at or prior to exercise of the proxy the Trust receives a specific written notice to the contrary from any one of them. A proxy purporting to be executed by or on behalf of a shareholder shall be deemed valid unless challenged at or prior to its exercise and the burden of proving invalidity shall rest on the challenger. 5 9 Section 2. Nominations of Trustees. Nominations of individuals for election to the board of trustees shall be made by the Board of Trustees or a nominating committee of the Board of Trustees, if one has been established (the "Nominating Committee"). Any shareholder of the Trust may submit names of individuals to be considered by the Nominating Committee or the Board of Trustees, as applicable, provided, however, (i) that such person was a shareholder of record at the time of submission of such names and is entitled to vote at the meeting, and (ii) that the Nominating Committee or the Board of Trustees, as applicable, shall make the final determination of persons to be nominated. Section 3. Election of Trustees. All meetings of shareholders for the purpose of electing Trustees shall be held on such date and at such time as shall be designated from time to time by the Trustees and stated in the notice of the meeting, at which the shareholders shall elect by a plurality vote any number of Trustees as the notice for such meeting shall state are to be elected, and transact such other business as may properly be brought before the meeting in accordance with Section 1 of this Article IV. Section 4. Notice of Meeting. Written notice of any meeting stating the place, date, and hour of the meeting shall be given to each shareholder entitled to vote at such meeting not less than ten days before the date of the meeting in accordance with Article V hereof. Section 5. Voting List. The officer who has charge of the share ledger of beneficial interests of the Trust shall prepare and make, at least ten days before any meeting of shareholders, a complete list of the shareholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each shareholder and the number of shares registered in the name of the shareholder. Such list shall be open to the examination of any shareholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any shareholder who is present. Section 6. Special Meetings. Special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by applicable law or by the Agreement and Declaration of Trust, may be called by any Trustee; provided, however, that the Trustees shall promptly call a meeting of the shareholders solely for the purpose of removing one or more Trustees, when requested in writing so to do by the record holders of not less than ten percent of the outstanding shares of the Trust. Section 7. Notice of Special Meeting. Written notice of a special meeting stating the place, date, and hour of the meeting and the purpose of purposes for which the meeting is called, shall be given not less than ten days before the date of the meeting, to each shareholder entitled to vote at such meeting. Section 8. Conduct of Special Meeting. Business transacted at any special meeting of shareholders shall be limited to the purpose stated in the notice. 6 10 Section 9. Quorum. The holders of one-third of the shares of beneficial interests that are issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the shareholders for the transaction of business except as otherwise provided by applicable law or by the Agreement and Declaration of Trust. If, however, such quorum shall not be present or represented at any meeting of the shareholders, the vote of the holders of a majority of shares cast shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting, at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. Section 10. Organization of Meetings. (a) The Chairman of the Board of Trustees shall preside at each meeting of shareholders. In the absence of the Chairman of the Board, the meeting shall be chaired by the President, or if the President shall not be present, by a Vice President. In the absence of all such officers, the meeting shall be chaired by a person elected for such purpose at the meeting. The Secretary of the Trust, if present, shall act as Secretary of such meetings, or if the Secretary is not present, an Assistant Secretary of the Trust shall so act, and if no Assistant Secretary is present, then a person designated by the Secretary of the Trust shall so act, and if the Secretary has not designated a person, then the meeting shall elect a secretary for the meeting. (b) The Board of Trustees of the Trust shall be entitled to make such rules and regulations for the conduct of meetings of shareholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Trustees, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing: an agenda or order of business for the meeting; rules and procedures for maintaining order at the meeting and the safety of those present; limitations on participation in such meeting to shareholders of record of the Trust and their duly authorized and constituted proxies, and such other persons as the chairman shall permit; restrictions on entry to the meeting after the time fixed for the commencement thereof; limitations on the time allotted to questions or comments by participants; and regulation of the opening and closing of the polls for balloting on matters which are to be voted on by ballot, unless and to the extent the Board of Trustees or the chairman of the meeting determines that meetings of shareholders shall not be required to be held in accordance with the rules of parliamentary procedure. Section 11. Voting Standard. When a quorum is present at any meeting, the vote of the holders of a majority of the shares cast shall decide any question brought before such meeting, unless the question is one on which by express provision of applicable law, the Agreement and Declaration of Trust or these Bylaws, a different vote is required in which case such express provision shall govern and control the decision of such question. Section 12. Voting Procedure. Each whole share shall be entitled to one vote, and each fractional share shall be entitled to a proportionate fractional vote. On any matter 7 11 submitted to a vote of the shareholders, all shares shall be voted together, except when required by applicable law or when the Trustees have determined that the matter affects the interests of one or more Portfolios (or Classes), then only the shareholders of such Portfolios (or Classes) shall be entitled to vote thereon. Section 13. Action Without Meeting. Unless otherwise provided in the Agreement and Declaration of Trust or applicable law, any action required to be taken at any meeting of shareholders of the Trust, or any action which may be taken at any meeting of such shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of any such action without a meeting by less than unanimous written consent shall be given to those shareholders who have not consented in writing. ARTICLE V NOTICES Section 1. Methods of Giving Notice. Whenever, under the provisions of applicable law or of the Agreement and Declaration of Trust or of these Bylaws, notice is required to be given to any Trustee or shareholder, it shall not, unless otherwise provided herein, be construed to mean personal notice, but such notice may be given orally in person, or by telephone (promptly confirmed in writing) or in writing, by mail addressed to such Trustee or shareholder, at his address as it appears on the records of the Trust, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to Trustees or members of a committee may also be given by telex, telegram, telecopier or via overnight courier. If sent by telex or telecopier, notice to a Trustee or member of a committee shall be deemed to be given upon transmittal; if sent by telegram, notice to a Trustee or member of a committee shall be deemed to be given when the telegram, so addressed, is delivered to the telegraph company, and if sent via overnight courier, notice to a Trustee or member of a committee shall be deemed to be given when delivered against a receipt therefor. Section 2. Written Waiver. Whenever any notice is required to be given under the provisions of applicable law or of the Agreement and Declaration of Trust or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. 8 12 ARTICLE VI CERTIFICATES OF SHARES Section 1. Issuance. Upon request, every holder of shares in the Trust shall be entitled to have a certificate, signed by, or in the name of the Trust by, a Trustee, certifying the number of shares owned by him in the Trust. Section 2. Countersignature. Where a certificate is countersigned (1) by a transfer agent other than the Trust or its employee, or, (2) by a registrar other than the Trust or its employee, the signature of the Trustee may be a facsimile. Section 3. Lost Certificates. The Board of Trustees may direct a new certificate or certificates to be issued in place of any certificate or certificates therefore issued by the Trust alleged to have been lost, stolen or destroyed, upon the making of an affidavit of the fact by the person claiming the certificate to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Trustees may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the Trust a bond in such sum as it may direct as indemnity against any claim that may be made against the Trust with respect to the certificate alleged to have been lost, stolen or destroyed. Section 4. Transfer of Shares. The Trustees shall make such rules as they consider appropriate for the transfer of shares and similar matters. To the extent certificates are issued in accordance with Section 1 of this Article VI, upon surrender to the Trust or the transfer agent of the Trust of such certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Trust to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Section 5. Fixing Record Date. In order that the Trustees may determine the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to action in writing without a meeting, or entitled to receive payment of any dividend or other distribution of allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of beneficial interests or for the purpose of any other lawful action, the Board of Trustees may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Trustees, and which record date shall not be more than ninety nor less than ten days before the date of such meeting, nor more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Trustees for action by shareholder consent in writing without a meeting, nor more than ninety days prior to any other action. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting; provided, however, that the Board of Trustees may fix a new record date for the adjourned meeting. 9 13 Section 6. Registered Shareholders. The Trust shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to interest in such share or shares on the part of any other person, whether or not it shall have express or other notice hereof, except as otherwise provided by the laws of Delaware. ARTICLE VII GENERAL PROVISIONS Section 1. Dividends and Distributions. The Trustees may from time to time declare and pay dividends and make other distributions with respect to any Portfolio, or Class thereof, which may be from income, capital gains or capital. The amount of such dividends or distributions and the payment of them and whether they are in cash or any other Trust Property shall be wholly in the discretion of the Trustees. Section 2. Redemptions. Any holder of record of shares of a particular Portfolio, or Class thereof, shall have the right to require the Trust to redeem his shares, or any portion thereof, subject to the terms and conditions set forth in the registration statement in effect from time to time. The redemption price may in any case or cases be paid wholly or partly in kind if the Trustees determine that such payment is advisable in the interest of the remaining shareholders of the Portfolio or Class thereof for which the shares are being redeemed. Subject to the foregoing, the fair value, selection and quantity of securities or other property so paid or delivered as all or part of the redemption price may be determined by or under authority of the Trustees. In no case shall the Trust be liable for any delay of any corporation or other Person in transferring securities selected for delivery as all or part of any payment in kind. The Trustees may, at their option, and at any time, have the right to redeem shares of any shareholder of a particular Portfolio or Class thereof in accordance with Section 2 of this Article VII. The Trustees may refuse to transfer or issue shares to any person to the extent that the same is necessary to comply with applicable law or advisable to further the purposes for which the Trust is formed. If, at any time when a request for transfer or redemption of shares of any Portfolio is received by the Trust or its agent, the value of the shares of such Portfolio in a shareholder's account is less than Five Hundred Dollars ($500.00), after giving effect to such transfer or redemption, the Trust may cause the remaining shares of such Portfolio in such shareholder's account to be redeemed in accordance with such procedures set forth above. Section 3. Indemnification. Every person who is, or has been, a Trustee or officer of the Trust shall be indemnified by the Trust to the fullest extent permitted by the Delaware Business Trust Act, these Bylaws and other applicable law. Section 4. Seal. The business seal shall have inscribed thereon the name of the business trust, the year of its organization and the word "Business Seal, Delaware". The seal 10 14 may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. ARTICLE VIII AMENDMENTS Section 1. Amendments. These Bylaws may be altered or repealed at any regular or special meeting of the Board of Trustees without prior notice. These Bylaws may also be altered or repaired at any special meeting of the shareholders, but only if the Board of Trustees resolves to put a proposed alteration or repealer to the vote of the shareholders and notice of such alteration or repealer is contained in a notice of the special meeting being held for such purpose. 11 EX-99.B5.B 4 MASTER INVESTMENT ADVISORY AGREEMENT 1 EXHIBIT 5(b) SHORT-TERM INVESTMENTS TRUST MASTER INVESTMENT ADVISORY AGREEMENT THIS AGREEMENT is made this 28th day of February, 1997, by and between Short-Term Investments Trust, a Delaware business trust (the "Company") with respect to its series of shares shown on the Appendix A attached hereto, as the same may be amended from time to time, and A I M Advisors, Inc., a Delaware corporation (the "Advisor"). RECITALS WHEREAS, the Company is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end, diversified management investment company; WHEREAS, the Advisor is registered under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), as an investment advisor and engages in the business of acting as an investment advisor; WHEREAS, the Company's Agreement and Declaration of Trust authorizes the Board of Trustees of the Company to classify or reclassify authorized but unissued shares of the Company, and as of the date of this Agreement, the Company's Board of Trustees has authorized the issuance of two series of shares representing interests in two investment portfolios (such portfolios and any other portfolios hereafter added to the Company being referred to collectively herein as the "Funds"); and WHEREAS, the Company and the Advisor desire to enter into an agreement to provide for investment advisory services to the Funds upon the terms and conditions hereinafter set forth; NOW THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: 1. Advisory Services. The Advisor shall act as investment advisor for the Funds and shall, in such capacity, supervise all aspects of the Funds' operations, including the investment and reinvestment of cash, securities or other properties comprising the Funds' assets, subject at all times to the policies and control of the Company's Board of Trustees. The Advisor shall give the Company and the Funds the benefit of its best judgment, efforts and facilities in rendering its services as investment advisor. 2. Investment Analysis and Implementation. In carrying out its obligations under Section 1 hereof, the Advisor shall: (a) supervise all aspects of the operations of the Funds; (b) obtain and evaluate pertinent information about significant developments and economic, statistical and financial data, domestic, foreign or otherwise, whether affecting the economy generally or the Funds, and whether concerning the individual issuers whose securities are included in the assets of the Funds or the activities in which such issuers 2 engage, or with respect to securities which the Advisor considers desirable for inclusion in the Funds' assets; (c) determine which issuers and securities shall be represented in the Funds' investment portfolios and regularly report thereon to the Company's Board of Trustees; and (d) formulate and implement continuing programs for the purchases and sales of the securities of such issuers and regularly report thereon to the Company's Board of Trustees; and take, on behalf of the Company and the Funds, all actions which appear to the Company and the Funds necessary to carry into effect such purchase and sale programs and supervisory functions as aforesaid, including but not limited to the placing of orders for the purchase and sale of securities for the Funds. 3. Delegation of Responsibilities. Subject to the approval of the Board of Trustees and the shareholders of the Funds, the Advisor may delegate to a sub-advisor certain of its duties enumerated in Section 2 hereof, provided that the Advisor shall continue to supervise the performance of any such sub-advisor. 4. Control by Board of Trustees. Any investment program undertaken by the Advisor pursuant to this Agreement, as well as any other activities undertaken by the Advisor on behalf of the Funds, shall at all times be subject to any directives of the Board of Trustees of the Company. 5. Compliance with Applicable Requirements. In carrying out its obligations under this Agreement, the Advisor shall at all times conform to: (a) all applicable provisions of the 1940 Act and the Advisers Act and any rules and regulations adopted thereunder; (b) the provisions of the registration statement of the Company, as the same may be amended from time to time under the Securities Act of 1933 and the 1940 Act; (c) the provisions of the Agreement and Declaration of Trust of the Company, as the same may be amended from time to time; (d) the provisions of the by-laws of the Company, as the same may be amended from time to time; and (e) any other applicable provisions of state, federal or foreign law. 6. Broker-Dealer Relationships. The Advisor is responsible for decisions to buy and sell securities for the Funds, broker-dealer selection, and negotiation of brokerage commission rates. The Advisor's primary consideration in effecting a security transaction will be to obtain execution at the most favorable price. In selecting a broker-dealer to execute each particular transaction, the Advisor will take the following into consideration: the best net price available; the reliability, integrity and financial condition of the broker-dealer; the size of and the difficulty in executing the order; and the value of the expected contribution of the broker-dealer to the investment performance of the Funds on a continuing basis. Accordingly, the price to the Funds in any transaction may be less favorable than that available from another broker-dealer if the difference is reasonably justified by other aspects of the fund execution services offered. Subject to such policies as the Board of Trustees may from time to time determine, the Advisor shall not be deemed to have acted unlawfully 2 3 or to have breached any duty created by this Agreement or otherwise solely by reason of its having caused the Funds to pay a broker or dealer that provides brokerage and research services to the Advisor an amount of commission for effecting a fund investment transaction in excess of the amount of commission another broker or dealer would have charged for effecting that transaction, if the Advisor determines in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer, viewed in terms of either that particular transaction or the Advisor's overall responsibilities with respect to a particular Fund, other Funds of the Company, and to other clients of the Advisor as to which the Advisor exercises investment discretion. The Advisor is further authorized to allocate the orders placed by it on behalf of the Funds to such brokers and dealers who also provide research or statistical material, or other services to the Funds, to the Advisor, or to any sub-advisor. Such allocation shall be in such amounts and proportions as the Advisor shall determine and the Advisor will report on said allocations regularly to the Board of Trustees of the Company indicating the brokers to whom such allocations have been made and the basis therefor. In making decisions regarding broker-dealer relationships, the Advisor may take into consideration the recommendations of any sub-advisor appointed to provide investment research or advisory services in connection with the Funds, and may take into consideration any research services provided to such sub-advisor by broker-dealers. 7. Compensation. The Company shall pay the Advisor as compensation for services rendered hereunder an annual fee, payable monthly, based upon the average daily net assets of the Funds as the same is set forth in Appendix A attached hereto. The average daily net asset value of the Funds shall be determined in the manner set forth in the Agreement and Declaration of Trust and registration statement of the Company, as amended from time to time. 8. Additional Services. Upon the request of the Company's Board of Trustees, the Advisor may perform certain accounting, shareholder servicing or other administrative services on behalf of the Funds which are not required by this Agreement. Such services will be performed on behalf of the Funds and the Advisor may receive from the Funds such reimbursement for costs or reasonable compensation for such services as may be agreed upon between the Advisor and the Company's Board of Trustees based on a finding by the Board of Trustees that the provision of such services by the Advisor is in the best interests of the Company and its shareholders. Payment or assumption by the Advisor of any Fund expense that the Advisor is not otherwise required to pay or assume under this Agreement shall not relieve the Advisor of any of its obligations to the Funds nor obligate the Advisor to pay or assume any similar Fund expense on any subsequent occasions. Such services may include, but are not limited to: (a) the services of a principal financial officer of the Company (including applicable office space, facilities and equipment) whose normal duties consist of maintaining the financial accounts and books and records of the Company and the Funds, including the review and calculation of daily net asset value and the preparation of tax returns; and the services (including applicable office space, facilities and equipment) of any of the personnel operating under the direction of such principal financial officer; (b) the services of staff to respond to shareholder inquiries concerning the status of their accounts; providing assistance to shareholders in exchanges among the mutual funds managed or advised by the Advisor; changing account designations or changing addresses; assisting in the purchase or redemption of shares; supervising the operations of the custodian, transfer agent(s) or dividend disbursing agent(s) for the Funds; or otherwise providing services to shareholders of the Funds; and 3 4 (c) such other administrative services as may be furnished from time to time by the Advisor to the Company or the Funds at the request of the Company's Board of Trustees. 9. Expenses of the Funds. All of the ordinary business expenses incurred in the operations of the Funds and the offering of their shares shall be borne by the Funds unless specifically provided otherwise in this Agreement. These expenses borne by the Funds include but are not limited to brokerage commissions, taxes, legal, accounting, auditing, or governmental fees, the cost of preparing share certificates, custodian, transfer and shareholder service agent costs, expenses of issue, sale, redemption and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to directors and shareholder meetings, the cost of preparing and distributing reports and notices to shareholders, the fees and other expenses incurred by the Company on behalf of the Funds in connection with membership in investment company organizations and the cost of printing copies of prospectuses and statements of additional information distributed to the Funds' shareholders. 10. Expense Limitation. If, for any fiscal year of the Company, the total of all ordinary business expenses of the Funds, including all investment advisory fees, but excluding brokerage commissions and fees, taxes, interest and extraordinary expenses, such as litigation costs, would exceed the applicable expense limitations imposed by state securities regulations in any state in which the Funds' shares are qualified for sale, as such limitations may be raised or lowered from time to time, the aggregate of all such investment advisory fees shall be reduced by the amount of such excess. The amount of any such reduction to be borne by the Advisor shall be deducted from the monthly investment advisory fee otherwise payable to the Advisor during such fiscal year. If required pursuant to such state securities regulations, the Advisor will, not later than the last day of the first month of the next succeeding fiscal year, reimburse the Funds for any such annual operating expenses (after reduction of all investment advisory fees in excess of such limitation). For the purposes of this Section, the term "fiscal year" shall exclude the portion of the current fiscal year which shall have elapsed prior to the date hereof and shall include the portion of the then current fiscal year which shall have elapsed at the date of termination of this Agreement. The application of expense limitations shall be applied to each Fund of the Company separately unless the laws or regulations of any state shall require that the expense limitations be imposed with respect to the Company as a whole. 11. Non-Exclusivity. The services of the Advisor to the Company and the Funds are not to be deemed to be exclusive, and the Advisor shall be free to render investment advisory and administrative or other services to others (including other investment companies) and to engage in other activities. It is understood and agreed that officers or directors of the Advisor may serve as officers or directors of the Company, and that officers or directors of the Company may serve as officers or directors of the Advisor to the extent permitted by law; and that the officers and directors of the Advisor are not prohibited from engaging in any other business activity or from rendering services to any other person, or from serving as partners, officers, directors or trustees of any other firm or trust, including other investment advisory companies. 12. Term and Approval. This Agreement shall become effective with respect to a Fund if approved by the shareholders of such Fund, and if so approved, this Agreement shall thereafter continue in force and effect until February 28, 1999, and may be continued from year to year thereafter, provided that the continuation of the Agreement is specifically approved at least annually: (a) (i) by the Company's Board of Trustees or (ii) by the vote of "a majority of the outstanding voting securities" of such Fund (as defined in Section 2(a)(42) of the 1940 Act); and 4 5 (b) by the affirmative vote of a majority of the trustees who are not parties to this Agreement or "interested persons" (as defined in the 1940 Act) of a party to this Agreement (other than as Company trustees), by votes cast in person at a meeting specifically called for such purpose. 13. Termination. This Agreement may be terminated as to the Company or as to any one or more of the Funds at any time, without the payment of any penalty, by vote of the Company's Board of Trustees or by vote of a majority of the outstanding voting securities of the applicable Fund, or by the Advisor, on sixty (60) days' written notice to the other party. The notice provided for herein may be waived by the party entitled to receipt thereof. This Agreement shall automatically terminate in the event of its assignment, the term "assignment" for purposes of this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act. 14. Liability of Advisor and Indemnification. In the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of the Advisor or any of its officers, directors or employees, the Advisor shall not be subject to liability to the Company or to the Funds or to any shareholder of the Funds for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security. 15. Liability of Shareholders. Notice is hereby given that, as provided by applicable law, the obligations of or arising out of this Agreement are not binding upon any of the shareholders of the Company individually but are binding only upon the assets and property of the Company and that the shareholders shall be entitled, to the fullest extent permitted by applicable law, to the same limitation on personal liability as stockholders of private corporations for profit. 16. Notices. Any notices under this Agreement shall be in writing, addressed and delivered, telecopied or mailed postage paid, to the other party entitled to receipt thereof at such address as such party may designate for the receipt of such notice. Until further notice to the other party, it is agreed that the address of the Company shall be and that of the Advisor shall be Eleven Greenway Plaza, Suite 1919, Houston, Texas 77046. 17. Questions of Interpretation. Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the 1940 Act or the Advisers Act shall be resolved by reference to such term or provision of the 1940 Act or the Advisers Act and to interpretations thereof, if any, by the United States Courts or in the absence of any controlling decision of any such court, by rules, regulations or orders of the Securities and Exchange Commission issued pursuant to said Acts. In addition, where the effect of a requirement of the 1940 Act or the Advisers Act reflected in any provision of the Agreement is revised by rule, regulation or order of the Securities and Exchange Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. Subject to the foregoing, this Agreement shall be governed by and construed in accordance with the laws (without reference to conflicts of law provisions) of the State of Texas. 18. License Agreement. The Company shall have the non-exclusive right to use the name "AIM" to designate any current or future series of shares only so long as A I M Advisors, Inc. serves as investment manager or advisor to the Company with respect to such series of shares. 5 6 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by their respective officers on the day and year first written above. SHORT-TERM INVESTMENTS TRUST (a Delaware business trust) Attest: /s/ DAVID L. KITE By: /s/ ROBERT H. GRAHAM - ----------------------------------- --------------------------------- Assistant Secretary President (SEAL) A I M Advisors, Inc. Attest: /s/ OFELIA M. MAYO By: /s/ ROBERT H. GRAHAM - ----------------------------------- --------------------------------- Assistant Secretary President (SEAL) 6 7 APPENDIX A TO MASTER INVESTMENT ADVISORY AGREEMENT OF SHORT-TERM INVESTMENTS TRUST The Company shall pay the Advisor, out of the assets of a Fund, as full compensation for all services rendered and all facilities furnished hereunder, a management fee for such Fund set forth below. Such fee shall be calculated by applying the following annual rates to the average daily net assets of such Fund for the calendar year computed in the manner used for the determination of the net asset value of shares of such Fund. TREASURY PORTFOLIO
NET ASSETS ANNUAL RATE First $300 million.........................................................................................0.15% Over $300 million up to and including $1.5 billion.........................................................0.06% Over $1.5 billion..........................................................................................0.05%
TREASURY TAXADVANTAGE PORTFOLIO
NET ASSETS ANNUAL RATE First $250 million.........................................................................................0.20% Over $250 million up to and including $500 million.........................................................0.15% Over $500 million..........................................................................................0.10%
7 EX-99.B6.D 5 MASTER DISTRIBUTION AGREEMENT 1 EXHIBIT 6(d) MASTER DISTRIBUTION AGREEMENT BETWEEN SHORT-TERM INVESTMENTS TRUST AND FUND MANAGEMENT COMPANY THIS AGREEMENT is made this 28th day of February, 1997, by and between SHORT-TERM INVESTMENTS TRUST, a Delaware business trust (hereinafter referred to as the "Company"), and FUND MANAGEMENT COMPANY, a Texas corporation, (hereinafter referred to as the "Distributor"). W I T N E S S E T H: In consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt whereof is hereby acknowledged, the parties hereto agree as follows: FIRST: The Company hereby appoints the Distributor as its exclusive agent for the sale of the shares set forth in Appendix A attached hereto (the "Shares") of the Company to the public directly and through investment dealers and financial institutions in the United States and throughout the world in accordance with the terms of the Company's current prospectus applicable to the Shares. SECOND: The Company shall not sell any Shares except through the Distributor and under the terms and conditions set forth in paragraph FOURTH below. Notwithstanding the provisions of the foregoing sentence, however, (A) the Company may issue Shares of one or more classes of its shares of beneficial interest to any other investment company or personal holding company, or to the shareholders thereof, in exchange for all or a majority of the shares or assets of any such company; and (B) the Company may issue Shares at their net asset value in connection with certain categories of transactions or to certain categories of persons, in accordance with Rule 22d-1 under the Investment Company Act of 1940, as amended (the "1940 Act"), provided that any such category is specified in the then current prospectuses of the Company. THIRD: The Distributor hereby accepts appointment as exclusive agent for the sale of the Shares and agrees that it will use its best efforts to sell such Shares; provided, however, that: (A) the Distributor may, and when requested by the Company shall, suspend its efforts to effectuate such sales at any time when, in the opinion of the Distributor or of the Company, no sales should be made because of market or other economic considerations or abnormal circumstance of any kind; and (B) the Company may withdraw the offering of the Shares (i) at any time with the consent of the Distributor, or (ii) without such consent when so required by the provisions of any statute or of any order, rule or regulation of any governmental body having jurisdiction. It is mutually understood and agreed that the Distributor does not undertake to sell any specific amount of the Shares. The Company shall have the right to specify minimum amounts for initial and subsequent orders for the purchase of Shares. -1- 2 FOURTH: (A) The public offering price of Shares of the Company (the "offering price") shall be the net asset value per Share. Net asset value per Share shall be determined in accordance with the provisions of the then current Shares' prospectus and statement of additional information. (B) No provision of this Agreement shall be deemed to prohibit any payments by the Company to the Distributor or by the Company or the Distributor or to investment dealers and financial institutions where such payments are made under a distribution plan adopted by the Company, on behalf of the applicable Shares, pursuant to Rule 12b-1 under the 1940 Act and approved by the Company's trustees and by the holders of the Shares in a manner consistent with such rule. FIFTH: The Distributor shall act as agent of the Company in connection with the sale and repurchase of Shares of the Company. Except with respect to such sales and repurchases, the Distributor shall act as principal in all matters relating to the promotion of the sale of Shares of the Company and shall enter into all of its own engagements, agreements and contracts as principal on its own account. The Distributor shall enter into agreements with investment dealers and financial institutions selected by the Distributor, authorizing such investment dealers and financial institutions to offer and sell Shares of the Company to the public upon the terms and conditions set forth therein, which shall not be inconsistent with the provisions of this Agreement. Each agreement shall provide that the investment dealer and financial institution shall act as a principal, and not as an agent of the Company. SIXTH: The Company shall bear (A) the expenses of qualification of the Shares for sale in connection with such public offerings in such states as shall be selected by the Distributor and of continuing the qualification therein until the Distributor notifies the Company that it does not wish such qualification continued; and (B) all legal expenses in connection with the foregoing. SEVENTH: The Distributor shall bear (A) the expenses of printing from the final proof and distributing prospectuses and statements of additional information (including supplements thereto) of the Company relating to the Shares in connection with public offerings made by the Distributor pursuant to this Agreement (which shall not include those prospectuses and statements of additional information, and supplements thereto, to be distributed to shareholders by the Company), and any other promotional or sales literature used by the Distributor or furnished by the Distributor to dealers in connection with such public offerings; and (B) expenses of advertising in connection with such public offerings; provided however, that the Distributor may be reimbursed for all or a portion of the expenses described in sections (A) and (B) of this paragraph, or may receive reasonable compensation for distribution related services, to the extent permitted by a distribution plan adopted by the Company pursuant to Rule 12b-1 under the 1940 Act. -2- 3 EIGHTH: The Distributor will accept orders for the purchase of Shares only to the extent of purchase orders actually received and not in excess of such orders, and it will not avail itself of any opportunity of making a profit by expediting or withholding orders. It is mutually understood and agreed that the Company may reject purchase orders where, in the judgment of the Company, such rejection is in the best interest of the Company. NINTH: The Company and the Distributor shall each comply with all applicable provisions of the 1940 Act, the Securities Act of 1933 and of all other federal and state laws, rules and regulations governing the issuance and sale of the Shares. TENTH: (A) In absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of the Distributor, the Company agrees to indemnify the Distributor against any and all claims, demands, liabilities and expenses which the Distributor may incur under the Securities Act of 1933, or common law or otherwise, arising out of or based upon any alleged untrue statement of a material fact contained in any registration statement or prospectuses of the Company, or any omission to state a material fact therein, the omission of which makes any statement contained therein misleading, unless such statement or omission was made in reliance upon, and in conformity with, information furnished to the Company in connection therewith by or on behalf of the Distributor. The Distributor agrees to indemnify the Company against any and all claims, demands, liabilities and expenses which the Company may incur arising out of or based upon any act or deed of the Distributor or its sales representatives which has not been authorized by the Company in its prospectuses or in this Agreement. (B) The Distributor agrees to indemnify the Company against any and all claims, demands, liabilities and expenses which the Company may incur under the Securities Act of 1933, or common law or otherwise, arising out of or based upon any alleged untrue statement of a material fact contained in any registration statement or prospectuses of the Company, or any omission to state a material fact therein if such statement or omission was made in reliance upon, and in conformity with, information furnished to the Company in connection therewith by or on behalf of the Distributor. (C) Notwithstanding any other provision of this Agreement, the Distributor shall not be liable for any errors of the Company's transfer agent or for any failure of such transfer agent to perform its duties. ELEVENTH: Nothing herein contained shall require the Company to take any action contrary to any provision of its charter or to any applicable statute or regulation. TWELFTH: This Agreement shall become effective as of the date hereof, shall continue until February 28, 1999, and shall continue in force and effect from year to year thereafter, provided, that such continuance is specifically approved at least annually (a)(i) by the Board of Trustees of the Company, or (ii) by the vote of a majority of the Company's outstanding voting securities (as defined in Section 2(a)(42) of the Investment Company Act), and (b) by vote of a majority of the Company's trustees who are not parties to this Agreement or "interested persons" (as defined in Section 2(a)(19) of the Investment Company Act) of any party to this Agreement cast in person at a meeting called for such purpose. -3- 4 THIRTEENTH: (A) This Agreement may be terminated at any time, without the payment of any penalty, by vote of the Board of Trustees of the Company or by vote of a majority of the outstanding voting securities of the Company, or by the Distributor, on sixty (60) days' written notice to the other party. (B) This Agreement shall automatically terminate in the event of its assignment, the term "assignment" having the meaning as defined in Section 2(a)(4) of the Investment Company Act. FOURTEENTH: Any notice under this Agreement shall be in writing, addressed and delivered, or mailed, postage paid, to the other party at such address as such other party may designate for the receipt of such notices. Until further notice to the other party, it is agreed that the address of both the Company and the Distributor shall be Eleven Greenway Plaza, Suite 1919, Houston, Texas 77046. FIFTEENTH: Copies of the Agreement and Declaration of Trust, as amended, establishing the Company are on file with the Secretary of State of the State of Delaware, and notice is hereby given that, as provided by applicable law, the obligations of or arising out of this Agreement are not binding upon any of the shareholders of the Company individually, but are binding only upon the assets and property of the Company and that the shareholders shall be entitled, to the fullest extent permitted by applicable law, to the same limitation on personal liability as stockholders of private corporations for profit. -4- 5 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate as of the day and year first above written. SHORT-TERM INVESTMENTS TRUST By: /s/ ROBERT H. GRAHAM ----------------------------------- Name: Robert H. Graham Title: President Attest: /s/ DAVID L. KITE - ----------------------------------- Name: David L. Kite Title: Assistant Secretary FUND MANAGEMENT COMPANY By: /s/ J. ABBOTT SPRAGUE ------------------------------------ Name: J. Abbott Sprague Title: President Attest: /s/ OFELIA M. MAYO - ----------------------------------- Name: Ofelia M. Mayo Title: Assistant Secretary -5- 6 APPENDIX A TO MASTER DISTRIBUTION AGREEMENT OF SHORT-TERM INVESTMENTS TRUST Treasury Portfolio Institutional Class Personal Investment Class Private Investment Class Cash Management Class Resource Class Treasury TaxAdvantage Portfolio Institutional Class Private Investment Class -6- EX-99.B7.B 6 FORM OF DEFERRED COMPENSATION AGREEMENT 1 EXHIBIT 7(b) 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. -1- 2 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. -2- 3 DEFERRED COMPENSATION AGREEMENT ------------------------------- AGREEMENT, made on this __ day of _______, 19__, 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 and 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. -1- 4 (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. -2- 5 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. -3- 6 (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 pemit, 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 Fund 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- 7 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, as least one year before the Payment Date, a Director may change the method of payment previously selected. (e) Irrevocability. Except as provided in paragraph 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 -5- 8 (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. -6- 9 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. -7- 10 (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. -8- 11 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. -9- 12 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. -10- 13 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 -11- 14 APPENDIX A ---------- AIM ADVISOR FUNDS, INC. AIM EQUITY FUNDS, INC. AIM FUNDS GROUP AIM INTERNATIONAL FUNDS, INC. AIM INVESTMENT SECURITIES FUNDS AIM SUMMIT FUND, INC. AIM TAX-EXEMPT FUNDS, INC. AIM VARIABLE INSURANCE FUNDS, INC. SHORT-TERM INVESTMENTS CO. SHORT-TERM INVESTMENTS TRUST TAX-FREE INVESTMENTS CO. 15 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 50 percent (50%) 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 o do o 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. -5- 16 Payment Method -------------- I hereby elect to receive the amounts credited to my Deferral Account in (check one) o a single payment in cash o quarterly installments for a period of ____ years (select no more than 10 years) o 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:_________________________ -6- 17 DEFERRED COMPENSATION AGREEMENT BENEFICIARY DESIGNATION 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 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 -1- 18 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:_________________________ -2- EX-99.B9.C 7 AMEND. 2 TO TRANSFER AGENCY & SERVICE AGMT. 1 EXHIBIT 9(c) AMENDMENT NO. 2 TRANSFER AGENCY AND SERVICE AGREEMENT The Transfer Agency and Service Agreement (the "Agreement"), dated September 16, 1994, as amended July 1, 1995, by and between Short-Term Investments Trust, a Delaware business trust and A I M Institutional Fund Services, Inc., a Delaware corporation, is hereby amended as follows (terms used herein but not otherwise defined herein have the meaning ascribed them in the Agreement): 1) Section 2.01 of the Agreement is hereby deleted in its entirety and replaced with the following: "For performance by the Transfer Agent pursuant to this Agreement, the Fund agrees on behalf of each of the Portfolios to pay the Transfer Agent an annual fee in the amount of .009% of average daily net assets, payable monthly. Such fee may be changed from time to time subject to mutual written agreements between the Fund and the Transfer Agent." All other terms and provisions of the Agreement not amended herein shall remain in full force and effect. Dated: July 1, 1996 SHORT-TERM INVESTMENTS TRUST Attest: /s/ DAVID L. KITE By: /s/ ROBERT H. GRAHAM ------------------------------ ------------------------------ Assistant Secretary Robert H. Graham President (SEAL) A I M INSTITUTIONAL FUND SERVICES, INC. Attest: /s/ DAVID L. KITE By: /s/ J. ABBOTT SPRAGUE ------------------------------ ------------------------------ Assistant Secretary J. Abbott Sprague President (SEAL) EX-99.B9.D 8 AMEND. 3 TO TRANSFER AGENCY & SERVICE AGMT. 1 EXHIBIT 9(d) AMENDMENT NO. 3 TRANSFER AGENCY AND SERVICE AGREEMENT The Transfer Agency and Service Agreement (the "Agreement"), dated September 16, 1994, as amended on July 1, 1995 and July 1, 1996, by and between Short-Term Investments Trust, a Delaware business trust and A I M Institutional Fund Services, Inc., a Delaware corporation, is hereby amended as follows (terms used herein but not otherwise defined herein have the meaning ascribed them in the Agreement): 1) A new Section 2.03 to the Agreement is hereby added in its entirety as follows: "In addition to the fee paid under Section 2.01 above, the Fund agrees to reimburse the Transfer Agent for out-of-pocket expenses or advances incurred by the Transfer Agent for the reconcilement of demand deposit accounts on behalf of each of the Portfolios. In addition, any other expenses incurred by the Transfer Agent at the request or with the consent of the Fund, will be reimbursed by the Fund on behalf of the applicable Shares." All other terms and provisions of the Agreement not amended herein shall remain in full force and effect. Dated: July 1,1997 SHORT-TERM INVESTMENTS TRUST Attest: /s/ STEPHEN I. WINER By: /s/ ROBERT H. GRAHAM ------------------------------- ------------------------------- Assistant Secretary Robert H. Graham President (SEAL) AIM INSTITUTIONAL FUND SERVICES, INC. Attest: /s/ OFELIA M. MAYO By: /s/ JOHN CALDWELL ------------------------------- ------------------------------- Assistant Secretary John Caldwell President (SEAL) EX-99.B9.E 9 TRANSFER AGENCY AND SERVICE AGREEMENT 1 EXHIBIT 9(e) TRANSFER AGENCY AND SERVICE AGREEMENT BETWEEN SHORT-TERM INVESTMENTS TRUST AND A I M FUND SERVICES, INC. 2 TABLE OF CONTENTS
PAGE ARTICLE 1 TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE 2 FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . 3 ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 ARTICLE 5 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 ARTICLE 6 COVENANTS OF THE FUND AND THE TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 ARTICLE 7 TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ARTICLE 8 ADDITIONAL FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ARTICLE 9 LIMITATION OF SHAREHOLDER LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ARTICLE 10 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ARTICLE 11 AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 ARTICLE 12 TEXAS LAW TO APPLY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 ARTICLE 13 MERGER OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 ARTICLE 14 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3 TRANSFER AGENCY AND SERVICE AGREEMENT AGREEMENT made as of the 29th day of December, 1997, by and between SHORT-TERM INVESTMENTS TRUST, a Delaware business trust, having its principal office and place of business at 11 Greenway Plaza, Suite 100, Houston, Texas 77046 (the "Fund"), and A I M Fund Services, Inc., a Delaware corporation having its principal office and place of business at 11 Greenway Plaza, Suite 100, Houston, Texas 77046 (the "Transfer Agent"). WHEREAS, the Transfer Agent is registered as such with the Securities and Exchange Commission (the "SEC"); and WHEREAS, the Fund is authorized to issue shares in separate series and classes, with each such series representing interests in a separate portfolio of securities and other assets and each such class having different distribution arrangements; and WHEREAS, the Fund on behalf of each class of each of the portfolios thereof (the "Portfolios") desires to appoint the Transfer Agent as its transfer agent, and agent in connection with certain other activities, with respect to the Portfolios, and the Transfer Agent desires to accept such appointment; NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows: ARTICLE 1 TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT 1.01 Subject to the terms and conditions set forth in this Agreement, the Fund hereby employs and appoints the Transfer Agent to act as, and the Transfer Agent agrees to act as, its transfer agent for the authorized and issued shares of beneficial interest of the Fund representing interests in each class of each of the respective Portfolios ("Shares"), dividend disbursing agent, and agent in connection with any accumulation or similar plans provided to shareholders of each of the Portfolios (the "Shareholders"), including without limitation any periodic investment plan or periodic withdrawal program, as provided in the currently effective prospectus and statement of additional information (the "Prospectus") of the Fund on behalf of the Portfolios. 1.02 The Transfer Agent agrees that it will perform the following services: (a) The Transfer Agent shall, in accordance with procedures established from time to time by agreement between the Fund on behalf of each of the Portfolios, as applicable, and the Transfer Agent: (i) receive for acceptance, orders for the purchase of Shares, and promptly deliver payment and appropriate documentation thereof to the Custodian of the Fund authorized pursuant to the Agreement and Declaration of Trust and By-Laws of the Fund (the "Custodian"); (ii) pursuant to purchase orders, issue the appropriate number of Shares and hold such Shares in the appropriate Shareholder account; 1 4 (iii) receive for acceptance redemption requests and redemption directions and deliver the appropriate documentation thereof to the Custodian; (iv) at the appropriate time as and when it receives monies paid to it by the Custodian with respect to any redemption, pay over or cause to be paid over in the appropriate manner such monies as instructed by the Fund; (v) effect transfers of Shares by the registered owners thereof upon receipt of appropriate instructions; (vi) prepare and transmit payments for dividends and distributions declared by the Fund on behalf of the Shares; (vii) maintain records of account for and advise the Fund and its Shareholders as to the foregoing; and (viii) record the issuance of Shares of the Fund and maintain pursuant to SEC Rule 17Ad-1O(e) a record of the total number of Shares which are authorized, based upon data provided to it by the Fund, and issued and outstanding. The Transfer Agent shall also provide the Fund on a regular basis with the total number of Shares which are authorized and issued and outstanding and shall have no obligation, when recording the issuance of Shares, to monitor the issuance of such Shares or to take cognizance of any laws relating to the issue or sale of such Shares, which function shall be the sole responsibility of the Fund. (b) In addition to the services set forth in the above paragraph (a), the Transfer Agent shall: (i) perform the customary services of a transfer agent, including but not limited to: maintaining all Shareholder accounts, mailing Shareholder reports and prospectuses to current Shareholders, preparing and mailing confirmation forms and statements of accounts to Shareholders for all purchases and redemptions of Shares and other confirmable transactions in Shareholder accounts, preparing and mailing activity statements for Shareholders, and providing Shareholder account information. (c) Procedures as to who shall provide certain of these services in Article 1 may be established from time to time by agreement between the Fund on behalf of each Portfolio and the Transfer Agent. The Transfer Agent may at times perform only a portion of these services and the Fund or its agent may perform these services on the Fund's behalf. ARTICLE 2 FEES AND EXPENSES 2.01 For performance by the Transfer Agent pursuant to this Agreement, the Fund agrees on behalf of each of the Portfolios to pay the Transfer Agent an annual fee in the amount of .009% of average daily net assets, payable monthly. Such fee and out-of-pocket expenses and advances identified under Section 2.03 below may be changed from time to time subject to mutual written agreement between the Fund and the Transfer Agent. 2 5 2.02 The Fund agrees on behalf of each of the Portfolios to pay all fees following the mailing of a billing notice. 2.03 In addition to the fee paid under Section 2.01 above, the Fund agrees to reimburse the Transfer Agent for out-of-pocket expenses or advances incurred by the Transfer Agent for the reconcilement of demand deposit accounts on behalf of each of the Portfolios. In addition, any other expenses incurred by the Transfer Agent at the request or with the consent of the Fund, will be reimbursed by the Fund on behalf of the applicable Shares. ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT The Transfer Agent represents and warrants to the Fund that: 3.01 It is a corporation duly organized and existing and in good standing under the laws of the state of Delaware. 3.02 It is duly qualified to carry on its business in Delaware and in Texas. 3.03 It is empowered under applicable laws and by its Charter and By-Laws to enter into and perform this Agreement. 3.04 All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement. 3.05 It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement. 3.06 It is registered as a Transfer Agent as required by the federal securities laws. 3.07 This Agreement is a legal, valid and binding obligation to it. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE FUND The Fund represents and warrants to the Transfer Agent that: 4.01 It is a business trust duly organized and existing and in good standing under the laws of Delaware. 4.02 It is empowered under applicable laws and by its Agreement and Declaration of Trust and By-Laws to enter into and perform this Agreement. 4.03 All corporate proceedings required by said Agreement and Declaration of Trust and By-Laws have been taken to authorize it to enter into and perform this Agreement. 4.04 It is an open-end, diversified management investment company registered under the Investment Company Act of 1940, as amended. 3 6 4.05 A registration statement under the Securities Act of 1933, as amended on behalf of each of the Portfolios is currently effective and will remain effective, with respect to all Shares of the Fund being offered for sale. ARTICLE 5 INDEMNIFICATION 5.01 The Transfer Agent shall not be responsible for, and the Fund shall on behalf of the applicable Portfolio, indemnify and hold the Transfer Agent harmless from and against, any and all losses, damages, costs, charges, counsel fees, payments, expenses and liability arising out of or attributable to: (a) all actions of the Transfer Agent or its agents or subcontractors required to be taken pursuant to this Agreement, provided that such actions are taken in good faith and without negligence or willful misconduct; (b) the Fund's lack of good faith, negligence or willful misconduct which arise out of the breach of any representation or warranty of the Fund hereunder; (c) the reliance on or use by the Transfer Agent or its agents or subcontractors of information, records and documents or services which (i) are received or relied upon by the Transfer Agent or its agents or subcontractors and/or furnished to it or performed by on behalf of the Fund, and (ii) have been prepared, maintained and/or performed by the Fund or any other person or firm on behalf of the Fund; provided such actions are taken in good faith and without negligence or willful misconduct; (d) the reliance on, or the carrying out by the Transfer Agent or its agents or subcontractors of any instructions or requests of the Fund on behalf of the applicable Portfolio; provided such actions are taken in good faith and without negligence or willful misconduct; or (e) the offer or sale of Shares in violation of any requirement under the federal securities laws or regulations or the securities laws or regulations of any state that such Shares be registered in such state or in violation of any stop order or other determination or ruling by any federal agency or any state with respect to the offer or sale of such Shares in such state. 5.02 The Transfer Agent shall indemnify and hold the Fund harmless from and against any and all losses, damages, costs, charges, counsel fees, payments, expenses and liability arising out of or attributable to any action or failure or omission to act by the Transfer Agent as result of the Transfer Agent's lack of good faith, negligence or willful misconduct. 5.03 At any time the Transfer Agent may apply to any officer of the Fund for instructions, and may consult with legal counsel with respect to any matter arising in connection with the services to be performed by the Transfer Agent under this Agreement, and the Transfer Agent and its agents or subcontractors shall not be liable to and shall be indemnified by the Fund on behalf of the applicable Portfolio for any action taken or omitted by it in reliance upon such instructions or upon the opinion of such counsel. The Transfer Agent shall be protected and indemnified in acting upon any paper or document furnished by or on behalf of the Fund, reasonably believed to be genuine and to have been signed by the proper person or persons, or upon any instruction, information, data, records or documents provided to the Transfer Agent or its agents or subcontractors by 4 7 machine readable input, telex, CRT data entry or other similar means authorized by the Fund, and shall not be held to have notice of any change of authority of any person, until receipt of written notice thereof from the Fund. 5.04 In the event either party is unable to perform its obligations under the terms of this Agreement because of acts of God, strikes, equipment or transmission failure or damage reasonably beyond its control, or other causes reasonably beyond its control, such party shall not be liable for damages to the other for any damages resulting from such failure to perform or otherwise from such causes. 5.05 Neither party to this Agreement shall be liable to the other party for consequential damages under any provision of this Agreement or for any consequential damages arising out of any act or failure to act hereunder. 5.06 In order that the indemnification provisions contained in this Article 5 shall apply, upon the assertion of a claim for which either party may be required to indemnify the other, the party seeking indemnification shall promptly notify the other party of such assertion, and shall keep the other party advised with respect to all developments concerning such claim. The party who may be required to indemnify shall have the option to participate with the party seeking indemnification in the defense of such claim. The party seeking indemnification shall in no case confess any claim or make any compromise in any case in which the other party may be required to indemnify it except with the other party's prior written consent. ARTICLE 6 COVENANTS OF THE FUND AND THE TRANSFER AGENT 6.01 The Fund shall, upon request, on behalf of each of the Portfolios promptly furnish to the Transfer Agent the following: (a) a certified copy of the resolution of the Board of Trustees of the Fund authorizing the appointment of the Transfer Agent and the execution and delivery of this Agreement; and (b) a copy of the Agreement and Declaration of Trust and By-Laws of the Fund and all amendments thereto. 6.02 The Transfer Agent shall keep records relating to the services to be performed hereunder, in the form and manner as it may deem advisable. To the extent required by Section 31 of the Investment Company Act of 1940, as amended, and the Rules thereunder, the Transfer Agent agrees that all such records prepared or maintained by the Transfer Agent relating to the services to be performed by the Transfer Agent hereunder are the property of the Fund and will be preserved, maintained and made available in accordance with such Section and Rules, and will be surrendered promptly to the Fund on and in accordance with its request. 6.03 The Transfer Agent and the Fund agree that all books, records, information and data pertaining to the business of the other party which are exchanged or received pursuant to the negotiation or the carrying out of this Agreement shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be required by law. 5 8 6.04 In case of any requests or demands for the inspection of the Shareholder records of the Fund, the Transfer Agent will endeavor to notify the Fund and to secure instructions from an authorized officer of the Fund as to such inspection. The Transfer Agent reserves the right, however, to exhibit the Shareholder records to any person whenever it is advised by its counsel that it may be held liable for the failure to exhibit the Shareholder records to such person. ARTICLE 7 TERMINATION OF AGREEMENT 7.01 This Agreement may be terminated by either party upon sixty (60) days written notice to the other. 7.02 Should the Fund exercise its right to terminate this Agreement, all out-of-pocket expenses associated with the movement of records and material will be borne by the Fund on behalf of the applicable Portfolios. Additionally, the Transfer Agent reserves the right to charge for any other reasonable expenses associated with such termination and/or a charge equivalent to the average of three (3) months' fees. ARTICLE 8 ADDITIONAL FUNDS 8.01 In the event that the Fund establishes one or more series of Shares in addition to the Portfolios with respect to which it desires to have the Transfer Agent render services as transfer agent under the terms hereof, it shall so notify the Transfer Agent in writing, and if the Transfer Agent agrees in writing to provide such services, such series of Shares shall become a Portfolio hereunder. ARTICLE 9 LIMITATION OF SHAREHOLDER LIABILITY 9.01 Notice is hereby given that this Agreement is being executed by the Fund by a duly authorized officer thereof acting as such and not individually. The obligations of this Agreement are not binding upon any of the trustees, officers, shareholders or the investment advisor of the Fund individually but are binding only upon the assets and property belonging to the Fund, on its own behalf or on behalf of a Portfolio, for the benefit of which the trustees or directors have caused this Agreement to be executed. ARTICLE 10 ASSIGNMENT 10.01 Except as provided in Section 10.03 below, neither this Agreement nor any rights or obligations hereunder may be assigned by either party without the written consent of the other party. 10.02 This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and assigns. 10.03 The Transfer Agent may, without further consent on the part of the Fund, subcontract for the performance hereof with any entity which is duly registered as a transfer agent pursuant to Section 17A(c)(1) of the Securities Exchange Act of 1934 as amended ("Section 17A(c)(1)"); 6 9 provided, however, that the Transfer Agent shall be as fully responsible to the Fund for the acts and omissions of any subcontractor as it is for its own acts and omissions. ARTICLE 11 AMENDMENT 11.01 This Agreement may be amended or modified by a written agreement executed by both parties and authorized or approved by a resolution of the Board of Trustees of the Fund. ARTICLE 12 TEXAS LAW TO APPLY 12.01 This Agreement shall be construed and the provisions thereof interpreted under and in accordance with the laws of the State of Texas. ARTICLE 13 MERGER OF AGREEMENT 13.01 This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject matter hereof whether oral or written. ARTICLE 14 COUNTERPARTS 14.01 This Agreement may be executed by the parties hereto on any number of counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 7 10 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf by and through their duly authorized officers, as of the day and year first above written. SHORT-TERM INVESTMENTS TRUST By: /s/ ROBERT H. GRAHAM -------------------------- President ATTEST: /S/ P. MICHELLE GRACE - ----------------------- Assistant Secretary A I M FUND SERVICES, INC. By: ILLEGIBLE President ATTEST: /S/ P. MICHELLE GRACE - ------------------------ Assistant Secretary 8 EX-99.B9.H 10 MASTER ADMINISTRATIVE SERVICES AGREEMENT 1 EXHIBIT 9(h) MASTER ADMINISTRATIVE SERVICES AGREEMENT This MASTER ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement") is made this 28th day of February, 1997 by and between A I M ADVISORS, INC., a Delaware corporation (the "Administrator"), and SHORT-TERM INVESTMENTS TRUST, a Delaware business trust (the "Company"), with respect to the separate series set forth from time to time in Appendix A to this Agreement (the "Portfolios"). W I T N E S S E T H: WHEREAS, the Company is an open-end investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Company, on behalf of the Portfolios, has retained the Administrator to provide investment advisory services pursuant to a Master Investment Advisory Agreement which provides that the Administrator may perform (or arrange for the performance of) accounting, shareholder servicing and other administrative services as well as investment advisory services to the Portfolios, and that the Administrator may receive reasonable compensation or may be reimbursed for its costs in providing such additional services, upon the request of the Board of Trustees and upon a finding by the Board of Trustees that the provision of such services is in the best interest of the Portfolios and their shareholders; and WHEREAS, the Board of Trustees has found that the provision of such administrative services is in the best interest of the Portfolios and their shareholders, and has requested that the Administrator perform such services; NOW, THEREFORE, the parties hereby agree as follows: 1. The Administrator hereby agrees to provide, or arrange for the provision of, any or all of the following services by the Administrator or its affiliates: (a) the services of a principal financial officer of the Company (including related office space, facilities and equipment) whose normal duties consist of maintaining the financial accounts and books and records of the Company and the Portfolios, including the review of daily net asset value calculations and the preparation of tax returns; and the services (including related office space, facilities and equipment) of any of the personnel operating under the direction of such principal financial officer; (b) the services of staff to respond to shareholder inquiries concerning the status of their accounts; providing assistance to shareholders in exchanges among the mutual funds managed or advised by the Administrator; changing account designations or changing addresses; assisting in the purchase or redemption of shares of the Portfolios; supervising the operations of the custodian(s), transfer agent(s) or dividend agent(s) for the Portfolios; or otherwise providing services to shareholders of the Portfolios; and 2 (c) such other administrative services as may be furnished from time to time by the Administrator to the Company or the Portfolios at the request of the Company's Board of Trustees. 2. The services provided hereunder shall at all times be subject to the direction and supervision of the Company's Board of Trustees. 3. As full compensation for the services performed and the facilities furnished by or at the direction of the Administrator, the Portfolios shall reimburse the Administrator for expenses incurred by them or their affiliates in accordance with the methodologies established from time to time by the Company's Board of Trustees. Such amounts shall be paid to the Administrator on a quarterly basis. 4. The Administrator shall not be liable for any error of judgment or for any loss suffered by the Company or the Portfolios in connection with any matter to which this Agreement relates, except a loss resulting from the Administrator's willful misfeasance, bad faith or gross negligence in the performance of its duties or from reckless disregard of its obligations and duties under this Agreement. 5. The Company and the Administrator each hereby represent and warrant, but only as to themselves, that each has all requisite authority to enter into, execute, deliver and perform its obligations under this Agreement and that this Agreement is legal, valid and binding, and enforceable in accordance with its terms. 6. Nothing in this Agreement shall limit or restrict the rights of any director, officer or employee of the Administrator who may also be a director, officer or employee of the Company to engage in any other business or to devote his time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the right of the Administrator to engage in any other business or to render services of any kind to any other corporation, firm, individual or association. 7. This Agreement shall continue in effect until February 28, 1999 and shall continue in effect from year to year thereafter; provided that such continuance is specifically approved at least annually: (a) (i) by the Company's Board of Trustees or (ii) by the vote of a majority of the outstanding voting securities of the Company (as defined in Section 2(a)(42) of the 1940 Act); and (b) by the affirmative vote of a majority of the Company's trustees who are not parties to this Agreement or interested persons of a party to this Agreement, by votes cast in person at a meeting specifically called for such purpose. This Agreement shall terminate automatically in the event of its assignment (as defined in Section 2(a) (4) of the 1940 Act) or, with respect to one or more Portfolios in the event of termination of the Master Investment Advisory Agreement relating to such Portfolio(s) between the Company and the Administrator. 2 3 8. This Agreement may be amended or modified with respect to one or more Portfolios, but only by a written instrument signed by both the Company and the Administrator. 9. Copies of the Agreement and Declaration of Trust establishing the Company are on file with the Secretary of State of the State of Delaware, and notice is hereby given that, as provided by applicable law, the obligations of or arising out of this Agreement are not binding upon any of the shareholders of the Company individually but are binding only upon the assets and property of the Company and that the shareholders shall be entitled, to the fullest extent permitted by applicable law, to the same limitation on personal liability as stockholders of private corporations for profit. 10. Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (a) to the Administrator at Eleven Greenway Plaza, Suite 1919, Houston, Texas 77046, Attention: President, with a copy to the General Counsel, or (b) to the Company at Eleven Greenway Plaza, Suite 1919, Houston, Texas 77046, Attention: President, with a copy to the General Counsel. 11. This Agreement contains the entire agreement between the parties hereto and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof. 12. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written. A I M ADVISORS, INC. Attest: /s/ DAVID L. KITE By: /s/ ROBERT H. GRAHAM ------------------------------ ------------------------------ Assistant Secretary President (SEAL) SHORT-TERM INVESTMENTS TRUST Attest: /s/ OFELIA M. MAYO By: /s/ ROBERT H. GRAHAM ------------------------------ ------------------------------ Assistant Secretary President (SEAL) 3 4 SHORT-TERM INVESTMENTS TRUST APPENDIX A TO MASTER ADMINISTRATIVE SERVICES AGREEMENT FEBRUARY 28, 1997 Treasury Portfolio Treasury TaxAdvantage Portfolio 4 EX-99.B11.A 11 CONSENT OF BALLARD SPAHR ANDREWS & INGERSOLL 1 EXHIBIT 11(a) CONSENT OF COUNSEL SHORT-TERM INVESTMENTS TRUST We hereby consent to the use of our name and to the references to our firm under the caption "General Information --Legal Counsel" in the Prospectus of each of the Cash Management Class, Institutional Class, Personal Investment Class, Private Investment Class and Resource Class, each a class of the Treasury Portfolio of Short-Term Investments Trust (the "Trust"), and in the Prospectus of each of the Institutional Class and Private Investment Class, each a class of the TaxAdvantage Portfolio of the Trust, which Prospecutses form a part of Post-Effective Amendment No. 30 to the Registration Statement under the Securities Act of 1933 (No. 2-58287) and Amendment No. 31 to the Registration Statement under the Investment Company Act of 1940 (No. 811-2729) on Form N-1A of the Company. /s/Ballard Spahr Andrews & Ingersoll Ballard Spahr Andrews & Ingersoll Philadelphia, Pennsylvania December 11, 1997 EX-99.B11.B 12 CONSENT OF KPMG PEAT MARWICK LLP 1 EXHIBIT 11(b) INDEPENDENT AUDITORS' CONSENT The Board of Trustees and Shareholders Short-Term Investments Trust We consent to the use of our reports on the Treasury Portfolio and the Treasury Tax Advantage Portfolio (portfolios of Short-Term Investments Trust) dated October 4, 1997 included therein and to the references to our firm under the headings "Financial Highlights" in the Prospectuses and "Financial Statements" in the Statements of Additional Information. /s/ KPMG PEAT MARWICK LLP KPMG Peat Marwick LLP Houston, Texas December 17, 1997 EX-99.B15.B 13 AMENDED MASTER DISTRO. PLAN TO RULE 12B-1 1 EXHIBIT 15(b) AMENDED AND RESTATED MASTER DISTRIBUTION PLAN PURSUANT TO RULE 12b-1 OF SHORT-TERM INVESTMENTS TRUST WHEREAS, Short-Term Investments Trust (the "Trust") is engaged in business as an open-end management investment company and is registered as such under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the shares of beneficial interest of the Trust may be divided into a number of separate series, (hereinafter referred to as the "Portfolios"); and WHEREAS, the Portfolios are offered to customers through certain banks and broker-dealers that may offer special shareholder services to such customers; and WHEREAS, the Trust desires to adopt, on behalf of the series of beneficial interest set forth in Appendix A attached hereto (the "Shares"), a plan pursuant to Rule 12b-1 under the Act with respect to the Shares, and the trustees of the Trust have determined that there is a reasonable likelihood that adoption of this plan will benefit the Trust, the Treasury Portfolio and the holders of the Shares; and WHEREAS, the Trust has employed A I M Advisors, Inc. ("AIM") as its investment advisor with respect to the Portfolios to supply investment advice; and WHEREAS, the Trust on behalf of the Portfolios has entered into a Master Distribution Agreement (the "Distribution Agreement") designating a principal distributor of the Shares (the "Distributor"). NOW, THEREFORE, the Trust hereby adopts, on behalf of the Portfolios, the following terms constituting a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the classes of Shares set forth in Appendix A: 1. The Trust may act as a distributor of the Shares of which the Trust is the issuer, pursuant to Rule 12b-1 under the 1940 Act, according to the terms of this Distribution Plan (the "Plan"). 2. Amounts set forth in Appendix A may be expended when and if authorized in advance by the Trust's Board of Trustees. Such amounts may be used to finance any activity which is primarily intended to result in the sale of the Shares, including, but not limited to, expenses of organizing and conducting sales seminars, advertising programs, finders fees, printing of prospectuses and statements of additional information (and supplements thereto) and reports for other than existing shareholders, preparation and distribution of advertising material and sales literature, supplemental payments to the Distributor and the costs of administering the Plan. All amounts expended pursuant to the Plan shall be paid (i) to the Distributor, as an asset-based sales charge, and (ii) as a service fee to certain broker-dealers, banks, and other financial institutions ("Service Providers") who offer continuing personal shareholder services to 2 their customers who invest in the Shares, and who have entered into Shareholder Service Agreements substantially in the form of Exhibit A hereto. The maximum shareholder service fee payable to any Service Provider shall not exceed twenty-five one hundredths of one percent (0.25%) per annum. Amounts paid under the Plan that are not paid as service fees shall be deemed to be asset-based sales charges. No provision of this Plan shall be interpreted to prohibit any payments by the Trust during periods when the Trust has suspended or otherwise limited sales. The activities, the payment of which by the Trust are intended to be within the scope of the Plan, shall include, but not necessarily be limited to, payments to the Distributor for its distribution-related activities and to Service Providers as asset-based sales charges or as a service fee in respect of the Shares owned by shareholders with whom such Service Provider has a shareholder servicing relationship. Shareholder servicing may include, among other things: (i) answering client inquiries regarding the Shares and the Portfolio; (ii) assisting clients in changing dividend options, account designations and addresses; (iii) performing sub-accounting; (iv) establishing and maintaining shareholder accounts and records; (v) processing purchase and redemption transactions; (vi) automatic investment in Shares of customer cash account balances; (vii) providing periodic statements showing a customer's account balance and integrating such statements with those of other transactions and balances in the customer's other accounts serviced by such firm; (viii) arranging for bank wires; and (ix) such other services as the Trust may request on behalf of the Shares, to the extent such firms are permitted to engage in such services by applicable statute, rule or regulation. 3. No additional payments are to be made by the Trust on behalf of a Portfolio with respect to the Shares as a result of the Plan other than the payments such Portfolio is otherwise obligated to make (i) to AIM pursuant to the Master Investment Advisory Agreement, and (ii) for the expenses otherwise incurred by the Portfolio and the Trust on behalf of the Shares in the normal conduct of the Portfolio's business pursuant to the Master Investment Advisory Agreement. However, to the extent any payments by the Trust on behalf of a Portfolio to AIM or such Portfolio's shareholder servicing and transfer agent; by AIM to any Service Providers pursuant to any Shareholder Service Agreement; or, generally, by the Trust on behalf of the Portfolio to any party for the Portfolio's operating expenses, are deemed to be payments for the financing of any activity primarily intended to result in the sale of the Portfolio's shares within the context of Rule 12b-1 under the 1940 Act, then such payments shall be deemed to be made pursuant to the Plan as set forth herein. 4. Notwithstanding any of the foregoing, while the Plan is in effect, the following terms and provisions will apply: a. The officers of the Trust shall report quarterly in writing to the Board of Trustees on the amounts and purpose of payments for any of the activities in paragraph 1 and shall furnish the Board of Trustees with such other information as the Board may reasonably request in connection with such payments in order to enable the Board to make an informed determination of the nature and value of such expenditures. -2- 3 b. The Plan shall continue in effect for a period of more than one year from the date written below only so long as such continuance is specifically approved, at least annually, by the Trust's Board of Trustees, including, the non-interested trustees by vote cast in person at a meeting called for the purpose of voting on the Plan. c. The Plan may be terminated with respect to any class of Shares at any time by vote of a majority of the non-interested trustees, or by vote of a majority of the outstanding voting securities of the applicable class of Shares on not more than sixty (60) days' written notice to any other party to the Plan. d. The Plan may not be amended to materially increase the amount to be spent hereunder, or to permit the Trust on behalf of a Portfolio to make payments for distribution other than to the Distributor, or with respect to a Shareholder Service Agreement, or without approval by the holders of the applicable class of Shares, and all material amendments to the Plan shall be approved by vote of the dis-interested trustees cast in person at a meeting called for the purpose of voting on such amendment. e. So long as the Plan is in effect, the selection and nomination of the Trust's dis-interested trustees shall be committed to the discretion of such dis-interested trustees. 5. This Plan shall be subject to the laws of the State of Texas and shall be interpreted and construed to further promote the operation of the Trust as an open-end investment company. As used herein the terms "Net Asset Value," "Offering Price," "Investment Company," "Open-End Investment Company," "Assignment," "Principal Underwriter," "Interested Person," "Parent," "Affiliated Person," and "Majority of the Outstanding Voting Securities" shall have the meanings set forth in the Securities Act of 1933, as amended, or the 1940 Act, and the rules and regulations thereunder. 6. Nothing herein shall be deemed to protect the parties to any Shareholder Service Agreement entered into pursuant to this Plan against any liability to the Trust or its shareholders to which they would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of their duties hereunder, or by reason of their reckless disregard of their obligations and duties hereunder. -3- 4 IN WITNESS WHEREOF, the undersigned has executed this document as constituting a Plan pursuant to Rule 12b-1. SHORT-TERM INVESTMENTS TRUST Attest:/s/ OFELIA M. MAYO By: /s/ CAROL F. RELIHAN ------------------------------ ------------------------------ Assistant Secretary Senior Vice President Effective as of August 6, 1993, as amended as of December 8, 1994, as further amended as of September 19, 1995, and as further amended as of December 5, 1995. Amended and restated as of June 30, 1997. -4- 5 APPENDIX A TO MASTER DISTRIBUTION PLAN OF SHORT-TERM INVESTMENTS TRUST (DISTRIBUTION FEE) The Trust shall pay the Distributor as full compensation for all services rendered and all facilities furnished under the Distribution Plan for each class as designated below, a Distribution Fee* determined by applying the annual rate set forth below as to each class to the average daily net asset value of the class for the plan year, computed in a manner used for the determination of the offering price of shares of the class. TREASURY PORTFOLIO ANNUAL RATE Personal Investment Class 0.75% Private Investment Class 0.50% Resource Class 0.20% Cash Management Class 0.10% TREASURY TAXADVANTAGE PORTFOLIO ANNUAL RATE Private Investment Class 0.50%
- ---------------- * The Distribution Fee is payable apart from the sales charge, if any, as stated in the current prospectus for the applicable class. The amount of the Distribution Fee is subject to any applicable limitations imposed from time to time by applicable rules of the National Association of Securities Dealers, Inc. -5- 6 EXHIBIT A [AIM LOGO APPEARS HERE] FUND MANAGEMENT COMPANY SHAREHOLDER SERVICE AGREEMENT Fund Management Company (Broker-Dealers and Banks) , 19 -------------- --- Fund Management Company 11 Greenway Plaza, Suite 1919 Houston, Texas 77046-1173 Gentlemen: We desire to enter into an Agreement with Fund Management Company ("FMC") as agent on behalf of the funds listed on Schedule A hereto (the "Funds"), for the provision of continuing personal shareholder services to our clients who are shareholders of, and/or the administration of accounts in, the Funds. We understand that this Shareholder Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act") by each of the Funds, under a Distribution Plan (the "Plan") adopted pursuant to said Rule, and is subject to applicable rules of the National Association of Securities Dealers, Inc. ("NASD"). This Agreement defines the services to be provided by us for which we are to receive payments pursuant to the Plan. The Plan and the Agreement have been approved by a majority of the directors or trustees of the applicable Fund in accordance with the requirements of Rule 12b-1. The terms and conditions of this Agreement will be as follows: 1. We will provide continuing personal shareholder services and/or administrative support services to our customers who may from time to time beneficially own shares of the Funds, including but not limited to, answering routine customer inquiries regarding the Funds, assisting customers in changing dividend options, account designations and addresses, and in enrolling into any of several special investment plans offered in connection with the purchase of the Funds, forwarding sales literature, assisting in the establishment and maintenance of customer accounts and records and in the processing of purchase and redemption transactions, investing dividends and capital gains distributions automatically in shares of the Funds and providing such other services as FMC or the customer may reasonably request, and you will pay us a fee periodically. We represent that we will accept payment of fees hereunder only so long as we continue to provide such services. 2. Shares of the Funds purchased by us on behalf of our clients may be registered in our name or the name of our nominee. The client will be the beneficial owner of the shares of the Funds purchased and held by us in accordance with the client's instructions and the client may exercise all applicable rights of a holder of such Shares. We agree to transmit to FMC in a timely manner, all purchase orders and redemption requests of our clients and to forward to each client all proxy statements, periodic shareholder reports and other communications received from FMC by us on behalf of our clients. FMC on behalf of the Funds agrees to pay all out-of-pocket expenses actually incurred by us in connection with the transfer by us of such proxy statements and reports to our clients as required under applicable law or regulation. Exhibit A has been replaced as of (3/97) 7 Shareholder Service Agreement Page 2 3. We agree to transfer to the Funds' custodian, in a timely manner as set forth in the applicable prospectus, federal funds in an amount equal to the amount of all purchase orders placed by us on behalf of our clients and accepted by FMC. In the event that FMC fails to receive such federal funds on such date (other than through the fault of FMC or the Fund's custodian), we will indemnify the applicable Fund or FMC against any expense (including overdraft charges) incurred by the applicable Fund or FMC as a result of the failure to receive such federal funds. 4. We agree to make available, upon FMC's request, such information relating to our clients who are beneficial owners of Fund shares and their transactions in such shares as may be required by applicable laws and regulations or as may be reasonably requested by FMC. 5. We agree to transfer record ownership of a client's Fund shares to the client promptly upon the request of a client. In addition, record ownership will be promptly transferred to the client in the event that the person or entity ceases to be our client. 6. We acknowledge that if we use AIM LINK(TM) we are solely responsible for the registration of account information for FMC's and A I M Institutional Fund Services, Inc.'s ("AIFS") subaccounting customers through AIM LINK(TM), and that neither FMC, AIFS nor any Fund is responsible for the accuracy of such information; and we will indemnify and hold harmless FMC, AIFS and the Funds for any claims or expenses resulting from the inaccuracy or inadequacy of such information. 7. We will provide such facilities and personnel (which may be all or any part of the facilities currently used in our business, or all or any personnel employed by us) as may be necessary or beneficial in carrying out the purposes of this Agreement. 8. Neither we nor any of our employees or agents are authorized to make any representation to our clients concerning the Funds except those contained in the then current applicable prospectus applicable to the Funds, copies of which will be supplied to us by FMC; and we will have no authority to act as agent for any Fund. Neither a Fund nor A I M Advisors, Inc. ("AIM") will be a party, nor will they be represented as a party, to any agreement that we may enter into with our clients and neither a Fund nor AIM will participate, directly or indirectly, in any compensation that we may receive from our clients in connection with our acting on their behalf with respect to this Agreement. 9. In consideration of the services and facilities described herein, we will receive a maximum annual service fee, payable monthly, as set forth in Schedule A. We understand that this Agreement and the payment of such fees has been authorized and approved by the Board of Directors or Trustees of the applicable Fund, and that the payment of fees hereunder is subject to limitations imposed by the rules of the NASD. Service fees may be remitted to us net of any amounts due and payable to FMC, AIFS or the Funds from us. A schedule of fees relating to subaccounting and administration is attached hereto as Schedule B. 10. FMC reserves the right, at its discretion and without notice, to suspend the sale of any Fund shares or withdraw the sale of shares of a Fund. 11. We represent that our activities on behalf of our clients and pursuant to this Agreement either (i) are not such as to require our registration as a broker-dealer with the Securities and 8 Shareholder Service Agreement Page 3 Exchange Commission (the "SEC") or in the state(s) in which we engage in such activities, or (ii) we are registered as a broker-dealer with the SEC and in the state(s) in which we engage in such activities. 12. If we are a broker-dealer registered with the SEC, we represent that we are a member in good standing of the NASD, and agree to abide by the Rules of Fair Practice of the NASD and all other federal and state rules and regulations that are now or may become applicable to transactions hereunder. Our expulsion from the NASD will automatically terminate this agreement without notice. Our suspension from the NASD or a violation by us of applicable state and federal laws and rules and regulations of authorized regulatory agencies will terminate this agreement effective upon notice received by us from FMC. 13. This Agreement or Schedule A hereto may be amended at any time without our prior consent by FMC, by mailing a copy of an amendment to us at the address set forth below. Such amendment will become effective on the date set forth in such amendment unless we terminate this Agreement within thirty (30) days of our receipt of such amendment. 14. This Agreement may be terminated at any time by FMC on not less than 60 days' written notice to us at our principal place of business. We, on 60 days' written notice addressed to FMC at its principal place of business, may terminate this Agreement. FMC may also terminate this Agreement for cause on violation by us of any of the provisions of this Agreement, said termination to become effective on the date of mailing notice to us of such termination. FMC's failure to terminate for any cause will not constitute a waiver of FMC's right to terminate at a later date for any such cause. This Agreement will terminate automatically in the event of its assignment, the term "assignment" for this purpose having the meaning defined in Section 2(a) (4) of the 1940 Act. 15. All communications to FMC will be sent to it at P.O. Box 4333, Houston, Texas 77210-4333. Any notice to us will be duly given if mailed or telegraphed to us at the address shown on this Agreement. 16. We agree that under this Agreement we will be acting as an independent contractor and not as your employee or agent, nor as an employee or agent of the Funds, and we may not hold ourselves out to any other party as your agent with the authority to bind you or the Funds in any manner. 17. We agree that this Agreement and the arrangement described herein are intended to be non-exclusive and that either of us may enter into similar agreements and arrangements with other parties. 9 Shareholder Service Agreement Page 4 18. This Agreement will become effective as of the date when it is executed and dated below by FMC. This Agreement and all rights and obligations of the parties hereunder will be governed by and construed under the laws of the State of Texas. ----------------------------------- (Firm Name) ----------------------------------- (Address) ----------------------------------- City/State/Zip/County BY: ------------------------------- Name: ------------------------------- Title: ------------------------------- Dated: ------------------------------- For administrative convenience, please supply the following information, which may be updated in writing at any time. Wiring instructions for service fees payable by FMC: ---------------- ----------------- (Bank Name) (Bank ABA Number) ----------------------------------- (Reference Account Name and Number) Contact person for operational issues: ---------------- ----------------- (Name) (Phone Number) ACCEPTED: FUND MANAGEMENT COMPANY BY: ---------------------------- Name: ---------------------------- Title: ---------------------------- Dated: --------------------------- 10 Shareholder Service Agreement Page 5 SCHEDULE A
FUNDS FEE Short-Term Investments Co. Prime Portfolio - Personal Investment Class .40%* Prime Portfolio - Private Investment Class .25% Prime Portfolio - Resource Class .16% Prime Portfolio - Cash Management Class .08% Liquid Assets Portfolio - Private Investment Class .25% Liquid Assets Portfolio - MSTC Cash Reserves Class .20% Liquid Assets Portfolio - Cash Management Class .08% Short-Term Investments Trust Treasury Portfolio - Personal Investment Class .40%* Treasury Portfolio - Private Investment Class .25% Treasury Portfolio - Resource Class .16% Treasury Portfolio - Cash Management Class .08% Treasury TaxAdvantage Portfolio - Private Investment Class .25% Tax-Free Investments Co. Cash Reserve Portfolio - Private Investment Class .25%
*Fees in excess of .25% are for services of an administrative nature, as described in Paragraph 1 of this Agreement. 11 Shareholder Service Agreement Page 6 SCHEDULE B SUBACCOUNTING AND ADMINISTRATION FEES We will be assessed a fee, payable monthly, in the amount of basis points of our monthly average net assets managed by your affiliates. As described in the attached Shareholder Service Agreement, we understand that the amount of any service fees remitted to us will be net of any amounts due and payable to FMC, AIFS or the Funds, including the basis points of monthly average net assets related to subaccounting and administration services provided to us by AIFS. EX-99.B18.B 14 AMENDED MULTIPLE CLASS (RULE 18F-3) PLAN 1 EXHIBIT 18(b) AMENDED AND RESTATED MULTIPLE CLASS PLAN OF THE AIM FAMILY OF FUNDS 1. This Amended and Restated Multiple Class Plan (the "Plan") adopted in accordance with Rule 18f-3 under the Act shall govern the terms and conditions under which the Funds may issue separate Classes of Shares representing interests in one or more Portfolios of each Fund. 2. Definitions. As used herein, the terms set forth below shall have the meanings ascribed to them below. a. Act - Investment Company Act of 1940, as amended. b. CDSC - contingent deferred sales charge. c. CDSC Period - the period of years following acquisition of Shares during which such Shares may be assessed a CDSC upon redemption. d. Class - a class of Shares of a Fund representing an interest in a Portfolio. e. Class A Shares - shall mean those Shares designated as Class A Shares in the Fund's organizing documents, as well as those Shares deemed to be Class A Shares for purposes of this Plan. f. Class B Shares - shall mean those Shares designated as Class B Shares in the Fund's organizing documents. g. Class C Shares - shall mean those Shares designated as Class C Shares in the Fund's organizing documents, as well as those Shares deemed to be Class C Shares for purposes of this Plan. h. Directors - the directors or trustees of a Fund. i. Distribution Expenses - expenses incurred in activities which are primarily intended to result in the distribution and sale of Shares as defined in a Plan of Distribution and/or agreements relating thereto. j. Distribution Fee - a fee paid by a Fund to the Distributor to compensate the Distributor for Distribution Expenses. k. Distributor - A I M Distributors, Inc. or Fund Management Company, as applicable. l. Fund - those investment companies advised by A I M Advisors, Inc. which have adopted this Plan. 1 2 m. Institutional Shares - shall mean Shares of a Fund representing an interest in a Portfolio offered for sale to institutional customers as may be approved by the Directors from time to time and as set forth in the Fund's prospectus. n. Plan of Distribution - Any plan adopted under Rule 12b-1 under the Act with respect to payment of a Distribution Fee. o. Portfolio - a series of the Shares of a Fund constituting a separate investment portfolio of the Fund. p. Service Fee - a fee paid to financial intermediaries for the ongoing provision of personal services to Fund shareholders and/or the maintenance of shareholder accounts. q. Share - a share of common stock of or beneficial interest in a Fund, as applicable. 3. Allocation of Income and Expenses. a. Distribution and Service Fees - Each Class shall bear directly any and all Distribution Fees and/or Service Fees payable by such Class pursuant to a Plan of Distribution adopted by the Fund with respect to such Class. b. Transfer Agency and Shareholder Recordkeeping Fees - Each Class shall bear directly the transfer agency fees and expenses and other shareholder recordkeeping fees and expenses specifically attributable to that Class. c. Allocation of Other Expenses - Each Class shall bear proportionately all other expenses incurred by a Fund based on the relative net assets attributable to each such Class. d. Allocation of Income, Gains and Losses - Except to the extent provided in the following sentence, each Portfolio will allocate income and realized and unrealized capital gains and losses to a Class based on the relative net assets of each Class. Notwithstanding the foregoing, each Portfolio that declares dividends on a daily basis will allocate income on the basis of settled shares. e. Waiver and Reimbursement of Expenses - A Portfolio's adviser, underwriter or any other provider of services to the Portfolio may waive or reimburse the expenses of a particular Class or Classes. 4. Distribution and Servicing Arrangements. The distribution and servicing arrangements identified below will apply for the following Classes offered by a Fund with respect to a Portfolio. The provisions of the Fund's prospectus describing the distribution and servicing arrangements in detail are incorporated herein by this reference. a. Class A Shares. Class A Shares shall be offered at net asset value plus a front-end sales charge as approved from time to time by the Directors and set forth in the Fund's prospectus, may be reduced or eliminated for certain money market fund 2 3 shares, for larger purchases, under a combined purchase privilege, under a right of accumulation, under a letter of intent or for certain categories of purchasers as permitted by Rule 22(d) of the Act and as set forth in the Fund's prospectus. Class A Shares that are not subject to a front-end sales charge as a result of the foregoing shall be subject to a CDSC for the CDSC Period set forth in Section 5(a) of this Plan if so provided in the Fund's prospectus. The offering price of Shares subject to a front-end sales charge shall be computed in accordance with Rule 22c-1 and Section 22(d) of the Act and the rules and regulations thereunder. Class A Shares shall be subject to ongoing Service Fees and/or Distribution Fees approved from time to time by the Directors and set forth in the Fund's prospectus. Although AIM Cash Reserve Shares, AIM Limited Maturity Treasury Shares, AIM Tax-Free Intermediate Shares and shares of AIM Tax-Exempt Bond Fund of Connecticut and AIM Tax Exempt Cash Fund are not designated as "Class A", they are substantially similar to Class A Shares as defined herein and shall be deemed to be Class A Shares for the purposes of this Plan. b. Class B Shares. Class B Shares shall be (i) offered at net asset value, (ii) subject to a CDSC for the CDSC Period set forth in Section 5(b), (iii) subject to ongoing Service Fees and Distribution Fees approved from time to time by the Directors and set forth in the Fund's prospectus, and (iv) converted to Class A Shares eight years from the end of the calendar month in which the shareholder's order to purchase was accepted as set forth in the Fund's prospectus. c. Class C Shares. Class C Shares shall be (i) offered at net asset value, (ii) subject to a CDSC for the CDSC Period set forth in Section 5(c), and (iii) subject to ongoing Service Fees and Distribution Fees approved from time to time by the Directors and set forth in the Fund's prospectus. d. Institutional Shares. Institutional Shares shall be (i) offered at net asset value, (ii) offered only to certain categories of institutional customers as approved from time to time by the Directors and as set forth in the Fund's prospectus and (iii) may be subject to ongoing Service Fees and/or Distribution Fees as approved from time to time by the Directors and set forth in the Fund's prospectus. 5. CDSC. A CDSC shall be imposed upon redemptions of Class A Shares that do not incur a front-end sales charge and of Class B Shares and Class C Shares as follows: a. Class A Shares. The CDSC Period for Class A Shares shall be 18 months. The CDSC Rate shall be as set forth in the Fund's prospectus, the relevant portions of which are incorporated herein by this reference. No CDSC shall be imposed on Class A Shares unless so provided in a Fund's prospectus. b. Class B Shares. The CDSC Period for the Class B Shares shall be six years. The CDSC Rate for the Class B Shares shall be as set forth in the Fund's prospectus, the relevant portions of which are incorporated herein by this reference. 3 4 c. Class C Shares. The CDSC Period for the Class C Shares shall be one year. The CDSC Rate for the Class C Shares shall be as set forth in the Fund's prospectus, the relevant portions of which are incorporated herein by reference. d. Method of Calculation. The CDSC shall be assessed on an amount equal to the lesser of the then current market value or the cost of the Shares being redeemed. No sales charge shall be imposed on increases in the net asset value of the Shares being redeemed above the initial purchase price. No CDSC shall be assessed on Shares derived from reinvestment of dividends or capital gains distributions. The order in which Shares are to be redeemed when not all of such Shares would be subject to a CDSC shall be determined by the Distributor in accordance with the provisions of Rule 6c-10 under the Act. e. Waiver. The Distributor may in its discretion waive a CDSC otherwise due upon the redemption of Shares and disclosed in the Fund's prospectus or statement of additional information and, for the Class A Shares, as allowed under Rule 6c-10 under the Act. 6. Exchange Privileges. Exchanges of Shares shall be permitted between Funds as follows: a. Class A Shares may be exchanged for Class A Shares of another Portfolio, subject to certain limitations set forth in the Fund's prospectus as it may be amended from time to time, relevant portions of which are incorporated herein by this reference. b. Class B Shares may be exchanged for Class B Shares of another Portfolio at their relative net asset value. c. Class C Shares may be exchanged for Class C Shares of any other Portfolio at their relative net asset value. d. Depending upon the Portfolio from which and into which an exchange is being made and when the shares were purchased, shares being acquired in an exchange may be acquired at their offering price, at their net asset value or by paying the difference in sales charges, as disclosed in the Fund's prospectus and statement of additional information. e. CDSC Computation. The CDSC payable upon redemption of Class A Shares, Class B Shares and Class C Shares subject to a CDSC shall be computed in the manner described in the Fund's prospectus. 7. Service and Distribution Fees. The Service Fee and Distribution Fee applicable to any Class shall be those set forth in the Fund's prospectus, relevant portions of which are incorporated herein by this reference. All other terms and conditions with respect to Service Fees and Distribution Fees shall be governed by the Plan of Distribution adopted by the Fund with respect to such fees and Rule 12b-1 of the Act. 4 5 8. Conversion of Class B Shares. a. Shares Received upon Reinvestment of Dividends and Distributions - Shares purchased through the reinvestment of dividends and distributions paid on Shares subject to conversion shall be treated as if held in a separate sub-account. Each time any Shares in a Shareholder's account (other than Shares held in the sub-account) convert to Class A Shares, a proportionate number of Shares held in the sub-account shall also convert to Class A Shares. b. Conversions on Basis of Relative Net Asset Value - All conversions shall be effected on the basis of the relative net asset values of the two Classes without the imposition of any sales load or other charge. c. Amendments to Plan of Distribution for Class A Shares - If any amendment is proposed to the Plan of Distribution under which Service Fees and Distribution Fees are paid with respect to Class A Shares of a Fund that would increase materially the amount to be borne by those Class A Shares, then no Class B Shares shall convert into Class A Shares of that Fund until the holders of Class B Shares of that Fund have also approved the proposed amendment. If the holders of such Class B Shares do not approve the proposed amendment, the Directors of the Fund and the Distributor shall take such action as is necessary to ensure that the Class voting against the amendment shall convert into another Class identical in all material respects to Class A Shares of the Fund as constituted prior to the amendment. 9. This Plan shall not take effect until a majority of the Directors of a Fund, including a majority of the Directors who are not interested persons of the Fund, shall find that the Plan, as proposed and including the expense allocations, is in the best interests of each Class individually and the Fund as a whole. 10. This Plan may not be amended to materially change the provisions of this Plan unless such amendment is approved in the manner specified in Section 9 above. 5 EX-99.B18.C 15 2ND AMENDED MULTIPLE CLASS (RULE 18F-3) PLAN 1 EXHIBIT 18(c) SECOND AMENDED AND RESTATED MULTIPLE CLASS PLAN OF THE AIM FAMILY OF FUNDS 1. This Second Amended and Restated Multiple Class Plan (the "Plan") adopted in accordance with Rule 18f-3 under the Act shall govern the terms and conditions under which the Funds may issue separate Classes of Shares representing interests in one or more Portfolios of each Fund. 2. Definitions. As used herein, the terms set forth below shall have the meanings ascribed to them below. a. Act - Investment Company Act of 1940, as amended. b. CDSC - contingent deferred sales charge. c. CDSC Period - the period of years following acquisition of Shares during which such Shares may be assessed a CDSC upon redemption. d. Class - a class of Shares of a Fund representing an interest in a Portfolio. e. Class A Shares - shall mean those Shares designated as Class A Shares in the Fund's organizing documents, as well as those Shares deemed to be Class A Shares for purposes of this Plan. f. Class B Shares - shall mean those Shares designated as Class B Shares in the Fund's organizing documents. g. Class C Shares - shall mean those Shares designated as Class C Shares in the Fund's organizing documents, as well as those Shares deemed to be Class C Shares for purposes of this Plan. h. Directors - the directors or trustees of a Fund. i. Distribution Expenses - expenses incurred in activities which are primarily intended to result in the distribution and sale of Shares as defined in a Plan of Distribution and/or agreements relating thereto. j. Distribution Fee - a fee paid by a Fund to the Distributor to compensate the Distributor for Distribution Expenses. k. Distributor - A I M Distributors, Inc. or Fund Management Company, as applicable. l. Fund - those investment companies advised by A I M Advisors, Inc. which have adopted this Plan. 1 2 m. Institutional Shares - shall mean Shares of a Fund representing an interest in a Portfolio offered for sale to institutional customers as may be approved by the Directors from time to time and as set forth in the Fund's prospectus. n. Plan of Distribution - Any plan adopted under Rule 12b-1 under the Act with respect to payment of a Distribution Fee. o. Portfolio - a series of the Shares of a Fund constituting a separate investment portfolio of the Fund. p. Service Fee - a fee paid to financial intermediaries for the ongoing provision of personal services to Fund shareholders and/or the maintenance of shareholder accounts. q. Share - a share of common stock of or beneficial interest in a Fund, as applicable. 3. Allocation of Income and Expenses. a. Distribution and Service Fees - Each Class shall bear directly any and all Distribution Fees and/or Service Fees payable by such Class pursuant to a Plan of Distribution adopted by the Fund with respect to such Class. b. Transfer Agency and Shareholder Recordkeeping Fees - Each Class shall bear directly the transfer agency fees and expenses and other shareholder recordkeeping fees and expenses specifically attributable to that Class; provided, however, that where two or more Classes of a Portfolio pay such fees and/or expenses at the same rate or in the same amount, those Classes shall bear proportionately such fees and expenses based on the relative net assets attributable to each such Class. c. Allocation of Other Expenses - Each Class shall bear proportionately all other expenses incurred by a Fund based on the relative net assets attributable to each such Class. d. Allocation of Income, Gains and Losses - Except to the extent provided in the following sentence, each Portfolio will allocate income and realized and unrealized capital gains and losses to a Class based on the relative net assets of each Class. Notwithstanding the foregoing, each Portfolio that declares dividends on a daily basis will allocate income on the basis of settled shares. e. Waiver and Reimbursement of Expenses - A Portfolio's adviser, underwriter or any other provider of services to the Portfolio may waive or reimburse the expenses of a particular Class or Classes. 4. Distribution and Servicing Arrangements. The distribution and servicing arrangements identified below will apply for the following Classes offered by a Fund with respect to a Portfolio. The provisions of the Fund's prospectus describing the distribution and servicing arrangements in detail are incorporated herein by this reference. 2 3 a. Class A Shares. Class A Shares shall be offered at net asset value plus a front-end sales charge as approved from time to time by the Directors and set forth in the Fund's prospectus, may be reduced or eliminated for certain money market fund shares, for larger purchases, under a combined purchase privilege, under a right of accumulation, under a letter of intent or for certain categories of purchasers as permitted by Rule 22(d) of the Act and as set forth in the Fund's prospectus. Class A Shares that are not subject to a front-end sales charge as a result of the foregoing shall be subject to a CDSC for the CDSC Period set forth in Section 5(a) of this Plan if so provided in the Fund's prospectus. The offering price of Shares subject to a front-end sales charge shall be computed in accordance with Rule 22c-1 and Section 22(d) of the Act and the rules and regulations thereunder. Class A Shares shall be subject to ongoing Service Fees and/or Distribution Fees approved from time to time by the Directors and set forth in the Fund's prospectus. Although AIM Cash Reserve Shares, AIM Limited Maturity Treasury Shares, AIM Tax-Free Intermediate Shares and shares of AIM Tax-Exempt Bond Fund of Connecticut and AIM Tax Exempt Cash Fund are not designated as "Class A", they are substantially similar to Class A Shares as defined herein and shall be deemed to be Class A Shares for the purposes of this Plan. b. Class B Shares. Class B Shares shall be (i) offered at net asset value, (ii) subject to a CDSC for the CDSC Period set forth in Section 5(b), (iii) subject to ongoing Service Fees and Distribution Fees approved from time to time by the Directors and set forth in the Fund's prospectus, and (iv) converted to Class A Shares eight years from the end of the calendar month in which the shareholder's order to purchase was accepted as set forth in the Fund's prospectus. c. Class C Shares. Class C Shares shall be (i) offered at net asset value, (ii) subject to a CDSC for the CDSC Period set forth in Section 5(c), and (iii) subject to ongoing Service Fees and Distribution Fees approved from time to time by the Directors and set forth in the Fund's prospectus. d. Institutional Shares. Institutional Shares shall be (i) offered at net asset value, (ii) offered only to certain categories of institutional customers as approved from time to time by the Directors and as set forth in the Fund's prospectus and (iii) may be subject to ongoing Service Fees and/or Distribution Fees as approved from time to time by the Directors and set forth in the Fund's prospectus. 5. CDSC. A CDSC shall be imposed upon redemptions of Class A Shares that do not incur a front-end sales charge and of Class B Shares and Class C Shares as follows: a. Class A Shares. The CDSC Period for Class A Shares shall be 18 months. The CDSC Rate shall be as set forth in the Fund's prospectus, the relevant portions of which are incorporated herein by this reference. No CDSC shall be imposed on Class A Shares unless so provided in a Fund's prospectus. b. Class B Shares. The CDSC Period for the Class B Shares shall be six years. The CDSC Rate for the Class B Shares shall be as set forth in the Fund's prospectus, the relevant portions of which are incorporated herein by this reference. 3 4 c. Class C Shares. The CDSC Period for the Class C Shares shall be one year. The CDSC Rate for the Class C Shares shall be as set forth in the Fund's prospectus, the relevant portions of which are incorporated herein by reference. d. Method of Calculation. The CDSC shall be assessed on an amount equal to the lesser of the then current market value or the cost of the Shares being redeemed. No sales charge shall be imposed on increases in the net asset value of the Shares being redeemed above the initial purchase price. No CDSC shall be assessed on Shares derived from reinvestment of dividends or capital gains distributions. The order in which Shares are to be redeemed when not all of such Shares would be subject to a CDSC shall be determined by the Distributor in accordance with the provisions of Rule 6c-10 under the Act. e. Waiver. The Distributor may in its discretion waive a CDSC otherwise due upon the redemption of Shares and disclosed in the Fund's prospectus or statement of additional information and, for the Class A Shares, as allowed under Rule 6c-10 under the Act. 6. Exchange Privileges. Exchanges of Shares shall be permitted between Funds as follows: a. Class A Shares may be exchanged for Class A Shares of another Portfolio, subject to certain limitations set forth in the Fund's prospectus as it may be amended from time to time, relevant portions of which are incorporated herein by this reference. b. Class B Shares may be exchanged for Class B Shares of another Portfolio at their relative net asset value. c. Class C Shares may be exchanged for Class C Shares of any other Portfolio at their relative net asset value. d. Depending upon the Portfolio from which and into which an exchange is being made and when the shares were purchased, shares being acquired in an exchange may be acquired at their offering price, at their net asset value or by paying the difference in sales charges, as disclosed in the Fund's prospectus and statement of additional information. e. CDSC Computation. The CDSC payable upon redemption of Class A Shares, Class B Shares and Class C Shares subject to a CDSC shall be computed in the manner described in the Fund's prospectus. 7. Service and Distribution Fees. The Service Fee and Distribution Fee applicable to any Class shall be those set forth in the Fund's prospectus, relevant portions of which are incorporated herein by this reference. All other terms and conditions with respect to Service Fees and Distribution Fees shall be governed by the Plan of Distribution adopted by the Fund with respect to such fees and Rule 12b-1 of the Act. 4 5 8. Conversion of Class B Shares. a. Shares Received upon Reinvestment of Dividends and Distributions - Shares purchased through the reinvestment of dividends and distributions paid on Shares subject to conversion shall be treated as if held in a separate sub-account. Each time any Shares in a Shareholder's account (other than Shares held in the sub-account) convert to Class A Shares, a proportionate number of Shares held in the sub-account shall also convert to Class A Shares. b. Conversions on Basis of Relative Net Asset Value - All conversions shall be effected on the basis of the relative net asset values of the two Classes without the imposition of any sales load or other charge. c. Amendments to Plan of Distribution for Class A Shares - If any amendment is proposed to the Plan of Distribution under which Service Fees and Distribution Fees are paid with respect to Class A Shares of a Fund that would increase materially the amount to be borne by those Class A Shares, then no Class B Shares shall convert into Class A Shares of that Fund until the holders of Class B Shares of that Fund have also approved the proposed amendment. If the holders of such Class B Shares do not approve the proposed amendment, the Directors of the Fund and the Distributor shall take such action as is necessary to ensure that the Class voting against the amendment shall convert into another Class identical in all material respects to Class A Shares of the Fund as constituted prior to the amendment. 9. This Plan shall not take effect until a majority of the Directors of a Fund, including a majority of the Directors who are not interested persons of the Fund, shall find that the Plan, as proposed and including the expense allocations, is in the best interests of each Class individually and the Fund as a whole. 10. This Plan may not be amended to materially change the provisions of this Plan unless such amendment is approved in the manner specified in Section 9 above. 5 EX-27.1 16 FDS - TREASURY PORTFOLIO CASH MANAGEMENT CLASS
6 This schedule contains summary financial information for the Short-Term Investments Trust Treasury Portfolio Cash Management Class for the annual period ended August 31, 1997. 0000205007 SHORT-TERM INVESTMENTS TRUST 013 TREASURY PORTFOLIO CASH MANAGEMENT CLASS 12-MOS AUG-31-1997 AUG-31-1997 5275690884 5275690884 8635412 202059 0 5284528355 0 0 23739850 23739850 0 5259983781 5259983781 3703242819 0 0 804724 0 0 5260788505 0 244075766 0 (7296033) 236779733 215978 0 236995711 0 (236779733) (59575) 0 27695639051 (26190404179) 51506090 1556897365 0 648321 0 0 2666379 0 8957752 781320880 1.00 0.05 0.00 (0.05) 0.00 0.00 1.00 0.17 0 0
EX-27.2 17 FDS - TREASURY PORTFOLIO INSTITUTIONAL CLASS
6 This schedule contains summary financial information for the Short-Term Investments Trust Treasury Portfolio Institutional Class for the annual period ended August 31, 1997. 0000205007 SHORT-TERM INVESTMENTS TRUST 002 TREASURY PORTFOLIO INSTITUTIONAL CLASS 12-MOS AUG-31-1997 AUG-31-1997 5275690884 5275690884 8635412 202059 0 5284528355 0 0 23739850 23739850 0 5259983781 5259983781 3703242819 0 0 804724 0 0 5260788505 0 244075766 0 (7296033) 236779733 215978 0 236995711 0 (236779733) (59575) 0 27695639051 (26190404179) 51506090 1556897365 0 648321 0 0 2666379 0 8957752 2873371753 1.00 0.05 0.00 (0.05) 0.00 0.00 1.00 0.09 0 0
EX-27.3 18 FDS - TREASURY PORTFOLIO PERSONAL INVEST. CLASS
6 This schedule contains summary financial information for the Short-Term Investments Trust Treasury Portfolio Personal Investment Class for the annual period ended August 31, 1997. 0000205007 SHORT-TERM INVESTMENTS TRUST 012 TREASURY PORTFOLIO PERSONAL INVESTMENT CLASS 12-MOS AUG-31-1997 AUG-31-1997 5275690884 5275690884 8635412 202059 0 5284528355 0 0 23739850 23739850 0 5259983781 5259983781 3703242819 0 0 804724 0 0 5260788505 0 244075766 0 (7296033) 236779733 215978 0 236995711 0 (236779733) (59575) 0 27695639051 (26190404179) 51506090 1556897365 0 648321 0 0 2666379 0 8957752 242057960 1.00 0.05 0.00 (0.05) 0.00 0.00 1.00 0.60 0 0
EX-27.4 19 FDS - TREASURY PORTFOLIO PRIVATE INVEST. CLASS
6 This schedule contains summary financial information for the Short-Term Investments Trust Treasury Portfolio Private Investment Class for the annual period ended August 31, 1997. 0000205007 SHORT-TERM INVESTMENTS TRUST 011 TREASURY PORTFOLIO PRIVATE INVESTMENT CLASS 12-MOS AUG-31-1997 AUG-31-1997 5275690884 5275690884 8635412 202059 0 5284528355 0 0 23739850 23739850 0 5259983781 5259983781 3703242819 0 0 804724 0 0 5260788505 0 244075766 0 (7296033) 236779733 215978 0 236995711 0 (236779733) (59575) 0 27695639051 (26190404179) 51506090 1556897365 0 648321 0 0 2666379 0 8957752 398566784 1.00 0.05 0.00 (0.05) 0.00 0.00 1.00 0.39 0 0
EX-27.5 20 FDS - TREASURY PORTFOLIO RESOURCE CLASS
6 This schedule contains summary financial information for the Short-Term Investments Trust Treasury Portfolio Resource Class for the annual period ended August 31, 1997. 0000205007 SHORT-TERM INVESTMENTS TRUST 015 TREASURY PORTFOLIO RESOURCE CLASS 12-MOS AUG-31-1997 AUG-31-1997 5275690884 5275690884 8635412 202059 0 5284528355 0 0 23739850 23739850 0 5259983781 5259983781 3703242819 0 0 804724 0 0 5260788505 0 244075766 0 (7296033) 236779733 215978 0 236995711 0 (236779733) (59575) 0 27695639051 (26190404179) 51506090 1556897365 0 648321 0 0 2666379 0 8957752 197440644 1.00 0.05 0.00 (0.05) 0.00 0.00 1.00 0.25 0 0
EX-27.6 21 FDS - TREASURY TAXADV. PORT. INSTITUTIONAL CLASS
6 This schedule contains summary financial information for the Short-Term Investments Trust Treasury TaxAdvantage Portfolio Institutional Class for the annual period ended August 31, 1997. 0000205007 SHORT-TERM INVESMENTS TRUST 007 TREASURY TAXADVANTAGE PORTFOLIO INSTITUTIONAL CLASS 12-MOS AUG-31-1997 AUG-31-1997 290127763 290127763 63821256 28094 0 353977113 55017151 0 1397182 56414333 0 297361476 297361476 457072217 0 0 201304 0 0 297562780 0 20141650 0 (899138) 19242512 77371 0 19319883 0 (19242512) 0 0 1524679522 (1685295086) 904823 (159633370) 0 123933 0 0 705397 0 1151662 337228562 1.00 0.05 0.00 (0.05) 0.00 0.00 1.00 0.20 0 0
EX-27.7 22 FDS - TREASURY TAXADV. PORT. PRIVATE INVEST. CLASS
6 This schedule contains summary financial information for the Short-Term Investments Trust Treasury TaxAdvantage Portfolio Private Investment Class for the annual period ended August 31, 1997. 0000205007 SHORT-TERM INVESMENTS TRUST 014 TREASURY TAXADVANTAGE PORTFOLIO PRIVATE INVESTMENT CLASS 12-MOS AUG-31-1997 AUG-31-1997 290127763 290127763 63821256 28094 0 353977113 55017151 0 1397182 56414333 0 297361476 297361476 457072217 0 0 201304 0 0 297562780 0 20141650 0 (899138) 19242512 77371 0 19319883 0 (19242512) 0 0 1524679522 (1685295086) 904823 (159633370) 0 123933 0 0 705397 0 1151662 49702532 1.00 0.05 0.00 (0.05) 0.00 0.00 1.00 0.45 0 0
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