SUB-ITEM 77M
MERGERS
AIM VARIABLE INSURANCE FUNDS
On December 10, 2003, the Board of Directors of INVESCO Variable Investment
Funds ("IVIF"), a Maryland Company, approved an Agreement and Plan of
Reorganization (the "Agreement") that provided for the redomestication of
INVESCO VIF-Core Equity Fund, INVESCO VIF-Dynamics Fund, INVESCO VIF-Financial
Services Fund, INVESCO VIF-Health Sciences Fund, INVESCO VIF-Leisure Fund,
INVESCO VIF-Real Estate Opportunity Fund, INVESCO VIF-Small Company Growth
Fund, INVESCO VIF-Technology Fund, INVESCO VIF-Total Return Fund, INVESCO
VIF-Utilities Fund, each a series portfolio of IVIF, as new series portfolios
(the "New Funds") of AIM Variable Insurance Funds ("AVIF"), an existing
open-end management investment company organized as a Delaware statutory trust
(the "Reorganization"). The Agreement was approved by the shareholders of
INVESCO VIF-Core Equity Fund, INVESCO VIF-Dynamics Fund, INVESCO VIF-Financial
Services Fund, INVESCO VIF-Health Sciences Fund, INVESCO VIF-Leisure Fund,
INVESCO VIF-Real Estate Opportunity Fund, INVESCO VIF-Small Company Growth
Fund, INVESCO VIF-Technology Fund, INVESCO VIF-Total Return Fund, INVESCO
VIF-Utilities Fund, (the "Funds") at a Special Meeting of shareholders of the
Funds held on April 2, 2004. Pursuant to the Agreement, on April 30, 2004, the
New Funds succeeded to the assets and assumed the liabilities of Funds. The
value of each New Fund's shareholder's account with AVIF immediately after the
Reorganization was the same as the value of such shareholder's account with
IVIF immediately prior to the Reorganization. The Reorganization has been
structured as a tax-free transaction. IVIF intends to file a Form N-8F with the
Securities and Exchange Commission to deregister as an investment company.
For a more detailed discussion on the Reorganization, please see the attached
proxy statement (attached hereto as Attachment A).
ATTACHMENT A
(INVESCO LOGO)
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF -- CORE EQUITY FUND
INVESCO VIF -- DYNAMICS FUND
INVESCO VIF -- FINANCIAL SERVICES FUND
INVESCO VIF -- HEALTH SCIENCES FUND
INVESCO VIF -- LEISURE FUND
INVESCO VIF -- REAL ESTATE OPPORTUNITY FUND
INVESCO VIF -- SMALL COMPANY GROWTH FUND
INVESCO VIF -- TECHNOLOGY FUND
INVESCO VIF -- TOTAL RETURN FUND
INVESCO VIF -- UTILITIES FUND
00 XXXXXXXX XXXXX, XXXXX 000
XXXXXXX, XXXXX 00000-0000
February 26, 2004
Dear Contract Owner:
As you may be aware, AMVESCAP PLC, the parent company of the investment
advisor to INVESCO VIF -- Core Equity Fund, INVESCO VIF -- Dynamics Fund,
INVESCO VIF -- Financial Services Fund, INVESCO VIF -- Health Sciences Fund,
INVESCO VIF -- Leisure Fund, INVESCO VIF -- Real Estate Opportunity Fund,
INVESCO VIF -- Small Company Growth Fund, INVESCO VIF -- Technology Fund,
INVESCO VIF -- Total Return Fund and INVESCO VIF -- Utilities Fund (the
"Funds"), has undertaken an integration initiative for its North American mutual
fund operations.
Shares of the Funds are sold to and held by separate accounts of various
insurance companies to fund variable annuity or variable life insurance
contracts offered by the insurance companies. The separate accounts invest in
shares of the Funds in accordance with instructions from variable annuity or
variable life contract owners. Except as otherwise might be provided by
applicable law, the separate accounts provide pass-through voting to contract
owners, and you, as a contract owner, have the right to instruct the separate
account on how to vote shares of your Fund held by the separate account under
your contract.
In the first phase of the integration initiative, A I M Distributors, Inc.
became the sole distributor for all retail INVESCO Funds and is now the
distributor for all retail INVESCO Funds and the retail AIM Funds. If the
redomestication of the Funds (discussed below) is not approved, A I M
Distributors, Inc. will become the distributor for the Funds on April 30, 2004.
As a result of this integration initiative, the independent directors of
the Board of Directors believe that your interests would best be served if the
AIM Funds and the INVESCO Funds had a unified board of directors/trustees. The
attached proxy statement seeks your vote in favor of the persons nominated to
serve as directors.
As part of the integration initiative, AMVESCAP PLC has also recommended
restructuring the advisory and administrative servicing arrangements so that
A I M Advisors, Inc. is the advisor and administrator for all INVESCO Funds and
AIM Funds. The Board has approved a proposed advisory agreement under which AIM
will serve as the investment advisor for the Funds. Also, the Board has approved
a proposed sub-advisory agreement under which INVESCO Institutional (N.A.),
Inc., an affiliate of INVESCO Funds Group, Inc., which is currently serving as
the Funds' investment advisor, will serve as sub-advisor. The portfolio
management team for the Funds will not change as a result of this restructuring.
The attached proxy statement seeks your approval of the new investment advisory
agreement and the new sub-advisory agreement.
The integration initiative also calls for changing the organizational
structure of the INVESCO Funds and the AIM Funds. To accomplish this goal,
AMVESCAP PLC has recommended that all INVESCO Funds and AIM Funds organized as
Maryland corporations change their form and state of organization to Delaware
statutory trusts. The Board has approved redomesticating the Funds as series of
a Delaware statutory trust. The attached proxy statement seeks your approval of
this redomestication.
Your vote is important. Please take a moment after reviewing the enclosed
materials to sign and return your proxy card or voting instruction card in the
enclosed postage paid return envelope. If you attend the meeting, you may vote
in person, with proper authorization from your life insurance company. If you
expect to attend the meeting in person, or have questions, please notify us by
calling (000) 000-0000. If we do not hear from you after a reasonable amount of
time, you may receive a telephone call from us reminding you to vote.
Sincerely,
/s/ XXXXXX X. XXXXXX
Xxxxxx X. Xxxxxx
President
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF -- CORE EQUITY FUND
INVESCO VIF -- DYNAMICS FUND
INVESCO VIF -- FINANCIAL SERVICES FUND
INVESCO VIF -- HEALTH SCIENCES FUND
INVESCO VIF -- LEISURE FUND
INVESCO VIF -- REAL ESTATE OPPORTUNITY FUND
INVESCO VIF -- SMALL COMPANY GROWTH FUND
INVESCO VIF -- TECHNOLOGY FUND
INVESCO VIF -- TOTAL RETURN FUND
INVESCO VIF -- UTILITIES FUND
00 XXXXXXXX XXXXX, XXXXX 000
XXXXXXX, XXXXX 00000-0000
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 2, 2004
We cordially invite you to attend our Special Meeting of Shareholders to:
1. Elect 16 directors to the Board of Directors of INVESCO Variable
Investment Funds, Inc. ("Company"), each of whom will serve until his or
her successor is elected and qualified.
2. Approve a new investment advisory agreement with A I M Advisors,
Inc. ("AIM") for the Funds.
3. Approve a new sub-advisory agreement between AIM and INVESCO
Institutional (N.A.), Inc. for the Funds.
4. Approve an Agreement and Plan of Reorganization which provides for
the redomestication of each series portfolio of Company as a new series
portfolio of AIM Variable Insurance Funds, an existing Delaware statutory
trust, and, in connection therewith, the sale of all of Company's assets
and the dissolution of Company as a Maryland corporation.
5. For INVESCO VIF -- Real Estate Opportunity Fund, approve changing
the investment objectives of such Fund and making the new investment
objective non-fundamental.
6. For INVESCO VIF -- Real Estate Opportunity Fund, approve changing
the fundamental investment restrictions of such Fund.
7. Transact any other business, not currently contemplated, that may
properly come before the Special Meeting, in the discretion of the proxies
or their substitutes.
We are holding the Special Meeting at 00 Xxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000-1173 on April 2, 2004, at 3:00 p.m., Central Time.
Shares of the Funds are sold to and held by separate accounts of various
insurance companies to fund variable annuity or variable life insurance
contracts offered by the insurance companies. The separate accounts invest in
shares of the Funds in accordance with instructions from variable annuity or
variable life contract owners. Except as otherwise might be provided by
applicable law, the separate accounts provide pass-through voting to contract
owners, and you, as a contract owner, have the right to instruct the separate
account on how to vote shares of your Fund held by the separate account under
your contract.
The Board is sending this Notice of Special Meeting of Shareholders, Proxy
Statement and proxy solicitation materials to (i) all separate accounts, which
are the shareholders who owned shares of common stock in the Funds at the close
of business on January 9, 2004 (the record date), and (ii) all contract owners
who had their variable annuity or variable life contract values allocated to the
Funds as of the close of business on January 9, 2004 and who are entitled to
instruct the corresponding separate account on how to vote.
WE REQUEST THAT YOU EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
THE ACCOMPANYING PROXY, WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF
COMPANY. 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 COMPANY OR BY VOTING IN PERSON AT THE SPECIAL MEETING.
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Secretary
February 26, 2004
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF -- CORE EQUITY FUND
INVESCO VIF -- DYNAMICS FUND
INVESCO VIF -- FINANCIAL SERVICES FUND
INVESCO VIF -- HEALTH SCIENCES FUND
INVESCO VIF -- LEISURE FUND
INVESCO VIF -- REAL ESTATE OPPORTUNITY FUND
INVESCO VIF -- SMALL COMPANY GROWTH FUND
INVESCO VIF -- TECHNOLOGY FUND
INVESCO VIF -- TOTAL RETURN FUND
INVESCO VIF -- UTILITIES FUND
00 XXXXXXXX XXXXX, XXXXX 000
XXXXXXX, XXXXX 00000-0000
(000) 000-0000
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 2, 2004
INTRODUCTION
Each series of INVESCO Variable Investment Funds, Inc. ("Company") is used
solely as an investment vehicle for variable annuity and variable life insurance
contracts issued by certain life insurance companies. You cannot purchase shares
of Company directly. As a contract owner of a variable annuity or variable life
insurance contract that offers one or more series of Company as an investment
option, however, you may allocate your contract values to a separate account of
the insurance company that invests in a series of Company.
The following table summarizes each proposal to be presented at the Special
Meeting and the Funds whose shareholders the Board is soliciting with respect to
each proposal:
PROPOSAL AFFECTED FUNDS
-------- --------------
1. Electing directors All Funds
2. Approving a new investment advisory agreement All Funds
with AIM for your Fund
3. Approving a new sub-advisory agreement between All Funds
AIM and INVESCO Institutional for your Fund
4. Approving an Agreement and Plan of Reorganization All Funds
(the "Plan") to redomesticate each series
portfolio of Company as a new series portfolio of
an existing Delaware statutory trust
5. For INVESCO VIF -- Real Estate Opportunities
Fund:
5(a) Change to investment objectives INVESCO VIF -- Real Estate
Opportunities Fund only
5(b) Making new investment objective
non-fundamental INVESCO VIF -- Real Estate
Opportunities Fund only
6. Approve changes to the following fundamental INVESCO VIF -- Real Estate
investment restrictions of INVESCO VIF -- Real Opportunity Fund only
Estate Opportunity Fund:
6(a) Change to fundamental restriction on issuer
diversification
6(b) Change to fundamental restriction on
borrowing money and issuing senior securities
PROPOSAL AFFECTED FUNDS
-------- --------------
6(c) Change to fundamental restriction on
underwriting securities
6(d) Change to fundamental restriction on
industry concentration
6(e) Change to fundamental restriction on
purchasing or selling real estate
6(f) Change to fundamental restriction on
purchasing or selling commodities
6(g) Change to fundamental restriction on making
loans
6(h) Change to fundamental restriction on
investing the Fund's assets in an open-end fund
7. Considering other matters All Funds
In accordance with current law, the life insurance company separate
accounts, which are the shareholders of record of the Company, in effect, pass
along their voting rights to the contract owners. Essentially, each life
insurance company seeks instructions as to how its contract owners wish the life
insurance company to vote the shares of the Company (i) technically owned by the
life insurance company, but (ii) beneficially owned by the contract owners. The
life insurance companies communicate directly with contract owners about the
procedures that the life insurance companies follow in seeking instructions and
voting shares under the particular separate accounts. Each share of an
investment portfolio of the Company that a contract owner beneficially owns,
entitles that contract owner to one vote on each proposal set forth in this
Proxy Statement (a fractional share has a fractional vote).
All references in this Proxy Statement to "shareholder" or "shareholders"
shall mean the "contract owner/separate account" or the "contract
owners/separate accounts," respectively. All references in this Proxy Statement
to "you" or "your" shall mean the "contract owner/separate account." All
references in this Proxy Statement to "proxy card" shall mean the "proxy card"
or "voting instruction card" you have received from the Board of Directors of
Company (the "Board") or from your applicable life insurance company.
Each Proposal that you are being asked to vote on relates to or results
from an integration initiative announced on March 27, 2003, by AMVESCAP PLC
("AMVESCAP"), the parent company of A I M Advisors, Inc. ("AIM") and INVESCO
Funds Group, Inc. ("INVESCO"), with respect to its North American mutual fund
operations. The primary components of AMVESCAP's integration initiative are:
- Using a single distributor for all AMVESCAP mutual funds in the United
States, with A I M Distributors, Inc. ("AIM Distributors"), the
distributor for the retail mutual funds advised by AIM (the "AIM Funds"),
replacing INVESCO Distributors, Inc. as the distributor for the retail
mutual funds advised by INVESCO (the "INVESCO Funds") effective July 1,
2003.
- Integrating back office support and creating a single platform for back
office support of AMVESCAP's mutual fund operations in the United States,
including such support services as transfer agency and information
technology.
- Rationalizing and streamlining the various AIM Funds and INVESCO Funds,
thereby reducing the number of smaller and less efficient funds that
compete for limited shareholder assets and consolidating certain funds
having similar investment objectives and strategies.
- Rationalizing the contractual arrangements for the provision of
investment advisory and administrative services to the AIM Funds and the
INVESCO Funds, with the objective of having AIM become the investment
advisor and administrator for each INVESCO Fund. To implement this
component, each INVESCO Fund is seeking shareholder approval to enter
into a new investment advisory agreement with AIM and certain INVESCO
Funds are seeking shareholder approval of a new sub-advisory agreement
between AIM and INVESCO Institutional (N.A.), Inc. ("INVESCO
Institutional") with
2
respect to such Funds. Proposals 2 and 3 relate to this component of
AMVESCAP's integration initiative.
- Simplifying the organizational structure of the AIM Funds and the INVESCO
Funds so that they are all organized as Delaware statutory trusts, using
as few entities as practicable. Proposal 4 relates to this component of
AMVESCAP's integration initiative.
In considering the integration initiative proposed by AMVESCAP, the
directors/trustees of the AIM Funds and the directors of the INVESCO Funds who
are not "interested persons" (as defined in the Investment Company Act of 1940
(the "1940 Act")) of the Funds or their advisors determined that the
shareholders of both the AIM Funds and the INVESCO Funds would benefit if one
set of directors/trustees was responsible for overseeing the operation of both
the AIM Funds and the INVESCO Funds and the services provided by AIM, INVESCO
and their affiliates. Accordingly, these directors/trustees agreed to combine
the separate boards and create a unified board of directors/trustees. Proposal 1
relates to the election of directors of your Fund.
INFORMATION ABOUT THE SPECIAL MEETING AND VOTING
PROXY STATEMENT
We are sending you this Proxy Statement and the enclosed proxy card on
behalf of the series portfolios of Company listed above (each a "Fund," and
together, the "Funds") because the Board of Directors of Company (the "Board")
is soliciting your proxy to vote at the Special Meeting of Shareholders and at
any adjournments of the Special Meeting (collectively, the "Special Meeting").
This Proxy Statement gives you information about the business to be conducted at
the Special Meeting. However, you do not need to attend the Special Meeting to
vote. Instead, you may simply complete, sign and return the enclosed proxy card.
Company intends to mail this Proxy Statement, the enclosed Notice of
Special Meeting of Shareholders and the enclosed proxy card on or about February
26, 2004 to all shareholders entitled to vote. Shareholders of record of any
class of a Fund as of the close of business on January 9, 2004 (the "Record
Date") are entitled to vote at the Special Meeting. The number of shares
outstanding of each class of each Fund on the Record Date can be found in
Exhibit A. Each share of a Fund is entitled to one vote on each proposal set
forth in the table below that applies to the Fund (a fractional share has a
fractional vote).
We have previously sent to shareholders the most recent annual report for
their Fund, including financial statements, and the most recent semiannual
report succeeding the annual report, if any. The financial statements should be
read in conjunction with the disclosure included in this Proxy Statement under
the heading "Certain Civil Proceedings and Lawsuits." If you have not received
such report(s) or would like to receive an additional copy, please contact
INVESCO Distributors, Inc., 00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
00000-0000, or call (000) 000-0000. We will furnish such report(s) free of
charge.
TIME AND PLACE OF SPECIAL MEETING
We are holding the Special Meeting at 00 Xxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000-1173 on April 2, 2004, at 3:00 p.m., Central Time.
VOTING IN PERSON
If you do attend the Special Meeting and wish to vote in person, you must
bring a letter from the insurance company that issued your variable annuity or
variable life contract, indicating that you are the beneficial owner of the
shares on the Record Date and authorizing you to vote. Please call Company at
(000) 000-0000 if you plan to attend the Special Meeting.
3
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 and vote.
If you properly fill in and sign your proxy card and send it to us in time
to vote at the Special Meeting, your "proxy" (the individual named on your 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 as
recommended by the Board as follows and in accordance with management's
recommendation on other matters:
- FOR the election of all 16 nominees for director of Company.
- FOR the proposal to approve a new investment advisory agreement with AIM
for all Funds.
- FOR the proposal to approve a new sub-advisory agreement between AIM and
INVESCO Institutional for all Funds.
- FOR the proposal to approve the Plan to redomesticate each series
portfolio of Company as new series portfolios of an existing Delaware
trust.
With respect to shareholders of INVESCO VIF -- Real Estate Opportunity Fund:
- FOR the proposals to approve changing the investment objectives of
INVESCO VIF -- Real Estate Opportunity Fund and making the new investment
objective non-fundamental.
- FOR the proposals to approve the proposed changes to the fundamental
investment restrictions of INVESCO VIF -- Real Estate Opportunity Fund.
Your proxy will have the authority to vote and act on your behalf at any
adjournment of the Special Meeting.
If you have given voting instructions you may revoke them only through and
in accordance with the procedures of the applicable life insurance company prior
to the date of the Special Meeting. In addition, although merely attending the
Special Meeting will not revoke your proxy, if you are present at the 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 in the discretion of the proxies or their
substitutes.
QUORUM REQUIREMENT AND ADJOURNMENT
A quorum of shareholders is necessary to hold a valid meeting. A quorum
will exist for Proposals 1 and 4 for Company if shareholders entitled to vote
one-third of the issued and outstanding shares of Company on the Record Date are
present at the Special Meeting in person or by proxy. A quorum will exist for
Proposals 2, 3, 5(a), 5(b) and 6(a) through 6(h) for a particular Fund if
shareholders entitled to vote one-third of the issued and outstanding shares of
such 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 that
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.
4
VOTE NECESSARY TO APPROVE EACH PROPOSAL
Proposal 1. The affirmative vote of a plurality of votes cast by the
shareholders of Company is necessary to elect directors of Company at the
Special Meeting, meaning that the director nominee with the most affirmative
votes for a particular slot is elected for that slot. Since the election for
directors is uncontested, the plurality requirement is not a factor. In other
words, each nominee needs just one vote to be elected director. Abstentions will
not count as votes cast and will have no effect on the outcome of this proposal.
Proposals 2, 3, 5(a), 5(b) and 6(a) through 6(h). Approval of Proposals 2,
3, 5(a), 5(b) and 6(a) through 6(h) requires the lesser of (a) the affirmative
vote of 67% or more of the voting securities of your Fund present or represented
by proxy at the Special Meeting, if the holders of more than 50% of the
outstanding voting securities of your Fund are present or represented by proxy,
or (b) the affirmative vote of more than 50% of the outstanding voting
securities of your 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 Proposals 2, 3, 5(a), 5(b) and 6(a) through 6(h)
because approval of Proposals 2, 3, 5(a), 5(b) and 6(a) through 6(h) require the
affirmative vote of a percentage of the voting securities present or represented
by proxy or a percentage of the outstanding voting securities.
Proposal 4. Approval of Proposal 4 for Company requires the affirmative
vote of a majority of the issued and outstanding shares of Company. 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 4 because
approval of Proposal 4 requires the affirmative vote of a percentage of the
outstanding voting securities.
PROXY SOLICITATION
Company will solicit proxies for the Special Meeting. Company expects to
solicit proxies principally by mail, but Company may also solicit proxies by
telephone, facsimile or personal interview. Company's officers will not receive
any additional or special compensation for any such solicitation. AMVESCAP or
one of its subsidiaries will bear the costs 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 those 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 Funds do not hold regular meetings of
shareholders. If you wish to submit a proposal for consideration at a meeting of
shareholders of your Fund, you should send such proposal to Company at the
address set forth on the first page of this Proxy Statement. To be considered
for presentation at a meeting of shareholders, Company must receive proposals a
reasonable time before proxy materials are prepared for the meeting. Your
proposal also must comply with applicable law.
For discussion of procedures that you must follow if you want to propose an
individual for nomination as a director, please refer to the section of this
Proxy Statement entitled "Proposal 1 -- Committees of the Board -- Governance
Committee."
5
PROPOSAL 1 --
ELECTION OF DIRECTORS
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 1?
Proposal 1 applies to the shareholders of all Funds.
BACKGROUND
In considering the integration initiative proposed by AMVESCAP, the
independent directors of the INVESCO Funds and the independent
directors/trustees of the AIM Funds determined that the shareholders of all the
AIM Funds and the INVESCO Funds would benefit if a unified board of
directors/trustees was responsible for overseeing the operation of both the AIM
Funds and the INVESCO Funds and the services provided by AIM, INVESCO and their
affiliates. Accordingly, the Boards of Directors of the INVESCO Funds and the
Boards of Directors/Trustees of the AIM Funds agreed to combine the separate
boards and create a unified board of directors/trustees.
STRUCTURE OF THE BOARD OF DIRECTORS
The Board of Company currently consists of the following five persons: Xxx
X. Xxxxx, Xxxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xxxxx Xxxx, Ph.D. and Xxxx X.
Xxxxxxxxxx. Four of the current directors are "independent," meaning they are
not "interested persons" of Company within the meaning of Section 2(a)(19) of
the 1940 Act. One of the current directors is an "interested person" because of
his business and financial relationships with Company and INVESCO, its
investment advisor, and/or INVESCO's parent, AMVESCAP.
NOMINEES FOR DIRECTORS
Company's Governance Committee (which consists solely of independent
directors) has approved the nomination of each of the five current directors, as
set forth below, each to serve as director until his successor is elected and
qualified. In addition, the Governance Committee has approved the nomination of
11 new nominees, as set forth below, each to serve as director until his or her
successor is elected and qualified. These 11 new nominees were nominated to
effect the proposed combination of the Boards of Directors/Trustees of the AIM
Funds and the Boards of Directors of the INVESCO Funds.
Each nominee serves as a director of Company, consisting of a total of 13
portfolios. Each nominee also serves as a director or trustee of 17 of the 19
registered investment companies mentioned above, consisting of a total of 78
portfolios, that make up the AIM Funds. The business address of each nominee who
is a current director is 00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
00000-0000.
Each new nominee serves as a director or trustee of the 19 AIM Funds,
consisting of a total of 99 portfolios. The business address of each new nominee
is 00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000. Each new nominee was
recommended to Company's Governance Committee by the independent directors of
Company.
If elected, each nominee who is a current director would oversee a total of
18 registered investment companies currently comprising 91 portfolios and each
new nominee would oversee a total of 20 registered investment companies
currently comprising 112 portfolios.
6
NOMINEES WHO CURRENTLY ARE INDEPENDENT DIRECTORS
DIRECTOR PRINCIPAL OCCUPATION(S)
NAME AND YEAR OF BIRTH SINCE DURING PAST 5 YEARS OTHER DIRECTORSHIP(S) HELD
---------------------- -------- ----------------------- --------------------------
Xxx X. Xxxxx -- 1936................. 1993 Retired None
Director
Formerly: President and Chief
Executive Officer, AMC Cancer
Research Center, and Chairman
and Chief Executive Officer,
First Columbia Financial
Corporation.
Xxxxx X. Xxxxx -- 1942............... 2000 Co-President and Founder of None
Director Green, Xxxxxxx & Bunch Ltd.,
(investment banking firm),
and Director, Policy Studies
and Xxx Xxxxxx Insurance
Corporation
Xxxxxx X. Xxxxx -- 1933.............. 2000 Chairman, Lawsuit Resolution General Chemical Group, Inc.
Director Services (San Diego,
California)
Formerly Associate Justice of
the California Court of
Appeals
Xxxxx Xxxx, Ph.D. -- 1942 1997 Retired. None
Director...........................
NOMINEE WHO CURRENTLY IS AN INTERESTED PERSON
DIRECTOR PRINCIPAL OCCUPATION(S)
NAME AND YEAR OF BIRTH SINCE DURING PAST 5 YEARS OTHER DIRECTORSHIP(S) HELD
---------------------- -------- ----------------------- --------------------------
Xxxx X. Xxxxxxxxxx(1) -- 1951........ 1998 Director, President and Chief None
Director, Chairman and Executive Executive Officer, A I M
Vice President Management Group Inc.
(financial services holding
company); Director, Chairman
and President, A I M Advisors,
Inc. (registered investment
advisor); 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),
and Fund Management Company
(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. and INVESCO Distributors,
Inc.; Chief Executive Officer,
AMVESCAP PLC -- Managed
Products; Chairman and Chief
Executive Officer of
NationsBank Advisors, Inc.; and
Chairman of NationsBanc
Investments, Inc.
---------------
(1) Xx. Xxxxxxxxxx is considered an interested person of Company because he is
an officer and a director of the advisor to, and a director of the principal
underwriter of, Company.
7
NEW NOMINEES WHO WILL BE INDEPENDENT DIRECTORS
PRINCIPAL OCCUPATION(S)
NAME AND YEAR OF BIRTH DURING PAST 5 YEARS OTHER DIRECTORSHIP(S) HELD
---------------------- ----------------------- --------------------------
Xxxxx X. Xxxxxx -- 1939.............. Of Counsel, law firm of Xxxxx & Badgley Funds, Inc. (registered
XxXxxxxx investment company)
Formerly: Partner, law firm of
Xxxxx & XxXxxxxx
Xxxxx X. Xxxxxxxx -- 1944............ Chairman, Xxxxxxxx Technology ACE Limited (insurance company);
Associates (technology consulting and Captaris, Inc. (unified
company) messaging provider)
Xxxxxx X. Xxxxxx -- 1941............. Director of a number of public Cortland Trust, Inc. (Chairman)
and private business (registered investment company);
corporations, including the Boss Annuity and Life Re (Holdings),
Group Ltd. (private investment Ltd. (insurance company)
and management) and Magellan
Insurance Company
Formerly: Director, President and
Chief Executive Officer, Volvo
Group North America, Inc.; Senior
Vice President, AB Volvo; and
director of various affiliated
Volvo companies
Xxxxxx X. Xxxx, Xx. -- 1935.......... Retired None
Formerly: Chairman, Mercantile
Mortgage Corp.; President and
Chief Operating Officer,
Mercantile-Safe Deposit & Trust
Co.; and President, Mercantile
Bankshares Corp.
Xxxx X. Xxxxxx -- 1952............... Chief Executive Officer, Twenty Administaff, Discovery Global
First Century Group, Inc. Education Fund (non-profit)
(government affairs company) and
Xxxxxx Xxxxxx LP (sustainable
forestry company)
Xxxx Xxxxxxxxxx -- 1937.............. Partner, law firm of Xxxxxx Xxxxx Xxxxxxxx Trust, Inc. (registered
Naftalis and Xxxxxxx LLP investment company)
Xxxxx Xxxxxx-Xxxxx -- 1950........... Formerly: Chief Executive None
Officer, YWCA of the USA
Xxxxx X. Xxxxxxx -- 1942............. Partner, law firm of Xxxxxxx & None
Xxxxxx
Xxxx X. Xxxxxxx -- 1935.............. Retired None
Xxxxx X. Xxxxx -- 1939............... Executive Vice President, None
Development and Operations Xxxxx
Interests Limited Partnership
(real estate development company)
8
NEW NOMINEE WHO WILL BE AN INTERESTED PERSON
PRINCIPAL OCCUPATION(S)
NAME AND YEAR OF BIRTH DURING PAST 5 YEARS OTHER DIRECTORSHIP(S) HELD
---------------------- ----------------------- --------------------------
Xxxxxx X. Xxxxxx(1) -- 1946...... Director and Chairman, A I M N/A
President Management Group, Inc. (financial
services holding company); and
Director and Vice Chairman,
AMVESCAP PLC and Chairman of
AMVESCAP PLC -- AIM Division
(parent of AIM and a global
investment management firm)
Formerly, President and Chief
Executive Officer, A I M
Management Group, Inc. Director,
Chairman and President, A I M
Advisors, Inc. (registered
investment advisor); Director and
Chairman, A I M Capital
Management, Inc. (registered
investment advisor), A I M
Distributors, Inc. (registered
broker dealer), AIM Investment
Services, Inc. (registered
transfer agent), and Fund
Management Company (registered
broker dealer); and Chief
Executive Officer, AMVESCAP
PLC -- Managed Products
---------------
(1) Xx. Xxxxxx will be considered an interested person of Company because he is
a director of AMVESCAP PLC, parent of the advisor to, and principal
underwriter of, Company.
THE BOARD'S RECOMMENDATION ON PROPOSAL 1
The Board, including the independent directors, unanimously recommends that
you vote "FOR" these 16 nominees.
COMMITTEES OF THE BOARD
The Board currently has five standing committees: an Audit Committee, a
Governance Committee, an Investments Committee, a Valuation Committee and a
Special Committee Related to Market Timing Issues. These committees will remain
as part of the combined Board. Prior to November 6, 2003, the Board had nine
committees: an audit committee, an investments and management liaison committee,
a brokerage committee, a derivatives committee, a valuation committee, a legal
committee, a compensation committee, a retirement plan committee and a
nominating committee.
AUDIT COMMITTEE
The Audit Committee is comprised entirely of directors who are not
"interested persons" of Company as defined in Section 2(a)(19) of the 1940 Act.
The current members of Company's Audit Committee are Messrs. Xxxxx, Bunch and
Soll. The Audit Committee is responsible for: (i) the appointment, compensation
and oversight of any independent auditors employed by each Fund (including
monitoring the independence, qualifications and performance of such auditors and
resolution of disagreements between each Fund's management and the auditors
regarding financial reporting) for the purpose of preparing or issuing an audit
report or performing other audit, review or attest services; (ii) overseeing the
financial reporting process of each Fund; (iii) monitoring the process and the
resulting financial statements prepared by management to promote accuracy and
integrity of the financial statements and asset valuation; (iv) to assist the
Board's oversight of each Fund's compliance with legal and regulatory
requirements that relate to each Fund's accounting and financial reporting,
internal control over financial reporting and independent audits; (v) to the
9
extent required by Section 10A of the Securities Exchange Act of 1934, to
pre-approve all permissible non-audit services that are provided to each Fund by
its independent auditors to; (vi) to pre-approve, in accordance with Item
2.01(c)(7)(ii) of Regulation S-X, certain non-audit services provided by each
Fund's independent auditors to each Fund's investment advisor and certain other
affiliated entities; and (vii) to the extent required by Regulation 14A, to
prepare an audit committee report for inclusion in each Fund's annual proxy
statement. The financial statements should be read in conjunction with the
disclosures, included in this Proxy Statement under the heading "Certain Civil
Proceedings and Lawsuits."
GOVERNANCE COMMITTEE
The Governance Committee is comprised entirely of directors who are not
"interested persons" of Company as defined in Section 2(a)(19) of the 1940 Act.
The current member of Company's Governance Committee is Xx. Xxxxx. The
Governance Committee is responsible for: (i) nominating persons who are not
interested persons of Company for election or appointment: (a) as additions to
the Board, (b) to fill vacancies which, from time to time, may occur in the
Board and (c) for election by shareholders of Company at meetings called for the
election of directors; (ii) nominating persons for appointment as members of
each committee of the Board, including, without limitation, the Audit Committee,
the Governance Committee, the Investments Committee and the Valuation Committee,
and to nominate persons for appointment as chair and vice chair of each such
committee; (iii) reviewing from time to time the compensation payable to the
directors and making recommendations to the Board regarding compensation; (iv)
reviewing and evaluating from time to time the functioning of the Board and the
various committees of the Board; (v) selecting independent legal counsel to the
independent directors and approving the compensation paid to independent legal
counsel; and (vi) approving the compensation paid to independent counsel and
other advisers, if any, to the Audit Committee of Company.
After a determination by the Governance Committee that a person should be
nominated as an additional director who is not an "interested person" of Company
as defined in Section 2(a)(19) of the 1940 Act (a "disinterested director"), or
as soon as practical after a vacancy occurs or it appears that a vacancy is
about to occur for a disinterested director position on the Board, the
Governance Committee will nominate a person for appointment by a majority of the
disinterested directors to add to the Board or to fill the vacancy. Prior to a
meeting of the shareholders of the Funds called for the purpose of electing
disinterested directors, the Governance Committee will nominate one or more
persons for election as disinterested directors at such meeting.
Evaluation by the Governance Committee of a person as a potential nominee
to serve as a disinterested director, including a person nominated by a
shareholder, should result in the following findings by the Governance
Committee: (i) upon advice of independent legal counsel to the disinterested
directors, that the person will qualify as a disinterested director and that the
person is otherwise qualified under applicable laws and regulations to serve as
a director of Company; (ii) that the person is willing to serve, and willing and
able to commit the time necessary for the performance of the duties of a
disinterested director; (iii) with respect to potential nominees to serve as
disinterested director members of the Audit Committee of Company, upon advice of
independent legal counsel to the disinterested directors, that the person: (a)
is free of any material relationship with the Funds (other than as a shareholder
of the Funds), either directly or as a partner, shareholder or officer of an
organization that has a relationship with the Funds, (b) meets the requirements
regarding the financial literacy or financial expertise of audit committee
members, as set forth from time to time in the New York Stock Exchange listing
standards and in any rules promulgated by the SEC that are applicable to
investment companies whose shares are listed for trading on a national
securities exchange, and (c) meets the director independence requirements for
serving on audit committees as set forth from time to time in the New York Stock
Exchange listing standards (currently, Section 303A.06), and as set forth in
rules promulgated by the SEC under the Securities Exchange Act of 1934, as
amended, that are applicable to investment companies whose shares are listed for
trading on a national securities exchange (currently, Rule 10A-3(b)(1)(iii));
(iv) that the person can make a positive contribution to the Board and the
Funds, with consideration being given to the person's business experience,
education and such other factors as the Governance Committee may consider
relevant; (v) that the person is of good character and high integrity; and
10
(vi) that the person has desirable personality traits including independence,
leadership and the ability to work with the other members of the Board.
Consistent with the 1940 Act, the Governance Committee can consider
recommendations from management in its evaluation process.
The Governance Committee will consider nominees recommended by a
shareholder to serve as directors, provided: (i) that such person is a
shareholder of record at the time he or she submits such names and is entitled
to vote at the meeting of shareholders at which directors will be elected; and
(ii) that the Governance Committee or the Board, as applicable, shall make the
final determination of persons to be nominated. If a shareholder desires to
nominate a candidate, the shareholder must submit a request in writing to the
chairman of the Governance Committee. The Governance Committee will evaluate
nominees recommended by a shareholder to serve as directors in the same manner
as they evaluate nominees identified by the Governance Committee.
A current copy of the Governance Committee's Charter is set forth in
Appendix I.
INVESTMENTS COMMITTEE
The current members of Company's Investments Committee are Messrs. Xxxxx,
Xxxxx, Xxxxx and Xxxx. The Investments Committee is responsible for: (i)
overseeing INVESCO's investment-related compliance systems and procedures to
ensure their continued adequacy; and (ii) considering and acting, on an interim
basis between meetings of the full Board, on investment-related matters
requiring Board consideration.
VALUATION COMMITTEE
The current members of Company's Valuation Committee are Messrs. Xxxxx,
Xxxxx, Xxxxx and Xxxx. The Valuation Committee meets on an ad hoc basis to
review matters related to valuation.
SPECIAL COMMITTEE RELATED TO MARKET TIMING ISSUES
The current member of Company's Special Committee Relating to Market Timing
Issues is Xx. Xxxxx. The purpose of the Special Committee Relating to Market
Timing Issues is to remain informed on matters relating to alleged excessive
short term trading in shares of your Fund and the other portfolios of Company
("market timing") and to provide guidance to special counsel for the independent
directors on market timing issues and related matters between meetings of the
independent directors. During the fiscal year ended December 31, 2003, the
Special Committee related to Market Timing Issues did not meet.
BOARD AND COMMITTEE MEETING ATTENDANCE
During the fiscal year ended December 31, 2003, the Board met 9 times, the
Audit Committee met 1 time, the Governance Committee met 1 time, the Investments
Committee met 1 time and the Valuation Committee and the Special Committee
Related to Market Timing Issues did not meet. During the fiscal year ended
December 31, 2003, the former audit committee met 3 times, the former
investments and management liaison committee met 3 times, the former brokerage
committee met 3 times, the former derivatives committee met 3 times, the former
nominating committee met 2 times, the former legal committee met 2 times, the
former compensation committee, and the former executive, valuation and
retirement plan committees did not meet. Directors then serving attended at
least 75% of the meetings of the board or applicable committee during the most
recent fiscal year. Company is not required to and does not hold annual meetings
of shareholders. Company's policy regarding Board member attendance at annual
meetings of shareholders, if any, is that directors are encouraged but not
required to attend such annual meetings.
SHAREHOLDER COMMUNICATIONS WITH THE BOARD
The Board provides a process for shareholders to send communications to the
Board. If any shareholder wishes to communicate with the Board or with an
individual director, that shareholder should send his, her or its communications
to Xxx X. XxXxxxxx, First Vice President Corporate Communications.
Communications
11
made to Xx. XxXxxxxx may be communicated by telephone, e-mail or regular mail to
the following address: (000) 000-0000, xxx.xxxxxxxx@xxxxxxxxxxxxxx.xxx, A I M
Management Group Inc., 00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000. All
shareholder communications received by Xx. XxXxxxxx shall be promptly forwarded
to the individual director of Company to whom they were addressed or to the full
Board, as applicable. Copies of all shareholder communications will also be
distributed to the Chairs of each of Trust's Audit Committee, Governance
Committee, Investments Committee and Valuation Committee, to counsel for Company
and to counsel for the independent directors of Company. Counsel for Company,
upon receipt of their copy of a shareholder communication, shall work with such
Chairs and counsel for the independent directors to determine whether such
shareholder communication should be distributed to any directors to whom it was
not sent and whether and in what manner the directors should respond to such
shareholder communication. Responses, if any, to shareholder communications
shall be coordinated by counsel for Company, working with the Chairs and counsel
for the independent directors.
DIRECTOR'S COMPENSATION
Each director who is independent is compensated for his or her services
according to a fee schedule which recognizes the fact that such director also
serves as a director of other INVESCO Funds. Each such director receives a fee,
allocated among the INVESCO Funds for which he or she serves as a director,
which consists of an annual retainer component and a meeting fee component.
Set forth below is information regarding compensation paid or accrued for
each continuing director of Company who was not affiliated with INVESCO during
the year ended December 31, 2003. Directors of Company who are affiliated with
INVESCO are not compensated by Company.
ESTIMATED ANNUAL
AGGREGATE RETIREMENT BENEFITS BENEFITS UPON TOTAL COMPENSATION
COMPENSATION ACCRUED BY ALL RETIREMENT FROM ALL FROM ALL AIM FUNDS AND
NAME OF DIRECTOR FROM COMPANY(1) INVESCO FUNDS(2) INVESCO FUNDS(3) INVESCO FUNDS(4)
---------------- --------------- ------------------- ------------------- ----------------------
Xxx X. Xxxxx......... $16,211 $ 0 $24,131 $154,554
Xxxxx X. Xxxxx....... 15,414 0 0 138,679
Xxxxxx X. Xxxxx...... 15,575 0 0 142,054
Xxxxx Xxxx, Ph.D. ... 15,493 21,545 18,090 140,429
---------------
(1) During the period January 1, 2003 through October 21, 2003 the vice chairman
of the Board, the chairs of certain of your Fund's committees who are
independent directors, and the members of your Fund's committees who are
independent directors each received compensation for serving in such
capacities in addition to the compensation paid to all independent
directors. Amounts shown are based on the fiscal year ended December 31,
2003.
(2) Represents estimated benefits accrued with respect to the current retirement
plan and deferred retirement plan account agreement applicable to
independent directors of Company, and not compensation deferred at the
election of the directors. Amounts shown are based on the fiscal year ended
December 31, 2003.
(3) These amounts represent the estimated annual benefits payable by the INVESCO
Funds upon the directors' retirement, calculated using the current method of
allocating director compensation among the INVESCO Funds. Xxxxxxx shown
assume each director serves until his normal retirement date of age 72.
(4) As of November 25, 2003, the AIM Funds and the INVESCO Funds are considered
to be part of one fund complex. All directors currently serve as directors
or trustees of 17 registered investment companies advised by AIM and one
registered investment company advised by INVESCO.
RETIREMENT PLAN FOR DIRECTORS
At a meeting held on November 6, 2003, the Boards of Directors of the
INVESCO Funds, including Company, adopted a new retirement plan (the "New
Retirement Plan") for the directors of Company who are not affiliated with
INVESCO, which was effective as of October 21, 2003. The New Retirement Plan
also has
12
been adopted by the Boards of Directors/Trustees of the AIM Funds. The reason
for adoption of the New Retirement Plan is to provide for consistency in the
retirement plans for the Boards of Directors of the INVESCO Funds and the Boards
of Directors/Trustees of the AIM Funds. The retirement plan includes a
retirement policy as well as retirement benefits for independent directors.
The retirement policy permits each independent director to serve until
December 31 of the year in which the director turns 72. A majority of the
directors may extend from time to time the retirement date of a director.
Annual retirement benefits are available to each independent director of
Company and/or the other INVESCO Funds and AIM Funds (each, a "Covered Fund")
who has at least five years of credited service as a director (including service
to a predecessor fund) for a Covered Fund. The retirement benefits will equal
75% of the director's annual retainer paid or accrued by any Covered Fund to
such director during the twelve-month period prior to retirement, including the
amount of any retainer deferred under a separate deferred compensation agreement
between the Covered Fund and the director. The annual retirement benefits will
be payable in quarterly installments for a number of years equal to the lesser
of (i) ten or (ii) the number of such director's credited years of service. A
death benefit also is available under the New Retirement Plan that will provide
a surviving spouse with a quarterly installment of 50% of a deceased director's
retirement benefits for the same length of time that the director would have
received the benefits based on his or her service. A director must have attained
the age of 65 (55 in the event of death or disability) to receive any retirement
benefit. Payment of benefits under the New Retirement Plan is not secured or
funded by Company.
Upon the effectiveness of the New Retirement Plan, the independent
directors ceased to accrue benefits under their prior retirement plan ("Prior
Retirement Plan") and deferred retirement plan account agreement ("Prior Account
Agreement"). Messrs. Xxxxx and Xxxx will not receive any additional benefits
under the Prior Retirement Plan or the Prior Account Agreement, but will be
entitled to amounts which have been previously funded under the Prior Retirement
Plan or the Prior Account Agreement for their benefit. An affiliate of INVESCO
will reimburse Company for any amounts funded by Company for Messrs. Xxxxx and
Xxxx under the Prior Retirement Plan and the Prior Account Agreement.
DEFERRED COMPENSATION AGREEMENTS
At a meeting held on November 6, 2003, the Boards of Directors of the
INVESCO Funds, including Company, adopted new deferred compensation agreements
which are consistent with the deferred compensation agreements adopted by the
Boards of Directors/Trustees of the AIM Funds. Pursuant to the new deferred
compensation agreements ("New Compensation Agreements"), a director has the
option to elect to defer receipt of up to 100% of his or her compensation
payable by Company, and such amounts are placed into a deferral account. The
deferring directors have the option to select various AIM Funds and INVESCO
Funds in which all or part of their deferral account will be deemed to be
invested. Distributions from the deferring directors' deferral accounts will be
paid in cash, generally in equal quarterly installments over a period of up to
ten years (depending on the New Compensation Agreement) beginning on the date
selected under the New Compensation Agreement.
The Board, in its sole discretion, may accelerate or extend the
distribution of such deferral accounts after the deferring directors' retirement
benefits commence under the New Retirement Plan. The Board, in its sole
discretion, also may accelerate or extend the distribution of such deferral
accounts after the deferring directors' termination of service as a director of
Company. If a deferring director dies prior to the distribution of amounts in
his or her deferral account, the balance of the deferral account will be
distributed to his or her designated beneficiary. The New Compensation
Agreements are not funded and, with respect to the payments of amounts held in
the deferral accounts, the deferring directors have the status of unsecured
creditors of Company and of each other INVESCO Fund and AIM Fund from which they
are deferring compensation.
INVESTMENT ADVISOR
INVESCO, 00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000, currently
is the investment advisor for the Funds.
13
ADMINISTRATOR
INVESCO, 00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000, currently
is the administrator for the Funds. Pursuant to an Assignment and Assumption
Agreement and Consent dated August 12, 2003, INVESCO has assigned to AIM all of
its rights under its administrative service agreement with Company, and AIM has
assumed all of INVESCO's obligations under such agreement. If Proposal 2 is
approved by shareholders of the Funds, AIM will replace INVESCO as administrator
for the Funds effective on or about April 30, 2004.
PRINCIPAL UNDERWRITER
INVESCO Distributors, Inc., 00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
00000-0000, currently is the principal underwriter for the Funds.
OFFICERS OF COMPANY
The following table provides information with respect to the current
officers of Company. Each officer is elected by the Board and serves until his
or her successor is chosen and qualified or until his or her resignation or
removal by the Board. The business address of all officers of Company is 00
Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000.
NAME, YEAR OF BIRTH AND OFFICER
POSITION(S) HELD WITH COMPANY SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
----------------------------- ------- -------------------------------------------
Xxxx X. Xxxxxxxxxx -- 1951................ 1998 Director, President and Chief Executive Officer,
Chairman of the Board A I M Management Group Inc.; Director, Chairman
and President, A I M Advisors, Inc. (registered
investment advisor); Director, A I M Capital
Management, Inc., A I M Distributors, Inc.
(registered broker dealer); Director and Chairman,
AIM Investment Services, Inc. and Fund Management
Company and Chief Executive Officer of the AIM
Division of AMVESCAP PLC -- AIM Division;
formerly, Chief Executive Officer, Managed
Products Division, AMVESCAP PLC (2001-2002);
Director, Chairman of the Board (1998-2002),
President (1998-2002) and Chief Executive Officer
(1998-2002) of INVESCO Funds Group, Inc.
(registered investment advisor) and INVESCO
Distributors, Inc. (registered broker dealer);
Chairman and Chief Executive Officer of
NationsBanc Advisors, Inc.; and Chairman of
NationsBanc Investments, Inc.
Xxxxxx X. Xxxxxx -- 1946.................. 2003 Director and Chairman A I M Management Group Inc.
President (since November 5, 2003) (financial services holding company); Director and
Vice Chairman, AMVESCAP PLC and Chairman of
AMVESCAP PLC -- AIM Division (parent of AIM and a
global investment management firm); formerly,
President and Chief Executive Officer, A I M
Management Group Inc.; Director, Chairman, and
President, A I M Advisors, Inc. (registered
investment advisor); Director and Chairman, A I M
Capital Management, Inc. (registered investment
advisor), A I M Distributors, Inc. (registered
broker dealer); AIM Investment Services, Inc.
(registered transfer agent), and Fund Management
Company (registered broker dealer); and Chief
Executive Officer of AMVESCAP PLC -- Managed
Products
14
NAME, YEAR OF BIRTH AND OFFICER
POSITION(S) HELD WITH COMPANY SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
----------------------------- ------- -------------------------------------------
Xxxxxxx X. Xxxxxxxxxx -- 1951............. 2001 Director, President and Chief Executive Officer
Executive Vice President (since November (2003- present) of INVESCO Funds Group, Inc.;
5, 2003) Chairman of the Board (2003-present) and
President, Director, Chairman and Chief Executive
Officer (2003-present) of INVESCO Distributors,
Inc.; Senior Vice President and Chief Operating
Officer, A I M Management Group Inc.; Senior Vice
President, A I M Advisors, Inc. and A I M
Distributors, Inc., A I M Capital Management,
Inc., AIM Investment Services, Inc. and Fund
Management Company; formerly, Chief Operating
Officer (2001-2003) and Senior Vice President
(1999-2002) of INVESCO Funds Group, Inc. and
INVESCO Distributors, Inc.; and Senior Vice
President of GT Global -- North America
(1992-1998).
Xxxxx X. Xxxxxx -- 1956................... 2003 Director, Senior Vice President, Secretary and
Senior Vice President, Secretary and General Counsel, A I M Management Group Inc.
Chief Legal Officer (since November 5, (financial services holding company) and A I M
2003) Advisors, Inc.; and Vice President, A I M Capital
Management, Inc., A I M Distributors, Inc. and AIM
Investment Services, Inc; Director, Vice President
and General Counsel, Fund Management Company;
formerly, Senior Vice President and General
Counsel, Liberty Financial Companies, Inc.; and
Senior Vice President and General Counsel, Liberty
Funds Group LLC
Xxxxxx X. Xxxxxxx -- 1961................. 2004 Vice President and Fund Treasurer, A I M Advisors,
Vice President and Treasurer (since Inc. Senior Vice President, AIM Investment
January 1, 2004) Services, Inc.; and Vice President, A I M
Distributors, Inc.
Xxxxxx X. Xxxx -- 1955.................... 2003 Managing Director and Director of Money Market
Vice President (since November 5, 2003) Research and Special Projects, A I M Capital
Management, Inc.; and Vice President, A I M
Advisors, Inc.
Xxxxxxxx X. Xxx -- 1943................... 2003 Vice President and Chief Compliance Officer, A I M
Vice President (since November 5, 2003) Advisors, Inc. and A I M Capital Management, Inc;
and Vice President, AIM Investment Services, Inc.
Xxxxx Xxxx Xxxxxx -- 1960................. 2003 Managing Director and Chief Cash Management
Vice President (since November 5, 2003) Officer, A I M Capital Management, Inc.; Director
and President, Fund Management Company; and Vice
President, A I M Advisors, Inc.
Xxxxx X. Xxxxxx -- 1940 Vice President 2003 Vice President, A I M Advisors, Inc.; and Chief
(since November 5, 2003) Executive Officer, President and Chief Investment
Officer, A I M Capital Management, Inc.
Xxxxxx X. Xxxxx -- 1948................... 2003 Managing Director, Chief Fixed Income Officer and
Vice President (since November 5, 2003) Senior Investment Officer, A I M Capital
Management, Inc. and Vice President, A I M
Advisors, Inc.
SECURITY OWNERSHIP OF MANAGEMENT
Information regarding the ownership of each class of each Fund's shares by
the directors, nominees and current executive officers of Company can be found
in Exhibit B.
15
OWNERSHIP OF SHARES
A list of the name, address and percent ownership of each person who, as of
January 9, 2004, to the knowledge of Company owned 5% or more of any class of
the outstanding shares of each Fund can be found in Exhibit C.
DIRECTOR OWNERSHIP OF FUND SHARES
Set forth below is the dollar range of equity securities beneficially owned
by each director and nominee as of December 31, 2003 (i) in each Fund and (ii)
on an aggregate basis, in all registered investment companies overseen by the
director within the AIM Funds and the INVESCO Funds complex.
DOLLAR RANGE OF EQUITY
SECURITIES PER FUND
----------------------
INTERESTED DIRECTOR
----------------------
XXXX X. XXXXXXXXXX
----------------------
INVESCO VIF -- Dynamics Fund................................ None
INVESCO VIF -- Core Equity Fund............................. None
INVESCO VIF -- Financial Services Fund...................... None
INVESCO VIF -- Health Sciences Fund......................... None
INVESCO VIF -- Leisure Fund................................. None
INVESCO VIF -- Real Estate Opportunity Fund................. None
INVESCO VIF -- Small Company Growth Fund.................... None
INVESCO VIF -- Technology Fund.............................. None
INVESCO VIF -- Total Return Fund............................ None
INVESCO VIF -- Utilities Fund............................... None
DOLLAR RANGE OF EQUITY
SECURITIES PER FUND
----------------------
INTERESTED NOMINEE
----------------------
XXXXXX X. XXXXXX
----------------------
INVESCO VIF -- Dynamics Fund................................ None
INVESCO VIF -- Core Equity Fund............................. None
INVESCO VIF -- Financial Services Fund...................... None
INVESCO VIF -- Health Sciences Fund......................... None
INVESCO VIF -- Leisure Fund................................. None
INVESCO VIF -- Real Estate Opportunity Fund................. None
INVESCO VIF -- Small Company Growth Fund.................... None
INVESCO VIF -- Technology Fund.............................. None
INVESCO VIF -- Total Return Fund............................ None
INVESCO VIF -- Utilities Fund............................... None
16
DOLLAR RANGE OF EQUITY SECURITIES PER FUND
-------------------------------------------
INDEPENDENT DIRECTORS
-------------------------------------------
XXX X. XXXXX X. XXXXXX X. XXXXX
XXXXX BUNCH XXXXX XXXX, PH.D.
------ -------- --------- -----------
INVESCO VIF -- Dynamics Fund.................... None None None None
INVESCO VIF -- Core Equity Fund................. None None None None
INVESCO VIF -- Financial Services Fund.......... None None None None
INVESCO VIF -- Health Sciences Fund............. None None None None
INVESCO VIF -- Leisure Fund..................... None None None None
INVESCO VIF -- Real Estate Opportunity Fund..... None None None None
INVESCO VIF -- Small Company Growth Fund........ None None None None
INVESCO VIF -- Technology Fund.................. None None None None
INVESCO VIF -- Total Return Fund................ None None None None
INVESCO VIF -- Utilities Fund................... None None None None
DOLLAR RANGE OF EQUITY SECURITIES PER FUND
-----------------------------------------------------
INDEPENDENT NOMINEES
-----------------------------------------------------
XXXXX X. XXXXX X. XXXXXX X. XXXXXX X. XXXX X.
XXXXXX XXXXXXXX XXXXXX XXXX, XX. FIELDS
-------- -------- --------- --------- -------
INVESCO VIF -- Dynamics Fund.......... None None None None None
INVESCO VIF -- Core Equity Fund....... None None None None None
INVESCO VIF -- Financial Services
Fund................................ None None None None None
INVESCO VIF -- Health Sciences Fund... None None None None None
INVESCO VIF -- Leisure Fund........... None None None None None
INVESCO VIF -- Real Estate Opportunity
Fund................................ None None None None None
INVESCO VIF -- Small Company Growth
Fund................................ None None None None None
INVESCO VIF -- Technology Fund........ None None None None None
INVESCO VIF -- Total Return Fund...... None None None None None
INVESCO VIF -- Utilities Fund......... None None None None None
DOLLAR RANGE OF EQUITY SECURITIES PER FUND
----------------------------------------------------
INDEPENDENT NOMINEES
----------------------------------------------------
PREMA
XXXX XXXXXX- XXXXX F. XXXX X. XXXXX X.
XXXXXXXXXX XXXXX XXXXXXX XXXXXXX XXXXX
---------- ------- -------- ------- --------
INVESCO VIF -- Dynamics Fund............ None None None None None
INVESCO VIF -- Core Equity Fund......... None None None None None
INVESCO VIF -- Financial Services
Fund.................................. None None None None None
INVESCO VIF -- Health Sciences Fund..... None None None None None
INVESCO VIF -- Leisure Fund............. None None None None None
INVESCO VIF -- Real Estate Opportunity
Fund.................................. None None None None None
INVESCO VIF -- Small Company Growth
Fund.................................. None None None None None
INVESCO VIF -- Technology Fund.......... None None None None None
INVESCO VIF -- Total Return Fund........ None None None None None
INVESCO VIF -- Utilities Fund........... None None None None None
17
PROPOSAL 2 --
APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 2?
Proposal 2 applies to the shareholders of all Funds.
BACKGROUND
INVESCO currently serves as the investment advisor to your Fund. AMVESCAP
has recommended restructuring the advisory and administrative servicing
arrangements so that AIM is the advisor and administrator for all INVESCO Funds
and AIM Funds. Your Board has approved a new advisory agreement under which AIM
will serve as the investment advisor for your Fund, and a new sub-advisory
agreement under which INVESCO Institutional, an affiliate of INVESCO, which is
currently serving as your Fund's investment advisor, will serve as sub-advisor.
The portfolio management team for your Fund will not change as a result of this
restructuring.
The Board recommends that you approve the new advisory agreement between
AIM and Company for your Fund. The Board is asking you to vote on this new
agreement because Company may enter into a new advisory agreement for your Fund
only with shareholder approval. If approved, this new agreement would replace
the current advisory agreement between INVESCO and Company for your Fund. The
form of Company's proposed Master Investment Advisory Agreement with AIM is at
Appendix II.
Under the new arrangements, the advisory fees paid by your Fund will not
change. If shareholders of your Fund approve Proposal 2, Company will also enter
into a new Master Administrative Services Agreement with AIM that will replace
the current Administrative Services Agreement between Company and INVESCO, and
move the provision of certain administrative services currently provided
pursuant to the current advisory agreement between Company and INVESCO to the
Master Administrative Services Agreement with AIM. If the proposed advisory
agreement is approved and these new arrangements are implemented, the aggregate
fees paid by your Fund for advisory and administrative services will not
increase.
Any voluntary or contractual expense limitations and fee waivers that have
been agreed to by INVESCO and Company with respect to your Fund will not be
terminated if the proposed new advisory agreement with AIM is approved. Instead,
AIM will assume INVESCO's obligations with respect to these voluntary and
contractual expense limitations and fee waivers, on the same terms and
conditions.
If INVESCO and Company have entered into voluntary or contractual expense
limitations or fee waivers with respect to your Fund, INVESCO currently is
entitled to reimbursement from a share class of your Fund that has fees and
expenses absorbed pursuant to this arrangement if such reimbursement does not
cause such share class to exceed the expense limitation and the reimbursement is
made within three years after INVESCO incurred the expense. If the proposed new
advisory agreement with AIM is approved, INVESCO will assign to AIM its right to
be reimbursed with respect to fees and expenses absorbed by it. Other than
substituting AIM for INVESCO as the party having the right to be reimbursed,
this assignment will not alter in any way the rights or obligations of your Fund
or its shareholders.
A description of how the proposed advisory agreement differs from the
current advisory agreement is set forth below under "Terms of the Proposed
Advisory Agreement." At an in-person meeting of the Board held on December 9-10,
2003, the Board, including a majority of the independent directors, voted to
recommend that shareholders approve a proposal to adopt the proposed advisory
agreement for your Fund.
YOUR FUND'S CURRENT INVESTMENT ADVISOR
INVESCO, the current investment advisor for your Fund, became the
investment advisor for each of the Funds under the current advisory agreement on
the dates indicated below. Your Fund's shareholders last voted
18
on the current advisory agreement on the date and for the purpose indicated
below. The Board, including a majority of the independent directors, last
approved the current advisory agreement on May 15, 2003.
XXXX XXXXXXX BECAME
ADVISOR UNDER CURRENT DATE LAST SUBMITTED TO
NAME OF FUND ADVISORY AGREEMENT A VOTE OF SHAREHOLDERS
------------ --------------------- ----------------------
INVESCO VIF -- Dynamics Fund....................... October 20, 1993(1) N/A
INVESCO VIF -- Core Equity Fund.................... February 28, 1997 January 31, 1997(2)
INVESCO VIF -- Financial Services Fund............. October 20, 1993(1) N/A
INVESCO VIF -- Health Sciences Fund................ October 20, 1993(1) N/A
INVESCO VIF -- Leisure Fund........................ October 20, 1993(1) N/A
INVESCO VIF -- Real Estate Opportunity Fund........ October 20, 1993(1) N/A
INVESCO VIF -- Small Company Growth Fund........... October 20, 1993(1) N/A
INVESCO VIF -- Technology Fund..................... October 20, 1993(1) N/A
INVESCO VIF -- Total Return Fund................... February 28, 1997 January 31, 1997(2)
INVESCO VIF -- Utilities Fund...................... February 28, 1997 January 31, 1997(2)
---------------
(1) The applicable Fund's initial shareholder initially approved the agreement
and such Fund's public shareholders have not subsequently voted on the
agreement.
(2) Shareholders last voted on the agreement on January 31, 1997, for the
purpose of approving a new investment advisory agreement, with the same
parties and on terms substantially identical to the then-existing investment
advisory agreement. Such approval was necessary because the then-existing
investment advisory agreement terminated automatically by operation of law
upon the consummation on February 28, 1997, of the merger of A I M
Management Group Inc. and INVESCO PLC, which at the time was the ultimate
parent company of the applicable Fund's investment advisor.
THE PROPOSED NEW INVESTMENT ADVISOR FOR YOUR FUND
AIM is a wholly owned subsidiary of A I M Management Group Inc. ("AIM
Management"), a holding company with its principal offices at 00 Xxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000. AIM Management is an indirect wholly owned
subsidiary of AMVESCAP, 00 Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx.
AMVESCAP and its subsidiaries are an independent investment management group.
19
The following table provides information with respect to the principal
executive officer and the directors of A I M Advisors, Inc. ("AIM"). The
business address of each principal executive officer and director is 00 Xxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000.
NAME POSITION WITH AIM PRINCIPAL OCCUPATION
---- ----------------- --------------------
Xxxx X. Xxxxxxxxxx.......... Director, Chairman and President Director, President and Chief
Executive Officer, A I M Management
Group Inc.; Director, Chairman and
President, A I M Advisors, Inc.
(registered investment advisor);
Director, A I M Capital Management,
Inc. and A I M Distributors, Inc.
(registered broker dealer); Director
and Chairman, AIM Investment
Services, Inc. and Fund Management
Company and Chief Executive Officer
of the AIM Division of AMVESCAP PLC
(2003-present); formerly Chief
Executive Officer, Managed Products
Division, AMVESCAP PLC Director;
Chairman of the Board (1998-2002),
President (1998-2002) and Chief
Executive Officer (1998-2002) of
INVESCO Funds Group, Inc. (registered
investment advisor) and INVESCO
Distributors, Inc. (registered broker
dealer); Chairman and Chief Executive
Officer of NationsBanc Advisors,
Inc.; and Chairman of NationsBanc
Investments, Inc.
Xxxxx X. Xxxxxx............. Director, Senior Vice President, Director, Senior Vice President,
General Counsel and Secretary Secretary and General Counsel, A I M
Management Group Inc. and A I M
Advisors, Inc.; Vice President, A I M
Capital Management, Inc., A I M
Distributors, Inc. and AIM Investment
Services, Inc.; and Director, Vice
President and General Counsel, Fund
Management Company; formerly, Senior
Vice President and General Counsel,
Liberty Financial Companies, Inc.;
and Senior Vice President and General
Counsel, Liberty Funds Group LLC
Xxxx X. Xxxxxx.............. Director, Senior Vice President Director, Senior Vice President and
and Chief Financial Officer Chief Financial Officer, A I M
Management Group Inc.; Vice President
and Treasurer, A I M Capital
Management, Inc. and A I M
Distributors, Inc.; Director, Vice
President and Chief Financial
Officer, AIM Investment Services,
Inc.; and Vice President and Chief
Financial Officer, Fund Management
Company
POSITIONS WITH AIM HELD BY COMPANY'S DIRECTORS OR EXECUTIVE OFFICERS
Xxxx X. Xxxxxxxxxx, who is a director and/or executive officer of Company,
also is a director and/or officer of AIM. He also beneficially owns shares of
AMVESCAP and/or options to purchase shares of AMVESCAP.
20
TERMS OF THE CURRENT ADVISORY AGREEMENT
Under the terms of the current advisory agreement with INVESCO for your
Fund, INVESCO acts as investment manager and administrator for your Fund. As
investment manager, INVESCO provides a continuous investment program for your
Fund, including investment research and management, with respect to all
securities, investments and cash equivalents of your Fund. INVESCO also makes
recommendations as to the manner in which voting rights, rights to consent to
actions of your Fund and any other rights pertaining to your Fund's securities
shall be exercised and calculates the net asset value of your Fund, subject to
such procedures established by the Board and based upon information provided by
your Fund, the custodian of your Fund or other source as designated by the
Board. INVESCO provides sub-accounting, recordkeeping and administrative
services to your Fund under an administrative services agreement. Under the
advisory agreement, as administrator, INVESCO is required to provide, at its
expense and at the request of your Fund, executive, statistical, administrative,
internal accounting and clerical services and office space, equipment and
facilities. Pursuant to an Assignment and Assumption Agreement and Consent dated
August 12, 2003, INVESCO has assigned to AIM all of its rights under its
administrative service agreement with Company, and AIM has assumed all of
INVESCO's obligations under such agreement.
Under the terms of the current advisory agreement, INVESCO has no liability
to Company, your Fund or to your Fund's shareholders or creditors, for any error
of judgment, mistake of law, or for any loss arising out of any investment, nor
for any other act or omission, in the performance of its obligations to Company
or your Fund unless such act or omission involves willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations and duties
under the current advisory agreement.
The current advisory agreement for your Fund continues 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 1940 Act) of your Fund, and (ii) the vote of a majority of the
directors of Company who are not interested persons of INVESCO or Company by
votes cast in person at a meeting called for such purpose. The current advisory
agreement provides that the Board, INVESCO or a majority of the outstanding
voting securities of your Fund may terminate the agreement with respect to your
Fund on 60 days' written notice without penalty. The agreement terminates
automatically in the event of its assignment, unless an order is issued by the
SEC conditionally or unconditionally exempting such assignment from the
applicable provisions of the 1940 Act.
The current advisory agreement for your Fund provides that your Fund will
pay or cause to be paid all of its expenses not assumed by INVESCO, including
without limitation:
- brokerage commissions, issue and transfer taxes and other costs related
to securities transactions;
- fees, charges and expenses related to accounting, custodian, depository,
dividend disbursing agent, dividend reinvestment agent, transfer agent,
registrar, independent pricing services and legal services performed for
your Fund;
- interest on indebtedness incurred by Company or your Fund;
- taxes;
- fees for maintaining the registration and qualification of your Fund or
its shares under federal and state law;
- compensation and expenses of the independent directors;
- costs of printing and distributing reports, notices of shareholders'
meetings, proxy statements, dividend notices, prospectuses, statements of
additional information and other communications to your Fund's
shareholders, including expenses relating to Board and shareholder
meetings;
- costs, fees and other expenses arising in connection with the
organization and filing of Company's Articles of Incorporation,
determinations of tax status of your Fund, initial registration and
qualification of your Fund's securities under federal and state
securities laws and approval of Company's operations by any other federal
or state authority;
21
- expenses of repurchasing and redeeming shares of your Fund;
- insurance premiums;
- costs of designing, printing and issuing certificates representing shares
of your Fund;
- extraordinary expenses, including fees and disbursements of Company's
counsel, in connection with litigation by or against Company or your
Fund;
- premiums for the fidelity bond maintained by your Fund pursuant to the
1940 Act (except those premiums that may be allocated to INVESCO as an
insured);
- association and institute dues;
- expenses, if any, of distributing shares of your Fund pursuant to a 12b-1
plan of distribution; and
- all other costs and expenses of your Fund's operations and organization
unless otherwise explicitly provided.
The current advisory agreement requires INVESCO to reimburse your Fund
monthly for any salaries paid by your Fund to officers, directors and full-time
employees of your Fund who are also officers, general partners or employees of
INVESCO or its affiliates. Although INVESCO has this obligation under the
current advisory agreement, your Fund does not pay salaries to its officers,
non-independent directors or employees for services rendered to your Fund.
If, in any given year, the sum of your Fund's expenses exceed the most
restrictive state-imposed annual expense limitation, INVESCO is required to
promptly reimburse such excess expenses to your Fund pursuant to the current
advisory agreement. Interest, taxes, extraordinary expenses and expenses which
are capitalized are not deemed expenses for purposes of this reimbursement
obligation.
Company pays INVESCO out of the assets of the applicable 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
22
annual rate 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.
NET FEES
PAID TO
INVESCO
FUNDS FEE WAIVERS OR
GROUP, INC. EXPENSE
TOTAL NET FOR THE MOST REIMBURSEMENTS
ASSETS FOR THE RECENTLY FOR THE MOST
MOST RECENTLY COMPLETED RECENTLY
ANNUAL RATE COMPLETED FISCAL COMPLETED
(BASED ON AVERAGE FISCAL PERIOD PERIOD OR FISCAL PERIOD OR
NAME OF FUND DAILY NET ASSETS) OR YEAR YEAR YEAR
------------ ----------------- -------------- ------------ ----------------
INVESCO VIF -- Dynamics
Fund....................... 0.75% $169,269,288 $1,007,109 $16,682
INVESCO VIF -- Core Equity
Fund....................... 0.75% $109,203,171 $ 748,951 $ 1,412
INVESCO VIF -- Financial
Services Fund.............. 0.75% $210,352,037 $1,244,850 $ 1,189
INVESCO VIF -- Health
Sciences Fund.............. 0.75% $340,711,007 $2,027,511 $ 102
INVESCO VIF -- Leisure Fund.. 0.75% $ 34,424,443 $ 61,863 $62,208
INVESCO VIF -- Real Estate
Opportunity Fund........... 0.90% $ 26,086,774 $ 113,978 $47,055
INVESCO VIF -- Small Company
Growth Fund................ 0.75% $ 49,597,824 $ 281,277 $18,166
INVESCO VIF -- Technology
Fund....................... 0.75% $171,546,097 $1,025,322 $ 2,617
INVESCO VIF -- Total Return
Fund....................... 0.75% $ 15,675,505 $ 62,055 $51,497
INVESCO VIF -- Utilities
Fund....................... 0.60% $ 62,510,422 $ 257,963 $ 263
ADDITIONAL SERVICES PROVIDED BY INVESCO AND ITS AFFILIATES
INVESCO and its affiliates also provide additional services to Company and
your Fund. INVESCO currently provides or arranges for others to provide
accounting and administrative services to your Fund. Prior to October 1, 2003,
INVESCO served as your Fund's transfer agent. INVESCO Distributors, Inc.
currently serves as the principal underwriter for your Fund. This company is an
indirect wholly owned subsidiary of AMVESCAP, the parent company of INVESCO.
23
The following chart sets forth the non-advisory fees paid by each Fund
during its most recently completed fiscal year to INVESCO and to affiliates of
INVESCO.
INVESCO INVESCO AIM INVESTMENT
(ADMINISTRATIVE INVESCO (TRANSFER SERVICES, INC.
NAME OF FUND SERVICES)* DISTRIBUTORS, INC.** AGENCY) (TRANSFER AGENCY)
------------ --------------- -------------------- --------- -----------------
INVESCO VIF -- Dynamics
Fund...................... $371,708 $0 $5,000 $1,260
INVESCO VIF -- Core Equity
Fund...................... $275,128 $0 $5,000 $1,260
INVESCO VIF -- Financial
Services Fund............. $450,267 $0 $5,000 $1,260
INVESCO VIF -- Health
Sciences Fund............. $726,423 $0 $5,000 $1,260
INVESCO VIF -- Leisure
Fund...................... $ 53,980 $0 $5,000 $1,260
INVESCO VIF -- Real Estate
Opportunity Fund.......... $ 57,415 $0 $5,000 $1,260
INVESCO VIF -- Small Company
Growth Fund............... $115,803 $0 $5,000 $1,260
INVESCO VIF -- Technology
Fund...................... $373,205 $0 $5,000 $1,260
INVESCO VIF -- Total Return
Fund...................... $ 50,122 $0 $5,000 $1,260
INVESCO VIF -- Utilities
Fund...................... $124,050 $0 $5,000 $1,260
---------------
* Fees paid to INVESCO for administrative services for the prior fiscal year
were paid pursuant to an agreement other than the advisory agreement.
** Net amount received from Rule 12b-1 fees. Excluded are amounts reallowed to
broker-dealers, agents and other service providers.
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 INVESCO VIF -- Real Estate Opportunities Fund and INVESCO
VIF -- Utilities Fund.
XXX XXXXXX, EXPENSE
TOTAL NET ASSETS FOR LIMITATIONS AND/OR EXPENSE
ANNUAL RATE THE MOST RECENTLY REIMBURSEMENTS FOR THE MOST
(BASED ON AVERAGE COMPLETED FISCAL RECENTLY COMPLETED FISCAL
NAME OF FUND DAILY NET ASSETS) PERIOD OR YEAR PERIOD OR YEAR
------------ ----------------- -------------------- ---------------------------
AIM Real Estate Fund.... 0.90% $ 365,641,782 N/A
AIM V.I. Global
Utilities Fund........ 0.65% of the first $250 $ 21,857,723 Waive advisory fees to
million; 0.60% of the extent necessary to limit
excess over $250 million expenses (excluding Rule
12b-1 plan fees, if any,
interest, taxes, dividend
expense on short sales,
extraordinary items and
increases in expenses due
to expense offset
arrangements, if any) of
each Series to 1.30%
24
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 INVESCO VIF -- Dynamics Fund, INVESCO VIF -- Financial Services
Fund, INVESCO VIF -- Health Sciences Fund, INVESCO VIF -- Leisure Fund, INVESCO
VIF -- Small Company Growth Fund, and INVESCO VIF -- Technology Fund.
XXX XXXXXX, EXPENSE
TOTAL NET ASSETS FOR LIMITATIONS AND/OR EXPENSE
ANNUAL RATE THE MOST RECENTLY REIMBURSEMENTS FOR THE MOST
(BASED ON AVERAGE COMPLETED FISCAL RECENTLY COMPLETED FISCAL
NAME OF FUND DAILY NET ASSETS) PERIOD OR YEAR PERIOD OR YEAR
------------ ----------------- -------------------- ---------------------------
AIM Aggressive Growth
Fund.................. 0.80% of the first $150 $2,330,530,569 N/A
million; 0.625% of the
excess over $150 million
AIM Capital Development
Fund.................. 0.75% of the first $350 $1,007,592,822 N/A
million; 0.625% of the
excess over $350 million
AIM Charter Fund........ 1.00% of the first $30 $3,326,279,144 Waive 0.025% on each $5
million; 0.75% over $30 billion increment on net
million up to and assets over $5 billion, up
including $150 million; to a maximum waiver of
0.625% of the excess 0.175% on net assets in
over $150 million excess of $35 billion
AIM Constellation Fund.. 1.00% of the first $30 $7,864,202,517 Waive 0.025% on each $5
million; 0.75% over $30 billion increment on net
million up to and assets over $5 billion, up
including $150 million; to a maximum waiver of
0.625% of the excess 0.175% on net assets in
over $150 million excess of $35 billion
AIM Dent Demographic
Trends Fund........... 0.85% of the first $2 $ 560,632,641 N/A
billion; 0.80% of the
excess over $2 billion
AIM Emerging Growth
Fund.................. 0.85% of the first $1 $ 150,250,503 N/A
billion; 0.80% of the
excess over $1 billion
AIM Large Cap Growth
Fund.................. 0.75% of the first $1 $ 322,636,921 N/A
billion; 0.70% over $1
billion up to and
including $2 billion;
0.625% of the excess
over $2 billion
AIM Mid Cap Growth
Fund.................. 0.80% of the first $1 $ 218,885,325 N/A
billion; 0.75% of the
excess over $1 billion
25
XXX XXXXXX, EXPENSE
TOTAL NET ASSETS FOR LIMITATIONS AND/OR EXPENSE
ANNUAL RATE THE MOST RECENTLY REIMBURSEMENTS FOR THE MOST
(BASED ON AVERAGE COMPLETED FISCAL RECENTLY COMPLETED FISCAL
NAME OF FUND DAILY NET ASSETS) PERIOD OR YEAR PERIOD OR YEAR
------------ ----------------- -------------------- ---------------------------
AIM Xxxxxxxxxx Fund..... 1.00% of the first $30 $2,810,450,428 Waive 0.025% on each $5
million; 0.75% over $30 billion increment on net
million up to and assets over $5 billion, up
including $350 million; to a maximum waiver of
0.625% of the excess 0.175% on net assets in
over $350 million excess of $35 billion
AIM Global Value Fund... 0.85% of the first $1 $ 19,198,623 Waive advisory fee and/or
billion; 0.80% of the reimburse expenses on Class
excess over $1 billion A, Class B and Class C to
extent necessary to limit
Total Operating Expenses
(excluding interest, taxes,
dividends on short sales,
extraordinary items and
increases in expenses due
to expense offset
arrangements, if any) of
Class A shares to 2.00%
AIM Mid Cap Basic Value
Fund.................. 0.80% of the first $ 106,959,173 Waive advisory fee and/or
billion; 0.75% over $1 reimburse expenses on Class
billion up to and A, Class B and Class C to
including $5 billion; extent necessary to limit
0.70% of the excess over Total Operating Expenses
$5 billion (excluding interest, taxes,
dividends on short sales,
extraordinary items and
increases in expenses due
to expense offset
arrangements, if any) of
Class A shares to 1.80%
AIM Asia Pacific Growth
Fund.................. 0.95% of the first $500 $ 130,553,990 Waive advisory fee and/or
million; 0.90% of the reimburse expenses on Class
excess over $500 million A, Class B and Class C to
extent necessary to limit
Total Operating Expenses
(excluding interest, taxes,
dividends on short sales,
extraordinary items and
increases in expenses due
to expense offset
arrangements, if any) of
Class A shares to 2.25%
AIM European Growth
Fund.................. 0.95% of the first $500 $ 441,950,942 N/A
million; 0.95% of the
excess over $500 million
26
XXX XXXXXX, EXPENSE
TOTAL NET ASSETS FOR LIMITATIONS AND/OR EXPENSE
ANNUAL RATE THE MOST RECENTLY REIMBURSEMENTS FOR THE MOST
(BASED ON AVERAGE COMPLETED FISCAL RECENTLY COMPLETED FISCAL
NAME OF FUND DAILY NET ASSETS) PERIOD OR YEAR PERIOD OR YEAR
------------ ----------------- -------------------- ---------------------------
AIM Global Aggressive
Growth Fund........... 0.90% of the first $1 $ 860,034,856 N/A
billion; 0.85% of the
excess over $1 billion
AIM Global Growth Fund.. 0.85% of the first $1 $ 544,473,894 N/A
billion; 0.80% of the
excess over $1 billion
AIM International Growth
Fund.................. 0.95% of the first $1 $1,593,002,563 Waive 0.05% of the advisory
billion; 0.90% of the fee on average net assets
excess over $1 billion in excess of $500 million
AIM European Small
Company Fund.......... 0.95% $ 57,864,326 Waive advisory fee and/or
reimburse expenses on Class
A, Class B and Class C to
extent necessary to limit
Total Operating Expenses
(excluding interest, taxes,
dividends on short sales,
extraordinary items and
increases in expenses due
to expense offset
arrangements, if any) of
Class A shares to 2.00%
AIM International
Emerging Growth Fund.. 0.95% $ 113,020,091 Waive advisory fee and/or
reimburse expenses on Class
A, Class B and Class C to
extent necessary to limit
Total Operating Expenses
(excluding interest, taxes,
dividends on short sales,
extraordinary items and
increases in expenses due
to expense offset
arrangements, if any) of
Class A shares to 2.00%
AIM Select Equity Fund.. 0.80% of the first $150 $ 520,709,171 N/A
million; 0.625% of the
excess over $150 million
AIM Small Cap Equity
Fund.................. 0.85% $ 522,360,452 N/A
AIM V.I. Aggressive
Growth Fund........... 0.80% of first $150 $ 147,184,067 N/A
million; 0.625% of the
excess over $150 million
27
XXX XXXXXX, EXPENSE
TOTAL NET ASSETS FOR LIMITATIONS AND/OR EXPENSE
ANNUAL RATE THE MOST RECENTLY REIMBURSEMENTS FOR THE MOST
(BASED ON AVERAGE COMPLETED FISCAL RECENTLY COMPLETED FISCAL
NAME OF FUND DAILY NET ASSETS) PERIOD OR YEAR PERIOD OR YEAR
------------ ----------------- -------------------- ---------------------------
AIM V.I. Basic Value
Fund.................. 0.725% of the first $500 $ 563,260,317 N/A
million; 0.70% of the
next $500 million;
0.675% of the next $500
million; 0.65% in excess
of $1.5 billion
AIM V.I. Capital
Appreciation Fund..... 0.65% of first $250 $1,009,286,102 N/A
million; 0.60% of the
excess over $250 million
AIM V.I. Capital
Development Fund...... 0.75% of first $350 $ 127,362,829 N/A
million; 0.625% of the
excess over $350 million
AIM V.I. Core Equity
Fund.................. 0.65% of first $250 $1,559,283,137 N/A
million; 0.60% of the
excess over $250 million
AIM V.I. Dent
Demographic Trends
Fund.................. 0.85% of the first $2 $ 124,520,653 Waive advisory fees of
billion; 0.80% of the Series I and II shares to
excess over $2 billion the extent necessary to
limit the expenses
(excluding 12b-1 plan fees,
if any, interest, taxes,
dividend expense on short
sales, extraordinary items
and increases in expenses
due to expense offset
arrangements, if any) of
each Series to 1.30%
AIM V.I. Growth Fund.... 0.65% of first $250 $ 402,336,311 N/A
million; 0.60% of the
excess over $250 million
AIM V.I. International
Growth Fund........... 0.75% of first $250 $ 301,651,602 N/A
million; 0.70% of excess
over $250 million
28
XXX XXXXXX, EXPENSE
TOTAL NET ASSETS FOR LIMITATIONS AND/OR EXPENSE
ANNUAL RATE THE MOST RECENTLY REIMBURSEMENTS FOR THE MOST
(BASED ON AVERAGE COMPLETED FISCAL RECENTLY COMPLETED FISCAL
NAME OF FUND DAILY NET ASSETS) PERIOD OR YEAR PERIOD OR YEAR
------------ ----------------- -------------------- ---------------------------
AIM V.I. Mid Cap Core
Equity Fund........... 0.725% of the first $500 $ 298,035,982 Waive advisory fees of
million; 0.70% of the Series I and II shares to
next $500 million; the extent necessary to
0.675% of the next $500 limit the expenses
million; 0.65% in excess (excluding 12b-1 plan fees,
of $1.5 billion if any, interest, taxes,
dividend expense on short
sales, extraordinary items
and increases in expenses
due to expense offset
arrangements, if any) of
each Series to 1.30%
AIM V.I. New Technology
Fund.................. 1.00% $ 20,573,564 Waive advisory fees of
Series I and II shares to
the extent necessary to
limit the expenses
(excluding 12b-1 plan fees,
if any, interest, taxes,
dividend expense on short
sales, extraordinary items
and increases in expenses
due to expense offset
arrangements, if any) of
each Series to 1.30%
AIM Summit Fund......... 1.00% of the first $10 $1,913,954,379 N/A
million; 0.75% of the
next $140 million;
0.625% in excess of $150
million
AIM Opportunities I
Fund.................. Base fee of 1.00%; $ 410,567,659 N/A
maximum annual
performance adjustment
of +/-0.75%
AIM Opportunities II
Fund.................. Base fee of 1.50%; $ 193,904,452 N/A
maximum annual
performance adjustment
of +/-1.00%
AIM Opportunities III
Fund.................. Base fee of 1.50%; $ 173,403,937 N/A
maximum annual
performance adjustment
of +/-1.00%
AIM Basic Value Fund.... 0.725% of first $500 $6,440,522,135 Waive advisory fees at the
million; 0.70% of next annual rate of 0.025% for
$500 million; 0.675% of each $5 billion increment,
next $500 million; 0.65% up to a maximum waiver of
of excess over $1.5 0.175% on net assets in
billion excess of $35 billion
29
XXX XXXXXX, EXPENSE
TOTAL NET ASSETS FOR LIMITATIONS AND/OR EXPENSE
ANNUAL RATE THE MOST RECENTLY REIMBURSEMENTS FOR THE MOST
(BASED ON AVERAGE COMPLETED FISCAL RECENTLY COMPLETED FISCAL
NAME OF FUND DAILY NET ASSETS) PERIOD OR YEAR PERIOD OR YEAR
------------ ----------------- -------------------- ---------------------------
AIM Mid Cap Core Equity
Fund.................. 0.725% on first $500 $3,084,306,540 N/A
million; 0.70% on next
$500 million; 0.675% on
next $500 million; 0.65%
on excess over $1.5
billion
AIM Small Cap Growth
Fund.................. 0.725% on first $500 $1,952,600,320 N/A
million; 0.70% on next
$500 million; 0.675% on
next $500 million; 0.65%
of excess over $1.5
billion
AIM Global Health Care
Fund.................. 0.975% on first $500 $ 759,873,816 N/A
million; 0.95% on next
$500 million; 0.925% on
next $500 million; 0.90%
of excess over $1.5
billion
AIM Libra Fund.......... 0.85% of first $1 $ 42,433,154 Expense limitation -- Limit
billion; 0.80% of excess Total Annual Operating
over $1 billion Expenses (excluding
interest, taxes, dividend
expense on short sales,
extraordinary items and
increases in expenses due
to expense offset
arrangements, if any):
Class A, 1.80% Class B,
2.45% Class C, 2.45%
AIM Global Trends Fund.. 0.975% on first $500 $ 181,622,257 Expense limitation -- Limit
million; 0.95% on next Total Annual Operating
$500 million; 0.925% on Expenses (excluding
next $500 million; 0.90% interest, taxes, dividend
of excess over $1.5 expense on short sales,
billion extraordinary items and
increases in expenses due
to expense offset
arrangements, if any):
Class A, 2.00% Class B,
2.50% Class C, 2.50%
30
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 INVESCO VIF -- Core Equity Fund and INVESCO VIF -- Total Return
Fund.
XXX XXXXXX, EXPENSE
TOTAL NET ASSETS FOR LIMITATIONS AND/OR EXPENSE
ANNUAL RATE THE MOST RECENTLY REIMBURSEMENTS FOR THE MOST
(BASED ON AVERAGE COMPLETED FISCAL RECENTLY COMPLETED FISCAL
NAME OF FUND DAILY NET ASSETS) PERIOD OR YEAR PERIOD OR YEAR
------------ ------------------------ -------------------- ---------------------------
AIM Basic Balanced
Fund.................. 0.65% of the first $1 $ 154,769,435 Waive advisory fee and/or
billion; 0.60% over $1 reimburse expenses on Class
billion up to and A, Class B and Class C to
including $5 billion; extent necessary to limit
0.55% of the excess over Total Operating Expenses
$5 billion (excluding interests,
taxes, dividends on short
sales, extraordinary items
and increases in expenses
due to expense offset
arrangements, if any) of
Class A shares to 1.50%
AIM Blue Chip Fund...... 0.75% of the first $350 $2,955,548,606 Waive 0.025% of advisory
million; 0.625% of the fee on each $5 billion
excess over $350 million increment on net assets in
excess of $5 billion up to
a maximum waiver of 0.175%
on net assets in excess of
$35 billion
AIM Developing Markets
Fund.................. 0.975% of the first $500 $ 243,693,078 Waive advisory fee and
million; 0.95% over $500 reimburse expenses on Class
million up to and A, Class B and Class C to
including $1 billion; extent necessary to limit
0.925% over $1 billion Total Operating Expenses
up to and including $1.5 (excluding interests,
billion; 0.90% of the taxes, dividends on short
excess over $1.5 billion sales, extraordinary items
and increases in expenses
due to expense offset
arrangements, if any) of
Class A shares to 2.00%
AIM Diversified Dividend
Fund.................. 0.75% of the first $1 $ 49,804,825 Waive advisory fee and/or
billion; 0.70% over $1 reimburse expenses on Class
billion up to and A, Class B and Class C to
including $2 billion; extent necessary to limit
0.625% of the excess Total Operating Expenses
over $2 billion (excluding interests,
taxes, dividends on short
sales, extraordinary items
and increases in expenses
due to expense offset
arrangements, if any) of
Class A shares to 1.00%
31
XXX XXXXXX, EXPENSE
TOTAL NET ASSETS FOR LIMITATIONS AND/OR EXPENSE
ANNUAL RATE THE MOST RECENTLY REIMBURSEMENTS FOR THE MOST
(BASED ON AVERAGE COMPLETED FISCAL RECENTLY COMPLETED FISCAL
NAME OF FUND DAILY NET ASSETS) PERIOD OR YEAR PERIOD OR YEAR
------------ ------------------------ -------------------- ---------------------------
AIM Large Cap Basic
Value Fund............ 0.60% of the first $1 $ 229,330,073 N/A
billion; 0.575% over $1
billion up to and
including $2 billion;
0.55% of the excess over
$2 billion
AIM Premier Equity
Fund.................. 0.80% of the first $150 $9,168,949,726 Waive 0.025% of advisory
million; 0.625% of the fee on each $5 billion
excess over $150 million increment on net assets in
excess of $5 billion up to
a maximum waiver of 0.175%
on net assets in excess of
$35 billion
AIM V.I. Blue Chip
Fund.................. 0.75% of the first $350 $ 123,843,213 Waive advisory fees of
million; 0.625% of the Series I and II shares to
excess over $350 million the extent necessary to
limit the expenses
(excluding 12b-1 plan fees,
if any, interest, taxes,
dividend expense on short
sales, extraordinary items
and increases in expenses
due to expense offset
arrangements, if any) of
each Series to 1.30%
AIM V.I. Premier Equity
Fund.................. 0.65% of the first $250 $1,771,375,105 N/A
million; 0.60% of the
excess over $250 million
TERMS OF THE PROPOSED ADVISORY AGREEMENT
Under the terms of the proposed advisory agreement, AIM would act as
investment manager and administrator for your Fund. As investment manager, AIM
would provide a continuous investment program for your Fund, including
supervision of all aspects of your Funds' operations, including the investment
and reinvestment of cash, securities or other properties comprising your Funds'
assets and investment research and management, subject at all times to the
policies and control of the Board. AIM would also provide administrative
services pursuant to a Master Administrative Services Agreement.
The proposed 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, or employees, AIM would not be subject to liability to Company or
your Fund or to any shareholders of your 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.
The proposed advisory agreement for your Fund would continue 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 1940 Act) of your Fund, and (ii) the affirmative vote of a
majority of the directors of Company who are not interested persons of AIM or
Company by votes cast in person at a meeting called for such purpose. The
proposed advisory agreement provides that the Board, a majority of the
outstanding voting securities of your Fund or AIM may terminate the agreement
with respect
32
to your Fund on 60 days' written notice without penalty. The proposed agreement
terminates automatically in the event of its "assignment" (as defined in the
1940 Act).
The proposed advisory agreement for your Fund provides that your Fund will
pay or cause to be paid all of the ordinary business expenses incurred in the
operations of your Fund and the offering of its shares. These expenses borne by
your Fund would 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, 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 Company on behalf of your
Fund in connection with membership in investment company organizations and the
cost of printing copies of prospectuses and statements of additional information
distributed to your Fund's shareholders.
The compensation to be paid to AIM under the proposed advisory agreement
would be calculated by applying annual rates to the average daily net assets of
your Fund for each calendar year. The following table provides information with
respect to the annual advisory fee rates proposed to be paid to AIM by each Fund
under the proposed advisory agreement.
ANNUAL RATE
NAME OF FUND (BASED ON AVERAGE DAILY NET ASSETS)
------------ -----------------------------------
INVESCO VIF -- Dynamics Fund........................... 0.75%
INVESCO VIF -- Core Equity Fund........................ 0.75%
INVESCO VIF -- Financial Services Fund................. 0.75%
INVESCO VIF -- Health Sciences Fund.................... 0.75%
INVESCO VIF -- Leisure Fund............................ 0.75%
INVESCO VIF -- Real Estate Opportunity Fund............ 0.90%
INVESCO VIF -- Small Company Growth Fund............... 0.75%
INVESCO VIF -- Technology Fund......................... 0.75%
INVESCO VIF -- Total Return Fund....................... 0.75%
INVESCO VIF -- Utilities Fund.......................... 0.60%
If Proposal 2 is approved, Company will be able to take advantage of an
exemptive order obtained from the SEC by AIM and certain of the AIM Funds. This
exemptive order will allow your Fund and each other series portfolio of Company
(each, an "Investing Fund") to invest their uninvested cash in money market
funds that have AIM or an affiliate of AIM as an investment advisor (the
"Affiliated Money Market Funds"), provided that investments in Affiliated Money
Market Funds do not exceed 25% of the total assets of the Investing Fund. AIM
will receive advisory fees from the Affiliated Money Market Fund to the extent
an Investing Fund invests uninvested cash in such Affiliated Money Market Fund.
If the Board approves AIM's use of the exemptive order for Company, AIM intends
to waive a portion of the advisory fees payable by each Investing Fund in an
amount equal to 25% of the advisory fee AIM receives from the Affiliated Money
Market Fund as a result of such Investing Fund's investment of uninvested cash
in such Affiliated Money Market Fund.
The primary differences between the current advisory agreement with INVESCO
and the proposed advisory agreement with AIM that the Board approved are to:
- replace INVESCO with AIM as the investment advisor for your Fund;
- move certain administrative services to an administrative services
agreement with AIM;
- expand provisions regarding broker-dealer relationships that are set
forth in the current advisory agreement to make them consistent with
similar provisions in other AIM advisory agreements;
- add provisions relating to certain functions to be performed by AIM in
connection with your Fund's securities lending program;
33
- change certain obligations regarding payment of expenses of your Fund to
remove: (i) an obligation by the advisor to reimburse your Fund for
certain salaries paid by your Fund because your Fund does not currently
pay any such salaries and (ii) an annual expense limitation that is no
longer applicable;
- revise non-exclusivity provisions that are set forth in the current
advisory agreement;
- amend delegation provisions that are set forth in the current advisory
agreement;
- add to the limitation of liability provisions that are set forth in the
current advisory agreement to, among other things, specifically state the
limitation of liability of Company's shareholders; and
- change the governing state law set forth in the current advisory
agreement.
Although certain terms and provisions in the current advisory agreement
with INVESCO and the proposed advisory agreement with AIM are described slightly
differently, there are few substantive differences between these agreements. The
substantive differences are discussed below.
ADMINISTRATIVE SERVICES
For your Fund, the Board, in approving the proposed advisory agreement with
AIM, has approved removing the provision of certain administrative services that
are covered under the current advisory agreement with INVESCO, and consolidating
those administrative services with your Fund's accounting and recordkeeping
services in a new Master Administrative Services Agreement with AIM. The primary
reason for this change is to make your Fund's agreements consistent with similar
agreements for the AIM Funds. If shareholders approve the proposed advisory
agreement, your Fund will continue to receive substantially the same accounting
and administrative services it currently receives and at the same costs pursuant
to the new Master Administrative Services Agreement. As a result, there would be
no loss of services nor would there be any increase in costs borne by your Fund
as a result of the transfer of administrative duties from the advisory agreement
to the Master Administrative Services Agreement.
BROKER-DEALER RELATIONSHIPS AND AFFILIATED BROKERAGE
The current advisory agreement requires INVESCO, when selecting brokers or
dealers, to first obtain the most favorable execution and price for your Fund;
after fulfilling this primary requirement INVESCO may consider, as secondary
factors whether such firms provide statistical research and other information to
INVESCO. The proposed 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 Company's portfolio funds on a
continuing basis. Accordingly, the price to your Fund 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
by the broker-dealer. The broker-dealer relationship provisions of the current
advisory agreement with INVESCO for your Fund do not specify these factors.
Although AIM does not currently execute trades through brokers or dealers
that are affiliated with AIM, the proposed advisory agreement includes a new
provision that would permit such trades, subject to compliance with applicable
federal securities laws, rules, interpretations and exemptions.
SECURITIES LENDING
If your Fund engages in securities lending, AIM will provide it with
investment advisory services and related administrative services. The proposed
advisory agreement includes a new provision that specifies the administrative
services to be rendered by AIM if your Fund engages in securities lending
activities, as well as the compensation AIM may receive for such administrative
services. Your Fund and its shareholders may benefit from engaging in securities
lending because securities lending can generate additional income for your Fund
in the form of the fee that the third party borrower pays to your Fund for the
use of your Fund's
34
securities. Administrative services to be provided include: (a) overseeing
participation in the securities lending program to ensure compliance with all
applicable regulatory and investment guidelines; (b) assisting the securities
lending agent or principal (the "agent") in determining which specific
securities are available for loans; (c) monitoring the agent to ensure that
securities loans are effected in accordance with AIM's instructions and with
procedures adopted by the Board; (d) preparing appropriate periodic reports for,
and seeking appropriate approvals from, the Board with respect to securities
lending activities; (e) responding to agent inquiries; and (f) performing such
other duties as may be necessary.
In accordance with an exemptive order issued by the SEC, before your 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 your Fund to invest in AIM-advised money market funds any
cash collateral your Fund receives as security for the borrower's obligation to
return the loaned securities. If your 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 does not receive any additional compensation for advisory services
rendered in connection with securities lending activities. As compensation for
the related administrative services AIM will provide, your Fund will pay AIM a
fee equal to 25% of the net monthly interest or fee income retained or paid to
your 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 AND RESTRICTIONS ON FEES RECEIVED
Under the current advisory agreement with INVESCO, INVESCO has the
obligation to reimburse your Fund for any salaries paid by your Fund to
officers, non-independent directors and employees of your Fund. Your Fund does
not currently pay any such salaries. Such provision is not included in the
proposed advisory agreement with AIM.
The current advisory agreement provides that if annual fees exceed the most
restrictive state-imposed annual expense limitation, INVESCO is required to
reimburse any such excess to your Fund. Such state-imposed limitations are no
longer applicable because the National Securities Market Improvements Act of
1996 (NSMIA) preempted state laws under which mutual funds such as your Fund
previously were regulated. Accordingly, under the proposed advisory agreement,
such annual expense limitation has been removed. Removing this state-imposed
annual expense limitation will not result in an increase in fees paid by your
Fund.
NON-EXCLUSIVITY PROVISIONS
The current advisory agreement with INVESCO provides that the services
furnished by INVESCO are not deemed to be exclusive and that INVESCO shall be
entitled to furnish similar services to others, including other investment
companies with similar objectives, and that INVESCO may aggregate orders for its
other customers together with any securities of the same type to be sold or
purchased for your Fund in order to obtain best execution and lower brokerage
commissions. In such event, INVESCO must allocate the securities purchased or
sold and the expenses incurred in the transaction in a manner it considers most
equitable.
AIM has proposed and the Board has agreed that the non-exclusivity
provisions in the proposed advisory agreement with AIM should be divided into
two separate provisions: one dealing with services provided by AIM to other
investment accounts and the other dealing with employees of AIM. Under the new
provisions, AIM will act as investment manager or advisor to fiduciary and other
managed accounts and to other investment companies and accounts, including
off-shore entities or accounts. The proposed advisory agreement states that
whenever your 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 to
be equitable to your Fund and such other companies and accounts.
35
Such allocation procedure may adversely affect the size of the positions
obtainable and the prices realized by your Fund. The non-exclusivity provisions
of the proposed advisory agreement also explicitly recognize that officers and
directors of AIM may serve as officers or directors of Company, and that
officers and directors of Company 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 Company. As described above, unlike the current advisory
agreement, the proposed advisory agreement does not require AIM to reimburse
Company for any salaries paid by Company to officers, directors and full-time
employees of Company who are also officers, directors or employees of AIM or its
affiliates. Your Fund does not currently pay any such salaries.
The practical impact of this provision is that the officers and directors
of AIM will not devote their full time to providing services to Company, 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.
DELEGATION
The current advisory agreement provides that INVESCO may, in compliance
with applicable law and with the prior written approval of your Fund, make use
of affiliated companies and their employees in connection with rendering of the
services required of INVESCO. INVESCO must supervise all such services and
remain fully responsible for the services provided.
The proposed advisory agreement expands the extent to which AIM can
delegate its rights, duties and obligations by expressly providing that AIM may
delegate any or all of its rights, duties or obligations under the agreement to
one or more sub-advisors rather than solely certain specified advisory services.
The proposed 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
currently intends to appoint INVESCO Institutional as the sub-advisor to your
Fund if the shareholders approve the proposed sub-advisory agreement described
under Proposal 3.
LIMITATION OF LIABILITY OF AIM, COMPANY AND SHAREHOLDERS
As described above under the descriptions of the terms of the current
advisory agreement and the proposed advisory agreement, respectively, both
agreements provide limitation of liability for the advisor. The limitation of
liability provisions of the 1940 Act also apply to both INVESCO and AIM in their
capacity as advisor. In addition, the proposed advisory agreement establishes a
limitation of liability standard for AIM and states that no series of Company
shall be liable for the obligations of other series of Company and the liability
of AIM to one series of Company shall not automatically render AIM liable to any
other series of Company. Consistent with applicable law, the proposed advisory
agreement would also include a provision stating that AIM's obligations under
the agreement are not binding on any shareholders of Company individually and
that shareholders are entitled to the same limitation on personal liability as
shareholders of private corporations for profit. The primary reason for this
change is to make your Fund's agreement consistent with similar agreements for
the AIM Funds.
STATE LAW GOVERNING THE AGREEMENT
Questions of state law under the current advisory agreement with INVESCO
are governed by the laws of Colorado. Under the proposed advisory agreement with
AIM, Texas law would apply. The Board determined that, because the services
under the proposed advisory agreement with AIM will primarily be provided in
Texas, it was more appropriate to apply Texas law to the proposed advisory
agreement.
FACTORS THE DIRECTORS CONSIDERED IN APPROVING THE ADVISORY AGREEMENT
At the request of AIM, the Board discussed the approval of the proposed
advisory agreement at an in-person meeting held on December 9-10, 2003. The
independent directors also discussed the approval of the
36
proposed advisory agreement with independent counsel prior to that meeting. In
evaluating the proposed advisory agreement, the Board requested and received
information from AIM to assist in its deliberations.
The Board considered the following factors in determining reasonableness
and fairness of the proposed changes between the current advisory agreement with
INVESCO and the proposed advisory agreement with AIM:
- The qualifications of AIM to provide investment advisory services. The
Board reviewed the credentials and experience of the officers and
employees of AIM who will provide investment advisory services to your
Fund and the proposal, if approved by shareholders, to appoint INVESCO
Institutional as sub-advisor to your Fund, and noted that the persons
providing portfolio management services to your Fund would not change if
Proposals 2 and 3 are approved by shareholders. 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 and
AIM's equity trading operation. Based on its review of these and other
factors, the Board concluded that AIM was qualified to provide investment
advisory services to your Fund.
- The range of advisory services provided by AIM. The Board reviewed the
services to be provided by AIM under the proposed advisory agreement, and
noted that no material changes in the level or type of services provided
under the current advisory agreement with INVESCO would occur if the
proposed advisory agreement is approved by the shareholders, other than
the provision by AIM of certain administrative services if your Fund
engages in securities lending. Based on its review and comparison of the
terms of the proposed advisory agreement with AIM and the current
advisory agreement with INVESCO, the Board concluded that the range of
services to be provided by AIM under the proposed advisory agreement,
including the provision by AIM of certain administrative services if your
Fund engages in securities lending, was appropriate.
- Qualifications of AIM to provide a range of management and administrative
services. The Board reviewed the general nature of the non-investment
advisory services 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. The Board reviewed the proposed elimination from the
proposed advisory agreement of the provision of administrative services
to your Fund. The Board also reviewed the proposed form of Master
Administrative Services Agreement, noted that the overall services to be
provided under the existing arrangements and under the proposed Master
Administrative Services Agreements are the same, and concluded that the
overall accounting and administrative services to be provided by AIM
would not change under the combination of the proposed advisory agreement
and the Master Administrative Services Agreement. Based on its review of
these and other factors, the Board concluded that AIM and its affiliates
were qualified to provide non-investment advisory services to your Fund,
including administrative, transfer agency and distribution services.
- The performance record of your Fund. The Board reviewed your Fund's
performance record and determined that AIM has developed the expertise
and resources for managing funds with an investment objective and
strategies similar to those of your Fund and is able, therefore, to
provide advisory and administrative services to your Fund. Although
INVESCO served as your Fund's investment advisor during the period over
which your Fund's performance record was based, the Board compared your
Fund's performance record to the performance records of funds advised by
AIM with an investment objective and strategies similar to those of your
Fund in reaching the conclusion that AIM is able to provide advisory and
administrative services to your Fund.
- Advisory fees and expenses. The Board examined the expense ratio and the
level of advisory fees for your Fund under the current advisory agreement
and compared them with the advisory fees expected to be incurred under
the proposed advisory agreement. The Board concluded that your Fund's
37
projected expense ratio and advisory fees under the proposed advisory
agreement were fair and reasonable in comparison with those of other
similar funds (including similar funds advised by AIM) and in light of
the investment management services to be provided by AIM under the
proposed advisory agreement. The advisory fee rates that are being
proposed under the proposed advisory agreement, which are set forth on
Exhibit J, are the same as the advisory fee rates paid to INVESCO under
the current advisory agreement. The only changes in fees are the removal
of the reimbursement obligation related to services provided to both your
Fund and AIM by officers and directors, which is not currently
applicable, and the provisions that permit AIM's receipt of fees for
providing administrative services in connection with securities lending
activities. Such fees would be paid only to the extent that your Fund
engages in securities lending. The Board noted that AIM intends to waive
its right to receive any fees under the proposed investment advisory
agreement for the administrative services it provides in connection with
securities lending activities. The Board also noted that AIM has agreed
to seek the Board's approval prior to its receipt of all or a portion of
such fees.
- The profitability of AIM. The Board reviewed information concerning the
profitability of AIM's (and its affiliates') investment advisory and
other activities and its financial condition. The Board noted that,
except as described above, no changes to the advisory fees were being
proposed, other than to permit AIM's receipt of fees for providing
services in connection with securities lending, and further noted that
AIM intends to waive its right to receive any such fees and has agreed to
seek the Board's approval prior to its receipt of all or a portion of
such fees. The Board also noted that, in accordance with an exemptive
order issued by the SEC, before your 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
determine that it is in the best interests of the shareholders of your
Fund to invest in AIM-advised money market funds any cash collateral your
Fund receives as security for the borrower's obligation to return the
loaned securities. If your 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. The Board noted that the cash collateral
relates to assets of your Fund that have already been invested, and the
investment of the cash collateral is intended to benefit your Fund by
providing it with additional income. The Board also noted that an
investment of the cash collateral in an AIM-advised money market fund
would have a positive effect on the profitability of AIM. Based on its
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 your Fund to AIM under the
proposed advisory agreement was not excessive.
- The terms of the proposed advisory agreement. The Board reviewed the
terms of the proposed advisory agreement, including changes being made to
clarify or expand non-exclusivity, delegation and liability provisions,
to separate administrative services from advisory services and to have
AIM assist your Fund if it engages in securities lending. The Board
determined that these changes reflect the current environment in which
your Fund operates, and that AIM should have the flexibility to operate
in that environment.
After considering the above factors, the Board concluded that it is in the
best interests of your Fund and its shareholders to approve the proposed
advisory agreement between Company and AIM for your Fund.
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 you approve the proposed advisory
agreement, the independent directors have taken the action which they believe to
be in your best interests. In so doing, they were advised by independent
counsel, retained by the independent directors and paid for by Company, as to
the nature of the matters to be considered and the standards to be used in
reaching their decision.
38
If approved, the proposed advisory agreement is expected to become
effective on or about April 30, 2004, and will expire, unless renewed, on or
before June 30, 2005. If shareholders of your Fund do not approve both Proposals
2 and 3, the current advisory agreement with INVESCO will continue in effect for
your Fund.
THE BOARD'S RECOMMENDATION ON PROPOSAL 2
The Board, including the independent directors, unanimously recommends that
you vote "FOR" this Proposal.
PROPOSAL 3 --
APPROVAL OF NEW SUB-ADVISORY AGREEMENT
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 3?
Proposal 3 applies to the shareholders of all Funds.
BACKGROUND
INVESCO currently serves as the investment advisor to your Fund. AMVESCAP
has recommended restructuring the advisory and administrative servicing
arrangements so that AIM is the advisor and administrator for all INVESCO Funds
and AIM Funds. The Board has approved a proposed advisory agreement under which
AIM will serve as the investment advisor for your Fund, and a proposed
sub-advisory agreement under which INVESCO Institutional, an affiliate of
INVESCO, will serve as sub-advisor. The portfolio management team for your Fund
will not change as a result of this restructuring.
The Board recommends that you approve the proposed sub-advisory agreement
between AIM and INVESCO Institutional for your Fund. The Board is asking you to
vote on this proposed sub-advisory agreement because the proposed sub-advisory
agreement for your Fund may only be entered into with shareholder approval. The
form of the proposed Master Intergroup Sub-Advisory Contract for Mutual Funds
between AIM and INVESCO Institutional for your Fund is at Appendix III.
At an in-person meeting of the Board held on December 9-10, 2003, the
Board, including a majority of the independent directors, voted to recommend
that shareholders approve a proposal to adopt the proposed sub-advisory
agreement for your Fund.
THE PROPOSED SUB-ADVISOR FOR YOUR FUND
INVESCO Institutional is an indirect wholly owned subsidiary of AMVESCAP.
The following table provides information with respect to the principal
executive officer and the directors of INVESCO Institutional (N.A.), Inc.
("INVESCO Institutional"). The business address of the principal executive
officer and directors of INVESCO Institutional is One Midtown Plaza, 0000
Xxxxxxxxx Xxxxxx, XX, Xxxxxxx, Xxxxxxx, 00000.
NAME POSITION WITH INVESCO INSTITUTIONAL PRINCIPAL OCCUPATION
---- ----------------------------------- --------------------
Xxxx X. Xxxxxx................ Director, Chairman, President and Chief Executive Officer,
Chief Executive Officer AMVESCAP PLC -- INVESCO
Division
Xxxxx X. Xxxxxxx.............. Director and Chief Financial Chief Financial Officer,
Officer INVESCO Division
Xxxxxx Xxxxxx................. Director None
POSITIONS WITH INVESCO INSTITUTIONAL HELD BY COMPANY'S DIRECTORS OR EXECUTIVE
OFFICERS
None of the directors or executive officers of Company also are directors
and/or officers of INVESCO Institutional.
39
TERMS OF THE PROPOSED SUB-ADVISORY AGREEMENT
Under the proposed sub-advisory agreement between AIM and INVESCO
Institutional, INVESCO Institutional will provide general investment advice and
portfolio management to your Fund and, subject to the supervision of the
directors of Company and AIM and in conformance with the stated policies of your
Fund, INVESCO Institutional will manage the investment operations of your Fund.
INVESCO Institutional will not only make investment decisions for your Fund, but
will also place the purchase and sale orders for the portfolio transactions of
your Fund. INVESCO Institutional may purchase and sell portfolio securities from
and to brokers and dealers who sell shares of your Fund or provide your Fund,
AIM's other clients or INVESCO Institutional's other clients with research,
analysis, advice and similar services. INVESCO Institutional may pay to brokers
and dealers, in return for such research and analysis, a higher commission or
spread than may be charged by other brokers and dealers, subject to INVESCO
Institutional determining in good faith that such commission or spread is
reasonable in terms either of the particular transaction or of the overall
responsibility of AIM and INVESCO Institutional to your Fund and their other
clients and that the total commissions or spreads paid by each fund will be
reasonable in relation to the benefits to the fund over the long term.
Specifically, INVESCO Institutional will be required to perform the
following services under the proposed sub-advisory agreement:
- To provide a continuous investment program for your Fund, including
investment research and management, with respect to all of your Fund's
assets in conformity with (i) Company's Articles of Incorporation, bylaws
and registration statement, and (ii) the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations;
- To determine what securities and other investments are to be purchased or
sold for your Fund and the brokers and dealers through whom trades will
be executed;
- Whenever INVESCO Institutional simultaneously places orders to purchase
or sell the same security on behalf of your Fund and one or more accounts
advised by INVESCO Institutional, to allocate as to price and amount
among all such accounts in a manner believed to be equitable to each
account; and
- To maintain all books and records with respect to the securities
transactions of your Fund in compliance with the requirements of the 1940
Act and to furnish the Board and AIM with periodic and special reports as
the Board or AIM reasonably may request.
The proposed sub-advisory agreement will continue from year to year for
your Fund 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 1940 Act) of your Fund, and (ii) the vote of a majority of
independent directors cast at a meeting called for such purpose. The proposed
sub-advisory agreement is terminable on 60 days' written notice by either party
thereto, by the Board, or by a vote of a majority of the outstanding voting
securities of your Fund, and will terminate automatically if assigned.
AIM proposes to pay INVESCO Institutional as full compensation for all
investment advisory services rendered to your Fund, a sub-advisory fee. Such fee
shall be computed daily and paid monthly, at the rate of 40% of AIM's
compensation on the sub-advised assets per year, on or before the last day of
the next succeeding calendar month.
ADVISORY FEES CHARGED BY INVESCO INSTITUTIONAL FOR SIMILAR TYPES OF ACCOUNTS FOR
WHICH IT SERVES AS ADVISOR
The following table provides information with respect to the annual
advisory fee rates paid to INVESCO Institutional (N.A.), Inc. by certain types
of accounts that have a similar investment objective as INVESCO VIF -- Financial
Services Fund.
INVESCO National Asset
Management Group ("NAM")... NAM Group's basic annual fee is as follows: For
Core Multiple Attribute Equity, Growth Multiple
Attribute Equity, and Premier
40
Growth Multiple Attribute Equity accounts, .75
of 1% of the market value of assets up to $10
million, .50 of 1% of the market value of
assets on the next $40 million, .40 of 1% of
the market value of assets on the next $50
million, and .25 of 1% of the market value of
assets above $100 million. For Mid Cap Multiple
Attribute Equity and Growth Mid Cap Multiple
Attribute Equity accounts, .85 of 1% of the
market value of assets up to $10 million, .60
of 1% of the market value of assets on the next
$40 million, .50 of 1% of the market value of
assets on the next $50 million, and .35 of 1%
of the market value of assets above $100
million. For balances accounts, .65 of 1% of
the market value of assets up to $10 million,
.40 of 1% of the market value of assets on the
next $40 million, .30 of 1% of the market value
of assets on the next $50 million, and .20 of
1% of the market value of assets above $100
million. Fees are typically billed quarterly in
arrears. The NAM Group reserves the right to
negotiate fees from the above schedules. Fees
may be paid monthly or quarterly in advance or
arrears. If payment is made prior to the
rendering of services and the contract is
terminated, the refundable portion of a fee
will be prorated for the period of time for
which no services were rendered. To terminate
an investment advisory contract, a 30-day
written notice is required by either party or
otherwise by mutual agreement by both parties.
The NAM Groups serves as an adviser or
subadviser to mutual funds. The fees for such
services are negotiated separately.
The following table provides information with respect to the annual
advisory fee rates paid to INVESCO Institutional (N.A.), Inc. by certain types
of accounts that have a similar investment objective as INVESCO VIF -- Total
Return Fund.
STRUCTURED EQUITY ENHANCED INDEX
----------------- --------------
INVESCO Structured Products
Group.......................... 0.60% on the first $25,000,000 0.30% on the first $25,000,000
0.45% on the next $25,000,000 0.25% on the next $50,000,000
0.35% on the next $50,000,000 0.20% on the next $125,000,000
0.25% on the next $300,000,000 0.10% on the next $300,000,000
0.10% thereafter 0.05% thereafter
MARKET NEUTRAL (BASE FEE): TAA
-------------------------- ---
0.30% on the first $50,000,000 0.75% on the first $10,000,000
0.20% on the next $100,000,000 0.50% on the next $25,000,000
0.10% thereafter 0.35% on the next $65,000,000
0.30% on the next $150,000,000
0.20% on the next $300,000,000
0.10% on the next $450,000,000
0.05% thereafter
41
Market Neutral (Performance Fee):
Hurdle agreed upon benchmark
Percent Profit Share 20%
FEE COMPUTATION AND RELATED MATTERS
Fees may be negotiated on a basis that differs from the
schedules above, if circumstances warrant. Such circumstances
may include, without limitation, specialized guidelines for the
products listed in the basic fee schedule, performance fee
arrangements entered into with a particular client (consistent
with the requirements of applicable law, including the
Investment Advisers Act of 1940, as amended, and ERISA), clients
with multiple accounts or relationships with Registrant and its
affiliates, off-shore relationships, and account size. Fee
schedules for the SPG products for institutional accounts are
typically negotiated individually with institutional clients.
FACTORS THE DIRECTORS CONSIDERED IN APPROVING THE PROPOSED SUB-ADVISORY
AGREEMENT
At the request of AIM, the Board discussed the approval of the proposed
sub-advisory agreement at an in-person meeting held on December 9-10, 2003. The
independent directors also discussed the approval of the proposed sub-advisory
agreement with independent counsel prior to that meeting. In evaluating the
proposed sub-advisory agreement, the Board requested and received information
from AIM to assist in its deliberations.
The Board considered the following factors in determining the
reasonableness and fairness of the proposed sub-advisory agreement between AIM
and INVESCO Institutional for your Fund:
- The range of sub-advisory services provided by INVESCO
Institutional. The Board reviewed the services to be provided by INVESCO
Institutional under the proposed sub-advisory agreement, and noted that,
if the proposed sub-advisory agreement is approved by shareholders, the
level and type of investment advisory services under the proposed
sub-advisory agreement will be comparable to those currently provided by
INVESCO under Company's current advisory agreement with INVESCO. Based on
its review and comparison of the terms of the proposed sub-advisory
agreement with INVESCO Institutional and the current advisory agreement
with INVESCO, the Board concluded that the range of services to be
provided by INVESCO Institutional under the proposed sub-advisory
agreement was appropriate.
- The fees payable to INVESCO Institutional for its services. The Board
noted that if the proposed sub-advisory agreement is approved, INVESCO
Institutional will receive compensation based on that portion of the
assets of your Fund that it manages (the sub-advised assets). In
addition, the fees paid would be a percentage of the advisory fees that
AIM receives on the sub-advised assets. The Board noted that these fees
had been agreed to by AIM and INVESCO Institutional, as well as by
AMVESCAP, the indirect parent of AIM and INVESCO Institutional. The Board
also noted that the proposed changes to the compensation to INVESCO
Institutional would have no effect on your Fund, since the fees are
payable by AIM. The Board concluded that the sub-advisory fees under the
proposed sub-advisory agreement, which are set forth on Exhibit L, were
fair and reasonable. in light of the sub-advisory services to be provided
by INVESCO Institutional under the proposed sub-advisory agreement.
- The performance record of your Fund. The Board reviewed the performance
record of your Fund and noted that the same portfolio management team
will be providing investment advisory services to your Fund under the
proposed sub-advisory agreement. The Board determined that such portfolio
management team had provided satisfactory services with respect to your
Fund, after considering performance information that it received during
the past year from INVESCO.
42
- The profitability of INVESCO Institutional. The Board considered
information concerning the profitability of INVESCO Institutional's (and
its affiliates') investment advisory and other activities and its
financial condition. The Board noted that INVESCO Institutional would
receive an annual fee equal to a percentage of AIM's compensation on the
sub-advised assets. The Board noted that the proposed sub-advisory fees
are less than the advisory fees currently received by INVESCO under the
current advisory agreement, but that INVESCO Institutional assured the
Board that such reduction would not affect the nature or quality of the
services provided by it to your Fund. Based on its review of the
profitability of INVESCO Institutional's and its affiliates' investment
advisory and other activities and its financial condition, the Board
concluded that the compensation to be paid by your Fund to INVESCO
Institutional under the proposed sub-advisory agreement was not
excessive.
- The terms of the proposed agreement. The Board reviewed the terms of the
proposed agreement. The Board determined that this new agreement reflects
the current environment in which your Fund operates, and that INVESCO
Institutional should have the flexibility to operate in that environment.
After considering the above factors, the Board concluded that it is in the
best interests of your Fund and its shareholders to approve the proposed
sub-advisory agreement between AIM and INVESCO Institutional for your Fund.
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 you approve the proposed
sub-advisory agreement, the independent directors have taken the action which
they believe to be in your best interests. In so doing, they were advised by
independent counsel, retained by the independent directors and paid for by
Company, as to the nature of the matters to be considered and the standards to
be used in reaching their decision.
If approved, each proposed sub-advisory agreement is expected to become
effective on or about April 30, 2004, and will expire, unless renewed, on or
before June 30, 2005. If shareholders of your Fund do not approve both Proposals
2 and 3, the current advisory agreement with INVESCO will continue in effect for
your Fund and AIM and INVESCO Institutional will not enter into the proposed
sub-advisory agreement for your Fund.
THE BOARD'S RECOMMENDATION ON PROPOSAL 3
The Board, including the independent directors, unanimously recommends that
you vote "FOR" this Proposal.
PROPOSAL 4 --
APPROVAL OF THE PLAN TO REDOMESTICATE EACH SERIES PORTFOLIO OF COMPANY
AS A NEW SERIES PORTFOLIO OF
AIM VARIABLE INSURANCE FUNDS
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 4?
Proposal 4 applies to the shareholders of all Funds.
BACKGROUND
Company currently is organized as a Maryland corporation. AMVESCAP has
identified each series portfolio of Company as appropriate to be redomesticated
as a new series portfolio of
AIM Variable Insurance Funds, an existing open-end
management investment company organized as a statutory trust under the Delaware
Statutory Trust Act (the "Trust").
The Board has approved the Plan, which provides for a series of
transactions to convert each series portfolio of Company (each, a "Current
Fund") to a corresponding series (a "New Fund") of the Trust. Under the Plan,
each Current Fund will transfer all its assets to a corresponding New Fund in
exchange solely for voting shares of beneficial interest in the New Fund and the
New Fund's assumption of all the Current
43
Fund's liabilities (collectively, the "Redomestication"). A form of the Plan
relating to the proposed Redomestication is set forth in Appendix IV.
Approval of the Plan requires the affirmative vote of a majority of the
issued and outstanding shares of Company. The Board is soliciting the proxies of
the shareholders of your Fund to vote on the Plan with this Proxy Statement. The
Board is soliciting the proxies of the shareholders of Company's other series
portfolios to vote on the Plan with a separate proxy statement.
The Redomestication is being proposed primarily to provide Company with
greater flexibility in conducting its business operations. The operations of
each New Fund following the Redomestication will be substantially similar to
those of its predecessor Current Fund. As described below, the Trust's Amended
and Restated Agreement and Declaration of Trust, as amended (the "Declaration of
Trust"), differs from Company's Articles of Incorporation in certain respects
that are expected to improve Company's and each Current Fund's operations. The
Trust, like Company, operates as an open-end management investment company
registered with the SEC under the 1940 Act. If Proposal 4 is not approved by
Company's shareholders, Company will continue to operate as a Maryland
corporation.
REASONS FOR THE PROPOSED REDOMESTICATION
The Redomestication is being proposed because, as noted above, INVESCO and
the Board believes that the Delaware statutory trust organizational form offers
a number of advantages over the Maryland corporate organizational form. As a
result of these advantages, the Delaware statutory trust organizational form has
been increasingly used by mutual funds, including the majority of the AIM Funds.
The Delaware statutory trust organizational form offers greater flexibility
than the Maryland corporate form. A Maryland corporation is governed by the
detailed requirements imposed by Maryland corporate law and by the terms of its
articles of incorporation. A Delaware statutory trust is subject to fewer
statutory requirements. The Trust is governed primarily by the terms of its
Declaration of Trust. In particular, the Trust has greater flexibility to
conduct business without the necessity of engaging in expensive proxy
solicitations to shareholders. For example, under Maryland corporate law,
amendments to Company's Articles of Incorporation would typically require
shareholder approval. Under Delaware law, unless the Declaration of Trust of a
Delaware statutory trust provides otherwise, amendments to it may be made
without first obtaining shareholder approval. In addition, unlike Maryland
corporate law, which restricts the delegation of a board of directors'
functions, Delaware law permits the board of trustees of a Delaware statutory
trust to delegate certain of its responsibilities. For example, the board of
trustees of a Delaware statutory trust may delegate the responsibility of
declaring dividends to duly empowered committees of the board or to appropriate
officers. Finally, Delaware law permits the trustees to adapt a Delaware
statutory trust to future contingencies. For example, the trustees may, without
a shareholder vote, change a Delaware statutory trust's domicile or
organizational form. In contrast, under Maryland corporate law, a company's
board of directors would be required to obtain shareholder approval prior to
changing domicile or organizational form.
The Redomestication will also have certain other effects on Company, its
shareholders and management, which are described below under the heading "The
Trust Compared to Company."
WHAT THE PROPOSED REDOMESTICATION WILL INVOLVE
To accomplish the Redomestication, each New Fund has been established as a
series portfolio of the Trust. On the closing date, each Current Fund will
transfer all of its assets to the corresponding classes of the corresponding New
Fund in exchange solely for a number of full and fractional classes of shares of
the New Fund equal to the number of full and fractional shares of common stock
of the corresponding classes of the Current Fund then outstanding and the New
Fund's assumption of the Current Fund's liabilities. Immediately thereafter,
each Current Fund will distribute those New Fund shares to its shareholders in
complete liquidation of such Current Fund. Upon completion of the
Redomestication, each shareholder of each Current Fund will be the owner of full
and fractional shares of the corresponding New Fund equal in number and
aggregate net asset value to the shares he or she held in the Current Fund. As
soon as practicable after the
44
consummation of the Redomestication, each Current Fund will be terminated and
Company will be dissolved as a Maryland corporation.
The obligations of Company and the Trust under the Plan are subject to
various conditions stated therein. To provide against unforeseen events, the
Plan may be terminated or amended at any time prior to the closing of the
Redomestication by action of the Board, notwithstanding the approval of the Plan
by the shareholders of any Current Fund. However, no amendments may be made that
would materially adversely affect the interests of shareholders of any Current
Fund. Company and the Trust may at any time waive compliance with any condition
contained in the Plan, provided that the waiver does not materially adversely
affect the interests of shareholders of any Current Fund.
The Plan authorizes Company to acquire one share of each class of each New
Fund and, as the sole shareholder of each New Fund prior to the Redomestication,
to do each of the following:
- Approve with respect to each New Fund a new investment advisory agreement
with AIM with an effective date of the closing date of the
Redomestication that will be substantially identical to that described in
Proposal 2. Information on the new advisory agreement, including a
description of the differences between it and Company's current advisory
agreement, is set forth above under Proposal 2. If Proposal 2 is not
approved by shareholders of a Current Fund of Company, Company will
approve for the corresponding New Fund an investment advisory agreement
with INVESCO that is substantially identical to such Current Fund's
existing investment advisory agreement with INVESCO.
- Approve with respect to each New Fund a new sub-advisory agreement
between AIM and INVESCO Institutional with an effective date of the
closing date of the Redomestication that will be substantially identical
to that described in Proposal 3. Information on the new sub-advisory
agreement is set forth above under Proposal 3. If either Proposal 2 or
Proposal 3 is not approved by shareholders of a Current Fund of Company,
Company will not approve a sub-advisory agreement between AIM and INVESCO
Institutional for the corresponding New Fund.
- Assuming that Proposal 2 is approved by shareholders, approve with
respect to each New Fund a new administrative services agreement with AIM
with an effective date of the closing date of the Redomestication that
will be substantially identical to the new administrative services
agreement with AIM that will be entered into by Company if shareholders
approve Proposal 2. If Proposal 2 is not approved by shareholders of a
Current Fund of Company, Company will approve for the corresponding New
Fund an administrative services agreement with AIM that is substantially
identical to such Current Fund's existing administrative services
agreement with INVESCO.
- Approve with respect to each New Fund a distribution agreement with AIM
Distributors. The proposed distribution agreement will provide for
substantially identical distribution services as currently provided to
each corresponding Current Fund by INVESCO Distributors, Inc.
- Approve a distribution plan pursuant to Rule 12b-1 under the 1940 Act
with respect to the Series II Shares of each New Fund that will be
substantially identical to the corresponding Current Fund's distribution
plan for the Series II Shares.
- Approve with respect to each New Fund a custodian agreement with State
Street Bank and Trust Company and a transfer agency and servicing
agreement with AIM Investment Services, Inc., each of which currently
provides such services to the corresponding Current Fund, and a multiple
class plan pursuant to Rule 18f-3 of the 1940 Act which will be
substantially identical to the multiple class plan that has been approved
by the Board for the corresponding Current Fund and which is expected to
become effective prior to the consummation of the Redomestication.
- Ratify the selection of PricewaterhouseCoopers LLP, the accountants for
each Current Fund, as the independent public accountants for each New
Fund. The financial statements should be read in conjunction with the
disclosures, included in this Proxy Statement/Prospectus under the
heading "Certain Civil Proceedings and Lawsuits."
45
- Approve such other agreements and plans as are necessary for each New
Fund's operation as a series of an open-end management investment
company.
The Trust's transfer agent will establish for each shareholder an account
containing the appropriate number of shares of each class of each New Fund. Such
accounts will be identical in all respects to the accounts currently maintained
by Company's transfer agent for each shareholder of the Current Funds. Shares
held in the Current Fund accounts will automatically be designated as shares of
the New Funds. Certificates for Current Fund shares issued before the
Redomestication will represent shares of the corresponding New Fund after the
Redomestication. Shareholders of the New Funds will not have the right to demand
or require the Trust to issue share certificates. Any account options or
privileges on accounts of shareholders under the Current Funds will be
replicated on the New Fund account. No sales charges will be imposed in
connection with the Redomestication.
Assuming your approval of Proposal 4, Company currently contemplates that
the Redomestication will be consummated on or about April 30, 2004.
THE FEDERAL INCOME TAX CONSEQUENCES OF THE REDOMESTICATION
Company and the Trust will receive an opinion of Xxxxxxx Xxxxx Xxxxxxx &
Xxxxxxxxx, LLP to the effect that the Redomestication will qualify as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended. Accordingly, the Current Funds, the New Funds and the
shareholders of the New Funds will recognize no gain or loss for Federal income
tax purposes as a result of the Redomestication. Shareholders of the Current
Funds should consult their tax advisers regarding the effect, if any, of the
Redomestication in light of their individual circumstances and as to state and
local consequences, if any, of the Redomestication.
APPRAISAL RIGHTS
Appraisal rights are not available to shareholders. However, shareholders
retain the right to redeem their shares of the Current Funds or the New Funds,
as the case may be, at any time before or after the Redomestication.
THE TRUST COMPARED TO COMPANY
STRUCTURE OF THE TRUST
The Trust is an existing statutory trust established under the laws of the
State of Delaware by the filing of a certificate of trust in the office of the
Secretary of State of Delaware. The Trust has established new series portfolios
corresponding to and having identical designations as the series portfolios of
Company. The Trust has also established classes with respect to each New Fund
corresponding to and having identical designations as the classes of each
corresponding Current Fund. Each New Fund will have the same investment
objectives, policies, and restrictions as its predecessor Current Fund, except
for INVESCO VIF -- Real Estate Opportunities Fund where such New Fund's
investment objectives, policies and restrictions will be substantially identical
to those described in Proposals 5(a), 5(b) and 6(a) through 6(h), provided that
such Proposals are approved by shareholders of INVESCO VIF -- Real Estate
Opportunities Fund. The Trust's fiscal year is the same as that of Company. No
New Fund will have any operations prior to the Redomestication. Initially,
Company will be the sole shareholder of each New Fund.
As a Delaware statutory trust, the Trust's operations are governed by its
Declaration of Trust and Amended and Restated Bylaws and applicable Delaware law
rather than by Company's Articles of Incorporation and Bylaws and applicable
Maryland law. Certain differences between the two domiciles and organizational
forms are summarized below. The operations of the Trust will continue to be
subject to the provisions of the 1940 Act and the rules and regulations
thereunder.
46
TRUSTEES OF THE TRUST
Subject to the provisions of the Declaration of Trust, the business of the
Trust is managed by its trustees, who have all powers necessary or convenient to
carry out their responsibilities. The responsibilities, powers, and fiduciary
duties of the trustees of the Trust are substantially the same as those of the
directors of Company.
SHARES OF THE TRUST
The beneficial interests in the New Funds will be represented by
transferable shares, par value $0.001 per share. Shareholders do not have the
right to demand or require the Trust to issue share certificates. The trustees
have the power under the Declaration of Trust to establish new series and
classes of shares; Company's directors currently have a similar right. The
Declaration of Trust permits the trustees to issue an unlimited number of shares
of each class and series. Company is authorized to issue only the number of
shares specified in the Articles of Incorporation and may issue additional
shares only with Board approval and after payment of a fee to the State of
Maryland on any additional shares authorized.
Your Fund currently has the classes of shares set forth in Exhibit D. The
Trust has established for each New Fund the classes that currently exist for its
predecessor Current Fund. Except as discussed in this Proxy Statement, shares of
each class of each New Fund will have rights, privileges, and terms
substantially similar to those of the corresponding class of the Current Fund.
LIABILITY OF SHAREHOLDERS
Shareholders of a Maryland corporation generally do not have personal
liability for the corporation's obligations, except that a shareholder may be
liable to the extent that he or she receives any distribution which exceeds the
amount which he or she could properly receive under Maryland law or where such
liability is necessary to prevent fraud.
Under Delaware law, shareholders of a Delaware statutory trust are entitled
to the same limitations of liability extended to shareholders of private
for-profit corporations. However, there is a remote possibility that
shareholders of a Delaware statutory trust might be held personally liable for
the trust's obligations. This might occur if the courts of another state that
does not recognize the limited liability granted to shareholders by Delaware law
were to apply the laws of such other state to a controversy involving the
trust's obligations.
The Declaration of Trust provides that shareholders of the Trust are not
subject to any personal liability for acts or obligations of the Trust. The
Declaration of Trust requires that every written agreement, obligation or other
undertaking made by the Trust contain a provision to the effect that
shareholders are not personally liable thereunder. In addition, the Declaration
of Trust provides for indemnification out of the trust's property for any
shareholder held personally liable solely by reason of his or her being or
having been a shareholder.
Therefore, the risk of any shareholder incurring financial loss beyond his
or her investment due to shareholder liability is limited to circumstances in
which the Trust itself is unable to meet its obligations and the express
disclaimer of shareholder liabilities is determined not to be effective. Given
the nature of the assets and operations of the Trust, the possibility of the
Trust being unable to meet its obligations is considered remote. Even if a claim
were brought against the Trust and a court determined that shareholders were
personally liable, it would likely not impose a material obligation on a
shareholder.
ELECTION OF DIRECTORS/TRUSTEES; TERMS
The shareholders of Company have elected a majority of the directors of
Company. Each director serves until a successor is elected, subject to his or
her earlier death, resignation or removal in the manner provided by law (see
below). In the case of a vacancy on the Board of Directors (other than a vacancy
created by removal by the shareholders), a majority of the directors may appoint
a successor to fill such vacancy. The right of the Board of Directors to appoint
directors to fill vacancies without shareholder approval is subject to the
provisions of the 1940 Act.
47
The current shareholders of the Trust have elected the trustees of the
Trust. Such trustees serve for the life of the Trust, subject to their earlier
death, incapacitation, resignation, retirement or removal (see below). In the
case of any vacancy on the Board of Trustees, a majority of the trustees may
appoint a successor to fill such vacancy. The right of the Board of Trustees to
appoint trustees to fill vacancies without shareholder approval is subject to
the provisions of the 1940 Act.
REMOVAL OF DIRECTORS/TRUSTEES
A director of Company may be removed by the affirmative vote of a majority
of the outstanding shares of Company.
A trustee of the Trust may be removed at any time by a written instrument
signed by at least two-thirds of the trustees or by vote of two-thirds of the
outstanding shares of the Trust.
MEETINGS OF SHAREHOLDERS
Company is not required to hold annual meetings of shareholders and do not
intend to do so unless required by the 1940 Act. The Bylaws of Company provide
that a special meeting of shareholders may be called by the president or, in his
or her absence, the vice-president or by a majority of the Board of Directors or
holders of shares entitled to cast at least 10% of the votes entitled to be cast
at the special meeting. Requests for special meetings must, among other things,
state the purpose of such meeting and the matters to be voted upon. No special
meeting need be called to consider any matter previously voted upon at a special
meeting called by the shareholders during the preceding twelve months, unless
requested by a majority of all shares entitled to vote at such meeting.
The Trust is not required to hold annual meetings of shareholders unless
required by the 1940 Act and does not intend to do so. The Amended and Restated
Bylaws of the Trust provide that any trustee may call a special meeting of
shareholders and the trustees shall call a special meeting of the shareholders
solely for the purpose of removing one or more trustees upon written request of
the holders of not less than 10% of the outstanding shares of the Trust. Special
meetings may be called for the purpose of electing trustees or for any other
action requiring shareholder approval, or for any matter deemed by the trustees
to be necessary or desirable.
LIABILITY OF DIRECTORS/TRUSTEES AND OFFICERS; INDEMNIFICATION
The Articles of Incorporation eliminate director and officer liability to
the fullest extent permitted under Maryland law.
Under Maryland law:
- a corporation is permitted to eliminate liability of its directors and
officers to the corporation or its stockholders, except for liability
arising from receipt of an improper benefit or profit and from active and
deliberate dishonesty;
- indemnification of a corporation's directors and officers is mandatory if
a director or officer has been successful on the merits or otherwise in
the defense of certain proceedings; and
- indemnification of a corporation's directors and officers for other
matters is permitted unless it is established that the act or omission
giving rise to the proceeding was committed in bad faith, a result of
active and deliberate dishonesty, or one in which a director or officer
actually received an improper benefit.
The Declaration of Trust provides:
- that the trustees and officers of Trust are not liable for any act or
omission or any conduct whatsoever in their capacity as trustees, except
for liability to the trust or shareholders due to willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved
in the conduct of the office of trustee; and
48
- for the indemnification of Trust's trustees and officers to the extent
that such trustees and officers act in good faith and reasonably believe
that their conduct is in the best interests of Trust, except with respect
to any matter in which it has been determined that such trustee acted
with willful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties.
Under Delaware law:
- trustees of a statutory trust are not liable to the trust or its
shareholders for acting in good faith reliance on the provisions of its
governing instrument and that the trustee's liabilities may be expanded
or restricted by such instrument; and
- a statutory trust is permitted to indemnify and hold harmless any trustee
or other person against any and all claims and demands.
Generally speaking, and for practical purposes, the impact of the change
from Maryland law to Delaware law on liability of directors/trustees and
officers will be minimized because the 1940 Act applies a certain level of
liability to the directors/trustees and officers of a mutual fund by prohibiting
the governing documents of the Fund from eliminating liability of
directors/trustees and officers for willful misfeasance, bad faith, gross
negligences or reckless disregard of duty.
DISSOLUTION AND TERMINATION
Maryland law provides that Company may be dissolved by the vote of a
majority of the Board and two-thirds of the shares entitled to vote on the
dissolution; however the Articles of Incorporation reduce the required
shareholder vote from two-thirds to a majority of the shares entitled to vote on
the dissolution.
Pursuant to the Declaration of Trust, the Trust or any series or class of
shares of beneficial interest in the Trust may be terminated by: (1) a majority
shareholder vote of the Trust or the affected series or class, respectively; or
(2) if there are fewer than 100 shareholders of record of the Trust or of such
terminating series or class, the trustees pursuant to written notice to the
shareholders of the Trust or the affected series or class.
VOTING RIGHTS OF SHAREHOLDERS
Shareholders of a Maryland corporation such as Company are entitled to vote
on, among other things, those matters which effect fundamental changes in the
corporate structure (such as a merger, consolidation or sale of substantially
all of the assets of the corporation) as provided by Maryland law.
The Declaration of Trust grants shareholders power to vote only with
respect to the following: (i) election of trustees, provided that a meeting of
shareholders has been called for that purpose; (ii) removal of trustees,
provided that a meeting of shareholders has been called for that purpose; (iii)
termination of the Trust or a series or class of its shares of beneficial
interest, provided that a meeting of shareholders has been called for that
purpose; (iv) sale of all or substantially all of the assets of the Trust or one
of its investment portfolios; (v) merger or consolidation of the Trust or any of
its investment portfolios, with certain exceptions; (vi) approval of any
amendments to shareholders' voting rights under the Declaration of Trust; and
(vii) approval of such additional matters as may be required by law or as the
trustees, in their sole discretion, shall determine.
Generally speaking, and for practical purposes, the impact of the change to
Delaware law from Maryland law on shareholder voting rights will be minimized
because the 1940 Act requires that shareholders vote on certain fundamental
matters.
DISSENTERS' RIGHTS
Under Maryland law, shareholders may not demand the fair value of their
shares from the successor company in a transaction involving the transfer of the
corporation's assets and are, therefore, bound by the terms of the transaction
if the stock is that of an open-end investment company registered with the SEC
under the 1940 Act and the value placed on the stock in the transaction is its
net asset value.
49
Neither Delaware law nor the Declaration of Trust confer upon shareholders
rights of appraisal or dissenters' rights.
AMENDMENTS TO ORGANIZATION DOCUMENTS
Company reserves the right to amend, alter, change or repeal any provision
contained in its Articles of Incorporation in the manner prescribed by statute,
including any amendment that alters the contract rights, as expressly set forth
in its Articles of Incorporation, of any outstanding stock, and all rights
conferred on shareholders are granted subject to this reservation. The Board may
approve amendments to its Articles of Incorporation to classify or reclassify
unissued shares of a class of stock without shareholder approval. Other
amendments to the Articles of Incorporation may be adopted if approved by the
affirmative vote of a majority of all the votes entitled to be cast on the
matter. The directors shall have the power to alter, amend or repeal the bylaws
of Company or adopt new bylaws at any time.
Consistent with Delaware law, the Board of Trustees of the Trust may,
without shareholder approval, amend its Declaration of Trust at any time, except
to eliminate any voting rights pertaining to the shares of the Trust, without
approval of the majority of the shares of the Trust. The trustees shall have the
power to alter, amend or repeal the bylaws of the Trust or adopt new bylaws at
any time.
The foregoing discussion is only a summary of certain differences between
and among Company's Articles of Incorporation and Bylaws and Maryland law and
the Trust's Amended and Restated Declaration of Trust and Amended and Restated
Bylaws and Delaware law. It is not a complete list of the differences.
Shareholders should refer to the provisions of the governing documents of
Company and the Trust and state law directly for a more thorough comparison.
Copies of the Articles of Incorporation and Bylaws of Company and the Trust's
Amended and Restated Declaration of Trust and Amended and Restated Bylaws are
available to shareholders without charge upon written request to Company.
THE BOARD'S RECOMMENDATION ON PROPOSAL 4
The Board, including the independent directors, unanimously recommends that
you vote "FOR" this Proposal.
PROPOSALS 5(a) AND 5(b) --
APPROVAL OF CHANGING THE INVESTMENT OBJECTIVES OF
INVESCO VIF -- REAL ESTATE OPPORTUNITY FUND AND
MAKING THE NEW INVESTMENT OBJECTIVE NON-FUNDAMENTAL
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSALS 5(a) AND 5(b)?
Proposals 5(a) and 5(b) apply only to the shareholders of INVESCO
VIF -- Real Estate Opportunity Fund.
BACKGROUND
INVESCO Real Estate Opportunity Fund, the retail fund after which your Fund
was patterned, was merged into AIM Real Estate Fund on November 3, 2003. There
is no corresponding variable insurance fund within the Trust into which to merge
your Fund. Accordingly, the Board proposes to rename your Fund the "AIM V.I.
Real Estate Fund" and to change its investment objectives, fundamental and
non-fundamental investment restrictions and investment policies so that they are
identical to those of AIM Real Estate Fund. Your Fund would therefore be
operated as a pattern fund (patterned after the AIM Real Estate Fund) going
forward.
Currently, your Fund's investment objective is to seek capital growth. It
also seeks to earn current income. Your Board recommends changing your Fund's
investment objectives so that your Fund will have a single investment objective,
which will be to achieve high total return. The Board is asking you to vote on
this
50
change because the investment objectives of your Fund are presently classified
as fundamental, which means that the Board cannot change them without
shareholder approval. Having the ability to change the investment objectives
without shareholder approval allows the Board to respond more quickly and
efficiently to changing market conditions and to save your Fund and its
shareholders money by eliminating the need to solicit proxies to obtain
shareholder approval to change an investment objective to respond to changing
market conditions. Accordingly, the Board also recommends that you approve
making your Fund's new investment objective non-fundamental. The current
investment objectives and policies of your Fund are set forth below.
Proposal 5(a) must be approved by your Fund's shareholders in order for
Proposal 5(b) to be effective, if Proposal 5(b) is approved. In other words, if
Proposal 5(a) is not approved, then the vote on Proposal 5(b) is irrelevant.
However, if Proposal 5(a) is approved by your Fund's shareholders and Proposal
5(b) is not approved, Proposal 5(a) will still be effective.
PROPOSAL 5(a) --
CHANGE TO INVESTMENT OBJECTIVES
REASONS FOR THE PROPOSED CHANGES TO YOUR FUND'S INVESTMENT OBJECTIVES
The Board is recommending changing your Fund's investment objectives in
order to allow your Fund to select from the broad range of equity securities
available in the real estate industry marketplace, which may include both
income-producing securities and those with an objective of capital appreciation.
The Board approved this change at an in-person meeting held on December 9-10,
2003. The practical difference between your Fund's current and proposed
investment objectives is that, rather than dual objectives of capital growth and
current income, your Fund will have a single objective of high total return.
WHAT THE PROPOSED CHANGES TO THE INVESTMENT OBJECTIVES WILL INVOLVE
If you approve changing your Fund's investment objectives certain
conforming changes will be made to your Fund's investment policies so that they
are identical to those of AIM Real Estate Fund. The chart below provides a
summary of your Fund's current investment policies and the proposed changes to
such investment policies that will be made if you approve changing your Fund's
investment objective.
YOUR FUND'S CURRENT INVESTMENT PROPOSED CHANGES TO YOUR FUND'S INVESTMENT
OBJECTIVES AND POLICIES OBJECTIVE AND POLICIES
------------------------------ ------------------------------------------
INVESTMENT OBJECTIVE
- capital growth and current income - high total return
INVESTMENT POLICIES
- normally invests at least 80% of its net - invests, normally, at least 80% of its
assets in the equity securities and assets in securities of real estate and
equity-related instruments of companies real-estate related companies. Securities
doing business in the real estate that may be purchased include debt and
industry, including real estate investment equity securities, including convertible
trusts ("REITs"), which invest in real securities, and may also include synthetic
estate or interests in real estate instruments such as warrants, futures,
options, exchange-traded funds and
American Depositary Receipts.
51
YOUR FUND'S CURRENT INVESTMENT PROPOSED CHANGES TO YOUR FUND'S INVESTMENT
OBJECTIVES AND POLICIES OBJECTIVE AND POLICIES
------------------------------ ------------------------------------------
- a company is doing business in the real - a company is considered to be a real
estate industry if: estate-related company if at least 50% of
- at least 50% of its gross income or its its assets, gross income or net profits
net sales come from activities in the are attributable to ownership,
real estate sector; construction, management or sale of
- at least 50% of its assets are devoted residential, commercial or industrial real
to producing revenues from the sector; estate (these companies include equity
or REITs that own property and mortgage REITs
- based on other available information, that make short-term construction and
INVESCO determines that its primary development mortgage loans or that invest
business is within the sector. in long-term mortgages or mortgage pools,
Companies in which it invests may also or companies whose products and services
include real estate brokers, home builders are related to the real estate industry,
or real estate developers, companies with such as manufacturers and distributors of
substantial real estate holdings, and building supplies and financial
companies with significant involvement in institutions that issue or services
the real estate industry or other real mortgages)
estate-related companies
- no one property type will represent more - no corresponding limitation
than 50% of its total assets
- may invest 20% of its assets in securities - may invest in equity, debt or convertible
of companies not in the real estate securities of companies unrelated to the
industry real estate industry that the portfolio
managers believe are undervalued and have
potential for growth of capital. Will
limit its investment in debt securities to
those that are investment-grade or deemed
by the fund's portfolio manager to be of
comparable quality
- may invest up to 25% of its assets in the - invests up to 25% of its total assets in
securities of non U.S. issuers. Securities foreign securities
of Canadian issuers and American
Depositary Receipts are not subject to
this limitation
- may be concentrated in a single industry - may be concentrated in a single industry
- although not a principal investment - may participate in the initial public
strategy, may invest a portion of its offering (IPO) market in some market
assets in securities of companies offering cycles
shares in initial public offerings (IPOs)
- advisor uses a bottom-up investment - advisor uses fundamental real estate
approach to create the portfolio, focusing analysis and quantitative securities
on company fundamentals and growth analysis to select investments for the
prospects when selecting securities. The Fund, including analyzing a company's
Fund emphasizes companies that INVESCO management and strategic focus, evaluating
believes are strongly managed and will the location, physical attributes and cash
generate above-average, long-term capital flow generating capacity of a company's
appreciation properties and calculating expected
returns, among other things
- INVESCO actively manages and trades the - does not normally engage in active and
Fund's portfolio, which may result in frequent trading
increased portfolio turnover
52
PROPOSAL 5(B) --
MAKING THE NEW INVESTMENT OBJECTIVE NON-FUNDAMENTAL
MAKING YOUR FUND'S NEW INVESTMENT OBJECTIVE NON-FUNDAMENTAL
The Board recommends making your Fund's new investment objective
non-fundamental. The Board approved making your Fund's new investment objective
non-fundamental at an in-person meeting held on December 9-10, 2003.
Proposal 5(a) must be approved by your Fund's shareholders in order for
Proposal 5(b) to be effective, if Proposal 5(b) is approved. In other words, if
Proposal 5(a) is not approved, then the vote on Proposal 5(b) is irrelevant.
However, if Proposal 5(a) is approved by your Fund's shareholders and Proposal
5(b) is not approved, Proposal 5(a) will still be effective.
If both Proposals 5(a) and 5(b) are approved by your Fund's shareholders,
the investment objective of your Fund will be made non-fundamental and will read
as follows:
"The fund's investment objective is to achieve high total return."
NAME CHANGE FOR YOUR FUND
If shareholders approve changing your Fund's investment objectives and
making the new investment objective non-fundamental and the changes to your
Fund's fundamental investment restrictions (discussed in Proposals 6(a) through
6(h) below), your Fund will be renamed the "AIM V.I. Real Estate Fund."
THE IMPLEMENTATION OF PROPOSALS 5(A) AND 5(B)
The Board anticipates that these Proposals, if approved, will be
implemented on or about April 30, 2004.
THE BOARD'S RECOMMENDATIONS ON PROPOSALS 5(A) AND 5(B)
Your Board, including the independent directors, unanimously recommends
that you vote "FOR" these Proposals.
PROPOSALS 6(a) THROUGH 6(h) --
CHANGES TO THE FUNDAMENTAL INVESTMENT RESTRICTIONS
OF INVESCO VIF -- REAL ESTATE OPPORTUNITY FUND
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSALS 6(a) THROUGH 6(h)?
Proposals 6(a) through 6(h) apply only to the shareholders of INVESCO
VIF -- Real Estate Opportunity Fund.
BACKGROUND
INVESCO Real Estate Opportunity Fund, the retail fund after which your Fund
was patterned, was merged into AIM Real Estate Fund on November 3, 2003. There
is no corresponding variable insurance fund within the Trust into which to merge
your Fund. Accordingly, the Board proposes to rename your Fund the "AIM V.I.
Real Estate Fund" and to change its investment objectives, fundamental and
non-fundamental investment restrictions and investment policies so that they are
identical to those of AIM Real Estate Fund. Your Fund would therefore be
operated as a pattern fund (patterned after the AIM Real Estate Fund) going
forward.
Pursuant to the 1940 Act, your Fund has adopted fundamental restrictions
covering certain types of investment practices, which may be changed only with
shareholder approval. Restrictions that your Fund has not specifically
designated as being fundamental are considered to be "non-fundamental" and may
be changed by the Board without shareholder approval. In addition to investment
restrictions, your Fund operates pursuant to investment objectives and policies.
These objectives and policies govern the investment activities
53
of your Fund and further limit its ability to invest in certain types of
securities or engage in certain types of transactions.
The Board is recommending that you approve changes to your Fund's
fundamental investment restrictions. The changes will conform these restrictions
to a set of uniform model restrictions under which most AIM Funds, including AIM
Real Estate Fund, currently operate. The Board does not expect these changes to
have any material impact on your Fund's current operations. The Board approved
the changes to your Fund's fundamental investment restrictions at an in-person
meeting held on December 9-10, 2003. Your Fund's current fundamental investment
restrictions and the new fundamental investment restrictions that the Board
proposes be adopted are as follows:
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED FUNDAMENTAL INVESTMENT RESTRICTIONS
------------------------------------------- --------------------------------------------
- - The Fund may not purchase the securities of - The Fund will concentrate (as such term may
any issuer (other than securities issued or be defined or interpreted by the 1940 Act
guaranteed by the U.S. government or any of Laws, Interpretations and Exemptions
its agencies or instrumentalities or (defined below)) its investments in the
municipal securities) if, as a result, more securities of domestic and foreign real
than 25% of the Fund's total assets would estate and real estate-related companies.
be invested in the securities of companies For purposes of the Fund's fundamental
whose principal business activities are in restriction regarding industry
the same industry, except that the Fund may concentration, real estate and real
invest more than 25% of the value of its estate-related companies shall consists of
total assets in one or more industries companies (i) that at least 50% of its
relating to the real estate industry. assets, gross income or net profits are
attributable to ownership, construction,
management, or sale of residential,
commercial or industrial real estate,
including listed equity REITS that own
property, and mortgage REITS which make
short-term construction and development
mortgage loans or which invest in long-term
mortgages or mortgage pools, or (ii) whose
products and services are related to the
real estate industry, such as manufacturers
and distributors of building supplies and
financial institutions which issue or
service mortgages.
- - The Fund may not, with respect to 75% of - The Fund is a "diversified company" as
the Fund's total assets, purchase the defined in the 1940 Act. The Fund will not
securities of any issuer (other than purchase the securities of any issuer if,
securities issued or guaranteed by the U.S. as a result, the Fund would fail to be a
government or any of its agencies or diversified company within the meaning of
instrumentalities, or securities of other the 1940 Act, and the rules and regulations
investment companies) if, as a result, (i) promulgated thereunder, as such statute,
more than 5% of the Fund's total assets rules and regulations are amended from time
would be invested in the securities of that to time or are interpreted from time to
issuer, or (ii) the Fund would hold more time by the SEC staff (collectively, the
than 10% of the outstanding voting "1940 Act Laws and Interpretations") or
securities of that issuer. except to the extent that the Fund may be
permitted to do so by exemptive order or
similar relief (collectively, with the 1940
Act Laws and Interpretations, the "1940 Act
Laws, Interpretations and Exemptions"). In
complying with this restriction, however,
the Fund may purchase securities of other
investment companies to the extent
permitted by the 1940 Act Laws,
Interpretations and Exemptions.
54
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED FUNDAMENTAL INVESTMENT RESTRICTIONS
------------------------------------------- --------------------------------------------
- - The Fund may not underwrite securities of - The Fund may not underwrite the securities
other issuers, except insofar as it may be of other issuers. This restriction does not
deemed to be an underwriter under the 1933 prevent the Fund from engaging in
Act in connection with the disposition of transactions involving the acquisition,
the Fund's portfolio securities. disposition or resale of its portfolio
securities, regardless of whether the Fund
may be considered to be an underwriter
under the Securities Act of 1933.
- - The Fund may not borrow money, except that - The Fund may not borrow money or issue
the Fund may borrow money in an amount not senior securities, except as permitted by the
exceeding 33 1/3% of its total assets 1940 Act Laws, Interpretations and
(including the amount borrowed) less Exemptions.
liabilities (other than borrowings).
- - The Fund may not issue senior securities, - The Fund may not borrow money or issue
except as permitted under the 1940 Act. senior securities, except as permitted by the
1940 Act Laws, Interpretations and
Exemptions.
- - The Fund may not lend any security or make - The Fund may not make personal loans or
any loan if, as a result, more than 33 1/3% loans of its assets to persons who control or
of its total assets would be lent to other are under common control with the Fund,
parties, but this limitation does not apply except to the extent permitted by 1940 Act
to the purchase of debt securities or to Laws, Interpretations and Exemptions. This
repurchase agreements. restriction does not prevent the Fund from,
among other things, purchasing debt
obligations, entering into repurchase
agreements, loaning its assets to
broker-dealers or institutional investors,
or investing in loans, including
assignments and participation interests.
- - The Fund may not purchase or sell physical - The Fund may not purchase physical
commodities; however, this policy shall not commodities or sell physical commodities
prevent the Fund from purchasing and unless acquired as a result of ownership of
selling foreign currency, futures securities or other instruments. This
contracts, options, forward contracts, restriction does not prevent the Fund from
swaps, caps, floors, collars, and other engaging in transactions involving futures
financial instruments. contracts and options thereon or investing
in securities that are secured by physical
commodities.
- - The Fund may not purchase or sell real - The Fund may not purchase real estate or
estate unless acquired as a result of sell real estate unless acquired as a result
ownership of securities or other of ownership of securities or other
instruments (but this shall not prevent the instruments. This restriction does not
Fund from investing in securities or other prevent the Fund from investing in issuers
instruments backed by real estate or that invest, deal, or otherwise engage in
securities of companies engaged in the real transactions in real estate or interests
estate business). This restriction shall therein, or in investing in securities that
not prohibit the Fund from directly holding are secured by real estate or interests
real estate if such real estate is acquired therein.
by the Fund as a result of a default on
debt securities held by the Fund.
- - The Fund may, notwithstanding any other - The Fund may, notwithstanding any other
fundamental investment policy or fundamental investment policy or
limitation, invest all of its assets in the limitation, invest all of its assets in the
securities of a single open-end management securities of a single open-end management
investment company managed by INVESCO or an investment company with substantially the
affiliate or a successor thereof, with same fundamental investment objectives,
substantially the same fundamental policies and limitations as the Fund.
investment objective, policies and
limitations as the Fund.
Each of Proposals 6(a) through 6(h) must be approved by your Fund's
shareholders in order for any of the fundamental restrictions of your Fund to be
changed. If each of Proposals 6(a) through 6(h) is not approved, no changes will
be made to any of your Fund's fundamental restrictions.
55
REASONS FOR THE PROPOSED CHANGES TO YOUR FUND'S FUNDAMENTAL RESTRICTIONS
The Board expects that you will benefit from these changes in a number of
ways. The proposed uniform restrictions will provide your Fund with as much
investment flexibility as is possible under the 1940 Act. The Board believes
that making your Fund's fundamental restrictions similar with other AIM Funds,
including AIM Real Estate Fund, will enhance management's ability to manage
efficiently and effectively your Fund's assets in changing regulatory and
investment environments.
WHAT THE PROPOSED CHANGES TO THE FUNDAMENTAL RESTRICTIONS WILL INVOLVE
Each proposed change to your Fund's fundamental restrictions is discussed
below. The proposed fundamental restrictions will provide your Fund with the
ability to operate under new interpretations of the 1940 Act or pursuant to
exemptive relief from the SEC without receiving prior shareholder approval of
operating under such interpretations or exemptions. Even though your Fund will
have this flexibility, if the proposed fundamental restrictions are approved by
shareholders, several new non-fundamental investment restrictions (which
function as internal operating guidelines) will become effective, which will
replace your Fund's current non-fundamental investment restrictions. Your Fund's
investment advisor must follow these non-fundamental restrictions in managing
your Fund. Of course, if circumstances change, the Board may change or eliminate
any non-fundamental investment restriction in the future without shareholder
approval. Your Fund's current non-fundamental investment restrictions and the
new non-fundamental investment restrictions that will be adopted if shareholders
approve the proposed changes to your Fund's fundamental investment restrictions
are as follows:
CURRENT NON-FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED NON-FUNDAMENTAL INVESTMENT RESTRICTIONS
----------------------------------------------- ------------------------------------------------
- - The Fund may not sell securities short - Notwithstanding the fundamental restriction
(unless it owns or has the right to obtain with regard to engaging in transactions
securities equivalent in kind and amount to involving futures contracts and options
the securities sold short) or purchase thereon or investing in securities that are
securities on margin, except that (i) this secured by physical commodities, the Fund
policy does not prevent the Fund from currently may not invest in any security
entering into short positions in foreign (including futures contracts or options
currency, futures contracts, options, forward thereon) that is secured by physical
contracts, swaps, caps, floors, collars, and commodities.
other financial instruments, (ii) the Fund
may obtain such short-term credits as are
necessary for the clearance of transactions,
and (iii) the Fund may make margin payments
in connection with futures contracts,
options, forward contracts, swaps, caps,
floors, collars, and other financial
instruments.
- - The Fund may borrow money only from a bank or - In complying with the fundamental restriction
from an open-end management investment regarding borrowing money and issuing senior
company managed by INVESCO or an affiliate or securities, the Fund may borrow money in an
a successor thereof for temporary or amount not exceeding 33 1/3% of its total
emergency purposes (not for leveraging or assets (including the amount borrowed) less
investing) or by engaging in reverse liabilities (other than borrowings). The Fund
repurchase agreements with any party (reverse may borrow from banks, broker/dealers or other
repurchase agreements will be treated as investment companies or their series
borrowings for purposes of fundamental portfolios that have AIM or an affiliate of
limitation(4)). AIM as an investment advisor (an "Advised
Fund"). The Fund may not borrow for
leveraging, but may borrow for temporary or
emergency purposes, in anticipation of or in
response to adverse market conditions, or for
cash management purposes. The Fund may not
purchase additional securities when any
borrowing from banks exceeds 5% of the Fund's
total assets or when any borrowings from an
AIM Advised Fund are outstanding.
56
CURRENT NON-FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED NON-FUNDAMENTAL INVESTMENT RESTRICTIONS
----------------------------------------------- ------------------------------------------------
- - The Fund does not currently intend to - No corresponding non-fundamental investment
purchase any security if, as a result, more restriction.
than 15% of its net assets would be invested
in securities that are deemed to be illiquid
because they are subject to legal or
contractual restrictions on resale or because
they cannot be sold or disposed of in the
ordinary course of business at approximately
the prices at which they are valued.
- - The Fund may invest in securities issued by - Notwithstanding the fundamental restriction
other investment companies to the extent that with regard to investing all assets in an
such investments are consistent with the open-end fund, the Fund may not invest all of
Fund's investment objective and policies and its assets in the securities of a single
permissible under the 1940 Act. open-end management investment company with
the same fundamental investment objectives,
policies and restrictions as the Fund.
- - With respect to fundamental limitation(1), - No corresponding non-fundamental investment
domestic and foreign banking will be restriction.
considered to be different industries.
- - In addition, with respect to a Fund that may - No corresponding non-fundamental investment
invest in municipal obligations, the restriction.
following non-fundamental policy applies,
which may be changed without shareholder
approval:
Each state (including the District of Columbia
and Puerto Rico), territory and possession of
the United States, each political
subdivision, agency, instrumentality and
authority thereof, and each multi-state
agency of which a state is a member is a
separate "issuer." When the assets and
revenues of an agency, authority,
instrumentality or other political
subdivision are separate from the government
creating the subdivision and the security is
backed only by assets and revenues of the
subdivision, such subdivision would be deemed
to be the sole issuer. Similarly, in the case
of an Industrial Development Bond or Private
Activity bond, if that bond is backed only by
the assets and revenues of the
non-governmental user, then that non-
governmental user would be deemed to be the
sole issuer. However, if the creating
government or another entity guarantees a
security, then to the extent that the value
of all securities issued or guaranteed by
that government or entity and owned by a Fund
exceeds 10% of the Fund's total assets, the
guarantee would be considered a separate
security and would be treated as issued by
that government or entity. With respect to a
Fund that is not a money market fund,
securities issued or guaranteed by a bank or
subject to financial guaranty insurance are
not subject to the limitations set forth in
the preceding sentence.
57
CURRENT NON-FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED NON-FUNDAMENTAL INVESTMENT RESTRICTIONS
----------------------------------------------- ------------------------------------------------
- - In order to enable California investors to - No corresponding non-fundamental investment
allocate variable annuity or variable life restriction.
insurance contract values to the Fund, IVIF
has committed to comply with the following
guidelines: (i) the borrowing limits for the
Fund are (a) 10% of net asset value when
borrowing for any general purpose and (b) 25%
of net asset value when borrowing as a
temporary measure to facilitate redemptions
(for purposes of this clause, the net asset
value of the Fund is the market value of all
investments or assets owned less outstanding
liabilities of the Fund at the time that any
new or additional borrowing is undertaken);
and (ii) if the Fund invests in foreign
companies, the foreign country
diversification guidelines to be followed by
the Fund are as follows:
(a) The Fund will be invested in a minimum of
five different foreign countries at all
times. However, this minimum is reduced
to four when foreign country investments
comprise less than 80% of the Fund's net
asset value, to three when less than 60%
of such value, to two when less than 40%
and to one when less than 20%.
(b) Except as set forth in items (c) and (d)
below, the Fund will have no more than
20% of its net asset value invested in
securities of issuers located in any one
country.
(c) The Fund may have an additional 15% of
its net asset value invested in
securities of issuers located in any one
of the following countries: Australia,
Canada, France, Japan, the United
Kingdom, or Germany.
(d) The Fund's investments in United States
issuers are not subject to the foreign
country diversification guidelines.
58
CURRENT NON-FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED NON-FUNDAMENTAL INVESTMENT RESTRICTIONS
----------------------------------------------- ------------------------------------------------
- - No corresponding non-fundamental investment - In complying with the fundamental restriction
restriction. regarding issuer diversification, the Fund
will not, with respect to 75% of its total
assets, purchase the securities of any issuer
(other than securities issued or guaranteed by
the U.S. Government or any of its agencies or
instrumentalities), if, as a result, (i) more
than 5% of the Fund's total assets would be
invested in the securities of that issuer,
except as permitted by Rule 2a-7 under the
1940 Act, or (ii) the Fund would hold more
than 10% of the outstanding voting securities
of that issuer. The Fund may (i) purchase
securities of other investment companies as
permitted by Section 12(d)(1) of the 1940 Act
and (ii) invest its assets in securities of
money market funds and lend money to other
investment companies and their series
portfolios that have AIM or an affiliate of
AIM as an investment advisor (an "AIM Advised
Fund"), subject to the terms and conditions of
any exemptive orders issued by the SEC.
- - No corresponding non-fundamental investment - In complying with the fundamental restriction
restriction. with regard to making loans, the Fund may lend
up to 33 1/3% of its total assets and may lend
money to an AIM Advised Fund, on such terms
and conditions as the SEC may require in an
exemptive order.
Any investment restriction that involves a maximum or minimum percentage of
securities or assets (other than with respect to borrowing) shall not be
considered to be violated unless an excess over or a deficiency under the
percentage occurs immediately after, and is caused by, an acquisition or
disposition of securities or utilization of assets by your Fund.
PROPOSAL 6(a) --
CHANGE TO FUNDAMENTAL RESTRICTION ON ISSUER DIVERSIFICATION
WHAT THE PROPOSED CHANGE WILL INVOLVE
Upon the approval of Proposal 6(a), the existing fundamental restrictions
with regard to issuer diversification for your Fund would be changed to read as
follows:
"The Fund is a 'diversified company"' as defined in the 1940 Act. The Fund
will not purchase the securities of any issuer if, as a result, the Fund
would fail to be a diversified company within the meaning of the 1940 Act,
and the rules and regulations promulgated thereunder, as such statute,
rules and regulations are amended from time to time or are interpreted from
time to time by the SEC staff (collectively, the "1940 Act Laws and
Interpretations") or except to the extent that the Fund may be permitted to
do so by exemptive order or similar relief (collectively, with the 1940 Act
Laws and Interpretations, the "1940 Act Laws, Interpretations and
Exemptions"). In complying with this restriction, however, the Fund may
purchase securities of other investment companies to the extent permitted
by the 1940 Act Laws, Interpretations and Exemptions."
If you approve the proposed change, the following non-fundamental
investment restriction would become effective for your Fund:
"In complying with the fundamental restriction regarding issuer
diversification, the Fund will not, with respect to 75% of its total assets
purchase the securities of any issuer (other than securities issued or
59
guaranteed by the U.S. Government or any of its agencies or
instrumentalities), if, as a result, (i) more than 5% of the Fund's total
assets would be invested in the securities of that issuer, except as
permitted by Rule 2a-7 under the 1940 Act, or (ii) the Fund would hold more
than 10% of the outstanding voting securities of that issuer. The Fund may
(i) purchase securities of other investment companies as permitted by
Section 12(d)(1) of the 1940 Act and (ii) invest its assets in securities
of other money market funds and lend money to other investment companies or
their series portfolios that have AIM or an affiliate of AIM as an
investment advisor (an "AIM Advised Fund"), subject to the terms and
conditions of any exemptive orders issued by the SEC."
PROPOSAL 6(b) --
CHANGE TO FUNDAMENTAL RESTRICTION ON
BORROWING MONEY AND ISSUING SENIOR SECURITIES
WHAT THE PROPOSED CHANGE WILL INVOLVE
Upon the approval of Proposal 6(b), the existing fundamental restriction on
borrowing and issuing senior securities for your Fund would be changed to read
as follows:
"The Fund may not borrow money or issue senior securities, except as
permitted by the 1940 Act Laws, Interpretations and Exemptions."
If you approve the proposed change, the following non-fundamental
investment restriction would become effective for your Fund:
"In complying with the fundamental restriction regarding borrowing money
and issuing senior securities, the Fund may borrow money in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). The Fund may borrow from banks,
broker-dealers or an AIM Advised Fund. The Fund may not borrow for
leveraging, but may borrow for temporary or emergency purposes, in
anticipation of or in response to adverse market conditions, or for cash
management purposes. The Fund may not purchase additional securities when
any borrowing from banks exceeds 5% of the Fund's total assets or when any
borrowings from an AIM Advised Fund are outstanding."
PROPOSAL 6(c) --
CHANGE TO FUNDAMENTAL RESTRICTION ON UNDERWRITING SECURITIES
WHAT THE PROPOSED CHANGE WILL INVOLVE
Upon the approval of Proposal 6(c), the existing fundamental restriction on
underwriting securities for your Fund would be changed to read as follows:
"The Fund may not underwrite the securities of other issuers. This
restriction does not prevent the Fund from engaging in transactions
involving the acquisition, disposition or resale of its portfolio
securities, regardless of whether the Fund may be considered to be an
underwriter under the Securities Act of 1933."
60
PROPOSAL 6(d) --
CHANGE TO FUNDAMENTAL RESTRICTION ON INDUSTRY CONCENTRATION
WHAT THE PROPOSED CHANGE WILL INVOLVE
Upon the approval of Proposal 6(d), the existing fundamental restriction on
industry concentration for your Fund would be changed to read as follows:
"The Fund will concentrate (as such term may be defined or interpreted by
the 1940 Act Laws, Interpretations and Exemptions) its investments in the
securities of domestic and foreign real estate and real estate-related
companies. For purposes of the Fund's fundamental restriction regarding
industry concentration, real estate and real estate-related companies shall
consists of companies (i) that at least 50% of its assets, gross income or
net profits are attributable to ownership, construction, management, or
sale of residential, commercial or industrial real estate, including listed
equity REITS that own property, and mortgage REITS which make short-term
construction and development mortgage loans or which invest in long-term
mortgages or mortgage pools, or (ii) whose products and services are
related to the real estate industry, such as manufacturers and distributors
of building supplies and financial institutions which issue or service
mortgages."
PROPOSAL 6(e) --
CHANGE TO FUNDAMENTAL RESTRICTION ON
PURCHASING OR SELLING REAL ESTATE
WHAT THE PROPOSED CHANGE WILL INVOLVE
Upon the approval of Proposal 6(e), the existing fundamental restriction on
real estate investments for your Fund would be changed to read as follows:
"The Fund may not purchase real estate or sell real estate unless acquired
as a result of ownership of securities or other instruments. This
restriction does not prevent the Fund from investing in issuers that
invest, deal, or otherwise engage in transactions in real estate or
interests therein, or investing in securities that are secured by real
estate or interests therein."
PROPOSAL 6(f) --
CHANGE TO FUNDAMENTAL RESTRICTION ON
PURCHASING OR SELLING COMMODITIES
WHAT IS THE PROPOSED CHANGE?
Upon the approval of Proposal 6(f), the existing fundamental restriction on
investing in commodities for your Fund would be changed to read as follows:
"The Fund may not purchase physical commodities or sell physical
commodities unless acquired as a result of ownership of securities or other
instruments. This restriction does not prevent the Fund from engaging in
transactions involving futures contracts and options thereon or investing
in securities that are secured by physical commodities."
If you approve the proposed change, the following non-fundamental
investment restriction will become effective for your Fund:
"Notwithstanding the fundamental restriction with regard to engaging in
transactions involving future contracts and options thereon or investing in
securities that are secured by physical commodities, the Fund currently may
not invest in any security (including futures contracts or options thereon)
that is secured by physical commodities."
61
PROPOSAL 6(g) --
CHANGE TO FUNDAMENTAL RESTRICTION ON MAKING LOANS
WHAT THE PROPOSED CHANGE WILL INVOLVE
Upon the approval of Proposal 6(g), the existing fundamental restriction on
making loans for your Fund would be changed to read as follows:
"The Fund may not make personal loans or loans of its assets to persons who
control or are under common control with the Fund, except to the extent
permitted by 1940 Act Laws, Interpretations and Exemptions. This
restriction does not prevent the Fund from, among other things, purchasing
debt obligations, entering into repurchase agreements, loaning its assets
to broker-dealers or institutional investors, or investing in loans,
including assignments and participation interests."
If you approve the proposed change, the following non-fundamental
investment restriction will become effective for your Fund:
"In complying with the fundamental restriction with regard to making loans,
the Fund may lend up to 33 1/3% of its total assets and may lend money to
an AIM Advised Fund, on such terms and conditions as the SEC may require in
an exemptive order."
PROPOSAL 6(h) --
CHANGE TO FUNDAMENTAL RESTRICTION ON
INVESTING ALL OF YOUR FUND'S ASSETS IN AN OPEN-END FUND
WHAT THE PROPOSED CHANGE WILL INVOLVE
Upon the approval of Proposal 6(h), the existing fundamental investment
restriction on investing in an open-end fund for your Fund would be changed to
read as follows:
"The Fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company with substantially the same fundamental
investment objectives, policies and restrictions as the Fund."
If you approve the proposed change, the following non-fundamental
investment restriction will become effective for your Fund:
"Notwithstanding the fundamental restriction with regard to investing all
assets in an open-end fund, the Fund may not invest all of its assets in
the securities of a single open-end management investment company with the
same fundamental investment objectives, policies and restrictions as the
Fund."
The proposed new fundamental restriction would permit your Fund to invest
all of its assets in another open-end fund, as is currently permitted by your
Fund's existing fundamental restriction. However, the Board at present has not
considered any specific proposal to authorize your Fund to invest all of its
assets in this fashion. The Board will authorize investing your Fund's assets in
another open-end fund only if the Board first determines that doing so is in the
best interests of your Fund and its shareholders.
Because your Fund does not currently intend to invest all of its assets in
another open-end fund, the non-fundamental investment restriction set forth
above will become effective for your Fund. This non-fundamental restriction can
be changed by the Board without shareholder approval if the Board determines
that investing your Fund's assets in another open-end fund is in the best
interests of your Fund and its shareholders.
THE IMPLEMENTATION OF PROPOSALS 6(a) THROUGH 6(h)
If you approve each of the above proposals, the new fundamental
restrictions will replace the current fundamental investment restrictions for
your Fund. Accordingly, the proposed fundamental restrictions will become the
only fundamental investment restrictions under which your Fund will operate. If
approved, the
62
above restrictions may not be changed with respect to your Fund without the
approval of the holders of a majority of your Fund's outstanding voting
securities (as defined in the 1940 Act). The Board anticipates that these
proposals, if approved, will be implemented on or about April 30, 2004.
NAME CHANGE FOR YOUR FUND
If shareholders approve changing your Fund's fundamental investment
restrictions and changing your Fund's investment objectives and making the new
investment objective non-fundamental (discussed in Proposal 5 above), your Fund
will be renamed the "AIM V.I. Real Estate Fund" on or about April 30, 2004.
THE BOARD'S RECOMMENDATION ON PROPOSALS 6(a) THROUGH 6(h)
Your Board, including the independent directors, unanimously recommends
that you vote "FOR" each of these Proposals.
CERTAIN CIVIL PROCEEDINGS AND LAWSUITS
The mutual fund industry as a whole is currently subject to a wide range of
inquiries and litigation related to issues of "market timing" and "late
trading." Both AIM and INVESCO are the subject of a number of such inquiries, as
described below.
REGULATORY ACTIONS AND INQUIRIES CONCERNING INVESCO
On December 2, 2003 each of the SEC and the Office of the Attorney General
of the State of New York ("NYAG") filed civil proceedings against INVESCO and
Xxxxxxx X. Xxxxxxxxxx, in his capacity as the chief executive officer of
INVESCO. Xx. Xxxxxxxxxx currently holds the positions of Chief Operating Officer
and Senior Vice President of A I M Management Group Inc., the parent of AIM, and
the position of Senior Vice President of AIM. In addition, on December 2, 2003,
the State of Colorado filed civil proceedings against INVESCO. Neither your Fund
nor any of the other AIM or INVESCO Funds has been named as a defendant in any
of these proceedings.
The SEC complaint, filed in the United States District Court for the
District of Colorado [Civil Action No. 03-N-2421 (PAC)], alleges that INVESCO
failed to disclose in the INVESCO Funds' prospectuses and to the INVESCO Funds'
independent directors that INVESCO had entered into certain arrangements
permitting market timing of the INVESCO Funds. The SEC alleges violations of
Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 under that Act, Section 206(1) and 206(2) of
the Investment Advisers Act of 1940, and Sections 34(b) and 36(a) of the 1940
Act. The SEC is seeking injunctions, including permanent injunctions from
serving as an investment advisor, officer or director of an investment company;
an accounting of all market timing as well as certain fees and compensation
received; disgorgement; civil monetary penalties; and other relief.
The NYAG complaint, filed in the Supreme Court of the State of New York
(New York County), is also based on the circumstances described above. The NYAG
complaint alleges violation of Article 23-A (the Xxxxxx Act) and Section 349 of
the General Business Law of the State of New York and Section 63(12) of the
State of New York's Executive Law. The NYAG is seeking injunctions, including
permanent injunctions from directly or indirectly selling or distributing shares
of mutual funds; disgorgement of all profits obtained, including fees collected,
and payment of all restitution and damages caused, directly or indirectly from
the alleged illegal activities; civil monetary penalties; and other relief.
The Colorado complaint, filed in the Colorado District Court, in the City
and County of Denver, Colorado, is also based on the circumstances described
above. The Colorado complaint alleges violations of Section 6-1-105(1) of the
Colorado Consumer Protection Act. The State of Colorado is seeking injunctions;
restitution, disgorgement and other equitable relief; civil monetary penalties;
and other relief.
No relief is being sought against your Fund or any of the other AIM or
INVESCO Funds in any of these complaints.
63
In addition, INVESCO has received inquiries in the form of subpoenas or
other oral or written requests for information from various regulators
concerning market timing activity, late trading, fair value pricing and related
issues concerning the INVESCO Funds. These regulators include the Florida
Department of Financial Services, the Commissioner of Securities for the State
of Georgia, the Office of the State Auditor for the State of West Virginia, the
Office of the Secretary of State for West Virginia and the Colorado Securities
Division. INVESCO has also received more limited inquiries concerning related
matters from the United States Department of Labor, NASD Inc., and the SEC.
REGULATORY INQUIRIES CONCERNING AIM
AIM has also received inquiries in the form of subpoenas or other oral or
written requests for information from various regulators concerning market
timing activity, late trading, fair value pricing, and related issues concerning
the AIM Funds. AIM has received requests for information and documents
concerning these and related matters from the SEC and the Massachusetts
Secretary of the Commonwealth. In addition, AIM has received subpoenas
concerning these and related matters from the NYAG, the United States Attorney's
Office for the District of Massachusetts, the Commissioner of Securities for the
State of Georgia, the Office of the State Auditor for the State of West
Virginia, and the Office of the Secretary of State for West Virginia. AIM has
also received more limited inquiries from the SEC and NASD, Inc. concerning
specific funds, entities and/or individuals, none of which directly bears upon
your Fund.
RESPONSE OF THE INDEPENDENT DIRECTORS/TRUSTEES
The independent directors/trustees (the "independent trustees") of the AIM
and INVESCO Funds have retained their own independent counsel to conduct an
investigation on behalf of the independent trustees into the frequent trading
arrangements and related issues raised by the regulators. The independent
trustees have created a special committee, consisting of four independent
trustees, to oversee the investigation and to formulate recommendations for
further board action. As part of the investigation by the independent trustees,
their independent counsel has been reviewing the examination of INVESCO and AIM
currently being conducted by management's outside counsel.
RESPONSE OF AMVESCAP
AMVESCAP is seeking to resolve both the pending regulatory complaints
against INVESCO alleging market timing and the ongoing market timing
investigations with respect to INVESCO and AIM. AMVESCAP recently found, in its
ongoing review of these matters, that shareholders were not always effectively
protected from the potential adverse impact of market timing and illegal late
trading through intermediaries. These findings were based, in part, on an
extensive economic analysis by outside experts who have been retained by
AMVESCAP to examine the impact of these activities. In light of these findings,
AMVESCAP has publicly stated that any AIM or INVESCO Fund, or any shareholders
thereof, harmed by these activities will receive full restitution. AMVESCAP has
informed regulators of these findings. In addition, AMVESCAP has retained
separate outside counsel to undertake a comprehensive review of AIM's and
INVESCO's policies, procedures and practices, with the objective that they rank
among the most effective in the fund industry.
There can be no assurance that AMVESCAP will be able to reach a
satisfactory settlement with the regulators, or that any such settlement will
not include terms which would have the effect of barring either or both of
INVESCO and AIM, or any other investment advisor directly or indirectly owned by
AMVESCAP, from serving as an investment advisor to any investment company
registered under the Investment Company Act of 1940 (a "registered investment
company"), including your Fund. Your Fund has been informed by AIM that, if AIM
is so barred, AIM will seek exemptive relief from the SEC to permit it to
continue to serve as your Fund's investment advisor. There can be no assurance
that such exemptive relief will be granted. Any settlement with the regulators
could also include terms which would bar Xx. Xxxxxxxxxx from serving as an
officer or director of any registered investment company.
64
PRIVATE ACTIONS
In addition to the complaints described above, multiple lawsuits, including
purported class action and shareholder derivative suits, have been filed against
various parties (including, depending on the lawsuit, certain INVESCO Funds,
certain AIM Funds, INVESCO, AIM, A I M Management Group Inc., the parent of AIM,
AMVESCAP, certain related entities and certain of their officers, including Xx.
Xxxxxxxxxx). The allegations in the majority of the lawsuits are substantially
similar to the allegations in the regulatory complaints against INVESCO
described above. Such lawsuits allege a variety of theories of recovery,
including but not limited to: (i) violation of various provisions of the Federal
and state securities laws; (ii) violation of various provisions of the Employee
Retirement Income Security Act ("ERISA"); (iii) breach of fiduciary duty; and
(iv) breach of contract. The lawsuits have been filed in both Federal and state
courts and seek such remedies as compensatory damages; restitution; rescission;
accounting for wrongfully gotten gains, profits and compensation; injunctive
relief; disgorgement; equitable relief; various corrective measures under ERISA;
rescission of certain Funds' advisory agreements with AIM; declaration that the
advisory agreement is unenforceable or void; refund of advisory fees; interest;
and attorneys' and experts' fees. The following list identifies such lawsuits
that have been served as of February 23, 2004:
- XXX XXXXXX, DERIVATIVELY ON BEHALF OF NATIONS INTERNATIONAL EQUITY
FUND, V. INVESCO GLOBAL ASSET MANAGEMENT, ET AL., in the Superior
Court Division, State of North Carolina (Civil Action No.
03-CVS-19622, filed on November 14, 2003.
- XXXX XXXXXXX X. INVESCO FUNDS GROUP, INC., ET AL., in the District
Court, City and County of Denver, Colorado (Case Number 03-CV-9268),
filed on December 5, 2003.
- X. XXXXX XXXXXX, DERIVATIVELY ON BEHALF OF INVESCO FUNDS GROUP,
INC. V. AMVESCAP PLC, INVESCO, INC., ET AL., in the United States
District Court, District of Colorado (Civil Action No. 03-MK-2406),
filed on November 28, 2003.
- XXXXXX XXXXXXXX AND XXXXXX XXXXXXXX X. INVESCO ADVANTAGE HEALTH
SCIENCES FUND, ET AL., in the United States District Court, Southern
District of New York (Civil Action No. 03-CV-9634), filed on
December 4, 2003.
- XXXXXXX XXXXX X. INVESCO FUNDS GROUP, INC., ET AL., in the United
States District Court, District of Colorado (Civil Action No.
03-F-2441), filed on December 2, 2003.
- XXXXXX X. XXXXXXX, ET AL., V. INVESCO ADVANTAGE HEALTH SCIENCES
FUND, ET AL., in the United States District Court, District of
Colorado (Civil Action No. 03-N-2559), filed on December 17, 2003.
- XXX X. XXXXXXX AND XXXXXX X. XXXXXXX V. INVESCO FUNDS GROUP, INC.
AND A I M ADVISORS, INC., in the United States District Court,
District of Colorado (Civil Action No. 03-MK-2612), filed on
December 24, 2003.
- XXXX XXXXXXX, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY
SITUATED, V. INVESCO FUNDS GROUP, INC., ET AL., in the United States
District Court, Southern District of New York (Civil Action No.
04-CV-00492), filed on January 21, 2004.
- XXXX X. XXXXXX XXXX AND XXXXXXX X. XXXXXX, ON BEHALF OF THEMSELVES
AND ALL OTHERS SIMILARLY SITUATED, V. INVESCO FUNDS GROUP, INC., ET
AL., in the United States District Court, District of Colorado
(Civil Action No. 04-CV-812), filed on February 5, 2004.
INVESCO has removed certain of the state court proceedings to Federal
District Court. The Judicial Panel on Multidistrict Litigation recently has
ordered that efficiency will be achieved if all actions alleging market timing
throughout the mutual fund industry are transferred to the District of Maryland
for coordinated pretrial discovery. AIM and INVESCO have informed the AIM and
INVESCO Funds that they anticipate
65
that the Panel will issue orders to transfer actions pending against them,
including the cases identified above, to the multidistrict litigation as well.
More detailed information regarding each of the cases identified above is
provided in your Fund's statement of additional information. Additional lawsuits
or regulatory actions arising out of these circumstances and presenting similar
allegations and requests for relief may be served or filed against your Fund,
INVESCO, AIM, AMVESCAP and related entities and individuals in the future.
Information about any similar additional lawsuits will be provided in the
statement of additional information.
As a result of these developments, investors in the AIM and INVESCO 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.
66
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board has appointed PricewaterhouseCoopers LLP
("PwC") as Company's independent public accountants for the fiscal year ending
December 31, 2004. The financial statements should be read in conjunction with
the disclosure in this Proxy Statement under the heading "Certain Civil
Proceedings and Lawsuits." A representative of PwC is expected to be available
at the Special Meeting and to have the opportunity to make a statement and
respond to appropriate questions from the shareholders. The Audit Committee has
considered whether the provision of the services below is compatible with
maintaining PwC's independence. The Audit Committee also has considered whether
the provision of non-audit services that were rendered to INVESCO, and any
entity controlling, controlled by or under common control with INVESCO that
provides ongoing services to Company ("INVESCO Affiliates"), that were not
required to be pre-approved pursuant to SEC regulations is compatible with
maintaining PwC's independence. A copy of the Audit Committee's Pre-Approval of
Audit and Non-Audit Services Policies and Procedures is at Appendix V.
FEES BILLED BY PWC RELATED TO THE COMPANY
PwC billed Company aggregate fees for services rendered to Company for the
last two fiscal years as follows:
PERCENTAGE OF
FEES BILLED
PERCENTAGE OF FEES APPLICABLE TO
BILLED APPLICABLE TO NON-AUDIT
NON-AUDIT SERVICES SERVICES PROVIDED
FEES BILLED FOR PROVIDED IN 2003 FEES BILLED FOR IN 2002 PURSUANT
SERVICES RENDERED PURSUANT TO WAIVER SERVICES RENDERED TO WAIVER OF PRE-
TO THE COMPANY OF PRE-APPROVAL TO THE COMPANY APPROVAL
IN 2003 REQUIREMENT(1)(2) IN 2002 REQUIREMENT(1)(2)
----------------- -------------------- ----------------- -----------------
Audit Fees.................... $240,566 N/A $196,700 N/A
Audit-Related Fees(3)......... $ 0 0% $ 508 N/A
Tax Fees(4)................... $ 37,700 0% $ 33,180 N/A
All Other Fees(5)............. $ 0 0% $ 811 N/A
-------- --------
Total Fees.................... $278,266 N/A $231,199 N/A
PwC billed Company aggregate non-audit fees of $37,700 for the fiscal year
ended 2003, and $34,499 for the fiscal year ended 2002, for non-audit services
rendered to Company.
---------------
(1) Prior to May 6, 2003, Company's Audit Committee was not required to
pre-approve non-audit services. Therefore, the percentage of fees shown in
this column only represents fees billed for non-audit services rendered
after May 6, 2003, pursuant to a waiver of the pre-approval requirement.
(2) With respect to the provision of non-audit services, the pre-approval
requirement is waived pursuant to a de minimis exception if (i) such
services were not recognized as non-audit services by Company at the time of
engagement, (ii) the aggregate amount of all such services provided is no
more than 5% of the aggregate audit and non-audit fees billed to Company
during a fiscal year; and (iii) such services are promptly approved by
Company's Audit Committee prior to the completion of the audit by the Audit
Committee.
(3) Audit-Related Fees for the fiscal year ended December 31, 2003 includes fees
billed for completing agreed upon procedures to report on inter-fund
lending.
(4) Tax Fees for the fiscal year ended December 31, 2003 includes fees billed
for reviewing tax returns. Tax Fees for the fiscal year ended December 31,
2002 includes fees billed for reviewing tax returns and consultation
services.
(5) All Other Fees for the fiscal year ended December 31, 2002 includes fees
billed for services requested by the Company's Board related to service fees
paid to affiliates.
67
FEES BILLED BY PWC RELATED TO INVESCO AND INVESCO AFFILIATES
PwC billed INVESCO and INVESCO Affiliates aggregate fees for pre-approved
non-audit services rendered to INVESCO and INVESCO Affiliates for the last two
fiscal years as follows:
FEES BILLED FOR NON- FEES BILLED FOR NON-
AUDIT SERVICES AUDIT SERVICES
RENDERED TO INVESCO PERCENTAGE OF FEES RENDERED TO INVESCO PERCENTAGE OF FEES
AND INVESCO BILLED APPLICABLE TO AND INVESCO BILLED APPLICABLE TO
AFFILIATES IN 2003 THAT NON-AUDIT SERVICES AFFILIATES IN 2002 THAT NON-AUDIT SERVICES
WERE REQUIRED TO BE PROVIDED IN 2003 WERE REQUIRED TO BE PROVIDED IN 2002
PRE-APPROVED BY PURSUANT TO WAIVER PRE-APPROVED BY PURSUANT TO WAIVER
COMPANY'S AUDIT OF PRE-APPROVAL COMPANY'S AUDIT OF PRE-APPROVAL
COMMITTEE(1) REQUIREMENT(2)(3) COMMITTEE(1) REQUIREMENT(2)(3)
----------------------- -------------------- ----------------------- --------------------
Audit-Related Fees... $0 0% N/A N/A
Tax Fees............. $0 0% N/A N/A
All Other Fees....... $0 0% N/A N/A
--
Total Fees........... $0 N/A N/A N/A
PwC billed INVESCO and INVESCO Affiliates aggregate non-audit fees of $0
for the fiscal year ended 2003, and $31,500 for the fiscal year ended 2002, for
non-audit services rendered to INVESCO and INVESCO Affiliates.
The Audit Committee also has considered whether the provision of non-audit
services that were rendered to INVESCO, and any entity controlling, controlled
by or under common control with INVESCO that provides ongoing services to the
Registrant ("INVESCO Affiliates"), that were not required to be pre-approved
pursuant to SEC regulations is compatible with maintaining PwC's independence.
The Audit Committee determined that the provision of such services is compatible
with PwC maintaining independence with respect the Registrant.
---------------
(1) Prior to May 6, 2003, Company's Audit Committee was not required to
pre-approve non-audit services. Therefore, the fees billed for non-audit
services shown in this column only represents fees for pre-approved
non-audit services rendered after May 6, 2003, to INVESCO and INVESCO
Affiliates.
(2) Prior to May 6, 2003, Company's Audit Committee was not required to
pre-approve non-audit services. Therefore, the percentage of fees shown in
this column only represents fees billed for non-audit services rendered
after May 6, 2003, pursuant to a waiver of the pre-approval requirement.
(3) With respect to the provision of non-audit services, the pre-approval
requirement is waived pursuant to a de minimis exception if (i) such
services were not recognized as non-audit services by Company at the time of
engagement, (ii) the aggregate amount of all such services provided is no
more than 5% of the aggregate audit and non-audit fees billed to Company
during a fiscal year; and (iii) such services are promptly approved by
Company's Audit Committee prior to the completion of the audit by the Audit
Committee.
68
EXHIBIT A
SHARES OF COMPANY
OUTSTANDING ON JANUARY 9, 2004
NUMBER OF SHARES OUTSTANDING
NAME OF FUND ON JANUARY 9, 2004
------------ ------------------------------
INVESCO VIF -- Growth Fund.................................. 1,044,928.20
INVESCO VIF -- Core Equity Fund............................. 6,073,684.57
INVESCO VIF -- Dynamics Fund................................ 14,535,385.12
INVESCO VIF -- High Yield Fund.............................. 9,278,344.32
INVESCO VIF -- Telecommunications Fund...................... 10,262,004.97
INVESCO VIF -- Real Estate Opportunity Fund................. 1,848,009.10
INVESCO VIF -- Total Return Fund............................ 1,241,824.37
INVESCO VIF -- Health Sciences Fund......................... 19,543,355.99
INVESCO VIF -- Leisure Fund................................. 3,172,208.93
INVESCO VIF -- Technology Fund.............................. 14,404,876.66
INVESCO VIF -- Financial Services Fund...................... 15,579,576.93
INVESCO VIF -- Utilities Fund............................... 4,866,603.09
INVESCO VIF -- Small Company Growth Fund.................... 3,660,956.11
EXHIBIT B
SECURITY OWNERSHIP OF MANAGEMENT
To the best knowledge of Company, no directors, nominees, or current
executive officers of the Company owned shares of common stock of any of the
Funds as of January 9, 2004.
EXHIBIT C
OWNERSHIP OF SHARES OF THE FUNDS
SIGNIFICANT HOLDERS
Listed below is the name, address and percent ownership of each person who,
as of January 9, 2004, to the best knowledge of Company owned 5% or more of any
class of the outstanding shares of a Fund. A shareholder who owns beneficially
25% or more of the outstanding securities of a Fund is presumed to "control" the
Fund as defined in the 1940 Act. Such control may affect the voting rights of
other shareholders. Company has no knowledge of whether all or any portion of
the shares owned of record are also owned beneficially.
All information listed below is as of January 9, 2004
INVESCO VIF GROWTH FUND
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OWNED
PRINCIPAL HOLDER OWNED OF RECORD OF RECORD
------------------- ---------------- ----------------
NATIONWIDE INSURANCE CO..................................... 538,456.37 51.53%*
IPO PORTFOLIO ACCOUNTING
PO BOX 182029
COLUMBUS OH 43218-2029
WESTERN RESERVE LIFE ASSURANCE.............................. 375,273.59 35.91%*
ATTN FMG ACCOUNTING MS 4410
0000 XXXXXXXX XX XX
XXXXX XXXXXX XX 00000-0000
SAGE LIFE ASSURANCE OF AMERICA.............................. 120,104.81 11.49%
VARIABLE ANNUITY
000 XXXX XXXXX XX XXX 000
XXXXXXXX XX 00000-0000
INVESCO VIF CORE EQUITY FUND
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OWNED
PRINCIPAL HOLDER OWNED OF RECORD OF RECORD
------------------- ---------------- ----------------
SECURITY LIFE SEPARATE ACCOUNT L1........................... 1,624,521.53 26.75%*
UNIT VALUATIONS 2T2
0000 XXXXXXXX XX
XXXX XXXXXXX XX 19380-1478
CONNECTICUT GENERAL LIFE INS................................ 1,271,050.36 20.93%
PRODUCT LOB #1501
ATTN XXXXXX XXXXXXXXX H18D
000 XXXXXXXX XX
PO BOX 2975
HARTFORD CT 06104-2975
GREAT-WEST LIFE & ANNUITY................................... 1,157,860.54 19.06%
UNIT VALUATIONS 2T2
ATTN MUTUAL FUND TRADING 2T2
0000 X XXXXXXX XX
XXXXXXXXX XX 00000-0000
ANNUITY INVESTORS LIFE INS CO............................... 757,895.85 12.48%
000 XXXX XXXXX XX
XXXXXXXXXX XX 00000-0000
---------------
* Presumed to be a control person because of beneficial ownership of 25% or more
of the Fund.
C-1
INVESCO VIF DYNAMICS FUND
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OWNED
PRINCIPAL HOLDER OWNED OF RECORD OF RECORD
------------------- ---------------- ----------------
AMERICAN SKANDIA LIFE ASSURANCE CO.......................... 7,226,841.08 49.72%*
VARIABLE ACCOUNT/SAB
ATTN INVESTMENT ACCOUNTING
PO BOX 883
0 XXXXXXXXX XX
XXXXXXX XX 00000-6208
COVA FINANCIAL SERVICES LIFE INS CO......................... 2,484,547.21 17.09%
0000 XXXXXXX XXXX XXX 000
X XXX XXXXXX XX 00000-0000
IDS LIFE INSURANCE CO....................................... 1,481,626.01 10.19%
1497 AXP FINANCIAL CTR
MINNEAPOLIS MN 55474-0014
INVESCO VIF HIGH YIELD FUND
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OWNED
PRINCIPAL HOLDER OWNED OF RECORD OF RECORD
------------------- ---------------- ----------------
SECURITY LIFE SEPARATE ACCOUNT L1
UNIT VALUATIONS 2T2....................................... 3,788,434.23 40.83%*
1475 DUNWOODY DR
WEST CHESTER PA 19380-1478
GREAT-WEST LIFE & ANNUITY................................... 2,399,184.66 25.86%*
UNIT VALUATIONS 2T2
ATTN MUTUAL FUND TRADING 2T2
0000 X XXXXXXX Xx
XXXXXXXXX XX 00000-5002
ANNUITY INVESTORS LIFE INS. CO.............................. 1,105,529.94 11.92%
000 XXXX XXXXX XX
XXXXXXXXXX XX 00000-0000
JEFFERSON NATIONAL LIFE INSURANCE........................... 728,527.41 7.85%
9920 CORPORATE XXXXXX XX XXX 0000
XXXXXXXXXX XX 00000-4051
INVESCO VIF TELECOMMUNICATIONS FUND
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OWNED
PRINCIPAL HOLDER OWNED OF RECORD OF RECORD
------------------- ---------------- ----------------
AMERICAN SKANDIA LIFE ASSURANCE CO.......................... 8,230,564.51 80.20%*
VARIABLE ACCOUNT/SAB
ATTN INVESTMENT ACCOUNTING
PO BOX 883
1 CORPORATE DR
SHELTON CT 06484-6208
IDS LIFE INSURANCE CO....................................... 938,409.86 9.14%
1497 AXP FINANCIAL CTR
MINNEAPOLIS MN 55474-0014
---------------
* Presumed to be a control person because of beneficial ownership of 25% or more
of the Fund.
C-2
INVESCO VIF REAL ESTATE OPPORTUNITY FUND
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OWNED
PRINCIPAL HOLDER OWNED OF RECORD OF RECORD
------------------- ---------------- ----------------
SAFECO LIFE INSURANCE....................................... 1,092,022.04 59.09%*
ATTN XXXXXXX XXXXX
PO BOX 34890
SEATTLE WA 98124-1890
JEFFERSON NATIONAL LIFE INSURANCE........................... 301,358.12 16.31%
9920 CORPORATE XXXXXX XX XXX 0000
XXXXXXXXXX XX 00000-4051
SECURITY BENEFIT LIFE....................................... 114,146.18 6.18%
FBO UNBUNDLED
c/o VARIABLE ANNUITY DEPT
1 SW SECURITY BENEFIT PL
TOPEKA KS 66636-1000
XXXXXX INVESTORS LIFE INSURANCE CO.......................... 94,443.06 5.11%
VARIABLE SEPARATE ACCT
1600 MCCONNOR PKWY
SCHAUMBURG IL 60196-6801
INVESCO VIF TOTAL RETURN FUND
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OWNED
PRINCIPAL HOLDER OWNED OF RECORD OF RECORD
------------------- ---------------- ----------------
SECURITY LIFE SEPARATE ACCOUNT L1........................... 913,327.31 73.55%*
UNIT VALUATIONS 2T2
0000 XXXXXXXX XX
XXXX XXXXXXX XX 00000-1478
ANNUITY INVESTORS LIFE INS. CO.............................. 161,384.62 13.00%
000 XXXX XXXXX XX
XXXXXXXXXX XX 00000-0000
NATIONWIDE INSURANCE CO..................................... 113,499.28 9.14%
IPO PORTFOLIO ACCOUNTING
PO BOX 182029
COLUMBUS OH 43218-2029
INVESCO VIF HEALTH SCIENCES FUND
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OWNED
PRINCIPAL HOLDER OWNED OF RECORD OF RECORD
------------------- ---------------- ----------------
AMERICAN SKANDIA LIFE ASSURANCE CO.......................... 7,417,635.31 37.95%*
VARIABLE ACCOUNT/SAB
ATTN INVESTMENT ACCOUNTING
PO BOX 883
0 XXXXXXXXX XX
XXXXXXX XX 00000-6208
---------------
* Presumed to be a control person because of beneficial ownership of 25% or more
of the Fund.
C-3
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OWNED
PRINCIPAL HOLDER OWNED OF RECORD OF RECORD
------------------- ---------------- ----------------
ING USA ANNUITY AND LIFE INSURANCE CO....................... 5,017,949.74 25.68%*
1475 DUNWOODY DR
WEST CHESTER PA 19380-1478
ALLMERICA FIN LIFE INS & ANNU............................... 1,756,254.17 8.99%
GROUP VEL ACCOUNT
000 XXXXXXX XX
SEPARATE ACCOUNTING
MAIL STATION S310
WORCESTER MA 01653-0002
CM LIFE INSURANCE CO........................................ 1,694,842.76 8.67%
FUND OPERATIONS/ N255
1295 STATE ST
SPRINGFIELD MA 01111-0001
INVESCO VIF LEISURE FUND
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OWNED
PRINCIPAL HOLDER OWNED OF RECORD OF RECORD
------------------- ---------------- ----------------
ING USA ANNUITY AND LIFE INSURANCE CO....................... 3,172,154.92 99.99%*
1475 DUNWOODY DR
WEST CHESTER PA 19380-1478
INVESCO VIF TECHNOLOGY FUND
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OWNED
PRINCIPAL HOLDER OWNED OF RECORD OF RECORD
------------------- ---------------- ----------------
AMERICAN SKANDIA LIFE ASSURANCE CO.......................... 7,695,840.35 53.43%*
VARIABLE ACCOUNT/SAB
ATTN INVESTMENT ACCOUNTING
PO BOX 883
1 CORPORATE DR
SHELTON CT 06484-6208
CM LIFE INSURANCE CO........................................ 1,324,095.61 9.19%
FUND OPERATIONS/ N255
1295 STATE ST
SPRINGFIELD MA 01111-0001
IDS LIFE INSURANCE CO....................................... 907,548.40 6.30%
1497 AXP FINANCIAL CTR
MINNEAPOLIS MN 55474-0014
GREAT-WEST LIFE & ANNUITY................................... 892,077.44 6.19%
UNIT VALUATIONS 2T2
ATTN MUTUAL FUND TRADING 2T2
0000 X XXXXXXX XX
XXXXXXXXX XX 00000-0000
---------------
* Presumed to be a control person because of beneficial ownership of 25% or more
of the Fund.
C-4
INVESCO VIF FINANCIAL SERVICES FUND
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OWNED
PRINCIPAL HOLDER OWNED OF RECORD OF RECORD
------------------- ---------------- ----------------
AMERICAN SKANDIA LIFE ASSURANCE CO.......................... 7,255,765.70 46.57%*
VARIABLE ACCOUNT/SAB
ATTN INVESTMENT ACCOUNTING
PO BOX 883
1 CORPORATE DR
SHELTON CT 06484-6208
ING USA ANNUITY AND LIFE INSURANCE CO....................... 4,419,477.71 28.37%*
1475 DUNWOODY DR
WEST CHESTER PA 19380-1478
IDS LIFE INSURANCE CO....................................... 1,266,200.56 8.13%
1497 AXP FINANCIAL CTR
MINNEAPOLIS MN 55474-0014
CM LIFE INSURANCE CO........................................ 1,150,257.22 7.38%
FUND OPERATIONS/ N255
1295 STATE ST
SPRINGFIELD MA 01111-0001
INVESCO VIF UTILITIES FUND
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OWNED
PRINCIPAL HOLDER OWNED OF RECORD OF RECORD
------------------- ---------------- ----------------
ING USA ANNUITY AND LIFE INSURANCE CO....................... 2,109,586.53 43.35%*
1475 DUNWOODY DR
WEST CHESTER PA 19380-1478
XXXXXX INVESTORS LIFE INSURANCE CO.......................... 971,125.41 19.95%
VARIABLE SEPARATE ACCT
1600 MCCONNOR PKWY
SCHAUMBURG IL 60196-6801
SECURITY LIFE SEPARATE ACCOUNT L1........................... 733,880.50 15.08%
UNIT VALUATIONS 2T2
0000 XXXXXXXX XX
XXXX XXXXXXX XX 00000-1478
ALLMERICA FIN LIFE INS & ANNU............................... 501,032.75 10.30%
GROUP VEL ACCOUNT
000 XXXXXXX XX
SEPARATE ACCOUNTING
MAIL STATION S310
WORCESTER MA 01653-0002
THE MANUFACTURES LIFE INS CO USA............................ 250,038.35 5.14%
US ANNUITIES
000 XXXXXXXX XX XXX 000
XXXXXX XX 00000-0000
---------------
* Presumed to be a control person because of beneficial ownership of 25% or more
of the Fund.
C-5
INVESCO VIF SMALL COMPANY GROWTH FUND
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OWNED
PRINCIPAL HOLDER OWNED OF RECORD OF RECORD
------------------- ---------------- ----------------
CONNECTICUT GENERAL LIFE INS................................ 1,159,287.10 31.67%*
PRODUCT LOB #1501
ATTN XXXXXX XXXXXXXXX H18D
000 XXXXXXXX XX PO BOX 2975
HARTFORD CT 06104-2975
SECURITY LIFE SEPARATE ACCOUNT L1........................... 1,006,832.14 27.50%*
UNIT VALUATIONS 2T2
0000 XXXXXXXX XX
XXXX XXXXXXX XX 00000-1478
CONNECTICUT GENERAL LIFE INS................................ 365,593.85 9.99%
SEPARATE ACCOUNT FE
ATTN XXXXXX XXXXXXXXX H18D
000 XXXXXXXX XX PO BOX 2975
HARTFORD CT 06104-2975
NATIONWIDE INSURANCE CO..................................... 308,700.38 8.43%
IPO PORTFOLIO ACCOUNTING
PO BOX 182029
COLUMBUS OH 43218-2029
SUN LIFE FINANCIAL.......................................... 233,151.82 6.37%
FUTURITY (NY)
PO BOX 9134
WELLESLEY HLS MA 02481-9134
PRINCIPAL LIFE INSURANCE CO................................. 184,937.46 5.05%
FVA -- PRINCIPAL VARIABLE ANNUITY
ATTN XXXX XXXXX IND ACG G 008-N10
711 HIGH ST
DES MOINES IA 50392-0001
---------------
* Presumed to be a control person because of beneficial ownership of 25% or more
of the Fund.
C-6
EXHIBIT D
SHARE CLASS
NAME OF FUND (CLASS)
--------------------
INVESCO VIF -- Dynamics Fund
INVESCO VIF -- Core Equity Fund
INVESCO VIF -- Financial Services Fund
INVESCO VIF -- Growth Fund
INVESCO VIF -- Health Sciences Fund
INVESCO VIF -- High Yield Fund
INVESCO VIF -- Leisure Fund
INVESCO VIF -- Real Estate Opportunity Fund
INVESCO VIF -- Small Company Growth Fund
INVESCO VIF -- Technology Fund
INVESCO VIF -- Telecommunications Fund
INVESCO VIF -- Total Return Fund
INVESCO VIF -- Utilities Fund
D-1
APPENDIX I
CHARTER OF THE
GOVERNANCE COMMITTEES OF THE AIM FUNDS
AND THE INVESCO FUNDS
(ADOPTED DECEMBER 10, 2003)
The Boards of Directors/Trustees ("Boards") of The AIM Funds and The
INVESCO Funds (collectively, "Funds"), have established a Governance Committee
for each of the Funds. This Charter shall govern the membership, duties and
operations of the Governance Committee of each of the Funds. References in this
Charter to "the Committees" shall mean the collective Governance Committees of
all Funds.
Membership: Each member of the Committees shall be a director and trustee
of the Funds who is not an "interested person" of the Funds within the meaning
of the Investment Company Act of 1940, as amended ("1940 Act"). Each member of
the Committees shall also meet the director independence requirements for
serving on audit committees as set forth from time to time in the New York Stock
Exchange listing standards (currently, Section 303A.06), and as set forth in
rules promulgated by the Securities and Exchange Act (the "SEC") under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
applicable to investment companies whose shares are listed for trading on a
national securities exchange (currently, Rule 10A-3(b)(1)(iii)) (members that
meet such requirements are referred to herein as the "audit committee
independent directors").
Chair and Vice Chair: The Committees shall have a Chair and Vice Chair.
The Chair shall set the agenda for, and preside at, each meeting of the
Committees and shall engage in such other activities on behalf of the Committees
as shall be determined from time to time by the Committees. The Vice Chair shall
act as Chair in the absence or inability to act of the Chair and shall engage in
such other activities on behalf of the Committees as shall be determined from
time to time by the Committees.
Lead Dis-interested Director: The directors/trustees of the Funds who are
not "interested persons" of the Funds, as defined in the 1940 Act
("dis-interested directors"), may appoint a dis-interested director as the "Lead
Dis-interested Director." The Lead Dis-interested Director shall from time to
time as requested by the Committees act as liaison with management on particular
issues. Such functions are not to interfere with any directors'/trustees'
communications with management (and vice versa) on any issue; nor are such
functions intended to interfere with the interaction between management and any
of the Committees, other committees of the Boards, or the chair or vice chair of
the Committees or of such other committees.
Recommendation as to Share Ownership: The Committees recommend that each
director/trustee of the Funds beneficially own, on an aggregate basis, a minimum
dollar amount of shares of the Funds. The recommended minimum dollar amount
shall be $100,000 or the lowest dollar amount in the highest dollar range set
forth from time to time in Item 13(b)(4) of Form N-1A and/or Item 22(b)(5) of
Schedule 14A, if the lowest dollar amount in the highest dollar range set forth
in such Items is greater than $100,000. For purposes of this recommendation, (i)
shares of the Funds beneficially owned by the directors/trustees shall include,
for those directors/trustees who have executed a Deferred Compensation Agreement
with respect to the Funds, shares of the Funds in which the deferral accounts of
such directors/trustees are deemed to be invested under such Deferred
Compensation Agreements, and (ii) shares of the Funds beneficially owned by the
directors/trustees shall not include shares of AIM Select Real Estate Income
Fund that are beneficially owned by the directors/trustees.
Meetings: The Committees may meet separately or in conjunction with
meetings of the Boards of the Funds. Meetings of the Committees may be held in
person or by other means as permitted by the Bylaws of the Funds.
I-1
Duties: The duties of the Committees are:
(a) to nominate persons for election or appointment as dis-interested
directors (i) as additions to the Boards, (ii) to fill vacancies which,
from time to time, may occur in the Boards and (iii) for election by
shareholders of Funds at meetings called for the election of directors;
(b) to nominate persons for appointment as members of each committee
of the Boards, including without limitation the Committees, the Audit
Committees, the Investments Committees and the Valuation Committees, and to
nominate persons for appointment as chair and vice chair of each such
committee;
(c) to review from time to time, the compensation, if any, payable to
the directors of the Funds and to make recommendations to the Boards with
respect thereto;
(d) to review and evaluate from time to time the functioning of the
Boards and the various committees of the Boards and to make recommendations
to the Boards with respect thereto;
(e) to select independent legal counsel to the dis-interested
directors and to review and approve the compensation paid to independent
legal counsel to the dis-interested directors; and
(f) provided that the Committees are comprised solely of
dis-interested directors and that each member of the Committees is an audit
committee independent director, to review and approve the compensation paid
to independent counsel and other advisers, if any, to the Audit Committees
of the Funds.
Nomination of Dis-interested Directors: After a determination by the
Committees that a person should be nominated as an additional dis-interested
director, or as soon as practical after a vacancy occurs or it appears that a
vacancy is about to occur for a dis-interested director position on any of the
Boards, the Committees shall nominate a person for appointment by a majority of
the dis-interested directors to add to the Boards or to fill the vacancy. Prior
to a meeting of the shareholders of the Funds called for the purpose of electing
dis-interested directors, the Committees shall nominate one or more persons for
election as dis-interested directors at such meeting.
Evaluation by the Committees of a person as a potential nominee to serve as
a dis-interested director, including a person nominated by a shareholder, should
result in the following findings by the Committees:
(a) upon advice of independent legal counsel to the dis-interested
directors, that the person will qualify as a dis-interested director and
that the person is otherwise qualified under applicable laws and
regulations to serve as a director/trustee of the Funds;
(b) that the person is willing to serve, and willing and able to
commit the time necessary for the performance of the duties of a
dis-interested director;
(c) with respect to potential nominees to serve as dis-interested
director members of the Audit Committees of the Funds, upon advice of
independent legal counsel to the dis-interested directors, that the person:
(i) is free of any material relationship with the Funds (other than as a
shareholder of the Funds), either directly or as a partner, shareholder or
officer of an organization that has a relationship with the Funds, (ii)
meets the requirements regarding the financial literacy or financial
expertise of audit committee members, as set forth from time to time in the
New York Stock Exchange listing standards and in any rules promulgated by
the SEC that are applicable to investment companies whose shares are listed
for trading on a national securities exchange, and (iii) is an audit
committee independent director;
(d) that the person can make a positive contribution to the Boards and
the Funds, with consideration being given to the person's business
experience, education and such other factors as the Committees may consider
relevant;
(e) that the person is of good character and high integrity; and
(f) that the person has desirable personality traits including
independence, leadership and the ability to work with the other members of
the Boards.
I-2
Consistent with the 1940 Act, the Committees can consider recommendations
from management in its evaluation process.
As long as any Fund relies on any of Rule 10f-3, Rule 12b-1, Rule
15a-4(b)(2), Rule 17a-7, Rule 17a-8, Rule 17d-1(d)(7), Rule 17e-1, Rule
17g-1(j), Rule 18f-3 or Rule 23c-3, (i) a majority of the directors/ trustees of
the Fund shall be dis-interested directors, (ii) the selection and nomination of
any other dis-interested directors shall be committed to the discretion of the
existing dis-interested directors, and (iii) any person who acts as legal
counsel to the dis-interested directors shall be "independent legal counsel," as
defined in the 1940 Act.
In seeking out potential nominees and in nominating persons to serve as
dis-interested directors of the Funds, the Committees shall not discriminate
against any person based on his or her race, religion, national origin, sex,
physical disability and other factors not relevant to the person's ability to
serve as a dis-interested director.
Nomination of Committee Members: The Committees shall periodically review
the members of each committee of the Boards, including without limitation the
Committees, the Audit Committees, the Investments Committees and the Valuation
Committees. The Committees shall from time to time nominate persons to serve as
members of each committee of the Boards, as well as persons who shall serve as
the chair and vice chair of each such committee. Evaluation by the Committees of
a person as a potential committee member shall include the factors set forth
above under "Nomination of Dis-interested Directors," to the extent that such
factors are applicable or relevant. All such persons shall be appointed by a
majority of the directors/ trustees of the Funds. An individual may be nominated
to serve on more than one committee of a Board.
Nominees Recommended by Shareholders: The Committees shall consider
nominees recommended by a shareholder to serve as directors/trustees, provided:
(i) that such person is a shareholder of record at the time he or she submits
such names and is entitled to vote at the meeting of shareholders at which
directors/ trustees will be elected; and (ii) that the Committees or the Board,
as applicable, shall make the final determination of persons to be nominated.
For each Fund other than INVESCO Variable Investment Funds, Inc. ("IVIFI"), the
procedures to be followed by shareholders in submitting such recommendations are
set forth in the Fund's Bylaws. For IVIFI, a shareholder who desires to
recommend a nominee shall submit a request in writing to the Chair of IVIFI's
Governance Committee. The Committees shall evaluate nominees recommended by a
shareholder to serve as directors/trustees in the same manner as they evaluate
nominees identified by the Committees.
Review of Compensation: At least annually, the Committees shall review and
recommend the amount of compensation, if any, payable to the directors of the
Funds and report its findings and recommendation to the Boards. Compensation
shall be based on the responsibilities and duties of the dis-interested
directors and such other directors and the time required to perform these
duties. The Committees shall also make recommendations to the Boards regarding
matters related to compensation including deferred compensation plans and
retirement plans for the dis-interested directors and such other directors, and
shall monitor any and all such retirement plans and deferred compensation plans.
Evaluation Function: The Committees shall consider, oversee and implement
any periodic evaluation process of the Boards and all committees of the Boards.
Selection of Counsel: The Committees shall consider and oversee the
selection of "independent legal counsel," as defined in the 1940 Act, to the
dis-interested directors and recommend such counsel to the dis-interested
directors. In making such selection the Committees will examine and monitor such
legal counsel's client relationships, in accordance with any applicable rules
promulgated by the SEC, in order to ascertain continued independence.
Attendance at Annual Meetings. Of the Funds, only AIM Select Real Estate
Income Fund holds annual meetings of shareholders. The Funds' policy with regard
to director/trustee attendance at annual meetings of shareholders, if any, is
that directors/trustees are encouraged but not required to attend such annual
meetings.
I-3
Authority: The Committees shall have the resources and authority
appropriate to carry out their duties, including the authority to engage
independent counsel and other advisers, experts or consultants as they deem
necessary to carry out their duties, all at the expense of the appropriate
Funds. The Committees shall be responsible for reviewing and approving the
compensation paid to such counsel and other advisers.
Funding: The Funds shall provide for appropriate funding, as determined by
the Committees, in their capacity as committees of the Boards, for payment of
(i) compensation to any independent counsel or other advisers employed by the
Committees and (ii) ordinary administrative expenses of the Committees under the
authority set forth in this Charter.
Review of Charter: The Committees shall review this Charter at least
annually, and shall recommend any changes to the full Boards. This Charter may
be amended only by the full Boards, with the approval of a majority of the
dis-interested directors.
Maintenance of Charter: Each Fund shall maintain and preserve in an easily
accessible place a copy of the Committee Charter established for such Fund and
any modification to such Charter.
I-4
APPENDIX II
AIM VARIABLE INSURANCE FUNDS
AMENDED AND RESTATED MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this day of , 2004, by and
between
AIM Variable Insurance Funds, 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
seventeen separate series portfolios (such portfolios and any other portfolios
hereafter added to the Trust being referred to collectively herein as the
"Funds"); and
WHEREAS, the Trust and the Advisor desire to enter into an agreement to
provide for investment advisory services to the Funds upon the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
1. Advisory Services. The Advisor shall act as investment advisor for
the Funds and shall, in such capacity, supervise all aspects of the Funds'
operations, including the investment and reinvestment of cash, securities
or other properties comprising the Funds' assets, subject at all times to
the policies and control of the Board of Trustees. The Advisor shall give
the Trust and the Funds the benefit of its best judgment, efforts and
facilities in rendering its services as investment advisor.
2. Investment Analysis and Implementation. In carrying out its
obligations under Section 1 hereof, the Advisor shall:
(a) supervise all aspects of the operations of the Funds;
(b) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the
Funds, and whether concerning the individual issuers whose securities
are included in the assets of the Funds or the activities in which such
issuers engage, or with respect to securities which the Advisor
considers desirable for inclusion in the Funds' assets;
(c) determine which issuers and securities shall be represented in
the Funds' investment portfolios and regularly report thereon to the
Board of Trustees;
(d) formulate and implement continuing programs for the purchases
and sales of the securities of such issuers and regularly report thereon
to the Board of Trustees; and
(e) take, on behalf of the Trust and the Funds, all actions which
appear to the Trust and the Funds necessary to carry into effect such
purchase and sale programs and supervisory functions as aforesaid,
including but not limited to the placing of orders for the purchase and
sale of securities for the Funds.
II-1
3. Securities Lending Duties and Fees. The Advisor agrees to provide
the following services in connection with the securities lending activities
of each Fund: (a) oversee participation in the securities lending program
to ensure compliance with all applicable regulatory and investment
guidelines; (b) assist the securities lending agent or principal (the
"Agent") in determining which specific securities are available for loan;
(c) monitor the Agent to ensure that securities loans are effected in
accordance with the Advisor's instructions and with procedures adopted by
the Board of Trustees; (d) prepare appropriate periodic reports for, and
seek appropriate approvals from, the Board of Trustees with respect to
securities lending activities; (e) respond to Agent inquiries; and (f)
perform such other duties as necessary.
As compensation for such services provided by the Advisor in
connection with securities lending activities of each Fund, a lending Fund
shall pay the Advisor a fee equal to 25% of the net monthly interest or fee
income retained or paid to the Fund from such activities.
4. Delegation of Responsibilities. The Advisor is authorized to
delegate any or all of its rights, duties and obligations under this
Agreement to one or more sub-advisors, and may enter into agreements with
sub-advisors, and may replace any such sub-advisors from time to time in
its discretion, in accordance with the 1940 Act, the Advisers Act, and
rules and regulations thereunder, as such statutes, rules and regulations
are amended from time to time or are interpreted from time to time by the
staff of the Securities and Exchange Commission ("SEC"), and if applicable,
exemptive orders or similar relief granted by the SEC and upon receipt of
approval of such sub-advisors by the Board of Trustees and by shareholders
(unless any such approval is not required by such statutes, rules,
regulations, interpretations, orders or similar relief).
5. Independent Contractors. The Advisor and any sub-advisors shall for
all purposes herein be deemed to be independent contractors and shall,
unless otherwise expressly provided or authorized, have no authority to act
for or represent the Trust in any way or otherwise be deemed to be an agent
of the Trust.
6. Control by Board of Trustees. Any investment program undertaken by
the Advisor pursuant to this Agreement, as well as any other activities
undertaken by the Advisor on behalf of the Funds, shall at all times be
subject to any directives of the Board of Trustees.
7. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform
to:
(a) all applicable provisions of the 1940 Act and the Advisers Act
and any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the Trust, as
the same may be amended from time to time under the Securities Act of
1933 and the 1940 Act;
(c) the provisions of the Declaration of Trust, as the same may be
amended from time to time;
(d) the provisions of the by-laws of the Trust, as the same may be
amended from time to time; and
(e) any other applicable provisions of state, federal or foreign
law.
8. Broker-Dealer Relationships. The Advisor is responsible for
decisions to buy and sell securities for the Funds, broker-dealer
selection, and negotiation of brokerage commission rates.
(a) The Advisor's primary consideration in effecting a security
transaction will be to obtain the best execution.
(b) In selecting a broker-dealer to execute each particular
transaction, the Advisor will take the following into consideration: the
best net price available; the reliability, integrity and financial
condition of the broker-dealer; the size of and the difficulty in
executing the order; and the value of the expected contribution of the
broker-dealer to the investment performance of the Funds on a continuing
basis. Accordingly, the price to the Funds in any transaction may be
less favorable than
II-2
that available from another broker-dealer if the difference is
reasonably justified by other aspects of the fund execution services
offered.
(c) Subject to such policies as the Board of Trustees may from time
to time determine, the Advisor shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Funds to pay a
broker or dealer that provides brokerage and research services to the
Advisor an amount of commission for effecting a fund investment
transaction in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction, if the Advisor
determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided
by such broker or dealer, viewed in terms of either that particular
transaction or the Advisor's overall responsibilities with respect to a
particular Fund, other Funds of the Trust, and to other clients of the
Advisor as to which the Advisor exercises investment discretion. The
Advisor is further authorized to allocate the orders placed by it on
behalf of the Funds to such brokers and dealers who also provide
research or statistical material, or other services to the Funds, to the
Advisor, or to any sub-advisor. Such allocation shall be in such amounts
and proportions as the Advisor shall determine and the Advisor will
report on said allocations regularly to the Board of Trustees indicating
the brokers to whom such allocations have been made and the basis
therefor.
(d) With respect to one or more Funds, to the extent the Advisor
does not delegate trading responsibility to one or more sub-advisors, in
making decisions regarding broker-dealer relationships, the Advisor may
take into consideration the recommendations of any sub-advisor appointed
to provide investment research or advisory services in connection with
the Funds, and may take into consideration any research services
provided to such sub-advisor by broker-dealers.
(e) Subject to the other provisions of this Section 8, the 1940
Act, the Securities Exchange Act of 1934, and rules and regulations
thereunder, as such statutes, rules and regulations are amended from
time to time or are interpreted from time to time by the staff of the
SEC, any exemptive orders issued by the SEC, and any other applicable
provisions of law, the Advisor may select brokers or dealers with which
it or the Funds are affiliated.
9. Compensation. The compensation that each Fund shall pay the Advisor
is set forth in Appendix B attached hereto.
10. Expenses of the Funds. All of the ordinary business expenses
incurred in the operations of the Funds and the offering of their shares
shall be borne by the Funds unless specifically provided otherwise in this
Agreement. These expenses borne by the Funds include but are not limited to
brokerage commissions, taxes, legal, accounting, auditing, or governmental
fees, the cost of preparing share certificates, custodian, transfer and
shareholder service agent costs, expenses of issue, sale, redemption and
repurchase of shares, expenses of registering and qualifying shares for
sale, expenses relating to trustees and shareholder meetings, the cost of
preparing and distributing reports and notices to shareholders, the fees
and other expenses incurred by the Trust on behalf of the Funds in
connection with membership in investment company organizations and the cost
of printing copies of prospectuses and statements of additional information
distributed to the Funds' shareholders.
11. Services to Other Companies or Accounts. The Trust understands
that the Advisor now acts, will continue to act and may act in the future
as investment manager or advisor to fiduciary and other managed accounts,
and as investment manager or advisor to other investment companies,
including any offshore entities, or accounts, and the Trust has no
objection to the Advisor so acting, provided that whenever the Trust and
one or more other investment companies or accounts managed or advised by
the Advisor have available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with a formula
believed to be equitable to each company and account. The Trust recognizes
that in some cases this procedure may adversely affect the size of the
positions obtainable and the prices realized for the Funds.
II-3
12. Non-Exclusivity. The Trust understands that the persons employed
by the Advisor to assist in the performance of the Advisor's duties under
this Agreement will not devote their full time to such service and nothing
contained in this Agreement shall be deemed to limit or restrict the right
of the Advisor or any affiliate of the Advisor to engage in and devote time
and attention to other businesses or to render services of whatever kind or
nature. The Trust further understands and agrees that officers or directors
of the Advisor may serve as officers or trustees of the Trust, and that
officers or trustees of the Trust may serve as officers or directors of the
Advisor to the extent permitted by law; and that the officers and directors
of the Advisor are not prohibited from engaging in any other business
activity or from rendering services to any other person, or from serving as
partners, officers, directors or trustees of any other firm or trust,
including other investment advisory companies.
13. Effective Date, Term and Approval. This Agreement shall become
effective with respect to a Fund, if approved by the shareholders of such
Fund, on the Effective Date for such Fund, as set forth in Appendix A
attached hereto. If so approved, this Agreement shall thereafter continue
in force and effect until [April 30, 2006], and may be continued from year
to year thereafter, provided that the continuation of the Agreement is
specifically approved at least annually:
(a) (i) by the Board of Trustees or (ii) by the vote of "a majority
of the outstanding voting securities" of such Fund (as defined in
Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the trustees who are
not parties to this Agreement or "interested persons" (as defined in the
1940 Act) of a party to this Agreement (other than as trustees of the
Trust), by votes cast in person at a meeting specifically called for
such purpose.
14. Termination. This Agreement may be terminated as to the Trust or
as to any one or more of the Funds at any time, without the payment of any
penalty, by vote of the Board of Trustees or by vote of a majority of the
outstanding voting securities of the applicable Fund, or by the Advisor, on
sixty (60) days' written notice to the other party. The notice provided for
herein may be waived by the party entitled to receipt thereof. This
Agreement shall automatically terminate in the event of its assignment, the
term "assignment" for purposes of this paragraph having the meaning defined
in Section 2(a)(4) of the 1940 Act.
15. Amendment. No amendment of this Agreement shall be effective
unless it is in writing and signed by the party against which enforcement
of the amendment is sought.
16. Liability of Advisor and Fund. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Advisor or any of its
officers, directors or employees, the Advisor shall not be subject to
liability to the Trust or to the Funds or to any shareholder of the Funds
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security. Any liability of the Advisor to one Fund
shall not automatically impart liability on the part of the Advisor to any
other Fund. No Fund shall be liable for the obligations of any other Fund.
17. Liability of Shareholders. Notice is hereby given that, as
provided by applicable law, the obligations of or arising out of this
Agreement are not binding upon any of the shareholders of the Trust
individually but are binding only upon the assets and property of the Trust
and that the shareholders shall be entitled, to the fullest extent
permitted by applicable law, to the same limitation on personal liability
as shareholders of private corporations for profit.
18. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered, telecopied or mailed postage paid, to the other
party entitled to receipt thereof at such address as such party may
designate for the receipt of such notice. Until further notice to the other
party, it is agreed that the address of the Trust and that of the Advisor
shall be 00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000.
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
II-4
Advisers Act shall be resolved by reference to such term or provision of
the 1940 Act or the Advisers Act and to interpretations thereof, if any, by
the United States Courts or in the absence of any controlling decision of
any such court, by rules, regulations or orders of the SEC issued pursuant
to said Acts. In addition, where the effect of a requirement of the 1940
Act or the Advisers Act reflected in any provision of the Agreement is
revised by rule, regulation or order of the SEC, such provision shall be
deemed to incorporate the effect of such rule, regulation or order. Subject
to the foregoing, this Agreement shall be governed by and construed in
accordance with the laws (without reference to conflicts of law provisions)
of the State of Texas.
20. License Agreement. The Trust shall have the non-exclusive right to
use the name "AIM" to designate any current or future series of shares only
so long as A I M Advisors, Inc. serves as investment manager or advisor to
the Trust with respect to such series of shares.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
written above.
Attest:
AIM VARIABLE INSURANCE FUNDS
(A DELAWARE BUSINESS TRUST)
------------------------------------------------ By: ---------------------------------------------
Assistant Secretary President
(Xxxx)
Attest: A I M ADVISORS, INC.
------------------------------------------------ By: ---------------------------------------------
Assistant Secretary President
(Xxxx)
II-5
APPENDIX A
FUNDS AND EFFECTIVE DATES
EFFECTIVE DATE OF
NAME OF FUND ADVISORY AGREEMENT
------------ ------------------
AIM V.I. Aggressive Growth Fund............................. May 1, 2000
AIM V.I. Balanced Fund...................................... May 1, 2000
AIM V.I. Basic Value Fund................................... September 10, 2001
AIM V.I. Blue Chip Fund..................................... May 1, 2000
AIM V.I. Capital Appreciation Fund.......................... May 1, 2000
AIM V.I. Capital Development Fund........................... May 1, 2000
AIM V.I. Core Equity Fund................................... May 1, 2000
AIM V.I. Dent Demographic Trends Fund....................... May 1, 2000
AIM V.I. Diversified Income Fund............................ May 1, 2000
AIM V.I. Global Utilities Fund.............................. May 1, 2000
AIM V.I. Government Securities Fund......................... May 1, 2000
AIM V.I. Growth Fund........................................ May 1, 2000
AIM V.I. High Yield Fund.................................... May 1, 2000
AIM V.I. International Growth Fund.......................... May 1, 2000
AIM V.I. Large Cap Growth Fund.............................. September 1, 2003
AIM V.I. Mid Cap Core Equity Fund........................... September 10, 2001
AIM V.I. Money Market Fund.................................. May 1, 2000
AIM V.I. New Technology Fund................................ May 1, 2001
AIM V.I. Premier Equity Fund................................ May 1, 2000
AIM V.I. Small Cap Equity Fund.............................. September 1, 2003
II-6
APPENDIX B
COMPENSATION TO THE ADVISOR
The Trust shall pay the Advisor, out of the assets of a Fund, as full
compensation for all services rendered, an advisory fee for such Fund set forth
below. Such fee shall be calculated by applying the following annual rates to
the average daily net assets of such Fund for the calendar year computed in the
manner used for the determination of the net asset value of shares of such Fund.
AIM V.I. CAPITAL APPRECIATION FUND
AIM V.I. GROWTH FUND
AIM V.I. CORE EQUITY FUND
AIM V.I. GLOBAL UTILITIES FUND
AIM V.I. PREMIER EQUITY FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $250 million.......................................... 0.65%
Over $250 million........................................... 0.60%
AIM V.I. AGGRESSIVE GROWTH FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $150 million.......................................... 0.80%
Over $150 million........................................... 0.625%
AIM V.I. BALANCED FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $150 million.......................................... 0.75%
Over $150 million........................................... 0.50%
AIM V.I. BASIC VALUE FUND
AIM V.I. MID CAP CORE EQUITY FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $500 million.......................................... 0.725%
Next $500 million........................................... 0.700%
Next $500 million........................................... 0.675%
Over $1.5 billion........................................... 0.65%
AIM V.I. BLUE CHIP FUND
AIM V.I. CAPITAL DEVELOPMENT FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $350 million.......................................... 0.75%
Over $350 million........................................... 0.625%
II-7
AIM V.I. DENT DEMOGRAPHIC TRENDS FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $2 billion............................................ 0.85%
Over $2 billion............................................. 0.80%
AIM V.I. DIVERSIFIED INCOME FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $250 million.......................................... 0.60%
Over $250 million........................................... 0.55%
AIM V.I. NEW TECHNOLOGY FUND
NET ASSETS ANNUAL RATE
---------- -----------
Average Daily Net Assets.................................... 1.00%
AIM V.I. GOVERNMENT SECURITIES FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $250 million.......................................... 0.50%
Over $250 million........................................... 0.45%
AIM V.I. HIGH YIELD FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $200 million.......................................... 0.625%
Next $300 million........................................... 0.55%
Next $500 million........................................... 0.50%
Over $1 billion............................................. 0.45%
AIM V.I. INTERNATIONAL GROWTH FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $250 million.......................................... 0.75%
Over $250 million........................................... 0.70%
AIM V.I. LARGE CAP GROWTH FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $1 billion............................................ 0.75%
Next $1 billion............................................. 0.70%
Over $2 billion............................................. 0.625%
II-8
AIM V.I. MONEY MARKET FUND
NET ASSETS ANNUAL RATE
---------- -----------
First $250 million.......................................... 0.40%
Over $250 million........................................... 0.35%
AIM V.I. SMALL CAP EQUITY FUND
NET ASSETS ANNUAL RATE
---------- -----------
All Assets.................................................. 0.85%
II-9
APPENDIX III
MASTER INTERGROUP SUB-ADVISORY CONTRACT FOR MUTUAL FUNDS
This contract is made as of December , 2003, between A I M Advisors, Inc.
hereinafter "Adviser," 00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, and
INVESCO Institutional (N.A.), Inc. "Sub-Adviser," 0000 Xxxxxxxxx Xxxxxx, X.X.,
Xxxxx 000, Xxxxxxx, Xxxxxxx 00000.
WHEREAS:
A) Adviser has entered into an investment advisory agreement with
INVESCO Variable Investment Funds, Inc. (hereinafter "Trust"), an open-end
management investment company registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), with respect to the funds set forth
in Exhibit A attached hereto (each a "Fund");
B) Sub-Adviser represents that it is licensed under the Investment
Advisers Act of 1940 ("Advisers Act") as an investment adviser and engages
in the business of acting as an investment adviser;
C) Adviser is authorized to delegate certain, any or all of its
rights, duties and obligations under investment advisory agreements to
sub-advisers, including sub-advisers that are affiliated with Adviser.
NOW THEREFORE, in consideration of the promises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. Adviser hereby appoints Sub-Adviser as Sub-Adviser of
each Fund for the period and on the terms set forth herein. Sub-Adviser
accepts such appointment and agrees to render the services herein set
forth, for the compensation herein provided.
2. Duties as Sub-Adviser.
(a) Subject to the supervision of the Trust's Board of Trustees
("Board") and Adviser, the Sub-Adviser will provide a continuous investment
program for each Fund, including investment research and management, with
respect to all or a portion of the securities and investments and cash
equivalents of the Fund (the "Sub-Advised Assets"), such Sub-Advised Assets
to be determined by the Adviser. The Sub-Adviser will determine from time
to time what securities and other investments will be purchased, retained
or sold with respect to the Sub-Advised Assets of each Fund, and the
brokers and dealers through whom trades will be executed.
(b) The Sub-Adviser agrees that, in placing orders with brokers and
dealers, it will attempt to obtain the best net result in terms of price
and execution. Consistent with this obligation, the Sub-Adviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who sell shares of the Funds or provide the Funds, Adviser's other
clients, or Sub-Adviser's other clients with research, analysis, advice and
similar services. The Sub-Adviser may pay to brokers and dealers, in return
for such research and analysis, a higher commission or spread than may be
charged by other brokers and dealers, subject to the Sub-Adviser
determining in good faith that such commission or spread is reasonable in
terms either of the particular transaction or of the overall responsibility
of the Adviser and the Sub-Adviser to the Funds and their other clients and
that the total commissions or spreads paid by each Fund will be reasonable
in relation to the benefits to the Fund over the long term. In no instance
will portfolio securities be purchased from or sold to the Sub-Adviser, or
any affiliated person thereof, except in accordance with the applicable
securities laws and the rules and regulations thereunder and any exemptive
orders currently in effect. Whenever the Sub-Adviser simultaneously places
orders to purchase or sell the same security on behalf of a Fund and one or
more other accounts advised by the Sub-Adviser, such orders will be
allocated as to price and amount among all such accounts in a manner
believed to be equitable to each account.
(c) The Sub-Adviser will maintain all required books and records with
respect to the securities transactions of the Funds, and will furnish the
Board and Adviser with such periodic and special reports as the Board or
Adviser reasonably may request. Sub-Adviser xxxxxx agrees that all records
which it
III-1
maintains for the Adviser are the property of the Adviser, and agrees to
preserve for the periods prescribed by applicable law any records which it
maintains for the Adviser and which are required to be maintained, and
further agrees to surrender promptly to the Adviser any records which it
maintains for the Adviser upon request by the Adviser.
3. Further Duties. In all matters relating to the performance of this
Contract, Sub-Adviser will act in conformity with the Agreement and
Declaration of Trust, By-Laws and Registration Statement of the Trust and
with the instructions and directions of the Board and will comply with the
requirements of the 1940 Act, the rules, regulations, exemptive orders and
no-action positions thereunder, and all other applicable laws and
regulations. Sub-Adviser shall maintain compliance procedures for the Funds
that it and the Adviser reasonably believe are adequate to ensure
compliance with the 1940 Act and the investment objective(s) and policies
as stated in the prospectuses and statements of additional information.
4. Services Not Exclusive. The services furnished by Sub-Adviser
hereunder are not to be deemed exclusive and Sub-Adviser shall be free to
furnish similar services to others so long as its services under this
Contract are not impaired thereby. Nothing in this Contract shall limit or
restrict the right of any director, officer or employee of Sub-Adviser, who
may also be a Trustee, officer or employee of the Trust, to engage in any
other business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a similar
nature or a dissimilar nature.
5. Compensation.
(a) For the services provided to a Fund under this Contract, Adviser
will pay Sub-Adviser a fee, computed daily and paid monthly, at the rate of
40% of the Adviser's compensation on the Sub-Advised Assets per year, on or
before the last business day of the next succeeding calendar month.
(b) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such
period bears to the full month in which such effectiveness or termination
occurs.
6. Fee Waivers and Expense Limitations. If, for any fiscal year of the
Trust, the amount of the advisory fee which the Fund would otherwise be
obligated to pay to the Adviser is reduced because of contractual or
voluntary fee waivers or expense limitations by the Adviser, the fee
payable hereunder to the Sub-Adviser shall be reduced proportionately; and
to the extent that the Adviser reimburses the Fund as a result of such
expense limitations, the Sub-Adviser shall reimburse the Adviser that
proportion of such reimbursement payments which the sub-advisory fee
hereunder bears to the advisory fee under this Contract.
7. Limitation of Liability of Sub-Adviser and Indemnification.
Sub-Adviser shall not be liable for any costs or liabilities arising from
any error of judgment or mistake of law or any loss suffered by the Fund or
the Trust in connection with the matters to which this Contract relates
except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of Sub-Adviser in the performance by Sub-Adviser of
its duties or from reckless disregard by Sub-Adviser of its obligations and
duties under this Contract. Any person, even though also an officer,
partner, employee, or agent of Sub-Adviser, who may be or become a Trustee,
officer, employee or agent of the Trust, shall be deemed, when rendering
services to a Fund or the Trust or acting with respect to any business of a
Fund or the Trust to be rendering such service to or acting solely for the
Fund or the Trust and not as an officer, partner, employee, or agent or one
under the control or direction of Sub-Adviser even though paid by it.
8. Duration and Termination.
(a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to
any Fund unless it has first been approved (i) by a vote of a majority of
the independent Trustees who are not parties to this Contract or
"interested persons" (as defined in the 1940 Act) of a party to this
Contract, other than as Board members ("Independent
III-2
Trustees"), cast in person at a meeting called for the purpose of voting on
such approval, and (ii) by vote of a majority of that Fund's outstanding
voting securities, when required by the 1940 Act.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in force and effect until June 30, 2005. Thereafter, if not
terminated, with respect to each Fund, this Contract shall continue
automatically for successive periods not to exceed twelve months each,
provided that such continuance is specifically approved at least annually
(i) by a vote of a majority of the Independent Trustees, cast in person at
a meeting called for the purpose of voting on such approval, and (ii) by
the Board or by vote of a majority of the outstanding voting securities of
that Fund.
(c) Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty,
(i) by vote of the Board or by a vote of a majority of the outstanding
voting securities of the Fund on sixty days' written notice to Sub-Adviser;
or (ii) by the Adviser on sixty days' written notice to Sub-Adviser; or
(iii) by the Sub-Adviser on sixty days' written notice to the Trust.
Termination of this Contract with respect to one Fund shall not affect the
continued effectiveness of this Contract with respect to any other Fund.
This Contract will automatically terminate in the event of its assignment.
9. Amendment. No provision of this Contract may be changed, waived,
discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and, when required by the 1940 Act, no
amendment of this Contract shall be effective until approved by vote of a
majority of the Fund's outstanding voting securities.
10. Notices. Any notices under this Contract shall be 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 the Adviser shall be
00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000. Until further notice to
the other party, it is agreed that the address of the Sub-Adviser shall be
0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxx, Xxxxxxx 00000.
11. Governing Law. This Contract shall be construed in accordance with
the laws of the State of Texas and the 1940 Act. To the extent that the
applicable laws of the State of Texas conflict with the applicable
provisions of the 1940 Act, the latter shall control.
12. Miscellaneous. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Contract shall
not be affected thereby. This Contract shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
Any question of interpretation of any term or provision of this Contract
having a counterpart in or otherwise derived from a term or provision of
the 1940 Act or the Advisers Act shall be resolved by reference to such
term or provision of the 1940 Act or the Advisers Act and to
interpretations thereof, if any, by the United States Courts or in the
absence of any controlling decision of any such court, by rules,
regulations or orders of the Securities and Exchange Commission ("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 Contract 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.
III-3
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their officers designated as of the day and year first above
written.
A I M ADVISORS, INC. INVESCO INSTITUTIONAL (N.A.), INC.
Adviser Sub-adviser
By: By:
-------------------------------------------- --------------------------------------------
Name: Name:
-------------------------------------------- --------------------------------------------
Title: Title:
-------------------------------------------- --------------------------------------------
III-4
EXHIBIT A
TO
MASTER INTERGROUP SUB-ADVISORY CONTRACT FOR MUTUAL FUNDS
FUND
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF -- Core Equity Fund
INVESCO VIF -- Dynamics Fund
INVESCO VIF -- Financial Services Fund
INVESCO VIF -- Growth Fund
INVESCO VIF -- Health Sciences Fund
INVESCO VIF -- High Yield Fund
INVESCO VIF -- Leisure Fund
INVESCO VIF -- Real Estate Opportunity Fund
INVESCO VIF -- Small Company Growth Fund
INVESCO VIF -- Technology Fund
INVESCO VIF -- Telecommunications Fund
INVESCO VIF -- Total Return Fund
INVESCO VIF -- Utilities Fund
III-5
APPENDIX IV
INVESCO VARIABLE INVESTMENT FUNDS, INC.
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of
December 10, 2003, by and between INVESCO Variable Investment Funds, Inc., a
Maryland corporation (the "Company"), acting on its own behalf and on behalf of
each of its series portfolios, all of which are identified on Schedule A to this
Agreement, and
AIM Variable Insurance Funds, a Delaware statutory trust (the
"Trust"), acting on its own behalf and on behalf of each of its series
portfolios, all of which are identified on Schedule A.
BACKGROUND
The Company is organized as a series management investment company and is
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940, as amended. The Company currently publicly offers shares of
common stock representing interests in one or more separate series portfolios.
Each of these series portfolios is listed on Schedule A and is referred to in
this Agreement as a "Current Fund."
The Board of Directors of the Company has designated two classes of common
stock that represent interests in each Current Fund. These classes are listed on
Schedule B to this Agreement and each such class is referred to in this
Agreement as a "Current Fund Class."
The Company desires to change its form and place of organization by
reorganizing as the Trust. In anticipation of such reorganization, the Board of
Trustees of the Trust has established a series portfolio corresponding to each
of the Current Funds (each a "New Fund"), and has designated one or more classes
of shares of beneficial interest in each New Fund corresponding to the Current
Fund Classes (each a "New Fund Class"). Schedule A lists the New Funds and
Schedule B lists the New Fund Classes.
Each Current Fund desires to provide for its Reorganization (each, a
"Reorganization" and collectively, the "Reorganizations") through the transfer
of all of its assets to the corresponding New Fund in exchange for the
assumption by such New Fund of the liabilities of the corresponding Current Fund
and the issuance by the Trust to such Current Fund of shares of beneficial
interest in the New Fund ("New Fund Shares"). New Fund Shares received by a
Current Fund will have an aggregate net asset value equal to the aggregate net
asset value of the shares of the Current Fund immediately prior to the
Reorganization (the "Current Fund Shares"). Each Current Fund will then
distribute the New Fund Shares it has received to its shareholders.
Each Reorganization of each Current Fund is dependent upon the consummation
of the Reorganization of all of the other Current Funds, so that the
Reorganizations of all of the Current Funds must be consummated if any of them
are to be consummated. For convenience, the balance of this Agreement refers
only to a single Reorganization, but the terms and conditions hereof shall apply
separately to each Reorganization and to the Current Fund and the corresponding
New Fund participating therein, as applicable.
The Reorganization is subject to, and shall be effected in accordance with,
the terms of this Agreement. This Agreement is intended to be and is adopted by
the Company, on its own behalf and on behalf of the Current Funds, and by the
Trust, on its own behalf and on behalf of the New Funds, as a Plan of
Reorganization within the meaning of the regulations under Section 368(a) of the
Internal Revenue Code of 1986, as amended.
IV-1
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. DEFINITIONS
Any capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the preamble or background to this Agreement. In addition,
the following terms shall have the following meanings:
1.1 "Assets" shall mean all assets including, without limitation, all cash,
cash equivalents, securities, receivables (including interest and dividends
receivable), claims and rights of action, rights to register shares under
applicable securities laws, books and records, deferred and prepaid expenses
shown as assets on a Current Fund's books, and other property owned by a Current
Fund at the Effective Time.
1.2 "Closing" shall mean the consummation of the transfer of Assets,
assumption of Liabilities and issuance of shares described in Sections 2.1 and
2.2 of this Agreement, together with the related acts necessary to consummate
the Reorganization, to occur on the date set forth in Section 3.1.
1.3 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.4 "Current Fund" shall mean each of the series portfolios of the Company
as shown on Schedule A.
1.5 "Current Fund Class" shall mean each class of common stock of the
Company representing an interest in a Current Fund as shown on Schedule B.
1.6 "Current Fund Shares" shall mean the shares of a Current Fund
outstanding immediately prior to the Reorganization.
1.7 "Effective Time" shall have the meaning set forth in Section 3.1.
1.8 "Liabilities" shall mean all liabilities of a Current Fund including,
without limitation, all debts, obligations, and duties of whatever kind or
nature, whether absolute, accrued, contingent, or otherwise, whether or not
determinable at the Effective Time, and whether or not specifically referred to
herein.
1.9 "New Fund" shall mean each of the series portfolios of the Trust, one
of which shall correspond to one of the Current Funds as shown on Schedule A.
1.10 "New Fund Class" shall mean each class of shares of beneficial
interest in a New Fund, one of which shall correspond to one of the Current Fund
Classes as shown on Schedule B.
1.11 "New Fund Shares" shall mean those shares of beneficial interest in a
New Fund issued to a Current Fund hereunder.
1.12 "Registration Statement" shall have the meaning set forth in Section
5.4.
1.13 "RIC" shall mean a "regulated investment company" (as defined under
Subchapter M of the Code).
1.14 "SEC" shall mean the Securities and Exchange Commission.
1.15 "Shareholder(s)" shall mean a Current Fund's shareholder(s) of record,
determined as of the Effective Time.
1.16 "Shareholders Meeting" shall have the meaning set forth in Section
5.1.
1.17 "Transfer Agent" shall have the meaning set forth in Section 2.2.
1.18 "1940 Act" shall mean the Investment Company Act of 1940, as amended.
IV-2
2. PLAN OF REORGANIZATION
2.1 The Company agrees, on behalf of each Current Fund, to assign, sell,
convey, transfer and deliver all of the Assets of each Current Fund to its
corresponding New Fund. The Trust, on behalf of each New Fund, agrees in
exchange therefor:
(a) to issue and deliver to the corresponding Current Fund the number
of full and fractional (rounded to the third decimal place) New Fund Shares
of each New Fund Class designated on Schedule B equal to the number of full
and fractional Current Fund Shares of each corresponding Current Fund Class
designated on Schedule B; and
(b) to assume all of the Current Fund's Liabilities.
Such transactions shall take place at the Closing.
2.2 At the Effective Time (or as soon thereafter as is reasonably
practicable), (a) the New Fund Shares issued pursuant to Section 5.2 shall be
redeemed by each New Fund for $10.00 and (b) each Current Fund shall distribute
the New Fund Shares received by it pursuant to Section 2.1 to the Current Fund's
Shareholders in exchange for such Shareholders' Current Fund Shares. Such
distribution shall be accomplished through opening accounts, by the transfer
agent for the Trust (the "Transfer Agent"), on each New Fund's share transfer
books in the Shareholders' names and transferring New Fund Shares to such
accounts. Each Shareholder's account shall be credited with the respective pro
rata number of full and fractional (rounded to the third decimal place) New Fund
Shares of each New Fund Class due that Shareholder. All outstanding Current Fund
Shares, including those represented by certificates, shall simultaneously be
canceled on each Current Fund's share transfer books. The Trust shall not issue
certificates representing the New Fund Shares in connection with the
Reorganization. However, certificates representing Current Fund Shares shall
represent New Fund Shares after the Reorganization.
2.3 Following receipt of the required shareholder vote and as soon as
reasonably practicable after the Closing, the status of each Current Fund as a
designated series of the Company shall be terminated; provided, however, that
the termination of each Current Fund as a designated series of the Company shall
not be required if the Reorganization shall not have been consummated.
2.4 Following receipt of the required shareholder vote and as soon as
reasonably practicable after distribution of the New Fund Shares pursuant to
Section 2.2, the Company and the Trust shall cause Articles of Transfer to be
filed with the State Department of Assessments and Taxation of Maryland and,
following the filing of Articles of Transfer, the Company shall file a Form N-8F
with the Securities and Exchange Commission to deregister as an investment
company. Following such deregistration, the Company shall file Articles of
Dissolution with the State Department of Assessments and Taxation of Maryland to
dissolve the Company as a Maryland corporation; provided, however, that the
filing of Articles of Transfer, a Form N-8F and Articles of Dissolution as
aforesaid shall not be required if the Reorganization shall not have been
consummated.
2.5 Any transfer taxes payable on issuance of New Fund Shares in a name
other than that of the registered holder of the Current Fund Shares exchanged
therefor shall be paid by the person to whom such New Fund Shares are to be
issued, as a condition of such transfer.
2.6 Any reporting responsibility of the Company or each Current Fund to a
public authority is and shall remain its responsibility up to and including the
date on which it is terminated.
3. CLOSING
3.1 The Closing shall occur at the principal office of the Company on
April 30, 2004, or on such other date and at such other place upon which the
parties may agree. All acts taking place at the Closing shall be deemed to take
place simultaneously as of the Company's and the Trust's close of business on
the date of the Closing or at such other time as the parties may agree (the
"Effective Time").
IV-3
3.2 The Company or its fund accounting agent shall deliver to the Trust at
the Closing, a certificate of an authorized officer verifying that the
information (including adjusted basis and holding period, by lot) concerning the
Assets, including all portfolio securities, transferred by the Current Funds to
the New Funds, as reflected on the New Funds' books immediately following the
Closing, does or will conform to such information on the Current Funds' books
immediately before the Closing. The Company shall cause the custodian for each
Current Fund to deliver at the Closing a certificate of an authorized officer of
the custodian stating that (a) the Assets held by the custodian will be
transferred to each corresponding New Fund at the Effective Time and (b) all
necessary taxes in conjunction with the delivery of the Assets, including all
applicable federal and state stock transfer stamps, if any, have been paid or
provision for payment has been made.
3.3 The Company shall deliver to the Trust at the Closing a list of the
names and addresses of each Shareholder of each Current Fund and the number of
outstanding Current Fund Shares of the Current Fund Class owned by each
Shareholder, all as of the Effective Time, certified by the Company's Secretary
or Assistant Secretary. The Trust shall cause the Transfer Agent to deliver at
the Closing a certificate as to the opening on each New Fund's share transfer
books of accounts in the Shareholders' names. The Trust shall issue and deliver
a confirmation to the Company evidencing the New Fund Shares to be credited to
each corresponding Current Fund at the Effective Time or provide evidence
satisfactory to the Company that such shares have been credited to each Current
Fund's account on such books. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, stock certificates, receipts, or
other documents as the other party or its counsel may reasonably request.
3.4 The Company and the Trust shall deliver to the other at the Closing a
certificate executed in its name by its President or a Vice President in form
and substance satisfactory to the recipient and dated the Effective Time, to the
effect that the representations and warranties it made in this Agreement are
true and correct at the Effective Time except as they may be affected by the
transactions contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Company represents and warrants on its own behalf and on behalf of
each Current Fund as follows:
(a) The Company is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Maryland, and its Charter
is on file with the Maryland Department of Assessments and Taxation;
(b) The Company is duly registered as an open-end series management
investment company under the 1940 Act, and such registration is in full
force and effect;
(c) Each Current Fund is a duly established and designated series of
the Company;
(d) At the Closing, each Current Fund will have good and marketable
title to its Assets and full right, power, and authority to sell, assign,
transfer, and deliver its Assets free of any liens or other encumbrances;
and upon delivery and payment for the Assets, the corresponding New Fund
will acquire good and marketable title to the Assets;
(e) The New Fund Shares are not being acquired for the purpose of
making any distribution thereof, other than in accordance with the terms
hereof;
(f) Each Current Fund is a "fund" as defined in Section 851(g)(2) of
the Code; each Current Fund qualified for treatment as a RIC for each
taxable year since it commenced operations that has ended (or will end)
before the Closing and will continue to meet all the requirements for such
qualification for its current taxable year (and the Assets will be invested
at all times through the Effective Time in a manner that ensures compliance
with the foregoing); each Current Fund has no earnings and profits
accumulated in any taxable year in which the provisions of Subchapter M did
not apply to it; and each Current Fund has made all distributions for each
calendar year that has ended (or will end) before
IV-4
the Closing that are necessary to avoid the imposition of federal excise
tax or has paid or provided for the payment of any excise tax imposed for
any such calendar year;
(g) During the five-year period ending on the date of the
Reorganization, neither Company nor any person related to Company (as
defined in Section 1.368-1(e)(3) of the Federal income tax regulations
adopted pursuant to the Code without regard to Section 1.368-1(e)(3)(i)(A))
will have directly or through any transaction, agreement, or arrangement
with any other person, (i) acquired shares of a Current Fund for
consideration other than shares of such Current Fund, except for shares
redeemed in the ordinary course of such Current Fund's business as an
open-end investment company as required by the 1940 Act, or (ii) made
distributions with respect to a Current Fund's shares, except for (a)
distributions necessary to satisfy the requirements of Sections 852 and
4982 of the Code for qualification as a regulated investment company and
avoidance of excise tax liability and (b) additional distributions, to the
extent such additional distributions do not exceed 50 percent of the value
(without giving effect to such distributions) of the proprietary interest
in such Current Fund at the Effective Time. There is no plan or intention
of the Shareholders who individually own 5% or more of any Current Fund
Shares and, to the best of the Company's knowledge, there is no plan or
intention of the remaining Shareholders to redeem or otherwise dispose of
any New Fund Shares to be received by them in the Reorganization. The
Company does not anticipate dispositions of those shares at the time of or
soon after the Reorganization to exceed the usual rate and frequency of
redemptions of shares of the Current Fund as a series of an open-end
investment company. Consequently, the Company is not aware of any plan that
would cause the percentage of Shareholder interests, if any, that will be
disposed of as a result of or at the time of the Reorganization to be one
percent (1%) or more of the shares of the Current Fund outstanding as of
the Effective Time;
(h) The Liabilities were incurred by the Current Funds in the ordinary
course of their business and are associated with the Assets;
(i) The Company is not under the jurisdiction of a court in a
proceeding under Title 11 of the United States Code or similar case within
the meaning of Section 368(a)(3)(A) of the Code;
(j) As of the Effective Time, no Current Fund will have outstanding
any warrants, options, convertible securities, or any other type of rights
pursuant to which any person could acquire Current Fund Shares except for
the right of investors to acquire its shares at net asset value in the
normal course of its business as a series of an open-end diversified
management investment company operating under the 1940 Act;
(k) At the Effective Time, the performance of this Agreement shall
have been duly authorized by all necessary action by the Company's
shareholders;
(l) Throughout the five-year period ending on the date of the Closing,
each Current Fund will have conducted its historic business within the
meaning of Section 1.368-1(d) of the Income Tax Regulations under the Code
in a substantially unchanged manner;
(m) The fair market value of the Assets of each Current Fund
transferred to the corresponding New Fund will equal or exceed the sum of
the Liabilities assumed by the New Fund plus the amount of Liabilities, if
any, to which the transferred Assets are subject; and
(n) The total adjusted basis of the Assets of each Current Fund
transferred to the corresponding New Fund will equal or exceed the sum of
the Liabilities assumed by the New Fund plus the amount of Liabilities, if
any, to which the transferred assets are subject.
4.2 The Trust represents and warrants on its own behalf and on behalf of
each New Fund as follows:
(a) The Trust is a statutory trust duly organized, validly existing,
and in good standing under the laws of the State of Delaware, and its
Certificate of Trust has been duly filed in the office of the Secretary of
State of Delaware;
IV-5
(b) The Trust is duly registered as an open-end management investment
company under the 1940 Act. At the Effective Time, the New Fund Shares to
be issued pursuant to Section 2.1 of this Agreement shall be duly
registered under the Securities Act of 1933 by a Registration Statement
filed with the SEC;
(c) At the Effective Time, each New Fund will be a duly established
and designated series of the Trust;
(d) No New Fund has commenced operations nor will it commence
operations until after the Closing;
(e) Prior to the Effective Time, there will be no issued and
outstanding shares in any New Fund or any other securities issued by the
Trust on behalf of any New Fund, except as provided in Section 5.2;
(f) No consideration other than New Fund Shares (and each New Fund's
assumption of the Liabilities) will be issued in exchange for the Assets in
the Reorganization;
(g) The New Fund Shares to be issued and delivered to each
corresponding Current Fund hereunder will, at the Effective Time, have been
duly authorized and, when issued and delivered as provided herein, will be
duly and validly issued and outstanding shares of the New Fund, fully paid
and nonassessable;
(h) Each New Fund will be a "fund" as defined in Section 851(g)(2) of
the Code and will meet all the requirements to qualify for treatment as a
RIC for its taxable year in which the Reorganization occurs;
(i) The Trust, on behalf of the New Funds, has no plan or intention to
issue additional New Fund Shares following the Reorganization except for
shares issued in the ordinary course of its business as an open-end
investment company; nor does the Trust, on behalf of the New Funds, have
any plan or intention to redeem or otherwise reacquire any New Fund Shares
issued pursuant to the Reorganization, other than in the ordinary course of
such business or to the extent necessary to comply with its legal
obligation under Section 22(e) of the 1940 Act;
(j) Each New Fund will actively continue the corresponding Current
Fund's business in substantially the same manner that the Current Fund
conducted that business immediately before the Reorganization; and no New
Fund has any plan or intention to sell or otherwise dispose of any of the
Assets, except for dispositions made in the ordinary course of its business
or dispositions necessary to maintain its qualification as a RIC, although
in the ordinary course of its business the New Fund will continuously
review its investment portfolio (as each Current Fund did before the
Reorganization) to determine whether to retain or dispose of particular
stocks or securities, including those included in the Assets, provided,
however that this Section 4.2(j) shall not preclude any of the combinations
of funds set forth on Schedule C to this Agreement; and
(k) There is no plan or intention for any of the New Funds to be
dissolved or merged into another corporation or statutory trust or "fund"
thereof (within the meaning of Section 851(g)(2) of the Code) following the
Reorganization, provided, however that this Section 4.2(k) shall not
preclude any of the combinations of Funds set forth on Schedule C.
4.3 Each of the Company and the Trust, on its own behalf and on behalf of
each Current Fund or each New Fund, as appropriate, represents and warrants as
follows:
(a) The fair market value of the New Fund Shares of each New Fund
received by each Shareholder will be equal to the fair market value of the
Current Fund Shares of the corresponding Current Fund surrendered in
exchange therefor;
(b) Immediately following consummation of the Reorganization, the
Shareholders will own all the New Fund Shares of each New Fund and will own
such shares solely by reason of their ownership of the Current Fund Shares
of the corresponding Current Fund immediately before the Reorganization;
IV-6
(c) The Shareholders will pay their own expenses, if any, incurred in
connection with the Reorganization;
(d) There is no intercompany indebtedness between a Current Fund and a
New Fund that was issued or acquired, or will be settled, at a discount;
and
(e) Immediately following consummation of the Reorganization, each New
Fund will hold the same assets, except for assets distributed to
shareholders in the course of its business as a RIC and assets used to pay
expenses incurred in connection with the Reorganization, and be subject to
the same liabilities that the corresponding Current Fund held or was
subject to immediately prior to the Reorganization. Assets used to pay (i)
expenses, (ii) all redemptions (other than redemptions at the usual rate
and frequency of the Current Fund as a series of an open-end investment
company), and (iii) distributions (other than regular, normal
distributions), made by a Current Fund after the date of this Agreement
will, in the aggregate, constitute less than one percent (1%) of its net
assets.
5. COVENANTS
5.1 As soon as practicable after the date of this Agreement, the Company
shall call a meeting of its shareholders (the "Shareholders Meeting") to
consider and act on this Agreement and, in connection therewith, the sale of all
of the Company's assets and the dissolution of the Company as a Maryland
corporation. The Board of Directors of the Company shall recommend that
shareholders approve this Agreement and, in connection therewith, sale of all of
the Company's assets and the dissolution of the Company as a Maryland
corporation. Approval by shareholders of this Agreement will authorize the
Company, and the Company hereby agrees, to vote on the matters referred to in
Sections 5.2 and 5.3.
5.2 Prior to the Closing, the Company shall acquire one New Fund Share in
each New Fund Class of each New Fund for the purpose of enabling the Company to
elect the Company's directors as the Trust's trustees (to serve without limit in
time, except as they may resign or be removed by action of the Trust's trustees
or shareholders), to ratify the selection of each New Fund's independent
accountants, and to vote on the matters referred to in Section 5.3.
5.3 Immediately prior to the Closing, the Trust (on its own behalf and
with respect to each New Fund or each New Fund Class, as appropriate) shall
enter into a Master Investment Advisory Agreement, a Master Sub-Advisory
Agreement, a Master Administrative Services Agreement, Master Distribution
Agreements, a Custodian Agreement, and a Transfer Agency and Servicing
Agreement; shall adopt a plan of distribution pursuant to Rule 12b-l of the 1940
Act for the Series II Shares of each New Fund, a multiple class plan pursuant to
Rule 18f-3 of the 1940 Act; and shall enter into or adopt, as appropriate, such
other agreements and plans as are necessary for each New Fund's operation as a
series of an open-end investment company. Each such agreement and plan shall
have been approved by the Trust's trustees and, to the extent required by law,
by such of those trustees who are not "interested persons" of the Trust (as
defined in the 1940 Act) and by the Company as the sole shareholder of each New
Fund.
5.4 The Company or the Trust, as appropriate, shall file with the SEC one
or more post-effective amendments to the Company's Registration Statement on
Form N-lA under the Securities Act of 1933, as amended, and the 1940 Act, as
amended (the "Registration Statement"), (i) which will contain such amendments
to such Registration Statement as are determined by the Company to be necessary
and appropriate to effect the Reorganization and (ii) which will register the
New Fund Shares to be issued pursuant to Section 2.1 of this Agreement, and
shall use its best efforts to have such post-effective amendment or amendments
to the Registration Statement become effective as of the Closing.
6. CONDITIONS PRECEDENT
The obligations of the Company, on its own behalf and on behalf of each
Current Fund, and the Trust, on its own behalf and on behalf of each New Fund,
will be subject to (a) performance by the other party of all its obligations to
be performed hereunder at or before the Effective Time, (b) all representations
and warranties of the other party contained herein being true and correct in all
material respects as of the date hereof and,
IV-7
except as they may be affected by the transactions contemplated hereby, as of
the Effective Time, with the same force and effect as if made on and as of the
Effective Time, and (c) the further conditions that, at or before the Effective
Time:
6.1 The shareholders of the Company shall have approved this Agreement and
the transactions contemplated by this Agreement in accordance with applicable
law.
6.2 All necessary filings shall have been made with the SEC and state
securities authorities, and no order or directive shall have been received that
any other or further action is required to permit the parties to carry out the
transactions contemplated hereby. All consents, orders, and permits of federal,
state, and local regulatory authorities (including the SEC and state securities
authorities) deemed necessary by either the Company or the Trust to permit
consummation, in all material respects, of the transactions contemplated hereby
shall have been obtained, except where failure to obtain such consults, orders,
and permits would not involve a risk of a material adverse effect on the assets
or properties of either a Current Fund or a New Fund, provided that either the
Company or the Trust may for itself waive any of such conditions.
6.3 Each of the Company and the Trust shall have received an opinion from
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP as to the federal income tax consequences
mentioned below. In rendering such opinion, such counsel may rely as to factual
matters, exclusively and without independent verification, on the
representations made in this Agreement (or in separate letters of representation
that the Company and the Trust shall use their best efforts to deliver to such
counsel) and the certificates delivered pursuant to Section 3.4. Such opinion
shall be substantially to the effect that, based on the facts and assumptions
stated therein and conditioned on consummation of the Reorganization in
accordance with this Agreement, for federal income tax purposes:
(a) The Reorganization will constitute a reorganization within the
meaning of section 368(a) of the Code, and each Current Fund and each New
Fund will be "a party to a reorganization" within the meaning of section
368(b) of the Code;
(b) No gain or loss will be recognized to a Current Fund on the
transfer of its Assets to the corresponding New Fund in exchange solely for
the New Fund's New Fund Shares and the New Fund's assumption of the Current
Fund's Liabilities or on the subsequent distribution of those New Fund
Shares to its Shareholders, in constructive exchange for their Current Fund
Shares, in liquidation of the Current Fund;
(c) No gain or loss will be recognized to a New Fund on its receipt of
the corresponding Current Fund's Assets in exchange for New Fund Shares and
its assumption of the Current Fund's Liabilities;
(d) Each New Fund's basis for the corresponding Current Fund's Assets
will be the same as the basis thereof in the Current Fund's hands
immediately before the Reorganization, and the New Fund's holding period
for those Assets will include the Current Fund's holding period therefor;
(e) A Shareholder will recognize no gain or loss on the constructive
exchange of Current Fund Shares solely for New Fund Shares pursuant to the
Reorganization; and
(f) A Shareholder's basis for the New Fund Shares of each New Fund to
be received in the Reorganization will be the same as the basis for the
Current Fund Shares of the corresponding Current Fund to be constructively
surrendered in exchange for such New Fund Shares, and a Shareholder's
holding period for such New Fund Shares will include its holding period for
such Current Fund Shares, provided that such Current Fund Shares are held
as capital assets by the Shareholder at the Effective Time.
6.4 No stop-order suspending the effectiveness of the Registration
Statement shall have been issued, and no proceeding for that purpose shall have
been initiated or threatened by the SEC (and not withdrawn or terminated).
IV-8
At any time prior to the Closing, any of the foregoing conditions (except
those set forth in Sections 6.1 and 6.3) may be waived by the directors/trustees
of either the Company or the Trust if, in their judgment, such waiver will not
have a material adverse effect on the interests of the Current Fund's
Shareholders.
7. EXPENSES
Except as otherwise provided in Section 4.3(c), all expenses incurred in
connection with the transactions contemplated by this Agreement (regardless of
whether they are consummated) will be borne by the parties as they mutually
agree.
8. ENTIRE AGREEMENT
Neither party has made any representation, warranty, or covenant not set
forth herein, and this Agreement constitutes the entire agreement between the
parties.
9. AMENDMENT
This Agreement may be amended, modified, or supplemented at any time,
notwithstanding its approval by the Company's shareholders, in such manner as
may be mutually agreed upon in writing by the parties; provided that following
such approval no such amendment shall have a material adverse effect on the
shareholders' interests.
10. TERMINATION
This Agreement may be terminated at any time at or prior to the Effective
Time, whether before or after approval by the Company's shareholders:
10.1 By either the Company or the Trust (a) in the event of the other
party's material breach of any representation, warranty, or covenant
contained herein to be performed at or prior to the Effective Time, (b) if
a condition to its obligations has not been met and it reasonably appears
that such condition will not or cannot be met, or (c) if the Closing has
not occurred on or before June 30, 2004; or
10.2 By the parties' mutual agreement.
Except as otherwise provided in Section 7, in the event of termination
under Sections 10.1(c) or 10.2, there shall be no liability for damages on the
part of either the Company or the Trust or any Current Fund or corresponding New
Fund, to the other.
11. MISCELLANEOUS
11.1 This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware; provided that, in the case of any
conflict between such laws and the federal securities laws, the latter shall
govern.
11.2 Nothing expressed or implied herein is intended or shall be construed
to confer upon or give any person, firm, trust, or corporation other than the
parties and their respective successors and assigns any rights or remedies under
or by reason of this Agreement.
11.3 The execution and delivery of this Agreement have been authorized by
the Trust's trustees, and this Agreement has been executed and delivered by a
duly authorized officer of the Trust in his or her capacity as an officer of the
Trust intending to bind the Trust as provided herein, and no officer, trustee or
shareholder of the Trust shall be personally liable for the liabilities or
obligations of the Trust incurred hereunder. The liabilities and obligations of
the Trust pursuant to this Agreement shall be enforceable against the assets of
the New Funds only and not against the assets of the Trust generally.
IV-9
IN WITNESS WHEREOF, each party has caused this Agreement to be executed and
delivered by its duly authorized officers as of the day and year first written
above.
Attest: INVESCO VARIABLE INVESTMENT FUNDS, INC.,
on behalf of each of its series
listed in Schedule A
------------------------------------------------ By: ---------------------------------------------
Title: ------------------------------------------
Attest:
AIM VARIABLE INSURANCE FUNDS,
on behalf of each of its series
listed in Schedule A
------------------------------------------------ By: ---------------------------------------------
Title: ------------------------------------------
IV-10
SCHEDULE A
SERIES OF INVESCO VARIABLE INVESTMENT FUNDS, INC. CORRESPONDING SERIES OF AIM VARIABLE INSURANCE FUNDS
(EACH A "CURRENT FUND") (EACH A "NEW FUND")
------------------------------------------------- ----------------------------------------------------
INVESCO VIF -- Core Equity Fund INVESCO VIF -- Core Equity Fund
INVESCO VIF -- Dynamics Fund INVESCO VIF -- Dynamics Fund
INVESCO VIF -- Financial Services Fund INVESCO VIF -- Financial Services Fund
INVESCO VIF -- Growth Fund INVESCO VIF -- Growth Fund
INVESCO VIF -- Health Sciences Fund INVESCO VIF -- Health Sciences Fund
INVESCO VIF -- High Yield Fund INVESCO VIF -- High Yield Fund
INVESCO VIF -- Leisure Fund INVESCO VIF -- Leisure Fund
INVESCO VIF -- Real Estate Opportunity Fund INVESCO VIF -- Real Estate Opportunity Fund
INVESCO VIF -- Small Company Growth Fund INVESCO VIF -- Small Company Growth Fund
INVESCO VIF -- Technology Fund INVESCO VIF -- Technology Fund
INVESCO VIF -- Telecommunications Fund INVESCO VIF -- Telecommunications Fund
INVESCO VIF -- Total Return Fund INVESCO VIF -- Total Return Fund
INVESCO VIF -- Utilities Fund INVESCO VIF -- Utilities Fund
IV-11
SCHEDULE B
SHARES OF COMMON STOCK OF EACH CURRENT FUND CORRESPONDING SHARES OF COMMON STOCK OF EACH NEW FUND
--------------------------------------------- -----------------------------------------------------
INVESCO VIF -- Core Equity Fund INVESCO VIF -- Core Equity Fund
Series I Shares Series I Shares
Series II Shares Series II Shares
INVESCO VIF -- Dynamics Fund INVESCO VIF -- Dynamics Fund
Series I Shares Series I Shares
Series II Shares Series II Shares
INVESCO VIF -- Financial Services Fund INVESCO VIF -- Financial Services Fund
Series I Shares Series I Shares
Series II Shares Series II Shares
INVESCO VIF -- Growth Fund INVESCO VIF -- Growth Fund
Series I Shares Series I Shares
Series II Shares Series II Shares
INVESCO VIF -- Health Sciences Fund INVESCO VIF -- Health Sciences Fund
Series I Shares Series I Shares
Series II Shares Series II Shares
INVESCO VIF -- High Yield Fund INVESCO VIF -- High Yield Fund
Series I Shares Series I Shares
Series II Shares Series II Shares
INVESCO VIF -- Leisure Fund INVESCO VIF -- Leisure Fund
Series I Shares Series I Shares
Series II Shares Series II Shares
INVESCO VIF -- Real Estate Opportunity Fund INVESCO VIF -- Real Estate Opportunity Fund
Series I Shares Series I Shares
Series II Shares Series II Shares
INVESCO VIF -- Small Company Growth Fund INVESCO VIF -- Small Company Growth Fund
Series I Shares Series I Shares
Series II Shares Series II Shares
INVESCO VIF -- Technology Fund INVESCO VIF -- Technology Fund
Series I Shares Series I Shares
Series II Shares Series II Shares
INVESCO VIF -- Telecommunications Fund INVESCO VIF -- Telecommunications Fund
Series I Shares Series I Shares
Series II Shares Series II Shares
INVESCO VIF -- Total Return Fund INVESCO VIF -- Total Return Fund
Series I Shares Series I Shares
Series II Shares Series II Shares
INVESCO VIF -- Utilities Fund INVESCO VIF -- Utilities Fund
Series I Shares Series I Shares
Series II Shares Series II Shares
IV-12
SCHEDULE C
PERMITTED COMBINATIONS OF FUNDS
AIM V.I. Global Utilities Fund into INVESCO VIF -- Utilities Fund
AIM V.I. New Technology Fund into INVESCO VIF -- Technology Fund
INVESCO VIF -- Telecommunications Fund into INVESCO VIF -- Technology Fund
INVESCO VIF -- Growth Fund into AIM V.I. Growth Fund
INVESCO VIF -- High Yield Fund into AIM V.I. High Yield Fund
LSA Basic Value Fund into AIM V.I. Basic Value Fund
IV-13
APPENDIX V
PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES
POLICIES AND PROCEDURES
AS ADOPTED BY THE AUDIT COMMITTEES OF
THE AIM FUNDS AND THE INVESCO FUNDS (THE "FUNDS")
AMENDED NOVEMBER 6, 2003
I. STATEMENT OF PRINCIPLES
Under the Xxxxxxxx-Xxxxx Act of 2002 and rules adopted by the Securities
and Exchange Commission ("SEC") ("Rules"), the Audit Committees of the Funds'
(the "Audit Committee") Board of Directors/ Trustees (the "Board") are
responsible for the appointment, compensation and oversight of the work of
independent accountants (an "Auditor"). As part of this responsibility and to
assure that the Auditor's independence is not impaired, the Audit Committee
pre-approves the audit and non-audit services provided to the Funds by the
Auditor, as well as all non-audit services provided by the Auditor to the Funds'
investment adviser and to affiliates of the adviser that provide ongoing
services to the Funds ("Service Affiliates") if the services directly impact the
Funds' operations or financial reporting. The SEC Rules also specify the types
of services that an Auditor may not provide to its audit client. The following
policies and procedures comply with the requirements for pre-approval and
provide a mechanism by which management of the Funds may request and secure
pre-approval of audit and non-audit services in an orderly manner with minimal
disruption to normal business operations.
Proposed services either may be pre-approved without consideration of
specific case-by-case services by the Audit Committee ("general pre-approval")
or require the specific pre-approval of the Audit Committee ("specific
pre-approval"). As set forth in these policies and procedures, unless a type of
service has received general pre-approval, it will require specific pre-approval
by the Audit Committee. Additionally, any proposed services exceeding general
pre-approved cost levels or established amounts will also require specific pre-
approval by the Audit Committee.
The Audit Committee will annually review and pre-approve the services that
may be provided by the Auditor without obtaining specific pre-approval from the
Audit Committee. The term of any general pre-approval runs from the date of such
pre-approval through September 30th of the following year, unless the Audit
Committee considers a different period and states otherwise. The Audit Committee
will add to or subtract from the list of general pre-approved services from time
to time, based on subsequent determinations.
The purpose of these policies and procedures is to set forth the guidelines
to assist the Audit Committee in fulfilling its responsibilities.
II. DELEGATION
The Audit Committee may from time to time delegate pre-approval authority
to one or more of its members who are Independent Directors. All decisions to
pre-approve a service by a delegated member shall be reported to the Audit
Committee at its next-scheduled meeting.
III. AUDIT SERVICES
The annual audit services engagement terms and fees will be subject to
specific pre-approval of the Audit Committee. Audit services include the annual
financial statement audit and other procedures such as tax provision work that
is required to be performed by the independent auditor to be able to form an
opinion on the Funds' financial statements. The Audit Committee will obtain,
review and consider sufficient information concerning the proposed Auditor to
make a reasonable evaluation of the Auditor's qualifications and independence.
In addition to the annual Audit services engagement, the Audit Committee
may grant general pre-approval for other audit services, which are those
services that only the independent auditor reasonably can provide. Other Audit
services may include services such as issuing consents for the inclusion of
audited
V-1
financial statements with SEC registration statements, periodic reports and
other documents filed with the SEC or other documents issued in connection with
securities offerings.
IV. GENERAL PRE-APPROVAL OF NON-AUDIT SERVICES
The Audit Committee may provide general pre-approval of types of non-audit
services described in this Section IV to the Funds and its Service Affiliates if
the Committee believes that the provision of the service will not impair the
independence of the Auditor, is consistent with the SEC's Rules on auditor
independence, and otherwise conforms to the Audit Committee's general principles
and policies as set forth herein.
AUDIT-RELATED SERVICES
"Audit-related services" are assurance and related services that are
reasonably related to the performance of the audit or review of the Fund's
financial statements or that are traditionally performed by the independent
auditor. Audit-related services include, among others, accounting consultations
related to accounting, financial reporting or disclosure matters not classified
as "Audit services"; assistance with understanding and implementing new
accounting and financial reporting guidance from rulemaking authorities; and
agreed-upon procedures related to mergers.
TAX SERVICES
"Tax services" include, but are not limited to, the review and signing of
the Funds' federal tax returns, the review of required distributions by the
Funds and consultations regarding tax matters such as the tax treatment of new
investments or the impact of new regulations. The Audit Committee will
scrutinize carefully the retention of the Auditor in connection with a
transaction initially recommended by the Auditor, the major business purpose of
which may be tax avoidance or the tax treatment of which may not be supported in
the Internal Revenue Code and related regulations. The Audit Committee will
consult with the Funds' Treasurer (or his or her designee) and may consult with
outside counsel or advisors as necessary to ensure the consistency of Tax
services rendered by the Auditor with the foregoing policy.
ALL OTHER SERVICES
The Audit Committee may pre-approve non-audit services classified as "All
other services" that are not categorically prohibited by the SEC, as listed in
Exhibit 1 to this policy.
V. SPECIFIC PRE-APPROVAL OF NON-AUDIT SERVICES
The Audit Committee may provide specific pre-approval of any non-audit
services to the Funds and its Service Affiliates if the Audit Committee believes
that the provision of the service will not impair the independence of the
auditor, is consistent with the SEC Rules on auditor independence, and otherwise
conforms to the Audit Committees' general principles and policies as set forth
herein.
VI. PRE-APPROVAL FEE LEVELS OR ESTABLISHED AMOUNTS
Pre-approval fee levels or established amounts for services to be provided
by the Auditor under general pre-approval policies will be set annually by the
Audit Committee. Any proposed services exceeding these levels or amounts will
require specific pre-approval by the Audit Committee. The Audit Committee will
always factor in the overall relationship of fees for audit and non-audit
services in determining whether to pre-approve any such services.
VII. PROCEDURES
On an annual basis, A I M Advisors, Inc. ("AIM") will submit to the Audit
Committee for general pre-approval, a list of non-audit services that the Funds
or Service Affiliates of the Funds may request from the Auditor. The list will
describe the non-audit services in reasonable detail and will include an
estimated range of fees where possible and such other information as the Audit
Committee may request.
V-2
Each request for services to be provided by the Auditor under the general
pre-approval of the Audit Committee will be submitted to the Funds' Treasurer
(or his or her designee) and must include a detailed description of the services
to be rendered. The Treasurer or his or her designee will ensure that such
services are included within the list of services that have received the general
pre-approval of the Audit Committee. The Audit Committee will be informed at the
next regularly scheduled Audit Committee meeting of any such services rendered
by the Auditor.
Each request to provide services that require specific approval by the
Audit Committee shall be submitted to the Audit Committee jointly by the Fund's
Treasurer or his or her designee and the Auditor, and must include a joint
statement that, in their view, such request is consistent with the policies and
procedures and the SEC Rules.
Non-audit services pursuant to the de minimis exception provided by the SEC
Rules will be promptly brought to the attention of the Audit Committee for
approval, including documentation that each of the conditions for this
exception, as set forth in the SEC Rules, has been satisfied.
On at least an annual basis, the Auditor will prepare a summary of all the
services provided to any entity in the investment company complex as defined in
section 2-01(f)(14) of Regulation S-X in sufficient detail as to the nature of
the engagement and the fees associated with those services.
The Audit Committee has designated the Funds' Treasurer to monitor the
performance of all services provided by the Auditor and to ensure such services
are in compliance with these policies and procedures. The Funds' Treasurer will
report to the Audit Committee on a periodic basis as to the results of such
monitoring. Both the Funds' Treasurer and management of AIM will immediately
report to the chairman of the Audit Committee any breach of these policies and
procedures that comes to the attention of the Funds' Treasurer or senior
management of AIM.
V-3
EXHIBIT 1
CONDITIONALLY PROHIBITED NON-AUDIT SERVICES (NOT PROHIBITED IF THE FUND CAN
REASONABLY CONCLUDE THAT THE RESULTS OF THE SERVICE WOULD NOT BE SUBJECT TO
AUDIT PROCEDURES IN CONNECTION WITH THE AUDIT OF THE FUND'S FINANCIAL
STATEMENTS)
- Bookkeeping or other services related to the accounting records or
financial statements of the audit client
- Financial information systems design and implementation
- Appraisal or valuation services, fairness opinions, or
contribution-in-kind reports
- Actuarial services
- Internal audit outsourcing services
CATEGORICALLY PROHIBITED NON-AUDIT SERVICES
- Management functions
- Human resources
- Broker-dealer, investment adviser, or investment banking services
- Legal services
- Expert services unrelated to the audit
- Any other service that the Public Company Oversight Board determines by
regulation is impermissible
V-4
EACH SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE VOTE YOUR PROXY TODAY!
PROXY CARD PROXY CARD
PROXY SOLICITED BY THE BOARD OF DIRECTORS (THE "BOARD")
INVESCO VIF - CORE EQUITY FUND
(A PORTFOLIO OF INVESCO VARIABLE INVESTMENT FUNDS, INC.)
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 2, 2004
The undersigned hereby appoints Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxxxxxx, and each of them separately, proxies with the 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
April 2, 2004, at 3:00 p.m., Central Time, and at any adjournment
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 CHOICES INDICATED, THE SHARES WILL BE VOTED "FOR" EACH
NOMINEE AND "FOR" THE APPROVAL OF THE PROPOSALS.
PROXY MUST BE SIGNED AND DATED BELOW.
Dated _____________________ 2004
-------------------------------------
-------------------------------------
Signature(s) (if held jointly)
(Please sign in 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,
PLEASE SIGN IN FULL CORPORATE NAME
AND INDICATE THE SIGNER'S OFFICE. IF
A PARTNER, PLEASE SIGN IN THE
PARTNERSHIP NAME.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. [X]
PLEASE DO NOT USE FINE POINT PENS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD. THE BOARD RECOMMENDS VOTING
"FOR" THE PROPOSAL.
WITHHOLD
FOR AUTHORITY FOR ALL
1. To elect sixteen individuals to the Board of INVESCO Variable Investment ALL FOR ALL EXCEPT*
Funds, Inc. ("Company"), each of whom will serve until his or her successor NOMINEES
is elected and qualified: [ ] [ ] [ ]
01 Xxx X. Xxxxx 05 Xxxxxx X. Xxxxxx 09 Xxxxxx X. Xxxxxx 13 Xxxx X. Xxxxxxx
02 Xxxxx X. Xxxxxx 06 Xxxxxx X. Xxxx, Xx. 10 Xxxxxx X. Xxxxx 14 Xxxxx X. Xxxxx
03 Xxxxx X. Xxxxx 07 Xxxx X. Xxxxxx 11 Xxxxx Xxxxxx-Xxxxx 15 Xxxxx Xxxx, Ph.D.
04 Xxxxx X. Xxxxxxxx 08 Xxxx Xxxxxxxxxx 12 Xxxxx X. Xxxxxxx 16 Xxxx X. Xxxxxxxxxx
*TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, XXXX THE "FOR ALL
EXCEPT" BOX AND WRITE THE NOMINEE'S NUMBER(S) ON THE LINE PROVIDED.
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]
FOR AGAINST ABSTAIN
3. To approve a new Sub-Advisory Agreement between A I M Advisors, Inc. and [ ] [ ] [ ]
INVESCO Institutional (N.A.), Inc.
FOR AGAINST ABSTAIN
4. To approve an
Agreement and Plan of Reorganization to redomesticate each [ ] [ ] [ ]
series portfolio of Company as a new series portfolio of AIM Variable
Insurance Funds, an existing Delaware statutory trust.
5. NOT APPLICABLE
6. NOT APPLICABLE
IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
EACH SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE VOTE YOUR PROXY TODAY!
PROXY CARD PROXY CARD
PROXY SOLICITED BY THE BOARD OF DIRECTORS (THE "BOARD")
INVESCO VIF - DYNAMICS FUND
(A PORTFOLIO OF INVESCO VARIABLE INVESTMENT FUNDS, INC.)
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 2, 2004
The undersigned hereby appoints Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxxxxxx, and each of them separately, proxies with the 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
April 2, 2004, at 3:00 p.m., Central Time, and at any adjournment
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 CHOICES INDICATED, THE SHARES WILL BE VOTED "FOR" EACH
NOMINEE AND "FOR" THE APPROVAL OF THE PROPOSALS.
PROXY MUST BE SIGNED AND DATED BELOW.
Dated _____________________ 2004
-------------------------------------
-------------------------------------
Signature(s) (if held jointly)
(Please sign in 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,
PLEASE SIGN IN FULL CORPORATE NAME
AND INDICATE THE SIGNER'S OFFICE. IF
A PARTNER, PLEASE SIGN IN THE
PARTNERSHIP NAME.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. [X]
PLEASE DO NOT USE FINE POINT PENS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD. THE BOARD RECOMMENDS VOTING
"FOR" THE PROPOSAL.
WITHHOLD
FOR AUTHORITY FOR ALL
1. To elect sixteen individuals to the Board of INVESCO Variable Investment ALL FOR ALL EXCEPT*
Funds, Inc. ("Company"), each of whom will serve until his or her successor NOMINEES
is elected and qualified: [ ] [ ] [ ]
01 Xxx X. Xxxxx 05 Xxxxxx X. Xxxxxx 09 Xxxxxx X. Xxxxxx 13 Xxxx X. Xxxxxxx
02 Xxxxx X. Xxxxxx 06 Xxxxxx X. Xxxx, Xx. 10 Xxxxxx X. Xxxxx 14 Xxxxx X. Xxxxx
03 Xxxxx X. Xxxxx 07 Xxxx X. Xxxxxx 11 Xxxxx Xxxxxx-Xxxxx 15 Xxxxx Xxxx, Ph.D.
04 Xxxxx X. Xxxxxxxx 08 Xxxx Xxxxxxxxxx 12 Xxxxx X. Xxxxxxx 16 Xxxx X. Xxxxxxxxxx
*TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, XXXX THE "FOR ALL
EXCEPT" BOX AND WRITE THE NOMINEE'S NUMBER(S) ON THE LINE PROVIDED.
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]
FOR AGAINST ABSTAIN
3. To approve a new Sub-Advisory Agreement between A I M Advisors, Inc. and [ ] [ ] [ ]
INVESCO Institutional (N.A.), Inc.
FOR AGAINST ABSTAIN
4. To approve an
Agreement and Plan of Reorganization to redomesticate each [ ] [ ] [ ]
series portfolio of Company as a new series portfolio of AIM Variable
Insurance Funds, an existing Delaware statutory trust.
5. NOT APPLICABLE
6. NOT APPLICABLE
IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
EACH SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE VOTE YOUR PROXY TODAY!
PROXY CARD PROXY CARD
PROXY SOLICITED BY THE BOARD OF DIRECTORS (THE "BOARD")
INVESCO VIF - FINANCIAL SERVICES FUND
(A PORTFOLIO OF INVESCO VARIABLE INVESTMENT FUNDS, INC.)
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 2, 2004
The undersigned hereby appoints Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxxxxxx, and each of them separately, proxies with the 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
April 2, 2004, at 3:00 p.m., Central Time, and at any adjournment
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 CHOICES INDICATED, THE SHARES WILL BE VOTED "FOR" EACH
NOMINEE AND "FOR" THE APPROVAL OF THE PROPOSALS.
PROXY MUST BE SIGNED AND DATED BELOW.
Dated _____________________ 2004
-------------------------------------
-------------------------------------
Signature(s) (if held jointly)
(Please sign in 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,
PLEASE SIGN IN FULL CORPORATE NAME
AND INDICATE THE SIGNER'S OFFICE. IF
A PARTNER, PLEASE SIGN IN THE
PARTNERSHIP NAME.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. [X]
PLEASE DO NOT USE FINE POINT PENS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD. THE BOARD RECOMMENDS VOTING
"FOR" THE PROPOSAL.
WITHHOLD
FOR AUTHORITY FOR ALL
1. To elect sixteen individuals to the Board of INVESCO Variable Investment ALL FOR ALL EXCEPT*
Funds, Inc. ("Company"), each of whom will serve until his or her successor NOMINEES
is elected and qualified: [ ] [ ] [ ]
01 Xxx X. Xxxxx 05 Xxxxxx X. Xxxxxx 09 Xxxxxx X. Xxxxxx 13 Xxxx X. Xxxxxxx
02 Xxxxx X. Xxxxxx 06 Xxxxxx X. Xxxx, Xx. 10 Xxxxxx X. Xxxxx 14 Xxxxx X. Xxxxx
03 Xxxxx X. Xxxxx 07 Xxxx X. Xxxxxx 11 Xxxxx Xxxxxx-Xxxxx 15 Xxxxx Xxxx, Ph.D.
04 Xxxxx X. Xxxxxxxx 08 Xxxx Xxxxxxxxxx 12 Xxxxx X. Xxxxxxx 16 Xxxx X. Xxxxxxxxxx
*TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, XXXX THE "FOR ALL
EXCEPT" BOX AND WRITE THE NOMINEE'S NUMBER(S) ON THE LINE PROVIDED.
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]
FOR AGAINST ABSTAIN
3. To approve a new Sub-Advisory Agreement between A I M Advisors, Inc. and [ ] [ ] [ ]
INVESCO Institutional (N.A.), Inc.
FOR AGAINST ABSTAIN
4. To approve an
Agreement and Plan of Reorganization to redomesticate each [ ] [ ] [ ]
series portfolio of Company as a new series portfolio of AIM Variable
Insurance Funds, an existing Delaware statutory trust.
5. NOT APPLICABLE
6. NOT APPLICABLE
IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
EACH SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE VOTE YOUR PROXY TODAY!
PROXY CARD PROXY CARD
PROXY SOLICITED BY THE BOARD OF DIRECTORS (THE "BOARD")
INVESCO VIF - HEALTH SCIENCES FUND
(A PORTFOLIO OF INVESCO VARIABLE INVESTMENT FUNDS, INC.)
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 2, 2004
The undersigned hereby appoints Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxxxxxx, and each of them separately, proxies with the 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
April 2, 2004, at 3:00 p.m., Central Time, and at any adjournment
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 CHOICES INDICATED, THE SHARES WILL BE VOTED "FOR" EACH
NOMINEE AND "FOR" THE APPROVAL OF THE PROPOSALS.
PROXY MUST BE SIGNED AND DATED BELOW.
Dated _____________________ 2004
-------------------------------------
-------------------------------------
Signature(s) (if held jointly)
(Please sign in 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,
PLEASE SIGN IN FULL CORPORATE NAME
AND INDICATE THE SIGNER'S OFFICE. IF
A PARTNER, PLEASE SIGN IN THE
PARTNERSHIP NAME.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. [X]
PLEASE DO NOT USE FINE POINT PENS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD. THE BOARD RECOMMENDS VOTING
"FOR" THE PROPOSAL.
WITHHOLD
FOR AUTHORITY FOR ALL
1. To elect sixteen individuals to the Board of INVESCO Variable Investment ALL FOR ALL EXCEPT*
Funds, Inc. ("Company"), each of whom will serve until his or her successor NOMINEES
is elected and qualified: [ ] [ ] [ ]
01 Xxx X. Xxxxx 05 Xxxxxx X. Xxxxxx 09 Xxxxxx X. Xxxxxx 13 Xxxx X. Xxxxxxx
02 Xxxxx X. Xxxxxx 06 Xxxxxx X. Xxxx, Xx. 10 Xxxxxx X. Xxxxx 14 Xxxxx X. Xxxxx
03 Xxxxx X. Xxxxx 07 Xxxx X. Xxxxxx 11 Xxxxx Xxxxxx-Xxxxx 15 Xxxxx Xxxx, Ph.D.
04 Xxxxx X. Xxxxxxxx 08 Xxxx Xxxxxxxxxx 12 Xxxxx X. Xxxxxxx 16 Xxxx X. Xxxxxxxxxx
*TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, XXXX THE "FOR ALL
EXCEPT" BOX AND WRITE THE NOMINEE'S NUMBER(S) ON THE LINE PROVIDED.
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]
FOR AGAINST ABSTAIN
3. To approve a new Sub-Advisory Agreement between A I M Advisors, Inc. and [ ] [ ] [ ]
INVESCO Institutional (N.A.), Inc.
FOR AGAINST ABSTAIN
4. To approve an
Agreement and Plan of Reorganization to redomesticate each [ ] [ ] [ ]
series portfolio of Company as a new series portfolio of AIM Variable
Insurance Funds, an existing Delaware statutory trust.
5. NOT APPLICABLE
6. NOT APPLICABLE
IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
EACH SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE VOTE YOUR PROXY TODAY!
PROXY CARD PROXY CARD
PROXY SOLICITED BY THE BOARD OF DIRECTORS (THE "BOARD")
INVESCO VIF - LEISURE FUND
(A PORTFOLIO OF INVESCO VARIABLE INVESTMENT FUNDS, INC.)
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 2, 2004
The undersigned hereby appoints Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxxxxxx, and each of them separately, proxies with the 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
April 2, 2004, at 3:00 p.m., Central Time, and at any adjournment
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 CHOICES INDICATED, THE SHARES WILL BE VOTED "FOR" EACH
NOMINEE AND "FOR" THE APPROVAL OF THE PROPOSALS.
PROXY MUST BE SIGNED AND DATED BELOW.
Dated _____________________ 2004
-------------------------------------
-------------------------------------
Signature(s) (if held jointly)
(Please sign in 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,
PLEASE SIGN IN FULL CORPORATE NAME
AND INDICATE THE SIGNER'S OFFICE. IF
A PARTNER, PLEASE SIGN IN THE
PARTNERSHIP NAME.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. [X]
PLEASE DO NOT USE FINE POINT PENS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD. THE BOARD RECOMMENDS VOTING
"FOR" THE PROPOSAL.
WITHHOLD
FOR AUTHORITY FOR ALL
1. To elect sixteen individuals to the Board of INVESCO Variable Investment ALL FOR ALL EXCEPT*
Funds, Inc. ("Company"), each of whom will serve until his or her successor NOMINEES
is elected and qualified: [ ] [ ] [ ]
01 Xxx X. Xxxxx 05 Xxxxxx X. Xxxxxx 09 Xxxxxx X. Xxxxxx 13 Xxxx X. Xxxxxxx
02 Xxxxx X. Xxxxxx 06 Xxxxxx X. Xxxx, Xx. 10 Xxxxxx X. Xxxxx 14 Xxxxx X. Xxxxx
03 Xxxxx X. Xxxxx 07 Xxxx X. Xxxxxx 11 Xxxxx Xxxxxx-Xxxxx 15 Xxxxx Xxxx, Ph.D.
04 Xxxxx X. Xxxxxxxx 08 Xxxx Xxxxxxxxxx 12 Xxxxx X. Xxxxxxx 16 Xxxx X. Xxxxxxxxxx
*TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, XXXX THE "FOR ALL
EXCEPT" BOX AND WRITE THE NOMINEE'S NUMBER(S) ON THE LINE PROVIDED.
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]
FOR AGAINST ABSTAIN
3. To approve a new Sub-Advisory Agreement between A I M Advisors, Inc. and [ ] [ ] [ ]
INVESCO Institutional (N.A.), Inc.
FOR AGAINST ABSTAIN
4. To approve an
Agreement and Plan of Reorganization to redomesticate each [ ] [ ] [ ]
series portfolio of Company as a new series portfolio of AIM Variable
Insurance Funds, an existing Delaware statutory trust.
5. NOT APPLICABLE
6. NOT APPLICABLE
IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
EACH SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE VOTE YOUR PROXY TODAY!
PROXY CARD PROXY CARD
PROXY SOLICITED BY THE BOARD OF DIRECTORS (THE "BOARD")
INVESCO VIF - REAL ESTATE OPPORTUNITY FUND
(A PORTFOLIO OF INVESCO VARIABLE INVESTMENT FUNDS, INC.)
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 2, 2004
The undersigned hereby appoints Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxxxxxx, and each of them separately, proxies with the 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
April 2, 2004, at 3:00 p.m., Central Time, and at any adjournment
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 CHOICES INDICATED, THE SHARES WILL BE VOTED "FOR" EACH
NOMINEE AND "FOR" THE APPROVAL OF THE PROPOSALS.
PROXY MUST BE SIGNED AND DATED BELOW.
Dated _____________________ 2004
-------------------------------------
-------------------------------------
Signature(s) (if held jointly)
(Please sign in 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,
PLEASE SIGN IN FULL CORPORATE NAME
AND INDICATE THE SIGNER'S OFFICE. IF
A PARTNER, PLEASE SIGN IN THE
PARTNERSHIP NAME.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. [X]
PLEASE DO NOT USE FINE POINT PENS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD. THE BOARD RECOMMENDS VOTING
"FOR" THE PROPOSAL.
WITHHOLD
FOR AUTHORITY FOR ALL
1. To elect sixteen individuals to the Board of INVESCO Variable Investment ALL FOR ALL EXCEPT*
Funds, Inc. ("Company"), each of whom will serve until his or her successor NOMINEES
is elected and qualified: [ ] [ ] [ ]
01 Xxx X. Xxxxx 05 Xxxxxx X. Xxxxxx 09 Xxxxxx X. Xxxxxx 13 Xxxx X. Xxxxxxx
02 Xxxxx X. Xxxxxx 06 Xxxxxx X. Xxxx, Xx. 10 Xxxxxx X. Xxxxx 14 Xxxxx X. Xxxxx
03 Xxxxx X. Xxxxx 07 Xxxx X. Xxxxxx 11 Xxxxx Xxxxxx-Xxxxx 15 Xxxxx Xxxx, Ph.D.
04 Xxxxx X. Xxxxxxxx 08 Xxxx Xxxxxxxxxx 12 Xxxxx X. Xxxxxxx 16 Xxxx X. Xxxxxxxxxx
*TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, XXXX THE "FOR ALL
EXCEPT" BOX AND WRITE THE NOMINEE'S NUMBER(S) ON THE LINE PROVIDED.
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]
FOR AGAINST ABSTAIN
3. To approve a new Sub-Advisory Agreement between A I M Advisors, Inc. and [ ] [ ] [ ]
INVESCO Institutional (N.A.), Inc.
FOR AGAINST ABSTAIN
4. To approve an Agreement and Plan of Reorganization to redomesticate each [ ] [ ] [ ]
series portfolio of Company as a new series portfolio of AIM Variable
Insurance Funds, an existing Delaware statutory trust.
5A. To approve changing the investment objective of INVESCO VIF-Real Estate [ ] [ ] [ ]
Opportunity Fund
5B. To approve making new investment objective non-fundamental of INVESCO [ ] [ ] [ ]
VIF-Real Estate Opportunity Fund.
6. To approve changing the fundamental investment restrictions of INVESCO FOR ALL
VIF-Real Estate Opportunity Fund: EXCEPT AS AGAINST ABSTAIN
MARKED ALL ALL
(a) Issuer diversification (e) Purchasing or selling real estate [ ] [ ] [ ]
(b) Borrowing money and issuing (f) Purchasing or selling commodities
senior securities (g) Making loans
(c) Underwriting securities (h) Investing the fund's assets in
(d) Industry concentration an open-end fund.
IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
EACH SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE VOTE YOUR PROXY TODAY!
PROXY CARD PROXY CARD
PROXY SOLICITED BY THE BOARD OF DIRECTORS (THE "BOARD")
INVESCO VIF - SMALL COMPANY GROWTH FUND
(A PORTFOLIO OF INVESCO VARIABLE INVESTMENT FUNDS, INC.)
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 2, 2004
The undersigned hereby appoints Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxxxxxx, and each of them separately, proxies with the 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
April 2, 2004, at 3:00 p.m., Central Time, and at any adjournment
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 CHOICES INDICATED, THE SHARES WILL BE VOTED "FOR" EACH
NOMINEE AND "FOR" THE APPROVAL OF THE PROPOSALS.
PROXY MUST BE SIGNED AND DATED BELOW.
Dated _____________________ 2004
-------------------------------------
-------------------------------------
Signature(s) (if held jointly)
(Please sign in 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,
PLEASE SIGN IN FULL CORPORATE NAME
AND INDICATE THE SIGNER'S OFFICE. IF
A PARTNER, PLEASE SIGN IN THE
PARTNERSHIP NAME.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. [X]
PLEASE DO NOT USE FINE POINT PENS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD. THE BOARD RECOMMENDS VOTING
"FOR" THE PROPOSAL.
WITHHOLD
FOR AUTHORITY FOR ALL
1. To elect sixteen individuals to the Board of INVESCO Variable Investment ALL FOR ALL EXCEPT*
Funds, Inc. ("Company"), each of whom will serve until his or her successor NOMINEES
is elected and qualified: [ ] [ ] [ ]
01 Xxx X. Xxxxx 05 Xxxxxx X. Xxxxxx 09 Xxxxxx X. Xxxxxx 13 Xxxx X. Xxxxxxx
02 Xxxxx X. Xxxxxx 06 Xxxxxx X. Xxxx, Xx. 10 Xxxxxx X. Xxxxx 14 Xxxxx X. Xxxxx
03 Xxxxx X. Xxxxx 07 Xxxx X. Xxxxxx 11 Xxxxx Xxxxxx-Xxxxx 15 Xxxxx Xxxx, Ph.D.
04 Xxxxx X. Xxxxxxxx 08 Xxxx Xxxxxxxxxx 12 Xxxxx X. Xxxxxxx 16 Xxxx X. Xxxxxxxxxx
*TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, XXXX THE "FOR ALL
EXCEPT" BOX AND WRITE THE NOMINEE'S NUMBER(S) ON THE LINE PROVIDED.
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]
FOR AGAINST ABSTAIN
3. To approve a new Sub-Advisory Agreement between A I M Advisors, Inc. and [ ] [ ] [ ]
INVESCO Institutional (N.A.), Inc.
FOR AGAINST ABSTAIN
4. To approve an Agreement and Plan of Reorganization to redomesticate each [ ] [ ] [ ]
series portfolio of Company as a new series portfolio of AIM Variable
Insurance Funds, an existing Delaware statutory trust.
5. NOT APPLICABLE
6. NOT APPLICABLE
IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
EACH SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE VOTE YOUR PROXY TODAY!
PROXY CARD PROXY CARD
PROXY SOLICITED BY THE BOARD OF DIRECTORS (THE "BOARD")
INVESCO VIF - TECHNOLOGY FUND
(A PORTFOLIO OF INVESCO VARIABLE INVESTMENT FUNDS, INC.)
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 2, 2004
The undersigned hereby appoints Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxxxxxx, and each of them separately, proxies with the 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
April 2, 2004, at 3:00 p.m., Central Time, and at any adjournment
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 CHOICES INDICATED, THE SHARES WILL BE VOTED "FOR" EACH
NOMINEE AND "FOR" THE APPROVAL OF THE PROPOSALS.
PROXY MUST BE SIGNED AND DATED BELOW.
Dated _____________________ 2004
-------------------------------------
-------------------------------------
Signature(s) (if held jointly)
(Please sign in 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,
PLEASE SIGN IN FULL CORPORATE NAME
AND INDICATE THE SIGNER'S OFFICE. IF
A PARTNER, PLEASE SIGN IN THE
PARTNERSHIP NAME.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. [X]
PLEASE DO NOT USE FINE POINT PENS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD. THE BOARD RECOMMENDS VOTING
"FOR" THE PROPOSAL.
WITHHOLD
FOR AUTHORITY FOR ALL
1. To elect sixteen individuals to the Board of INVESCO Variable Investment ALL FOR ALL EXCEPT*
Funds, Inc. ("Company"), each of whom will serve until his or her successor NOMINEES
is elected and qualified: [ ] [ ] [ ]
01 Xxx X. Xxxxx 05 Xxxxxx X. Xxxxxx 09 Xxxxxx X. Xxxxxx 13 Xxxx X. Xxxxxxx
02 Xxxxx X. Xxxxxx 06 Xxxxxx X. Xxxx, Xx. 10 Xxxxxx X. Xxxxx 14 Xxxxx X. Xxxxx
03 Xxxxx X. Xxxxx 07 Xxxx X. Xxxxxx 11 Xxxxx Xxxxxx-Xxxxx 15 Xxxxx Xxxx, Ph.D.
04 Xxxxx X. Xxxxxxxx 08 Xxxx Xxxxxxxxxx 12 Xxxxx X. Xxxxxxx 16 Xxxx X. Xxxxxxxxxx
*TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, XXXX THE "FOR ALL
EXCEPT" BOX AND WRITE THE NOMINEE'S NUMBER(S) ON THE LINE PROVIDED.
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]
FOR AGAINST ABSTAIN
3. To approve a new Sub-Advisory Agreement between A I M Advisors, Inc. and [ ] [ ] [ ]
INVESCO Institutional (N.A.), Inc.
FOR AGAINST ABSTAIN
4. To approve an Agreement and Plan of Reorganization to redomesticate each [ ] [ ] [ ]
series portfolio of Company as a new series portfolio of AIM Variable
Insurance Funds, an existing Delaware statutory trust.
5. NOT APPLICABLE
6. NOT APPLICABLE
IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
EACH SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE VOTE YOUR PROXY TODAY!
PROXY CARD PROXY CARD
PROXY SOLICITED BY THE BOARD OF DIRECTORS (THE "BOARD")
INVESCO VIF - TOTAL RETURN FUND
(A PORTFOLIO OF INVESCO VARIABLE INVESTMENT FUNDS, INC.)
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 2, 2004
The undersigned hereby appoints Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxxxxxx, and each of them separately, proxies with the 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
April 2, 2004, at 3:00 p.m., Central Time, and at any adjournment
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 CHOICES INDICATED, THE SHARES WILL BE VOTED "FOR" EACH
NOMINEE AND "FOR" THE APPROVAL OF THE PROPOSALS.
PROXY MUST BE SIGNED AND DATED BELOW.
Dated _____________________ 2004
-------------------------------------
-------------------------------------
Signature(s) (if held jointly)
(Please sign in 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,
PLEASE SIGN IN FULL CORPORATE NAME
AND INDICATE THE SIGNER'S OFFICE. IF
A PARTNER, PLEASE SIGN IN THE
PARTNERSHIP NAME.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. [X]
PLEASE DO NOT USE FINE POINT PENS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD. THE BOARD RECOMMENDS VOTING
"FOR" THE PROPOSAL.
WITHHOLD
FOR AUTHORITY FOR ALL
1. To elect sixteen individuals to the Board of INVESCO Variable Investment ALL FOR ALL EXCEPT*
Funds, Inc. ("Company"), each of whom will serve until his or her successor NOMINEES
is elected and qualified: [ ] [ ] [ ]
01 Xxx X. Xxxxx 05 Xxxxxx X. Xxxxxx 09 Xxxxxx X. Xxxxxx 13 Xxxx X. Xxxxxxx
02 Xxxxx X. Xxxxxx 06 Xxxxxx X. Xxxx, Xx. 10 Xxxxxx X. Xxxxx 14 Xxxxx X. Xxxxx
03 Xxxxx X. Xxxxx 07 Xxxx X. Xxxxxx 11 Xxxxx Xxxxxx-Xxxxx 15 Xxxxx Xxxx, Ph.D.
04 Xxxxx X. Xxxxxxxx 08 Xxxx Xxxxxxxxxx 12 Xxxxx X. Xxxxxxx 16 Xxxx X. Xxxxxxxxxx
*TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, XXXX THE "FOR ALL
EXCEPT" BOX AND WRITE THE NOMINEE'S NUMBER(S) ON THE LINE PROVIDED.
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]
FOR AGAINST ABSTAIN
3. To approve a new Sub-Advisory Agreement between A I M Advisors, Inc. and [ ] [ ] [ ]
INVESCO Institutional (N.A.), Inc.
FOR AGAINST ABSTAIN
4. To approve an Agreement and Plan of Reorganization to redomesticate each [ ] [ ] [ ]
series portfolio of Company as a new series portfolio of AIM Variable
Insurance Funds, an existing Delaware statutory trust.
5. NOT APPLICABLE
6. NOT APPLICABLE
IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
EACH SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE VOTE YOUR PROXY TODAY!
PROXY CARD PROXY CARD
PROXY SOLICITED BY THE BOARD OF DIRECTORS (THE "BOARD")
INVESCO VIF - UTILITIES FUND
(A PORTFOLIO OF INVESCO VARIABLE INVESTMENT FUNDS, INC.)
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 2, 2004
The undersigned hereby appoints Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxxxxxx, and each of them separately, proxies with the 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
April 2, 2004, at 3:00 p.m., Central Time, and at any adjournment
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 CHOICES INDICATED, THE SHARES WILL BE VOTED "FOR" EACH
NOMINEE AND "FOR" THE APPROVAL OF THE PROPOSALS.
PROXY MUST BE SIGNED AND DATED BELOW.
Dated _____________________ 2004
-------------------------------------
-------------------------------------
Signature(s) (if held jointly)
(Please sign in 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,
PLEASE SIGN IN FULL CORPORATE NAME
AND INDICATE THE SIGNER'S OFFICE. IF
A PARTNER, PLEASE SIGN IN THE
PARTNERSHIP NAME.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. [X]
PLEASE DO NOT USE FINE POINT PENS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD. THE BOARD RECOMMENDS VOTING
"FOR" THE PROPOSAL.
WITHHOLD
FOR AUTHORITY FOR ALL
1. To elect sixteen individuals to the Board of INVESCO Variable Investment ALL FOR ALL EXCEPT*
Funds, Inc. ("Company"), each of whom will serve until his or her successor NOMINEES
is elected and qualified: [ ] [ ] [ ]
01 Xxx X. Xxxxx 05 Xxxxxx X. Xxxxxx 09 Xxxxxx X. Xxxxxx 13 Xxxx X. Xxxxxxx
02 Xxxxx X. Xxxxxx 06 Xxxxxx X. Xxxx, Xx. 10 Xxxxxx X. Xxxxx 14 Xxxxx X. Xxxxx
03 Xxxxx X. Xxxxx 07 Xxxx X. Xxxxxx 11 Xxxxx Xxxxxx-Xxxxx 15 Larry Soll, Ph.D.
04 Bruce L. Crockett 08 Carl Frischling 12 Lewis F. Pennock 16 Mark H. Williamson
*TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "FOR ALL
EXCEPT" BOX AND WRITE THE NOMINEE'S NUMBER(S) ON THE LINE PROVIDED.
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve a new Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]
FOR AGAINST ABSTAIN
3. To approve a new Sub-Advisory Agreement between A I M Advisors, Inc. and [ ] [ ] [ ]
INVESCO Institutional (N.A.), Inc.
FOR AGAINST ABSTAIN
4. To approve an Agreement and Plan of Reorganization to redomesticate each [ ] [ ] [ ]
series portfolio of Company as a new series portfolio of AIM Variable
Insurance Funds, an existing Delaware statutory trust.
5. NOT APPLICABLE
6. NOT APPLICABLE
IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
