SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
<Table>
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</Table>
AIM TREASURER'S SERIES TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------------------
(AIM LOGO)
PREMIER U.S. GOVERNMENT MONEY PORTFOLIO
A PORTFOLIO OF
AIM TREASURER'S SERIES TRUST
11 GREENWAY PLAZA, SUITE 100
HOUSTON, TEXAS 77046-1173
December 29, 2004
Dear Shareholder:
The Board of Trustees of AIM Treasurer's Series Trust believes that your
interests would best be served if Premier U.S. Government Money Portfolio (the
"Fund") enters into a new investment advisory agreement with A I M Advisors,
Inc. ("AIM"), the Fund's current investment advisor. The attached proxy
statement seeks your vote in favor of the proposal to approve the new investment
advisory agreement with AIM.
Your vote is important. Please take a moment after reviewing the enclosed
materials to sign and return your proxy card in the enclosed postage-paid return
envelope. If you attend the meeting, you may vote your shares in person. If you
expect to attend the meeting in person, or have questions, please notify us by
calling (800) 952-3502. You may also vote your shares by telephone or through a
website established for that purpose by following the instructions that appear
on the enclosed proxy card. If we do not hear from you after a reasonable amount
of time, you may receive a telephone call from our proxy solicitor, Georgeson
Shareholder Communications, Inc., reminding you to vote your shares.
Sincerely,
-s- Bruce L. Crockett
Bruce L. Crockett
Chair
-s- Robert H. Graham
Robert H. Graham
President
PREMIER U.S. GOVERNMENT MONEY PORTFOLIO
A PORTFOLIO OF
AIM TREASURER'S SERIES TRUST
11 GREENWAY PLAZA, SUITE 100
HOUSTON, TEXAS 77046-1173
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 24, 2005
We cordially invite you to attend our Special Meeting of Shareholders (the
"Special Meeting") to:
1. Approve a new investment advisory agreement with A I M Advisors,
Inc. for Premier U.S. Government Money Portfolio, a portfolio of AIM
Treasurer's Series Trust (the "Trust"); and
2. Transact any other business, not currently contemplated, that may
properly come before the Special Meeting or any adjournments or
postponements thereof.
We are holding the Special Meeting at 11 Greenway Plaza, Suite 100,
Houston, Texas 77046-1173 on February 24, 2005, at 3:00 p.m., Central Time.
Shareholders of record as of the close of business on December 3, 2004 are
entitled to notice of, and to vote at, the Special Meeting and at any
adjournment or postponement of the Special Meeting.
WE REQUEST THAT YOU EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
THE ACCOMPANYING PROXY, WHICH IS BEING SOLICITED BY THE BOARD OF TRUSTEES OF THE
TRUST. YOUR VOTE IS IMPORTANT FOR THE PURPOSE OF ENSURING A QUORUM AT THE
SPECIAL MEETING. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS EXERCISED BY
EXECUTING AND SUBMITTING A REVISED PROXY, BY GIVING WRITTEN NOTICE OF REVOCATION
TO THE SECRETARY OF THE TRUST, OR BY VOTING IN PERSON AT THE SPECIAL MEETING.
/s/ KEVIN M. CAROME
----------------------------------------
Kevin M. Carome
Secretary
December 29, 2004
PREMIER U.S. GOVERNMENT MONEY PORTFOLIO
A PORTFOLIO OF
AIM TREASURER'S SERIES TRUST
11 GREENWAY PLAZA, SUITE 100
HOUSTON, TEXAS 77046-1173
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 24, 2005
INFORMATION ABOUT THE SPECIAL MEETING AND VOTING
PROXY STATEMENT
We are sending you this Proxy Statement and the enclosed proxy card on
behalf of Premier U.S. Government Money Portfolio (the "Fund"), a series
portfolio of AIM Treasurer's Series Trust (the "Trust"), because the Board of
Trustees (the "Board") of the Trust is soliciting your proxy to vote at the
special meeting of shareholders and at any adjournments or postponements of the
special meeting (collectively, the "Special Meeting"). This Proxy Statement
gives you information about the business to be conducted at the Special Meeting.
You do not need to attend the Special Meeting to vote. Instead, you may
simply complete, sign and return the enclosed proxy card.
This proxy statement, the foregoing Notice of Special Meeting and the
enclosed proxy card are first being sent on or about December 29, 2004 to all
shareholders entitled to vote. Shareholders of record of the Fund as of the
close of business on December 3, 2004 (the "Record Date") are entitled to notice
of and to vote at the Special Meeting. The number of shares of the Fund
outstanding on the Record Date was 36,670,934. Each share of the Fund is
entitled to one vote on each proposal (a fractional share has a fractional
vote).
TIME AND PLACE OF SPECIAL MEETING
We are holding the Special Meeting at 11 Greenway Plaza, Suite 100,
Houston, Texas 77046-1173 on February 24, 2005, 3:00 p.m., Central Time.
ANNUAL REPORT DELIVERY
We have previously sent to shareholders the annual report for the Fund,
including financial statements for the fiscal year ended August 31, 2004. The
financial statements should be read in conjunction with the
disclosure included in this Proxy Statement under the heading "Settled
Enforcement Actions and Investigations Related to Market Timing, Regulatory
Inquiries and Pending Litigation." If you have not received such report or would
like to receive an additional copy, please contact AIM Investment Services,
Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or call (800)
347-4246. We will furnish such report free of charge.
VOTING IN PERSON
If you do attend the Special Meeting and wish to vote in person, we will
provide you with a ballot prior to the vote. However, if your shares are held in
the name of your broker, bank or other nominee, you must bring a letter from the
nominee indicating that you are the beneficial owner of the shares on the Record
Date and authorizing you to vote. Please call the Trust at (800) 952-3502 if you
plan to attend the Special Meeting.
VOTING BY PROXY
Whether you plan to attend the Special Meeting or not, we urge you to
complete, sign and date the enclosed proxy card and to return it promptly in the
envelope provided. Returning the proxy card will not affect your right to attend
the Special Meeting or to vote at the Special Meeting if you choose to do so.
If you properly complete and sign your proxy card and send it to us in time
to vote at the Special Meeting, your proxy (the individual(s) named on the proxy
card) will vote your shares as you have directed. If you sign your proxy card
but do not make specific choices, your proxy will vote your shares in the manner
recommended by the Board on the one item of business known to be presented
(i.e., FOR the proposal to approve a new investment advisory agreement with
A I M Advisors, Inc. ("AIM") for the Fund) and in accordance with management's
recommendation on any other matters that may come before the Special Meeting.
If you authorize a proxy, you may revoke it at any time before it is
exercised by sending in another proxy card with a later date or by notifying the
Trust's Secretary in writing to the address of the Trust set forth on the cover
page of this Proxy Statement before the Special Meeting that you have revoked
your proxy. In addition, although merely attending the Special Meeting will not
revoke your proxy, if you are present at a Special Meeting you may withdraw your
proxy and vote in person. Shareholders may also transact any other business not
currently contemplated that may properly come before the Special Meeting.
2
VOTING BY TELEPHONE OR THE INTERNET
You may vote your shares by telephone or through a website established for
that purpose by following the instructions that appear on the proxy card
accompanying this Proxy Statement.
QUORUM REQUIREMENT AND ADJOURNMENT
A quorum of shareholders is necessary to hold a valid meeting. A quorum
will exist for the meeting if shareholders entitled to vote one-third of the
issued and outstanding shares of the Fund on the Record Date are present at the
Special Meeting in person or by proxy. Abstentions will count as shares present
at the Special Meeting for purposes of establishing a quorum.
If a quorum is not present at the Special Meeting or a quorum is present
but sufficient votes to approve a Proposal are not received, the persons named
as proxies may propose one or more adjournments of the Special Meeting to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of the votes cast at the Special Meeting in
person or by proxy. The persons named as proxies will vote those proxies they
are entitled to vote FOR a proposal in favor of such an adjournment and will
vote those proxies required to be voted AGAINST such proposal AGAINST such an
adjournment. A shareholder vote may be taken on a proposal in this Proxy
Statement prior to any such adjournment if sufficient votes have been received
and it is otherwise appropriate.
VOTE NECESSARY TO APPROVE PROPOSAL 1
Approval of Proposal 1 requires the lesser of (a) the affirmative vote of
67% or more of the voting securities of the Fund present or represented by proxy
at the Special Meeting, if the holders of more than 50% of the outstanding
voting securities of the Fund are present or represented by proxy, or (b) the
affirmative vote of more than 50% of the outstanding voting securities of the
Fund. Abstentions are counted as present but are not considered votes cast at
the Special Meeting. As a result, they have the same effect as a vote AGAINST
Proposal 1 because approval of Proposal 1 requires the affirmative vote of a
percentage of the voting securities present or represented by proxy or a
percentage of the outstanding voting securities.
PROXY SOLICITATION
AIM has engaged the services of Georgeson Shareholder Communications, Inc.
("Solicitor") to assist in the solicitation of proxies for the
3
Special Meeting. Solicitor's costs are estimated to be approximately $5,800. The
Trust expects to solicit proxies principally by mail, but the Trust or Solicitor
may also solicit proxies by telephone, facsimile or personal interview. The
Trust's officers will not receive any additional or special compensation for any
such solicitation performed by them. AIM will pay for the cost of soliciting
proxies, the printing and mailing of this Proxy Statement, the attached Notice
of Special Meeting of Shareholders, the enclosed proxy card, and any further
solicitation.
OTHER MATTERS
Management does not know of any matters to be presented at the Special
Meeting other than the one discussed in this Proxy Statement. If any other
matters properly come before the Special Meeting, the shares represented by
proxies will be voted with respect thereto in accordance with management's
recommendation.
SHAREHOLDER PROPOSALS
As a general matter, the Fund does not hold regular meetings of
shareholders. If you wish to submit a proposal for consideration at a meeting of
shareholders of the Fund, you should send such proposal to the Trust at the
address set forth on the first page of this Proxy Statement. To be considered
for presentation at a meeting of shareholders, the Trust must receive proposals
a reasonable time before proxy materials are prepared for the next shareholder
meeting. Your proposal also must comply with applicable law.
ADDITIONAL INFORMATION
INVESTMENT ADVISOR AND ADMINISTRATOR
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, is the
investment advisor and administrator for the Fund.
PRINCIPAL UNDERWRITER
A I M Distributors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173, is the principal underwriter for the Fund.
4
SECURITY OWNERSHIP OF MANAGEMENT AND TRUSTEES
Information regarding the ownership of the Fund's shares and shares of the
Trust's other series portfolios by the trustees and executive officers of the
Trust can be found in Exhibit A.
OWNERSHIP OF SHARES
A list of the name, address and ownership percentage of each person who, as
of December 3, 2004, to the knowledge of the Trust, owned 5% or more of the
outstanding shares of the Fund and of the Trust's other series portfolios can be
found in Exhibit B.
PROPOSAL 1
APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT
BACKGROUND
AIM currently serves as the investment advisor to the Fund. At an in-person
meeting of the Board held on December 2, 2004, the Board approved a new advisory
agreement under which AIM will continue to serve as investment advisor to the
Fund. Pursuant to this new advisory agreement, AIM will bear all operating
expenses of the Fund except for certain expenses as described below and the Fund
will pay an annual "all-in" fee of 0.25% of average daily net assets. The Board
believes that these changes will result in substantially lower aggregate fees
which will be payable by the Fund for advisory and other services than the fees
the Fund currently pays for such services. Therefore, the Board believes such
changes will be of substantial benefit to Fund shareholders. Neither the
portfolio management team nor the investment objective and strategies of the
Fund will change as a result of this new advisory agreement.
The Board recommends that you approve the new advisory agreement. The Board
is asking you to vote on this new agreement because the Trust may enter into a
new advisory agreement for the Fund only with shareholder approval. If approved,
this new agreement would replace the current advisory agreement between AIM and
the Trust with respect to the Fund. The form of the proposed Master Investment
Advisory Agreement with AIM can be found at Appendix I.
A description of how the proposed advisory agreement differs from the
current advisory agreement is set forth below beginning under "Terms of the
Proposed Advisory Agreement." At an in-person meeting of the Board
5
held on December 2, 2004, the Board, including a majority of the independent
trustees, voted to recommend that shareholders approve a proposal to approve the
proposed advisory agreement for the Fund.
THE FUND'S INVESTMENT ADVISOR
AIM became the investment advisor for the Fund under the current advisory
agreement on the date indicated below. The Fund's shareholders last voted on the
current advisory agreement on the date and for the purpose indicated below. The
Board, including a majority of the independent trustees, last approved the
current advisory agreement on June 8, 2004.
<Table>
<Caption>
DATE CURRENT ADVISORY
DATE AIM BECAME AGREEMENT WAS
ADVISOR UNDER CURRENT SUBMITTED TO A VOTE
NAME OF FUND ADVISORY AGREEMENT OF SHAREHOLDERS
- ------------ --------------------- ---------------------
Premier U.S. Government
Money Portfolio......... November 25, 2003 October 21, 2003(1)
</Table>
- ---------------
(1) Shareholders last voted on the agreement on October 21, 2003 for the purpose
of approving a new investment advisory agreement with AIM. Such approval was
necessary because the then-existing investment advisory agreement for the
Fund was with INVESCO Funds Group, Inc. ("INVESCO") (the Fund's former
investment advisor). AMVESCAP PLC ("AMVESCAP"), the parent of the Fund's
current and former investment advisor, AIM and INVESCO, respectively, had
undertaken an integration initiative for its North American mutual funds
operations. As part of such integration initiative, AMVESCAP restructured
the advisory and administrative servicing arrangements so that AIM became
investment advisor for all INVESCO Funds and AIM Funds, including the Fund.
AIM is a wholly owned subsidiary of A I M Management Group Inc. ("AIM
Management"), a holding company with its principal offices at 11 Greenway Plaza,
Suite 100, Houston, Texas 77046-1173. AIM Management is a wholly-owned
subsidiary of AVZ, Inc., a holding company with its principal offices at 1315
Peachtree Street, NE, Suite 500, Atlanta, Georgia 30309. AIM Management is an
indirect wholly-owned subsidiary of AMVESCAP, 30 Finsbury Square, London EC2A
1AG, United Kingdom. AVZ, Inc. is a wholly-owned subsidiary of AMVESCAP.
AMVESCAP and its subsidiaries are an independent management group.
6
The following table provides information with respect to the principal
executive officer and the directors of AIM. The business address of each
principal executive officer and director is 11 Greenway Plaza, Suite 100,
Houston, Texas 77046.
<Table>
<Caption>
NAME POSITION WITH AIM PRINCIPAL OCCUPATION
- ---- ---------------------- --------------------------
Mark H. Williamson...... Director, Chairman and Director, President and
President Chief Executive Officer,
A I M Management Group
Inc. (financial services
holding company);
Director, A I M Capital
Management, Inc.
(registered investment
advisor) and A I M
Distributors, Inc.
(registered broker
dealer); Director and
Chairman, AIM Investment
Services, Inc. (registered
transfer agent), Fund
Management Company
(registered broker dealer)
and INVESCO Distributors,
Inc. (registered broker
dealer) and Chief
Executive Officer,
AMVESCAP PLC -- AIM
Division (parent of AIM
and a global investment
management firm);
formerly: Director,
Chairman, President and
Chief Executive Officer,
INVESCO Funds Group, Inc;
President and Chief
Executive Officer, INVESCO
Distributors, Inc.; Chief
Executive Officer,
AMVESCAP PLC -- Managed
Products; Chairman and
Chief Executive Officer,
NationsBanc Advisors,
Inc.; and Chairman,
NationsBanc Investments,
Inc.
</Table>
7
<Table>
<Caption>
NAME POSITION WITH AIM PRINCIPAL OCCUPATION
- ---- ---------------------- --------------------------
Kevin M. Carome......... Director, Senior Vice Director, Senior Vice
President, General President, Secretary and
Counsel and Secretary General Counsel, AIM
Management Group Inc.
(financial services
holding company); Director
and Vice President,
INVESCO Distributors,
Inc.; Vice President, AIM
Capital Management, Inc.
and AIM Investment
Services, Inc.; Senior
Vice President, AIM
Distributors, Inc.; and
Director, Vice President
and General Counsel, Fund
Management Company;
formerly: Senior Vice
President and General
Counsel, Liberty Financial
Companies, Inc.; Senior
Vice President and General
Counsel, Liberty Funds
Group, LLC; and Vice
President, AIM
Distributors, Inc.
Dawn M. Hawley.......... Director, Senior Vice Director, Senior Vice
President and Chief President and Chief
Financial Officer Financial Officer, A I M
Management Group Inc.;
Vice President and
Treasurer, A I M Capital
Management, Inc. and A I M
Distributors, Inc. and
INVESCO Distributors,
Inc.; Director, Vice
President and Chief
Financial Officer, AIM
Investment Services, Inc.;
and Vice President and
Chief Financial Officer,
Fund Management Company
</Table>
POSITIONS WITH AIM HELD BY THE TRUST'S TRUSTEES OR OFFICERS
Mark H. Williamson, who is a trustee and officer of the Trust, is also a
director and officer of AIM. He also beneficially owns shares of AMVESCAP and
options to purchase shares of AMVESCAP.
Robert G. Alley, Lisa O. Brinkley, Kevin M. Carome, Stuart W. Coco, Sidney
M. Dilgren and Karen Dunn Kelley who are officers of the
8
Trust are also directors and/or officers of AIM. Each such officer of the Trust
beneficially owns shares of AMVESCAP and/or owns options to purchase shares of
AMVESCAP.
TERMS OF THE CURRENT ADVISORY AGREEMENT
Under the terms of the current advisory agreement, AIM acts as investment
manager and administrator for the Fund. As investment manager, AIM provides a
continuous investment program for the Fund, including supervision of all aspects
of the Fund's operations, including the investment and reinvestment of cash,
securities or other properties comprising the Fund's assets and investment
research and management, subject at all times to the policies and control of the
Board. The principal terms of the current advisory agreement are summarized
below; however, the following summary is qualified by reference to the complete
text of the current advisory agreement as filed with the Securities and Exchange
Commission ("SEC") on November 25, 2003 (and which is available for inspection
at www.sec.gov).
DELEGATION
The current advisory agreement provides that AIM may delegate any or all of
its duties or obligations under the agreement to one or more sub-advisors. The
current advisory agreement also provides that AIM may replace sub-advisors from
time to time, in accordance with applicable federal securities laws, rules and
regulations in effect or interpreted from time to time by the SEC or with
exemptive orders or other similar relief. Any such delegation shall require
approval by the Board and the shareholders unless, in accordance with applicable
federal securities laws, rules, interpretations and exemptions, AIM is not
required to seek shareholder approval of the appointment of a sub-advisor. AIM
has not appointed a sub-advisor for the Fund and does not currently intend to do
so.
BROKER-DEALER RELATIONSHIPS AND AFFILIATED BROKERAGE
The current advisory agreement specifies that AIM's primary consideration
in effecting a security transaction will be to obtain the best execution. In
selecting broker-dealers to execute particular transactions, AIM will consider
the best net price available, the reliability, integrity and financial condition
of the broker-dealer, the size of and difficulty in executing the order and the
value of the expected contribution of the broker-dealer to the investment
performance of the Trust's portfolio funds on a continuing basis. Accordingly,
the price to the Fund in any particular
9
transaction may be less favorable than that available from another broker-
dealer if the difference is believed by AIM reasonably justified by other
aspects of the execution services offered by the broker-dealer.
Although AIM does not currently execute trades through brokers or dealers
that are affiliated with AIM, the current advisory agreement includes a
provision that permits such trades, subject to compliance with applicable
federal securities laws, rules, interpretations and exemptions.
NON-EXCLUSIVITY PROVISIONS
The current advisory agreement acknowledges that AIM acts as investment
manager or advisor to fiduciary and other managed accounts and to other
investment companies and accounts. The current advisory agreement states that
whenever the Fund and one or more other investment companies or accounts advised
by AIM have moneys available for investment, investments suitable and
appropriate for each will be allocated in accordance with a formula believed by
AIM to be equitable to the Fund and such other companies and accounts. Such
allocation procedure may adversely affect the size of the positions obtainable
and the prices realized by the Fund. The non-exclusivity provisions of the
current advisory agreement also explicitly recognize that officers and trustees
of AIM may serve as officers or trustees of the Trust, and that officers and
trustees of the Trust may serve as officers or directors of AIM to the extent
permitted by law; and that officers and directors of AIM do not owe an exclusive
duty to the Trust. The practical impact of this provision is that the officers
and directors of AIM do not devote their full time to providing services to the
Trust, and that they are permitted to engage in and devote time and attention to
other businesses or to render services of whatever kind to other entities,
including other AIM funds.
TERMINATION
The current advisory agreement for the Fund is in effect from year to year
only if such continuance is specifically approved at least annually by (i) the
Board or the vote of a majority of the outstanding voting securities (as defined
in the Investment Company Act of 1940, as amended (the "1940 Act")) of the Fund,
and (ii) the affirmative vote of a majority of the trustees of the Trust who are
not interested persons of AIM or the Trust by votes cast in person at a meeting
called for such purpose. The current advisory agreement provides that the Board,
a majority of the outstanding voting securities of the Fund or AIM may terminate
the agreement with respect to the Fund on 60 days' written notice without
penalty. The current
10
agreement terminates automatically in the event of its assignment (as defined in
the 1940 Act).
LIMITATION OF LIABILITY OF AIM, THE TRUST AND SHAREHOLDERS
The current advisory agreement states that in the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of obligations
or duties under the agreement on the part of AIM or any of its officers,
directors, employees, AIM will not be subject to liability to the Trust or the
Fund or to any shareholders of the Fund for any act or omission in the course
of, or connected with, rendering services under the agreement or for any losses
that may be sustained in the purchase, holding or sale of any security.
In addition, the current advisory agreement states that no series of the
Trust shall be liable for the obligations of any other series of the Trust, and
the liability of AIM to one series of the Trust shall not automatically render
AIM liable to any other series of the Trust. Consistent with applicable law, the
current advisory agreement includes a provision stating that AIM's obligations
under the agreement are not binding on any shareholders of the Trust
individually and that shareholders are entitled to the same limitation on
personal liability as shareholders of private corporations for profit.
STATE LAW GOVERNING THE AGREEMENT
Questions of state law under the current advisory agreement with AIM are
governed by the laws of Texas.
SECURITIES LENDING
The Fund is not currently permitted to engage in securities lending. If,
however, the Fund were permitted to engage in securities lending in the future
and sought to engage in such securities lending, AIM would provide the Fund with
investment advisory services and related administrative services. The current
advisory agreement includes a provision that specifies the administrative
services to be rendered by AIM if the Fund engages in securities lending
activities, as well as the compensation AIM may receive for such administrative
services. Administrative services to be provided would include: (a) overseeing
participation in the securities lending program to ensure compliance with all
applicable regulatory and investment guidelines; (b) assisting the securities
lending agent (the "agent") or principal in determining which securities are
available for loans; (c) monitoring the agent to ensure that securities loans
are effected in accordance with AIM's instructions and with procedures adopted
by the
11
Board; (d) preparing appropriate periodic reports for, and seeking appropriate
approvals from, the Board with respect to securities lending activities; (e)
responding to agent inquiries; and (f) performing such other duties as may be
necessary.
In accordance with an exemptive order issued by the SEC, before the Fund
may participate in a securities lending program, the Board must approve such
participation. In addition, the Board must evaluate the securities lending
arrangements annually, and must determine that it is in the best interests of
the shareholders of the Fund to invest in AIM advised money market funds any
cash collateral the Fund receives as security for the borrower's obligation to
return the loaned securities. If the Fund invests the cash collateral in AIM
advised money market funds, AIM will receive additional advisory fees from these
money market funds, because the invested cash collateral will increase the
assets of these funds and AIM receives advisory fees based upon the assets of
these funds.
AIM will not receive any additional compensation from the Fund for advisory
services rendered in connection with securities lending activities if the Fund
engages in such activities. As compensation for the related administrative
services AIM will provide the Fund if the Fund engages in securities lending,
the Fund will pay AIM a fee equal to 25% of the net monthly interest or fee
income retained by or paid to the Fund from such activities. AIM intends to
waive this fee, and has agreed to seek Board approval prior to its receipt of
all or a portion of such fee.
PAYMENT OF EXPENSES
The current advisory agreement for the Fund provides that the Fund will pay
or cause to be paid all of the ordinary business expenses incurred in the
operations of the Fund and the offering of its shares. These expenses borne by
the Fund include, without limitation:
- brokerage commissions;
- taxes;
- legal, accounting, auditing, or governmental fees;
- the cost of preparing share certificates;
- custodian, transfer and shareholder service agent costs;
- expenses of issue, sale redemption and repurchase of shares;
- expenses of registering and qualifying shares for sale;
12
- expenses relating to trustees and shareholder meetings;
- the cost of preparing and distributing reports and notices to
shareholders;
- the fees and other expenses incurred by the Trust on behalf of the Fund
in connection with membership in investment company organizations; and
- the cost of printing copies of prospectuses and statements of additional
information distributed by the Fund's shareholders.
ADVISORY FEE
The Trust currently pays AIM out of the assets of the Fund, as full
compensation for all advisory services rendered, an advisory fee for the Fund.
Such fee is calculated by applying the annual rate set forth in the table below
to the average daily net assets of the Fund for the calendar year, computed in
the manner used for the determination of the net asst value of shares of the
Fund. The aggregate amount of the advisory fee paid to AIM during the most
recently completed fiscal year of the Fund is set forth in the table under the
heading "Comparative Expense Information."
<Table>
<Caption>
ANNUAL RATE
NAME OF FUND (BASED ON AVERAGE DAILY NET ASSETS)(1)
- ------------ --------------------------------------
Premier U.S. Government Money
Portfolio.................... 0.40% of the first $300 million; 0.30%
of the next $200 million; 0.20% of the
excess over $500 million
</Table>
- ---------------
(1) Effective July 1, 2004, the Board approved an amendment to the Fund's
current investment advisory agreement which reduced the advisory fee for the
Fund to the amounts shown in the table. For the period September 1,
2003 - June 30, 2004 the advisory fee rate was 0.50% of the first $300
million; 0.40% of the next $200 million; 0.30% of the excess over $500
million of the Fund's average daily net assets. Currently, the effective
advisory fee rate for the Fund is 0.40% of the Fund's average daily net
assets.
ADDITIONAL SERVICES PROVIDED BY AIM AND ITS AFFILIATES
AIM and its affiliates also provide additional services to the Trust and
the Fund. AIM currently provides or arranges for others to provide accounting
and administrative services to the Fund pursuant to a Master
13
Administrative Services Agreement. AIM Investment Services, Inc. ("AIS")
currently serves as the Fund's transfer agent pursuant to a Transfer Agency and
Services Agreement. Prior to October 1, 2003, INVESCO Funds Group, Inc.
("INVESCO") served as the Fund's transfer agent.
A I M Distributors, Inc. ("ADI") currently serves as principal underwriter
for the Fund's Investor Class shares. It is anticipated that Fund Management
Company ("FMC") will serve as the Fund's principal underwriter with respect to
its Institutional Class shares, currently scheduled to commence sales on or
about February 25, 2005. ADI, AIS and FMC are indirect wholly owned subsidiaries
of AMVESCAP.
The table under the heading "Comparative Expense Information" sets forth
the non-advisory fees paid by the Fund during its most recently completed fiscal
year to AIM and to affiliates of AIM. If the proposed advisory agreement is
approved by shareholders, the non-advisory services provided by AIM, ADI and AIS
will continue to be provided with respect to the Fund's Investor Class shares
but without charge to the Fund. (See "Certain Service Agreements" and
"Comparative Expense Information" below.)
14
ADVISORY FEES CHARGED BY AIM FOR SIMILAR FUNDS IT MANAGES
The following table provides information with respect to the annual
advisory fee rates paid to AIM by certain funds that have a similar investment
objective as Premier U.S. Government Money Portfolio.
<Table>
<Caption>
FEE WAIVER, EXPENSE
TOTAL NET ASSETS LIMITATIONS AND/OR
AT THE END OF THE EXPENSE
ANNUAL RATE MOST RECENTLY REIMBURSEMENTS
(BASED ON AVERAGE DAILY COMPLETED FOR THE MOST RECENTLY
NAME OF FUND NET ASSETS) FISCAL YEAR COMPLETED FISCAL YEAR
- ------------ ----------------------- ----------------- ---------------------
AIM V.I. Money Market 0.40% of the first $250 $ 79,887,894 N/A
Fund............... million; 0.35% of the
excess over $250
million
Liquid Assets 0.15% $19,912,129,274 Limit Total Operating
Portfolio.......... Expenses (excluding
Rule 12b-1
distribution fees,
interest expense,
taxes and
extraordinary items
and indirect expenses
resulting from
expense offset
arrangements, if any)
to 0.12%
STIC Prime 0.15% $ 6,374,670,205 Limit Total Operating
Portfolio.......... Expenses (excluding
Rule 12b-1
distribution fees,
interest expense,
taxes and
extraordinary items
and indirect expenses
resulting from
expense offset
arrangements, if any)
to 0.12%
</Table>
15
<Table>
<Caption>
FEE WAIVER, EXPENSE
TOTAL NET ASSETS LIMITATIONS AND/OR
AT THE END OF THE EXPENSE
ANNUAL RATE MOST RECENTLY REIMBURSEMENTS
(BASED ON AVERAGE DAILY COMPLETED FOR THE MOST RECENTLY
NAME OF FUND NET ASSETS) FISCAL YEAR COMPLETED FISCAL YEAR
- ------------ ----------------------- ----------------- ---------------------
Government & Agency 0.10% $ 3,180,993,964 Limit Total Operating
Portfolio.......... Expenses (excluding
Rule 12b-1
distribution fees,
interest expense,
taxes and
extraordinary items
and indirect expenses
resulting from
expense offset
arrangements, if any)
to 0.12%
Treasury Portfolio... 0.15% $ 5,322,187,511 Waive 0.075% of
advisory fee on
average net assets
Government 0.20% of the first $250 $ 354,308,043 Limit Total Operating
TaxAdvantage million; 0.15% over Expenses (excluding
Portfolio.......... $250 million up to and Rule 12b-1
including $500 million; distribution fees,
0.10% of the excess interest expense,
over $500 million taxes and
extraordinary items
and indirect expenses
resulting from
expense offset
arrangements, if any)
to 0.12%
AIM Money Market 0.40% of the first $1 $ 1,528,643,291 AIM and/or the fund's
Fund............... billion; 0.35% of the distributor have been
excess over $1 billion waiving fees and/or
reimbursing expenses
in order to increase
the yield for
shareholders
</Table>
16
TERMS OF THE PROPOSED ADVISORY AGREEMENT
The primary differences between the current advisory agreement with AIM and
the proposed advisory agreement with AIM are to:
- change certain obligations regarding the payment of expenses of the Fund;
and
- change the advisory fee rate payable by the Fund to AIM.
Each of these changes is discussed more fully below. Except for these changes,
the terms of the current advisory agreement and the proposed advisory agreement
are substantially identical, except for the effective dates and the renewal
dates.
PAYMENT OF EXPENSES
The current advisory agreement provides that the Fund will pay or cause to
be paid all of its ordinary business expenses incurred in the operations of the
Fund and the offering of its shares. The proposed advisory agreement provides
that AIM will pay all of the expenses incurred by the Trust and the Fund, as
applicable, in connection with their operations except for transfer agency,
sub-accounting, recordkeeping, and administrative services which are to be
provided by AIM or an affiliate of AIM at no cost to the Fund under separate
transfer agency and administrative services agreements between the Fund and AIM
or an AIM affiliate, as applicable, which are or have been approved by the
Board, including all of the independent trustees. (See "Certain Service
Agreements.")
Under the proposed advisory agreement, AIM will pay the following costs and
expenses, unless the Board determines that the Fund shall pay for any such item:
- the fees, charges and expenses of any independent public accountants,
custodian, depository, dividend disbursing agent, dividend reinvestment
agent, independent pricing services and legal counsel for the Trust or
for the Fund;
- the taxes including franchise, income, issue, transfer, business license,
and other corporate fees payable by the Trust or the Fund to Federal,
state, county, city, or other governmental agents;
- the fees and expenses involved in maintaining the registration and
qualification of the Trust and of its shares under laws administered by
the SEC or under other applicable regulatory requirements,
17
including the preparation and printing of prospectuses and statements of
additional information;
- the compensation and expenses of the trustees of the Trust;
- the costs of printing and distributing reports, notices of shareholders'
meetings, proxy statements, dividend notices, prospectuses, statements of
additional information and other communications to the Trust's
shareholders, as well as all expenses of shareholders' meetings and
trustees' meetings;
- all costs, fees or other expenses arising in connection with the
organization and filing of the Trust's Certificate of Trust including its
initial registration and qualification under the 1940 Act and under the
Securities Act of 1933, as amended, the initial determination of its tax
status and any rulings obtained for this purpose, the initial
registration and qualification of its securities under the laws of any
State and the approval of the Trust's operations by any other Federal or
State authority;
- the expenses, including fees and disbursements of counsel, in connection
with litigation by or against the Trust and the Fund; and
- premiums for the fidelity bond maintained by the Trust pursuant to
Section 17(g) of the 1940 Act and rules promulgated thereunder (except
those premiums that may be allocated to AIM as an insured).
The Board has specifically approved the payment by the Fund of interest,
taxes and extraordinary items such as litigation costs.
In addition, the proposed advisory agreement does not explicitly list the
salary and other compensation of the Senior Officer of the Trust appointed
pursuant to the New York Attorney General Assurance of Discontinuance applicable
to AIM (the "Senior Officer") in the non-exclusive list of costs and expenses
listed above payable by AIM. (See "Settled Enforcement Actions and
Investigations Related to Market Timing, Regulatory Inquiries and Pending
Litigation" below.) However, if shareholders approve the proposed advisory
agreement, AIM will pay the salary and other compensation of the Senior Officer
as part of the Fund's ordinary operating expenses under the new "all-in"
advisory fee.
The proposed advisory agreement also provides that at the Trust's request,
AIM will also furnish to the Trust, at the expense of AIM, executive,
statistical, administrative, internal accounting and clerical services as may be
required in the judgment of the Board. These services
18
would include, among other things, the maintenance (but not preparation) of the
Trust's accounts and records, and the preparation (apart from legal and
accounting costs) of all requisite corporate documents such as tax returns and
reports to the SEC and Trust shareholders. Under the proposed advisory
agreement, AIM also would furnish, at AIM's expense, such office space,
equipment and facilities as may be reasonably requested by the Trust from time
to time.
Pursuant to the proposed advisory agreement, the Fund would still be
required to pay: (i) brokers' commissions, issue and transfer taxes, and other
costs chargeable to the Trust or Fund in connection with securities transaction
to which the Trust or Fund is a party or in connection with securities owned by
the Trust or Fund; (ii) interest on indebtedness, if any, incurred by the Trust
or Fund; and (iii) other expenditures, including costs incurred in connection
with the purchase or sale of securities, which are capitalized in accordance
with generally accepted accounting principles applicable to investment
companies.
See "Certain Service Agreements" below for other services that will be
provided by AIM and its affiliates to the Fund without charge if the proposed
advisory agreement is approved by shareholders.
ADVISORY FEE
The advisory fee rates paid by the Fund to AIM under the current advisory
agreement are set forth above under the heading "Terms of the Current Advisory
Agreement -- Advisory Fee." Under the proposed advisory agreement, the Fund
would pay AIM advisory fees at an annual rate of 0.25% of the Fund's average
daily net assets. In addition, if the proposed advisory agreement is approved by
Fund shareholders, AIM intends voluntarily to waive advisory fees for the Fund
in an amount necessary to limit the advisory fees to 0.17% of the Fund's average
daily net assets. This waiver may be modified or discontinued at any time by AIM
without further notice to shareholders.
Because the proposed "all-in" fee structure covers many expenses that the
Fund currently pays outside of the current advisory agreement (see "Certain
Service Agreements" below), AIM believes the most appropriate comparison for
shareholders to consider in comparing the fees of the current and proposed
advisory agreements is a comparison of the advisory fees plus other fees and
expenses currently being paid by the Fund, on the one hand, with the "all-in"
advisory fee to be paid under the proposed advisory agreement, on the other
hand. Such a comparison is provided in the sections labeled "Comparative Expense
Information" and "Fees and
19
Expenses". These comparisons show a benefit to shareholders and the Fund.
AIM also believes that if shareholders consider a simple comparison of the
fees paid under the current advisory agreement to the fees that would be paid
under the proposed advisory agreement, at current asset levels, it is evident
that the proposed advisory agreement is beneficial to shareholders and the Fund.
If asset levels were to grow substantially, the fees paid under the current
advisory agreement could be less than the fees that would be paid under the
proposed advisory agreement because of the breakpoint structure of the current
advisory fee rate. For this to happen, AIM estimates that the Fund's assets
would have to grow to be in excess of $1.6 billion -- assets of the Fund were
approximately $41 million as of August 31, 2004. The comparison described in
this paragraph obviously ignores the benefit of the "all-in" nature of the
proposed advisory agreement, as well as the proposed voluntary fee advisory
waiver. (See "Fee Waivers and Expense Reimbursements" below.)
Taking AIM's proposed voluntary advisory fee waiver into consideration, as
well as the "all-in" nature of the proposed advisory agreement, the Fund will
pay lower aggregate fees for advisory and other services than the fees and the
Fund currently pays for such services.
CERTAIN SERVICE AGREEMENTS
Currently, the Trust on behalf of the Fund pays the Fund's administrator
and transfer agent, AIM and AIS, respectively, certain fees pursuant to a Master
Administrative Services Agreement and a Transfer Agency Agreement. If
shareholders approve the proposed advisory agreement, the Master Administrative
Services Agreement and Transfer Agency Agreement will be amended such that AIM
and AIS will provide the Fund with accounting, administrative and transfer
agency services pursuant to such agreements at no cost to the Fund. Any such
amendment may only be changed following consultation with the independent
trustees of the Fund. (See "Comparative Expense Information" and "Fees and
Expenses" below.)
FEE WAIVERS AND EXPENSE REIMBURSEMENTS
Currently, AIM voluntarily waives advisory fees and/or reimburses expenses
to the extent necessary to limit the Fund's total annual operating expenses to
0.85% of average daily net assets. If shareholders approve the proposed
investment advisory agreement, AIM will discontinue the current voluntary waiver
of fees and expense reimbursement arrangement that limit the Fund's annual
operating expenses to 0.85% of average daily net assets.
20
Such discontinuance will not negatively affect Fund shareholders because the
total annual operating expenses of the Fund under the proposed advisory
agreement and related service agreements should be substantially less than such
expenses under the current advisory agreement and related service agreements.
Specifically, the total annual operating expenses of the Fund under the proposed
advisory agreement will be limited to the "all in" advisory fee of 0.25% of
average daily net assets plus certain other expenses discussed above, which are
expected to be minimal.
In addition, if the proposed advisory agreement is approved by Fund
shareholders, AIM intends voluntarily to waive advisory fees for the Fund in an
amount necessary to limit the advisory fee to 0.17% of the Fund's average daily
net assets. This voluntary fee waiver can be discontinued or modified at any
time by AIM without further notice to shareholders. Therefore, the Fund will
continue to receive substantially the same accounting, administrative, advisory
and transfer agency services it currently receives, but at substantially lower
costs. (See "Comparative Expense Information" and "Fees and Expenses" below.)
COMPARATIVE EXPENSE INFORMATION
The amounts which would have been paid by the Fund had the new investment
advisory agreement and related services agreements been in effect during the
Fund's fiscal year ended August 31, 2004 would have been
21
substantially less than the amounts actually paid under the existing agreements
as shown in the table below.
<Table>
<Caption>
(B)
FEES/EXPENSES
(A) WHICH WOULD
FEES/EXPENSES HAVE BEEN
PAID BY THE FUND PAYABLE BY THE
UNDER CURRENT FUND UNDER
ADVISORY PROPOSED ADVISORY INCREASE (DECREASE)
AGREEMENT FOR THE AGREEMENT FOR BETWEEN COLUMN (A)
FISCAL YEAR FISCAL YEAR AND COLUMN (B)
ENDED AUGUST 31, ENDED AUGUST 31, --------------------
DESCRIPTION OF FEES/EXPENSES 2004 2004 ($) (%)
- ---------------------------- ----------------- ----------------- ---------- -------
Advisory Fees............... $ 237,222(1) $122,134(2) $(115,088) (48.5)%
Administrative Services
Fees...................... 35,590(3) 0 (35,590) (100.0)%
Underwriting Fees........... 0 0 0 0%
Transfer Agency Fees........ 270,854(4) 0 (270,854) (100.0)%
Other Fees.................. 187,420(5) 0 (187,420) (100.0)%
--------- -------- --------- ------
Gross Fees................ $ 731,086 $122,134 $(608,952) (83.3)%
Fee Waivers/Expense
Reimbursements............ (317,242)(6) (39,083)(7) 278,159 87.7%
--------- -------- --------- ------
Net Fees.................. $ 413,844 $ 83,051 $(330,793) (79.9)%
========= ======== ========= ======
</Table>
- ---------------
(1) Advisory fees payable by the Fund to AIM, and includes fees INVESCO, the
Fund's former advisor, was entitled to receive for periods prior to November
25, 2003, the date that AIM became the Fund's advisor.
(2) Pursuant to the proposed investment advisory agreement, AIM will bear all
expenses incurred by the Fund in connection with its operations, except for
(i) interest, taxes and extraordinary items such as litigation costs; (ii)
brokers' commissions, issue and transfer taxes, and other costs chargeable
to the fund in connection with securities transactions to which the Fund is
a party or in connection with securities owned by the Fund; and (iii) other
expenditures which are capitalized in accordance with generally accepted
accounted principles applicable to investment companies. There can be no
guarantee that the Fund will not incur these types of expenses, in which
case the Fund could have higher total annual operating expenses than
reflected in the table.
(3) Non-advisory fees payable by the Fund to AIM for administrative services.
(4) Non-advisory fees payable by the Fund to AIS for transfer agency services.
Includes fees paid to INVESCO for transfer agency services
22
for the period prior to October 1, 2003, the date AIS became the Fund's
transfer agent.
(5) Other fees and expenses include, but are not limited to, custodian fees,
trustee fees, audit fees, legal fees, insurance fees, postage fees, printing
fees and registration fees.
(6) Currently, AIM voluntarily waives advisory fees and/or reimburses expenses
to the extent necessary to limit Total Annual Operating Expenses (excluding
certain items discussed below) to 0.85% of average daily net assets. In
determining AIM's obligation to waive advisory fees and/or reimburse
expenses, the following expenses are not taken into account, and could cause
the Total Annual Fund Operating Expenses to exceed the limits: (i) interest;
(ii) taxes; (iii) extraordinary items (these are expenses that are not
anticipated to arise from the Fund's day-to-day operations), as defined in
the Financial Accounting Standard's Board's Generally Accepted Accounting
Principles or as approved by the Board; (iv) expenses related to a merger or
reorganization, as approved by the Board; and (v) expenses that the Fund has
incurred but did not actually pay because of an expenses offset arrangement.
Currently, the only expense offset arrangements from which the Fund benefits
are in the form of credits that the Fund receives from banks where the Fund
or its transfer agent has deposit accounts in which it holds uninvested
cash. These credits are used to pay certain expenses incurred by the Fund.
This expense limitation may be modified or discontinued without further
notice to investors.
(7) If the proposed advisory agreement is approved by the Fund shareholders, AIM
intends voluntarily to waive advisory fees for the Fund in an amount
necessary to limit the advisory fee to 0.17% of the Fund's average daily net
assets. This waiver may be modified or discontinued at any time by AIM
without further notice to investors.
FEES AND EXPENSES
FEE TABLE
The following table identifies the fees and expenses that you would likely
pay under both the current advisory agreement and proposed advisory agreement if
you buy and hold Investor Class shares of the Fund. If you invest in the Fund
through a financial intermediary, you may be charged a
23
commission or transaction fee by the financial intermediary for purchases and
sales of Investor Class shares of the Fund.
<Table>
<Caption>
CURRENT PROPOSED
ADVISORY ADVISORY
SHAREHOLDER FEES PAID DIRECTLY FROM YOUR ACCOUNT AGREEMENT AGREEMENT
- ------------------------------------------------ --------- ---------
Maximum Front-End Sales Charge on Purchases (as
a percentage of offering price)............. None None
Maximum Contingent Deferred Sales Charge (CDSC)
(as a percentage of the total original cost of
the shares)................................. None None
ANNUAL FUND OPERATING EXPENSES THAT ARE DEDUCTED
FROM FUND ASSETS(1)
Advisory Fees................................. 0.40%(2) 0.25%(4)(5)
Distribution and/or Service (12b-1) Fees...... None None
Other Expenses(7)............................. 0.73%(6) 0.00%(8)
---- ----
Total Annual Fund Operating Expenses.......... 1.13%(3) 0.25%
==== ====
</Table>
- ---------------
(1) All percentages are based on average daily net assets.
(2) Effective July 1 2004, the Board approved an amendment to the current master
investment advisory agreement. Under the current amendment master investment
advisory agreement, the advisory fee for the Fund has been reduced. The new
tiered fee rate is as follows: 0.40% on the first $300 million of the Fund's
average daily net assets, plus 0.30% on the next $200 million of the Fund's
average daily net assets, plus 0.20% on the Fund's average daily net assets
in excess of $500 million. Expenses have been restated to reflect this new
fee rate.
(3) Currently, AIM voluntarily waives advisory fees and/or reimburse expenses to
the extent necessary to limit Total Annual Operating Expenses (excluding
certain items discussed below) to 0.85%. In determining AIM's obligation to
waive advisory fees and/or reimburse expenses, the following expenses are
not taken into account, and could cause the Total Annual Fund Operating
Expenses to exceed the limits: (i) interest; (ii) taxes; (iii) extraordinary
items (these are expenses that are not anticipated to arise from the Fund's
day-to-day operations), as defined in the Financial Accounting Standard's
Board's Generally Accepted Accounting Principles or as approved by the
Board; (iv) expenses related to a merger or reorganization, as approved by
the Board; and (v) expenses that the Fund has incurred but did not actually
pay because of an expenses offset arrangement. Currently, the only expense
offset arrangements from which the Fund benefits are in the form of credits
that the Fund receives from banks
24
where the Fund or its transfer agent has deposit accounts in which it holds
uninvested cash. These credits are used to pay certain expenses incurred by
the Fund. This expense limitation may be modified or discontinued without
further notice to investors.
(4) Pursuant to the proposed investment advisory agreement, AIM will bear all
expenses incurred by the Fund in connection with its operations, except for
(i) interest, taxes and extraordinary items such as litigation costs; (ii)
brokers' commissions, issues and transfer taxes, and other costs chargeable
to the fund in connection with securities transactions to which the Fund is
a party or in connection with securities owned by the Fund; and (iii) other
expenditures which are capitalized in accordance with generally accepted
accounted principles applicable to investment companies. There can be no
guarantee that the Fund will not incur these types of expenses, in which
case the Fund could have higher total annual operating expenses than
reflected in the table.
(5) If the proposed advisory agreement is approved by the Fund shareholders, AIM
intends voluntarily to waive advisory fees for the Fund in an amount
necessary to limit the advisory fee to 0.17% of the Fund's average daily net
assets. This waiver may be modified or discontinued at any time by AIM
without further notice to investors.
(6) Effective April 1, 2004, the Board approved a revised expense allocation
methodology for the Fund. Effective July 1, 2004, the Board approved an
amendment to the administrative services and transfer agency agreements.
Other expenses have been restated to reflect these changes.
(7) There is no guarantee that actual expenses will be the same as those shown
in the table.
(8) If the proposed advisory agreement is approved by the Fund shareholders, AIM
and AIS will provide at no cost to the Fund accounting, administrative and
transfer agency services under separate administrative services and transfer
agency agreements.
EXPENSE EXAMPLE
The following example is intended to help shareholders compare the cost of
investing in Investor Class shares of the Fund under both the current advisory
agreement and the proposed advisory agreement to the cost of investing in other
mutual funds.
25
The example assumes that a shareholder invests $10,000 in Investor Class
shares of the Fund for the time periods indicated and then redeems all of the
shares at the end of such periods. The example also assumes that the investment
had a hypothetical 5% return each year, and that the Fund's Investor Class
shares' operating expenses remain the same. Although the actual costs and
performance of the Fund's Investor Class shares may be higher or lower, based on
these assumptions, the costs would be:
<Table>
<Caption>
PREMIER U.S. GOVERNMENT MONEY PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------- ------ ------- ------- --------
Current Advisory Agreement......... $115 $359 $622 $1,375
Proposed Advisory Agreement........ $ 26 $ 80 $141 $ 318
</Table>
FACTORS THE TRUSTEES CONSIDERED IN APPROVING THE ADVISORY AGREEMENT
The Board discussed the proposed advisory agreement at an in-person meeting
held on December 2, 2004. The independent trustees also discussed the approval
of the proposed advisory agreement with independent counsel at that meeting. In
evaluating the proposed advisory agreement, the Board requested and received
information from AIM to assist in its deliberations.
The Board re-approved the Fund's current advisory agreement at an in-
person meeting held on June 8, 2004 after considering all the relevant factors,
including those set forth below. The Board considered the following factors in
determining reasonableness and fairness of the proposed changes between the
current advisory agreement with AIM and the proposed advisory agreement with
AIM. In addition to considering these factors at the in-person meeting held on
December 2, 2004, the Board considered certain of these factors as part of the
Board's ongoing monitoring of the Fund.
- The nature and extent of the advisory services to be provided by
AIM. The Board reviewed the services to be provided by AIM under the
proposed advisory agreement. The Board noted that there are no material
differences between the level or type of services provided under the
current advisory agreement as compared to the proposed advisory
agreement. Based on the review of the terms of the proposed advisory
agreement, and comparison to the current advisory agreement, the Board
concluded that the range of services to be provided by AIM under the
proposed advisory agreement was appropriate.
- The quality of services to be provided by AIM. The Board reviewed the
credentials and experience of the officers and employees of AIM who
currently provide investment advisory services to the
26
Fund and noted that the persons providing such services to the Fund would not
change under the proposed advisory agreement. In reviewing the qualifications of
AIM to provide investment advisory services, the Board reviewed the
qualifications of AIM's investment personnel and considered such issues
as AIM's portfolio and product review process, AIM's legal and compliance
function, AIM's use of technology, AIM's portfolio administration
function, the quality of AIM's investment research. Based on the review
of these and other factors, the Board concluded that the quality of
services to be provided by AIM was appropriate.
- The performance of the Fund relative to comparable funds. The Board
reviewed the performance of the Fund during the past five calendar years
against the performance of funds advised by other advisors with
investment strategies comparable to those of the Fund. The Board noted
that the Fund's performance in each year was below the average
performance of such comparable funds. The Board also noted that the AIM
personnel currently managing the Fund began doing so in February 2002 in
a sub-advisory capacity and that AIM began serving as investment advisor
to the Fund in November 2003. The Board then noted that the Fund's
performance had improved relative to the performance of such comparable
funds during the past two calendar years. The Board also noted the all-in
nature of the advisory fee under the proposed advisory agreement, whereby
AIM pays all of the Fund's ordinary operating expenses. Finally, the
Board noted that, had the proposed advisory agreement with the all-in
advisory fee been in effect, the Fund's overall expenses would have been
reduced which would have improved the Fund's performance relative to the
performance of the funds with which the Fund was compared. Based on this
review, the Board concluded that no changes should be made to the Fund
and that it was not necessary to change the Fund's portfolio management
team at this time.
- The performance of the Fund relative to indices. The Board reviewed the
performance of the Fund during the past five calendar years against the
performance of the Lipper U.S. Government Money Market Index. The Board
noted that the Fund's performance in each year was below the performance
of such Index. The Board also noted that the AIM personnel currently
managing the Fund began doing so in February 2002 in a sub-advisory
capacity and that AIM began serving as investment advisor to the Fund in
November 2003. The Board then noted that the Fund's
27
performance had improved relative to such Index during the past two
calendar years. The Board also noted the all-in nature of the advisory
fee under the proposed advisory agreement, whereby AIM pays all of the
Fund's ordinary operating expenses. Finally, the Board noted that, had
the proposed advisory agreement with the all-in advisory fee been in
effect, the Fund's overall expenses would have been reduced which would
have improved the Fund's performance relative to the performance of the
Index. Based on this review, the Board concluded that no changes should
be made to the Fund and that it was not necessary to change the Fund's
portfolio management team at this time.
- Meetings with the Fund's portfolio managers and investment
personnel. The Board is meeting periodically with the Fund's portfolio
managers and/or other investment personnel and believes that such
individuals are competent and able to continue to carry out their
responsibilities under the proposed advisory agreement.
- Overall performance of AIM. The Board considered the overall performance
of AIM in providing investment advisory and portfolio administrative
services to the Fund under the current advisory agreement and concluded
that such performance was satisfactory and should be satisfactory under
the proposed advisory agreement.
- Fees relative to those of clients of AIM with comparable investment
strategies. The Board reviewed the advisory fee rate for the Fund under
the proposed advisory agreement. The Board noted that this rate was lower
than the advisory fee rates for retail money market funds advised by AIM
with investment strategies comparable to those of the Fund, and higher
than the advisory fee rates for institutional money market funds advised
by AIM with investment strategies comparable to those of the Fund. The
Board also noted the all-in nature of the advisory fee under the proposed
advisory agreement, whereby AIM pays all of the Fund's ordinary operating
expenses. Based on this review, the Board concluded that the advisory fee
rate under the proposed advisory agreement was fair and reasonable. The
Board noted that AIM (i) does not serve as an advisor to any variable
insurance funds offered to insurance company separate accounts, offshore
funds or private accounts with investment strategies comparable to those
of the Fund and (ii) does not serve as a sub-advisor to any unaffiliated
mutual funds with investment strategies comparable to those of the Fund.
28
- Fees relative to those of comparable funds with other advisors. The Board
reviewed the advisory fee rate for the Fund under the proposed advisory
agreement. The Board noted that this rate was lower than the advisory fee
rates for all of the comparable funds advised by other advisors with
investment strategies comparable to those of the Fund that the Board
reviewed, with one exception (for which the advisory fee rate was the
same or lower, depending on asset levels). The Board also noted the
all-in nature of the advisory fee under the proposed advisory agreement,
whereby AIM pays all of the Fund's ordinary operating expenses. Finally,
the Board noted that none of the comparable funds had all-in fees and
that the comparable funds therefore all had higher overall expenses than
the Fund would have had under the proposed advisory agreement. Based on
this review, the Board concluded that the advisory fee rate under the
proposed advisory agreement was fair and reasonable.
- Expense limitations and fee waivers. The Board noted that, under the
current advisory agreement, AIM voluntarily waives advisory fees and/or
reimburses expenses to the extent necessary to limit the Fund's total
annual operating expenses to 0.85% of average daily net assets and that,
if shareholders approve the proposed advisory agreement, AIM will
discontinue this voluntary waiver. The Board concluded that such
discontinuance will not negatively affect Fund shareholders because the
total annual operating expenses of the Fund under the proposed advisory
agreement should be substantially less than such expenses under the
current advisory agreement and related service agreements. In addition,
the Board noted that if the proposed advisory agreement is approved by
shareholders, AIM intends voluntarily to waive advisory fees for the Fund
in an amount necessary to limit the advisory fee to 0.17% of the Fund's
average daily net assets. The Board considered the voluntary nature of
this new fee waiver and the effect that it would have on the Fund's
expenses, and noted that voluntary fee waivers can be terminated at any
time by AIM without further notice to investors. The Board concluded that
the proposed new voluntary fee waiver was fair and reasonable.
- Breakpoints and economies of scale. The Board reviewed the structure of
the Fund's advisory fee under the proposed advisory agreement, noting
that it does not include any breakpoints. The Board considered whether it
would be appropriate to add advisory fee breakpoints for the Fund or
whether, due to the nature of the Fund and the advisory fee structures of
comparable funds, it was
29
reasonable to structure the advisory fee without breakpoints. The Board
also noted that the Fund's asset level is currently too low to realize
any economies of scale resulting from the breakpoints included in the
Fund's current advisory agreement. Based on this review, the Board
concluded that it was not necessary to add advisory fee breakpoints to
the Fund's advisory fee schedule. The Board reviewed the level of the
Fund's advisory fees, and noted that such fees, as a percentage of the
Fund's net assets, would have remained constant under the proposed
advisory agreement because the proposed advisory agreement does not
include any breakpoints. The Board concluded that the Fund's fee levels
under the proposed advisory agreement therefore would not reflect
economies of scale. However, the Board also concluded that the all-in
nature of the Fund's advisory fee under the proposed advisory agreement
and the fact that AIM pays for the Fund's ordinary operating expenses
would be more beneficial to Fund shareholders than the breakpoints
included in the Fund's current advisory agreement, based on the Fund's
current asset levels.
- Profitability of AIM and its affiliates. The Board reviewed information
concerning the profitability of AIM's (and its affiliates') investment
advisory and other activities and its financial condition. The Board
considered the overall profitability of AIM, as well as the profitability
of AIM in connection with managing the Fund. The Board noted that AIM's
operations remain profitable, although increased expenses in recent years
have reduced AIM's profitability. Based on the review of the
profitability of AIM's and its affiliates' investment advisory and other
activities and its financial condition, the Board concluded that the
compensation to be paid by the Fund to AIM under the proposed advisory
agreement was not excessive.
- AIM's financial soundness in light of the Fund's needs. The Board
considered whether AIM is financially sound and has the resources
necessary to perform its obligations under the proposed advisory
agreement, and concluded that AIM has the financial resources necessary
to fulfill its obligations under such agreement.
- Historical relationship between the Fund and AIM. In determining whether
to approve the proposed advisory agreement, the Board also considered the
prior relationship between AIM and the Fund, as well as the Board's
knowledge of AIM's operations, and concluded that it was beneficial to
maintain the current relationship, in part, because of such knowledge.
The Board also reviewed the general
30
nature of the non-investment advisory services currently performed by AIM
and its affiliates, such as administrative, transfer agency and
distribution services, and the fees received by AIM and its affiliates
for performing such services. In addition to reviewing such services, the
Board also considered the organizational structure employed by AIM and
its affiliates to provide those services. Based on the review of these
and other factors, the Board concluded that AIM and its affiliates were
qualified to continue to provide non-investment advisory services to the
Fund, including administrative, transfer agency and distribution
services. The Board noted that AIM and its affiliates would provide
administrative and transfer agency services for no charge if shareholders
approve the proposed advisory agreement due to the all-in nature of the
advisory fee under the proposed advisory agreement.
- Other factors and current trends. In determining whether to approve the
proposed advisory agreement, the Board considered regulatory and legal
actions currently pending against AIM, as well as those that were
recently settled. The Board also considered the internal compliance
reviews being undertaken by AIM and its affiliates, and the additional
controls and procedures being implemented by AIM and its affiliates. The
Board concluded that these actions indicated a good faith effort on the
part of AIM to adhere to the highest ethical standards, and determined
that the pending and recently settled regulatory and legal actions should
not prevent the Board from approving the proposed advisory agreement.
After considering these factors, the Board concluded that it is in the best
interests of the Fund and its shareholders to approve the proposed advisory
agreement.
The Board reached this conclusion after careful discussion and analysis.
The Board believes that it has carefully and thoroughly examined the pertinent
issues and alternatives. In recommending that shareholders approve the proposed
advisory agreement, the independent trustees have taken the action which they
believe to be in the best interests of shareholders. In so doing, they were
advised by independent counsel, retained by the independent trustees and paid
for by the Trust, as to the nature of the matters to be considered and the
standards to be used in reaching their decision.
If approved, the proposed advisory agreement is expected to become
effective on February 25, 2005 or such later date as such agreement is approved
by shareholders if the Special Meeting is adjourned or postponed.
31
The proposed advisory agreement will expire, unless renewed, on or before June
30, 2005. If shareholders of the Fund do not approve Proposal 1, the current
advisory agreement with AIM will continue in effect for the Fund.
THE BOARD'S RECOMMENDATION ON PROPOSAL 1
The Board, including the independent trustees, unanimously recommends that
you vote "FOR" this Proposal.
32
SETTLED ENFORCEMENT ACTIONS AND INVESTIGATIONS
RELATED TO MARKET TIMING, REGULATORY INQUIRIES
AND PENDING LITIGATION
On October 8, 2004, INVESCO (the former investment advisor to certain AIM
Funds, including the Fund) and AIM reached final settlements with certain
regulators, including without limitation the SEC, the New York Attorney General
("NYAG") and the Colorado Attorney General ("COAG"), to resolve civil
enforcement actions and investigations related to market timing activity and
related issues in the AIM Funds, including those formerly advised by INVESCO.
These regulators alleged, in substance, that INVESCO and AIM failed to disclose
in the prospectuses for the AIM Funds that they advised and to the independent
directors/trustees of such Funds that they had entered into certain arrangements
permitting market timing of such Funds, thereby breaching their fiduciary duties
to such Funds. As a result of the foregoing, the regulators alleged that INVESCO
and AIM breached various Federal and state securities, business and consumer
protection laws. On the same date, ADI (the distributor of the retail AIM Funds)
reached a final settlement with the SEC to resolve an investigation relating to
market timing activity and related issues in the AIM Funds. The SEC also alleged
that ADI violated various Federal securities laws. The SEC also has settled
related market timing enforcement actions brought against certain former
officers and employees of INVESCO.
Under the settlements, $325 million will be made available for distribution
to the shareholders of those AIM Funds that INVESCO formerly advised that were
harmed by market timing activity, and $50 million will be made available for
distribution to the shareholders of those AIM Funds advised by AIM that were
harmed by market timing activity. These settlement funds will be distributed in
accordance with a methodology to be determined by an independent distribution
consultant, in consultation with AIM and the independent trustees of the AIM
Funds and acceptable to the staff of the SEC. Under the settlements with the
NYAG and the COAG, AIM has also agreed to reduce management fees on certain AIM
equity and balanced Funds by $15 million per year for the next five years, based
upon effective fee rates and assets under management as of July 1, 2004, and not
to increase certain management fees during this period. In addition, as required
by the settlements, AIM is in the process of making certain governance and
compliance reforms and reviewing its policies and procedures.
None of the costs of the settlements will be borne by the AIM Funds or by
Fund shareholders.
33
The independent trustees of the AIM Funds have been assisted by their own
independent counsel and financial expert in their own investigation of market
timing activity in the AIM Funds. A special committee, consisting of four
independent trustees, was formed to oversee this investigation. None of the
costs of this investigation will be borne by the AIM Funds or by Fund
shareholders.
INVESCO, AIM, certain related entities, certain of their current and former
officers and/or certain of the AIM Funds have received regulatory inquiries in
the form of subpoenas or other oral or written requests for information and/or
documents related to one or more of the following issues: market timing
activity, late trading, fair value pricing, excessive or improper advisory
and/or distribution fees, mutual fund sales practices, including revenue sharing
and directed-brokerage arrangements, investments in securities of other
registered investment companies, contractual plans, issues related to Section
529 college savings plans and procedures for locating lost securityholders.
Additional regulatory inquiries related to these or other issues may be received
by the AIM Funds, INVESCO, AIM and/or related entities and individuals in the
future.
A number of civil lawsuits related to market timing, late trading and
related issues have been filed against (depending on the lawsuit) certain of the
AIM Funds, INVESCO, AIM, AMVESCAP, certain related entities, certain of their
current and former officers and/or certain unrelated third parties. All such
lawsuits based on allegations of market timing, late trading and related issues
have been transferred to the United States District Court for the District of
Maryland for consolidated or coordinated pre-trial proceedings. Other civil
lawsuits have been filed against (depending on the lawsuit) INVESCO, AIM, ADI,
certain related entities, certain of their current and former officers and/or
certain of the AIM Funds and their trustees alleging the improper use of fair
value pricing, excessive advisory and/or distribution fees, improper charging of
distribution fees on closed funds or share classes and improper mutual fund
sales practices and directed-brokerage arrangements. Additional civil lawsuits
related to the above or other issues may be filed against the AIM Funds,
INVESCO, AIM and/or related entities and individuals in the future.
You can find more detailed information concerning all of the above matters,
including the parties to the civil lawsuits and summaries of the various
allegations and remedies sought in such lawsuits, in the Fund's public filings
with the SEC and on AIM's Internet website (http://www.aiminvestments.com).
As a result of the matters discussed above, investors in the AIM Funds
might react by redeeming their investments. This might require the funds to sell
investments to provide for sufficient liquidity and could also have an adverse
effect on the investment performance of the funds.
34
EXHIBIT A
SECURITY OWNERSHIP OF MANAGEMENT AND TRUSTEES
To the best knowledge of the Trust, the following table sets forth certain
information regarding the ownership as of December 3, 2004 of shares of
beneficial interest of the Fund and of shares of the Trust's other series
portfolios by the trustees and executive officers of the Trust. No information
is given as to the Fund or the Trust's other series portfolios if a trustee or
executive officer held no shares of the Fund or other series portfolios as of
December 3, 2004. No information is given for the total amount of compensation
deferred by a trustee at his or her election pursuant to a deferred compensation
plan and deemed to be invested in the Fund or the Trust's other series
portfolios pursuant to such plan.
<Table>
<Caption>
NUMBER OF
SHARES OF THE
FUND OWNED PERCENT OF
NAME OF TRUSTEE FUND BENEFICIALLY FUND*
- --------------- ---------------------------- ------------- ----------
Larry Soll, Ph.D. ....... Premier Portfolio 1,668,496.66 1.30%
All trustees and
executive officers as a
group.................. Premier U.S. Government
Money Portfolio *
Premier Portfolio 1.30%
Premier Tax-Exempt Portfolio *
</Table>
- ---------------
* Less than 1% of the outstanding shares of the Fund.
A-1
EXHIBIT B
OWNERSHIP OF SHARES OF THE FUND
SIGNIFICANT HOLDERS
Listed below is the name, address and percent ownership of each person who,
as of December 3, 2004, to the best knowledge of the Trust owned 5% or more of
the outstanding shares of the Fund and of each other series portfolio of the
Trust. A shareholder who owns beneficially 25% or more of the outstanding
securities of the Fund or other series portfolio of the Trust is presumed to
"control" the Fund or other series portfolio of the Trust as defined in the 1940
Act. Such control may affect the voting rights of other shareholders.
<Table>
<Caption>
NUMBER OF PERCENT
SHARES OF OWNED
OWNED OF OF
NAME AND ADDRESS OF RECORD OWNER RECORD RECORD*
- -------------------------------- ------------- ---------
PREMIER U.S. GOVERNMENT MONEY PORTFOLIO
ANTC TTEE FBO.................................... 1,873,238.60 5.11%
Tetra Tech Inc. and Subsidiaries
Retirement Plan
630 N. Rosemead Blvd.
Pasadena, CA 91107-2101
PREMIER PORTFOLIO
AMVESCAP National Trust Company TTEE FBO......... 34,619,565.31 27.02%
Paychex 401(k) Incentive
Retirement Plan
P.O. Box 105779
Atlanta, GA 30348-5779
PREMIER TAX-EXEMPT PORTFOLIO
Ralph H. or Lynne J. Jenkins Jr. ................ 2,001,223.36 7.97%
JT WROS
39 Woodcrest Ave.
Atlanta, GA 30309-1535
Oppenheimer & Co. Inc............................ 1,561,012.62 6.21%
FBO G581410250
125 Broad Street Fl 15
New York, NY 10004-2464
Robert W. Trudeau Trustee........................ 1,353,898.80 5.39%
Robert W. Trudeau Trust
2 Parwood Ct
Johnson City, TN 37601-2179
Michael P. Tinkler............................... 1,268,501.37 5.05%
33 Beverly Ave
Lansdowne, PA 19050-2705
</Table>
- ---------------
* The Trust has no knowledge of whether all or any portion of the shares owned
of record are also owned beneficially.
B-1
APPENDIX I
AIM TREASURER'S SERIES TRUST
MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this day of , 200 , by and
between AIM Treasurer's Series Trust, a Delaware statutory trust (the "Trust")
with respect to its series of shares shown on the Appendix A attached hereto, as
the same may be amended from time to time, and A I M Advisors, Inc., a Delaware
corporation (the "Advisor").
RECITALS
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end, diversified management investment
company;
WHEREAS, the Advisor is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment advisor and engages in
the business of acting as an investment advisor;
WHEREAS, the Trust's Agreement and Declaration of Trust (the "Declaration
of Trust") authorizes the Board of Trustees of the Trust (the "Board of
Trustees") to create separate series of shares of beneficial interest of the
Trust, and as of the date of this Agreement, the Board of Trustees has created
four separate series portfolios (such portfolios and any other portfolios
hereafter added to the Trust being referred to collectively herein as the
"Funds"); and
WHEREAS, the Trust and the Advisor desire to enter into an agreement to
provide for investment advisory services to the Funds upon the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
1. Advisory Services. The Advisor shall act as investment advisor for the
Funds and shall, in such capacity, supervise all aspects of the Funds'
operations, including the investment and reinvestment of cash, securities or
other properties comprising the Funds' assets, subject at all times to the
policies and control of the Board of Trustees. The Advisor shall give the Trust
and the Funds the benefit of its best judgment, efforts and facilities in
rendering its services as investment advisor.
I-1
2. Investment Analysis and Implementation. In carrying out its
obligations under Section 1 hereof, the Advisor shall:
(a) supervise all aspects of the operations of the Funds;
(b) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the Funds,
and whether concerning the individual issuers whose securities are included
in the assets of the Funds or the activities in which such issuers engage,
or with respect to securities which the Advisor considers desirable for
inclusion in the Funds' assets;
(c) determine which issuers and securities shall be represented in the
Funds' investment portfolios and regularly report thereon to the Board of
Trustees;
(d) formulate and implement continuing programs for the purchases and
sales of the securities of such issuers and regularly report thereon to the
Board of Trustees; and
(e) take, on behalf of the Trust and the Funds, all actions which
appear to the Trust and the Funds necessary to carry into effect such
purchase and sale programs and supervisory functions as aforesaid,
including but not limited to the placing of orders for the purchase and
sale of securities for the Funds.
3. Securities Lending Duties and Fees. The Advisor agrees to provide the
following services in connection with the securities lending activities of each
Fund: (a) oversee participation in the securities lending program to ensure
compliance with all applicable regulatory and investment guidelines; (b) assist
the securities lending agent or principal (the "Agent") in determining which
specific securities are available for loan; (c) monitor the Agent to ensure that
securities loans are effected in accordance with the Advisor's instructions and
with procedures adopted by the Board of Trustees; (d) prepare appropriate
periodic reports for, and seek appropriate approvals from, the Board of Trustees
with respect to securities lending activities; (e) respond to Agent inquiries;
and (f) perform such other duties as necessary.
As compensation for such services provided by the Advisor in connection
with securities lending activities of each Fund, a lending Fund shall pay the
Advisor a fee equal to 25% of the net monthly interest or fee income retained or
paid to the Fund from such activities.
I-2
4. Delegation of Responsibilities. The Advisor is authorized to delegate
any or all of its rights, duties and obligations under this Agreement to one or
more sub-advisors, and may enter into agreements with sub-advisors, and may
replace any such sub-advisors from time to time in its discretion, in accordance
with the 1940 Act, the Advisers Act, and rules and regulations thereunder, as
such statutes, rules and regulations are amended from time to time or are
interpreted from time to time by the staff of the Securities and Exchange
Commission ("SEC"), and if applicable, exemptive orders or similar relief
granted by the SEC and upon receipt of approval of such sub-advisors by the
Board of Trustees and by shareholders (unless any such approval is not required
by such statutes, rules, regulations, interpretations, orders or similar
relief).
5. Independent Contractors. The Advisor and any sub-advisors shall for
all purposes herein be deemed to be independent contractors and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Trust in any way or otherwise be deemed to be an agent of the
Trust.
6. Control by Board of Trustees. Any investment program undertaken by the
Advisor pursuant to this Agreement, as well as any other activities undertaken
by the Advisor on behalf of the Funds, shall at all times be subject to any
directives of the Board of Trustees.
7. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and the Advisers Act and
any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the Trust, as the
same may be amended from time to time under the Securities Act of 1933 and
the 1940 Act;
(c) the provisions of the Declaration of Trust, as the same may be
amended from time to time;
(d) the provisions of the by-laws of the Trust, as the same may be
amended from time to time; and
(e) any other applicable provisions of state, federal or foreign law.
8. Broker-Dealer Relationships. The Advisor is responsible for decisions
to buy and sell securities for the Funds, broker-dealer selection, and
negotiation of brokerage commission rates.
I-3
(a) The Advisor's primary consideration in effecting a security
transaction will be to obtain the best execution.
(b) In selecting a broker-dealer to execute each particular
transaction, the Advisor will take the following into consideration: the
best net price available; the reliability, integrity and financial
condition of the broker-dealer; the size of and the difficulty in executing
the order; and the value of the expected contribution of the broker-dealer
to the investment performance of the Funds on a continuing basis.
Accordingly, the price to the Funds in any transaction may be less
favorable than that available from another broker-dealer if the difference
is reasonably justified by other aspects of the fund execution services
offered.
(c) Subject to such policies as the Board of Trustees may from time to
time determine, the Advisor shall not be deemed to have acted unlawfully or
to have breached any duty created by this Agreement or otherwise solely by
reason of its having caused the Funds to pay a broker or dealer that
provides brokerage and research services to the Advisor an amount of
commission for effecting a fund investment transaction in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction, if the Advisor determines in good faith that
such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed
in terms of either that particular transaction or the Advisor's overall
responsibilities with respect to a particular Fund, other Funds of the
Trust, and to other clients of the Advisor as to which the Advisor
exercises investment discretion. The Advisor is further authorized to
allocate the orders placed by it on behalf of the Funds to such brokers and
dealers who also provide research or statistical material, or other
services to the Funds, to the Advisor, or to any sub-advisor. Such
allocation shall be in such amounts and proportions as the Advisor shall
determine and the Advisor will report on said allocations regularly to the
Board of Trustees indicating the brokers to whom such allocations have been
made and the basis therefor.
(d) With respect to one or more Funds, to the extent the Advisor does
not delegate trading responsibility to one or more sub-advisors, in making
decisions regarding broker-dealer relationships, the Advisor may take into
consideration the recommendations of any sub-advisor appointed to provide
investment research or advisory services in
I-4
connection with the Funds, and may take into consideration any research
services provided to such sub-advisor by broker-dealers.
(e) Subject to the other provisions of this Section 8, the 1940 Act,
the Securities Exchange Act of 1934, and rules and regulations thereunder,
as such statutes, rules and regulations are amended from time to time or
are interpreted from time to time by the staff of the SEC, any exemptive
orders issued by the SEC, and any other applicable provisions of law, the
Advisor may select brokers or dealers with which it or the Funds are
affiliated.
9. Compensation. The compensation that each Fund shall pay the Advisor is
set forth in Appendix B attached hereto.
10. Allocation of Costs and Expenses.
(a) The Advisor hereby agrees that it shall pay on behalf of the Trust
and the Funds all of the expenses incurred by the Trust and the Funds, as
applicable, in connection with their operations except for such transfer
agency, sub-accounting, recordkeeping, and administrative services which
are to be provided by the Advisor or an affiliate of the Advisor under
separate transfer agency and administrative services agreements between the
Fund and the Advisor or affiliate, as applicable, which are or have been
approved by the Board of Trustees, including all of the independent
trustees. At the Trust's request the Advisor shall also furnish to the
Trust, at the expense of the Advisor, such competent executive,
statistical, administrative, internal accounting and clerical services as
may be required in the judgment of the Boards of Trustees. These services
will include, among other things, the maintenance (but not preparation) of
the Trust's accounts and records, and the preparation (apart from legal and
accounting costs) of all requisite corporate documents such as tax returns
and reports to the SEC and Trust shareholders. The Advisor also will
furnish, at the Advisor's expense, such office space, equipment and
facilities as may be reasonably requested by the Trust from time to time.
Without limiting the generality of the foregoing, such costs and expenses
payable by the Advisor include the following, unless the Board of Trustees
approves any of the following costs and expenses being paid directly by the
Funds:
(1) the fees, charges and expenses of any independent public
accountants, custodian, depository, dividend disbursing agent,
dividend reinvestment agent, independent pricing services and legal
counsel for the Trust or for any Fund;
I-5
(2) the taxes, including franchise, income, issue, transfer,
business license, and other corporate fees payable by the Trust or any
Fund to Federal, state, county, city, or other governmental agents;
(3) the fees and expenses involved in maintaining the
registration and qualification of the Trust and of its shares under
laws administered by the SEC or under other applicable regulatory
requirements, including the preparation and printing of prospectuses
and statements of additional information;
(4) the compensation and expenses of the trustees of the Trust;
(5) the costs of printing and distributing reports, notices of
shareholders' meetings, proxy statements, dividend notices,
prospectuses, statements of additional information and other
communications to the Trust's shareholders, as well as all expenses of
shareholders' meetings and trustees' meetings;
(6) all costs, fees or other expenses arising in connection with
the organization and filing of the Trust's Certificate of Trust
including its initial registration and qualification under the 1940
Act and under the Securities Act of 1933, as amended, the initial
determination of its tax status and any rulings obtained for this
purpose, the initial registration and qualification of its securities
under the laws of any State and the approval of the Trust's operations
by any other Federal or State authority;
(7) the expenses of repurchasing and redeeming shares of the
Trust;
(8) insurance premiums;
(9) the expenses, including fees and disbursements of counsel, in
connection with litigation by or against the Trust and any Fund; and
(10) premiums for the fidelity bond maintained by the Trust
pursuant to Section 17(g) of the 1940 Act and rules promulgated
thereunder.
Interest, taxes and extraordinary items such as litigation costs are
not deemed expenses for purposes of this paragraph and shall be borne by
the Trusts or such Fund in any event. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities,
I-6
which are capitalized in accordance with generally accepted accounting
principles applicable to investment companies, are accounted for as capital
items and shall not be deemed to be expenses for purposes of this
paragraph.
(b) Except to the extent required by law to be paid by the Advisor,
the Trust shall pay the following costs and expenses:
(1) all brokers' commissions, issue and transfer taxes, and other
costs chargeable to the Trust or any Fund in connection with
securities transactions to which the Trust or any Fund is a party or
in connection with securities owned by the Trust or any Fund; and
(2) the interest on indebtedness, if any, incurred by the Trust
or any Fund.
11. Services to Other Companies or Accounts. The Trust understands that
the Advisor now acts, will continue to act and may act in the future as
investment manager or advisor to fiduciary and other managed accounts, and as
investment manager or advisor to other investment companies, including any
offshore entities, or accounts, and the Trust has no objection to the Advisor so
acting, provided that whenever the Trust and one or more other investment
companies or accounts managed or advised by the Advisor have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a formula believed to be equitable to each company and account.
The Trust recognizes that in some cases this procedure may adversely affect the
size of the positions obtainable and the prices realized for the Funds.
12. Non-Exclusivity. The Trust understands that the persons employed by
the Advisor to assist in the performance of the Advisor's duties under this
Agreement will not devote their full time to such service and nothing contained
in this Agreement shall be deemed to limit or restrict the right of the Advisor
or any affiliate of the Advisor to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature. The Trust
further understands and agrees that officers or directors of the Advisor may
serve as officers or trustees of the Trust, and that officers or trustees of the
Trust may serve as officers or directors of the Advisor to the extent permitted
by law; and that the officers and directors of the Advisor are not prohibited
from engaging in any other business activity or from rendering services to any
other person, or from serving as partners, officers, directors or trustees of
any other firm or trust, including other investment advisory companies.
I-7
13. Effective Date, Term and Approval. This Agreement shall become
effective with respect to a Fund, if approved by the shareholders of such Fund,
on the Effective Date for such Fund, as set forth in Appendix A attached hereto.
If so approved, this Agreement shall thereafter continue in force and effect
until June 30, 2004, and may be continued from year to year thereafter, provided
that the continuation of the Agreement is specifically approved at least
annually:
(a) (i) by the Board of Trustees or (ii) by the vote of "a majority of
the outstanding voting securities" of such Fund (as defined in Section
2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the trustees who are not
parties to this Agreement or "interested persons" (as defined in the 1940
Act) of a party to this Agreement (other than as trustees of the Trust), by
votes cast in person at a meeting specifically called for such purpose.
14. Termination. This Agreement may be terminated as to the Trust or as
to any one or more of the Funds at any time, without the payment of any penalty,
by vote of the Board of Trustees or by vote of a majority of the outstanding
voting securities of the applicable Fund, or by the Advisor, on sixty (60) days'
written notice to the other party. The notice provided for herein may be waived
by the party entitled to receipt thereof. This Agreement shall automatically
terminate in the event of its assignment, the term "assignment" for purposes of
this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act.
15. Amendment. No amendment of this Agreement shall be effective unless
it is in writing and signed by the party against which enforcement of the
amendment is sought.
16. Liability of Advisor and Fund. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Advisor or any of its officers, directors or
employees, the Advisor shall not be subject to liability to the Trust or to the
Funds or to any shareholder of the Funds for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that may
be sustained in the purchase, holding or sale of any security. Any liability of
the Advisor to one Fund shall not automatically impart liability on the part of
the Advisor to any other Fund. No Fund shall be liable for the obligations of
any other Fund.
17. Liability of Shareholders. Notice is hereby given that, as provided
by applicable law, the obligations of or arising out of this Agreement
I-8
are not binding upon any of the shareholders of the Trust individually but are
binding only upon the assets and property of the Trust and that the shareholders
shall be entitled, to the fullest extent permitted by applicable law, to the
same limitation on personal liability as shareholders of private corporations
for profit.
18. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered, telecopied or mailed postage paid, to the other party
entitled to receipt thereof at such address as such party may designate for the
receipt of such notice. Until further notice to the other party, it is agreed
that the address of the Trust and that of the Advisor shall be 11 Greenway
Plaza, Suite 100, Houston, Texas 77046-1173.
19. Questions of Interpretation. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the 1940 Act or the Advisers Act shall be resolved
by reference to such term or provision of the 1940 Act or the Advisers Act and
to interpretations thereof, if any, by the United States Courts or in the
absence of any controlling decision of any such court, by rules, regulations or
orders of the SEC issued pursuant to said Acts. In addition, where the effect of
a requirement of the 1940 Act or the Advisers Act reflected in any provision of
the Agreement is revised by rule, regulation or order of the SEC, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
Subject to the foregoing, this Agreement shall be governed by and construed in
accordance with the laws (without reference to conflicts of law provisions) of
the State of Texas.
20. License Agreement. The Trust shall have the non-exclusive right to
use the name "AIM" to designate any current or future series of shares only so
long as A I M Advisors, Inc. serves as investment manager or advisor to the
Trust with respect to such series of shares.
I-9
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.
<Table>
AIM TREASURER'S SERIES TRUST
(a Delaware statutory trust)
Attest:
Assistant Secretary By: Executive Vice President
(SEAL)
Attest: A I M ADVISORS, INC.
Assistant Secretary By: President
(SEAL)
</Table>
I-10
APPENDIX A
FUNDS AND EFFECTIVE DATES
<Table>
<Caption>
NAME OF FUND EFFECTIVE DATE OF ADVISORY AGREEMENT
- ------------ ------------------------------------
Premier U.S. Government Money February 25, 2005
Portfolio.......................
</Table>
I-11
APPENDIX B
COMPENSATION TO THE ADVISOR
The Trust shall pay the Advisor, out of the assets of a Fund, as full
compensation for all services rendered, an advisory fee for such Fund set forth
below. Such fee shall be calculated by applying the following annual rates to
the average daily net assets of such Fund for the calendar year computed in the
manner used for the determination of the net asset value of shares of such Fund.
PREMIER U.S. GOVERNMENT MONEY PORTFOLIO
<Table>
<Caption>
NET ASSETS ANNUAL RATE
- ---------- -----------
All Assets......................................... 0.25%
</Table>
I-12
FOUR EASY WAYS TO VOTE YOUR PROXY
INTERNET: Go to WWW.AIMINVESTMENTS.COM/PROXY and follow the online directions.
TELEPHONE: Call 1-800-690-6903 and follow the simple instructions.
MAIL: Vote, sign, date and return your proxy by mail.
IN PERSON: Vote at the Special Meeting of Shareholders.
IF YOU VOTE BY INTERNET, TELEPHONE OR IN PERSON DO NOT MAIL YOUR PROXY.
999 999 999 999 99
PREMIER U.S. GOVERNMENT MONEY PORTFOLIO (THE "FUND")
AN INVESTMENT PORTFOLIO OF AIM TREASURER'S SERIES TRUST (THE "REGISTRANT")
PROXY SOLICITED BY THE BOARD OF TRUSTEES (THE "BOARD")
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD FEBRUARY 24, 2005
The undersigned hereby appoints Mark H. Williamson, Robert H. Graham and Kevin
M. Carome, and each of them separately, proxies with full power of substitution
to each, and hereby authorizes them to represent and to vote, as designated on
reverse, at the Special Meeting of Shareholders on February 24, 2005, at 3:00
p.m., Central Time, and at any adjournment or postponement thereof, all of the
shares of the FUND which the undersigned would be entitled to vote if personally
present. IF THIS PROXY IS SIGNED AND RETURNED WITH NO CHOICE INDICATED, THE
SHARES WILL BE VOTED "FOR" THE APPROVAL OF THE PROPOSAL.
NOTE: IF YOU VOTE BY TELEPHONE OR ON THE INTERNET,
PLEASE DO NOT RETURN YOUR PROXY CARD.
PROXY MUST BE SIGNED AND DATED BELOW.
Dated ____________________ 200__
_________________________________________________________
Signature(s) (if held jointly) (SIGN IN THE BOX)
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY CARD. All joint
owners should sign. When signing as executor, administrator, attorney, trustee
or guardian or as custodian for a minor, please give full title as such. If a
corporation, limited liability company, or partnership, please sign in full
entity name and indicate the signer's position with the entity.
AIM PMM DH
PLEASE FILL IN BOX AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL.
PLEASE DO NOT USE FINE POINT PENS. [X]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD. THE BOARD RECOMMENDS VOTING
"FOR" THE PROPOSAL AS PROPOSED BY THE REGISTRANT.
PLEASE VOTE, SIGN AND DATE THIS PROXY CARD AND RETURN IT IN THE ENCLOSED
ENVELOPE.
1. To approve a new Investment Advisory Agreement with A I M Advisors, Inc.
FOR AGAINST ABSTAIN
0 0 0
PROXIES ARE AUTHORIZED TO VOTE, IN THEIR DISCRETION, UPON SUCH OTHER BUSINESS AS
MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
PLEASE VOTE, SIGN AND DATE THIS PROXY CARD AND RETURN IT IN THEENCLOSED
ENVELOPE.
AIM PMM DH