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The Chairman's Letter
[PHOTO OF CHARLES T. BAUER, CHAIRMAN OF THE BOARD OF THE FUND, APPEARS HERE]
Dear Shareholder:
As you may have heard in the financial news, AIM Management Group Inc. recently
announced a significant event in our company's history--an agreement to merge
with INVESCO PLC, one of the world's largest independent investment management
groups.
AIM has long been known for its strategic planning and forward
thinking. In seeking this merger, AIM had specific goals in choosing a partner:
to better AIM's position to succeed in an increasingly competitive financial
services environment, both in the U.S. and globally; to ensure the continuation
of AIM's independent culture, investment philosophy, and dedication to our
shareholders; and to offer the broadest range of products and services to our
shareholders.
A "MERGER OF EQUALS" THAT PRESERVES INDEPENDENCE
When the merger is completed, AIM and INVESCO will be combined under a new
holding company to be named AMVESCO, to reflect the strongly complementary
strengths of our two companies which together create a "merger of equals."
AMVESCO will have combined assets under management in excess of $150 billion.
Most importantly, the agreement enables AIM to preserve its independent
culture--which has been so essential to our company's success. The locations,
management, structure, and brand names of AIM and INVESCO will not change.
With INVESCO, AIM achieves a strategic combination with a partner that
offers complementary rather than overlapping strengths. AIM has delivered
impressive performance over the years as a domestic retail fund manager.
INVESCO brings to AIM its primary strengths as an institutional money manager,
and as a successful international investment manager with significant
operations in North America, Europe, and the Pacific region.
NO CHANGES IN YOUR AIM FUND OR ITS MANAGEMENT
While AIM certainly will be enriched through these added strengths, it will
retain those qualities that have produced two decades of successful
performance. The reputation of AIM funds has been built by its seasoned team of
portfolio managers who adhere to AIM's disciplined and successful investment
management process. AIM's central goal is to keep the current investment team
in place and our time-tested investment philosophy intact. Also, the names of
AIM funds will not change.
Moreover, because the merger will not result in any changes in the way
AIM does business, this transaction will be seamless--without any disruption of
service to you.
YOUR VOTE IS IMPORTANT
The merger is expected to be completed on or about February 28. As a result of
the merger, it is necessary for shareholders of AIM funds to approve a new
investment advisory agreement.
Recently, we mailed an announcement for the shareholder meeting planned
on February 7, along with a proxy card that describes proposals that relate to
the management and policies of your Fund. We encourage you to review and return
your proxy as soon as possible. Your Fund's Board of Directors carefully
considered and unanimously approved the proposals and recommends that you vote
in favor of each one. Your vote is important to us. If you haven't yet mailed
your proxy card, please send it today.
The AIM/INVESCO merger marks a new and promising era for AIM, and we
believe it will yield exciting opportunities for AIM shareholders. We
appreciate the trust you have placed in us.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
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With INVESCO, AIM
achieves a strategic
combination with a
partner that offers comple-
mentary rather than
overlapping strengths.
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