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As filed with the Securities and Exchange Commission on May 28, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No. [ ] Post-Effective Amendment No.
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AIM INVESTMENT FUNDS
(Exact Name of Registrant as Specified in Charter)
11 GREENWAY PLAZA, SUITE 100, HOUSTON, TX 77046
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 626-1919
COPIES TO:
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Samuel D. Sirko, Esq. Arthur J. Brown, Esq.
A I M Advisors, Inc. R. Darrell Mounts, Esq.
11 Greenway Plaza, Suite 100 Kirkpatrick & Lockhart LLP
Houston, Texas 77046 1800 Massachusetts Avenue, N.W., 2nd Floor
(Name and Address of Agent for Service) Washington, D.C. 20036
</TABLE>
Approximate Date of Proposed Public Offering: as soon as practicable
after this Registration Statement becomes effective
under the Securities Act of 1933.
It is proposed that this filing will become effective on June 27, 1999
pursuant to Rule 488.
Title of securities being registered: Class A Shares of beneficial
interest, par value $0.01 per share
No filing fee is required because of reliance on Section 24(f) of the Investment
Company Act of 1940, as amended.
<PAGE> 2
AIM INVESTMENT FUNDS
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following papers and documents:
o Cover Sheet
o Contents of Registration Statement
o Form N-14 Cross Reference Sheet
o Part A - Prospectus/Proxy Statement
o Part B - Statement of Additional Information
o Part C - Other Information
o Signature Page
o Exhibits
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AIM INVESTMENT FUNDS
FORM N-14 CROSS REFERENCE SHEET
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Part A Item No. Prospectus/Proxy
and Caption Statement Caption
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1. Beginning of Registration Statement and Outside Front Cover Page
Cover Page of Prospectus
2. Beginning and Outside Back Cover Page of Prospectus Table of Contents
3. Fee Table, Synopsis Information, and Risk Factors Synopsis; Comparison of Principal Risk Factors
4. Information about the Transaction Synopsis; Additional Information about the
Reorganization
5. Information about the Registrant Synopsis; Comparison of Principal Risk Factors;
Organization of the Funds; Capitalization. See
also the Prospectus for AIM Developing Markets
Fund, dated March 1, 1999, previously filed on
EDGAR, Accession Number 0000950129-99-00061
6. Information about the Company Being Acquired Synopsis; Comparison of Principal Risk Factors;
Organization of the Funds; Capitalization; NAV,
Market Price, and Discount of Eastern Europe
Fund shares. See also the Annual Report to
Shareholders of AIM Eastern Europe Fund for the
fiscal year ended October 31, 1998, previously
filed on EDGAR, Accession Number
0001047469-99-000591
7. Voting Information Introduction
8. Interest of Certain Persons and Experts Not Applicable
9. Additional Information Required for Re-offering by Not Applicable
Persons Deemed to be Underwriters
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AIM INVESTMENT FUNDS
FORM N-14 CROSS REFERENCE SHEET
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Part B Item No. Statement of Additional
and Caption Information Caption
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10. Cover Page Cover Page
11. Table of Contents Not Applicable
12. Additional Information about the Registrant Statement of Additional Information of AIM
Developing Markets Fund, dated March 1, 1999 and
previously filed on EDGAR, Accession Number
0000950129-99-00061; Annual Report to
Shareholders of AIM Developing Markets Fund for
the fiscal year ended October 31, 1998,
previously filed on EDGAR, Accession Number
0001047469-98-045383
13. Additional Information about the Company Being Annual Report to Shareholders of AIM Eastern Europe Fund
Acquired for the fiscal year ended October 31, 1998, previously
filed on EDGAR, Accession Number 0001047469-99-000591
14. Financial Statements Annual Report to Shareholders of AIM Developing
Markets Fund for the fiscal year ended October
31, 1998, previously filed on EDGAR, Accession
Number 0001047469-98-045383; Annual Report to
Shareholders of AIM Eastern Europe Fund for the
fiscal year ended October 31, 1998, previously
filed on EDGAR, Accession Number
0001047469-99-000591; Pro Forma Financial
Statements for the fiscal year ended October 31,
1998.
</TABLE>
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Part C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
<PAGE> 6
AIM EASTERN EUROPE FUND
11 GREENWAY PLAZA, SUITE 100
HOUSTON, TEXAS 77046-1173
June 28, 1999
Dear Shareholder:
Enclosed is a combined proxy statement and prospectus seeking your approval
of a proposal pursuant to which AIM Eastern Europe Fund ("Eastern Europe Fund")
would convert from a closed-end investment company to an open-end investment
company by reorganizing it into AIM Developing Markets Fund ("Developing Markets
Fund"), a series of AIM Investment Funds (the "Trust"), an open-end investment
company (the "Reorganization"). If the proposal is approved and implemented,
each shareholder of Eastern Europe Fund automatically would become a holder of
Class A shares of Developing Markets Fund, and Eastern Europe Fund would
thereafter be liquidated.
After careful consideration, the Board of Trustees of Eastern Europe Fund
(the "Board") has unanimously approved each proposal and recommends that you
read the enclosed materials carefully and then vote FOR each proposal. As with
many closed-end investment companies, Eastern Europe Fund shares have
historically traded on the New York Stock Exchange at a discount to (i.e.,
below) the net asset value of those shares. The Board believes that the
Reorganization would provide Eastern Europe Fund shareholders with the benefits
of the open-end investment company form of organization, while also providing
shareholders with the economies of scale and other benefits of a combination
with an existing fund having similar investment objectives but broader
investment policies.
Eastern Europe Fund's investment objective is long-term capital
appreciation. Developing Markets Fund has a primary investment objective of
long-term growth of capital and a secondary objective of income, to the extent
consistent with seeking growth of capital. To achieve its investment objectives,
Developing Markets Fund invests substantially all of its assets in the
securities of issuers located in developing markets. In contrast, Eastern Europe
Fund invests primarily in securities of issuers located in Eastern Europe. As a
result, Developing Markets Fund possesses greater investment flexibility than
Eastern Europe Fund, because it can and does invest in other regions, including
Latin America, Asia and Africa. The accompanying document describes the proposed
transaction and compares the investment policies, operating expenses, and
performance histories of the Funds in more detail.
Your vote is important. Please take a moment now to sign and return your
proxy cards in the enclosed postage paid return envelope. If we do not hear from
you after a reasonable amount of time, you may receive a telephone call from our
proxy solicitor, Shareholder Communications Corporation, reminding you to vote
your shares. You may also vote your shares through a web site established by
Shareholder Communications Corporation by following the instructions that appear
on the enclosed proxy insert.
Sincerely,
/s/ Robert H. Graham
---------------------
Robert H. Graham
Chairman and President
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AIM EASTERN EUROPE FUND
11 GREENWAY PLAZA, SUITE 100
HOUSTON, TEXAS 77046-1173
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 25, 1999
TO THE SHAREHOLDERS OF AIM Eastern Europe Fund:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders ("Meeting")
of AIM Eastern Europe Fund ("Eastern Europe Fund") will be held at 11 Greenway
Plaza, Suite 100, Houston, TX 77046, on August 25, 1999, at 3:00 p.m., Central
time, for the following purposes:
1. To approve an Agreement and Plan of Reorganization and Termination
("Plan") that provides for the reorganization of Eastern Europe Fund into AIM
Developing Markets Fund ("Developing Markets Fund"), a series of AIM Investment
Funds ("Trust") ("Reorganization"). Pursuant to the Plan, Eastern Europe Fund
will transfer all of its assets to Developing Markets Fund, which will assume
all the liabilities of Eastern Europe Fund, and the Trust will issue to each
Eastern Europe Fund shareholder a number of full and fractional Class A shares
of Developing Markets Fund having an aggregate value that, on the effective date
of the Reorganization, is equal to the aggregate net asset value of the
shareholder's shares in Eastern Europe Fund;
2. To elect a Trustee of Eastern Europe Fund;
3. To ratify the selection of PricewaterhouseCoopers LLP as Eastern Europe
Fund's independent public accountants; and
4. To transact such other business that may properly come before the
Meeting, or any adjournment thereof, in the discretion of the proxies or their
substitutes.
Shareholders of record as of the close of business on June 21, 1999, are
entitled to notice of, and to vote at, the Meeting or any adjournment thereof.
Please execute and return promptly in the enclosed envelope the
accompanying proxy, which is being solicited by the Board of Trustees of Eastern
Europe Fund. You may also vote your shares through a web site established for
that purpose by following the instructions on the enclosed proxy insert.
Returning your proxy promptly is important to ensure a quorum at the Meeting.
You may revoke your proxy at any time before it is exercised by the subsequent
execution and submission of a revised proxy, by giving written notice of
revocation to Eastern Europe Fund at any time before the proxy is exercised, or
by voting in person at the Meeting.
By Order of the Board of Trustees,
/s/ Samuel D. Sirko
--------------------
Samuel D. Sirko
Secretary
June 28, 1999
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
<PAGE> 8
AIM EASTERN EUROPE FUND
11 GREENWAY PLAZA, SUITE 100
HOUSTON, TX 77046-1173
TOLL FREE: (800) 347-4246
AIM DEVELOPING MARKETS FUND
(A PORTFOLIO OF AIM INVESTMENT FUNDS)
11 GREENWAY PLAZA, SUITE 100
HOUSTON, TX 77046-1173
TOLL FREE: (800) 347-4246
COMBINED PROXY STATEMENT AND PROSPECTUS
Dated: June 28, 1999
This document is being furnished in connection with the Annual Meeting of
Shareholders of AIM Eastern Europe Fund ("Eastern Europe Fund"), a Massachusetts
business trust, to be held at 11 Greenway Plaza, Suite 100, Houston, TX 77046 on
August 25, 1999 at 3:00 p.m., Central time (such meeting and any adjournments
thereof are referred to as the "Meeting"). At the Meeting, the shareholders of
Eastern Europe Fund are being asked to consider and approve an Agreement and
Plan of Reorganization and Termination ("Plan") that provides for the
reorganization of Eastern Europe Fund into AIM Developing Markets Fund
("Developing Markets Fund"), a series of AIM Investment Funds, a Delaware
business trust ("Trust") ("Reorganization"). A form of the Plan is attached as
Appendix A to this Combined Proxy Statement and Prospectus ("Proxy
Statement/Prospectus"). THE BOARD OF TRUSTEES OF EASTERN EUROPE FUND ("BOARD")
HAS UNANIMOUSLY APPROVED THE PLAN AS BEING IN THE BEST INTEREST OF EASTERN
EUROPE FUND.
Pursuant to the Plan, Eastern Europe Fund will transfer all of its assets
to Developing Markets Fund, which will assume all liabilities of Eastern Europe
Fund, and the Trust will issue a number of full and fractional Class A shares of
beneficial interest in Developing Markets Fund having an aggregate value that,
on the effective date of the Reorganization, is equal to the aggregate net asset
value of the outstanding shares of beneficial interest in Eastern Europe Fund.
The value of each Eastern Europe Fund shareholder's account with Developing
Markets Fund immediately after the Reorganization will be same as the net asset
value of such shareholder's shares of Eastern Europe Fund immediately prior to
the Reorganization. The Reorganization has been structured as a tax-free
transaction. No initial sales charge will be imposed on Developing Markets Fund
Class A shares issued in connection with the Reorganization. Such shares will be
subject to a 2% fee if they are presented for redemption within the first year
following the Reorganization.
Developing Markets Fund is a non-diversified series of the Trust, which is
an open-end management investment company comprised of several outstanding
series. Developing Markets Fund's primary investment objective is long-term
growth of capital; its secondary investment objective is income, to the extent
consistent with seeking growth of capital. Developing Markets Fund seeks to
achieve its investment objectives by investing primarily in equity securities of
developing market issuers. Developing Markets Fund may also invest up to 50% of
its total assets in various types of developing market debt securities.
This Proxy Statement/Prospectus sets forth the information that a
shareholder of Eastern Europe Fund should know before voting on the Plan. It
should be read and retained for future reference.
A copy of the current Prospectus of Developing Markets Fund, dated March 1,
1999, is attached as Appendix B to this Proxy Statement/Prospectus. In addition,
the management's discussion of the performance of Developing Markets Fund, which
is included in the Annual Report to Shareholders of Developing Markets Fund for
the fiscal year ended October 31, 1998, is attached as Appendix C to this Proxy
Statement/Prospectus. The current Annual Report to Shareholders of Eastern
Europe Fund for the fiscal year ended October 31, 1998 is on file with the
Securities and Exchange Commission (the "SEC") and is incorporated by reference
into this Proxy Statement/Prospectus. In addition, the current Statement of
Additional Information of Developing Markets Fund, dated March 1, 1999, and the
Annual Report to Shareholders of Developing Markets Fund for the fiscal year
ended October 31, 1998 (part of which is attached as Appendix C), are on file
with the SEC and are incorporated by reference into this Proxy
Statement/Prospectus. Such documents are available without charge by writing to
A I M Distributors, Inc.,
<PAGE> 9
P.O. Box 4739, Houston, Texas 77210-4739 or by calling (800) 347-4246. The SEC
maintains a web site at http://www.sec.gov that contains the documents described
above and other information about Eastern Europe Fund and the Trust. Additional
information about Developing Markets Fund may also be obtained on the web at
http://www.aimfunds.com.
AS WITH ALL OTHER MUTUAL FUND SECURITIES, THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
WHETHER THE INFORMATION IN THIS PROXY STATEMENT/PROSPECTUS IS ADEQUATE OR
ACCURATE. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
<PAGE> 10
[AIMLOGO]
THE AIM FAMILY OF FUNDS
TABLE OF CONTENTS
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SECTION TITLE PAGE
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INTRODUCTION................................................ 1
PROPOSAL NO. 1: REORGANIZATION OF EASTERN EUROPE FUND INTO
DEVELOPING MARKETS FUND................................... 3
REASONS FOR THE REORGANIZATION.............................. 3
BOARD CONSIDERATIONS...................................... 3
SYNOPSIS.................................................... 5
THE REORGANIZATION........................................ 5
COMPARISON OF THE FUNDS................................... 6
COMPARISON OF PRINCIPAL RISK FACTORS........................ 11
PRIMARY DIFFERENCES IN RISKS OF THE FUNDS................. 11
RISKS COMMON TO BOTH FUNDS................................ 12
Investing in Securities Generally...................... 12
Investing in Foreign Securities and Developing
Markets............................................... 12
Lower Quality Debt..................................... 12
Sovereign Debt......................................... 13
Illiquid Securities.................................... 13
Non-Diversified Classification......................... 13
Year 2000.............................................. 13
FINANCIAL HIGHLIGHTS........................................ 13
ADDITIONAL INFORMATION ABOUT THE REORGANIZATION............. 16
TERMS OF THE REORGANIZATION............................... 16
DESCRIPTION OF SECURITIES TO BE ISSUED.................... 16
DIVIDENDS AND OTHER DISTRIBUTIONS......................... 17
POTENTIAL NET REDEMPTION.................................. 17
ACCOUNTING TREATMENT...................................... 18
FEDERAL INCOME TAX CONSIDERATIONS......................... 18
ORGANIZATION OF THE FUNDS................................... 19
NAV, MARKET PRICE, AND DISCOUNT OF EASTERN EUROPE FUND
SHARES.................................................... 19
CAPITALIZATION.............................................. 20
PROPOSAL NO. 2: ELECTION OF A TRUSTEE....................... 20
PROPOSAL NO. 3: RATIFICATION OF THE SELECTION OF INDEPENDENT
PUBLIC ACCOUNTANTS........................................ 23
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SECTION TITLE PAGE
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LEGAL MATTERS............................................... 23
INFORMATION FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AND NYSE....................................... 24
INFORMATION ABOUT THE FUNDS' ADVISOR AND SUB-ADVISOR, AND
DEVELOPING MARKETS FUND'S DISTRIBUTOR..................... 24
ADDITIONAL INFORMATION ABOUT EASTERN EUROPE FUND AND
DEVELOPING MARKETS FUND................................... 25
EXPERTS..................................................... 25
SHAREHOLDER PROPOSALS....................................... 25
OWNERSHIP OF EASTERN EUROPE FUND AND DEVELOPING MARKETS FUND
SHARES.................................................... 26
APPENDIX A: Agreement and Plan of Reorganization and
Termination............................................... A-1
APPENDIX B: Prospectus of AIM Developing Markets Fund....... B-1
APPENDIX C: Management's Discussion of Fund Performance..... C-1
</TABLE>
The AIM Family of Funds, the AIM Family of Funds and Design (i.e., the AIM
logo), AIM and Design, AIM, AIM Link, AIM Institutional Funds, aimfunds.com,
Invest with Discipline, La Familia AIM de Fondos and La Familia AIM de Fondos
and Design are registered service marks, and AIM Bank Connection is a service
mark, of A I M Management Group, Inc.
ii
<PAGE> 12
INTRODUCTION
This Proxy Statement/Prospectus is being furnished to shareholders of
Eastern Europe Fund in connection with the solicitation of proxies by the Board
for use at the Meeting. All properly executed and unrevoked proxies received in
time for the Meeting will be voted in accordance with the instructions contained
therein. If no instructions are given, shares represented by proxies will be
voted FOR all the proposals described in this Proxy Statement/Prospectus and in
accordance with management's recommendation on other matters. The presence in
person or by proxy of Eastern Europe Fund shareholders entitled to cast 50% of
all the votes entitled to be cast at the Meeting will constitute a quorum. If a
quorum is not present at the Meeting or a quorum is present but sufficient votes
to approve any proposal described in this Proxy Statement/ Prospectus are not
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of the shares represented at the
Meeting in person or by proxy. The persons named as proxies will vote those
proxies that they are entitled to vote FOR any proposal in favor of such an
adjournment and will vote those proxies required to be voted AGAINST any
proposal against such adjournment. In addition, if you sign, date, and return
the proxy card, the duly appointed proxies may, in their discretion, vote upon
such other matters as may come before the Meeting.
The proposal to approve the Plan requires the affirmative vote of a
"majority of the outstanding voting securities" of Eastern Europe Fund, which
for this purpose means the affirmative vote of the lesser of (1) more than 50%
of the outstanding shares of Eastern Europe Fund or (2) 67% or more of the
shares of Eastern Europe Fund present at the meeting if more than 50% of the
outstanding shares of Eastern Europe Fund are represented at the Meeting in
person or by proxy. A plurality of all the votes cast at the Meeting is required
for the election of the Trustee. Ratification of the selection of
PricewaterhouseCoopers LLP as independent accountants for Eastern Europe Fund
requires the affirmative vote of a majority of the votes cast thereon at the
Meeting.
Abstentions and broker non-votes will be counted as shares present at the
Meeting for quorum purposes, but will not be considered votes cast at the
Meeting. Accordingly, abstentions and broker non-votes are effectively a vote
against a proposal where the required vote is a percentage of the shares present
at the Meeting. Broker non-votes arise from a proxy returned by a broker holding
shares for a customer which indicates that the broker has not been authorized by
the customer to vote on a proposal. Any person giving a proxy has the power to
revoke it at any time prior to its exercise by executing a superseding proxy or
by submitting a written notice of revocation to the Secretary of Eastern Europe
Fund (the "Secretary"). To be effective, such revocation must be received by the
Secretary prior to the Meeting and must indicate your name and account number.
In addition, although mere attendance at the Meeting will not revoke a proxy, a
registered shareholder present at the Meeting may withdraw his proxy and vote in
person. Shareholders may also transact any other business not currently
contemplated that may properly come before the Meeting in the discretion of the
proxies or their substitutes.
Shareholders of record as of the close of business on June 21, 1999 (the
"Record Date"), are entitled to vote at the Meeting. On the Record Date, there
were approximately 5,864,784 shares of Eastern Europe Fund outstanding. Each
share is entitled to one vote for each full share held and a fractional vote for
a fractional share held. Except as set forth below, AIM does not know of any
person who owned beneficially 5% or more of the shares of Eastern Europe Fund or
Developing Markets Fund on the Record Date.
Eastern Europe Fund has engaged the services of Shareholder Communications
Corporation ("SCC") to assist it in the solicitation of proxies for the Meeting.
Eastern Europe Fund expects to solicit proxies principally by mail, but it or
SCC may also solicit proxies by telephone, facsimile, telegraph, or personal
interview. Eastern Europe Fund officers and employees of A I M Advisors, Inc.
("AIM") who assist in the proxy solicitation will not receive any additional or
special compensation for any such efforts. Each Fund will bear its own expenses
incurred in connection with the Reorganization (including any shareholder
solicitation costs), which are expected to be approximately $70,000 for Eastern
Europe Fund and $15,000 for Developing Markets Fund. However, because Eastern
Europe Fund and Developing Markets Fund currently operate at their respective
expense limits, their portion of the Reorganization expenses will effectively be
borne by AIM
1
<PAGE> 13
through reimbursement of expenses and waivers. Eastern Europe Fund will request
broker/dealer firms, custodians, nominees, and fiduciaries to forward proxy
material to the beneficial owners of the shares held of record by such persons.
Eastern Europe Fund may reimburse such brokers/dealer firms, custodians,
nominees, and fiduciaries for their reasonable expenses incurred in connection
with such proxy solicitation.
Eastern Europe Fund intends to mail this Proxy Statement/Prospectus and the
accompanying proxy on or about June 28, 1999.
2
<PAGE> 14
PROPOSAL NO. 1:
REORGANIZATION OF EASTERN EUROPE
FUND INTO DEVELOPING MARKETS FUND
REASONS FOR THE REORGANIZATION
BOARD CONSIDERATIONS
The Board, including a majority of trustees who are not "interested
persons" of Eastern Europe Fund, as that term is defined in the Investment
Company Act of 1940 ("1940 Act"), has determined that the Reorganization is in
the best interests of Eastern Europe Fund and that the interests of Eastern
Europe Fund's shareholders will not be diluted as a result of the
Reorganization.
At a Board meeting held on May 13, 1999, AIM proposed that the Board
approve the reorganization of Eastern Europe Fund into Developing Markets Fund
(each a "Fund"). The Board received from AIM written materials that described
the structure and expected tax consequences of the Reorganization and contained
information concerning both Funds, including comparative total return
information, a comparison of their investment objectives, policies, and risks,
comparative and pro forma expense information, and biographical information on
the portfolio managers of Developing Markets Fund. The Board then made extensive
inquiry into a number of factors with respect to the Reorganization, including:
(1) the compatibility of the Funds' investment objectives, policies, and
restrictions; (2) the Funds' respective investment performance; (3) the effect
of the Reorganization on the expense ratio of Developing Markets Fund Class A
shares and that expense ratio relative to Eastern Europe Fund's current expense
ratio; (4) the costs to be incurred by each Fund as a result of the
Reorganization; (5) the tax consequences of the Reorganization; (6) possible
alternatives to the Reorganization, including continuing to operate Eastern
Europe Fund as a closed-end fund, converting it to an open-end investment
company without reorganizing it into any pre-existing fund, or liquidating it;
and (7) the potential benefits of the Reorganization to other persons,
especially AIM and its affiliates.
As compared to the available alternatives, the Board determined that
converting Eastern Europe Fund to open-end format by merging it into Developing
Markets Fund was the most advantageous to Eastern Europe Fund. As with most
closed-end funds, shares of Eastern Europe Fund have historically traded at a
discount to net asset value ("NAV"). This discount has persisted despite
conversion of Eastern Europe Fund to "interval fund" status and the occurrence
of repurchase offers at NAV for each of the past four years. Converting Eastern
Europe Fund to open-end format would eliminate the discount by enabling
shareholders to redeem shares at NAV, rather than selling them in the secondary
market. Combining the Funds, rather than operating Eastern Europe Fund as a
stand-alone open-end fund, would provide Eastern Europe Fund shareholders with
the benefits of the open-end form of organization, while also providing them
with potential economies of scale and other benefits of a combination with an
existing fund having a similar primary investment objective and broader
investment policies.
The Board also considered the following alternatives to the Reorganization:
(1) continuing to operate Eastern Europe Fund as a closed-end fund; (2)
converting it to an open-end fund without reorganizing it into any pre-existing
fund; and (3) liquidating it. In considering whether to continue to operate
Eastern Europe Fund as a closed-end fund, the Board compared the benefits of
operating as an open-end fund to those of operating as a closed-end fund.
Particularly, the Board noted that the closed-end structure offers benefits in
terms of portfolio management, such as the ability to invest without limitation
in illiquid securities and to manage the portfolio without concern to inflows
and outflows of fund assets. However, the Board also noted that continuing to
operate Eastern Europe Fund as a closed-end fund would not address the
persistent discount to NAV at which Fund shares have historically traded.
Conversion to open-end format would result in immediate elimination of this
discount. On balance, the Board concluded that the benefits of the closed-end
structure were outweighed by the advantages of operating as an open-end fund,
most notably elimination of the discount to NAV.
Converting Eastern Europe Fund to an open-end fund operating on a
stand-alone basis would eliminate the discount to NAV, but would result in added
distribution-related expenses borne entirely by Eastern
3
<PAGE> 15
Europe Fund's asset base, rather than by the combined assets of two funds. In
addition, operating Eastern Europe Fund as a stand-alone open-end fund might not
be economically feasible given its comparatively small asset base, which would
be subject to further reduction by possible net redemptions following conversion
to open-end format. The Reorganization would combine Eastern Europe Fund's
assets with those of Developing Markets Fund, potentially realizing economies of
scale and the benefits noted above.
Terminating Eastern Europe Fund was determined by the Board to be
undesirable because it would result in additional expenses arising out of
liquidating the Fund's portfolio securities and would be a taxable event to
shareholders.
The Board then considered the investment objectives and policies of the
Funds. Eastern Europe Fund's investment objective is long-term capital
appreciation. Developing Markets Fund has a primary investment objective of
long-term growth of capital and a secondary objective of income, to the extent
consistent with growth of capital. To achieve its investment objectives,
Developing Markets Fund may invest substantially all of its assets in the
securities of issuers located in developing markets. In contrast, Eastern Europe
Fund invests at least 65% of its total assets in securities of issuers located
in eastern Europe. As a result, Developing Markets Fund possesses greater
investment flexibility than Eastern Europe Fund. Such flexibility could, over
the long term, benefit shareholders. The Board also considered the fact that,
although Developing Markets Fund has a broader investment mandate, the Funds'
investment objectives and policies are sufficiently compatible to enable
Developing Markets Fund to maintain its investment policies without any material
changes due to the Reorganization. The Board also noted that Eastern Europe Fund
is subject to somewhat greater risk than Developing Markets Fund because of its
narrower geographical focus, but recognized that Developing Markets Fund is
potentially subject to more risk to the extent that the other countries and
regions in which it invests, primarily in Latin American and Pacific Region
countries, have experienced and may continue to experience substantial economic
difficulties. More information on the risks of investing in developing markets
generally, and in Latin America and Pacific Region countries specifically, is
provided below in "Comparison of Principal Risk Factors -- Investing in Foreign
Countries and Developing Markets."
The Board also considered the historic performance of Eastern Europe Fund
in relation to the performance of Developing Markets Fund. AIM advised the Board
that, while past performance provides no guarantee of future results, Developing
Markets Fund recently had experienced better investment performance than Eastern
Europe Fund. Information on the relative performance of the Funds is provided
below in "Comparison of the Funds -- Performance."
The Board also considered the impact the Reorganization would have on
expenses. As a closed-end fund, Eastern Europe Fund currently pays no Rule 12b-1
distribution or service fees. The Developing Markets Fund Class A shares that
Eastern Europe Fund shareholders would receive in the Reorganization are subject
to an annual Rule 12b-1 distribution and service fee of up to 0.50% of average
net assets attributable to Class A. Open-end funds such as Developing Markets
Fund also normally pay higher transfer agency fees than closed-end funds due to
the continuous sale and redemption of their shares. In addition, open-end funds
such as Developing Markets Fund incur expenses associated with maintaining
continuous federal securities registration. Closed-end funds such as Eastern
Europe Fund typically do not incur these expenses.
In analyzing expenses, the Board also considered the lower investment
advisory and administration fees paid by Developing Market Fund. Eastern Europe
Fund pays total investment advisory and administrative fees of 1.40% of its
average net assets, which includes a voluntary reimbursement by AIM of 0.05% of
average net assets. Developing Markets Fund pays investment advisory and
administration fees of 0.975% on the first $500 million of its average net
assets, 0.95% on the next $500 million of those assets, 0.925% on the next $500
million of those assets, and 0.90% on those assets over $1.5 billion. The Board
considered the level and quality of investment advisory services provided by AIM
and INVESCO Asset Management Limited ("IAML"), and decided that these services
should be continued. As a result, if the Reorganization is effected, this
investment advisory and administration fee schedule will apply to the assets of
the combined entity.
The Board also considered that, overall, the Reorganization may result in
slightly higher total operating expenses for Eastern Europe Fund shareholders.
For its fiscal year ended October 31, 1998, Eastern Europe Fund had total
operating expenses of 1.78% (1.83% before reimbursements) of average weekly net
assets. For
4
<PAGE> 16
its fiscal year ended October 31, 1998, Developing Markets Fund Class A shares
had total operating expenses of 1.93% (2.34% before a contractual fee cap) of
average daily net assets. The Board noted that, in the fiscal year ended October
31, 1998, Developing Markets Fund had experienced interest expenses of 0.20% of
average daily net assets. The Board also considered information provided by AIM
that, based on the first six months of the current fiscal year, those interest
expenses have decreased by approximately 0.19%. Accordingly, the Reorganization
may result in an increase in total annual operating expenses for Eastern Europe
Fund shareholders. For more information on the comparative fees and expenses of
Developing Markets Fund and Eastern Europe Fund, see "Comparison of the
Funds -- Fees and Expenses," below.
The Board noted that no initial sales charges would be imposed on the
Developing Markets Fund Class A shares issued to Eastern Europe Fund
shareholders in connection with the Reorganization. However, those shares will
be subject to a 2% redemption fee for the first year following the
Reorganization, payable to Developing Markets Fund. The Board approved the
temporary imposition of this redemption fee as reasonable in light of Developing
Markets Fund's anticipated expenses in connection with post-Reorganization
redemptions of those shares. These expenses include brokerage and other costs of
selling portfolio securities to raise cash for redemption requests and transfer
agency and other administrative expenses caused by redeeming shareholders. The
redemption fee will decrease the likelihood that these expenses would be borne
by present Developing Markets Fund shareholders. The Board also noted that
imposition of the redemption fee may deter some redemptions of Developing
Markets Fund Class A shares immediately following the Reorganization and may
deter short-term trading in Eastern Europe Fund shares just prior to the
Reorganization. In this regard, the Board considered the detrimental effect that
such short-term trading would have on Developing Markets Fund.
The Board also considered that, although AIM will effectively bear
Developing Markets Fund's portion of the Reorganization-related expenses, it may
also receive an indirect benefit from the Reorganization. To the extent that
Developing Markets Fund's operating expenses decrease as a result of the
Reorganization, there could be a reduction in payment by AIM to cover its
reimbursement obligation to limit the expenses of Developing Markets Fund Class
A shares to 2.00% of average net assets. Further, the obligation of AIM to
reimburse the expenses of Eastern Europe Fund will terminate with the close of
the Reorganization.
Finally, the Board reviewed the principal terms of the Plan and noted that
Eastern Europe Fund would be provided with an opinion of counsel that the
Reorganization would be tax-free to it and its shareholders.
On the basis on the information provided to the Board and on its evaluation
of that information, the Board determined that the proposed Reorganization will
not dilute the interests of shareholders of Eastern Europe Fund and is in the
best interest of Eastern Europe Fund. Therefore, the Board recommended the
approval of the Plan by the shareholders of Eastern Europe Fund at the Meeting.
SYNOPSIS
THE REORGANIZATION
The Plan provides for the acquisition by Developing Markets Fund of all of
Eastern Europe Fund's assets in exchange solely for Developing Markets Fund
Class A shares and the assumption by Developing Markets Fund of all of Eastern
Europe Fund's liabilities. Those transactions will occur at 4:00 p.m., Central
time, on August 27, 1999, or on such later date as the conditions to the closing
are satisfied ("Closing Date"). Eastern Europe Fund will then distribute the
Developing Markets Fund Class A shares to its shareholders so that each Eastern
Europe Fund shareholder will receive full and fractional Developing Markets Fund
Class A shares equal in aggregate value to the NAV of the shareholder's shares
of Eastern Europe Fund as of the Closing Date. Eastern Europe Fund will be
liquidated as soon as is practicable thereafter.
Eastern Europe Fund and the Trust will receive an opinion of Kirkpatrick &
Lockhart LLP, their counsel, to the effect that the Reorganization will
constitute a tax-free reorganization within the meaning of section 368(a)(1)(C)
of the Internal Revenue Code of 1986, as amended ("Code"). Accordingly, neither
5
<PAGE> 17
Fund nor any of their shareholders will recognize any gain or loss as a result
of the Reorganization. See "Additional Information About the
Reorganization -- Federal Income Tax Considerations," below.
COMPARISON OF THE FUNDS
Forms of Organization
Developing Markets Fund is an open-end fund organized as a series of the
Trust, a Delaware business trust, whose shares are continuously sold and
redeemed at NAV. Eastern Europe Fund is a closed-end "interval" fund organized
as a Massachusetts business trust whose shares are traded on the New York Stock
Exchange ("NYSE") and are subject to annual repurchase offers pursuant to Rule
23c-3 under the 1940 Act. Open-end funds such as Developing Markets Fund
continuously offer and redeem their shares, causing their total assets to
fluctuate. In contrast, most closed-end funds make a single offering of
non-redeemable shares and thus retain a stable pool of assets, which changes
only upon appreciation or depreciation of their portfolio investments.
Closed-end interval funds, like Eastern Europe Fund, conduct periodic repurchase
offers, which result in some fluctuation in their assets, although generally
less than that experienced by open-end funds like Developing Markets Fund.
Investment Objectives
The investment objectives of Developing Markets Fund and Eastern Europe
Fund are similar. Developing Markets Fund's primary investment objective is
long-term growth of capital. Its secondary investment objective is income, to
the extent consistent with seeking growth of capital. Eastern Europe Fund's
investment objective is long-term capital appreciation.
Investment Policies
As described below, the primary difference in the investment policies of
Developing Markets Fund and Eastern Europe Fund is the geographic focus of their
investments. Developing Markets Fund invests in issuers in developing markets in
Asia, Europe, Latin America, and elsewhere. Eastern Europe Fund, in contrast,
invests primarily in issuers located in Eastern Europe.
Developing Markets Fund seeks its investment objectives by investing,
normally, substantially all of its assets in equity and debt securities of
issuers located in developing markets. A majority of the Developing Markets
Fund's assets ordinarily is invested in developing market equity securities.
Developing Markets Fund may invest up to 50% of its assets in developing market
debt securities, which are selected based on their potential to provide a
combination of capital appreciation and/or current income. There is no limit on
the percentage of assets that Developing Markets Fund may invest in
non-investment grade debt securities.
Eastern Europe Fund seeks its objective by investing, normally, at least
65% of its total assets in equity and debt securities of issuers (including
government issuers) located in Eastern Europe. "Eastern European" countries
include Albania, Bulgaria, the Czech Republic, Germany, Hungary, Poland,
Romania, Slovakia, all countries west of the Ural Mountains that were formerly a
part of the USSR (including Russia, Belarus, Estonia, Latvia, Lithuania, and the
Ukraine), and all countries that formerly constituted Yugoslavia. Eastern Europe
Fund normally invests at least 50% of its total assets in the developing markets
of Eastern Europe, which includes all of the countries listed above except
Germany. In addition, Eastern Europe Fund may invest up to 35% of its total
assets in equity and debt securities of issuers (including government issuers)
located elsewhere in Europe, most of which are developed countries. There is no
limit on the percentage of assets that Eastern Europe Fund may invest in
non-investment grade debt securities.
Portfolio Management
Closed-end interval funds such as Eastern Europe Fund generally have
greater freedom in managing their portfolios than open-end funds like Developing
Markets Fund. Because closed-end interval funds are not subject to forced sale
of portfolio securities at undesirable times or prices to meet redemption
requests (except to the extent that securities must be sold to meet the demands
of periodic repurchase offers), they have more
6
<PAGE> 18
freedom to invest in illiquid securities and may keep a larger percentage of
their assets fully invested in equity or debt securities, rather than in cash.
In addition, closed-end funds have greater flexibility under the 1940 Act to
leverage their portfolios by borrowing. Despite having greater flexibility in
portfolio management, Eastern Europe Fund has generally not engaged in such
leveraging. Moreover, as of April 30, 1999, only about 14% of Eastern Europe
Fund's assets were invested in illiquid securities.
Performance
Set forth below are average annual total returns for the periods indicated
for Eastern Europe Fund and Developing Markets Fund. Average annual total return
figures do not take into account sales charges applicable to purchases of
Developing Markets Fund Class A shares.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE INCEPTION
(FOR THE PERIODS ENDED DECEMBER 31, 1998) 1 YEAR 5 YEARS INCEPTION DATE
<S> <C> <C> <C> <C>
Eastern Europe Fund....................... (51.49)% (7.66)% (4.44)% 3/29/90
Developing Markets Fund(1) (Class A
Shares)................................. (35.32)% N/A (9.09)% 01/11/94
MSCI Emerging Markets Free Index(2)....... (25.34)% (9.27)% 7.26 %
(9.27)%
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Prior to November 1, 1997, Developing Markets Fund operated as a closed-end
fund and was subject to different fees and expenses.
(2) The Morgan Stanley Capital International ("MSCI") Emerging Markets Free
Index measures the performance of securities listed on the exchanges of 26
countries. The index excludes shares that are not readily purchased by
non-local investors. The first "Since Inception" figure is based on the
period beginning March 31, 1990, which is the closest month-end to the date
of completion of Eastern Europe Fund's initial public offering; the second
such figure is based on the period beginning December 31, 1993, which is the
closest month-end to Developing Markets Fund's inception date.
Fees and Expenses
These tables describe the fees and expenses that you may pay if you buy and
hold shares of Developing Markets Fund and Eastern Europe Fund. The pro forma
information reflects the effects of the Reorganization. The information set
forth below is based on the Funds' fees and expenses for the year ended October
31, 1998.
SHAREHOLDER FEES
<TABLE>
<CAPTION>
DEVELOPING MARKETS
DEVELOPING MARKETS FUND CLASS A
FUND CLASS A PRO FORMA
<S> <C> <C>
====================================================================================================
(fees paid directly from your investment)
Maximum Sales Charge (load) Imposed on Purchases......... 4.75%(1) 4.75%(1)
(as a percentage of offering price)
Maximum Deferred Sales Charge (load)..................... None(2) None(2)
(as a percentage of original purchase price or redemption
proceeds, whichever is less)
Redemption Fee........................................... None None(3)
(as a percentage of amount redeemed)
</TABLE>
7
<PAGE> 19
ANNUAL FUND OPERATING EXPENSES
<TABLE>
<S> <C> <C>
======================================================================================
(expenses that are deducted from fund assets)
Management Fees............................................. 0.98% 0.98%
Distribution and/or Service (12b-1) Fees.................... 0.25% 0.32%
Other Expenses..............................................
Other..................................................... 0.91% 0.91%
Interest.................................................. 0.20% 0.20%
----- -----
Total Annual Fund Operating Expenses........................ 2.34% 2.41%
Expense Reimbursement(4).................................... 0.39% 0.39%
----- -----
Net Expenses................................................ 1.95% 2.02%
======================================================================================
</TABLE>
(1) Shares issued in connection with the Reorganization are not subject to the
sales charge.
(2) If you buy $1,000,000 or more of Developing Markets Fund Class A shares and
redeem these shares within 18 months from the date of purchase, you may pay
a 1% contingent deferred sales charge (CDSC) at the time of redemption.
(3) A 2% redemption fee applies for the first year following the Reorganization
to shares issued in connection with the Reorganization.
(4) The investment advisor has contractually agreed to limit expenses.
As a result of Rule 12b-1 fees, long-term shareholders in Developing
Markets Fund may pay more than the maximum permitted initial sales charge.
8
<PAGE> 20
Set forth below are the annual operating expenses as a percentage of net
assets for shares of Eastern Europe Fund.
EASTERN EUROPE FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
==================================================================
Sales Load (as a percentage of offering price).............. None(1)
Dividend Reinvestment and Cash Purchase Plan Fees........... None
</TABLE>
ANNUAL FUND OPERATING EXPENSES
<TABLE>
<S> <C>
===================================================================
Management Fees............................................. 1.25%
Administration Fees......................................... 0.20%
Other Expenses.............................................. 0.38%
Total Annual Fund Operating Expenses........................ 1.83%
Expense Reimbursement(2).................................... 0.05%
-----
Net Expenses................................................ 1.78%
===================================================================
</TABLE>
(1) Eastern Europe Fund shares tendered in conjunction with an Annual Repurchase
Offer conducted by the Fund pursuant to Rule 23c-3 under the 1940 Act are
subject to a repurchase fee that does not exceed 2%.
(2) AIM has voluntarily undertaken to reduce the administration fee that Eastern
Europe Fund pays by 0.05%.
Expense Example
The example is intended to help you compare the costs of investing in Class
A shares of Developing Markets Fund, both before and after the Reorganization,
with the costs of investing in shares of Eastern Europe Fund.
The example assumes that you invest $10,000 in each Fund for the time
periods indicated. The example also assumes that your investments each have 5%
return each year and that each Fund's operating expenses remain the same. To the
extent fees are waived, the expenses will be lower. Although your actual returns
and costs may be higher or lower, based on these assumptions your costs would
be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
==================================================================================================
Developing Markets Fund Class A shares..................... $727 $1,248 $1,794 $3,279
Eastern Europe Fund........................................ $186 $ 576 $ 990 $2,148
Combined Fund Pro Forma Class A shares..................... $708 $1,191 $1,699 $3,091
</TABLE>
Sales Charges
Developing Markets Fund Class A shares received in connection with the
Reorganization are not subject to the customary initial sales charge of 4.75%.
However, those shares will be subject to a 2% redemption fee for the first year
following the Reorganization. Shares received in connection with the
Reorganization and exchanged for shares in other AIM Funds will be subject to
the 2% redemption fee upon the exchange. Any new purchases of Developing Markets
Fund Class A shares will be subject to the initial sales charge but not the
redemption fee.
Distribution, Purchase, Exchange, and Redemption
Shares of Developing Markets Fund are available through A I M Fund
Services, Inc. ("Transfer Agent") or through any dealer authorized by A I M
Distributors, Inc. ("AIM Distributors") to sell shares of the AIM Funds. The
minimum initial investment in Developing Markets Fund is $500; each additional
investment must be $50 or more. These minimums may be waived or reduced for
investments by employees of AIM or its
9
<PAGE> 21
affiliates, certain pension plans and retirement accounts, and participants in
an AIM Fund's automatic investment plan.
Developing Markets Fund Class A shares pay a fee in the amount of up to
0.50% of average daily net assets to AIM Distributors for distribution and
shareholder services pursuant to a Rule 12b-1 plan (the "12b-1 fee"). As noted
above, Developing Markets Fund Class A shares are generally subject to an
initial sales charge of 4.75%. Shares of Developing Markets Fund may be
exchanged for shares of other AIM Funds of the corresponding class and may be
acquired through exchange of the corresponding Class of shares of other AIM
Funds, as described in Developing Markets Fund's prospectus. No initial sales
charge is imposed on the shares acquired through an exchange. Exchanges are
subject to minimum investment and other requirements of the AIM Fund into which
exchanges are made. Developing Markets Fund Class A shares may be redeemed by
the Fund at NAV and are generally not subject to a CDSC.
Shares of Eastern Europe Fund are listed and publicly traded on the NYSE
under the symbol "GTF" and are not subject to distribution fees. The Developing
Markets Fund Class A shares that would be issued to Eastern Europe Fund
shareholders in connection with the Reorganization are subject to the 12b-1 fee.
Eastern Europe Fund shares were issued in a public offering completed on March
29, 1990. Shareholders of Eastern Europe Fund currently do not have an exchange
privilege. Upon completion of the Reorganization, however, former Eastern Europe
Fund shareholders would hold Developing Markets Fund Class A shares and would
enjoy the same exchange privileges as other Developing Markets Fund Class A
shareholders, although such exchanges would be subject to the one-year
redemption fee described above. Although Eastern Europe Fund shares are
non-redeemable, shareholders of Eastern Europe Fund may sell their shares on the
NYSE or participate in one of the Fund's annual repurchase offers. As noted
above, the Developing Markets Fund Class A shares received by Eastern Europe
Fund shareholders in the Reorganization will be subject to a redemption fee in
certain circumstances.
Operations of Developing Markets Fund Following the Reorganization
Although there are differences in the investment objectives and policies of
the Funds, it is not expected that Developing Markets Fund will revise any of
its investment objectives or policies following the Reorganization to reflect
those of Eastern Europe Fund. Rather, because Eastern Europe Fund's assets are
predominantly equity securities of Eastern European issuers, all of which are
consistent with Developing Markets Fund's investment policies, AIM and IAML,
Eastern Europe Fund's investment advisor and sub-advisor, respectively, believe
that substantially all of Eastern Europe Fund's assets could be transferred to
and held by Developing Markets Fund if the Reorganization is approved. Upon such
approval of the Reorganization, Eastern Europe Fund will sell any assets that
are inconsistent with Developing Markets Fund's investment policies prior to the
effective time of the Reorganization, and the proceeds thereof will be held in
temporary investments or reinvested in assets that qualify to be held by
Developing Markets Fund. The need, if any, for Eastern Europe Fund to dispose of
assets prior to the effective time of the Reorganization may result in selling
securities at a disadvantageous time and could result in Eastern Europe Fund's
realizing gains or losses that would not otherwise have been realized.
Investment Advisors and Portfolio Management
AIM serves as investment adviser, and IAML serves as investment
sub-adviser, to both Eastern Europe Fund and Developing Markets Fund. AIM and
IAML use a team approach to managing the Funds' respective investment
portfolios. The individual members of the team who are responsible for the
day-to-day management of Eastern Europe Fund's portfolio are:
- Peter Jarvis, Portfolio Manager for Eastern Europe Fund since 1998 and a
Fund Manager with IAML since 1993. Also since 1998, he has been a member
of the INVESCO Central and Eastern Europe Asset Management Group
specializing in Eastern Europe.
- Jonathan Brock, Portfolio Manager for Eastern Europe Fund since 1998 and
a Senior Investment Manager with IAML since 1994. Also since 1994, he has
been a member of the INVESCO Central
10
<PAGE> 22
and Eastern Europe Asset Management Group. From 1991 to 1994, he was a
Chartered Accountant with Price Waterhouse in London.
- Nadya Wells, Portfolio Manager for Eastern Europe Fund since 1998 and an
Investment Manager with IAML since 1995. Also since 1995, she has been a
member of the INVESCO Central and Eastern Europe Asset Management Group.
From 1993 to 1995 she was with Ernst & Young Management Consultancy in
London.
The individual members of the team who are responsible for the day-to-day
management of Developing Markets Fund's portfolio are:
- Francesco Bertoni, Portfolio Manager for Developing Markets Fund since
1998 and Head of Global Emerging Markets for IAML since 1995. Mr. Bertoni
was, from 1994 to 1999, Investment Director for IAML, from 1990 to 1995,
a Portfolio Manager for IAML and, from June to December 1998, a Portfolio
Manager for INVESCO (NY), Inc., an indirect wholly owned subsidiary of
AMVESCAP PLC.
- Craig Munro, Portfolio Manager of Developing Markets Fund since 1999 and
Head of Emerging Markets Fixed Income and a Portfolio Manager for IAML
since December 1998. Prior to this, Mr. Munro was, from August 1997 to
December 1998, a Portfolio Manager for INVESCO (NY), Inc. and, from 1993
to August 1997, Vice President and Senior Analyst in the Emerging Markets
Group of the Global Fixed Income Division of Merrill Lynch Asset
Management.
- Christine Rowley, Portfolio Manager of Developing Markets Fund since 1999
and a Portfolio Manager for IAML since December 1998. Prior to this, Ms.
Rowley was, from January 1991 to December 1998, a Portfolio Manager for
INVESCO (NY), Inc., GT Asset Management PLC (London) and INVESCO GT Asset
Management Asia Ltd. (Hong Kong), all indirect wholly owned subsidiaries
of AMVESCAP PLC.
COMPARISON OF PRINCIPAL RISK FACTORS
PRIMARY DIFFERENCES IN RISKS OF THE FUNDS
Developing Markets Fund and Eastern Europe Fund are subject to
substantially the same investment risks arising out of investing in foreign
securities generally and developing markets specifically. However, Eastern
Europe Fund is subject to additional risk arising out of its narrower geographic
focus. Eastern Europe Fund focuses its investments in a small number of
countries, many of which are either involved in, or may be affected by, the
current instability in that region. By contrast, Developing Markets Fund may
invest in developing markets around the world, and thus has greater latitude to
limit its investments in countries that are undergoing political or economic
upheaval. On the other hand, some of the non-European countries and regions in
which Developing Markets Fund invests, such as Latin America and the Pacific
Region, have recently experienced substantial economic difficulties.
Investments in Latin American countries involve special risks. Most Latin
American countries have experienced substantial, and in some periods extremely
high, rates of inflation for many years, which have had, and may continue to
have, very negative effects on the economies and securities markets of Latin
American countries. Certain Latin American countries are among the largest
debtors to commercial banks and foreign governments. At times, some of these
countries have suspended payments of principal and/or interest on external debt.
Some Latin American securities markets have experienced high volatility in
recent years. Latin American countries may close certain sectors of their
economies to equity investments by foreigners. Due to these and other
restrictions on direct investment by foreign entities, and to the absence of
securities markets and publicly owned corporations in certain Latin American
countries, investments may be made solely or primarily through governmentally
approved investment vehicles or companies. Certain Latin American countries may
have managed currencies that are maintained at artificially high levels to the
U.S. dollar rather than at market determined levels. This type of system can
lead to sudden and large adjustments in the
11
<PAGE> 23
currency which, in turn, can have a disruptive and negative effect on foreign
investors. For example, in late 1994, the value of the Mexican peso lost more
than one-third of its value relative to the U.S. dollar.
Certain of the risks associated with international investments are
heightened for investments in Pacific Region countries. For example, some of the
currencies of Pacific Region countries have experienced steady devaluations
relative to the U.S. dollar, and major adjustments have been made periodically
in certain of such currencies. Certain countries, such as India, face serious
currency exchange constraints. Territorial disputes exist between North Korea
and South Korea. Developing Markets Fund may invest in Hong Kong, which reverted
to Chinese administration on July 1, 1997. Investments in Hong Kong may be
subject to expropriation, nationalization, or confiscation, in which case
Developing Markets Fund could lose its entire investment in Hong Kong. In
addition, reversion of Hong Kong also presents a risk that the Hong Kong dollar
will be devalued and a risk of possible loss of investor confidence in Hong
Kong's currency, stock market, and assets.
RISKS COMMON TO BOTH FUNDS
Investing in Securities Generally
Investing in either Developing Markets Fund or Eastern Europe Fund entails
a risk that you could lose all or a portion of your investment. The value of
your investment in either Fund goes up and down with the prices of the
securities in which the Fund invests. The prices of equity securities change in
response to many factors, including the historical and prospective earnings of
the issuer, the value of its assets, general economic conditions, interest
rates, investor perceptions, and market liquidity. Debt securities are
particularly vulnerable to credit risk and interest rate fluctuations. When
interest rates rise, bond prices fall; the longer the bond's duration, the more
sensitive it is to this risk.
Investing in Foreign Securities and Developing Markets
Investments in foreign securities may be affected by, among others, the
following factors:
- Currency exchange rates -- The dollar value of the Funds' foreign
investments will be affected by changes in the exchange rates between the
dollar and the currencies in which those investments are traded.
- Political and economic conditions -- The value of the Funds' foreign
investments may be adversely affected by political and social instability
in their home countries and by changes in economic or taxation policies
in those countries.
- Regulations -- Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less publicly available
information about foreign companies than about U.S. companies.
- Markets -- The securities markets of other countries are smaller than
U.S. securities markets. As a result, many foreign securities may be less
liquid and their prices may be more volatile than U.S. securities.
These factors may affect the prices of securities issued by foreign
companies located in developing countries more than those in countries with
mature economies. For example, many developing countries have, in the past,
experienced high rates of inflation or sharply devalued their currencies against
the U.S. dollar, thereby causing the value of investments in companies located
in those countries to decline. Transaction costs are often higher in developing
countries and there may be delays in settlement procedures.
Lower Quality Debt
Both Developing Markets Fund and Eastern Europe Fund may invest up to 100%
of their respective total assets in debt securities rated below investment grade
or, if unrated, deemed by AIM or IAML to be of comparable quality ("junk
bonds"). Compared to higher-quality debt securities, junk bonds involve greater
risk of default or price changes due to changes in the credit quality of the
issuer because they are generally
12
<PAGE> 24
unsecured and may be subordinated to other creditors' claims. The value of junk
bonds often fluctuates in response to issuer, political, or economic
developments and can decline significantly over short periods of time or during
periods of general or regional economic difficulty. During those times, the
bonds may be difficult to value or sell at a fair price. Credit ratings on junk
bonds do not necessarily reflect their actual market risk.
Sovereign Debt
Both Developing Markets Fund and Eastern Europe Fund may invest in
sovereign debt securities of developing country governments, including Brady
Bonds. Brady Bonds are debt restructurings that provide for the exchange of cash
and loans for newly issued bonds. Investments in sovereign debt securities of
developing countries involve special risks. Sovereign debt securities of
developing countries are generally lower-quality debt securities, equivalent to
junk bonds. Accordingly, they are subject to many of the same risks as junk
bonds, detailed above. In addition, sovereign debt securities are subject to the
risk that, under certain political, diplomatic, social, or economic
circumstances, some developing countries that issue sovereign debt securities
may be unable or unwilling to make principal or interest payments as they come
due.
Illiquid Securities
Developing Markets Fund may invest up to 15% of its net assets in illiquid
securities. Eastern Europe Fund may invest without restriction (consistent with
its obligation to maintain adequate liquidity to satisfy its annual repurchase
offers) in certain restricted or otherwise illiquid securities. Any limitations
on resale and marketability of such securities may have the effect of preventing
the Funds from disposing of such securities at the time desired or at a
reasonable price. In addition, in order to resell restricted securities, the
Funds might have to bear the expense and incur the delays associated with
registering such securities.
Non-Diversified Classification
Both Developing Markets Fund and Eastern Europe Fund are classified under
the 1940 Act as "non-diversified" funds. Non-diversified funds may invest in
fewer issuers than diversified funds. As a result, each Fund may be subject to
greater investment and credit risk, than if it invested more broadly.
Year 2000
The value of shares in both Developing Markets Fund and Eastern Europe Fund
could be adversely affected if the computer systems used by the Funds'
investment advisors or other service providers are unable to distinguish the
year 2000 from the year 1900.
The Funds' investment advisors and independent technology consultants are
working to avoid Year 2000-related problems in their systems and to obtain
assurances that other service providers are taking similar steps. Year 2000
problems may also affect issuers in whose securities the Funds invest.
AIM considers the Year 2000 preparedness of the companies in which the
Funds invest as one factor among many in deciding whether to purchase or sell a
security.
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
financial performance of Developing Markets Fund's Class A shares. Certain
information reflects financial results for a single Developing Markets Fund
Class A share.
The total returns in the table represent the rate that an investor would
have earned (or lost) on an investment in Developing Markets Fund Class A shares
(assuming reinvestment of all dividends and distributions).
This information has been audited by PricewaterhouseCoopers LLP, whose
report, along with Developing Markets Fund's financial statements, is included
in Developing Markets Fund's Annual Report to Shareholders, which is available
upon request.
13
<PAGE> 25
On October 31, 1997, Developing Markets Fund, which had no previous
operating history, acquired the assets and assumed the liabilities of G.T.
Global Developing Markets Fund, Inc. (the "Predecessor Fund"), a closed-end
investment company whose single class of shares traded on the NYSE. The fees and
expenses of Developing Markets Fund differ from those of the Predecessor Fund.
Developing Markets Fund's fiscal year ends October 31, rather than December 31,
which was the Predecessor Fund's fiscal year-end.
<TABLE>
<CAPTION>
DEVELOPING MARKETS FUND: CLASS A(A)
---------------------------------------------------------------------------
TEN
YEAR MONTHS
ENDED ENDED YEAR ENDED JANUARY 11, 1994
OCTOBER 31, OCTOBER 31, DECEMBER 31, TO DECEMBER 31,
1998(B) 1997(C) 1996(C) 1995(C) 1994(C)
----------- ----------- -------- -------- ----------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning
of
period.................... $ 12.56 $ 13.84 $ 11.60 $ 12.44 $ 15.00
Income From Investment
operations:
Net investment income....... 0.39(d)(e) 0.25 0.53 0.72 0.35
Net realized and
unrealized gain (loss)
on investments.......... (5.10) (1.53) 2.19 (0.84) (2.46)
------- -------- -------- -------- --------
Net increase (decrease)
from investment
operations.............. (4.71) (1.28) 2.72 (0.12) (2.11)
------- -------- -------- -------- --------
Redemption fees
retained................ 0.28 -- -- -- --
-------
Distributions to
shareholders:
From net investment
income.................. (0.60) -- (0.48) (0.72) (0.35)
From net realized gain on
investments............. -- -- -- -- (0.10)
------- -------- -------- -------- --------
Total distributions....... (0.60) -- (0.48) (0.72) (0.45)
------- -------- -------- -------- --------
Net asset value, end of
period.................... $ 7.53 $ 12.56 $ 13.84 $ 11.60 $ 12.44
======= ======== ======== ======== ========
Market value, end of
period.................... N/A $ 11.81 $ 11.63 $ 9.75 $ 9.75
======= ======== ======== ======== ========
Total investment return
(based on market value)... N/A 1.62%(f) 24.18% 6.60% (32.16)%(f)
Total investment return
(based on net asset
value).................... (37.09)%(g) (9.25)%(f) 23.59% (0.95)% (14.07)%(f)
Ratios and supplemental
data:
Net assets, end of period
(in 000's)................ $87,517 $457,379 $504,012 $422,348 $452,872
Ratio of net investment
income to average net
assets:
With expense reductions
and reimbursement....... 3.84% 2.03%(h) 4.07% 6.33% 2.75%(h)
Without expense reductions
and reimbursement....... 3.43% 1.95%(h) 4.04% 6.30% 2.75%(h)
Ratio of expenses to average
net assets excluding
interest expense:
With expense reductions
and reimbursement....... 1.73% 1.75%(h) 1.82% 1.77% 2.01%(h)
Without expense reductions
and reimbursement....... 2.14% 1.83%(h) 1.85% 1.80% 2.01%(h)
Ratio of interest expense to
average net assets(i)..... 0.20% N/A N/A N/A N/A
Portfolio turnover
rate(i)................... 111% 184%(h) 138% 75% 56%
</TABLE>
- ---------------
(a) All capital shares of the Predecessor Fund issued and outstanding on
October 31, 1997 were reclassified as Class A shares.
14
<PAGE> 26
(b) These selected per share data were calculated based upon average shares
outstanding during the period.
(c) These financial highlights provide per share information of the
Predecessor Fund for the period January 11, 1994 (commencement of
operations) up to and including October 31, 1997.
(d) Net investment income per share reflects an interest payment received from
the conversion of Vnesheconombank loan agreements of $0.14 per share.
(e) Before reimbursement, the net investment income per share would have been
reduced by $0.04.
(f) Not annualized.
(g) Total investment return does not include sales charges.
(h) Annualized.
(i) Portfolio turnover rates and ratio of interest expense to average net
assets are calculated on the basis of Developing Markets Fund as a whole
without distinguishing between the classes of shares issued.
N/A Not Applicable.
15
<PAGE> 27
ADDITIONAL INFORMATION ABOUT THE REORGANIZATION
TERMS OF THE REORGANIZATION
The terms and conditions under which the Reorganization may be consummated
are set forth in the Plan. Significant provisions of the Plan are summarized
below; however, this summary is qualified in its entirety by reference to the
Plan, a form of which is attached as Appendix A to this Proxy
Statement/Prospectus.
The Plan contemplates (a) Developing Markets Fund acquiring on the Closing
Date all the assets of Eastern Europe Fund in exchange solely for Developing
Markets Fund Class A shares and Developing Markets Fund's assumption of all of
Eastern Europe Fund's liabilities and (b) the distribution of those shares to
Eastern Europe Fund shareholders. Eastern Europe Fund's assets include 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 its books, and other property owned by it as of the close of
regular trading on the NYSE on the Closing Date ("Valuation Time")
(collectively, the "Assets"). Developing Markets Fund will assume from Eastern
Europe Fund all its liabilities, debts, obligations, and duties of whatever kind
or nature, whether absolute, accrued, contingent, or otherwise, whether or not
arising in the ordinary course of business, whether or not determinable at the
Valuation Time, and whether or not referred to in the Plan (collectively, the
"Liabilities"); provided, however, that Eastern Europe Fund will use its best
efforts to discharge all of its known Liabilities prior to the Valuation Time.
Developing Markets Fund will deliver its Class A shares to Eastern Europe Fund,
which then will be distributed to Eastern Europe Fund's shareholders.
The value of the Assets to be acquired, and the amount of the Liabilities
to be assumed, by Developing Markets Fund and the NAV of a Class A share of
Developing Markets Fund will be determined as of the Valuation Time. Where
market quotations are readily available, portfolio securities will be valued
based upon the quotations, provided they adequately reflect, in AIM's judgment,
the fair value of the security. Where market quotations are not readily
available, securities will be valued based upon appraisals received from a
pricing service using a computerized matrix system or appraisals derived from
information concerning the security or similar securities received from
recognized dealers in those securities. The amortized cost method of valuation
generally will be used to value debt instruments with 60 days or less remaining
to maturity, unless a Fund's Board of Trustees determines that this method does
not represent fair value. All other securities and assets will be valued at fair
value as determined in good faith by or under the direction of each Fund's Board
of Trustees.
On, or as soon as practicable after, the Closing Date, Eastern Europe Fund
will distribute to its shareholders of record the Developing Markets Fund Class
A shares it receives so that each Eastern Europe Fund shareholder will receive a
number of full and fractional Class A shares of Developing Markets Fund equal in
aggregate NAV to the shareholder's shares in Eastern Europe Fund. Such
distribution will be accomplished by opening accounts on the books of Developing
Markets Fund in the names of Eastern Europe Fund's shareholders and crediting
such accounts with Developing Markets Fund Class A shares equal in aggregate NAV
to the shareholders' shares in Eastern Europe Fund. Fractional shares of
Developing Markets Fund will be rounded to the third decimal place.
Immediately after the Reorganization, each former shareholder of Eastern
Europe Fund will own Class A shares of Developing Markets Fund equal in NAV to
the aggregate NAV of that shareholder's shares in Eastern Europe Fund
immediately prior to the Reorganization. The NAV per share of Developing Markets
Fund will not be changed as a result of the Reorganization. Thus, the
Reorganization will not result in a dilution of any shareholder interest.
DESCRIPTION OF SECURITIES TO BE ISSUED
The Trust is registered with the SEC as an open-end management investment
company. Pursuant to the Trust's Agreement and Declaration of Trust, the Trust
may issue an unlimited number of shares. The Trust's Board of Trustees (the
"Trust's Board") has established Developing Markets Fund as a series of the
Trust and has authorized the public offering of four classes of shares of that
Fund, designated Class A, Class B, Class C,
16
<PAGE> 28
and Advisor Class shares. Only Class A shares will be issued in connection with
the Reorganization. Although Class A shares are generally subject to an initial
sales charge of 4.75%, this sales charge will be waived for the shares issued in
connection with the Reorganization. As noted above, those shares will be subject
to a 2% redemption fee for the first year following the Reorganization.
Each share of Developing Markets Fund represents an equal proportionate
interest with other shares in that Fund, has a par value of $0.01 per share, has
equal earnings, assets, and voting privileges, except as noted in the Developing
Markets Fund Statement of Additional Information, and is entitled to such
dividends and other distributions out of the income earned and gain realized on
the assets belonging to the Fund as may be declared by the Trust's Board. Each
share in a class represents an equal proportionate interest in Developing
Markets Fund's assets with each other share in that class. Shares of Developing
Markets Fund entitle their holders to one vote per full share and fractional
votes for fractional shares held, except that each Class has exclusive voting
rights on matters pertaining to its plan of distribution. Shares of Developing
Markets Fund, when issued, are fully paid and nonassessable.
DIVIDENDS AND OTHER DISTRIBUTIONS
Dividends from Developing Markets Fund's net investment income, if any, are
distributed at least annually. Any net capital gain (the excess of net long-term
capital gain over net short-term capital loss) and net short-term capital gain
realized from the sale of portfolio securities and net gains from foreign
currency transactions are also distributed at least annually. Shareholders of
Developing Markets Fund may reinvest dividends and other distributions in
additional Fund shares of the distributing class (or in shares of the
corresponding class of other AIM Funds) on the payment date at those shares' NAV
that day or receive the distribution amount in cash.
Dividends from Eastern Europe Fund's net investment income, if any, are
distributed at least annually. Any net capital gain and net short-term capital
gain realized from the sale of portfolio securities and net gains from foreign
currency transactions are also distributed at least annually. Shareholders of
Eastern Europe Fund may participate in the Fund's Dividend Reinvestment Plan,
under which dividends and capital gains distributions are automatically invested
in additional shares of the Fund at NAV. Alternatively, shareholders may elect
to receive dividends and other distributions in cash.
Each Fund may make additional distributions if necessary to avoid a 4%
excise tax on certain undistributed ordinary income and capital gains.
On or before the Closing Date, Eastern Europe Fund will declare as a
distribution substantially all of its undistributed net investment income, net
capital gain, net short-term capital gain, and net gains from foreign currency
transactions to maintain its tax status as a regulated investment company.
The consummation of the Reorganization is subject to a number of conditions
set forth in the Plan, some of which may be waived by Eastern Europe Fund. In
addition, the Plan may be amended in any mutually agreeable manner, except that
no amendment may be made subsequent to the Meeting that would have a material
adverse effect on Eastern Europe Fund shareholders' interests.
POTENTIAL NET REDEMPTION
If a large percentage of Eastern Europe Fund shareholders redeem their
shares after the Reorganization, significant costs may be imposed on Developing
Markets Fund. The proposed redemption fee is intended to offset such costs, but,
to the extent those costs exceed the fees charged, those costs would be borne by
Developing Markets Fund shareholders. To meet redemption requests, Developing
Markets Fund may be required either to draw upon a line of credit, which would
impose some interest costs, or to sell portfolio securities, which would incur
brokerage costs and may result in capital gain or loss that would not otherwise
have been recognized. Any gain would, to the extent it is not otherwise offset
during the year, be distributed to shareholders. Recognition and distribution of
gain would have two negative consequences: first, non-redeeming shareholders
would be required to pay taxes on larger capital gain distributions than they
would
17
<PAGE> 29
otherwise; and second, Developing Markets Fund may need to sell additional
portfolio securities to raise cash to make the distributions, potentially
resulting in recognition of additional capital gain.
ACCOUNTING TREATMENT
The Reorganization will be accounted for on a tax-free combined basis.
Accordingly, the book cost basis to Developing Markets Fund of the Assets will
be the same as Eastern Europe Fund's book cost basis of the Assets.
FEDERAL INCOME TAX CONSIDERATIONS
The exchange of all of Eastern Europe Fund's assets solely for Developing
Markets Fund Class A shares and Developing Markets Fund's assumption of all the
liabilities of Eastern Europe Fund is intended to qualify for federal income tax
purposes as a tax-free reorganization under section 368 of the Code. Eastern
Europe Fund and the Trust will receive an opinion of Kirkpatrick & Lockhart LLP,
their counsel, substantially to the effect that:
(1) Developing Markets Fund's acquisition of the Assets in exchange
solely for Developing Markets Fund Class A shares and Developing Markets
Fund's assumption of the Liabilities, followed by Eastern Europe Fund's
distribution of those shares pro rata to its shareholders constructively in
exchange for their Eastern Europe Fund shares, will qualify as a
reorganization within the meaning of section 368(a)(1)(C) of the Code, and
each Fund will be "a party to a reorganization" within the meaning of
section 368(b) of the Code;
(2) Eastern Europe Fund will recognize no gain or loss on the transfer
of the Assets to Developing Markets Fund in exchange solely for Developing
Markets Fund Class A shares and Developing Markets Fund's assumption of the
Liabilities or on the subsequent distribution of those shares to Eastern
Europe Fund's shareholders in constructive exchange for their Eastern
Europe Fund shares;
(3) Developing Markets Fund will recognize no gain or loss on its
receipt of the Assets in exchange solely for Developing Markets Fund Class
A shares and its assumption of the Liabilities;
(4) Developing Markets Fund's basis for the Assets will be the same as
Eastern Europe Fund's basis therefor immediately before the Reorganization,
and Developing Markets Fund's holding period for the Assets will include
Eastern Europe Fund's holding period therefor;
(5) An Eastern Europe Fund shareholder will recognize no gain or loss
on the constructive exchange of all its Eastern Europe Fund shares solely
for Developing Markets Fund Class A shares pursuant to the Reorganization;
and
(6) An Eastern Europe Fund shareholder's aggregate basis for the
Developing Markets Fund Class A shares to be received by it in the
Reorganization will be the same as the aggregate basis for its Eastern
Europe Fund shares to be constructively surrendered in exchange for those
Developing Market Fund shares, and its holding period for those Developing
Market Fund Class A shares will include its holding period for those
Eastern Europe Fund shares, provided they are held as capital assets by the
shareholder on the Closing Date.
Notwithstanding the foregoing, however, the opinion will not express any
conclusion about the tax consequences of the Reorganization regarding the
treatment of unrealized gain or loss on Assets (such as certain futures and
foreign currency contracts) that is required to be recognized for federal income
tax purposes under a market-to-market system of accounting. The funds do not
expect that the amount of such gain will be significant.
Utilization by Developing Markets Fund after the Reorganization of any
pre-Reorganization capital losses realized by Eastern Europe Fund would be
subject to limitation in future years under the Code.
Shareholders of Eastern Europe Fund should consult their tax advisers
regarding the effect, if any, of the Reorganization in light of their individual
circumstances. Because the foregoing discussion only relates to the
18
<PAGE> 30
federal income tax consequences of the Reorganization, those shareholders also
should consult their tax advisers as to state and local tax consequences, if
any, of the Reorganization.
ORGANIZATION OF THE FUNDS
Developing Markets Fund is a non-diversified series of the Trust, an
open-end management investment company. Developing Markets Fund commenced
operations, as a series of AIM Investment Funds, Inc. ("Investment Funds,
Inc."), an open-end management investment company on November 1, 1997, as the
successor (in a reorganization) to G.T. Global Developing Markets Fund, Inc., a
closed-end investment company that had commenced operations on January 11, 1994.
The Trust was organized as a Delaware business trust on May 7, 1998, and on
September 8, 1998, it acquired the assets and assumed the liabilities of
Investment Funds, Inc. As a result of this acquisition, Developing Markets Fund
became a series of the Trust. The operations of the Trust, as a Delaware
business trust, are governed by its Agreement and Declaration of Trust, as
amended, and Delaware law. The overall direction and supervision of Developing
Markets Fund is the responsibility of the Trust's Board, which has the primary
duty of ensuring that the Fund's general investment policies and programs are
adhered to and the Fund is properly administered.
Eastern Europe Fund is a non-diversified closed-end management investment
company that was organized as a Massachusetts business trust under the name
"G.T. Greater Europe Fund" on December 6, 1989. On May 31, 1996, the Fund's
investment focus was narrowed and its name changed to "G.T. Global Eastern
Europe Fund." Concurrent with the name change, the Fund was converted to
"interval fund" status pursuant to Rule 23c-3 under the 1940 Act and has since
conducted annual repurchase offers for its shares. On May 29, 1998, the Fund was
renamed "AIM Eastern Europe Fund." Eastern Europe Fund shares have been listed
and publicly traded on the NYSE under the symbol "GTF" since March 29, 1990. The
operations of Eastern Europe Fund, as a Massachusetts business trust, are
governed by its Agreement and Declaration of Trust, as amended, and
Massachusetts law. The overall direction and supervision of Eastern Europe Fund
is the responsibility of its Board, which has the primary duty of ensuring that
the Fund's general investment policies and programs are adhered to and the Fund
is properly administered.
NAV, MARKET PRICE, AND DISCOUNT
OF EASTERN EUROPE FUND SHARES
Eastern Europe Fund shares trade on the NYSE. The following table sets
forth, on a quarterly basis, the high and low NAVs of the shares, the high and
low sales prices of the shares, and the discount to NAV that these figures
represent, since May 1, 1996, when Eastern Europe Fund was converted to
"interval fund" status pursuant to Rule 23c-3 under the 1940 Act.
<TABLE>
<CAPTION>
NAV MARKET PRICE (DISCOUNT)
------------- --------------- ----------------
HIGH LOW HIGH LOW HIGH LOW
----- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
May 1, 1996 to July 31, 1996............... 16.03 15.43 14.625 12.625 [. ]% (5.64)%
August 1, 1996 to October 31, 1996......... 16.99 15.71 14.125 12.750 (25.20)% (19.49)%
November 1, 1996 to January 31, 1997....... 18.21 15.01 15.625 12.125 (24.90)% (13.63)%
February 1, 1997 to April 30, 1997......... 18.78 16.85 16.000 14.000 (22.00)% (13.38)%
May 1, 1997 to July 31, 1997............... 20.72 17.21 18.750 14.750 (21.82)% (10.27)%
August 1, 1997 to October 31, 1997......... 23.47 18.62 20.625 16.250 (34.83)% (8.20)%
November 1, 1997 to January 31, 1998....... 18.62 12.05 16.875 10.563 (40.85)% (5.56)%
February 1, 1998 to April 30, 1998......... 14.77 12.05 12.750 10.938 (20.21)% (5.93)%
May 1, 1998 to July 31, 1998............... 14.68 10.13 12.250 7.938 (31.91)% (17.33)%
August 1, 1998 to October 31, 1998......... 10.97 6.00 8.750 4.438 (61.53)% (20.91)%
November 1, 1998 to January 31, 1999....... 8.28 7.23 6.688 5.563 (33.11)% (16.08)%
February 1, 1999 to April 30, 1999......... 7.96 7.11 6.625 5.500 (30.91)% (15.92)%
</TABLE>
19
<PAGE> 31
CAPITALIZATION
The following table shows the capitalization of each Fund as of its fiscal
year ended October 31, 1998, and on a pro forma combined basis (unaudited) as of
that date, giving effect to the Reorganization.
<TABLE>
<CAPTION>
DEVELOPING MARKETS PRO FORMA CLASS A
EASTERN EUROPE FUND FUND: CLASS A COMBINED
------------------- ------------------ -----------------
<S> <C> <C> <C>
Net Assets................................ $47,099,546 $87,517,225 $134,616,771
Shares Outstanding........................ 6,516,426 11,616,154 17,872,961
Net Asset Value Per Share................. $ 7.23 $ 7.53 $ 7.53
</TABLE>
The following table shows the capitalization of each Fund as of April 30,
1999, and on a pro forma combined basis (unaudited) as of that date, giving
effect to the Reorganization.
<TABLE>
<CAPTION>
DEVELOPING MARKETS PRO FORMA CLASS A
EASTERN EUROPE FUND FUND: CLASS A COMBINED
------------------- ------------------ -----------------
<S> <C> <C> <C>
Net Assets.............................. $51,869,960(1) $138,271,639(2) $190,141,599(1)(2)
Shares Outstanding...................... 6,516,426(1) 14,529,141 19,977,749(1)
Net Asset Value Per Share............... $ 7.96 $ 9.52 $ 9.52
</TABLE>
- ---------------
(1) These figures do not reflect the payment made on May 7, 1999, in the amount
of $5,082,820.11 to Eastern Europe Fund shareholders participating in the
1999 repurchase offer, nor do they reflect the decrease in the number of
outstanding shares as a result of that repurchase offer.
(2) These figures reflect the addition of the assets of AIM Emerging Markets
Fund resulting from the reorganization of that fund into Developing Markets
Fund completed on February 12, 1999.
REQUIRED VOTE. The proposal to approve the Plan requires the affirmative
vote of a "majority of the outstanding voting securities" of Eastern Europe
Fund, which for this purpose means the affirmative vote of the lesser of (1)
more than 50% of the outstanding shares of Eastern Europe Fund or (2) 67% or
more of the shares of Eastern Europe Fund present at the meeting if more than
50% of the outstanding shares of Eastern Europe Fund are represented at the
Meeting in person or by proxy.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 1
------------------------
PROPOSAL NO. 2:
ELECTION OF A TRUSTEE
The Board has nominated the individual identified below for election to the
Board at the Meeting. It is the intention of each proxyholder named on the
accompanying proxy card to vote FOR the election of the nominee listed below
unless the Eastern Europe Fund shareholder specifically indicates on his or her
proxy card a desire to withhold authority to vote for the nominee. The Board
does not contemplate that the nominee, who has consented to being nominated,
will be unable to serve as a Trustee for any reason but if that should occur
prior to the Meeting, the proxies will be voted for such other nominee as the
Board may recommend.
20
<PAGE> 32
INFORMATION REGARDING THE NOMINEE FOR ELECTION AT THE MEETING
<TABLE>
<CAPTION>
POSITION(S) WITH EASTERN
NAME, AGE, AND BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS AND OTHER DIRECTORSHIPS EUROPE FUND AND TENURE
- ------------------------------------------------------------------------------------- ---------------------------
<S> <C> <C>
ROBERT H. GRAHAM, Age 52*............................................... Trustee, Since 1998
Mr. Graham is Director, President and Chief Executive Officer, A I M Management Group Chairman and
Inc.; Director and President, AIM; Director and Senior Vice President, A I M Capital President
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc. and Fund
Management Company; and Director, AMVESCAP PLC.
</TABLE>
INFORMATION REGARDING TRUSTEES WHOSE CURRENT TERMS CONTINUE
<TABLE>
<CAPTION>
POSITION(S) WITH EASTERN
NAME, AGE, AND BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS AND OTHER DIRECTORSHIPS EUROPE FUND AND TENURE
- ------------------------------------------------------------------------------------- ---------------------------
<S> <C> <C>
C. DEREK ANDERSON, Age 57............................................... Trustee Since 1990
Mr. Anderson is President, Plantagenet Capital Management, LLC (an investment
partnership); Chief Executive Officer, Plantagenet Holdings, Ltd. (an investment
banking firm); Director, Anderson Capital Management, Inc., since 1988; Director,
PremiumWear, Inc. (formerly Munsingwear, Inc.) (a casual apparel company); and
Director, "R" Homes, Inc. and various other companies. Mr. Anderson is also a
director or trustee of several other investment companies registered under the 1940
Act that are managed or administered by AIM.
FRANK S. BAYLEY, Age 59................................................. Trustee Since 1990
Mr. Bayley is a partner of the law firm of Baker & Mackenzie; and Director and
Chairman of C.D. Stimpson Company (a private investment company). Mr. Bayley is also
a director or trustee of several other investment companies registered under the 1940
Act that are managed or administered by AIM.
ARTHUR C. PATTERSON, Age 55............................................. Trustee Since 1990
Mr. Patterson is a Managing Partner of Accel Partners (a venture capital firm). He
also serves as a director of Viasoft and Pagemart, Inc. (both publicly-traded
software companies), as well as several privately held software and communications
companies. Mr. Patterson is also a director or trustee of several other investment
companies registered under the 1940 Act that are managed or administered by AIM.
RUTH H. QUIGLEY, Age 64................................................. Trustee Since 1990
Ms. Quigley is a private investor. From 1984 to 1986, she was President of Quigley
Friedlander & Co., Inc. (a financial advisory services firm). Ms. Quigley is also a
director or trustee of several other investment companies registered under the 1940
Act that are managed or administered by AIM.
</TABLE>
- ---------------
* Mr. Graham is deemed an "interested person" of Eastern Europe Fund, as defined
in the 1940 Act, by virtue both of his association with AIM and its
affiliates.
21
<PAGE> 33
INFORMATION REGARDING THE EXECUTIVE
OFFICERS OF EASTERN EUROPE FUND
<TABLE>
<CAPTION>
POSITION(S) WITH EASTERN
NAME, AGE, AND BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS EUROPE FUND AND TENURE
- ------------------------------------------------------------- ---------------------------
<S> <C> <C>
ROBERT H. GRAHAM, Age 52.................................... Trustee, Since 1998
Mr. Graham is Director, President and Chief Executive Chairman, and
Officer, A I M Management Group Inc.; Director and President, President
AIM; Director and Senior Vice President, A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund
Services, Inc. and Fund Management Company; and Director,
AMVESCAP PLC.
DANA R. SUTTON, Age 40...................................... Vice President Since 1999
Ms. Sutton is Vice President and Fund Controller, AIM and and Treasurer
Vice President and Assistant Treasurer, Fund Management
Company.
SAMUEL D. SIRKO, Age 39..................................... Vice President Since 1998
Mr. Sirko is Associate General Counsel and Assistant and Secretary
Secretary, A I M Management Group Inc., A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund
Services, Inc., and Fund Management Company; and Vice
President, Assistant General Counsel and Assistant Secretary
of AIM.
MELVILLE B. COX, Age 55..................................... Vice President Since 1998
Mr. Cox is Vice President and Chief Compliance Officer, AIM,
A I M Capital Management, Inc., A I M Distributors, Inc.,
A I M Fund Services, Inc., and Fund Management Company.
GARY T. CRUM, Age 51........................................ Vice President Since 1998
Mr. Crum is Director and President, A I M Capital Management,
Inc.; Director and Senior Vice President, A I M and AIM
Management Group, Inc.; and Director, A I M Distributors,
Inc. and AMVESCAP.
CAROL F. RELIHAN, Age 44.................................... Vice President Since 1998
Ms. Relihan is Director, Senior Vice President, General
Counsel, and Secretary, AIM; Senior Vice President, General
Counsel, and Secretary, A I M Management Group Inc.;
Director, Vice President and General Counsel, Fund Management
Company; Vice President and General Counsel, A I M Fund
Services, Inc.; and Vice President, A I M Capital Management,
Inc. and A I M Distributors, Inc.
</TABLE>
To the knowledge of Eastern Europe Fund's management, as of the Record
Date, the Trustees and Officers of Eastern Europe Fund owned, as a group, less
than 1% of the outstanding shares of Eastern Europe Fund.
There were fourteen meetings of Eastern Europe Fund's Board held during the
Fund's fiscal year ended October 31, 1998. The Board has a Nominating and Audit
Committee composed of Miss Quigley (Chairman) and Messrs. Anderson, Bayley and
Patterson. The purpose of the Nominating and Audit Committee is to nominate
persons to serve as Trustees, review annual audits of Eastern Europe Fund, and
recommend firms to serve as independent auditors for Eastern Europe Fund. The
Nominating and Audit Committee does not normally consider nominees recommended
by security holders. During Eastern Europe Fund's last completed fiscal year,
the Nominating and Audit Committee met [once]. Each Trustee attended at least
75% of the total number of meetings of the Board, and [each member of the
Nominating and Audit Committee has attended at least 75% of the meetings of that
committee.]
All of Eastern Europe Fund's Trustees also serve as directors or trustees
of some or all of the other investment companies managed, administered or
advised by AIM. Eastern Europe Fund pays each Trustee, who is not a director,
officer or employee of AIM or any affiliated company, an annual retainer
component,
22
<PAGE> 34
plus a per-meeting fee component for each Board or committee meeting attended by
such Trustee and reimburses travel and other out-of-pocket expenses incurred in
connection with attending such meetings. The table below summarizes the
compensation of Eastern Europe Fund's Trustees for the fiscal year ended October
31, 1998 and provides the total compensation of the Board members by the Fund
Complex for the fiscal year ended October 31, 1998.
COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION TOTAL COMPENSATION FROM
FROM EASTERN EUROPE EASTERN EUROPE FUND AND
NAME OF PERSON, POSITION(2) FUND the Fund Complex(3)
- --------------------------- ---------------------- ------------------------
<S> <C> <C>
C. Derek Anderson.................................. $6,450 $ 97,600
Trustee
Frank S. Bayley.................................... $7,400 $ 97,500
Trustee
Arthur C. Patterson................................ $7,700 $105,450
Trustee
Ruth H. Quigley.................................... $7,700 $106,350
Trustee
</TABLE>
- ---------------
(1) The Trustees do not receive any pension or retirement benefits as
compensation for their services to Eastern Europe Fund.
(2) As an employee of AIM, Mr. Graham receives no additional compensation from
Eastern Europe Fund for serving as a Trustee.
(3) The "Fund Complex" includes all investment companies advised by AIM;
however, each of the Trustees listed above serves on the board of only 12 of
those investment companies.
REQUIRED VOTE. A plurality of all the votes cast at the Meeting is required
for the election of the Trustee.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 2
------------------------
PROPOSAL NO. 3:
RATIFICATION OF THE SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
At a meeting called for the purpose of such selection, the firm of
PricewaterhouseCoopers LLP was selected by Eastern Europe Fund's Board,
including its trustees who are not "interested persons" of Eastern Europe Fund,
Developing Markets Fund, AIM or IAML, as the independent public accountants to
audit the books and accounts of Eastern Europe Fund for the fiscal year ending
October 31, 1999 and to include its opinion in financial statements filed with
the SEC. The Board has directed the submission of this selection to the Eastern
Europe Fund shareholders for ratification. PricewaterhouseCoopers LLP has
advised the Board that it has no financial interest in Eastern Europe Fund. For
the fiscal year ended October 31, 1998, the professional services rendered by
PricewaterhouseCoopers LLP included the issuance of an opinion on the financial
statements of Eastern Europe Fund and an opinion on other reports of Eastern
Europe Fund filed with the SEC. Representatives of PricewaterhouseCoopers LLP
are not expected to be present at the Meeting, but have been given the
opportunity to make a statement if they so desire and will be available should
any matter arise requiring their presence.
REQUIRED VOTE. Ratification of the selection of PricewaterhouseCoopers LLP
requires the affirmative vote of a majority of the votes cast thereon at the
Meeting.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 3
------------------------
23
<PAGE> 35
LEGAL MATTERS
Certain legal matters concerning Eastern Europe Fund and the Trust and
their participation in the Reorganization, the issuance of Class A shares of
Developing Markets Fund in connection with the Reorganization, and the tax
consequences of the Reorganization will be passed upon by Kirkpatrick & Lockhart
LLP, 1800 Massachusetts Avenue, N.W., Washington, D.C. 20036-1800, counsel to
Eastern Europe Fund and to the Trust.
INFORMATION FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION AND NYSE
This Proxy Statement/Prospectus and the related Statement of Additional
Information do not contain all the information set forth in the registration
statements and the exhibits relating thereto and annual reports which Eastern
Europe Fund has filed with the Securities and Exchange Commission ("SEC")
pursuant to the requirements of the Securities Act of 1933 Act and the 1940 Act,
to which reference is hereby made. The SEC file number for Eastern Europe Fund's
Annual Report to Shareholders dated October 31, 1998, is 811-5978. Such Annual
Report to Shareholders is incorporated herein by reference. The SEC file number
for the Trust's registration statement containing the Prospectus and Statement
of Additional Information relating to Developing Markets Fund is Registration
No. 33-19338. Such Prospectus and Statement of Additional Information are
incorporated herein by reference.
Eastern Europe Fund and the Trust are each subject to the informational
requirements of the 1940 Act and in accordance therewith each files reports and
other information with the SEC. Reports, proxy statements, registration
statements and other information filed by Eastern Europe Fund and the Trust
(including the Registration Statement of the Trust relating to the Developing
Markets Fund and Eastern Europe Fund on Form N-14 of which this Proxy
Statement/Prospectus is a part and which is hereby incorporated by reference)
may be inspected without charge and copied at the public reference facilities
maintained by the SEC at Room 1014, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, DC 20549, and at the following regional offices of the SEC: 7 World
Trade Center, New York, NY 10048; and 500 West Madison Street, 14th floor,
Chicago, IL 60661. Copies of such material may also be obtained from the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, DC 20549 at
the prescribed rates. The SEC maintains an internet web site at
http://www.sec.gov that contains information regarding the Trust, Eastern Europe
Fund, and other registrants that file electronically with the SEC.
Eastern Europe Fund shares are listed and publicly traded on the NYSE. If
the Reorganization is approved, Eastern Europe Fund will no longer be listed on
the NYSE. Reports, proxy statements and other information concerning Eastern
Europe Fund may be inspected at the offices of the NYSE, 20 Broad Street, New
York, NY 10005.
INFORMATION ABOUT THE FUNDS' ADVISOR AND SUB-ADVISOR,
AND DEVELOPING MARKETS FUND'S DISTRIBUTOR
AIM serves as investment advisor, and IAML serves as investment
sub-advisor, to both Eastern Europe Fund and Developing Markets Fund. AIM is
located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. IAML is
located at 11 Devonshire Square, London, EC2M 4YR, England. The advisors
supervise all aspects of the Funds' respective operations and provide investment
advisory services to each Fund, including obtaining and evaluating economic,
statistical, and financial information to formulate and implement investment
programs for the Funds. AIM has acted as an investment advisor since its
organization in 1976, and IAML has acted as an investment advisor since 1967.
Today, AIM, together with its subsidiaries, advises or manages over 110
investment portfolios, including Eastern Europe Fund and Developing Markets
Fund, encompassing a broad range of investment objectives. AIM Distributors acts
as Developing Markets Fund's distributor. AIM Distributors is located at 11
Greenway Plaza, Suite 100, Houston, Texas, 77046-1173.
24
<PAGE> 36
AIM, IAML, and AIM Distributors are each indirect wholly-owned subsidiaries
of AMVESCAP PLC, which is an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
ADDITIONAL INFORMATION ABOUT EASTERN
EUROPE FUND AND DEVELOPING MARKETS FUND
For more information with respect to Eastern Europe Fund concerning the
following topics, please refer to the Eastern Europe Fund Annual Report to
Shareholders, dated October 31, 1998, as indicated: (i) see "Related Parties"
for further information regarding Eastern Europe Fund's investment advisor,
investment sub-advisor, and administrator; (ii) see discussion in "About the
Portfolio Managers" for further information regarding management of Eastern
Europe Fund; (iii) see "Capital Shares" and "Portfolio Valuation" for further
information regarding the shares of Eastern Europe Fund; (iv) see "Dividend
Reinvestment Plan" for further information regarding the reinvestment of
dividends paid by Eastern Europe Fund; and (v) see "Fundamental Periodic
Repurchase Policy," for further information regarding participation in annual
repurchase offers conducted by the Fund pursuant to Rule 23c-3.
For more information with respect to the Trust and Developing Markets Fund
concerning the following topics, please refer to Developing Markets Fund
Prospectus, dated March 1, 1999 and attached as Appendix B to this Proxy
Statement/Prospectus, as indicated: (i) see "Investment Objectives and
Strategies," and "Fund Management" for further information regarding Developing
Market Fund; (ii) see discussion in "Fund Management" and "Investment Objectives
and Strategies" for further information regarding management of Developing
Markets Fund; (iii) see "Shareholder Information," and "Other Information" for
further information regarding the shares of Developing Markets Fund; (iv) see
"Shareholder Information" for further information regarding the purchase,
redemption and repurchase of shares of Developing Markets Fund.
EXPERTS
The audited financial statements of Eastern Europe Fund and Developing
Markets Fund are incorporated by reference herein and in included in Eastern
Europe Fund's Annual Report to Shareholders for the fiscal year ended October
31, 1998 and Developing Markets Fund's Statement of Additional Information dated
March 1, 1999, respectively, have each been audited by PricewaterhouseCoopers
LLP, independent accountants, whose reports thereon are included in the Funds'
respective Annual Reports to Shareholders for the fiscal year ended October 31,
1998. The financial statements audited by PricewaterhouseCoopers LLP have been
incorporated herein by reference in reliance on its reports given on its
authority as experts in auditing and accounting.
SHAREHOLDER PROPOSALS
Any shareholder who wishes to submit a proposal for consideration at
Eastern Europe Fund's next annual shareholders meeting (which will not be held
if the Reorganization is approved and Eastern Europe Fund is liquidated) should
submit such proposal to the Fund no later than [February 1, 2000.] Shareholder
proposals that are submitted in a timely manner will not necessarily be included
in Eastern Europe Fund's proxy materials. Inclusion of such proposals is subject
to limitations under the federal securities laws.
25
<PAGE> 37
OWNERSHIP OF EASTERN EUROPE FUND
AND DEVELOPING MARKETS FUND SHARES
Listed below is the name, address and percent ownership of each person who
as of June 21, 1999, to the knowledge of the Trust or Eastern Europe Fund, owned
beneficially 5 percent or more of the outstanding shares of Eastern Europe Fund
or owned beneficially 5 percent or more of the outstanding Class A shares of
Developing Markets Fund:
EASTERN EUROPE FUND
<TABLE>
<CAPTION>
PERCENT
NUMBER OF BENEFICIAL
NAME AND ADDRESS SHARES OWNED OWNERSHIP
- ---------------- ------------ ----------
<S> <C> <C>
[ ]
[ ]
</TABLE>
DEVELOPING MARKETS FUND: CLASS A
<TABLE>
<CAPTION>
PERCENT
NUMBER OF BENEFICIAL
NAME AND ADDRESS SHARES OWNED OWNERSHIP
- ---------------- ------------ ----------
<S> <C> <C>
[none]
</TABLE>
26
<PAGE> 38
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION AND TERMINATION
THIS AGREEMENT AND PLAN OF REORGANIZATION AND TERMINATION ("Agreement") is
made as of May 14, 1999, between AIM Investment Funds, a Delaware business trust
("Trust"), on behalf of AIM Developing Markets Fund, a segregated portfolio of
assets ("series") thereof ("Acquiring Fund"), and AIM Eastern Europe Fund, a
Massachusetts business trust ("Target"). (Acquiring Fund and Target are
sometimes referred to herein individually as a "Fund" and collectively as the
"Funds," and Trust and Target are sometimes referred to herein individually as
an "Investment Company" and collectively as the "Investment Companies.") All
agreements, representations, actions, and obligations described herein made or
to be taken or undertaken by Acquiring Fund are made and shall be taken or
undertaken by Trust.
The Investment Companies wish to effect a reorganization described in
section 368(a)(1)(C) of the Internal Revenue Code of 1986, as amended ("Code").
The reorganization will involve the transfer of Target's assets to Acquiring
Fund in exchange solely for voting shares of beneficial interest ("shares") in
Acquiring Fund and the assumption by Acquiring Fund of Target's liabilities,
followed by the constructive distribution of those shares pro rata to the
holders of shares in Target ("Target Shares") in exchange therefor, all on the
terms and conditions set forth in this Agreement (which is intended to be, and
is adopted as, a "plan of reorganization" within the meaning of the regulations
under the Code). The foregoing transactions are referred to herein collectively
as the "Reorganization."
Acquiring Fund is an open-end management investment company. Its shares are
divided into four classes, designated Class A, Class B, Class C, and Advisor
Class shares; only Acquiring Fund's Class A shares ("Acquiring Fund Shares") are
involved in the Reorganization.
Target is a closed-end management investment company that has only a single
class of shares. Target Shares can be purchased and sold only on the New York
Stock Exchange ("NYSE"), except for purchases by Target through periodic
repurchase offers pursuant to Rule 23c-3 under the Investment Company Act of
1940, as amended ("1940 Act").
In consideration of the mutual promises contained herein, the parties agree
as follows:
1. PLAN OF REORGANIZATION AND TERMINATION
1.1. Target agrees to assign, sell, convey, transfer, and deliver all of
its assets described in paragraph 1.2 ("Assets") to Acquiring Fund. Acquiring
Fund agrees in exchange therefor --
(a) to issue and deliver to Target the number of full and fractional
(rounded to the third decimal place) Acquiring Fund Shares, determined by
dividing the net value of Target (computed as set forth in paragraph 2.1)
by the net asset value ("NAV") of an Acquiring Fund Share (computed as set
forth in paragraph 2.2), and
(b) to assume all of Target's liabilities described in paragraph 1.3
("Liabilities").
Such transactions shall take place at the Closing (as defined in paragraph
3.1).
1.2. The Assets shall include, 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 Target's books, and other property owned by Target at the
Effective Time (as defined in paragraph 3.1).
1.3. The Liabilities shall include (except as otherwise provided herein)
all of Target's liabilities, debts, obligations, and duties of whatever kind or
nature, whether absolute, accrued, contingent, or otherwise, whether or not
arising in the ordinary course of business, whether or not determinable at the
Effective Time, and whether or not specifically referred to in this Agreement.
Notwithstanding the foregoing, Target agrees to use its best efforts to
discharge all its known Liabilities before the Effective Time.
<PAGE> 39
1.4. At or immediately before the Effective Time, Target shall declare and
pay to its shareholders a dividend and/or other distribution in an amount large
enough so that it will have distributed substantially all (and in any event not
less than 90%) of its investment company taxable income (computed without regard
to any deduction for dividends paid) and substantially all of its realized net
capital gain, if any, for the current taxable year through the Effective Time.
1.5. At the Effective Time (or as soon thereafter as is reasonably
practicable), Target shall distribute the Acquiring Fund Shares received by it
pursuant to paragraph 1.1 to Target's shareholders of record, determined as of
the Effective Time (each a "Shareholder" and collectively "Shareholders"), in
constructive exchange for their Target Shares. Such distribution shall be
accomplished by Trust's transfer agent's opening accounts on Acquiring Fund's
share transfer books in the Shareholders' names and transferring such Acquiring
Fund Shares thereto. Each Shareholder's account shall be credited with the
respective pro rata number of full and fractional (rounded to the third decimal
place) Acquiring Fund Shares due that Shareholder. All outstanding Target
Shares, including any represented by certificates, shall simultaneously be
canceled on Target's share transfer books. Acquiring Fund shall not issue
certificates representing the Acquiring Fund Shares issued in connection with
the Reorganization.
1.6. As soon as reasonably practicable after distribution of the Acquiring
Fund Shares pursuant to paragraph 1.5, but in all events within six months after
the Effective Time, Target shall be terminated and any further actions shall be
taken in connection therewith as required by applicable law.
1.7. Any reporting responsibility of Target to a public authority is and
shall remain its responsibility up to and including the date on which it is
terminated.
1.8. Any transfer taxes payable upon issuance of Acquiring Fund Shares in a
name other than that of the registered holder on Target's books of the Target
Shares constructively exchanged therefor shall be paid by the person to whom
such Acquiring Fund Shares are to be issued, as a condition of such transfer.
2. VALUATION
2.1. For purposes of paragraph 1.1(a), Target's net value shall be (a) the
value of the Assets computed as of the close of regular trading on the NYSE on
the date of the Closing ("Valuation Time"), using the valuation procedures set
forth in Target's most recent annual report to its shareholders, less (b) the
amount of the Liabilities as of the Valuation Time.
2.2. For purposes of paragraph 1.1(a), the NAV of an Acquiring Fund Share
shall be computed as of the Valuation Time, using the valuation procedures set
forth in Acquiring Fund's then-current prospectus and statement of additional
information ("SAI").
2.3. All computations pursuant to paragraphs 2.1 and 2.2 shall be made by
or under the direction of A I M Advisors, Inc.
3. CLOSING AND EFFECTIVE TIME
3.1. The Reorganization, together with related acts necessary to consummate
the same ("Closing"), shall occur at the Funds' principal office on August [ ],
1999, or at such other place and/or on such other date as to which the parties
may agree. All acts taking place at the Closing shall be deemed to take place
simultaneously as of the close of business on the date thereof or at such other
time as to which the parties may agree ("Effective Time"). If, immediately
before the Valuation Time, (a) the NYSE is closed to trading or trading thereon
is restricted or (b) trading or the reporting of trading on the NYSE or
elsewhere is disrupted, so that accurate appraisal of the net value of Target
and the NAV of an Acquiring Fund Share is impracticable, the Effective Time
shall be postponed until the first business day after the day when such trading
shall have been fully resumed and such reporting shall have been restored.
3.2. Target's fund accounting and pricing agent shall deliver 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 Target to Acquiring Fund, as
reflected on Acquiring Fund's books immediately following the Closing, does or
will conform to such information on Target's books
A-2
<PAGE> 40
immediately before the Closing. Target's custodian shall deliver at the Closing
a certificate of an authorized officer stating that (a) the Assets held by the
custodian will be transferred to Acquiring 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. Target shall deliver to Trust at the Closing a list of the names and
addresses of the Shareholders and the number of outstanding Target Shares owned
by each Shareholder, all as of the Effective Time, certified by Target's
Secretary or Assistant Secretary. Trust's transfer agent shall deliver at the
Closing a certificate as to the opening on Acquiring Fund's share transfer books
of accounts in the Shareholder's names. Trust shall issue and deliver a
confirmation to Target evidencing the Acquiring Fund Shares to be credited to
Target at the Effective Time or provide evidence satisfactory to Target that
such Acquiring Fund Shares have been credited to Target's account on Acquiring
Fund's 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. Each Investment Company 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 Target represents and warrants as follows:
4.1.1. Target is a trust operating under a written declaration of trust,
the beneficial interest in which is divided into transferable shares ("Business
Trust"), that is duly organized and validly existing under the laws of the
Commonwealth of Massachusetts; and a copy of its Agreement and Declaration of
Trust is on file with the Secretary of the Commonwealth of Massachusetts;
4.1.2. Target is duly registered as a closed-end management investment
company under the 1940 Act, and such registration will be in full force and
effect at the Effective Time;
4.1.3. At the Closing, Target will have good and marketable title to the
Assets and full right, power, and authority to sell, assign, transfer, and
deliver the Assets free of any liens or other encumbrances; and upon delivery
and payment for the Assets, Acquiring Fund will acquire good and marketable
title thereto;
4.1.4. Target is not in violation of, and the execution and delivery of
this Agreement and consummation of the transactions contemplated hereby will not
conflict with or violate, Massachusetts law or any provision of its Agreement
and Declaration of Trust or Amended and Restated By-Laws or of any agreement,
instrument, lease, or other undertaking to which Target is a party or by which
it is bound or result in the acceleration of any obligation, or the imposition
of any penalty, under any agreement, judgment, or decree to which Target is a
party or by which it is bound, except as previously disclosed in writing to and
accepted by Trust;
4.1.5. Except as otherwise disclosed in writing to and accepted by Trust,
all material contracts and other commitments of Target (other than this
Agreement and investment contracts, including options, futures, and forward
contracts) will be terminated, or provision for discharge of any liabilities of
Target thereunder will be made, at or prior to the Effective Time, without
either Fund's incurring any liability or penalty with respect thereto and
without diminishing or releasing any rights Target may have had with respect to
actions taken or omitted or to be taken by any other party thereto prior to the
Closing;
4.1.6. Except as otherwise disclosed in writing to and accepted by Trust,
no litigation, administrative proceeding, or investigation of or before any
court or governmental body is presently pending or (to Target's knowledge)
threatened against Target or any of its properties or assets that, if adversely
determined, would materially and adversely affect its financial condition or the
conduct of its business; and Target knows of no facts that might form the basis
for the institution of any such litigation, proceeding, or investigation and is
not a party to or subject to the provisions of any order, decree, or judgment of
any court or governmental body that materially or adversely affects its business
or its ability to consummate the transactions contemplated hereby;
A-3
<PAGE> 41
4.1.7. The execution, delivery, and performance of this Agreement have been
duly authorized as of the date hereof by all necessary action on the part of
Target's board of trustees, which has made the determinations required by Rule
17a-8(a) under the 1940 Act; and, subject to approval by Target's shareholders,
this Agreement constitutes a valid and legally binding obligation of Target,
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and
similar laws relating to or affecting creditors' rights and by general
principles of equity;
4.1.8. At the Effective Time, the performance of this Agreement shall have
been duly authorized by all necessary action by Target's shareholders;
4.1.9. No governmental consents, approvals, authorizations, or filings are
required under the Securities Act of 1933, as amended ("1933 Act"), the
Securities Exchange Act of 1934, as amended ("1934 Act"), or the 1940 Act for
the execution or performance of this Agreement by Target, except for (a) the
filing with the Securities and Exchange Commission ("SEC") of a registration
statement by Trust on Form N-14 relating to the Acquiring Fund Shares issuable
hereunder, and any supplement or amendment thereto ("Registration Statement"),
including therein a prospectus/proxy statement ("Proxy Statement"), and (b) such
consents, approvals, authorizations, and filings as have been made or received
or as may be required subsequent to the Effective Time;
4.1.10. On the effective date of the Registration Statement, at the time of
the shareholders' meeting referred to in paragraph 5.2, and at the Effective
Time, the Proxy Statement will (a) comply in all material respects with the
applicable provisions of the 1933 Act, the 1934 Act, and the 1940 Act and the
rules and regulations thereunder and (b) not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which such statements were made, not misleading; providing that the foregoing
shall not apply to statements in or omissions from the Proxy Statement made in
reliance on and in conformity with information furnished by Trust for use
therein;
4.1.11. The Liabilities were incurred by Target in the ordinary course of
its business; and there are no Liabilities other than liabilities disclosed or
provided for in its financial statements referred to in paragraph 4.1.17 and
liabilities incurred by Target in the ordinary course of its business subsequent
to October 31, 1998, or otherwise previously disclosed to Trust, none of which
has been materially adverse to the business, assets, or results of Target
operations;
4.1.12. Target qualified for treatment as a regulated investment company
under Subchapter M of the Code ("RIC") for each past taxable year since it
commenced operations and will continue to meet all the requirements for such
qualification for its current taxable year; it has no earnings and profits
accumulated in any taxable year in which the provisions of Subchapter M did not
apply to it; and the Assets will be invested at all times through the Effective
Time in a manner that ensures compliance with the foregoing;
4.1.13. Target 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;
4.1.14. Not more than 25% of the value of Target's total assets (excluding
cash, cash items, and U.S. government securities) is invested in the stock and
securities of any one issuer, and not more than 50% of the value of such assets
is invested in the stock and securities of five or fewer issuers;
4.1.15. Target will be terminated as soon as reasonably practicable after
the Effective Time, but in all events within six months thereafter;
4.1.16. Target's federal income tax returns, and all applicable state and
local tax returns, for all taxable years through and including the taxable year
ended October 31, [1998], have been timely filed and all taxes payable pursuant
to such returns have been timely paid; and
4.1.17. Target's financial statements for the year ended October 31, 1998,
to be delivered to Trust, fairly represent Target's financial position as of
that date and the results of its operations and changes in its net assets for
the year then ended.
A-4
<PAGE> 42
4.2. Acquiring Fund represents and warrants as follows:
4.2.1. Trust is a business trust duly organized and validly existing 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 thereof;
4.2.2. Trust is duly registered as an open-end management investment
company under the 1940 Act, and such registration will be in full force and
effect at the Effective Time;
4.2.3. Acquiring Fund is a duly established and designated series of Trust;
4.2.4. No consideration other than Acquiring Fund Shares (and Acquiring
Fund's assumption of the Liabilities) will be issued in exchange for the Assets
in the Reorganization;
4.2.5. The Acquiring Fund Shares to be issued and delivered to Target
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 Acquiring Fund, fully paid and non-assessable;
4.2.6. Acquiring Fund's current prospectus and SAI conform in all material
respects to the applicable requirements of the 1933 Act and the 1940 Act and the
rules and regulations thereunder and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;
4.2.7. Acquiring Fund is not in violation of, and the execution and
delivery of this Agreement and consummation of the transactions contemplated
hereby will not conflict with or violate, Delaware law or any provision of
Trust's Agreement and Declaration of Trust or Amended and Restated Bylaws or of
any provision of any agreement, instrument, lesse, or other undertaking to which
Acquiring Fund is a party or by which it is bound or result in the acceleration
of any obligation, or the imposition of any penalty, under any agreement,
judgment, or decree to which Acquiring Fund is a party or by which it is bound,
except as previously disclosed in writing to and accepted by Target;
4.2.8. Except as otherwise disclosed in writing to and accepted by Target,
no litigation, administrative proceeding, or investigation of or before any
court or governmental body is presently pending or (to Acquiring Fund's
knowledge) threatened against Trust with respect to Acquiring Fund or any of its
properties or assets that, if adversely determined, would materially and
adversely affect Acquiring Fund's financial condition or the conduct of its
business; and Acquiring Fund knows of no facts that might form the basis for the
institution of any such litigation, proceeding, or investigation and is not a
party to or subject to the provisions of any order, decree, or judgment of any
court or governmental body that materially or adversely affects its business or
its ability to consummate the transactions contemplated hereby;
4.2.9. The execution, delivery, and performance of this Agreement have been
duly authorized as of the date hereof by all necessary action on the part of
Trust's board of trustees (together with Target's board of trustees, the
"Boards"), which has made the determinations required by Rule 17a-8(a) under the
1940 Act; and this Agreement constitutes a valid and legally binding obligation
of Acquiring Fund, enforceable in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and similar laws relating to or affecting creditors' rights and by
general principles of equity;
4.2.10. No governmental consents, approvals, authorizations, or filings are
required under the 1933 Act, the 1934 Act, or the 1940 Act for the execution or
performance of this Agreement by Trust, except for (a) the filing with the SEC
of the Registration Statement and (b) such consents, approvals, authorizations,
and filings as have been made or received or as may be required subsequent to
the Effective Time;
4.2.11. On the effective date of the Registration Statement, at the time of
the shareholders' meeting referred to in paragraph 5.2, and at the Effective
Time, the Proxy Statement will (a) comply in all material respects with the
applicable provisions of the 1933 Act, the 1934 Act, and the 1940 Act and the
rules and regulations thereunder and (b) not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
A-5
<PAGE> 43
under which such statements were made, not misleading; provided that the
foregoing shall not apply to statements in or omissions from the Proxy Statement
made in reliance on and in conformity with information furnished by Target for
use therein;
4.2.12. Acquiring Fund is a "fund" as defined in section 851(g)(2) of the
Code; it qualified for treatment as a RIC for each past taxable year since it
commenced operations and will continue to meet all the requirements for such
qualification for its current taxable year; Acquiring Fund intends to continue
to meet all such requirements for the next taxable year; and it has no earnings
and profits accumulated in any taxable year in which the provisions of
Subchapter M of the Code did not apply to it;
4.2.13. Acquiring Fund has no plan or intention to issue additional
Acquiring Fund Shares following the Reorganization except for shares issued in
the ordinary course of its business as a series of an open-end investment
company; nor does Acquiring Fund have any plan or intention to redeem or
otherwise reacquire any Acquiring Fund Shares issued to the Shareholders
pursuant to the Reorganization, except to the extent it is required by the 1940
Act to redeem any of its shares presented for redemption at NAV in the ordinary
course of that business;
4.2.14. Following the Reorganization, Acquiring fund (a) will continue
Target's "historic business" (within the meaning of section 1.368-1(d)(2) of the
Income Tax Regulations under the Code), (b) use a significant portion of
Target's historic business assets (within the meaning of section 1.3681(d)(3) of
those regulations) in a business, (c) has no plan or intention to sell or
otherwise dispose of any of the Assets, except for dispositions made in the
ordinary course of that business and dispositions necessary to maintain its
status as a RIC, and (d) expects to retain substantially all the Assets in the
same form as it receives them in the Reorganization, unless and until subsequent
investment circumstances suggest the desirability of change or it becomes
necessary to make dispositions thereof to maintain such status;
4.2.15. There is no plan or intention for Acquiring Fund to be dissolved or
merged into another business trust or a corporation or any "fund" thereof
(within the meaning of section 851(g)(2) of the Code) following the
Reorganization;
4.2.16. Immediately after the Reorganization, (a) not more than 25% of the
value of Acquiring Fund's total assets (excluding cash, cash items, and U.S.
government securities) will be invested in the stock and securities of any one
issuer and (b) not more than 50% of the value of such assets will be invested in
the stock and securities of five or fewer issuers;
4.2.17. Acquiring Fund does not own, directly or indirectly, nor at the
Effective Time will it own, directly or indirectly, nor has it owned, directly
or indirectly, at any time during the past five years, any shares of Target;
4.2.18. Acquiring Fund's federal income tax returns, and all applicable
state and local tax returns, for all taxable years through and including the
taxable year ended October 31, [1998], have been timely filed and all taxes
payable pursuant to such returns have been timely paid; and
4.2.19. Trust's financial statements for the year ended October 31, 1998,
to be delivered to Target, fairly represent Acquiring Fund's financial position
as of that date and the results of its operations and changes in its net assets
for the year then ended.
4.3. Each Fund represents and warrants as follows:
4.3.1. The fair market value of the Acquiring Fund Shares received by each
Shareholder will be approximately equal to the fair market value of its Target
Shares constructively surrendered in exchange therefor;
4.3.2. Its management is unaware of any plan or intention of Shareholders
to redeem, sell, or otherwise dispose of (a) any portion of their Target Shares
before the Reorganization to any person related (within the meaning of section
1.368-1(e)(3) of the Income Tax Regulations under the Code) to either Fund or
(b) any portion of the Acquiring Fund Shares to be received by them in the
Reorganization to any person related (within such meaning) to Acquiring Fund;
A-6
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4.3.3. The Shareholders will pay their own expenses, if any, incurred in
connection with the Reorganization;
4.3.4. The fair market value of the Assets on a going concern basis will
equal or exceed the Liabilities to be assumed by Acquiring Fund and those to
which the Assets are subject;
4.3.5. There is no intercompany indebtedness between the Funds that was
issued or acquired, or will be settled, at a discount;
4.3.6 Pursuant to the Reorganization, Target will transfer to Acquiring
Fund, and Acquiring Fund will acquire, at least 90% of the fair market value of
the net assets, and at least 70% of the fair market value of the gross assets,
held by Target immediately before the Reorganization. For the purposes of this
representation, any amounts used by Target to pay its Reorganization expenses
and to make redemptions and distributions immediately before the Reorganization
(except (a) redemptions not made as part of the Reorganization and (b)
distributions made to conform to its policy of distributing all or substantially
all of its income and gains to avoid the obligation to pay federal income tax
and/or the excise tax under section 4982 of the Code) will be included as assets
held thereby immediately before the Reorganization;
4.3.7 None of the compensation received by any Shareholder who is an
employee of or service provider to Target will be separate consideration for, or
allocable to, any of the Target Shares held by such Shareholder, none of the
Acquiring Fund Shares received by any such Shareholder will be separate
consideration for, or allocable to, any employment agreement, investment
advisory agreement, or other service agreement; and the consideration paid to
any such Shareholder will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arm's-length for
similar services;
4.3.8 Immediately after the Reorganization, the Shareholders will not own
shares constituting "control" (within the meaning of section 304(c) of the Code)
of Acquiring Fund; and
4.3.9 Neither Fund will be reimbursed for any expenses incurred by it or on
its behalf in connection with the Reorganization unless those expenses are
solely and directly related to the Reorganization (determined in accordance with
the guidelines set forth in Rev. Rul. 73-54, 1973-1 C.B. 187).
5. COVENANTS
5.1 Each Fund covenants to operate its respective business in the ordinary
course between the date hereof and the Closing, it being understood that --
(a) such ordinary course will include declaring and paying customary
dividends and other distributions and changes in operations contemplated by
each Fund's normal business activities, and
(b) each Fund will retain exclusive control of the composition of its
portfolio until the Closing; provided that (1) Target shall not dispose of
more than an insignificant portion of its historic business assets during
such period without Acquiring Fund's prior consent and (2) if Target's
shareholders approve this Agreement (and the transactions contemplated
hereby), then between the date of such approval and the Closing, the Funds
shall coordinate their respective portfolios so that the transfer of the
Assets to Acquiring Fund will not cause it to fail to be in compliance with
all of its investment policies and restrictions immediately after the
Closing.
5.2. Target covenants to call a shareholders' meeting to consider and act
on this Agreement and to take all other action necessary to obtain approval of
the transactions contemplated hereby.
5.3. Target covenants that the Acquiring Fund Shares to be delivered
hereunder are not being acquired for the purpose of making any distribution
thereof, other than in accordance with the terms hereof.
5.4. Target covenants that it will assist Trust in obtaining information
Trust reasonably requests concerning the beneficial ownership of Target Shares.
A-7
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5.5. Target covenants that its books and records (including all books and
records required to be maintained under the 1940 Act and the rules and
regulations thereunder) will be turned over to Trust at the Closing.
5.6. Each Fund covenants to cooperate in preparing the Proxy Statement in
compliance with applicable federal and state securities laws.
5.7. Each Fund covenants that it will, from time to time, as and when
requested by the other Fund, execute and deliver or cause to be executed and
delivered all such assignments and other instruments, and will take or cause to
be taken such further action, as the other Fund may deem necessary or desirable
in order to vest in, and confirm to, (a) Acquiring Fund, title to and possession
of all the Assets, and (b) Target, title to and possession of the Acquiring Fund
Shares to be delivered hereunder, and otherwise to carry out the intent and
purpose hereof.
5.8. Acquiring Fund covenants to use all reasonable efforts to obtain the
approvals and authorizations required by the 1993 Act, the 1940 Act, and such
state securities laws it may deem appropriate to continue its operations after
the Effective Time.
5.9. Subject to this Agreement, each Fund covenants to take or cause to be
taken all actions, and to do or cause to be done all things, reasonably
necessary, proper, or advisable to consummate and effectuate the transactions
contemplated hereby.
6. CONDITIONS PRECEDENT
Each Fund's obligations hereunder shall be subject to (a) performance by
the other Fund of all its obligations to be performed hereunder at or before the
Effective Time, (b) all representations and warranties of the other Fund
contained herein being true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated
hereby, as of the Effective Time, with the same force and effect as if made at
and as of the Effective Time, and (c) the following further conditions that, at
or before the Effective Time:
6.1. This Agreement and the transactions contemplated hereby shall have
been duly adopted and approved by the Boards and shall have been approved by
Target's shareholders in accordance with its Agreement and Declaration of Trust
and 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. The Registration Statement shall have become
effective under the 1933 Act, no stop orders suspending the effectiveness
thereof shall have been issued, and the SEC shall not have issued an unfavorable
report with respect to the Reorganization under section 25(b) of the 1940 Act
nor instituted any proceedings seeking to enjoin consummation of the
transactions contemplated hereby under section 25(c) of the 1940 Act. All
consents, orders, and permits of federal, state, and local regulatory
authorities (including the SEC and state securities authorities) deemed
necessary by either Investment Company to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain same would not involve a risk of a material
adverse effect on either Fund's assets or properties, provided that either
Investment Company may for itself waive any of such conditions.
6.3. At the Effective Time, no action, suit, or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or to obtain damages or other relief in connection with,
the transactions contemplated hereby.
6.4. Target shall have received an opinion of Kirkpatrick & Lockhart LLP
("Counsel") substantially to the effect that:
6.4.1. Acquiring Fund is a duly established series of Trust, a
business trust duly organized and validly existing under the laws of the
State of Delaware with power under its Agreement and Declaration
A-8
<PAGE> 46
of Trust to own all its properties and assets and, to the knowledge of
Counsel, to carry on its business as presently conducted;
6.4.2. This Agreement (a) has been duly authorized, executed, and
delivered by Trust on behalf of Acquiring Fund and (b) assuming due
authorization, execution, and delivery of this Agreement by Target, is a
valid and legally binding obligation of Trust with respect to Acquiring
Fund, enforceable in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and similar laws relating to or affecting creditors' rights and
by general principles of equity;
6.4.3. The Acquiring Fund Shares to be issued and distributed to the
Shareholders under this Agreement, assuming their due delivery as
contemplated by this Agreement, will be duly authorized, validly issued and
outstanding, and fully paid and non-assessable;
6.4.4. The execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, materially
violate Trust's Agreement and Declaration of Trust or Amended and Restated
Bylaws or any provision of any agreement (known to Counsel, without any
independent inquiry or investigation) to which Trust (with respect to
Acquiring Fund) is a party or by which it is bound or (to the knowledge of
Counsel, without any independent inquiry or investigation) result in the
acceleration of any obligation, or the imposition of any penalty, under any
agreement, judgment, or decree to which Trust (with respect to Acquiring
Fund) is a party or by which it is bound, except as set forth in such
opinion or as previously disclosed in writing to and accepted by Target;
6.4.5. To the knowledge of Counsel (without any independent inquiry or
investigation), no consent, approval, authorization, or order of any court
or governmental authority is required for the consummation by Trust on
behalf of Acquiring Fund of the transactions contemplated herein, except
those obtained under the 1933 Act, the 1934 Act, and the 1940 Act and those
that may be required under state securities laws;
6.4.6. Trust is registered with the SEC as an investment company, and
to the knowledge of Counsel no order has been issued or proceeding
instituted to suspend such registration; and
6.4.7. To the knowledge of Counsel (without any independent inquiry or
investigation), (a) no litigation, administrative proceeding, or
investigation of or before any court or governmental body is pending or
threatened as to Trust (with respect to Acquiring Fund) or any of its
properties or assets attributable or allocable to Acquiring Fund and (b)
Trust (with respect to Acquiring Fund) is not a party to or subject to the
provisions of any order, decree, or judgment of any court or governmental
body that materially and adversely affects Acquiring Fund's business,
except as set forth in such opinion or as otherwise disclosed in writing to
and accepted by Target.
In rendering such opinion, Counsel may (1) rely, as to matters governed by the
laws of the State of Delaware, on an opinion of competent Delaware counsel, (2)
make assumptions regarding the authenticity, genuineness, and/or conformity of
documents and copies thereof without independent verification thereof, (3) limit
such opinion to applicable federal and state law, and (4) define the word
"knowledge" and related terms to mean the knowledge of attorneys then with
Counsel who have devoted substantive attention to matters directly related to
this Agreement and the Reorganization.
6.5. Trust shall have received an opinion of Counsel substantially to the
effect that:
6.5.1. Target is a Business Trust duly organized and validly existing
under the laws of the Commonwealth of Massachusetts with power under its
Agreement and Declaration of Trust to own all its properties and assets
and, to the knowledge of Counsel, to carry on its business as presently
conducted;
6.5.2. This Agreement (a) has been duly authorized, executed, and
delivered by Target and (b) assuming due authorization, execution, and
delivery of this Agreement by Trust on behalf of Acquiring Fund, is a valid
and legally binding obligation of Target, enforceable in accordance with
its
A-9
<PAGE> 47
terms, except as the same may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium, and similar laws relating
to or affecting creditors' rights and by general principles of equity;
6.5.3. The execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, materially
violate Target's Agreement and Declaration of Trust or Amended and Restated
By-Laws or any provision of any agreement (known to Counsel, without any
independent inquiry or investigation) to which Target is a party or by
which it is bound or (to the knowledge of Counsel, without any independent
inquiry or investigation) result in the acceleration of any obligation, or
the imposition of any penalty, under any agreement, judgment, or decree to
which Target is a party or by which it is bound, except as set forth in
such opinion or as previously disclosed in writing to and accepted by
Trust;
6.5.4. To the knowledge of Counsel (without any independent inquiry or
investigation), no consent, approval, authorization, or order of any court
or governmental authority is required for the consummation by Target of the
transactions contemplated herein, except those obtained under the 1933 Act,
the 1934 Act, and the 1940 Act and those that may be required under state
securities laws;
6.5.5. Target is registered with the SEC as an investment company, and
to the knowledge of Counsel no order has been issued or proceeding
instituted to suspend such registration; and
6.5.6. To the knowledge of Counsel (without any independent inquiry or
investigation), (a) no litigation, administrative proceeding, or
investigation of or before any court or governmental body is pending or
threatened as to Target or any of its properties or assets and (b) Target
is not a party to or subject to the provisions of any order, decree, or
judgment of any court or governmental body that materially and adversely
affects Target's business, except as set forth in such opinion or as
otherwise disclosed in writing to and accepted by Trust.
In rendering such opinion, Counsel may (1) rely, as to matters governed by the
laws of the Commonwealth of Massachusetts, on an opinion of competent
Massachusetts counsel, (2) make assumptions regarding the authenticity,
genuineness, and/or conformity of documents and copies thereof without
independent verification thereof, (3) limit such opinion to applicable federal
and state law, and (4) define the word "knowledge" and related terms to mean the
knowledge of attorneys then with Counsel have devoted substantive attention to
matters directly related to this Agreement and the Reorganization.
6.6. Each Investment Company shall have received an opinion of Counsel,
addressed to and in form and substance satisfactory to it, as to the federal
income tax consequences mentioned below ("Tax Opinion"). In rendering the Tax
Opinion, Counsel may rely as to factual matters, exclusively and without
independent verification, on the representations made in this Agreement (or in
separate letters addressed to Counsel) and the certificates delivered pursuant
to paragraph 3.4. The Tax 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:
6.6.1. Acquiring Fund's acquisition of the Assets in exchange solely
for Acquiring Fund Shares and Acquiring Fund's assumption of the
Liabilities, followed by Target's distribution of those shares pro rata to
the Shareholders constructively in exchange for their Target Shares, will
qualify as a reorganization within the meaning of section 368(a)(1)(C) of
the Code, and each Fund will be "a party to a reorganization" within the
meaning of section 368(b) of the Code;
6.6.2. Target will recognize no gain or loss on the transfer of the
Assets to Acquiring Fund in exchange solely for Acquiring Fund Shares and
Acquiring Fund's assumption of the Liabilities or on the subsequent
distribution of those shares to the Shareholders in constructive exchange
for their Target Shares;
6.6.3. Acquiring Fund will recognize no gain or loss on its receipt of
the Assets in exchange solely for Acquiring Fund Shares and its assumption
of the Liabilities;
A-10
<PAGE> 48
6.6.4. Acquiring Fund's basis for the Assets will be the same as
Target's basis therefor immediately before the Reorganization, and
Acquiring Fund's holding period for the Assets will include Target's
holding period therefor;
6.6.5. A Shareholder will recognize no gain or loss on the
constructive exchange of all its Target Shares solely for Acquiring Fund
Shares pursuant to the Reorganization; and
6.6.6. A Shareholder's aggregate basis for the Acquiring Fund Shares
to be received by it in the Reorganization will be the same as the
aggregate basis for its Target Shares to be constructively surrendered in
exchange for those Acquiring Fund Shares, and its holding period for those
Acquiring Fund Shares will include its holding period for those Target
Shares, provided they are held as capital assets by the Shareholder at the
Effective Time.
Notwithstanding subparagraphs 6.6.2 and 6.6.4, the Tax Opinion may state that no
opinion is expressed as to the effect of the Reorganization on the Funds or any
Shareholder with respect to any asset as to which any unrealized gain or loss is
required to be recognized for federal income tax purposes at the end of a
taxable year (or on the termination or transfer thereof) under a mark-to-market
system of accounting.
At any time before the Closing, either Investment Company may waive any of
the foregoing conditions (except that set forth in paragraph 6.1) if, in the
judgment of its Board, such waiver will not have a material adverse effect on
its Fund's shareholders' interests.
7. BROKERAGE FEES AND EXPENSES
7.1. Each Investment Company represents and warrants to the other that
there are no brokers or finders entitled to receive any payments in connection
with the transactions provided for herein.
7.2. Each Fund will bear its own Reorganization expenses.
8. ENTIRE AGREEMENT: NO SURVIVAL
Neither party has made any representation, warranty, or covenant not set
forth herein, and this Agreement constitutes the entire agreement between the
parties. The representations, warranties, and covenants contained herein or in
any document delivered pursuant hereto or in connection herewith shall not
survive the Closing.
9. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time at or prior to the Effective
Time, whether before or after approval by Target's shareholders:
9.1. By either Fund (a) in the event of the other Fund's material breach of
any representation, warranty, or covenant contained herein to be performed at or
prior to the Effective Time, (b) if a condition to its obligations has not been
met and it reasonably appears that such condition will not or cannot be met, or
(c) if the Closing has not occurred on or before December 31, 1999; or
9.2. By the parties' mutual agreement.
In the event of termination under paragraphs 9.1(c) or 9.2, there shall be no
liability for damages on the part of either Fund, or the trustees or officers of
either Investment Company, to the other Fund.
10. AMENDMENT
This Agreement may be amended, modified, or supplemented at any time,
notwithstanding approval thereof by Target's shareholders, in any manner
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.
A-11
<PAGE> 49
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 parties acknowledge that Target is a Business Trust. This
Agreement is executed on behalf of Target and by its trustees and/or officers in
their capacities as such, and not individually. Target's obligations under this
Agreement are not binding on or enforceable against any of its trustees,
officers, or shareholders but are only binding on and enforceable against
Target's assets and property. Acquiring Fund agrees that, in asserting any
rights or claims under this Agreement, it shall look only to Target's assets and
property in settlement of such rights or claims and not to such trustees,
officers, or shareholders.
11.4. A trustee of Trust shall not be personally liable hereunder to Target
or its trustees or shareholders for any act, omission, or obligation of Trust or
any other trustee thereof. Target agrees that, in asserting any claim against
Trust or its trustees, it shall look only to Acquiring Fund's assets for payment
under such claim; and neither the shareholders nor the trustees of Trust, nor
any of their agents, whether past, present, or future, shall be personally
liable therefor.
11.5. This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been executed by each Investment Company and
delivered to the other party hereto. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
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.
<TABLE>
<S> <C>
ATTEST: AIM EASTERN EUROPE FUND
- ----------------------------------------------------- By: -------------------------------------------------
Secretary President
ATTEST: AIM INVESTMENT FUNDS,
on behalf of its series,
AIM Developing Markets Fund
- ----------------------------------------------------- By: -------------------------------------------------
Secretary President
</TABLE>
A-12
<PAGE> 50
AIM DEVELOPING MARKETS FUND
------------------------------------------------------------------------
AIM Developing Markets Fund primarily seeks to provide long-term growth
of capital with a secondary objective of income, to the extent
consistent with seeking growth of capital.
PROSPECTUS
MARCH 1, 1999
This prospectus contains important
information about the Class A, B and
C shares of the fund. Please read it
before investing and keep it for
future reference.
As with all other mutual fund
securities, the Securities and
Exchange Commission has not approved
or disapproved these securities or
determined whether the information
in this prospectus is adequate or
accurate. Anyone who tells you
otherwise is committing a crime.
[AIM LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark--
B-1
<PAGE> 51
---------------------------
AIM DEVELOPING MARKETS FUND
---------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT OBJECTIVES AND STRATEGIES 1
- - - - - - - - - - - - - - - - - - - - - - - - -
PRINCIPAL RISKS OF INVESTING IN THE FUND 1
- - - - - - - - - - - - - - - - - - - - - - - - -
PERFORMANCE INFORMATION 3
- - - - - - - - - - - - - - - - - - - - - - - - -
Annual Total Returns 3
Performance Table 3
FEE TABLE AND EXPENSE EXAMPLE 4
- - - - - - - - - - - - - - - - - - - - - - - - -
Fee Table 4
Expense Example 4
FUND MANAGEMENT 5
- - - - - - - - - - - - - - - - - - - - - - - - -
The Advisors 5
Advisor Compensation 5
Portfolio Managers 5
OTHER INFORMATION 5
- - - - - - - - - - - - - - - - - - - - - - - - -
Sales Charges 5
Dividends and Distributions 5
FINANCIAL HIGHLIGHTS 6
- - - - - - - - - - - - - - - - - - - - - - - - -
SHAREHOLDER INFORMATION A-1
- - - - - - - - - - - - - - - - - - - - - - - - -
Choosing a Share Class A-1
Purchasing Shares A-3
Redeeming Shares A-4
Exchanging Shares A-6
Pricing of Shares A-7
Taxes A-8
OBTAINING ADDITIONAL INFORMATION Back Cover
- - - - - - - - - - - - - - - - - - - - - - - - -
</TABLE>
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM
logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, aimfunds.com, La
Familia AIM de Fondos, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in this
prospectus, and you should not rely on such other information or
representations.
B-2
<PAGE> 52
---------------------------
AIM DEVELOPING MARKETS FUND
---------------------------
INVESTMENT OBJECTIVES AND STRATEGIES
- --------------------------------------------------------------------------------
The fund's primary investment objective is long-term growth of capital and its
secondary investment objective is income, to the extent consistent with seeking
growth of capital.
The fund seeks to meet these objectives by investing substantially all of its
assets in issuers in developing countries, i.e., those that are in the initial
stages of their industrial cycles. The fund will invest a majority of its assets
in equity securities, and may also invest in debt securities, of developing
countries. The fund considers issuers in "developing countries" to be those (1)
organized under the laws of a developing country or have a principal office in a
developing country; (2) that derive 50% or more, alone or on a consolidated
basis, of their total revenues from business in developing countries; or (3)
whose securities are trading principally on a stock exchange, or in an over-the-
counter market, in a developing country. The fund will normally invest in
issuers in at least four countries, but it will invest no more than 25% of its
assets in issuers in any one country. The fund also may hold no more than 40% of
its assets in any one foreign currency and securities denominated in or indexed
to such currency. The fund may invest in debt securities when economic and other
factors appear to favor such investments. The fund may also invest up to 100% of
its assets in lower-quality debt securities, i.e., "junk bonds."
The fund may invest up to 50% of its total assets in the following types of
developing market debt securities: (1) debt securities issued or guaranteed by
governments, their agencies, instrumentalities or political subdivisions, or by
government owned, controlled or sponsored entities, including central banks
(sovereign debt), and "Brady Bonds"; (2) interests in issuers organized and
operated for the purpose of restructuring the investment characteristics of
sovereign debt; (3) debt securities issued by banks and other business entities;
and (4) debt securities denominated in or indexed to the currencies of emerging
markets. Brady Bonds are debt restructurings that provide for the exchange of
cash and loans for newly issued bonds. There is no requirement with respect to
the maturity or duration of debt securities in which the fund may invest.
The portfolio managers focus on companies that have experienced above-average,
long-term growth in earnings and have excellent prospects for future growth. In
selecting countries in which the fund will invest, the portfolio managers also
consider such factors as the prospect for relative economic growth among
countries or regions, economic or political conditions, currency exchange
fluctuations, tax considerations and the liquidity of a particular security. The
portfolio managers consider whether to sell a particular security when any of
those factors materially changes.
The fund is non-diversified. With respect to 50% of its assets, it is
permitted to invest more than 5% of its assets in the securities of any one
issuer.
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash
(U.S. dollars, foreign currencies or multinational currency units), money market
instruments or high-quality debt securities. As a result, the fund may not
achieve its investment objectives.
PRINCIPAL RISKS OF INVESTING IN THE FUND
- --------------------------------------------------------------------------------
There is a risk that you could lose all or a portion of your investment in the
fund and that the income you may receive from your investment may vary. The
value of your investment in the fund will go up and down with the prices of the
securities in which the fund invests. The prices of equity securities change in
response to many factors including the historical and prospective earnings of
the issuer, the value of its assets, general economic conditions, interest
rates, investor perceptions, and market liquidity. Debt securities are
particularly vulnerable to credit risk and interest rate fluctuations. When
interest rates rise, bond prices fall; the longer a bond's duration, the more
sensitive it is to this risk.
The prices of foreign securities may be further affected by other factors,
including:
- - Currency exchange rates--The dollar value of the fund's foreign investments
will be affected by changes in the exchange rates between the dollar and the
currencies in which those investments are traded.
- - Political and economic conditions--The value of the fund's foreign investments
may be adversely affected by political and social instability in their home
countries and by changes in economic or taxation policies in those countries.
- - Regulations--Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less publicly available information
about foreign companies than about U.S. companies.
- - Markets--The securities markets of other countries are smaller than U.S.
securities markets. As a result, many foreign securities may be less liquid
and more volatile than U.S. securities.
These factors may affect the prices of securities issued by foreign companies
located in developing countries more than those in countries with mature
economies. For example, many developing countries have, in the past, experienced
high rates of inflation or sharply devalued their currencies against the U.S.
dollar, thereby causing the value of investments in companies located in those
countries to decline. Transaction costs are often higher in developing countries
and there may be delays in settlement procedures.
B-3
<PAGE> 53
---------------------------
AIM DEVELOPING MARKETS FUND
---------------------------
Sovereign debt securities of developing country governments are generally
lower-quality debt securities. Sovereign debt securities are subject to the
additional risk that, under some political, diplomatic, social or economic
circumstances, some developing countries that issue lower-quality debt
securities may be unable or unwilling to make principal or interest payments as
they come due.
Compared to higher-quality debt securities, junk bonds involve greater risk of
default or price changes due to changes in the credit quality of the issuer
because they are generally unsecured and may be subordinated to other creditors'
claims. The value of junk bonds often fluctuates in response to company,
political or economic developments and can decline significantly over short
periods of time or during periods of general or regional economic difficulty.
During those times, the bonds could be difficult to value or to sell at a fair
price. Credit ratings on junk bonds do not necessarily reflect their actual
market risk.
Because it is non-diversified, the fund may invest in fewer issuers than if it
were a diversified fund. The value of the fund's shares may vary more widely,
and the fund may be subject to greater investment and credit risk, than if the
fund invested more broadly.
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and the fund's other service providers are
unable to distinguish the year 2000 from the year 1900.
The fund's investment advisor and independent technology consultants are
working to avoid year 2000-related problems in its systems and to obtain
assurances that other service providers are taking similar steps. Year 2000
problems may also affect issuers in whose securities the fund invests.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
B-4
<PAGE> 54
---------------------------
AIM DEVELOPING MARKETS FUND
---------------------------
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund's past performance is not necessarily an
indication of its future performance.
ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
The following bar chart shows changes in the performance of the fund's Class A
shares from year to year. The bar chart does not reflect sales loads. If it did,
the annual total returns shown would be lower.
[GRAPH]
<TABLE>
<CAPTION>
Total
Year Ended Annual
December 31, Return
- ------------ ------
<S> <C>
1995 -95%
1996 23.59%
1997 -8.49%
1998 -35.32%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
15.38% (quarter ended June 30, 1995) and the lowest quarterly return was -27.81%
(quarter ended September 30, 1998).
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(for the periods ended SINCE INCEPTION
December 31, 1998) 1 YEAR INCEPTION DATE
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Class A (38.38)% (9.98)% 1/11/94
Class B (38.96) (35.70) 11/3/97
Class C -- -- 03/01/99
MSCI Emerging Markets Free Index(1) (25.34) (9.27)(2) 12/31/93(2)
- -------------------------------------------------------------------------
</TABLE>
(1) The Morgan Stanley Capital International Emerging Markets Free Index
measures the performance of securities listed on the exchanges of 26
countries. The index excludes shares that are not readily purchased by
non-local investors.
(2) The average annual total return given is since the date closest to the
inception date of the class with the longest performance history.
B-5
<PAGE> 55
---------------------------
AIM DEVELOPING MARKETS FUND
---------------------------
FEE TABLE AND EXPENSE EXAMPLE
- --------------------------------------------------------------------------------
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund:
<TABLE>
<CAPTION>
SHAREHOLDER FEES
- -------------------------------------------------------
(fees paid directly from
your investment) CLASS A CLASS B CLASS C
- -------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge (Load)
Imposed on Purchases
(as a percentage of
offering price) 4.75% None None
Maximum Deferred
Sales Charge (Load)
(as a percentage of
original purchase
price or redemption
proceeds, whichever
is less) None(1) 5.00 1.00
- -------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
- -------------------------------------------------------
(expenses that are deducted
from fund assets) CLASS A CLASS B CLASS C
- -------------------------------------------------------
<S> <C> <C> <C>
Management Fees 0.98% 0.98% 0.98%
Distribution and/or
Service (12b-1) Fees 0.50 1.00 1.00
Other Expenses
Other 0.66 0.91 0.91
Interest 0.20 0.20 0.20
Total Other Expenses 0.86 1.11 1.11
Total Annual Fund
Operating Expenses 2.34 3.09 3.09
Expense
Reimbursement(2) 0.41 0.41 0.41
Net Expenses 1.93 2.68 2.68
- -------------------------------------------------------
</TABLE>
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares
within 18 months from the date of purchase, you may pay a 1% contingent
deferred sales charge (CDSC) at the time of redemption.
(2) The investment advisor has contractually agreed to limit net expenses.
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than
the maximum permitted initial sales charge.
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in different
classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's gross operating expenses remain the same. To the extent fees are waived,
the expenses will be lower. Although your actual returns and costs may be higher
or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------
<S> <C> <C> <C> <C>
Class A $701 $1,171 $1,666 $3,024
Class B 812 1,254 1,820 3,228
Class C 412 954 1,620 3,402
- ----------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------
<S> <C> <C> <C> <C>
Class A $701 $1,171 $1,666 $3,024
Class B 312 954 1,620 3,228
Class C 312 954 1,620 3,402
- ----------------------------------------------
</TABLE>
B-6
<PAGE> 56
---------------------------
AIM DEVELOPING MARKETS FUND
---------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
THE ADVISORS
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor.
INVESCO Asset Management Limited (the subadvisor), an affiliate of the advisor,
is the fund's subadvisor and is responsible for its day-to-day management. The
advisor is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.
The subadvisor is located at 11 Devonshire Square, London, EC2M 4YR, England.
The advisors supervise all aspects of the fund's operations and provide
investment advisory services to the fund, including obtaining and evaluating
economic, statistical and financial information to formulate and implement
investment programs for the fund.
The advisor has acted as an investment advisor since its organization in 1976,
and the subadvisor has acted as an investment advisor since 1967. Today, the
advisor, together with its subsidiaries, advises or manages over 110 investment
portfolios, including the fund, encompassing a broad range of investment
objectives.
ADVISOR COMPENSATION
During the fiscal year ended October 31, 1998, the advisor and Chancellor LGT
Asset Management, Inc. (the advisor for the period November 1, 1997 through May
28, 1998) together received compensation of 0.616% of average daily net assets,
consisting of a management and administrative fee of 0.59% and an accounting fee
of 0.026%.
PORTFOLIO MANAGERS
The advisors use a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management
of the fund's portfolio are
- - Francesco Bertoni, Portfolio Manager, who has been responsible for the fund
since 1998 and has been associated with the advisor and/or its affiliates
since 1990.
- - Craig Munro, Portfolio Manager, who has been responsible for the fund since
1999 and has been associated with the advisor and/or its affiliates since
1997. From 1993 to 1997, he was Vice President and Senior Analyst in the
Emerging Markets Group of the Global Fixed Income Division of Merrill Lynch
Asset Management.
- - Christine Rowley, Portfolio Manager, who has been responsible for the fund
since 1999 and has been associated with the advisor and/or its affiliates
since 1991.
OTHER INFORMATION
- --------------------------------------------------------------------------------
SALES CHARGES
Purchases of Class A shares of AIM Developing Markets Fund are subject to the
maximum of 4.75% initial sales charge as listed under the heading "CATEGORY II
Initial Sales Charges" in the "Shareholder Information--Choosing a Share Class"
section of this prospectus. Purchases of Class B and Class C shares are subject
to the contingent deferred sales charges listed in that section.
DIVIDENDS AND DISTRIBUTIONS
DIVIDENDS
The fund generally declares and pays dividends, if any, annually.
CAPITAL GAINS DISTRIBUTIONS
The fund generally distributes long-term and short-term capital gains (including
any net gains from foreign currency transactions), if any, annually.
B-7
<PAGE> 57
---------------------------
AIM DEVELOPING MARKETS FUND
---------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
This information has been audited by PricewaterhouseCoopers LLP, whose report,
along with the fund's financial statements, is included in the fund's annual
report, which is available upon request.
<TABLE>
<CAPTION>
CLASS A(a)
----------------------------------------------------------------------
YEAR TEN MONTHS
ENDED ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, DECEMBER 31, JANUARY 11, TO
1998(b) 1997(c) 1996(c) 1995(c) DECEMBER 31, 1994(c)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 12.56 $ 13.84 $ 11.60 $ 12.44 $ 15.00
Income from investment operations:
Net investment income 0.39(d)(e) 0.25 0.53 0.72 0.35
Net realized and unrealized gain (loss) on
investments (5.10) (1.53) 2.19 (0.84) (2.46)
Net increase (decrease) from investment
operations (4.71) (1.28) 2.72 (0.12) (2.11)
Redemption fees retained 0.28 -- -- -- --
Distributions to shareholders:
From net investment income (0.60) -- (0.48) (0.72) (0.35)
From net realized gain on investments -- -- -- -- (0.10)
Total distributions (0.60) -- (0.48) (0.72) (0.45)
Net asset value, end of period $ 7.53 $ 12.56 $ 13.84 $ 11.60 $ 12.44
Market value, end of period N/A $ 11.81 $ 11.63 $ 9.75 $ 9.75
Total investment return (based on market value) N/A 1.62%(f) 24.18% 6.60% (32.16)%(f)
Total investment return (based on net asset
value) (37.09)%(g) (9.25)%(f) 23.59% (0.95)% (14.07)%(f)
- ------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data:
Net assets, end of period (in 000s) $87,517 $457,379 $504,012 $422,348 $452,872
Ratio of net investment income to average net
assets:
With expense reductions and reimbursement 3.84% 2.03%(h) 4.07% 6.33% 2.75%(h)
Without expense reductions and reimbursement 3.43% 1.95%(h) 4.04% 6.30% 2.75%(h)
Ratio of expenses to average net assets
excluding interest expense:
With expense reductions and reimbursement 1.73% 1.75%(h) 1.82% 1.77% 2.01%(h)
Without expense reductions and reimbursement 2.14% 1.83%(h) 1.85% 1.80% 2.01%(h)
Ratio of interest expense to average net
assets(i) 0.20% N/A N/A N/A N/A
Portfolio turnover rate(i) 111% 184%(h ) 138% 75% 56%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) All capital shares issued and outstanding of the predecessor fund on October
31, 1997 were reclassified as Class A shares.
(b) These selected per share data were calculated based upon average shares
outstanding during the period.
(c) These financial highlights provide per share information of G.T. Global
Developing Markets Fund, Inc. ("predecessor fund") for the period
January 11, 1994 (commencement of operations) up to and including
October 31, 1997. The fees and expenses of the fund differ from those of
the predecessor fund.
(d) Net investment income per share reflects an interest payment received from
the conversion of Vnesheconombank loan agreements of $0.14 per share.
(e) Before reimbursement the net investment income per share would have been
reduced by $0.04.
(f) Not annualized.
(g) Total investment return does not include sales charges.
(h) Annualized.
(i) Portfolio turnover rates and ratio of interest expense to average net assets
are calculated on the basis of the fund as whole without distinguishing
between the classes of shares issued.
N/A Not applicable.
B-8
<PAGE> 58
---------------------------
AIM DEVELOPING MARKETS FUND
---------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS B(a)
----------------------
YEAR ENDED OCTOBER 31,
1998(b)
- ------------------------------------------------------------------------------------
<S> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 12.56
Income from investment operations:
Net investment income 0.31(c)(d)
Net realized and unrealized gain (loss) on investments (5.07)
Net increase (decrease) from investment operations (4.76)
Redemption fees retained 0.28
Distributions to shareholders:
From net investment income (0.59)
From net realized gain on investments --
Total distributions (0.59)
Net asset value, end of period $ 7.49
Total investment return (based on net asset value) (39.76)%(e)
- ------------------------------------------------------------------------------------
Ratios and supplemental data:
Net assets, end of period (in 000s) $ 154
Ratio of net investment income to average net assets:
With expense reductions and reimbursement 3.09%
Without expense reductions and reimbursement 2.68%
Ratio of expenses to average net assets excluding interest
expense:
With expense reductions and reimbursement 2.48%
Without expense reductions and reimbursement 2.89%
Ratio of interest expense to average net assets(f) 0.20%
Portfolio turnover rate(f) 111%
- ------------------------------------------------------------------------------------
</TABLE>
(a) Commencing November 1, 1997, the fund began offering Class B shares.
(b) These selected per share data were calculated based upon the average shares
outstanding during the period.
(c) Net investment income per share reflects an interest payment received from
the conversion of Vnesheconombank loan agreements of $0.14 per share.
(d) Before reimbursement the net investment income per share would have been
reduced by $0.04.
(e) Total investment return does not include sales charges.
(f) Portfolio turnover rates and ratio of interest expense to average net assets
are calculated on the basis of the fund as whole without distinguishing
between the classes of shares issued.
B-9
<PAGE> 59
---------------------------
AIM DEVELOPING MARKETS FUND
---------------------------
OBTAINING ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of Funds
or your account, or wish to obtain free copies of the fund's current SAI or
annual or semiannual reports, please contact us
- ---------------------------------------------------------
<TABLE>
<S> <C>
BY MAIL: A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
BY TELEPHONE: (800) 347-4246
BY E-MAIL: [email protected]
ON THE INTERNET: http://www.aimfunds.com
(prospectuses and annual
and semiannual reports
only)
</TABLE>
- ---------------------------------------------------------
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, DC, on the SEC's website
(http://www.sec.gov), or by sending a letter, including a duplicating fee, to
the SEC's Public Reference Section, Washington, DC 20549-6009. Please call the
SEC at 1-800-SEC-0330 for information about the Public Reference Room.
- ------------------------------------
AIM Developing Markets Fund
SEC 1940 Act file number: 811-05426
- ------------------------------------
[AIM LOGO APPEARS HERE] www.aimfunds.com DVM-PRO-1 INVEST WITH DISCIPLINE
--Registered Trademark--
B-10
<PAGE> 60
ANNUAL REPORT / MANAGERS' OVERVIEW
FUND ENDURES TUMULTUOUS YEAR IN EMERGING MARKETS
Global Market Volatility Dominated Financial News in 1998. How Did the Fund
Perform in this Environment?
We have been in a very challenging environment over the last year. The Fund
has suffered from the particular crises hitting individual countries, but it has
also been hurt by the increasingly negative perception of the riskiness of
emerging market investing.
Results for the fiscal year ended October 31, 1998 were quite
disappointing. Total return was -37.09% for Class A shares. In comparison, the
MSCI Emerging Markets Free Index had a return of -30.98%.
Since their inception on November 3, 1997, Class B shares had a cumulative
total return of -39.76%.
Why Was Market Turmoil So Pervasive?
The chain reaction started in Asia. Devalued currencies plus billions in
bad loans curtailed the region's ability to purchase goods and raw materials
from the world's sellers. When Asian companies flooded global commodities
markets with their inventories to produce desperately needed revenues, the
combination of oversupply and weakened demand caused prices to plummet,
contributing to worldwide deflation.
Meanwhile, investors worried over news of Russia's overwhelming government
debt and the speculative borrowing practiced by its private banks. The situation
was especially troubling because it was set against a backdrop of weakening oil
and commodity prices. In August, Russia attempted to stabilize the banking
system by floating the ruble and suspending repayment of much of its foreign
debt. These events spurred a worldwide flight to quality, resulting in a
broad-based selloff. Even though Russia has a relatively small economy and
engages in just a tiny portion of world trade, many investors sustained millions
of dollars in losses from their exposure to both its debt and its equity
markets.
In the wake of the Asian and Russian crises, investors began to reduce
their exposure to emerging markets. Latin America as well as the more open
markets in the Emerging EMEA (Europe, Middle East, and Africa) region suffered
both from investor flight and from the associated rising interest rates.
What Is Your Overall Strategy In Managing the Fund?
First we determine the portfolio's target country allocations through a
top-down process that evaluates and scores countries based on their economic
growth, monetary cycle, government policy, and overall earnings growth. Our
stock research and selection process identifies stocks demonstrating growth, but
at a reasonable price. We then adjust our top-down allocation depending on the
availability of stocks suitable for investment in a particular country or
sector.
OUR STOCK RESEARCH AND SELECTION PROCESS IDENTIFIES STOCKS DEMONSTRATING GROWTH,
BUT AT A REASONABLE PRICE.
What Are the Most Significant Changes You've Made in the Portfolio Recently?
The most important strategy we've taken in the last few months has been to
concentrate the portfolio in the markets and stocks where we are most confident
about the growth and valuation outlook. We've deliberately reduced the breadth
of holdings, and we've eliminated exposure to such highly unstable markets as
Pakistan, Sri Lanka, the Philippines, Thailand, and Malaysia. We've also
virtually eliminated the Fund's exposure to Russia. We don't expect to invest in
the Russian market until the political and economic environment has stabilized.
Your Largest Country Allocations Are in Latin America. Why Did You Favor This
Region?
Despite recent market turbulence, we still believe in Latin America's
long-term potential. Relative to Asia, Latin America stands to perform much
better because of its more favorable trade ties to the United
C-1
<PAGE> 61
States. The governments of the major economies in Latin America continue to
emphasize responsible fiscal and monetary policies. We feel that many are truly
committed to reform and deregulation. In fact, we've already witnessed important
restructuring efforts in the banking industries of several Latin American
countries and the first stages of fiscal reform in Brazil.
Which Stocks Did You Like?
In Brazil, we own a number of privatization candidates. Many of the larger
utilities in Brazil appear undervalued given the strong medium-term growth
prospects for the economy. We emphasized oil and natural resource stocks because
they benefit from U.S. dollar revenues and from privatization efforts, which
should encourage greater operating efficiency. We also liked Brazil's utilities
such as Companhia Energetica de Minas Gerais (CEMIG), provider of electric power
to the Brazilian state of Minas Gerais. With political uncertainties now
reduced, such stocks have attracted investor interest once again.
Our largest country allocation was in Mexico, which we believe will show
relatively stable economic growth into 1999. We've focused on blue chips as well
as stocks that stand to benefit from the large devaluation of the peso. Although
earnings will certainly be affected this year by the monetary correction, it
should help the competitive position of companies like Fomento Economico
Mexicano, S.A. de C.V., a soft-drink producer that exports to 63 countries
around the world.
PORTFOLIO COMPOSITION
AS OF OCTOBER 31, 1998, BASED ON TOTAL NET ASSETS
<TABLE>
<CAPTION>
TOP 10 PORTFOLIO HOLDINGS
- -------------------------
<S> <C> <C>
1. Telecomunicacoes Brasileiras S.A. (Telebras)
Preferred -- ADR.......................................... (Brazil) 4.3%
2. Telefonos de Mexico, S.A. de C.V. "L" -- ADR............ (Mexico) 3.0
3. Merrill Lynch -- Kospi 200 Call Warrants, due 9/9/99.... (United States) 2.9
4. Petroleo Brasileiro, S.A. (Petrobras) Preferred......... (Brazil) 2.3
5. Companhia Energetica de Minas Gerais (CEMIG) -- ADR..... (Brazil) 2.2
6. South African Breweries Ltd............................. (South Africa) 2.0
7. Hellenic Telecommunication Organization S.A. (OTE)...... (Greece) 1.9
8. Magyar Tavkozlesi Rt. -- ADR............................ (Hungary) 1.8
9. Grupo Carso, S.A. de C.V. "A1".......................... (Mexico) 1.8
10. MISR Elgadida for Housing and Reconstruction............ (Egypt) 1.8
</TABLE>
<TABLE>
<CAPTION>
TOP 10 INDUSTRIES TOP 10 COUNTRIES
- ----------------- ----------------
<S> <C> <C> <C>
1. Services........................... 20.2% 1. Mexico............................. 16.3%
2. Finance............................ 15.0 2. Brazil............................. 16.1
3. Energy............................. 9.7 3. South Africa....................... 6.9
4. Consumer Non-Durables.............. 9.5 4. Argentina.......................... 6.9
5. Materials/Basic Industry........... 8.3 5. India.............................. 6.2
6. Multi-Industry/Miscellaneous....... 6.7 6. Taiwan............................. 5.9
7. Technology......................... 4.3 7. Greece............................. 5.8
8. Capital Goods...................... 2.9 8. Egypt.............................. 5.7
9. Health Care........................ 1.9 9. United States...................... 5.3
10. Consumer Durables.................. 0.6 10. Israel............................. 4.2
</TABLE>
Please keep in mind that the Fund's portfolio is subject to change and there is
no assurance the Fund will continue to hold any particular security.
Where Else Did You Find Opportunities?
One of the advantages of a global emerging markets portfolio is its
diversity. We have found a number of investments that were relatively sheltered
from global economic difficulties. For example, Hindustan Lever,
C-2
<PAGE> 62
one of the largest low-end consumer good manufacturers in India, has announced
better-than-anticipated earnings expectations. The company makes soap,
toothpaste, and other personal care products.
Global volatility has created good buying opportunities in such smaller
markets as Egypt and Morocco, which have demonstrated relatively strong growth,
falling interest rates, a decline in inflation, and attractive valuations.
Similarly, problems in Russia have affected the prices of some of Eastern
Europe's more attractive stocks. For instance, Magyar Olaj-es Gazipari
(MOL) -- the gas distributor in Hungary, and KREDYT BANK of Poland are both
strong stocks that we believe are trading at a discount.
We've raised our weighting in Greece, which is committed to joining
Europe's Economic and Monetary Union (EMU). In anticipation of that goal, the
country has made major strides in economic and fiscal reform. An example of a
Greek company we liked is Stet Hellas, a cellular company that has shown very
strong earnings growth in recent quarters.
What About Emerging-Markets Debt?
Political and currency instabilities have kept us in a cautious mode with
this asset class. At the end of the reporting period, just over 11% of the
portfolio was in foreign government and government agency obligations. The
largest allocation went to Mexican government debt; the remainder was spread
across several Eastern European and Latin American countries. We have very
limited exposure to corporate bonds, with a scattering of holdings in Argentina,
Brazil, and a few other countries.
What Is Your Outlook for Emerging Markets and for the Fund?
Although we expect growth to be disappointing over the next year, we
believe that emerging markets continue to offer a long-term investment option
for the most aggressive investors. The fundamentals driving growth in emerging
markets are still there: consumption, industrialization, a maturing financial
services industry, and continuing investment in infrastructure.
Emerging markets potentially can offer earnings growth rates that exceed
those in developed countries; however, there are also many more risks associated
with this type of investment. We urge you to read your prospectus for more
information about the Fund's objectives, strategies, and risks.
C-3
<PAGE> 63
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM DEVELOPING MARKETS FUND VS. BENCHMARK INDEXES
1/11/94-10/31/98
<TABLE>
<CAPTION>
MSCI EMERGING IFC INVESTABLE
AIM DEVELOPING MARKETS COMPOSITE
MARKETS FUND FREE INDEX INDEX
-------------- ------------- --------------
<S> <C> <C> <C>
1/11/94............................................ $9,524 $10,000 $10,000
4/30/94............................................ 7,943 8,922 8,601
10/31/94........................................... 9,314 10,641 10,176
4/30/95............................................ 7,250 8,494 7,776
10/31/95........................................... 7,664 8,573 7,782
4/30/96............................................ 9,036 9,716 8,963
10/31/96........................................... 9,581 9,130 8,598
4/30/97............................................ 10,511 10,133 9,433
10/31/97........................................... 9,092 8,356 7,735
4/30/98............................................ 9,427 8,660 8,018
10/31/98........................................... 5,720 5,767 5,503
</TABLE>
Past performance cannot guarantee comparable future results.
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDED OCTOBER 31, 1998, INCLUDING SALES CHARGES
<TABLE>
<S> <C>
CLASS A SHARES
Inception (1/11/94)......................................... -10.98%
1 year...................................................... -40.09*
CLASS B SHARES
Inception (11/3/97)......................................... -42.63%**
ADVISOR CLASS SHARES
(sales charges do not apply)
Inception (11/3/97)......................................... -39.21%***
</TABLE>
- ---------------
* -37.09%, excluding sales charges
** -39.76%, excluding CDSC. Total return provided is cumulative total return
that has not been annualized.
*** Total return provided is cumulative total return that has not been
annualized.
Sources: Towers Data Systems Hypo -- Registered Trademark-- and Bloomberg.
Your Fund's total return includes sales charges, expenses, and management
fees. The performance of the Fund's Class B and Advisor Class shares will differ
from Class A shares due to differing fees and expenses. For Fund data
performance calculations and descriptions of indexes cited on this page, please
refer to the inside front cover.
On October 31, 1997, shareholders of record as of a certain date of GT
Global Developing Markets Fund, Inc., a closed-end fund, became Class A
shareholders of the Fund, an open-end fund. Performance of Class A shares prior
to November 1, 1997 reflects the different fees and expenses of the closed-end
fund.
C-4
<PAGE> 64
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS OF AN
INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE
SHOWN.
About This Chart
The chart above compares your Fund's Class A shares to benchmark indexes.
Use of these indexes is intended to give you a general idea of your Fund's
comparative performance. It is important to understand the differences between
your Fund and these indexes. An index measures performance of a hypothetical
portfolio.
A market index such as the MSCI Emerging Markets Free Index is not managed
and incurs no sales charges, expenses, or fees. If you could buy all the
securities that make up a market index, you would incur expenses that would
affect your investment's return.
Since the last reporting period, AIM Developing Markets Fund has elected to
use the MSCI Emerging Markets Free Index as one of its benchmarks. This index
more closely reflects the performance of the securities in which the Fund
invests. The Fund will no longer be measured against the IFC Investable
Composite Index, the index published in previous reports to shareholders.
Because this is the first reporting period since we have adopted the new
index, SEC guidelines require that we compare the Fund's performance to both the
old and the new index.
ANNUAL REPORT / FOR CONSIDERATION
TAKE A CLOSER LOOK AT MARKET INDEXES
You step into your car after work and hear the radio announcer say, "The
market was down 200 points today." Instantly you start to worry. But should you?
The question is, what exactly is "the market"? And how are your investments
going to be affected by it? You need the facts, and fast. Market indexes are a
good place to start. They can help you gauge how your investments are
performing.
"The market" actually is much broader than newspapers and television
reports make it out to be. The media often report movements in the Dow Jones
Industrial Average (the Dow) as indicative of the market as a whole. But the Dow
is made up of just 30 stocks; the U.S. market is made up of more than 12,000
stocks traded on the New York Stock Exchange, regional exchanges, and over the
counter. The Dow only measures the performance of the largest American
companies.
If you're like most investors, you've got a range of investments across
market segments, not just blue-chip stocks. The best way to compare your
investments to their peers in the marketplace is to find the right index. An
index measures the performance of a particular group of stocks. But keep in
mind, there is rarely a perfect match between the stocks in a mutual fund and
the stocks in an index.
Indexes and funds have different purposes. Mutual funds select stocks based
on their past performance or future potential. Indexes pick stocks based on
their ability to act as reliable measuring tools. For example, index makers for
the S&P 500 look for actively traded, widely owned stocks that reflect the
active stock market.
There are other important differences between a fund and an index. You
cannot invest directly in an index. Because indexes are unmanaged, they incur no
sales charges, expenses, or fees. Even if you bought all the securities making
up an index, your transaction expenses would lower your investment returns.
As you follow the various indexes, you'll notice that their tracks often
diverge. When large-caps are up, small-caps or overseas stocks are down -- and
vice versa. The chart at the right shows calendar-year returns for two domestic
and one foreign equity index for the decade 12/31/87 through 12/31/97. The
market segments often move out of synch, and performance leadership often
rotates from one segment to another.
By positioning your investments strategically in various market segments,
you're less likely to miss out on the peaks, and you'll be more protected from
the valleys. Remember, patience is the key. If you jump in and
C-5
<PAGE> 65
out of investments, you could miss out on some of the market's best moments. See
your financial adviser to build a diversified portfolio suited to fluctuating
markets.
THE USUAL INDEXES
THE DOW JONES INDUSTRIAL AVERAGE
What It Is: In its 102-year history, the Dow always has focused on the
largest, most successful U.S. companies. The types of firms in the index have
changed drastically over the years -- from the cotton companies of the 19th
century to the computer icons of the 20th. The 30 stocks now in the Dow include
household names such as International Business Machines Corp., Boeing Co.,
McDonald's Corp., and Walt Disney Co.
What It Tells You: While stocks in the Dow make up about 20% of the value
of all U.S. stocks, the index leaves out many sectors of the market. For most
mutual fund investors, the Dow is an inadequate and often inappropriate measure
of comparison. Use it to check the pulse of American big business, but look
elsewhere for a more inclusive market view.
S&P 500
What It Is: The S&P 500 (Standard & Poor's Composite Index of 500 Stocks)
is often used as a gauge of the whole market. But it measures only 500 stocks in
the large-capitalization portion of the U.S. stock market. Included in the index
are Apple Computer, Hilton Hotels, NIKE Inc., and Pennzoil Co.
What It Tells You: The S&P 500 is useful for evaluating a fund that invests
in large-capitalization U.S. stocks. It's a poor gauge for others funds, such as
a small-cap aggressive growth fund.
Keep in mind that the S&P 500 is very concentrated. The top 50 companies
represent half the S&P 500's assets. For the past few years, the total return of
the S&P 500 has been unusually high, but much of this performance can be
attributed to just a few stocks in the index. Most mutual funds are more
diversified than this index.
NASDAQ COMPOSITE INDEX
What It Is: The NASDAQ (National Association of Securities Dealers
Automated Quotation system) Composite Index measures the performance of all
NASDAQ domestic and foreign stocks. Often associated with the over-the-counter
market, the index also includes some exchange-listed stocks. More than 5,300
stocks are in the NASDAQ Composite Index.
What It Tells You: Many consider NASDAQ a barometer for small- and mid-cap
stocks. However, the index is market-value weighted -- each company's stock
affects the index in proportion to that company's market value. Large-cap
technology stocks such as Microsoft, Intel, and Dell Computer dominate it. The
NASDAQ is not a good measure of small- and mid-cap stock performance. It
basically tells you how large-cap technology stocks are doing. It is not a
suitable index for most mutual funds.
C-6
<PAGE> 66
DIVERGING INDEXES
<TABLE>
<CAPTION>
S&P 500 INDEX EUROPE-AUSTRALASIA-FAR
WITH MONTHLY DIVIDENDS EAST INDEX WITH DIVIDENDS* RUSSELL 2000 STOCK INDEX
---------------------- -------------------------- ------------------------
<S> <C> <C> <C>
12/88......................... 16.55% 25.02% 28.59%
12/89......................... 31.64 16.26 10.8
12/90......................... -3.09 19.48 23.2
12/91......................... 30.41 46.04 12.5
12/92......................... 7.61 18.41 11.85
12/93......................... 10.06 18.88 32.94
12/94......................... 1.32 -1.82 8.06
12/95......................... 37.54 28.45 11.55
12/96......................... 22.95 16.49 6.36
12/97......................... 33.35 22.36 2.06
</TABLE>
Past performance is no guarantee of future investment results.
- ---------------
* International investing presents risks not associated with investing solely
in the United States. These include risks relating to fluctuation in the
value of the U.S. dollar, custody arrangements made for a Fund's foreign
holdings, differences in accounting, political risks, and the lesser degree
of public information required to be provided by non-U.S. companies.
A FEW MORE INDEXES
S&P 400
What It Is: The Standard & Poor's 400 Mid-Cap Index is a relatively new
index that dates to 1981 and measures performance of 400 stocks in the
mid-capitalization sector of the domestic stock market. Companies in the index
include America Online, Inc., CompuWare Corp., Starbucks Corp., and Office
Depot. As of July 31, the median market capitalization in the S&P 400 was
approximately $1.8 billion, but some stocks in the index have capitalizations as
large as $5 billion.
What It Tells You: If your fund invests primarily in mid-caps, this is one
of the best benchmarks to use. But keep in mind that the index may include
companies smaller or larger than the ones in your fund.
RUSSELL 2000 INDEX
What It Is: The Russell 2000 Index measures the performance of small-cap
stocks. A total of 2,000 U.S. companies are represented in the index, including
such well-known firms as Bally Total Fitness, Bethlehem Steel, Coca-Cola
Bottling Co., and Coors Brewing Co. The index, which is cap-weighted, represents
about 10% of the U.S. stock market. More than 900 of the stocks in the Russell
2000 trade on either the New York Stock Exchange or the American Stock Exchange.
What It Tells You: The Russell 2000 Index is a very good indicator of
small-cap stock performance. It is a true small-cap index with the market value
of companies represented in this index ranging from $171.7 million to $1.1
billion. Many mutual funds investing in small-cap stocks use the Russell 2000 as
their benchmark index.
THE EUROPE, AUSTRALASIA, AND FAR EAST INDEX (EAFE)
What It Is: The EAFE consists of approximately 1,600 foreign stocks tracked
by Morgan Stanley Capital International (MSCI). They are listed on stock
exchanges in 20 developed countries. Stocks are chosen to reflect 60% of the
market capitalization of each country and of each major industry group.
What It Tells You: As international investing has grown, a need has arisen
to measure global stock-market performance. The EAFE fulfills this need for
developed markets in Europe, Australia and the Far
C-7
<PAGE> 67
East. It is frequently used as a benchmark for mutual funds investing in stocks
in these markets. MSCI also has developed indexes for specific countries and
regions and for emerging markets. Since your fund's country allocation may be
different from EAFE, you may need to look at a more specific index.
An index is not an investment product available for purchase. An index
measures the performance of a hypothetical portfolio. An index is not managed,
incurring no sales charges, expenses, or fees. If you could buy all the
securities that make up a particular index, you would incur expenses that would
affect the return on your investment.
C-8
<PAGE> 68
AIM DEVELOPING MARKETS FUND
(A PORTFOLIO OF AIM INVESTMENT FUNDS)
AIM EASTERN EUROPE FUND
11 GREENWAY PLAZA, SUITE 100
HOUSTON, TEXAS 77046
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information relates specifically to the
proposed Reorganization whereby AIM Developing Markets Fund ("Developing Markets
Fund"), a portfolio of AIM Investment Funds, would acquire all of the assets of
AIM Eastern Europe Fund ("Eastern Europe Fund") in exchange solely for Class A
shares of beneficial interest in Developing Markets Fund and the assumption by
Developing Markets Fund of all of Eastern Europe Fund's liabilities. This
Statement of Additional Information consists of this cover page, the pro forma
financial statements of Developing Markets Fund (giving effect to the
Reorganization) for the fiscal year ended October 31, 1998, and the following
described documents, each of which is incorporated by reference herein:
(1) The Statement of Additional Information of Developing Markets Fund,
dated March 1, 1999.
(2) The Annual Report to Shareholders of Developing Markets Fund for
the fiscal year ended October 31, 1998.
(3) The Annual Report to Shareholders of Eastern Europe Fund for the
fiscal year ended October 31, 1998.
This Statement of Additional Information is not a prospectus and should
be read only in conjunction with the Proxy Statement dated June 28, 1999
relating to the above-referenced matter. A copy of the Proxy Statement may be
obtained without charge by writing to A I M Distributors, Inc., P.O. Box 4739,
Houston, Texas 77210-4739 or by calling toll-free 1-800-347-4246. This Statement
of Additional Information is dated June 28, 1999.
<PAGE> 69
AIM DEVELOPING MARKETS FUND
AIM EASTERN EUROPE FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
AIM Developing AIM Emerging
Markets Markets Adjustments
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 5,875,109 $ 250,454
------------ ------------ -----------
Dividends 4,212,609 4,700,768
(net of $263,295 foreign withholding tax-AIM Developing Markets Fund)
(net of $75,619 foreign withholding tax-AIM Eastern Europe Fund)
------------ ------------ -----------
Securities lending income 241,088 186,080
------------ ------------ -----------
Total investment income 10,328,806 5,137,302
============ ============ ===========
EXPENSES:
Investment management and administration fees 1,740,733 1,660,548
------------ ------------ -----------
Administration fees --
------------ ------------ -----------
Transfer agent fees 538,250 1,069,500
------------ ------------ -----------
Service and distribution expenses: Class A 454,554 406,198
------------ ------------ -----------
Service and distribution expenses: Class B 1,576 871,360
------------ ------------ -----------
Professional fees 360,255 122,310
------------ ------------ -----------
Interest expense 359,635 447,556
------------ ------------ -----------
Printing and postage expenses 312,740 219,000
------------ ------------ -----------
Custodian fees 155,690 160,000
------------ ------------ -----------
Registration and filing fees 96,900 74,900
------------ ------------ -----------
Amortization of organization costs 70,755
------------ ------------ -----------
Fund accounting fees 53,782 45,603
------------ ------------ -----------
Trustees' fees and expenses 30,660 13,870
------------ ------------ -----------
Other expenses 17,000 10,950
------------ ------------ -----------
Total expenses 4,192,530 5,101,795
============ ============ ===========
Less Expense reimbursement by AIM Advisors, Inc. (691,157) (821,992)
------------ ------------ -----------
Expense reductions (41,663) (39,255)
------------ ------------ -----------
Net expenses 3,459,710 4,240,548
============ ============ ===========
Net investment income 6,869,096 896,754
============ ============ ===========
Net realized and unrealized gain (loss) on investments and foreign currencies:
Net realized loss on investments (81,224,308) (72,668,661)
------------ ------------ -----------
Net realized loss on foreign currency transactions (2,134,815) (2,512,849)
------------ ------------ -----------
Net realized loss during the year (83,359,123) (75,181,510)
============ ============ ===========
Net change in unrealized appreciations (depreciation) on
translation of assets and liabilities in foreign currencies 197,153 601,285
------------ ------------ -----------
Net change in unrealized appreciation (depreciation) of investments 13,544,276 5,031,551
------------ ------------ -----------
Net unrealized appreciation (depreciation) during the year 13,741,429 5,632,836
============ ============ ===========
Net realized and unrealized loss on investments and foreign currencies (69,617,694) (69,548,674)
============ ============ ===========
Net decrease in net assets resulting from operations ($62,748,598) ($68,651,920)
============ ============ ===========
<CAPTION>
Pro Forma AIM Eastern
Combining Europe
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 6,125,563 $ 840,587
------------- -------------
Dividends 8,913,377 497,178
(net of $263,295 foreign withholding tax-AIM Developing Markets Fund)
(net of $75,619 foreign withholding tax-AIM Eastern Europe Fund)
------------- -------------
Securities lending income 427,168 --
------------- -------------
Total investment income 15,466,108 1,337,765
============= =============
EXPENSES:
Investment management and administration fees 3,401,281 1,017,796
------------- -------------
Administration fees 0 162,844
------------- -------------
Transfer agent fees 1,607,750 29,713
------------- -------------
Service and distribution expenses: Class A 860,752 --
------------- -------------
Service and distribution expenses: Class B 872,936 --
------------- -------------
Professional fees 482,565 59,412
------------- -------------
Interest expense 807,191 --
------------- -------------
Printing and postage expenses 531,740 73,465
------------- -------------
Custodian fees 315,690 42,988
------------- -------------
Registration and filing fees 171,800 --
------------- -------------
Amortization of organization costs 70,755 --
------------- -------------
Fund accounting fees 99,385 --
------------- -------------
Trustees' fees and expenses 44,530 34,432
------------- -------------
Other expenses 27,950 54,438
------------- -------------
Total expenses 9,294,325 1,475,088
============= =============
Less Expense reimbursement by AIM Advisors, Inc. (1,513,149) (40,711)
------------- -------------
Expense reductions (80,918) --
------------- -------------
Net expenses 7,700,258 1,434,377
============= =============
Net investment income 7,765,850 (96,612)
============= =============
Net realized and unrealized gain (loss) on investments and foreign currencies:
Net realized loss on investments (153,892,969) (7,904,517)
------------- -------------
Net realized loss on foreign currency transactions (4,647,664) (194,719)
------------- -------------
Net realized loss during the year (158,540,633) (8,099,236)
============= =============
Net change in unrealized appreciations (depreciation) on
translation of assets and liabilities in foreign currencies 798,438 (49,219)
------------- -------------
Net change in unrealized appreciation (depreciation) of investments 18,575,827 (38,905,480)
------------- -------------
Net unrealized appreciation (depreciation) during the year 19,374,265 (38,954,699)
============= =============
Net realized and unrealized loss on investments and foreign currencies (139,166,368) (47,053,935)
============= =============
Net decrease in net assets resulting from operations $(131,400,518) $ (47,150,547)
============= =============
<CAPTION>
Pro Forma
Adjustments Combining
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 6,966,150
--------- -------------
Dividends 9,410,555
(net of $263,295 foreign withholding tax-AIM Developing Markets Fund)
(net of $75,619 foreign withholding tax-AIM Eastern Europe Fund)
--------- -------------
Securities lending income 427,168
--------- -------------
Total investment income 16,803,873
========= =============
EXPENSES:
Investment management and administration fees (260,627) 4,158,450
--------- -------------
Administration fees (162,844) 0
--------- -------------
Transfer agent fees 1,637,463
--------- -------------
Service and distribution expenses: Class A 202,330 1,063,082
--------- -------------
Service and distribution expenses: Class B 872,936
--------- -------------
Professional fees 541,977
--------- -------------
Interest expense 807,191
--------- -------------
Printing and postage expenses 605,205
--------- -------------
Custodian fees 358,678
--------- -------------
Registration and filing fees 171,800
--------- -------------
Amortization of organization costs 70,755
--------- -------------
Fund accounting fees 24,835 124,220
--------- -------------
Trustees' fees and expenses 78,962
--------- -------------
Other expenses 82,388
--------- -------------
Total expenses (196,306) 10,573,107
========= =============
Less Expense reimbursement by AIM Advisors, Inc. (1,553,860)
--------- -------------
Expense reductions (80,918)
========= =============
Net expenses (196,306) 8,938,329
========= =============
Net investment income 196,306 7,865,544
========= =============
Net realized and unrealized gain (loss) on investments and foreign currencies:
Net realized loss on investments (161,797,486)
--------- -------------
Net realized loss on foreign currency transactions (4,842,383)
--------- -------------
Net realized loss during the year (166,639,869)
========= =============
Net change in unrealized appreciations (depreciation) on
translation of assets and liabilities in foreign currencies 749,219
--------- -------------
Net change in unrealized appreciation (depreciation) of investments (20,329,653)
--------- -------------
Net unrealized appreciation (depreciation) during the year (19,580,434)
========= =============
Net realized and unrealized loss on investments and foreign currencies (186,220,303)
========= =============
Net decrease in net assets resulting from operations $ 196,306 $(178,354,759)
========= =============
</TABLE>
See Accompanying Notes to Pro Forma Combining Financial Statements.
<PAGE> 70
AIM DEVELOPING MARKETS FUND
AIM EMERGING MARKETS
AIM EASTERN EUROPE FUND
Pro Forma Combining Statements of Assets and Liabilities
October 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
AIM Developing AIM Emerging Pro Forma
Markets Markets Combining
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS:
Investments, at market value $ 90,220,411 $ 95,678,089 $185,898,500
------------ ------------ ------------
(cost $117,236,708-AIM Developing Markets Fund)
(cost $73,141,633-AIM Eastern Europe Fund)
------------ ------------ ------------
Repurchase agreement, at value and cost -- 0
------------ ------------ ------------
U.S. currency 895 827 1,722
------------ ------------ ------------
Foreign currencies 723,408 1,235,418 1,958,826
------------ ------------ ------------
(cost $730,519-AIM Developing Markets Fund)
(cost $99,392-AIM Eastern Europe Fund)
------------ ------------ ------------
Receivable for Securities Sold 903,099 66,130 969,229
------------ ------------ ------------
Receivable for Fund shares sold 5,619 413,554 419,173
------------ ------------ ------------
Dividends and foreign withholding taxes receivable 268,551 320,223 588,774
------------ ------------ ------------
Prepaid expenses -- 0
------------ ------------ ------------
Interest receivable 424,599 2,692 427,291
------------ ------------ ------------
Unamortized organizational costs 14,557 14,557
------------ ------------ ------------
Total assets 92,561,139 97,716,933 190,278,072
============ ============ ============
LIABILITIES:
Payables for:
------------ ------------ ------------
Securities purchased 3,823,511 3,143,073 6,966,584
------------ ------------ ------------
Fund shares repurchased 394,946 288,586 683,532
------------ ------------ ------------
Investment management and administration fees 356,752 394,425 751,177
------------ ------------ ------------
Service and distribution expenses 96,087 147,714 243,801
------------ ------------ ------------
Professional fees 49,710 43,949 93,659
------------ ------------ ------------
Transfer agent fees 30,788 136,937 167,725
------------ ------------ ------------
Trustees' fees and expenses 25,309 4,101 29,410
------------ ------------ ------------
Custodian 10,081 8,199 18,280
------------ ------------ ------------
Registration and filing fees 7,596 24,709 32,305
------------ ------------ ------------
Printing and postage expenses 6,093 102,809 108,902
------------ ------------ ------------
Open forward foreign currency contracts 950 950
------------ ------------ ------------
Fund Accounting fees 883 4,847 5,730
------------ ------------ ------------
Administration fees -- 0
------------ ------------ ------------
Other accrued expenses 57,979 15,003 72,982
------------ ------------ ------------
Total liabilities 4,860,685 4,314,352 9,175,037
============ ============ ============
Net assets applicable to shares outstanding 87,700,454 93,402,581 181,103,035
============ ============ ============
NET ASSETS:
Class A $ 87,517,225 $ 43,925,435 $131,442,660
============ ============ ============
Class B $ 153,941 $ 49,439,410 $ 49,593,351
============ ============ ============
Advisor Class $ 29,288 $ 37,736 $ 67,024
============ ============ ============
SHARES OUTSTANDING:
Class A 11,616,154 5,964,824 17,446,312
------------ ------------ ------------
Class B 20,565 6,894,258 6,620,273
------------ ------------ ------------
Class C 3,877 5,067 8,877
------------ ------------ ------------
Class A:
Net asset value and redemption price per share $ 7.53 $ 7.36 $ 7.53
------------ ------------ ------------
Offering price per share:
(Net asset value of $7.53/95.25%)-AIM Developing Markets Fund) $ 7.91
============ ============ ============
Class B:
Net asset value and offering price per share $ 7.49 $ 7.17 $ 7.49
============ ============ ============
Class C:
Net asset value and offering price per share $ 7.55 $ 7.45 $ 7.55
============ ============ ============
<CAPTION>
AIM Eastern Pro Forma
Europe Combining
------------ ------------
<S> <C> <C>
ASSETS:
Investments, at market value $ 41,708,968 $227,607,468
------------ ------------
(cost $117,236,708-AIM Developing Markets Fund)
(cost $73,141,633-AIM Eastern Europe Fund)
------------ ------------
Repurchase agreement, at value and cost 5,036,000 5,036,000
------------ ------------
U.S. currency 685 2,407
------------ ------------
Foreign currencies 97,972 2,056,798
------------ ------------
(cost $730,519-AIM Developing Markets Fund)
(cost $99,392-AIM Eastern Europe Fund)
------------ ------------
Receivable for Securities Sold 635,491 1,604,720
------------ ------------
Receivable for Fund shares sold -- 419,173
------------ ------------
Dividends and foreign withholding taxes receivable 132,076 720,850
------------ ------------
Prepaid expenses 4,905 4,905
------------ ------------
Interest receivable 741 428,032
------------ ------------
Unamortized organizational costs -- 14,557
------------ ------------
Total assets 47,616,838 237,894,910
============ ============
LIABILITIES:
Payables for:
------------ ------------
Securities purchased 310,383 7,276,967
------------ ------------
Fund shares repurchased -- 683,532
------------ ------------
Investment management and administration fees 38,395 789,572
------------ ------------
Service and distribution expenses -- 243,801
------------ ------------
Professional fees 53,350 147,009
------------ ------------
Transfer agent fees -- 167,725
------------ ------------
Trustees' fees and expenses 10,400 39,810
------------ ------------
Custodian 2,500 20,780
------------ ------------
Registration and filing fees -- 32,305
------------ ------------
Printing and postage expenses 75,000 183,902
------------ ------------
Open forward foreign currency contracts -- 950
------------ ------------
Fund Accounting fees -- 5,730
------------ ------------
Administration fees 7,132 7,132
------------ ------------
Other accrued expenses 20,132 93,114
------------ ------------
Total liabilities 517,292 9,692,329
============ ============
Net assets applicable to shares outstanding 47,099,546 228,202,581
============ ============
NET ASSETS:
Class A $ 47,099,546 $178,542,206
============ ============
Class B -- $ 49,593,351
============ ============
Advisor Class -- $ 67,024
============ ============
SHARES OUTSTANDING:
Class A 6,516,426 23,703,119
============ ============
Class B -- 6,620,273
============ ============
Class C -- 8,877
============ ============
Class A:
Net asset value and redemption price per share $ 7.23 $ 7.53
Offering price per share:
(Net asset value of $7.53/95.25%)-AIM Developing Markets Fund) -- --
============ ============
Class B:
Net asset value and offering price per share -- $ 7.49
============ ============
Class C:
Net asset value and offering price per share -- $ 7.55
============ ============
</TABLE>
See Accompanying Notes to Pro Forma Combining Financial Statements.
<PAGE> 71
AIM DEVELOPING MARKETS FUND
AIM EASTERN EUROPE FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Markets Markets Europe
<S> <C> <C> <C> <C> <C>
EQUITY INVESTMENTS (81.9%)
SERVICES (20.4%)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
Telecomunicacoes Brasileiras S.A. (Telebras)
49,291 59,262 108,553 108,553 Preferred - ADR (a)
(Telephone Networks)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
50,583 48,027 98,610 98,610 Telefonos de Mexico, S.A. de C.V. "L" - ADR (a)
(Telephone Networks)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
74,322 57,266 131,588 131,588 Hellenic Telecommunication Organization S.A. (OTE)
(Telephone Networks)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
59,100 67,990 127,090 202,700 329,790 Magyar Tavkozlesi Rt. - ADR (a)
(Telephone Networks)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
64,000 64,000 Julius Meinl International AG
(Retailers - Food)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
80,900 81,400 162,300 162,300 Telefonica del Peru S.A. - ADR (a)
(Telephone Networks)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
748,662 995,730 1,744,392 1,744,392 Cifra, S.A. de C.V. "V" (b)
(Retailers - Other)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
27,528 30,983 58,511 58,511 Telefonica de Argentina S.A. - ADR (a)
(Telephone Networks)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
Telecomunicacoes de Sao Paulo S.A. (TELESP):
(Telephone Regional/Local)
7,001,000 10,859,000 17,860,000 17,860,000 Common (b)
150,157 185,406 335,563 335,563 Preferred
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
26,700 35,100 61,800 61,800 Grupo Televisa, S.A. de C.V. - GDR (a)(b)
(Broadcasting & Publishing)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
24,976 24,829 49,805 49,805 STET Hellas Telecommunications S.A. - ADR (a)(b)
(Wireless Communications)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
Mahanagar Telephone Nigam Ltd. (a)(b)(c)
(Telecom - Other)
43,300 43,300 43,300 GDR
143,500 84,400 227,900 227,900 Common
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
37,000 37,000 Danubius Hotels and Spa Rt. (b)
(Leisure & Tourism)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
7,132,127 10,607,155 17,739,282 17,739,282 Companhia de Saneamento Basico do Estado de Sao Paulo
(Business & Public Services)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
37,000 37,000 74,000 74,000 Videsh Sanchar Nigam Ltd. - Reg S GDR (a)(b)(c)
(Telecom - Other)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
15,500 27,900 43,400 43,400 Nortel Inversora S.A. - ADR (a)
(Telephone Networks)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
10,300 19,400 29,700 29,700 Telecom Argentina S.A. - ADR (a)
(Telephone Networks)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
2,320 2,809 5,129 5,129 ONA (Omnium Nord Africain) S.A. "A"
(Business & Public Services)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
86,900 108,700 195,600 195,600 Bezeq Israeli Telecommunication Corporation Ltd.
(Telephone Networks)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
295,000 295,000 Nizhny Novgorod Sviazinform (a)
(Telecom - Other)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
14,898 18,591 33,489 33,489 Blue Square Chain Investments & Properties Ltd. (b)
(Retailers - Food)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
Russian Telecommunication Development Corp.
(Telephone Networks)
52,600 52,600 Non-Voting (a)(b)(d)(e)
38,400 38,400 Voting (a)(b)(d)(e)
--------- ---------- ---------- --------- ---------- -----------------------------------------------------
<CAPTION>
MARKET VALUE
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Country Markets Markets Europe
<S> <C> <C> <C> <C> <C> <C>
EQUITY INVESTMENTS (81.9%)
SERVICES (20.4%)
Telecomunicacoes Brasileiras S.A. (Telebras)
Preferred - ADR (a) BRZL 3,743,034 4,500,208 8,243,242 8,243,242
(Telephone Networks)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Telefonos de Mexico, S.A. de C.V. "L" - ADR (a) MEX 2,671,415 2,536,426 5,207,841 5,207,841
(Telephone Networks)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Hellenic Telecommunication Organization S.A. (OTE) GREC 1,690,938 1,302,888 2,993,826 2,993,826
(Telephone Networks)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Magyar Tavkozlesi Rt. - ADR (a) HGRY 1,588,313 1,827,231 3,415,544 5,447,562 8,863,106
(Telephone Networks)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Julius Meinl International AG ASTRI 1,319,248 1,319,248
(Retailers - Food)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Telefonica del Peru S.A. - ADR (a) PERU 1,051,700 1,058,200 2,109,900 2,109,900
(Telephone Networks)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Cifra, S.A. de C.V. "V" (b) MEX 1,015,210 1,350,243 2,365,453 2,365,453
(Retailers - Other)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Telefonica de Argentina S.A. - ADR (a) ARG 910,145 1,024,375 1,934,520 1,934,520
(Telephone Networks)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Telecomunicacoes de Sao Paulo S.A. (TELESP): BRZL
(Telephone Regional/Local)
Common (b) 760,144 1,179,032 1,939,176 1,939,176
Preferred 25,177 31,088 56,265 56,265
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Grupo Televisa, S.A. de C.V. - GDR (a)(b) MEX 724,238 952,088 1,676,326 1,676,326
(Broadcasting & Publishing)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
STET Hellas Telecommunications S.A. - ADR (a)(b) GREC 655,620 651,761 1,307,381 1,307,381
(Wireless Communications)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Mahanagar Telephone Nigam Ltd. (a)(b)(c) IND
(Telecom - Other)
GDR 465,475 465,475 465,475
Common 620,816 365,135 985,951 985,951
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Danubius Hotels and Spa Rt. (b) HGRY 597,159 597,159
(Leisure & Tourism)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Companhia de Saneamento Basico do Estado de Sao Paulo BRZL 574,014 853,695 1,427,709 1,427,709
(Business & Public Services)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Videsh Sanchar Nigam Ltd. - Reg S GDR (a)(b)(c) IND 388,500 388,500 777,000 777,000
(Telecom - Other)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Nortel Inversora S.A. - ADR (a) ARG 344,875 620,775 965,650 965,650
(Telephone Networks)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Telecom Argentina S.A. - ADR (a) ARG 332,175 625,650 957,825 957,825
(Telephone Networks)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
ONA (Omnium Nord Africain) S.A. "A" MOR 301,551 365,111 666,662 666,662
(Business & Public Services)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Bezeq Israeli Telecommunication Corporation Ltd. ISRL 249,999 312,714 562,713 562,713
(Telephone Networks)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Nizhny Novgorod Sviazinform (a) RUS 247,800 247,800
(Telecom - Other)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Blue Square Chain Investments & Properties Ltd. (b) ISRL 190,525 237,753 428,278 428,278
(Retailers - Food)
- ----------------------------------------------------- ---- --------- --------- --------- --------- ---------
Russian Telecommunication Development Corp. RUS
(Telephone Networks)
Non-Voting (a)(b)(d)(e) 129,396 129,396
Voting (a)(b)(d)(e) 94,464 94,464
</TABLE>
<PAGE> 72
AIM DEVELOPING MARKETS FUND
AIM EASTERN EUROPE FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Markets Markets Europe
<S> <C> <C> <C> <C> <C>
Samara Svyazinform
(Telephone - Regional/Local)
4,600 4,600 Common (a)(e)
8,900 8,900 Preferred (a)(e)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
14,109 14,109 Chelyabinsk Svyazinform (a)
(Telecom - Other)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
1,400 1,400 Technoimpex (a)(b)(d)(e)
(Wholesale & International Trade)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
50 50 50 Indian Hotels Co., Ltd.
(Leisure & Tourism)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
FINANCE (16.3%)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
88,250 91,470 179,720 179,720 Liberty Life Association of Africa Ltd.
(Insurance - Life)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
Bank Handlowy W. Warszawie
(Banks - Money Center)
70,000 70,000 Common
47,139 47,139 Reg S GDR (a)(c)
2,590 2,590 GDR (f)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
63,120 63,120 Bank Rozwoju Eksportu S.A.
(Banks - Money Center)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
26,059 26,059 Bank Slaski S.A.
(Banks - Money Center)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
301,200 382,800 684,000 684,000 Cathay Life Insurance Co., Ltd.
(Insurance - Life)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
28,000 28,000 OTP Bank Reg S GDR (a)(c)
(Banks - Money Center)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
6,520 8,845 15,365 15,365 National Bank of Greece S.A.
(Banks - Money Center)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
11,255 14,955 26,210 26,210 Alpha Credit Bank
(Banks - Regional)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
797,733 797,733 Big Bank Gdanski S.A.
(Banks - Money Center)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
Uniao de Bancos Brasileiros S.A. (Unibanco)
(Banks - Money Center)
14,649,042 16,569,429 31,218,471 31,218,471 Units (g)
18,510 21,670 40,180 40,180 GDR (a)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
440,500 642,510 1,083,010 1,083,010 Bank Hapoalim Ltd.
(Banks - Money Center)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
691,100 1,007,400 1,698,500 1,698,500 Grupo Financiero Banamex Accival, S.A. de
C.V. "B" (b)
(Banks - Money Center)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
43,000 46,000 89,000 89,000 BIG Bank Gdanski S.A. - Reg S GDR (a)(c)
(Banks - Regional)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
519,768 768,745 1,288,513 1,288,513 Bank Leumi Le - Israel
(Banks - Money Center)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
69,400 95,500 164,900 164,900 MISR International Bank - Reg S GDR (a)(c)
(Banks - Money Center)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
23,068,549 34,305,200 57,373,749 57,373,749 Turkiye Is Bankasi (Isbank) "C"
(Banks - Money Center)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
28,872 28,226 57,098 57,098 Banco de Galicia y Buenos Aires, S.A. de
C.V. - ADR (a)
(Banks - Money Center)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
5,800 7,460 13,260 13,260 Commercial Bank of Greece S.A.
(Banks - Money Center)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
104,591 104,591 Vilniaus Bankas AB Reg S GDR (a)(c)
(Banks - Money Center)
- ---------- ---------- ---------- ------- ---------- -------------------------------------------
<CAPTION>
MARKET VALUE
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Country Markets Markets Europe
<S> <C> <C> <C> <C> <C> <C>
Samara Svyazinform RUS
(Telephone - Regional/Local)
Common (a)(e) 94,300 94,300
Preferred (a)(e) 91,225 91,225
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Chelyabinsk Svyazinform (a) RUS 93,472 93,472
(Telecom - Other)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Technoimpex (a)(b)(d)(e) HGRY
(Wholesale & International Trade)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Indian Hotels Co., Ltd. IND 484 484 484
(Leisure & Tourism)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
17,838,873 20,648,348 38,487,221 8,114,626 46,601,847
FINANCE (16.3%)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Liberty Life Association of Africa Ltd. SAFR 1,515,564 1,570,862 3,086,426 3,086,426
(Insurance - Life)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Bank Handlowy W. Warszawie POL
(Banks - Money Center)
Common 772,807 772,807
Reg S GDR (a)(c) 537,384 537,384
GDR (f) 29,576 29,576
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Bank Rozwoju Eksportu S.A. 1,320,349 1,320,349
(Banks - Money Center)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Bank Slaski S.A. POL 1,302,193 1,302,193
(Banks - Money Center)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Cathay Life Insurance Co., Ltd. TWN 1,065,248 1,353,841 2,419,089 2,419,089
(Insurance - Life)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
OTP Bank Reg S GDR (a)(c) HGRY 1,015,000 1,015,000
(Banks - Money Center)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
National Bank of Greece S.A. GREC 927,124 1,257,732 2,184,856 2,184,856
(Banks - Money Center)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Alpha Credit Bank GREC 900,040 1,195,922 2,095,962 2,095,962
(Banks - Regional)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Big Bank Gdanski S.A. POL 822,764 822,764
(Banks - Money Center)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Uniao de Bancos Brasileiros S.A. (Unibanco) BRZL
(Banks - Money Center)
Units (g) 480,810 543,841 1,024,651 1,024,651
GDR (a) 323,925 379,225 703,150 703,150
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Bank Hapoalim Ltd. ISRL 796,944 1,162,416 1,959,360 1,959,360
(Banks - Money Center)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Grupo Financiero Banamex Accival, S.A. de
C.V. "B" (b) MEX 718,257 1,046,986 1,765,243 1,765,243
(Banks - Money Center)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
BIG Bank Gdanski S.A. - Reg S GDR (a)(c) POL 692,300 740,600 1,432,900 1,432,900
(Banks - Regional)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Bank Leumi Le - Israel ISRL 664,712 983,119 1,647,831 1,647,831
(Banks - Money Center)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
MISR International Bank - Reg S GDR (a)(c) EGPT 654,095 900,088 1,554,183 1,554,183
(Banks - Money Center)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Turkiye Is Bankasi (Isbank) "C" TRKY 633,157 941,566 1,574,723 1,574,723
(Banks - Money Center)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Banco de Galicia y Buenos Aires, S.A. de
C.V. - ADR (a) ARG 492,629 481,606 974,235 974,235
(Banks - Money Center)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Commercial Bank of Greece S.A. GREC 491,753 632,496 1,124,249 1,124,249
(Banks - Money Center)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
Vilniaus Bankas AB Reg S GDR (a)(c) LIT 483,733 483,733
(Banks - Money Center)
- ------------------------------------------- ------- ----------- ----------- ---------- --------- ----------
</TABLE>
<PAGE> 73
AIM DEVELOPING MARKETS FUND
AIM EASTERN EUROPE FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Markets Markets Europe
<S> <C> <C> <C> <C> <C>
5,360 7,170 12,530 1 12,531 Ergo Bank S.A.
(Banks - Regional)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
41,379,593 48,631,340 90,010,933 90,010,933 Yapi ve Kredi Bankasi AS
(Banks - Regional)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
56,220 77,770 133,990 133,990 Credicorp Ltd. - ADR (a)
(Banks - Money Center)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
2,900 3,500 6,400 6,400 Wafabank
(Banks - Money Center)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
14,680 22,010 36,690 34,770 71,460 Kredyt Bank S.A. Reg S GDR (a)(b)(c)
(Banks - Money Center)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
19,162,500 22,711,500 41,874,000 41,874,000 Akbank T.A.S.
(Banks - Regional)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
26,900 32,100 59,000 59,000 Banco Rio de La Plata S.A. - ADR (a)
(Banks - Money Center)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
9,000 10,750 19,750 19,750 Inversiones y Representaciones S.A. (IRSA) - GDR (a)
(Real Estate)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
70,000 68,000 138,000 138,000 National Development Bank
(Banks - Regional)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
12,700 12,610 25,310 25,310 Kazkommertsbank Co. - GDR (a)(b)
(Banks - Regional)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
5,820 5,820 Zagrebacka Banka d.d. GDR (a)(b)
(Banks - Money Center)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
4,200 4,200 4,200 Commercial National Bank
(Banks - Money Center)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
3,000 1,650 4,650 4,650 State Bank of India Ltd.
(Banks - Money Center)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
5 5 5 Housing Development Finance Corp.
(Other - Financial)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
ENERGY (12.1%)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
16,207,398 16,324,080 32,531,478 32,531,478 Petroleo Brasileiro S.A. (Petrobras) Preferred
(Oil)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
97,731 96,750 194,481 194,481 Companhia Energetica de Minas Gerais (CEMIG) - ADR (a)
(Electrical & Gas Utilities)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
68,330 72,410 140,740 218,800 359,540 MOL Magyar Olaj-es Gazipari RT - Reg S GDR (a)(c)
(Gas Production & Distribution)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
130,000 130,000 Gazprom Reg S ADR (a)(c)
(Electrical & Gas Utilities)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
70,958 110,068 181,026 181,026 Huaneng Power International, Inc. - ADR (a)(b)
(Electrical & Gas Utilities)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
30,728 44,268 74,996 74,996 Enersis S.A. - ADR (a)
(Electrical & Gas Utilities)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
Unified Energy Systems
(Electrical & Gas Utilities)
88,500 88,500 Reg S GDR (a)(c)
6,920,000 6,920,000 Common (a)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
208,480 208,480 Mosenergo (a)
(Electrical & Gas Utilities)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
516,295 516,295 Bitech Pertoleum Corp. (b)
(Oil)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
15,600 15,600 Ceske Energeticke Zavody AS (b)
(Electrical & Gas Utilities)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
12,500,000 15,100,000 27,600,000 27,600,000 Companhia de Electricidade do Estado da Bahia
(Electrical & Gas Utilities)
- ---------- ---------- ---------- --------- ---------- -------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET VALUE
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Country Markets Markets Europe
<S> <C> <C> <C> <C> <C> <C>
Ergo Bank S.A GREC 476,360 637,220 1,113,580 89 1,113,669
(Banks - Regional)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Yapi ve Kredi Bankasi AS TRKY 467,233 549,115 1,016,348 1,016,348
(Banks - Regional)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Credicorp Ltd. - ADR (a) PERU 379,485 524,948 904,433 904,433
(Banks - Money Center)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Wafabank MOR 378,516 456,830 835,346 835,346
(Banks - Money Center)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Kredyt Bank S.A. Reg S GDR (a)(b)(c) POL 292,866 439,100 731,966 693,661 1,425,627
(Banks - Money Center)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Akbank T.A.S TRKY 282,947 335,350 618,297 618,297
(Banks - Regional)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Banco Rio de La Plata S.A. - ADR (a) ARG 242,100 288,900 531,000 531,000
(Banks - Money Center)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Inversiones y Representaciones S.A. (IRSA) - GDR (a) ARG 232,875 278,156 511,031 511,031
(Real Estate)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
National Development Bank SLNKA 80,910 78,598 159,508 159,508
(Banks - Regional)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Kazkommertsbank Co. - GDR (a)(b) KAZ 70,485 69,986 140,471 140,471
(Banks - Regional)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Zagrebacka Banka d.d. GDR (a)(b) CRT 62,274 62,274
(Banks - Money Center)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Commercial National Bank EGPT 33,723 33,723 33,723
(Banks - Money Center)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
State Bank of India Ltd. IND 11,035 6,070 17,105 17,105
(Banks - Money Center)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Housing Development Finance Corp. IND 264 264 264
(Other - Financial)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
13,271,370 16,888,560 30,159,930 7,039,830 37,199,760
ENERGY (12.1%)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Petroleo Brasileiro S.A. (Petrobras) Preferred BRZL 2,038,154 2,052,827 4,090,981 4,090,981
(Oil)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Companhia Energetica de Minas Gerais (CEMIG) - ADR BRZL 1,893,538 1,874,531 3,768,069 3,768,069
(Electrical & Gas Utilities)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
MOL Magyar Olaj-es Gazipari RT - Reg S GDR (a)(c) HGRY 1,556,216 1,649,138 3,205,354 4,977,700 8,183,054
(Gas Production & Distribution)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Gazprom Reg S ADR (a)(c) RUS 1,212,250 1,212,250
(Electrical & Gas Utilities)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Huaneng Power International, Inc. - ADR (a)(b) CHNA 975,673 1,513,435 2,489,108 2,489,108
(Electrical & Gas Utilities)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Enersis S.A. - ADR (a) CHLE 641,447 924,095 1,565,542 1,565,542
(Electrical & Gas Utilities)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Unified Energy Systems RUS
(Electrical & Gas Utilities)
Reg S GDR (a)(c) 276,563 276,563
Common (a) 221,440 221,440
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Mosenergo (a) RUS 416,960 416,960
(Electrical & Gas Utilities)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Bitech Pertoleum Corp. (b) CAN 401,656 401,656
(Oil)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Ceske Energeticke Zavody AS (b) CZK 355,088 355,088
(Electrical & Gas Utilities)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
Companhia de Electricidade do Estado da Bahia BRZL 398,223 481,053 879,276 879,276
(Electrical & Gas Utilities)
- ---------------------------------------------------- ------ ---------- ---------- ---------- --------- ----------
</TABLE>
<PAGE> 74
AIM DEVELOPING MARKETS FUND
AIM EASTERN EUROPE FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Markets Markets Europe
<S> <C> <C> <C> <C> <C>
163,020 225,855 388,875 743,500 1,132,375 Surgutneftegaz - ADR (a)
(Oil)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
7,843,375 9,317,824 17,161,199 17,161,199 Electropaulo Metropolitana Preferred
(Electrical & Gas Utilities)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
1,654,290 2,158,561 3,812,851 3,812,851 Light - Servicos de Electricidade S.A.
(Electrical & Gas Utilities)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
7,843,375 9,317,824 17,161,199 17,161,199 Empresa Bandeirante de Energia S.A. (b)
(Electrical & Gas Utilities)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
12,154,000 14,418,000 26,572,000 26,572,000 Companhia Brasileira de Petroleo Ipiranga S.A. Preferred
(Gas)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
4,653 4,653 Elektrim Spolka Akcyjna S.A.
(Energy Sources)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
1,350 1,350 1,350 Bombay Suburban Electric Supply (BSES) Ltd. (b)
(Electrical & Gas Utilities)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
65 65 65 Pakistan State Oil., Ltd
(Oil)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
CONSUMER NON-DURABLES (9.0%)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
89,806 92,963 182,769 182,769 South African Breweries Ltd.
(Beverages - Alcoholic)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
40,650 51,000 91,650 91,650 Hindustan Lever Ltd.
(Personal Care/Cosmetics)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
79,900 92,128 172,028 172,028 ITC Ltd.
(Tobacco)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
44,311 64,322 108,633 108,633 Fomento Economico Mexicano, S.A. de C.V. - ADR (a)
(Beverages - Non-alcoholic)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
34,000 50,000 84,000 84,000 Panamerican Beverages, Inc. "A" (a)
(Beverages - Non-alcoholic)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
82,626 82,626 Okocimskie Zaklady Piwowarskie S.A. (b)
(Beverage - Alcoholic)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
38,500 38,500 Pick Szeged Rt. - Reg S GDR (a)(c)
(Food)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
A-Ahram Beverages Co. S.A.E. - 144A GDR (a)(h)
(Beverages - Alcoholic)
15,814 21,235 37,049 37,049 144A GDR
11,000 11,000 11,000 GDR
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
18,100 36,546 54,646 54,646 Compania Cervecerias Unidas S.A. - ADR (a)
(Beverages - Alcoholic)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
2,747,000 5,002,000 7,749,000 7,749,000 Companhia de Tecidos Norte de Minas Preferred
(Textiles & Apparel)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
563,721 663,129 1,226,850 1,226,850 Companhia Cervejaria Brahma Preferred
(Beverages - Alcoholic)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
11,400 12,000 23,400 23,400 Oriental Weavers "C"
(Textiles & Apparel)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
1,243 1,560 2,803 2,168 4,971 Zaklady Piwowarskie w Zywcu S.A. (Zywiec)
(Beverages - Alcoholic)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
50,000 50,000 Russkie Samotsvety (a)(b)
(Other Consumer Goods)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
47,740 58,916 106,656 106,656 Truworths International Ltd.
(Textiles & Apparel)
- ---------- ---------- ---------- ------- ---------- --------------------------------------------------------
MATERIALS/BASIC INDUSTRY (7.9%)
</TABLE>
<TABLE>
<CAPTION>
MARKET VALUE
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Country Markets Markets Europe
<S> <C> <C> <C> <C> <C> <C>
Surgutneftegaz - ADR (a) RUS 326,040 451,710 777,750 1,579,937 2,357,687
(Oil)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Electropaulo Metropolitana Preferred BRZL 264,339 314,031 578,370 578,370
(Electrical & Gas Utilities)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Light - Servicos de Electricidade S.A. BRZL 205,261 267,830 473,091 473,091
(Electrical & Gas Utilities)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Empresa Bandeirante de Energia S.A. (b) BRZL 76,211 90,538 166,749 166,749
(Electrical & Gas Utilities)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Companhia Brasileira de Petroleo Ipiranga S.A. Preferred BRZL 65,213 77,360 142,573 142,573
(Gas)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Elektrim Spolka Akcyjna S.A. POL 55,425 55,425
(Energy Sources)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Bombay Suburban Electric Supply (BSES) Ltd. (b) IND 4,774 4,774 4,774
(Electrical & Gas Utilities)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Pakistan State Oil., Ltd PAK 64 64 64
(Oil)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
8,445,089 9,696,612 18,141,701 9,497,019 27,638,720
CONSUMER NON-DURABLES (9.0%)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
South African Breweries Ltd. SAFR 1,747,924 1,809,369 3,557,293 3,557,293
(Beverages - Alcoholic)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Hindustan Lever Ltd. IND 1,540,472 1,932,695 3,473,167 3,473,167
(Personal Care/Cosmetics)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
ITC Ltd. IND 1,321,750 1,524,032 2,845,782 2,845,782
(Tobacco)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Fomento Economico Mexicano, S.A. de C.V. - ADR (a) MEX 1,154,855 1,676,392 2,831,247 2,831,247
(Beverages - Non-alcoholic)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Panamerican Beverages, Inc. "A" (a) MEX 688,500 1,012,500 1,701,000 1,701,000
(Beverages - Non-alcoholic)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Okocimskie Zaklady Piwowarskie S.A. (b) POL 535,317 535,317
(Beverage - Alcoholic)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Pick Szeged Rt. - Reg S GDR (a)(c) HGRY 332,063 332,063
(Food)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
A-Ahram Beverages Co. S.A.E. - 144A GDR (a)(h) EGPT
(Beverages - Alcoholic)
144A GDR 443,583 595,642 1,039,225 1,039,225
GDR 308,550 308,550 308,550
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Compania Cervecerias Unidas S.A. - ADR (a) CHLE 325,800 657,828 983,628 983,628
(Beverages - Alcoholic)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Companhia de Tecidos Norte de Minas Preferred BRZL 317,812 578,702 896,514 896,514
(Textiles & Apparel)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Companhia Cervejaria Brahma Preferred BRZL 264,658 311,328 575,986 575,986
(Beverages - Alcoholic)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Oriental Weavers "C" EGPT 245,974 258,920 504,894 504,894
(Textiles & Apparel)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Zaklady Piwowarskie w Zywcu S.A. (Zywiec) POL 169,369 212,562 381,931 295,407 677,338
(Beverages - Alcoholic)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Russkie Samotsvety (a)(b) RUS 252,500 252,500
(Other Consumer Goods)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
Truworths International Ltd. SAFR 36,381 44,898 81,279 81,279
(Textiles & Apparel)
- -------------------------------------------------------- ------- --------- --------- ---------- --------- ----------
8,257,078 10,923,418 19,180,496 1,415,287 20,595,783
MATERIALS/BASIC INDUSTRY (7.9%)
</TABLE>
<PAGE> 75
AIM DEVELOPING MARKETS FUND
AIM EASTERN EUROPE FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Markets Markets Europe
<S> <C> <C> <C> <C> <C>
47,673 47,673 Pannonplast Rt.
(Plastics & Rubber)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
95,195 109,535 204,730 204,730 Suez Cement Co. - Reg S GDR (a)(c)
(Cement)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
87,900 90,800 178,700 178,700 Anglo American Platinum Corporation Ltd.
(Metals - Non-Ferrous)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
31,500 34,370 65,870 65,870 Sociedad Quimica y Minera de Chile S.A. - ADR (a)
(Chemicals)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
55,700 54,200 109,900 109,900 Companhia Vale do Rio Doce "A" Preferred
(Metals - Steel)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
161,674 161,674 Stomil Olsztyn S.A.
(Plastics & Rubber)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
47,792 54,606 102,398 102,398 Compania de Minas Buenaventura S.A. - ADR (a)
(Gold)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
Cemex, S.A. de C.V. "CPO"
(Cement)
238,120 349,153 587,273 587,273 "CPO"
43,400 43,400 43,400 "A"
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
115,233 147,781 263,014 263,014 Apasco, S.A. de C.V. "A"
(Cement)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
Hindalco Industries Ltd.:
(Metals - Non-Ferrous)
26,200 34,200 60,400 60,400 GDR (a)
1,634 1,802 3,436 3,436 Common
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
144,665 142,780 287,445 287,445 Makhteshim-Agan Industries Ltd. (b)
(Chemicals)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
118,000 187,600 305,600 305,600 Siderca S.A. "A"
(Metals - Steel)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
283,300 537,100 820,400 820,400 Grupo Cementos de Chihuahua, S.A. de C.V. "B"
(Cement)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
69,370 72,711 142,081 142,081 Engro Chemicals Pakistan Ltd.
(Chemicals)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
35,360 43,350 78,710 78,710 Nan Ya Plastics Corp. (b)
(Plastics & Rubber)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
16 16 16 Associated Cement Cos., Ltd.
(Cement)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
4 4 4 Dewan Salman Fibre Ltd. (b)
(Chemicals)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
MULTI-INDUSTRY/MISCELLANEOUS (5.5%)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
452,400 664,600 1,117,000 1,117,000 Grupo Carso, S.A. de C.V. "A1"
(Multi-Industry)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
220,610 228,160 448,770 448,770 Rembrandt Group Ltd.
(Conglomerate)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
43,775,250 57,726,250 101,501,500 101,501,500 Haci Omer Sabanci Holding AS
(Conglomerate)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
288,900 380,700 669,600 669,600 China Development Corp.
(Conglomerate)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
175,000 156,000 331,000 331,000 Central Asia Regional Growth Fund (a)(b)(e)
(Country Funds)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
5,220,550 3,488,650 8,709,200 8,709,200 Koc Holding AS
(Conglomerate)
- ---------- ---------- ----------- -------- ----------- -------------------------------------------------
24,643 31,615 56,258 56,258 Koor Industries Ltd. - ADR (a)
(Conglomerate)
</TABLE>
<TABLE>
<CAPTION>
MARKET VALUE
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Country Markets Markets Europe
<S> <C> <C> <C> <C> <C> <C>
Pannonplast Rt. HGRY 1,472,882 1,472,882
(Plastics & Rubber)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Suez Cement Co. - Reg S GDR (a)(c) EGPT 1,404,126 1,615,641 3,019,767 3,019,767
(Cement)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Anglo American Platinum Corporation Ltd. SAFR 1,336,583 1,380,680 2,717,263 2,717,263
(Metals - Non-Ferrous)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Sociedad Quimica y Minera de Chile S.A.
- ADR (a) CHLE 1,047,375 1,142,803 2,190,178 2,190,178
(Chemicals)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Companhia Vale do Rio Doce "A" Preferred BRZL 840,543 817,907 1,658,450 1,658,450
(Metals - Steel)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Stomil Olsztyn S.A. POL 821,992 821,992
(Plastics & Rubber)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Compania de Minas Buenaventura S.A. - ADR (a) PERU 585,452 668,924 1,254,376 1,254,376
(Gold)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Cemex, S.A. de C.V. "CPO" MEX
(Cement)
"CPO" 568,019 832,880 1,400,899 1,400,899
"A" 104,387 104,387 104,387
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Apasco, S.A. de C.V. "A" MEX 422,015 541,215 963,230 963,230
(Cement)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Hindalco Industries Ltd.: IND
(Metals - Non-Ferrous)
GDR (a) 307,195 400,995 708,190 708,190
Common 19,759 21,790 41,549 41,549
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Makhteshim-Agan Industries Ltd. (b) ISRL 256,973 253,624 510,597 510,597
(Chemicals)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Siderca S.A. "A" ARG 165,250 262,719 427,969 427,969
(Metals - Steel)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Grupo Cementos de Chihuahua, S.A. de C.V. "B" MEX 151,983 288,140 440,123 440,123
(Cement)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Engro Chemicals Pakistan Ltd. PAK 63,948 67,027 130,975 130,975
(Chemicals)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Nan Ya Plastics Corp. (b) TWN 44,780 54,899 99,679 99,679
(Plastics & Rubber)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Associated Cement Cos., Ltd. IND 356 356 356
(Cement)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Dewan Salman Fibre Ltd. (b) PAK - 1 1 1
(Chemicals)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
7,214,001 8,453,988 15,667,989 2,294,874 17,962,863
MULTI-INDUSTRY/MISCELLANEOUS (5.5%)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Grupo Carso, S.A. de C.V. "A1" MEX 1,567,257 2,302,385 3,869,642 3,869,642
(Multi-Industry)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Rembrandt Group Ltd. SAFR 1,472,049 1,522,427 2,994,476 2,994,476
(Conglomerate)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Haci Omer Sabanci Holding AS TRKY 661,579 872,422 1,534,001 1,534,001
(Conglomerate)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
China Development Corp. TWN 571,107 752,581 1,323,688 1,323,688
(Conglomerate)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Central Asia Regional Growth Fund (a)(b)(e) IRE 525,000 468,000 993,000 993,000
(Country Funds)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Koc Holding AS TRKY 480,647 321,194 801,841 801,841
(Conglomerate)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
Koor Industries Ltd. - ADR (a) ISRL 398,909 511,768 910,677 910,677
(Conglomerate)
- --------------------------------------------- ------- --------- --------- --------- --------- ---------
</TABLE>
<PAGE> 76
AIM DEVELOPING MARKETS FUND
AIM EASTERN EUROPE FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Markets Markets Europe
<S> <C> <C> <C> <C> <C>
17,000 3,800 20,800 20,800 John Keells Holdings Ltd.
(Conglomerate)
- ------- ------- --------- ------- --------- -------------------------------------------------
75,800 75,800 75,800 Romanian Growth Fund (a) (b)
(Country Funds)
- ------- ------- --------- ------- --------- -------------------------------------------------
200 200 200 KEC International (b)
(Miscellaneous)
- ------- ------- --------- ------- --------- -------------------------------------------------
TECHNOLOGY (3.7%)
- ------- ------- --------- ------- --------- -------------------------------------------------
597,950 667,450 1,265,400 1,265,400 Taiwan Semiconductor Manufacturing Co. (b)
(Semiconductors)
- ------- ------- --------- ------- --------- -------------------------------------------------
96,862 127,997 224,859 224,859 Asustek Computer Inc. - Reg S GDR (a)(b)(c)
(Computers & Peripherals)
- ------- ------- --------- ------- --------- -------------------------------------------------
112,000 141,960 253,960 253,960 Hon Hai Precision Industry
(Computers & Peripherals)
- ------- ------- --------- ------- --------- -------------------------------------------------
160,000 212,000 372,000 372,000 Compal Electronics, Inc. (b)
(Computers & Peripherals)
- ------- ------- --------- ------- --------- -------------------------------------------------
153,600 196,800 350,400 350,400 Delta Electronics, Inc.
(Computers & Peripherals)
- ------- ------- --------- ------- --------- -------------------------------------------------
16,505 21,505 38,010 38,010 Formula Systems Ltd. (b)
(Software)
- ------- ------- --------- ------- --------- -------------------------------------------------
INVESTMENT FUNDS (.8%)
- ------- ------- --------- ------- --------- -------------------------------------------------
9,000 9,000 Baltic Republics Fund Ltd. (a)(b)(d)
(Country Fund)
- ------- ------- --------- ------- --------- -------------------------------------------------
15,000 15,000 Romania Fund Ltd. (a)(b)
(Country Fund)
- ------- ------- --------- ------- --------- -------------------------------------------------
15,000 15,000 Ladenburg Thalmann Ukraine Fund Ltd. (a)(b)
(Country Fund)
- ------- ------- --------- ------- --------- -------------------------------------------------
75,000 75,000 Romanian Growth Fund PLC (a)(b)
(Country Fund)
- ------- ------- --------- ------- --------- -------------------------------------------------
CAPITAL GOODS (3.0%)
- ------- ------- --------- ------- --------- -------------------------------------------------
17,100 20,165 37,265 37,265 MISR Elgadida for Housing and Reconstruction
(Construction)
- ------- ------- --------- ------- --------- -------------------------------------------------
330,000 330,000 Uralmash Zavody (a)(b)(e)
(Machinery & Engineering)
- ------- ------- --------- ------- --------- -------------------------------------------------
23,005 27,170 50,175 50,175 NASR (E1) City Company For Housing & Construction
(Construction)
- ------- ------- --------- ------- --------- -------------------------------------------------
165,800 214,600 380,400 380,400 Corporacion GEO, S.A. de C.V. "B" (b)
(Construction)
- ------- ------- --------- ------- --------- -------------------------------------------------
41,822 41,822 41,822 Arabian International Construction (b)
(Construction)
- ------- ------- --------- ------- --------- -------------------------------------------------
HEALTH CARE (2.2%)
- ------- ------- --------- ------- --------- -------------------------------------------------
81,000 81,000 Pliva d.d. Reg S GDR (a)(c)
(Pharmaceuticals)
- ------- ------- --------- ------- --------- -------------------------------------------------
79,850 75,000 154,850 154,850 Ranbaxy Laboratories Ltd.
(Medical Technology & Supplies)
- ------- ------- --------- ------- --------- -------------------------------------------------
18,700 29,600 48,300 48,300 Teva Pharmaceutical Industries Ltd.
(Pharmaceuticals)
- ------- ------- --------- ------- --------- -------------------------------------------------
CONSUMER DURABLES (1.0%)
</TABLE>
<TABLE>
<CAPTION>
MARKET VALUE
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Country Markets Markets Europe
<S> <C> <C> <C> <C> <C> <C>
John Keells Holdings Ltd. SLNKA 48,173 10,768 58,941 58,941
(Conglomerate)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Romanian Growth Fund (a) (b) ROM 94,750 94,750 94,750
(Country Funds)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
KEC International (b) IND 113 113 113
(Miscellaneous)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
5,724,721 6,856,408 12,581,129 -- 12,581,129
TECHNOLOGY (3.7%)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Taiwan Semiconductor Manufacturing Co. (b) TWN 1,209,752 1,350,362 2,560,114 2,560,114
(Semiconductors)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Asustek Computer Inc. - Reg S GDR (a)(b)(c) TWN 743,416 982,377 1,725,793 1,725,793
(Computers & Peripherals)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Hon Hai Precision Industry TWN 539,676 684,039 1,223,715 1,223,715
(Computers & Peripherals)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Compal Electronics, Inc. (b) TWN 499,151 661,375 1,160,526 1,160,526
(Computers & Peripherals)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Delta Electronics, Inc. TWN 443,602 568,364 1,011,966 1,011,966
(Computers & Peripherals)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Formula Systems Ltd. (b) ISRL 353,214 460,212 813,426 813,426
(Software)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
3,788,811 4,706,729 8,495,540 -- 8,495,540
INVESTMENT FUNDS (.8%)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Baltic Republics Fund Ltd. (a)(b)(d) IRE 720,000 720,000
(Country Fund)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Romania Fund Ltd. (a)(b) ROM 562,500 562,500
(Country Fund)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Ladenburg Thalmann Ukraine Fund Ltd. (a)(b) UKR 525,000 525,000
(Country Fund)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Romanian Growth Fund PLC (a)(b) ROM 93,750 93,750
(Country Fund)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
-- -- -- 1,901,250 1,901,250
CAPITAL GOODS (3.0%)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
MISR Elgadida for Housing and Reconstruction EGPT 1,563,864 1,844,170 3,408,034 3,408,034
(Construction)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Uralmash Zavody (a)(b)(e) RUS 825,000 825,000
(Machinery & Engineering)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
NASR (E1) City Company For Housing & Construction EGPT 713,659 842,865 1,556,524 1,556,524
(Construction)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Corporacion GEO, S.A. de C.V. "B" (b) MEX 287,192 371,721 658,913 658,913
(Construction)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Arabian International Construction (b) EGPT 303,927 303,927 303,927
(Construction)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
2,564,715 3,362,683 5,927,398 825,000 6,752,398
HEALTH CARE (2.2%)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Pliva d.d. Reg S GDR (a)(c) CRT 1,190,700 1,190,700
(Pharmaceuticals)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Ranbaxy Laboratories Ltd. IND 942,438 885,195 1,827,633 1,827,633
(Medical Technology & Supplies)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
Teva Pharmaceutical Industries Ltd. ISRL 737,188 1,166,886 1,904,074 1,904,074
(Pharmaceuticals)
------------------------------------------------- ------ --------- --------- ---------- --------- ----------
1,679,626 2,052,081 3,731,707 1,190,700 4,922,407
CONSUMER DURABLES (1.0%)
</TABLE>
<PAGE> 77
AIM DEVELOPING MARKETS FUND
AIM EASTERN EUROPE FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Markets Markets Europe
<S> <C> <C> <C> <C> <C>
40,000 40,000 Mezogazdasagi Gepgyarto (b)(d)
(Auto Parts)
- --------- --------- --------- ------- --------- ----------------------------------------------------------
50,000 50,000 North American Business Industries (b)
(Auto Parts)
- --------- --------- --------- ------- --------- ----------------------------------------------------------
100,000 100,000 Nizhnekamskshina (a)(b)
(Auto Parts)
- --------- --------- --------- ------- --------- ----------------------------------------------------------
29,300 29,300 29,300 Bajaj Auto Ltd.
(Automobiles)
- --------- --------- --------- ------- --------- ----------------------------------------------------------
100 100 100 Tata Engineering and Locomotive Co., Ltd.
(Automobiles)
- --------- --------- --------- ------- --------- ----------------------------------------------------------
1,022,000 1,475,000 2,497,000 2,497,000 Qingling Motors Co., Ltd. (i)
(Automobiles)
- --------- --------- --------- ------- --------- ----------------------------------------------------------
TOTAL EQUITY INVESTMENTS (COST $92,943,216)
FIXED INCOME INVESTMENTS (9.5%)
GOVERNMENT AGENCY OBLIGATIONS (7.8%)
- --------- --------- --------- ------- --------- ----------------------------------------------------------
Algeria (0.2%)
1,050,000 1,050,000 1,050,000 Algeria Tranche 1 Loan Assignment, 6.625% due 9/4/06 (j)
- --------- --------- --------- ------- --------- ----------------------------------------------------------
Argentina (0.8%)
Republic of Argentina:
1,425,000 1,425,000 1,425,000 Discount Bond, 6.625% due 3/31/23 (j)
875,000 875,000 875,000 Par Bond Series 1, 5.75%(6% at 3/31/99) due 3/31/23 (k)
350,000 350,000 350,000 I.O. Strip, 12.11% due 4/10/05
- --------- --------- --------- ------- --------- ----------------------------------------------------------
Brazil (0.2%)
845,000 845,000 845,000 Brazil Floating Rate Discount Note, 6.125% due 4/15/24 (j)
- --------- --------- --------- ------- --------- ----------------------------------------------------------
Bulgaria (0.4%)
Republic of Bulgaria:
771,000 771,000 771,000 Discount Bond Series A, 6.6875% due 7/28/24 - Euro (j)
760,000 760,000 760,000 Front Loaded Interest Reduction Bond Series A, 2.5%
(2.75% at 7/99) due 7/28/12 (k)
- --------- --------- --------- ------- --------- ----------------------------------------------------------
Colombia (0.2%)
Republic of Colombia:
472,000 472,000 472,000 8.625% due 4/1/08 (l)
59,000 59,000 59,000 7.27% due 6/15/03 - 144A (h)
- --------- --------- --------- ------- --------- ----------------------------------------------------------
Mexico (1.7%)
United Mexican States:
1,570,000 1,570,000 1,570,000 Discount Bond Series D, 6.6016% due 12/31/19 (j)
1,353,000 1,353,000 1,353,000 Discount Bond Series C, 6.6172% due 12/31/19 (j)(m)
575,000 575,000 575,000 9.875% due 1/15/07
3,000,000 3,000,000 3,000,000 6.63% due 12/31/19
</TABLE>
<TABLE>
<CAPTION>
MARKET VALUE
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combing Eastern Combining
Country Markets Markets Europe
<S> <C> <C> <C> <C> <C> <C>
Mezogazdasagi Gepgyarto (b)(d) HGRY 580,097 580,097
(Auto Parts)
- ------------------------------------------------------- ------- ---------- ---------- ----------- ---------- -----------
North American Business Industries (b) HGRY 417,320 417,320
(Auto Parts)
- ------------------------------------------------------- ------- ---------- ---------- ----------- ---------- -----------
Nizhnekamskshina (a)(b) RUS 407,500 407,500
(Auto Parts)
- ------------------------------------------------------- ------- ---------- ---------- ----------- ---------- -----------
Bajaj Auto Ltd. IND 383,567 383,567 383,567
(Automobiles)
- ------------------------------------------------------- ------- ---------- ---------- ----------- ---------- -----------
Tata Engineering and Locomotive Co., Ltd. IND 267 267 267
(Automobiles)
- ------------------------------------------------------- ------- ---------- ---------- ----------- ---------- -----------
Qingling Motors Co., Ltd. (i) CHNA 188,709 272,355 461,064 461,064
(Automobiles)
- ------------------------------------------------------- ------- ---------- ---------- ----------- ---------- -----------
572,276 272,622 844,898 1,404,917 2,249,815
TOTAL EQUITY INVESTMENTS (COST $92,943,216) 69,356,560 83,861,449 153,218,009 33,683,503 186,901,512
FIXED INCOME INVESTMENTS (9.5%)
GOVERNMENT AGENCY OBLIGATIONS (7.8%)
- ------------------------------------------------------- ------- ---------- ---------- ----------- ---------- -----------
Algeria (0.2%)
Algeria Tranche 1 Loan Assignment, 6.625% due 9/4/06 (j) USD 535,500 535,500 535,500
- ------------------------------------------------------- ------- ---------- ---------- ----------- ---------- -----------
Argentina (0.8%)
Republic of Argentina:
Discount Bond, 6.625% due 3/31/23 (j) USD 970,781 970,781 970,781
Par Bond Series 1, 5.75%(6% at 3/31/99) due 3/31/23 (k) USD 608,125 608,125 608,125
I.O. Strip, 12.11% due 4/10/05 USD 308,000 308,000 308,000
- ------------------------------------------------------- ------- ---------- ---------- ----------- ---------- -----------
Brazil (0.2%)
Brazil Floating Rate Discount Note, 6.125% due
4/15/24 (j) USD 502,247 502,247 502,247
- ------------------------------------------------------- ------- ---------- ---------- ----------- ---------- -----------
Bulgaria (0.4%)
Republic of Bulgaria:
Discount Bond Series A, 6.6875% due 7/28/24 - Euro (j) USD 541,628 541,628 541,628
Front Loaded Interest Reduction Bond Series A, 2.5% USD 419,900 419,900 419,900
(2.75% at 7/99) due 7/28/12 (k)
- ------------------------------------------------------- ------- ---------- ---------- ----------- ---------- -----------
Colombia (0.2%)
Republic of Colombia:
8.625% due 4/1/08 (l) USD 370,520 370,520 370,520
7.27% due 6/15/03 - 144A (h) USD 48,085 48,085 48,085
- ------------------------------------------------------- ------- ---------- ---------- ----------- ---------- -----------
Mexico (1.7%)
United Mexican States:
Discount Bond Series D, 6.6016% due 12/31/19 (j) USD 1,225,581 1,225,581 1,225,581
Discount Bond Series C, 6.6172% due 12/31/19 (j)(m) USD 1,056,186 1,056,186 1,056,186
9.875% due 1/15/07 USD 546,969 546,969 546,969
6.63% due 12/31/19 FRF 420,666 420,666 420,666
</TABLE>
<PAGE> 78
AIM DEVELOPING MARKETS FUND
AIM EASTERN EUROPE FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Markets Markets Europe
<S> <C> <C> <C> <C> <C>
412,000 412,000 412,000 Discount Bond Series A, 6.1156% due 12/31/19 (j)(m)
375,000 375,000 375,000 Discount Bond Series B, 6.47656% due 12/31/19 (j)(m)
- --------- --------- ---------- ---------- -----------------------------------------------------------
Panama (0.2%)
Republic of Panaman:
370,000 370,000 370,000 Interest Reduction Bond, 4% (4.25% at 7/99) due 7/17/14 (k)
67,000 67,000 67,000 8.875% due 9/30/27
- --------- --------- ---------- ---------- -----------------------------------------------------------
Peru (0.3%)
Republic of Peru:
1,116,000 1,116,000 1,116,000 Past Due Interest Bond, 4% (4.5% at 3/8/99) due 3/7/17 (k)
- --------- --------- ---------- ---------- -----------------------------------------------------------
Poland (0.2%)
685,000 685,000 685,000 3% (3.5% at 10/28/99) due 10/27/24 -Euro (k)
2,000 2,000 2,000 Past Due Interest Bond, 5% (6% at 10/28/99)
due 10/27/14 - Euro (k)
- --------- --------- ---------- ---------- -----------------------------------------------------------
Russia (0.1%)
2,717,360 2,717,360 2,717,360 Bank for Foreign Economic Affairs (Venesheconombank)
Principal Loans, 6.625% due 12/15/20 (j)
- --------- --------- ---------- ---------- -----------------------------------------------------------
United States (3.5%)
U.S. Treasury Bills:
4,050,000 4,050,000 5.00% due 1/7/99 (n)
4,020,000 4,020,000 5.00% due 11/27/98 (n)
- --------- --------- ---------- ---------- -----------------------------------------------------------
United Kingdom (0.0%)
14,652,000 14,652,000 Deutsche Bank AG London Note linked to Gosudarstvennyie
Kratkosrochynie Obligatsii 0.00% due 6/9/99 (b)(e)(o)
- --------- --------- ---------- ---------- -----------------------------------------------------------
TOTAL GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS (COST $11,677,186)
CORPORATE BONDS (1.5%)
- --------- --------- ---------- ---------- -----------------------------------------------------------
Argentina (0.6%)
1,504,000 1,504,000 1,504,000 Telefonica de Argentina, 9.125% due 5/7/08 - Reg S (c)
- --------- --------- ---------- ---------- -----------------------------------------------------------
Brazil (0.5%)
710,000 710,000 710,000 Banco Hipotecario Espana, 10% due 4/17/03 - 144A (h)
1,042,000 1,042,000 1,042,000 RBS Participacoes S.A., 11% due 4/1/07 - 144A (h)
125,000 125,000 125,000 Globo Comunicacoes Participacoes, 10.625% due 5/12/08
- 144A (h)
- --------- --------- ---------- ---------- -----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET VALUE
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Country Markets Markets Europe
<S> <C> <C> <C> <C> <C> <C>
Discount Bond Series A, 6.1156% due 12/31/19 (j)(m) USD 321,618 321,618 321,618
Discount Bond Series B, 6.47656% due 12/31/19 (j)(m) USD 292,734 292,734 292,734
- -------------------------------------------------------------- ------- --------- -------- --------- --------- ----------
Panama (0.2%)
Republic of Panaman:
Interest Reduction Bond, 4% (4.25% at 7/99) due 7/17/14 (k) USD 270,794 270,794 270,794
8.875% due 9/30/27 USD 61,808 61,808 61,808
- -------------------------------------------------------------- ------- --------- -------- --------- --------- ----------
Peru (0.3%)
Republic of Peru:
Past Due Interest Bond, 4% (4.5% at 3/8/99) due 3/7/17 (k) USD 641,700 641,700 641,700
- -------------------------------------------------------------- ------- --------- -------- --------- --------- ----------
Poland (0.2%)
3% (3.5% at 10/28/99) due 10/27/24 -Euro (k) USD 455,525 455,525 455,525
Past Due Interest Bond, 5% (6% at 10/28/99) USD 1,819 1,819 1,819
due 10/27/14 - Euro (k)
- -------------------------------------------------------------- ------- --------- -------- --------- --------- ----------
Russia (0.1%)
Bank for Foreign Economic Affairs (Venesheconombank) USD 215,690 215,690 215,690
Principal Loans, 6.625% due 12/15/20 (j)
- -------------------------------------------------------------- ------- --------- -------- --------- --------- ----------
United States (3.5%)
U.S. Treasury Bills:
5.00% due 1/7/99 (n) USD 4,017,941 4,017,941
5.00% due 11/27/98 (n) USD 4,007,524 4,007,524
- -------------------------------------------------------------- ------- --------- -------- --------- --------- ----------
United Kingdom (0.0%)
Deutsche Bank AG London Note linked to Gosudarstvennyie RUR
Kratkosrochynie Obligatsii 0.00% due 6/9/99 (b)(e)(o)
- -------------------------------------------------------------- ------- --------- -------- --------- --------- ----------
TOTAL GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS
(COST $11,677,186) 9,815,876 9,815,876 8,025,465 17,841,341
CORPORATE BONDS (1.5%)
- -------------------------------------------------------------- ------- --------- -------- --------- --------- ----------
Argentina (0.6%)
Telefonica de Argentina, 9.125% due 5/7/08 - Reg S (c) USD 1,305,649 1,305,649 1,305,649
- -------------------------------------------------------------- ------- --------- -------- --------- --------- ----------
Brazil (0.5%)
Banco Hipotecario Espana, 10% due 4/17/03 - 144A (h) USD 624,800 624,800 624,800
RBS Participacoes S.A., 11% due 4/1/07 - 144A (h) USD 468,900 468,900 468,900
Globo Comunicacoes Participacoes, 10.625% due 5/12/08 USD 71,563 71,563 71,563
- 144A (h)
- -------------------------------------------------------------- ------- --------- -------- --------- --------- ----------
</TABLE>
<PAGE> 79
AIM DEVELOPING MARKETS FUND
AIM EASTERN EUROPE FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Markets Markets Europe
<S> <C> <C> <C> <C> <C>
Colombia (0.1%)
148,000 148,000 148,000 Financiera Energia Nacional, 9.375% due 6/15/06 - Reg S (c)
- ----------- --------- --------- ------- --------- ---------------------------------------------------------------
Korea (0.0%)
5,500,000 5,500,000 5,500,000 Pohang Iron & Steel, 2% due 10/9/00
- ----------- --------- --------- ------- --------- ---------------------------------------------------------------
Mexico (0.2%)
360,000 360,000 360,000 Petroleos Mexicanos (PEMEX), 9.25% due 3/30/18 - 144A (h)
210,000 210,000 210,000 Dine, S.A. de C.V., 8.75% due 10/15/07 - 144A (h)
97,000 97,000 97,000 Banco Nacional Comercio Exte., 8% due 7/18/02 - Reg S (c)
- ----------- --------- --------- ------- --------- ---------------------------------------------------------------
Russia (0.1%)
851,000 851,000 851,000 Lukinter Finance BV Convertible, 3.5% due 5/6/02 - 144A (h)
5,000 5,000 5,000 Mosenergo Finance BV, 8.375% due 10/9/02 - 144A (h)
- ----------- --------- --------- ------- --------- ---------------------------------------------------------------
TOTAL CORPORATE BONDS (COST $4,998,295)
STRUCTURED NOTES (0.2%)
- ----------- --------- --------- ------- --------- ---------------------------------------------------------------
Korea (0.2%)
470,000 470,000 470,000 Fixed Rate Trust Certificate 13.55% due 2/15/02 (p)
(Issued y a newly created Deleware Business Trust,
collateralized by triple A paper. This trust certificate has a
credit risk component linked to the value of a referenced
security. Korean Development Bonds, 1.875%
2002.) (Cost $470,000)
- ----------- --------- --------- ------- --------- ---------------------------------------------------------------
TOTAL FIXED INCOME INVESTMENTS (COST $17,145,481)
WARRANTS (2.3%)
- ----------- --------- --------- ------- --------- ---------------------------------------------------------------
765,294 765,294 796,274 1,561,568 Merrill Lynch - Kospi Call Warrants due 9/9/99
Performance linked to equity securities. Redemption amount
100% of the final closing price of the Korean Kospi 200 Index
converted to the prevailing foreign exchange rate.
(Cost $2,495,011)
(Investment Management)
- ----------- --------- --------- ------- --------- ---------------------------------------------------------------
REPURCHASE AGREEMENTS (8.2%)
- ----------- --------- --------- ------- --------- ---------------------------------------------------------------
4,653,000 4,653,000 4,653,000 Dated October 30,1998 with State Street Bank & Trust Co.,
due Novemeber 2,1998, for an effective yield of 5.30%,
collateralized by $4,145,000 U.S. Treasury Notes, 6.50%
due 5/15/05 (market value of collateral is $4,750,253,
including accrued interest.) (Cost $4,653,000)
- ----------- --------- --------- ------- --------- ---------------------------------------------------------------
Dated October 30,1998 with State Street Bank & Trust Co.,
due Novemeber 2,1998, for an effective yield of 5.30%,
collateralized by $4,145,000 U.S. Treasury Notes, 6.50% due
5/15/05 (market value of collateral is $4,750,253,
9,141,000 9,141,000 9,141,000 including accrued interest.) (Cost $4,653,000)
- ----------- --------- --------- ------- --------- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET VALUE
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Country Markets Markets Europe
<S> <C> <C> <C> <C> <C> <C>
Colombia (0.1%)
Financiera Energia Nacional, 9.375% due 6/15/06 - Reg S (c) USD 108,528 108,528 108,528
- -------------------------------------------------------------- ------- ---------- --------- ---------- --------- ----------
Korea (0.0%)
Pohang Iron & Steel, 2% due 10/9/00 JPY 40,886 40,886 40,886
- -------------------------------------------------------------- ------- ---------- --------- ---------- --------- ----------
Mexico (0.2%)
Petroleos Mexicanos (PEMEX), 9.25% due 3/30/18 - 144A (h) USD 293,400 293,400 293,400
Dine, S.A. de C.V., 8.75% due 10/15/07 - 144A (h) USD 165,900 165,900 165,900
Banco Nacional Comercio Exte., 8% due 7/18/02 - Reg S (c) USD 88,513 88,513 88,513
- -------------------------------------------------------------- ------- ---------- --------- ---------- --------- ----------
Russia (0.1%)
Lukinter Finance BV Convertible, 3.5% due 5/6/02 - 144A (h) USD 310,615 310,615 310,615
Mosenergo Finance BV, 8.375% due 10/9/02 - 144A (h) USD 875 875 875
- -------------------------------------------------------------- ------- ---------- --------- ---------- --------- ----------
TOTAL CORPORATE BONDS (COST $4,998,295) 3,479,629 3,479,629 3,479,629
STRUCTURED NOTES (0.2%)
- -------------------------------------------------------------- ------- ---------- --------- ---------- --------- ----------
Korea (0.2%)
Fixed Rate Trust Certificate 13.55% due 2/15/02 (p) USD 343,805 343,805 343,805
(Issued y a newly created Deleware Business Trust,
collateralized by triple A paper. This trust certificate has
a credit risk component linked to the value of a referenced
security. Korean Development Bonds, 1.875%
2002.) (Cost $470,000)
- -------------------------------------------------------------- ------- ---------- --------- ---------- --------- ----------
TOTAL FIXED INCOME INVESTMENTS (COST $17,145,481) 13,639,310 13,639,310 8,025,465 21,664,775
WARRANTS (2.3%)
- -------------------------------------------------------------- ------- ---------- --------- ---------- --------- ----------
Merrill Lynch - Kospi Call Warrants due 9/9/99 US 2,571,541 2,675,640 5,247,181 5,247,181
Performance linked to equity securities. Redemption amount
100% of the final closing price of the Korean Kospi 200 Index
converted to the prevailing foreign exchange rate.
(Cost $2,495,011)
(Investment Management)
- -------------------------------------------------------------- ------- ---------- --------- ---------- --------- ----------
REPURCHASE AGREEMENTS (8.2%)
- -------------------------------------------------------------- ------- ---------- --------- ---------- --------- ----------
Dated October 30,1998 with State Street Bank & Trust Co., 4,653,000 4,653,000 4,653,000
due Novemeber 2,1998, for an effective yield of 5.30%,
collateralized by $4,145,000 U.S. Treasury Notes, 6.50%
due 5/15/05 (market value of collateral is $4,750,253,
including accrued interest.) (Cost $4,653,000)
- -------------------------------------------------------------- ------- ---------- --------- ---------- --------- ----------
Dated October 30,1998 with State Street Bank & Trust Co.,
due Novemeber 2,1998, for an effective yield of 5.30%,
collateralized by $4,145,000 U.S. Treasury Notes, 6.50% due
5/15/05 (market value of collateral is $4,750,253,
including accrued interest.) (Cost $4,653,000) 9,141,000 9,141,000 9,141,000
- -------------------------------------------------------------- ------- ---------- --------- ---------- --------- ----------
</TABLE>
<PAGE> 80
AIM DEVELOPING MARKETS FUND
AIM EASTERN EUROPE FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Markets Markets Europe
<S> <C> <C> <C> <C> <C>
Dated October 30, 1998 with State Street
Bank & Trust Co., due November 2, 1998, for
an effective yield of 5.30%, collateralized
by $4,905,000 U.S. Treasury Bonds, 7.125%
due 2/29/00 (market value of collateral is
$5,136,832, including accrued interest.)
5,036,000 5,036,000 (Cost $5,036,000)
- ----------- --------- --------- --------- --------- -------------------------------------------
TOTAL INVESTMENTS (COST $117,236,708)- 101.9%
- ----------- --------- --------- ---------------------------------------------
LIABILITIES LESS OTHER ASSETS - (1.9)%
- ----------- --------- --------- ---------------------------------------------
NET ASSETS- 100.0%
=========== ========= ========= =============================================
</TABLE>
<TABLE>
<CAPTION>
MARKET VALUE
AIM AIM Pro Forma AIM Pro Forma
Developing Emerging Combining Eastern Combining
Country Markets Markets Europe
<S> <C> <C> <C> <C> <C> <C>
Dated October 30, 1998 with State Street
Bank & Trust Co., due November 2, 1998, for
an effective yield of 5.30%, collateralized
by $4,905,000 U.S. Treasury Bonds, 7.125%
due 2/29/00 (market value of collateral is
$5,136,832, including accrued interest.)
(Cost $5,036,000) 5,036,000 5,036,000
- ------------------------------------------------ ------- ----------- ----------- ----------- ----------- ------------
TOTAL INVESTMENTS (COST $117,236,708)- 101.9% 90,220,411 95,678,089 185,898,500 46,744,968 232,643,468
- ------------------------------------------------ ------- ----------- ----------- ----------- ----------- ------------
LIABILITIES LESS OTHER ASSETS - (1.9)% (2,519,957) (2,275,508) (4,795,465) 354,578 (4,440,887)
- ------------------------------------------------ ------- ----------- ----------- ----------- ----------- ------------
NET ASSETS- 100.0% $87,700,454 $93,402,581 181,103,035 $47,099,546 $228,202,581
================================================ ======= =========== =========== =========== =========== ============
</TABLE>
Notes to Schedule of Investments:
(a) U.S. currency denominated.
(b) Non-income producing security.
(c) Security issued under Regulation S. Rule 144A and additional restrictions
may apply in the resale of such securities.
(d) At October 31, 1998, the Fund owned the following restriced securities
constituting 3.2% of net assets which may not be publicly sold without
registation under the Securites Act of 1933. Additional information on
restricted securities is as follows:
<TABLE>
<CAPTION>
Acquisition Value
Date Shares Cost Per Share
<S> <C> <C> <C> <C>
Baltic Republics Fund Ltd. 9/2/94 9,000 $900,000 $80.00
Mezogazdasagi Gepgyarto 2/26/97 40,000 572,188 14.50
Russian Telecommunications Development Corp.:
Non-Voting 12/20/93 52,600 526,000 2.46
Voting 12/20/93 38,400 384,000 2.46
Technoimpex 11/22/90 1,400 2,989,406 0.00
</TABLE>
(e) Valued in good faith at fair value using procedures approved by the Board
of Trustees.
(f) Denominated in Deutsche Marks.
(g) Each unit represents one preferred share of Unibanco and one preferred "B"
share of Unibanco Holdings.
(h) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(i) Security denominated in Hong Kong Dollars.
(j) The coupon rate shown on floating rate note represents the rate at period
end.
(k) The coupon rate shown on step-up coupon bond represents the rate at period
end.
(l) All or part of the Fund's holdings in this security is segregated as
collateral for extended settlement of derivatvie instruments.
(m) Issued with detachable warrants or value recovery rights. The current
market value of each warrant or right is zero.
(n) These securities are traded on a discount basis; the interest rates shown
are the discount rates paid at the time of purchase of the Fund.
(o) The issuer's obligation is limited to paying the holder a maturity value
based on the amounts that would have been paid to a direct holder of the
referenced zero coupon government security. In August 1998, the Russian
government announced a potential restructuring of its short-term debt. At
that time, interest accruals ceased due to this uncertainty. Details of the
restructuring have not been finalized.
(p) Certain events may cause the contract to terminate prior to date shown.
Abbreviations:
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
See Accompanying Notes to Pro Forma Combining Financial Statements.
<PAGE> 81
AIM Developing Markets Fund
AIM Eastern Europe Fund
Notes to Pro Forma Combining Financial Statements
October 31, 1998
(Unaudited)
Note 1 - Basis of Pro Forma Presentation
The pro forma financial statements and the accompanying pro forma schedule of
investments give effect to the proposed Agreement and Plan of Reorganization and
Termination between AIM Eastern Europe Fund and AIM Developing Markets Fund, a
portfolio of AIM Investment Funds, Inc., and the consummation of the
transactions contemplated therein to be accounted for as a tax-free
reorganization of investment companies, and the transaction of the tax-free
reorganization of AIM Emerging Markets Fund and AIM Developing Markets Fund,
both portfolios of AIM Investment Funds, Inc., transacted on February 18, 1999.
The Agreement and Plan of Reorganization and Termination would be accomplished
by an exchange of Class A shares of AIM Developing Markets Fund for the net
assets of AIM Eastern Europe Fund and the distribution of AIM Developing Markets
Fund Class A shares to AIM Eastern Europe Fund shareholders. If the Agreement
and Plan of Reorganization and Termination had taken place at October 31, 1998,
AIM Eastern Europe Fund shareholders would have received 6,256,807 shares of AIM
Developing Markets Fund - Class A shares.
Note 2 - Pro Forma Adjustments
Pro forma adjustments have been made to reflect the contractual expenses of the
surviving entity.
<PAGE> 82
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION.
State the general effect of any contract, arrangements or statute under
which any director, officer, underwriter or affiliated person of the Registrant
is insured or indemnified against any liability which may be incurred in such
capacity, other than insurance provided by any director, officer, affiliated
person or underwriter for their own protection.
Article VIII of the Registrant's Agreement and Declaration of Trust, as
amended, provides for indemnification of certain persons acting on
behalf of the Registrant. Article VIII, Section 8.1 provides that a
Trustee, when acting in such capacity, shall not be personally liable
to any person for any act, omission, or obligation of the Registrant or
any Trustee; provided, however, that nothing contained in the
Registrant's Agreement and Declaration of Trust or in the Delaware
Business Trust Act shall protect any Trustee against any liability to
the Registrant or its shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence,
or reckless disregard of the duties involved in the conduct of the
office of Trustee.
Article VIII, Section 3 of the Registrant's Bylaws, as amended, also
provides that every person who is, or has been, a Trustee or Officer of
the Registrant is indemnified to the fullest extent permitted by the
Delaware Business Trust Act, the Registrant's Bylaws and other
applicable law.
A I M Advisors, Inc. ("AIM"), the Registrant and other investment
companies managed by AIM and their respective officers, trustees,
directors and employees are insured under a joint Mutual Fund and
Investment Advisory Professional and Directors and Officers Liability
Policy, issued by ICI Mutual Insurance Company, with a $35,000,000
limit of liability.
Section 9 of the Investment Management and Administration Contract
between the Registrant and AIM provides that AIM shall not be liable,
and each series of the Registrant shall indemnify AIM and its
directors, officers and employees, for any costs or liabilities arising
from any error of judgment or mistake of law or any loss suffered by
any series of the Registrant or the Registrant in connection with the
matters to which the Investment Management and Administration Contract
relates except a loss resulting from willful misfeasance, bad faith or
gross negligence on the part of AIM in the performance by AIM of its
duties or from reckless disregard by AIM of its obligations and duties
under the Investment Management and Administration Contract.
Section 7 of the Sub-Advisory Contract between AIM and INVESCO Asset
Management Limited ("IAML") (the "Sub-Advisory Contract") provides that
<PAGE> 83
IAML shall not be liable for any costs or liabilities arising from any
error of judgment or any mistake of law or any loss suffered by any
series of the Registrant or the Registrant in connection with the
matters to which the Sub-Advisory Contract relates except a loss
resulting from willful misfeasance, bad faith or gross negligence on
the part of IAML in the performance by IAML of its duties or from
reckless disregard by IAML of its obligations and duties under the
Sub-Avisory Contract.
ITEM 16. EXHIBITS.
Exhibit
Number Description
- ------- -----------
(1) (a) - Agreement and Declaration of Trust of Registrant, dated May 7,
1998 was filed as an Exhibit to Post-Effective Amendment No. 55
on August 26, 1998 and is hereby incorporated by reference.
(b) - First Amendment to Agreement and Declaration of Trust of
Registrant, dated August 12, 1998, was filed as an Exhibit to
Post-Effective Amendment No. 56 on December 26, 1998 and is
hereby incorporated by reference.
(c) - Second Amendment to Agreement and Declaration of Trust of
Registrant, dated December 10, 1998, was filed as an Exhibit to
Post-Effective Amendment No. 57 on February 22, 1998 and is
hereby incorporated by reference.
(d) - Third Amendment to Agreement and Declaration of Trust of
Registrant, dated February 4, 1999, is filed herewith
electronically.
(e) - Fourth Amendment to Agreement and Declaration of Trust of
Registrant, dated February 16, 1999, is filed herewith
electronically.
(2) - Amended and Restated Bylaws of Registrant, adopted effective May
7, 1998 and amended effective December 10, 1998 are filed
herewith electronically.
(3) - Voting Trust Agreements - None.
(4) - A copy of the form of Agreement and Plan of Reorganization and
Termination is attached as Appendix I to the Prospectus
contained in the Registration Statement.
<PAGE> 84
(5) - Provisions of instruments defining the rights of holders of
Registrant's securities are contained in Articles II, VI, VII,
VIII and IX of the Agreement and Declaration of Trust, as
amended, which were filed as part of Exhibit (a)(1) to
Post-Effective Amendment No. 57 on February 22, 1999 and are
hereby incorporated by reference, and Articles IV, V, VI, VII and
VIII of the Amended and Restated Bylaws, which are part of
Exhibit (2) filed herewith electronically.
(6) (a) - Investment Management and Administration Contract, dated
September 8, 1998, between Registrant and A I M Advisors, Inc.
was filed as an Exhibit to Post-Effective Amendment No. 55 on
August 26, 1998 and is hereby incorporated by reference.
(b) - Administration Contract, dated September 8, 1998, between
Registrant and A I M Advisors, Inc. was filed as an Exhibit to
Post-Effective Amendment No. 55 on August 26, 1998 and is hereby
incorporated by reference.
(c) - Sub-Administration Contract, dated September 8, 1998, between
A I M Advisors, Inc. and INVESCO (NY), Inc. with respect to
Registrant was filed as an Exhibit to Post-Effective Amendment
No. 55 on August 26, 1998 and is hereby incorporated by
reference.
(d) - Sub-Advisory and Sub-Administration Contract, dated September 8,
1998, between A I M Advisors, Inc. and INVESCO (NY), Inc. with
respect to Registrant was filed as an Exhibit to Post-Effective
Amendment No. 55 on August 26, 1998 and is hereby incorporated by
reference.
(e) - Investment Management and Administration Contract, dated May 29,
1998, between Global Investment Portfolio and A I M Advisors,
Inc. was filed as an Exhibit to Post-Effective Amendment No. 55
on August 26, 1998 and is hereby incorporated reference.
(f) - Investment Management and Administration Contract, dated May 29,
1998, between Global High Income Portfolio (now known as Emerging
Markets Debt Portfolio) and A I M Advisors, Inc. was filed as an
Exhibit to Post-Effective Amendment No. 55 on August 26, 1998 and
is hereby incorporated by reference.
(g) - Sub-Advisory and Sub-Administration Contract, dated May 29,
1998, between A I M Advisors, Inc. and INVESCO (NY), Inc. with
respect to Global Investment Portfolio was filed as an Exhibit to
Post-Effective Amendment No. 57 on February 22, 1999 and is
hereby incorporated by reference.
<PAGE> 85
(h) - Sub-Advisory and Sub-Administration Contract, dated May 29,
1998, between A I M Advisors, Inc. and INVESCO (NY), Inc. with
respect to Global High Income Portfolio (now known as Emerging
Markets Debt Portfolio) was filed as an Exhibit to Post-Effective
Amendment No. 57 on February 22, 1999 and is hereby incorporated
by reference.
(i) - Form of Sub-Advisory Contract between A I M Advisors, Inc. and
INVESCO (NY), Inc. with respect to the Registrant was filed as an
Exhibit to Post-Effective Amendment No. 57 on February 22, 1999
and is hereby incorporated by reference.
(j) - Sub-Advisory Contract, dated February 12, 1999, between A I M
Advisors, Inc. and INVESCO Asset Management Limited with respect
to the Registrant is filed herewith electronically.
(k) - Form of Sub-Advisory Contract between A I M Advisors, Inc. and
INVESCO Asset Management Limited with respect to Emerging Markets
Debt Portfolio was filed as an Exhibit to Post-Effective
Amendment No. 57 on February 22, 1999 and is hereby incorporated
by reference.
(7) (a) - (i) Distribution Agreement, dated September 8, 1998, between
Registrant and A I M Distributors, Inc. with respect to Class A
shares was filed as an Exhibit to Post-Effective Amendment No. 55
on August 26, 1998 and is hereby incorporated by reference.
- (ii) Master Distribution Agreement, dated March 1, 1999,
between Registrant and A I M Distributors, Inc. with respect to
Class A and C shares is filed herewith electronically.
- (iii) Amendment No. 1, dated March 18, 1999, to Master
Distribution Agreement, dated September 8, 1998, between
Registrant and AIM Distributors, Inc. with respect to Class B
shares is filed herewith electronically.
- (iv) Amendment No. 1, dated March 18, 1999, to Master
Distribution Agreement, dated March 1, 1999, between Registrant
and A I M Distributors, Inc. with respect to Class A and C shares
is filed herewith electronically.
(b) - Distribution Agreement, dated September 8, 1998, between
Registrant and A I M Distributors, Inc. with respect to Class B
shares was filed as an Exhibit to Post-Effective Amendment No. 55
on August 26, 1998 and is hereby incorporated by reference.
(c) - Distribution Agreement, dated September 8, 1998, between
Registrant and A I M Distributors, Inc. with respect to Advisor
Class shares was filed as an Exhibit to Post-Effective Amendment
No. 55 on August 26, 1998 and is hereby incorporated by
reference.
<PAGE> 86
(d) -- Form of Selected Dealer Agreement between A I M Distributors,
Inc. and selected dealers was filed as an Exhibit to
Post-Effective Amendment No. 57 February 22, 1999 and is hereby
incorporated by reference.
(e) -- Form of Bank Selling Group Agreement between A I M Distributors,
Inc. and banks was filed as an Exhibit to Post-Effective
Amendment No. 57 on February 22, 1999, and is hereby incorporated
by reference.
(8) -- Agreements Concerning Officers and Directors/Trustees Benefits -
None.
(9) (a) -- Custodian Contract, dated April 27, 1988, between Registrant and
State Street Bank and Trust Company was filed as an Exhibit to
Post-Effective Amendment No. 56 on December 30, 1998 and is
hereby incorporated by reference.
(b) -- Notice of Additional Fund, dated August 7, 1989, to Custodian
Contract, dated April 27, 1988, between Registrant and State
Street Bank and Trust Company was filed as an Exhibit to
Post-Effective Amendment No. 56 on December 30, 1998 and is
hereby incorporated by reference.
(c) -- Notice of Additional Fund, dated September 23, 1990, to Custodian
Contract, dated April 27, 1988, between Registrant and State
Street Bank and Trust Company was filed as an Exhibit to
Post-Effective Amendment No. 56 on December 30, 1998 and is
hereby incorporated by reference.
(d) -- Notice of Additional Fund, dated August 8, 1991, to Custodian
Contract, dated April 27, 1988, between Registrant and State
Street Bank and Trust Company was filed as an Exhibit to
Post-Effective Amendment No. 56 on December 30, 1998 and is
hereby incorporated by reference.
(e) -- Notice of Additional Fund, dated January 27, 1992, to Custodian
Contract, dated April 27, 1988, between Registrant and State
Street Bank and Trust Company was filed as an Exhibit to
Post-Effective Amendment No. 56 on December 30, 1998 and is
hereby incorporated by reference.
(f) -- Notice of Additional Fund, dated May 10, 1992, to Custodian
Contract, dated April 27, 1988, between Registrant and State
Street Bank and Trust Company was filed as an Exhibit to
Post-Effective Amendment No. 56 on December 30, 1998 and is
hereby incorporated by reference.
(g) -- Notice of Additional Fund, dated June 1, 1992, to Custodian
Contract, dated April 27, 1988, between Registrant and State
Street Bank and Trust Company was filed as an Exhibit to
Post-Effective Amendment No. 56 on December 30, 1998 and is
hereby incorporated by reference.
<PAGE> 87
(h) - Notice of Additional Fund, dated October 22, 1992, to Custodian
Contract, dated April 27, 1988, between Registrant and State
Street Bank and Trust Company was filed as an Exhibit to
Post-Effective Amendment No. 56 on December 30, 1998 and is
hereby incorporated by reference.
(i) - Notice of Additional Fund, dated May 31, 1994, to Custodian
Contract, dated April 27, 1988, between Registrant and State
Street Bank and Trust Company was filed as an Exhibit to
Post-Effective Amendment No. 56 on December 30, 1998 and is
hereby incorporated by reference.
(j) - Amendment to Custodian Contract, dated August 17, 1994, was
filed as an Exhibit to Post-Effective Amendment No. 56 on
December 30, 1998 and is hereby incorporated by reference.
(k) - Amendment to Custodian Contract, dated June 20, 1995, was
filed as an Exhibit to Post-Effective Amendment No. 56 on
December 30, 1998 and is hereby incorporated by reference.
(l) - Notice of Additional Fund, dated October 24, 1997, to Custodian
Contract, dated April 27, 1988, between Registrant and State
Street Bank and Trust Company was filed as an Exhibit to
Post-Effective Amendment No. 56 on December 30, 1998 and is
hereby incorporated by reference.
(m) - Notice of Registrant's reorganization, dated September 22, 1998,
to Custodian, was filed as an Exhibit to Post-Effective Amendment
No. 56 on December 30, 1998 and is hereby incorporated by
reference.
(n) - Amendment to Custodian Contract, dated January 26, 1989, was
filed as an Exhibit to Post-Effective Amendment No. 57 on
February 22, 1999 and is hereby incorporated by reference.
(10) (a) - Form of Master Distribution Plan, pursuant to Rule 12b-1 with
respect to Class A and Class C shares was filed as an Exhibit to
Post-Effective Amendment No. 57 on February 22, 1999 and is
hereby incorporated by reference.
(b) - (i) Distribution Plan, effective as of September 8, 1998,
adopted pursuant to Rule 12b-1 with respect to Class B shares
was filed as an Exhibit to Post-Effective Amendment No. 53 on May
29, 1998 and is hereby incorporated by reference.
<PAGE> 88
(c) -- (i) Form of Shareholder Service Agreement to be used in
connection with Registrant's Master Distribution Plan is
filed herewith electronically.
-- (ii) Form of Bank Shareholder Service Agreement to be used
in connection with Registrant's Master Distribution Plan is
filed herewith electronically.
-- (iii) Form of Service Agreement for Bank Trust Department
and for Brokers to be used in connection with Registrant's
Master Distribution Plan is filed herewith electronically.
-- (iv) Form of Service Agreement for Bank Trust Departments
to be used in connection with Registrant's Master
Distribution Plan is filed electronically herewith.
-- (v) Form of Service Agreement for Brokers for Bank Trust
Departments to be used in connection with Registrant's
Master Distribution Plan is filed electronically herewith.
-- (vi) Form of Agency Pricing Agreement to be used in
connection with Registrant's Master Distribution Plan is
filed herewith electronically.
(d) -- Rule 18f-3 Multiple Class Plan was filed as an Exhibit to
Post-Effective Amendment No. 55 on August 26, 1998 and is
hereby incorporated by reference.
(11) (a) -- Opinion and Consent of Kirkpatrick & Lockhart LLP as to the
legality of the securities being registered is filed
herewith electronically.
(b) -- Opinion and Consent of Delaware Counsel is filed herewith
electronically.
(12) -- Opinion and Consent of Kirkpatrick & Lockhart LLP supporting
the tax matters and consequences to shareholders discussed
in the prospectus will be filed in an amendment to this
Registration Statement.
(13) (a) -- (i) Transfer Agency and Service Agreement, dated September
8, 1998, between Registrant and A I M Fund Services, Inc.
was filed as an Exhibit to Post-Effective Amendment No. 56
on December 30, 1998 and is hereby incorporated by
reference.
<PAGE> 89
- (ii) Form of Amendment No. 1 to Transfer Agency and Services
Agreement, dated September 8, 1998, between Registrant and A I M
Fund Services, Inc. was filed as an Exhibit to Post-Effective
Amendment No. 57 on February 22, 1999 and is hereby incorporated
by reference.
(b) - (i) Remote Access and Related Services Agreement, dated as of
December 23, 1994, was filed as an Exhibit to Post-Effective
Amendment No. 55 on August 26, 1998 and is hereby incorporated by
reference.
- (ii) Amendment No. 1, dated October 4, 1995, to the Remote
Access and Related Services Agreement, dated as of December 23,
1994, was filed as an Exhibit to Post-Effective Amendment No. 55
on August 26, 1998 and is hereby incorporated by reference.
- (iii) Addendum No. 2, dated October 12, 1995, to the Remote
Access and Related Services Agreement, dated as of December 23,
1994, was filed as an Exhibit to Post-Effective Amendment No. 55
on August 26, 1998 and is hereby incorporated by reference.
- (iv) Amendment No. 3, dated February 1, 1997, to the Remote
Access and Related Services Agreement, dated December 23, 1994,
was filed as an Exhibit to Post-Effective Amendment No. 55 on
August 26, 1998 and is hereby incorporated as reference.
- (v) Exhibit 1, effective as of August 4, 1997, to the Remote
Access and Related Services Agreement, dated December 23, 1994,
was filed as an Exhibit to Post-Effective Amendment No. 55 on
August 26, 1998 and is hereby incorporated by reference.
- (vi) Preferred Registration Technology Escrow Agreement, dated
September 10, 1997, was filed as an Exhibit to Post-Effective
Amendment No. 55 on August 26, 1998 and is hereby incorporated by
reference.
- (vii) Amendment No. 4, dated June 30, 1998, to the Remote Access
and Related Services Agreement, dated December 23, 1994, was
filed as an Exhibit to Post-Effective Amendment No. 56 on
December 30, 1998 and is hereby incorporated by reference.
- (viii) Amendment No. 5, dated July 1, 1998, to the Remote Access
and Related Services Agreement, dated December 23, 1994, was
filed as an Exhibit to Post-Effective Amendment No. 56 on
December 30, 1998 and is hereby incorporated by reference.
<PAGE> 90
(c) - Fund Accounting and Pricing Agent Agreement between Registrant
and A I M Advisors, Inc., dated June 1, 1998, was filed as an
Exhibit to Post-Effective Amendment No. 57 on February 22, 1999
and is hereby incorporated by reference.
(14) - Consent of PricewaterhouseCoopers LLP is filed herewith
electronically.
(15) - Omitted Financial Statements - None.
(16) - Powers of Attorney - None.
(17) (a) - Form of Proxy.
ITEM 17. UNDERTAKINGS.
(1) The undersigned Registrant agrees that prior to any public re-offering of
the securities registered through the use of the prospectus which is a part of
this Registration Statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, the
re-offering prospectus will contain the information called for by the applicable
registration form for re-offering by persons who may be deemed underwriters, in
addition to the information called for by other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as a part of an amendment to the Registration
Statement and will not be used until the amendment is effective, and that, in
determining any liability under the Securities Act of 1933, each post-effective
amendment shall be deemed to be a new Registration Statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
<PAGE> 91
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement on Form N-14 to be
signed on its behalf by the undersigned, thereto duly authorized, in the City of
Houston, and the State of Texas, on the 27th day of May, 1999.
REGISTRANT: AIM INVESTMENT FUNDS
By: /s/ Robert H. Graham
--------------------------------------
Robert H. Graham, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form N-14 has been signed below by the following
persons in the capacities indicated on the dates indicated.
SIGNATURES TITLE DATE
---------- ----- ----
/s/ Robert H. Graham Chairman, Trustee & President May 27, 1999
- ------------------------ (Principal Executive Officer)
(Robert H. Graham)
/s/ Carol F. Relihan* Trustee May 27, 1999
- ------------------------
(C. Derek Anderson)
/s/ Frank S. Bayley Trustee May 27, 1999
- ------------------------
(Frank S. Bayley)
/s/ Arthur C. Patterson Trustee May 27, 1999
- ------------------------
(Arthur C. Patterson)
/s/ Ruth H. Quigley Trustee May 27, 1999
- ------------------------
(Ruth H. Quigley)
/s/ Dana R. Sutton Vice President and Treasurer May 27, 1999
- ------------------------
(Dana R. Sutton)
*POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Robert H. Graham or Carol F. Relihan, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all his
capacities as a Trustee or officer of AIM Investment Funds, a Delaware business
trust, to sign on his or its behalf any and all Registration Statements
(including any amendments to Registration Statements) under the Securities Act
of 1933, the Investment Company Act of 1940 and any amendments and supplements
thereto and applications thereunder, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission and any other applicable regulatory authority, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, and fully as to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, may lawfully do or cause to be
done by virtue hereof.
DATED this 27th day of May, 1999.
/s/ C. Derek Anderson
-------------------------
C. Derek Anderson
<PAGE> 92
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
(1) (d) -- Third Amendment to Agreement and Declaration of Trust of
Registrant, dated February 4, 1999.
(1) (e) -- Fourth Amendment to Agreement and Declaration of Trust of
Registrant, dated February 16, 1999.
(2) -- Amended and Restated Bylaws of Registrant, adopted effective
May 7, 1998 and amended effective December 10, 1998.
(6) (j) -- Sub-Advisory Contract, dated February 12, 1999, between
A I M Advisors, Inc. and INVESCO Asset Management Limited
with respect to the Registrant.
(7) (a) -- (ii) Master Distribution Agreement, dated March 1, 1999,
between Registrant and A I M Distributors, Inc. with respect
to Class A and C shares.
(7) (a) -- (iii) Amendment No. 1, dated March 18, 1999, to Master
Distribution Agreement, dated September 8, 1998, between
Registrant and AIM Distributors, Inc. with respect to Class B
shares is filed herewith electronically.
(7) (a) -- (iv) Amendment No. 1, dated March 18, 1999, to Master
Distribution Agreement, dated March 1, 1999, between
Registrant and A I M Distributors, Inc. with respect to
Class A and C shares.
(10) (c) -- (i) Form of Shareholder Service Agreement to be used in
connection with Registrant's Master Distribution Plan.
(10) (c) -- (ii) Form of Bank Shareholder Service Agreement to be used
in connection with Registrant's Master Distribution Plan.
(10) (c) -- (iii) Form of Service Agreement for Bank Trust Department
and for Brokers to be used in connection with Registrant's
Master Distribution Plan.
(10) (c) -- (vi) Form of Agency Pricing Agreement to be used in
connection with Registrant's Master Distribution Plan.
(11) (a) -- Opinion and Consent of Kirkpatrick & Lockhart LLP as to the
legality of the securities being registered.
</TABLE>
<PAGE> 93
(11) (b) Opinion and Consent of Delaware Counsel.
(14) Consent of PricewaterhouseCoopers LLP.
(17) (a) Form of Proxy.
<PAGE> 1
THIRD AMENDMENT
TO
AGREEMENT AND DECLARATION OF TRUST
OF
AIM INVESTMENT FUNDS
THIS THIRD AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST OF AIM
INVESTMENT FUNDS (the "Amendment") is entered into as of the 4th day of
February, 1999, among C. Derek Anderson, Frank S. Bayley, Robert H. Graham,
Arthur C. Patterson and Ruth H. Quigley, as Trustees, and each person who
became or becomes a Shareholder in accordance with the terms set forth in that
certain Agreement and Declaration of Trust of AIM Investment Funds, a Delaware
business trust (the "Trust"), entered into as of May 7, 1998, as amended (the
"Agreement").
WHEREAS, Sections 2.3 and 9.7 of the Agreement empower the Trustees
without shareholder action to amend the Agreement in order to change the
designations of the Trust's Portfolios; and
WHEREAS, at a meeting duly called and held on the 4th day of February,
1999, the trustees resolved to amend the Agreement, effective June 1, 1999, in
order to change the name of AIM Global Telecommunications Fund.
NOW, THEREFORE, the Trustees hereby amend the Agreement as follows:
1. Capitalized terms not specifically defined in this Amendment shall
have the meanings ascribed to them in the Agreement.
2. Effective June 1, 1999, Schedule A of the Agreement shall be
deleted in its entirety and the following new Schedule A shall be substituted
in lieu thereof in order to change the name of AIM Global Telecommunications
Fund:
<PAGE> 2
"SCHEDULE A
AIM Investment Funds shall be divided into the following Portfolios
and Classes:
Class A, Class B, Class C and Advisor Class
AIM Developing Markets Fund
AIM Global Growth & Income Fund
AIM Latin American Growth Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund AIM Global Resources Fund
AIM Global Telecommunications and Technology Fund
AIM Global Government Income Fund
AIM Emerging Markets Debt Fund
AIM Strategic Income Fund
Class A, Class B and Advisor Class
AIM Emerging Markets Fund
Approved: February 4, 1999
Effective: June 1, 1999"
3. Except for the above change in Schedule A to the Agreement, the
Agreement as shall in all other respects remain in full force and effect.
4. This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same Amendment.
<PAGE> 3
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this Amendment to Agreement and Declaration of Trust of
AIM Investment Funds as of the day and year first above written.
/s/ C. DEREK ANDERSON /s/ FRANK S. BAYLEY
- -------------------------------------- ----------------------------------
C. Derek Anderson, Trustee Frank S. Bayley, Trustee
/s/ ROBERT H. GRAHAM /s/ ARTHUR C. PATTERSON
- -------------------------------------- ----------------------------------
Robert H. Graham, Trustee Arthur C. Patterson, Trustee
/s/ RUTH H. QUIGLEY
- --------------------------------------
Ruth H. Quigley, Trustee
[THIS IS THE SIGNATURE PAGE FOR
THE THIRD AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST
OF AIM INVESTMENT FUNDS]
<PAGE> 1
FOURTH AMENDMENT
TO
AGREEMENT AND DECLARATION OF TRUST
OF
AIM INVESTMENT FUNDS
THIS FOURTH AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST OF AIM
INVESTMENT FUNDS (the "Amendment") is entered into as of the 16th day of
February, 1999, among C. Derek Anderson, Frank S. Bayley, Robert H. Graham,
Arthur C. Patterson and Ruth H. Quigley, as Trustees, and each person who
became or becomes a Shareholder in accordance with the terms set forth in that
certain Agreement and Declaration of Trust of AIM Investment Funds, a Delaware
business trust (the "Trust"), entered into as of May 7, 1998, as amended (the
"Agreement").
WHEREAS, the Trustees of the Trust and the Shareholders of AIM
Emerging Markets Fund have approved the Plan of Reorganization and Termination,
dated as of November 30, 1998, adopted by the Trust on behalf of AIM Emerging
Markets Fund and AIM Developing Markets Fund, pursuant to which AIM Emerging
Markets Fund would be reorganized into AIM Developing Markets Fund (the
"Reorganization"); and
WHEREAS, the Reorganization was consummated as of the close of
business on February 12, 1999; and
WHEREAS, the Trustees of the Trust have directed that promptly
following the Reorganization, the Trust shall terminate AIM Emerging Markets
Fund in accordance with Delaware law;
NOW, THEREFORE, the Trustees hereby amend the Agreement as herein set
forth below:
1. Capitalized terms not specifically defined in this Amendment shall
have the meanings ascribed to them in the Agreement.
2. Schedule A of the Agreement shall be deleted in its entirety and
the following new Schedule A shall be substituted in lieu thereof:
-1-
<PAGE> 2
"SCHEDULE A
AIM Investment Funds shall be divided into the following Portfolios
and Classes:
Class A, Class B, Class C and Advisor Class
AIM Developing Markets Fund
AIM Global Growth & Income Fund
AIM Latin American Growth Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications Fund
AIM Global Government Income Fund
AIM Emerging Markets Debt Fund
AIM Strategic Income Fund
As previously provided in the Third Amendment to Agreement and Declaration of
Trust of AIM Investment Funds, dated as of February 4, 1999, the name of AIM
Global Telecommunications Fund shall be changed, effective June 1, 1999, to
'AIM Global Telecommunications and Technology Fund.'
Date: February 16, 1999"
3. With the exception of the amendment to Schedule A of the Agreement
as set forth in paragraph 2 of this Amendment, the Agreement, as amended, shall
in all other respects remain in full force and effect.
4. This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same Amendment.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the undersigned, being all of the
Trustees of the Trust, have executed this Amendment to Agreement and
Declaration of Trust of AIM Investment Funds as of the day and year first above
written.
/s/ C. DEREK ANDERSON /s/ FRANK S. BAYLEY
- ------------------------------ ------------------------------------
C. Derek Anderson, Trustee Frank S. Bayley, Trustee
/s/ ROBERT H. GRAHAM /s/ ARTHUR C. PATTERSON
- ------------------------------ ------------------------------------
Robert H. Graham, Trustee Arthur C. Patterson, Trustee
/s/ RUTH H. QUIGLEY
- ------------------------------
Ruth H. Quigley, Trustee
[THIS IS THE SIGNATURE PAGE FOR
THE FOURTH AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST
OF AIM INVESTMENT FUNDS]
<PAGE> 1
EXHIBIT (2)
AMENDED AND RESTATED BYLAWS
OF
AIM INVESTMENT FUNDS,
A DELAWARE BUSINESS TRUST
ADOPTED EFFECTIVE MAY 7, 1998
AMENDED EFFECTIVE DECEMBER 10, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I OFFICES............................................................1
Section 1. Registered Office.............................................1
Section 2. Other Offices.................................................1
ARTICLE II TRUSTEES..........................................................1
Section 1. Number........................................................1
Section 2. Term..........................................................1
Section 3. Vacancy.......................................................2
Section 4. Delegation of Power...........................................2
Section 5. Inability to Serve Full Term..................................2
Section 6. Powers........................................................2
Section 7. Meetings of the Trustees......................................3
Section 8. Regular Meetings..............................................3
Section 9. Quorum........................................................3
Section 10. Action Without Meeting.......................................3
Section 11. Designation, Powers, and Name of Committees..................4
Section 12. Minutes of Committee.........................................4
Section 13. Compensation of Trustees.....................................4
ARTICLE III OFFICERS.........................................................4
Section 1. Executive Officers............................................4
Section 2. Term of Office................................................5
Section 3. President.....................................................5
Section 4. Chairman of the Board.........................................5
Section 5. Other Officers................................................5
Section 6. Secretary.....................................................5
Section 7. Treasurer.....................................................6
Section 8. Surety Bond...................................................6
ARTICLE IV MEETINGS OF SHAREHOLDERS..........................................6
Section 1. Purpose.......................................................6
Section 2. Nominations of Trustees.......................................7
Section 3. Election of Trustees..........................................7
Section 4. Notice of Meetings............................................7
Section 5. Special Meetings..............................................7
Section 6. Notice of Special Meeting.....................................7
Section 7. Conduct of Special Meeting....................................7
Section 8. Quorum........................................................7
Section 9. Organization of Meetings......................................8
Section 10. Voting Standard..............................................8
Section 11. Voting Procedure.............................................8
Section 12. Action Without Meeting.......................................9
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE V NOTICES.............................................................9
Section 1. Methods of Giving Notice.......................................9
Section 2. Written Waiver.................................................9
ARTICLE VI CERTIFICATES OF SHARES............................................10
Section 1. Issuance......................................................10
Section 2. Countersignature..............................................10
Section 3. Lost Certificates.............................................10
Section 4. Transfer of Shares............................................10
Section 5. Fixing Record Date............................................10
Section 6. Registered Shareholders.......................................11
ARTICLE VII GENERAL PROVISIONS...............................................11
Section 1. Dividends and Distributions...................................11
Section 2. Redemptions...................................................11
Section 3. Indemnification...............................................12
Section 4. Advance Payments of Indemnifiable Expenses....................12
Section 5. Seal..........................................................12
Section 6. Severability...................................................12
Section 7. Headings......................................................13
ARTICLE VIII AMENDMENTS......................................................13
Section 1. Amendments....................................................13
</TABLE>
ii
<PAGE> 4
AMENDED AND RESTATED BYLAWS
OF
AIM INVESTMENT FUNDS,
A DELAWARE BUSINESS TRUST
Capitalized terms not specifically defined herein
shall have the meanings ascribed to them in the Trust's
Agreement and Declaration of Trust ("Agreement").
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of AIM Investment
Funds (the "Trust") shall be in the County of New Castle, State of Delaware.
Section 2. Other Offices. The Trust may also have offices at such other
places both within and without the State of Delaware as the Trustees may from
time to time determine or the business of the Trust may require.
ARTICLE II
TRUSTEES
Section 1. Number. The number of Trustees shall initially be five, and
thereafter shall be such number as shall be fixed from time to time by
resolution of the Board of Trustees; provided, however, that the number of
Trustees shall in no event be less than two nor more than twelve.
Section 2. Term. The Trustees shall hold office during the lifetime of
the Trust, except (a) that any Trustee may resign his trusteeship or may retire
by written instrument signed by him and delivered to the other Trustees, which
shall take effect upon such delivery or upon such later date as is specified
therein; (b) that any Trustee may be removed at any time by written instrument,
signed by at least two-thirds of the number of Trustees prior to such removal,
specifying the date when such removal shall become effective; (c) that any
Trustee who has died, become physically or mentally incapacitated by reason of
disease or otherwise, or is otherwise unable to serve, may be retired by written
instrument signed by a majority of the other Trustees, specifying the date of
his retirement; and (d) that a Trustee may be removed at any meeting of the
shareholders of the Trust.
Section 3. Vacancy. In case of the declination to serve, death,
resignation, retirement or removal of a Trustee, or a Trustee is otherwise
unable to serve, or an increase in the number of Trustees, a vacancy shall
occur. Whenever a vacancy in the Trustees shall occur, until such vacancy is
filled, the other Trustees shall have all the powers hereunder and the
certification of
<PAGE> 5
the other Trustees of such vacancy shall be conclusive. In the case of an
existing vacancy, the remaining Trustees may fill such vacancy by appointing
such other person as they in their discretion shall see fit, or may leave such
vacancy unfilled or may reduce the number of Trustees to not less than two
Trustees. Such appointment shall be evidenced by a written instrument signed by
a majority of the Trustees in office or by resolution of the Trustees, duly
adopted, which shall be recorded in the minutes of a meeting of the Trustees,
whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office
in anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon as any
Trustee appointed pursuant to Sections 2 and 3 of Article II of these Amended
and Restated Bylaws, or elected pursuant to Section 3 of Article IV, and the
Agreement shall have accepted this appointment in writing and agreed in writing
to be bound by the terms of the Trust Agreement, the Trust estate shall vest in
the new Trustee or Trustees, together with the continuing Trustees, without any
further act or conveyance, and he shall be deemed a Trustee hereunder.
Section 4. Delegation of Power. Any Trustee may, by power of attorney,
delegate his power for a period not exceeding six months at any one time to any
other Trustee or Trustees, provided that in no case shall less than two Trustees
personally exercise the other powers hereunder except as herein otherwise
expressly provided.
Section 5. Inability to Serve Full Term. The declination to serve,
death, resignation, retirement, removal, incapacity, or inability of the
Trustees, or any one of them, shall not operate to terminate the Trust or to
revoke any existing agency created pursuant to the terms of the Agreement.
Section 6. Powers. The Trustees shall have exclusive and absolute
control over the trust property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the trust property and
business in their own right, but with such powers of delegation as may be
permitted by the Agreement. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the State of Delaware, in any and
all states of the United States of America, in the District of Columbia, in any
and all commonwealths, territories, dependencies, colonies, or possessions of
the United States of America, and in any foreign jurisdiction and to do all such
other things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although such things
are not herein specifically mentioned. Any determination as to what is in the
interests of the Trust made by the Trustees in good faith shall be conclusive.
In construing the provisions of these Amended and Restated Bylaws and the
Agreement, the presumption shall be in favor of a grant of power to the
Trustees.
Section 7. Meetings of the Trustees. The Trustees of the Trust may hold
meetings, both regular and special, either within or without the State of
Delaware.
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Section 8. Regular Meetings. Regular meetings of the Board of Trustees
shall be held each year, at such time and place as the Board of Trustees may
determine.
Section 9. Notice of Meetings. Notice of the time, date, and place of
all meetings of the Trustees shall be given to each Trustee by telephone,
facsimile, electronic-mail, or other electronic mechanism sent to his or her
home or business address at least twenty-four hours in advance of the meeting or
in person at another meeting of the Trustees or by written notice mailed to his
or her home or business address at least seventy-two hours in advance of the
meeting.
Section 10. Quorum. At all meetings of the Trustees, a majority of the
Trustees then in office (but in no event less than two Trustees) shall
constitute a quorum for the transaction of business and the act of a majority of
the Trustees present at any meeting at which there is a quorum shall be the act
of the Board of Trustees, except as may be otherwise specifically provided by
applicable law or by the Agreement or these Amended and Restated Bylaws. If a
quorum shall not be present at any meeting of the Board of Trustees, the
Trustees present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 11. Action Without Meeting. Unless otherwise restricted by the
Agreement or these Amended and Restated Bylaws, any action required or permitted
to be taken at any meeting of the Board of Trustees or of any committee thereof
may be taken without a meeting by unanimous written consent of the Trustees or
committee members (or by written consent of a majority of the Trustees if the
President of the Trust determines that such exceptional circumstances exist, and
are of such urgency, as to make unanimous written consent impossible or
impractical, which determination shall be conclusive and binding on all Trustees
and not otherwise subject to challenge) and the writing or writings are filed
with the minutes of proceedings of the board or committee.
Section 12. Designation, Powers, and Name of Committees. The Board of
Trustees may, by resolution passed by a majority of the whole Board, designate
one or more committees, each committee to consist of two or more of the Trustees
of the Trust. The Board may designate one or more Trustee as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of such committee. Each committee, to the extent provided in the
resolution, shall have and may exercise the powers of the Board of Trustees in
the management of the business and affairs of the Trust; provided, however, that
in the absence or disqualification of any member of such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such members constitute a quorum, may
unanimously appoint another member of the Board of Trustees to act at the
meeting in the place of any such absent or disqualified member. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board of Trustees.
Section 13. Minutes of Committee. Each committee shall keep regular
minutes of its meetings and report the same to the Board of Trustees when
required.
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Section 14. Compensation of Trustees. The Trustees as such shall be
entitled to reasonable compensation for their services as determined from time
to time by the Board of Trustees. Nothing herein shall in any way prevent the
employment of any Trustee for advisory, management, administrative, legal,
accounting, investment banking, underwriting, brokerage, or investment dealer or
other services and the payment for the same by the Trust.
ARTICLE III
OFFICERS
Section 1. Executive Officers. The initial executive officers of the
Trust shall be elected by the Board of Trustees as soon as practicable after the
organization of the Trust. The executive officers may include a Chairman of the
Board, and shall include a President, one or more Vice Presidents (the number
thereof to be determined by the Board of Trustees), a Secretary and a Treasurer.
The Chairman of the Board, if any, shall be selected from among the Trustees.
The Board of Trustees may also in its discretion appoint Assistant Vice
Presidents, Assistant Secretaries, Assistant Treasurers, and other officers,
agents and employees, who shall have such authority and perform such duties as
the Board may determine. The Board of Trustees may fill any vacancy which may
occur in any office. Any two offices, except for those of President and Vice
President, may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument on behalf of the Trust in more than one
capacity, if such instrument is required by law or by these Amended and Restated
Bylaws to be executed, acknowledged or verified by two or more officers.
Section 2. Term of Office. Unless otherwise specifically determined by
the Board of Trustees, the officers shall serve at the pleasure of the Board of
Trustees. If the Board of Trustees in its judgment finds that the best interests
of the Trust will be served, the Board of Trustees may remove any officer of the
Trust at any time with or without cause. The Trustees may delegate this power to
the President with respect to any other officer. Such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Any officer
may resign from office at any time by delivering a written resignation to the
Trustees or the President. Unless otherwise specified therein, such resignation
shall take effect upon delivery.
Section 3. President. The President shall be the chief executive
officer of the Trust and, subject to the Board of Trustees, shall generally
manage the business and affairs of the Trust. If there is no Chairman of the
Board, or if the Chairman of the Board has been appointed but is absent, the
President shall, if present, preside at all meetings of the shareholders and the
Board of Trustees.
Section 4. Chairman of the Board. The Chairman of the Board, if any,
shall preside at all meetings of the shareholders and the Board of Trustees, if
the Chairman of the Board is present. The Chairman of the Board shall have such
other powers and duties as shall be determined by the Board of Trustees, and
shall undertake such other assignments as may be requested by the President.
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Section 5. Other Officers. The Chairman of the Board or one or more
Vice Presidents shall have and exercise such powers and duties of the President
in the absence or inability to act of the President, as may be assigned to them,
respectively, by the Board of Trustees or, to the extent not so assigned, by the
President. In the absence or inability to act of the President, the powers and
duties of the President not otherwise assigned by the Board of Trustees or the
President shall devolve upon the Chairman of the Board, or in the Chairman's
absence, the Vice Presidents in the order of their election.
Section 6. Secretary. The Secretary shall (a) have custody of the seal
of the Trust; (b) attend meetings of the shareholders, the Board of Trustees,
and any committees of Trustees and keep the minutes of such meetings of
shareholders, Board of Trustees and any committees thereof; and (c) issue all
notices of the Trust. The Secretary shall have charge of the shareholder records
and such other books and papers as the Board may direct, and shall perform such
other duties as may be incidental to the office or which are assigned by the
Board of Trustees. The Secretary shall also keep or cause to be kept a
shareholder book, which may be maintained by means of computer systems,
containing the names, alphabetically arranged, of all persons who are
shareholders of the Trust, showing their places of residence, the number and
class or series of any class of shares of beneficial interest held by them,
respectively, and the dates when they became the record owners thereof, and such
book shall be open for inspection as prescribed by the laws of the State of
Delaware.
Section 7. Treasurer. The Treasurer shall have the care and custody of
the funds and securities of the Trust and shall deposit the same in the name of
the Trust in such bank or banks or other depositories, subject to withdrawal in
such manner as these Amended and Restated Bylaws or the Board of Trustees may
determine. The Treasurer shall, if required by the Board of Trustees, give such
bond for the faithful discharge of duties in such form as the Board of Trustees
may require.
Section 8. Surety Bond. The Trustees may require any officer or agent
of the Trust to execute a bond (including, without limitation, any bond required
by the Investment Company Act of 1940, as amended ("1940 Act") and the rules and
regulations of the Securities and Exchange Commission ("Commission") to the
Trust in such sum and with such surety or sureties as the Trustees may
determine, conditioned upon the faithful performance of his or her duties to the
Trust, including responsibility for negligence and for the accounting of any of
the Trust's property, funds, or securities that may come into his or her hands.
ARTICLE IV
MEETINGS OF SHAREHOLDERS
Section 1. Purpose. All meetings of the shareholders for the election
of Trustees shall be held at such place as may be fixed from time to time by the
Trustees, or at such other place either within or without the State of Delaware
as shall be designated from time to time by the Trustees and stated in the
notice indicating that a meeting has been called for such purpose. Meetings of
shareholders may be held for any purpose determined by the Trustees and may be
held at such
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time and place, within or without the State of Delaware as shall be stated in
the notice of the meeting or in a duly executed waiver of notice thereof. At all
meetings of the shareholders, every shareholder of record entitled to vote
thereat shall be entitled to vote either in person or by proxy, which term shall
include proxies provided through written, electronic, telephonic, computerized,
facsimile, telecommunications, telex or oral communication or by any other form
of communication, each pursuant to such voting procedures and through such
systems as are authorized by the Trustees or one or more executive officers of
the Trust. Unless a proxy provides otherwise, such proxy is not valid more than
eleven months after its date. A proxy with respect to shares held in the name of
two or more persons shall be valid if executed by any one of them unless at or
prior to exercise of the proxy the Trust receives a specific written notice to
the contrary from any one of them. A proxy purporting to be executed by or on
behalf of a shareholder shall be deemed valid unless challenged at or prior to
its exercise and the burden of proving invalidity shall rest on the challenger.
Section 2. Nominations of Trustees. Nominations of individuals for
election to the Board of Trustees shall be made by the Board of Trustees or a
nominating committee of the Board of Trustees, if one has been established (the
"Nominating Committee"). Any shareholder of the Trust may submit names of
individuals to be considered by the Nominating Committee or the Board of
Trustees, as applicable, provided, however, (i) that such person was a
shareholder of record at the time of submission of such names and is entitled to
vote at the meeting, and (ii) that the Nominating Committee or the Board of
Trustees, as applicable, shall make the final determination of persons to be
nominated.
Section 3. Election of Trustees. All meetings of shareholders for the
purpose of electing Trustees shall be held on such date and at such time as
shall be designated from time to time by the Trustees and stated in the notice
of the meeting, at which the shareholders shall elect by a plurality vote any
number of Trustees as the notice for such meeting shall state are to be elected,
and transact such other business as may properly be brought before the meeting
in accordance with Section 1 of this Article IV.
Section 4. Notice of Meetings. Written notice of any meeting stating
the place, date, and hour of the meeting shall be given to each shareholder
entitled to vote at such meeting not less than ten days before the date of the
meeting in accordance with Article V hereof.
Section 5. Special Meetings. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by applicable law or by the
Agreement, may be called by any Trustee; provided, however, that the Trustees
shall promptly call a meeting of the shareholders solely for the purpose of
removing one or more Trustees, when requested in writing so to do by the record
holders of not less than ten percent of the outstanding shares of the Trust.
Section 6. Notice of Special Meeting. Written notice of a special
meeting stating the place, date, and hour of the meeting and the purpose of
purposes for which the meeting is called, shall be given not less than ten days
before the date of the meeting, to each shareholder entitled to vote at such
meeting.
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Section 7. Conduct of Special Meeting. Business transacted at any
special meeting of shareholders shall be limited to the purpose stated in the
notice.
Section 8. Quorum. The holders of one-third of the shares of beneficial
interests that are issued and outstanding and entitled to vote thereat, present
in person or represented by proxy, shall constitute a quorum at all meetings of
the shareholders for the transaction of business except as otherwise provided by
applicable law or by the Agreement. If, however, such quorum shall not be
present or represented at any meeting of the shareholders, the vote of the
holders of a majority of shares cast shall have power to adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present or represented. At such adjourned meeting, at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
Section 9. Organization of Meetings.
(a) The Chairman of the Board of Trustees shall preside at each
meeting of shareholders. In the absence of the Chairman of the Board, the
meeting shall be chaired by the President, or if the President shall not be
present, by a Vice President. In the absence of all such officers, the meeting
shall be chaired by a person elected for such purpose at the meeting. The
Secretary of the Trust, if present, shall act as Secretary of such meetings, or
if the Secretary is not present, an Assistant Secretary of the Trust shall so
act, and if no Assistant Secretary is present, then a person designated by the
Secretary of the Trust shall so act, and if the Secretary has not designated a
person, then the meeting shall elect a secretary for the meeting.
(b) The Board of Trustees of the Trust shall be entitled to
make such rules and regulations for the conduct of meetings of shareholders as
it shall deem necessary, appropriate or convenient. Subject to such rules and
regulations of the Board of Trustees, if any, the chairman of the meeting shall
have the right and authority to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such chairman, are necessary,
appropriate or convenient for the proper conduct of the meeting, including,
without limitation, establishing: an agenda or order of business for the
meeting; rules and procedures for maintaining order at the meeting and the
safety of those present; limitations on participation in such meeting to
shareholders of record of the Trust and their duly authorized and constituted
proxies, and such other persons as the chairman shall permit; restrictions on
entry to the meeting after the time fixed for the commencement thereof;
limitations on the time allotted to questions or comments by participants; and
regulation of the opening and closing of the polls for balloting on matters
which are to be voted on by ballot, unless and to the extent the Board of
Trustees or the chairman of the meeting determines that meetings of shareholders
shall not be required to be held in accordance with the rules of parliamentary
procedure.
Section 10. Voting Standard. When a quorum is present at any meeting,
the vote of the holders of a majority of the shares cast shall decide any
question brought before such meeting, unless the question is one on which, by
express provision of applicable law, the Agreement, these Amended and Restated
Bylaws, or applicable contract, a different vote is required, in which case such
express provision shall govern and control the decision of such question.
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Section 11. Voting Procedure. Each whole share shall be entitled to one
vote, and each fractional share shall be entitled to a proportionate fractional
vote. On any matter submitted to a vote of the shareholders, all shares shall be
voted together, except when required by applicable law or when the Trustees have
determined that the matter affects the interests of one or more Portfolios (or
Classes), then only the shareholders of such Portfolios (or Classes) shall be
entitled to vote thereon.
Section 12. Action Without Meeting. Unless otherwise provided in the
Agreement or applicable law, any action required to be taken at any meeting of
shareholders of the Trust, or any action which may be taken at any meeting of
such shareholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of any such action without a meeting by less
than unanimous written consent shall be given to those shareholders who have not
consented in writing.
ARTICLE V
NOTICES
Section 1. Methods of Giving Notice. Whenever, under the provisions of
applicable law or of the Agreement or of these Amended and Restated Bylaws,
notice is required to be given to any Trustee or shareholder, it shall not,
unless otherwise provided herein, be construed to mean personal notice, but such
notice may be given orally in person, or by telephone (promptly confirmed in
writing) or in writing, by mail addressed to such Trustee or shareholder, at his
address as it appears on the records of the Trust, with postage thereon prepaid,
and such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Notice to Trustees or members of a
committee may also be given by telex, telegram, telecopier or via overnight
courier. If sent by telex or telecopier, notice to a Trustee or member of a
committee shall be deemed to be given upon transmittal; if sent by telegram,
notice to a Trustee or member of a committee shall be deemed to be given when
the telegram, so addressed, is delivered to the telegraph company, and if sent
via overnight courier, notice to a Trustee or member of a committee shall be
deemed to be given when delivered against a receipt therefor.
Section 2. Written Waiver. Whenever any notice is required to be given
under the provisions of applicable law or of the Agreement or of these Amended
and Restated Bylaws, a waiver thereof in writing, signed by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.
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ARTICLE VI
CERTIFICATES OF SHARES
Section 1. Issuance. Upon request, every holder of shares in the Trust
shall be entitled to have a certificate, signed by, or in the name of the Trust
by, a Trustee, certifying the number of shares owned by him in the Trust.
Section 2. Countersignature. Where a certificate is countersigned (1)
by a transfer agent other than the Trust or its employee, or, (2) by a registrar
other than the Trust or its employee, the signature of the Trustee may be a
facsimile.
Section 3. Lost Certificates. The Board of Trustees may direct a new
certificate or certificates to be issued in place of any certificate or
certificates therefore issued by the Trust alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of the fact by the person claiming
the certificate to be lost, stolen or destroyed. When authorizing such issue of
a new certificate or certificates, the Board of Trustees may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and/or
to give the Trust a bond in such sum as it may direct as indemnity against any
claim that may be made against the Trust with respect to the certificate alleged
to have been lost, stolen or destroyed.
Section 4. Transfer of Shares. The Trustees shall make such rules as
they consider appropriate for the transfer of shares and similar matters. To the
extent certificates are issued in accordance with Section 1 of this Article VI,
upon surrender to the Trust or the transfer agent of the Trust of such
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Trust to issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
Section 5. Fixing Record Date. In order that the Trustees may determine
the shareholders entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof, or to express consent to action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution of
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of beneficial interests or for the purpose of any
other lawful action, the Board of Trustees may fix a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Trustees, and which record date shall not be more
than ninety nor less than ten days before the date of such meeting, nor more
than ten days after the date upon which the resolution fixing the record date is
adopted by the Board of Trustees for action by shareholder consent in writing
without a meeting, nor more than ninety days prior to any other action. A
determination of shareholders of record entitled to notice of or to vote at a
meeting of shareholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Trustees may fix a new record date for the adjourned
meeting.
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Section 6. Registered Shareholders. The Trust shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice hereof, except as otherwise provided by
the laws of Delaware.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends and Other Distributions. The Trustees may from
time to time declare and pay dividends and make other distributions with respect
to any Portfolio, or Class thereof, which may be from income, capital gains or
capital. The amount of such dividends or other distributions and the payment of
them and whether they are in cash or any other Trust Property shall be wholly in
the discretion of the Trustees.
Section 2. Redemptions. Any holder of record of shares of a particular
Portfolio, or Class thereof, shall have the right to require the Trust to redeem
his shares, or any portion thereof, subject to the terms and conditions set
forth in the registration statement in effect from time to time. The redemption
price may in any case or cases be paid wholly or partly in kind if the Trustees
determine that such payment is advisable in the interest of the remaining
shareholders of the Portfolio or Class thereof for which the shares are being
redeemed. Subject to the foregoing, the fair value, selection and quantity of
securities or other property so paid or delivered as all or part of the
redemption price may be determined by or under authority of the Trustees. In no
case shall the Trust be liable for any delay of any Person in transferring
securities selected for delivery as all or part of any payment in kind.
The Trustees may, at their option, and at any time, have the right to
redeem shares of any shareholder of a particular Portfolio or Class thereof in
accordance with Section 2 of this Article VII. The Trustees may refuse to
transfer or issue shares to any person to the extent that the same is necessary
to comply with applicable law or advisable to further the purposes for which the
Trust is formed.
If, at any time when a request for transfer or redemption of Shares of
any Portfolio is received by the Trust or its agent, the value of the shares of
such Portfolio in a Shareholder's account is less than Five Hundred Dollars
($500.00), after giving effect to such transfer or redemption, the Trust may, at
any time following such transfer or redemption and upon giving thirty (30) days'
notice to the Shareholder, cause the remaining Shares of such Portfolio in such
Shareholder's account to be redeemed at net asset value in accordance with such
procedures set forth above.
Section 3. Indemnification. Every person who is, or has been, a Trustee
or officer of the Trust shall be indemnified by the Trust to the fullest extent
permitted by the Delaware Business Trust Act, these Amended and Restated Bylaws
and other applicable law.
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Section 4. Advance Payments of Indemnifiable Expenses.To the maximum
extent permitted by the Delaware Act and other applicable law, the Trust or
applicable Portfolio may advance to a Covered Person, in connection with the
preparation and presentation of a defense to any claim, action, suit, or
proceeding, expenses for which the Covered Person would ultimately be entitled
to indemnification; provided that the Trust or applicable Portfolio has received
an undertaking by or on behalf of such Covered Person that such amount will be
paid over by him to the Trust or applicable Portfolio if it is ultimately
determined that he is not entitled to indemnification for such expenses, and
further provided that (i) such Covered Person shall have provided appropriate
security for such undertaking, (ii) the Trust is insured against losses arising
out of any such advance payments, or (iii) either a majority of the Trustees who
are not interested persons (as defined in the 1940 Act) of the Trust nor parties
to the matter, or independent legal counsel in a written opinion shall have
determined, based upon a review of readily available facts (as opposed to a full
trial-type inquiry) that there is reason to believe that such Covered Person
will not be disqualified from indemnification for such expenses.
Section 5. Seal. The business seal shall have inscribed thereon the
name of the business trust, the year of its organization and the word "Business
Seal, Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or otherwise reproduced. Any officer or Trustee of the
Trust shall have authority to affix the corporate seal of the Trust to any
document requiring the same.
Section 6. Severability. The provisions of these Amended and Restated
Bylaws are severable. If the Board of Trustees determines, with the advice of
counsel, that any provision hereof conflicts with the 1940 Act, the regulated
investment company provisions of the Internal Revenue Code, or other applicable
laws and regulations, the conflicting provision shall be deemed never to have
constituted a part of these Amended and Restated Bylaws; provided, however, that
such determination shall not affect any of the remaining provisions of these
Amended and Restated Bylaws or render invalid or improper any action taken or
omitted prior to such determination. If any provision hereof shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision only in such jurisdiction
and shall not affect any other provision of these Amended and Restated Bylaws.
Section 7. Headings. Headings are placed in these Amended and Restated
Bylaws for convenience of reference only and in case of any conflict, the text
of these Amended and Restated Bylaws rather than the headings shall control.
ARTICLE VIII
AMENDMENTS
Section 1. Amendments. These Amended and Restated Bylaws may be altered
or repealed at any regular or special meeting of the Board of Trustees without
prior notice. These Amended and Restated Bylaws may also be altered or repealed
at any special meeting of the shareholders, but only if the Board of Trustees
resolves to put a proposed alteration or repealer to
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the vote of the shareholders and notice of such alteration or repealer is
contained in a notice of the special meeting being held for such purpose.
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<PAGE> 1
AIM INVESTMENT FUNDS
AMENDED AND RESTATED
SUB-ADVISORY CONTRACT
BETWEEN
A I M ADVISORS, INC.
AND
INVESCO ASSET MANAGEMENT LIMITED
Contract made as of February 12, 1999, between A I M Advisors, Inc., a
Delaware corporation ("Adviser"), and INVESCO Asset Management Limited, a
company organized under the laws of England and Wales ("Sub-Adviser").
WHEREAS Adviser has entered into an Investment Management and
Administration Contract with AIM Investment Funds ("Company"), an open-end
management investment company registered under the Investment Company Act of
1940, as amended ("1940 Act"), with respect to AIM Latin American Growth Fund,
AIM Emerging Markets Fund, AIM Global Growth & Income Fund, AIM Global
Government Income Fund and AIM Developing Markets Fund (each a "Fund" and
collectively, the "Funds"), each Fund being a series of the Company's shares of
beneficial interest; and
WHEREAS Adviser previously retained Sub-Adviser as investment
sub-adviser in order to furnish certain advisory services to the Funds, and
Adviser and Sub-Adviser entered into a Sub-Advisory Contract dated as of
December 14, 1998 with respect to the Funds ("Sub-Advisory Contract); and
WHEREAS Adviser and Sub-Adviser desire to amend and restate the
Sub-Advisory Contract to remove AIM Emerging Markets Fund from the list of
Funds since it ceased operations as of February 12, 1999;
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 in this Contract. 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 Company'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 securities and investments and cash equivalents of the Fund. The
Sub-Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by each Fund, and the brokers
and dealers through whom trades will be executed.
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(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 federal 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 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. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Sub-Adviser hereby agrees that all records which it maintains
for the Company are the property of the Company, agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any records which it
maintains for the Company and which are required to be maintained by Rule 31a-1
under the 1940 Act, and further agrees to surrender promptly to the Company any
records which it maintains for the Company upon request by the Company.
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 Company and with the
instructions and directions of the Board and will comply with the requirements
of the 1940 Act, the rules thereunder, and all other applicable federal and
state laws and regulations.
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 Company, 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. Expenses.
2
<PAGE> 3
(a) During the term of this Contract, each Fund will bear all
expenses, not specifically assumed by Adviser and Sub-Adviser, incurred in its
operations and the offering of its shares.
(b) Expenses borne by each Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of
portfolio securities, including the cost (including brokerage commissions, if
any) of securities purchased or sold by the Fund and any losses incurred in
connection therewith; (ii) fees payable to and expenses incurred on behalf of
the Fund by Sub-Adviser under this Contract; (iii) investment consulting fees
and related costs; (iv) expenses of organizing the Company and the Fund; (v)
expenses of preparing and filing reports and other documents with governmental
and regulatory agencies; (vi) filing fees and expenses relating to the
registration and qualification of the Fund's shares and the Company under
federal and/or state securities laws and maintaining such registrations and
qualifications; (vii) costs incurred in connection with the issuance, sale or
repurchase of the Fund's shares of beneficial interest; (viii) fees and
salaries payable to the Company's Trustees who are not parties to this Contract
or interested persons of any such party ("Independent Trustees"); (ix) all
expenses incurred in connection with the Independent Trustees' services,
including travel expenses; (x) taxes (including any income or franchise taxes)
and governmental fees; (xi) costs of any liability, uncollectible items of
deposit and other insurance and fidelity bonds; (xii) any costs, expenses or
losses arising out of a liability of or claim for damages or other relief
asserted against the Company or the Fund for violation of any law; (xiii)
interest charges; (xiv) legal, accounting and auditing expenses, including
legal fees of special counsel for the Independent Trustees; (xv) charges of
custodians, transfer agents, pricing agents and other agents; (xvi) expenses of
disbursing dividends and distributions; (xvii) costs of preparing share
certificates; (xviii) expenses of setting in type, printing and mailing
prospectuses and supplements thereto, statements of additional information,
reports, notices and proxy materials for existing shareholders; (xix) any
extraordinary expenses (including fees and disbursements of counsel, costs of
actions, suits or proceedings to which the Company is a party and the expenses
the Company may incur as a result of its legal obligation to provide
indemnification to its officers, Trustees, employees and agents) incurred by
the Company; (xx) fees, voluntary assessments and other expenses incurred in
connection with membership in investment company organizations; (xxi) costs of
mailing and tabulating proxies and costs of meetings of shareholders, the Board
and any committees thereof; (xxii) the cost of investment company literature
and other publications provided by the Company to its Trustees and officers;
and (xxiii) costs of mailing, stationery and communications equipment.
(c) The payment or assumption by Sub-Adviser of any expense of the
Company or any Fund that Sub-Adviser is not required by this Contract to pay or
assume shall not obligate Sub-Adviser to pay or assume the same or any similar
expense of the Company or any Fund on any subsequent occasion.
6. Compensation.
3
<PAGE> 4
(a) For the services provided to a Fund under this Contract, Adviser
will pay Sub-Adviser a fee, computed weekly and paid monthly, as set forth in
Appendix A hereto.
(b) For the services provided under this Contract to each Fund as
hereafter may be established, Adviser will pay to Sub-Adviser a fee in an
amount to be agreed upon in a written Appendix to this Contract executed by
Adviser and by Sub-Adviser.
(c) The fee shall be computed weekly and paid monthly to Sub-Adviser
on or before the last business day of the next succeeding calendar month.
(d) 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.
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 Company 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
Company, shall be deemed, when rendering services to a Fund or the Company or
acting with respect to any business of a Fund or the Company to be rendering
such service to or acting solely for the Fund or the Company 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, 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 effect for two years from the above written date. 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.
4
<PAGE> 5
(c) Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, 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 by
Sub-Adviser at any time, without the payment of any penalty, on sixty days'
written notice to the Company. 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 no amendment of this Contract shall be effective until approved by
vote of a majority of the Fund's outstanding voting securities, when required
by the 1940 Act.
10. Governing Law. This Contract shall be construed in accordance with the
laws of the State of Delaware (without regard to Delaware conflict or choice of
law provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
11. 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. As used in this Contract, the terms
"majority of the outstanding voting securities," "interested person,"
"assignment," "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "sale," "sell" and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act
reflected in any provision of this Contract is made less restrictive by a rule,
regulation or order of the Securities and Exchange Commission, whether of
special or general application, such provision shall be deemed to incorporate
the effect of such rule, regulation or order.
5
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.
A I M ADVISORS, INC.
Attest: [ILLEGIBLE]
------------------------- By: /s/ ROBERT H. GRAHAM
---------------------------
Name: Robert H. Graham
Title: President
INVESCO ASSET MANAGEMENT LIMITED
Attest: [ILLEGIBLE] By: /s/ J. LAMBOURNE
------------------------- -----------------------------
Name: J. Lambourne
Title: Director
6
<PAGE> 7
APPENDIX A
TO
AIM INVESTMENT FUNDS
AMENDED AND RESTATED
SUB-ADVISORY CONTRACT
BETWEEN
A I M ADVISORS, INC.
AND
INVESCO ASSET MANAGEMENT LIMITED
AIM LATIN AMERICAN GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM
DEVELOPING MARKETS FUND
<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
- ---------- -----------
<S> <C>
First $ 500 million................................................ 0.39%
Next $ 500 million................................................ 0.38%
Next $ 500 million................................................ 0.37%
On amounts thereafter.............................................. 0.36%
</TABLE>
AIM GLOBAL GOVERNMENT INCOME FUND
<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
- ---------- -----------
<S> <C>
First $ 500 million................................................ 0.29%
Next $ 1 billion.................................................. 0.28%
Next $ 1 billion.................................................. 0.27%
On amounts thereafter.............................................. 0.26%
</TABLE>
7
<PAGE> 1
MASTER DISTRIBUTION AGREEMENT
BETWEEN
AIM INVESTMENT FUNDS
(CLASS A AND C SHARES)
AND
A I M DISTRIBUTORS, INC.
THIS AGREEMENT made as of the 1st day of March, 1999, by and
between AIM INVESTMENT FUNDS, a Delaware business trust (the "Company"), with
respect to each of the Class A and Class C shares (the "Class A and C shares")
of each series of shares of beneficial interest set forth on Appendix A to this
Agreement (the "Portfolios") and A I M DISTRIBUTORS, INC., a Delaware
corporation (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:
FIRST: The Company on behalf of the Class A and Class C Shares
hereby appoints the Distributor as its exclusive agent for the sale of the Class
A and Class C Shares to the public directly and through investment dealers and
financial institutions in the United States and throughout the world in
accordance with the terms of the current prospectuses applicable to the
Portfolios.
SECOND: The Company shall not sell any Class A and Class C Shares
except through the Distributor and under the terms and conditions set forth in
paragraph FOURTH below.
Notwithstanding the provisions of the foregoing sentence, however:
(A) the Company may issue Class A and Class C Shares to any other
investment company or personal holding company, or to the shareholders thereof,
in exchange for all or a majority of the shares or assets of any such company;
and
(B) the Company may issue Class A and Class C Shares at their net
asset value in connection with certain classes of transactions or to certain
categories of persons, in accordance with Rule 22d-1 under the Investment
Company Act of 1940, as amended (the "1940 Act"), provided that any such
category is specified in the then current prospectus of the applicable Class A
and Class C Shares.
THIRD: The Distributor hereby accepts appointment as exclusive agent
for the sale of the Class A and Class C Shares and agrees that it will use its
best efforts to sell such shares; provided, however, that:
(A) the Distributor may, and when requested by the Company on behalf
of the Class A and Class C Shares shall, suspend its efforts to effectuate such
sales at any time when, in the opinion of the Distributor or of the Company, no
sales should be made because of market or other economic considerations or
abnormal circumstances of any kind; and
1
<PAGE> 2
(B) the Company may withdraw the offering of the Class A and Class C
Shares (I) at any time with the consent of the Distributor, or (ii) without such
consent when so required by the provisions of any statute or of any order, rule
or regulation of any governmental body having jurisdiction. It is mutually
understood and agreed that the Distributor does not undertake to sell any
specific amount of the Class A and Class C Shares. The Company shall have the
right to specify minimum amounts for initial and subsequent orders for the
purchase of Class A and Class C Shares.
FOURTH:
(A) The public offering price of Class A Shares (the "offering
price") shall be the net asset value per share plus a sales charge, if any. Net
asset value per share shall be determined in accordance with the provisions of
the then current prospectus and statement of additional information of the
Portfolios. The sales charge shall be established by the Distributor. The
Distributor may establish a schedule of contingent deferred sales charges to be
imposed at the time of redemption of certain Class A Shares and such schedule of
contingent deferred sales charges shall be disclosed in the current prospectus
or statement of additional information for each Portfolio. The sales charges and
contingent deferred sales charges may reflect scheduled variations in, or the
elimination of, sales charges on sales of Class A Shares or redemption of Class
A Shares either generally to the public, or to any specified class of investors
or in connection with any specified class of transactions, in accordance with
Rule 22d-1 and as set forth in the then current prospectus and statement of
additional information of the Portfolios. The Distributor shall apply any
scheduled variation in, or elimination of, the selling commission or contingent
deferred sales charge uniformly to all offerees in the class specified.
The public offering price of the Class C shares shall be the net
asset value per share of the applicable Class C shares. Net asset value per
share shall be determined in accordance with the provisions of the then current
prospectus and statement of additional information of the applicable Portfolio.
The Distributor may establish a schedule of contingent deferred sales charges to
be imposed at the time of redemption of the Shares, and such schedule shall be
disclosed in the current prospectus or statement of additional information of
each Portfolio. Such schedule of contingent deferred sales charges may reflect
variations in or waivers of such charges on redemptions of Class C shares,
either generally to the public or to any specified class of shareholders and/or
in connection with any specified class of transactions, in accordance with
applicable rules and regulations and exemptive relief granted by the Securities
and Exchange Commission, and as set forth in the Portfolios' current
prospectus(es) or statement(s) of additional information. The Distributor and
the Company shall apply any then applicable scheduled variation in or waiver of
contingent deferred sales charges uniformly to all shareholders and/or all
transactions belonging to a specified class.
(B) The Portfolios shall allow directly to investment dealers and
other financial institutions through whom Class A Shares are sold such portion
of the sales charge as may be payable to them and specified by the Distributor
up to but not exceeding the amount of the total sales charge. The difference
between any commissions so payable and the total sales charges included in the
offering price shall be paid to the Distributor.
2
<PAGE> 3
The Distributor may pay to investment dealers and other financial
institutions through whom Class C shares are sold, such sales commission as the
Distributor may specify from time to time. Payment of any such sales commissions
shall be the sole obligation of the Distributor.
(C) No provision of this Agreement shall be deemed to prohibit any
payments by a Portfolio to the Distributor or by a Portfolio or the Distributor
to investment dealers, financial institutions and 401(k) plan service providers
where such payments are made under a distribution plan adopted by the Company on
behalf of each Portfolio pursuant to Rule 12b-1 under the 1940 Act.
(D) The Company shall redeem Class A and Class C Shares from
shareholders in accordance with the terms set forth from time to time in the
current prospectus and statement of additional information of each Portfolio.
The price to be paid to a shareholder to redeem Class A and Class C Shares shall
be equal to the net asset value of the Class A and Class C Shares being
redeemed, less any applicable contingent deferred sales charge. The Distributor
shall be entitled to receive the amount of any applicable contingent deferred
sales charge that has been subtracted from gross redemption proceeds. The
Company shall pay or cause the Company's transfer agent to pay the applicable
contingent deferred sales charge to the Distributor on the date net redemption
proceeds are payable to the redeeming shareholder.
FIFTH: The Distributor shall act as agent of the Company on behalf
of each Portfolio in connection with the sale and repurchase of Class A and
Class C Shares. Except with respect to such sales and repurchases, the
Distributor shall act as principal in all matters relating to the promotion or
the sale of Class A and Class C Shares and shall enter into all of its own
engagements, agreements and contracts as principal on its own account. The
Distributor shall enter into agreements with investment dealers and financial
institutions selected by the Distributor, authorizing such investment dealers
and financial institutions to offer and sell Class A and Class C Shares to the
public upon the terms and conditions set forth therein, which shall not be
inconsistent with the provisions of this Agreement. Each agreement shall provide
that the investment dealer and financial institution shall act as a principal,
and not as an agent, of the Company on behalf of the Portfolios. The Distributor
or such other investment dealers or financial institutions will be deemed to
have performed all services required to be performed in order to be entitled to
receive the asset based sales charge portion of any amounts payable with respect
to Class C Shares to the Distributor pursuant to a distribution plan adopted by
the Company on behalf of each Portfolio pursuant to Rule 12b-1 under the 1940
Act upon the settlement of each sale of a Class C Share (or a share of another
portfolio from which the Class C Share derives).
SIXTH: The Portfolios shall bear:
(A) the expenses of qualification of Class A and Class C Shares for
sale in connection with such public offerings in such states as shall be
selected by the Distributor, and of continuing the qualification therein until
the Distributor notifies the Company that it does not wish such qualification
continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the
final proof and distributing the Portfolios' prospectuses and statements of
additional information (including supplements
3
<PAGE> 4
thereto) relating to public offerings made by the Distributor pursuant to this
Agreement (which shall not include those prospectuses and statements of
additional information, and supplements thereto, to be distributed to
shareholders of each Portfolio), and any other promotional or sales literature
used by the Distributor or furnished by the Distributor to dealers in connection
with such public offerings, and expenses of advertising in connection with such
public offerings.
(B) The Distributor may be reimbursed for all or a portion of such
expenses, or may receive reasonable compensation for distribution related
services, to the extent permitted by a distribution plan adopted by the Company
on behalf of the Portfolios pursuant to Rule 12b-1 under the 1940 Act.
EIGHTH: The Distributor will accept orders for the purchase of Class
A and Class C Shares only to the extent of purchase orders actually received and
not in excess of such orders, and it will not avail itself of any opportunity of
making a profit by expediting or withholding orders. It is mutually understood
and agreed that the Company may reject purchase orders where, in the judgment of
the Company, such rejection is in the best interest of the Company.
NINTH: The Company, on behalf of the Portfolios, and the Distributor
shall each comply with all applicable provisions of the 1940 Act, the Securities
Act of 1933 and of all other federal and state laws, rules and regulations
governing the issuance and sale of Class A and Class C Shares.
TENTH:
(A) In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Distributor, the Company on behalf of the Portfolios agrees to indemnify
the Distributor against any and all claims, demands, liabilities and expenses
which the Distributor may incur under the Securities Act of 1933, or common law
or otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of the
Portfolios, or any omission to state a material fact therein, the omission of
which makes any statement contained therein misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or Portfolio in connection therewith by or on behalf of
the Distributor. The Distributor agrees to indemnify the Company and the
Portfolios against any and all claims, demands, liabilities and expenses which
the Company or the Portfolios may incur arising out of or based upon any act or
deed of the Distributor or its sales representatives which has not been
authorized by the Company or the Portfolios in its prospectus or in this
Agreement.
(B) The Distributor agrees to indemnify the Company and the
Portfolios against any and all claims, demands, liabilities and expenses which
the Company or the Portfolios may incur under the Securities Act of 1933, or
common law or otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in any registration statement or
prospectus of the Portfolios, or any omission to state a material fact therein
if such statement or omission was made in reliance upon, and in conformity with,
information furnished to the Company or the Portfolios in connection therewith
by or on behalf of the Distributor.
(C) Notwithstanding any other provision of this Agreement, the
Distributor shall not be liable for any errors of the Portfolios' transfer
agent(s), or for any failure of any such transfer agent to perform its duties.
4
<PAGE> 5
ELEVENTH: Nothing herein contained shall require the Company to take
any action contrary to any provision of its Agreement and Declaration of Trust,
or to any applicable statute or regulation.
TWELFTH: This Agreement shall become effective as of the date
hereof, shall continue in force and effect until June 30, 1999, and shall
continue in force and effect from year to year thereafter, provided, that such
continuance is specifically approved at least annually (a)(I) by the Board of
Trustees of the Company or (ii) by the vote of a majority of the Portfolios'
outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act),
and (b) by vote of a majority of the Company's trustees who are not parties to
this Agreement or "interested persons" (as defined in Section 2(a)(19) of the
1940 Act) of any party to this Agreement cast in person at a meeting called for
such purpose.
THIRTEENTH:
(A) This Agreement may be terminated at any time, without the
payment of any penalty, by vote of the Board of Trustees of the Company or by
vote of a majority of the outstanding voting securities of each Portfolio, or by
the Distributor, on sixty (60) days' written notice to the other party.
(B) This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act.
FOURTEENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices. Until
further notice to the other party, it is agreed that the addresses of both the
Company and the Distributor shall be 11 Greenway Plaza, Suite 100, Houston,
Texas 77046.
FIFTEENTH: Notice is hereby given that, as provided by applicable
law, the obligations of or arising out of this Agreement are not binding upon
any of the shareholders of the Company individually, but are binding only upon
the assets and property of the Company and that the shareholders shall be
entitled, to the fullest extent permitted by applicable law, to the same
limitation on personal liability as stockholders of private corporations for
profit.
SIXTEENTH: This Agreement shall be governed by and construed in
accordance with the laws (without reference to conflicts of law provisions) of
the State of Delaware.
5
<PAGE> 6
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.
AIM INVESTMENT FUNDS
Attest:
/s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
- ---------------------------------- -----------------------------------
Name: Nancy L. Martin Name: Robert H. Graham
Title: Title: President
A I M DISTRIBUTORS, INC.
Attest:
/s/ NANCY L. MARTIN By: /s/ MICHAEL J. CEMO
- ---------------------------------- -----------------------------------
Name: Nancy L. Martin Name: Michael J. Cemo
Title: Title: President
6
<PAGE> 7
APPENDIX A
TO
MASTER DISTRIBUTION AGREEMENT
OF
AIM INVESTMENT FUNDS
CLASS A SHARES
AIM Developing Markets Fund
AIM Emerging Markets Debt Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services
Fund AIM Global Government Income Fund
AIM Global Growth & Income Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications Fund
AIM Latin American Growth Fund
AIM Strategic Income Fund
CLASS C SHARES
AIM Developing Markets Fund
AIM Emerging Markets Debt Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services
Fund AIM Global Government Income Fund
AIM Global Growth & Income Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications Fund
AIM Latin American Growth Fund
AIM Strategic Income Fund
7
<PAGE> 1
EXHIBIT 7(a)(iii)
AMENDMENT NO. 1
DISTRIBUTION AGREEMENT
BETWEEN
AIM INVESTMENT FUNDS
AND
AIM DISTRIBUTORS, INC.
(CLASS B SHARES)
The Distribution Agreement (the "Agreement"), dated September 8, 1998, by
and between AIM Investment Funds, a Delaware business trust, and A I M
Distributors, Inc., a Delaware corporation, is hereby amended as follows:
Schedule A of the Agreement is hereby deleted in its entirety and replaced
with the following:
"SCHEDULE A
TO
DISTRIBUTION AGREEMENT
OF
AIM INVESTMENT FUNDS
CLASS B SHARES
AIM Developing Markets Fund
AIM Emerging Markets Debt Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Government Income Fund
AIM Global Growth & Income Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications Fund
AIM Latin American Growth Fund
AIM Strategic Income Fund"
1
<PAGE> 2
All other terms and provisions of the Agreement not amended herein shall
remain in full force and effect.
Dated: March 18, 1999
AIM INVESTMENT FUNDS
Attest:
/s/ KATHLEEN J. PFLUEGER /s/ [ILLEGIBLE]
- ------------------------------ ------------------------------
Assistant Secretary President
AIM DISTRIBUTORS, INC.
Attest:
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
- ------------------------------ ------------------------------
Assistant Secretary President
2
<PAGE> 1
EXHIBIT 7(a)(iv)
AMENDMENT NO. 1
MASTER DISTRIBUTION PLAN
OF
AIM INVESTMENT FUNDS
(CLASS A AND CLASS C SHARES)
The Master Distribution Plan (the "Plan"), dated as of March 1, 1999,
pursuant to Rule 12b-1 of AIM Investment Funds, a Delaware business trust, is
hereby amended as follows:
Appendix A of the Plan is hereby deleted in its entirety and replaced
with the following:
"APPENDIX A
TO
MASTER DISTRIBUTION PLAN
OF
AIM INVESTMENT FUNDS
(CLASS A AND CLASS C SHARES)
(DISTRIBUTION FEE)
The Fund shall pay the Distributor as full compensation for all
services rendered and all facilities furnished under the Distribution Plan for
each Portfolio as designated below, a Distribution Fee* determined by applying
the annual rate set forth below as to each Portfolio (or Class A or Class C
thereof) to the average daily net assets of the Portfolio (or Class A or Class C
thereof) for the plan year, computed in a manner used for the determination of
the offering price of shares of the Portfolio (or Class A or Class C thereof).
<TABLE>
<CAPTION>
MAXIMUM
ASSET-BASED SERVICE AGGREGATE
FUND SALES CHARGE FEE ANNUAL FEE
---- ------------ ------- ------------
<S> <C> <C> <C>
Class A Shares
AIM Developing Markets Fund 0.25% 0.25% 0.50%
AIM Emerging Markets Debt Fund 0.10% 0.25% 0.35%
AIM Global Consumer Products
and Services Fund 0.25% 0.25% 0.50%
AIM Global Financial Services Fund 0.25% 0.25% 0.50%
AIM Global Government Income Fund 0.10% 0.25% 0.35%
AIM Global Growth & Income Fund 0.10% 0.25% 0.35%
AIM Global Health Care Fund 0.25% 0.25% 0.50%
AIM Global Infrastructure Fund 0.25% 0.25% 0.50%
AIM Global Resources Fund 0.25% 0.25% 0.50%
AIM Global Telecommunications Fund 0.25% 0.25% 0.50%
AIM Latin American Growth Fund 0.25% 0.25% 0.50%
AIM Strategic Income Fund 0.10% 0.25% 0.35%
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
Class C Shares
<S> <C> <C> <C>
AIM Developing Markets Fund 0.75% 0.25% 1.00%
AIM Emerging Markets Debt Fund 0.75% 0.25% 1.00%
AIM Global Consumer Products and
Services Fund 0.75% 0.25% 1.00%
AIM Global Financial Services Fund 0.75% 0.25% 1.00%
AIM Global Government Income Fund 0.75% 0.25% 1.00%
AIM Global Growth & Income Fund 0.75% 0.25% 1.00%
AIM Global Health Care Fund 0.75% 0.25% 1.00%
AIM Global Infrastructure Fund 0.75% 0.25% 1.00%
AIM Global Resources Fund 0.75% 0.25% 1.00%
AIM Global Telecommunications Fund 0.75% 0.25% 1.00%
AIM Latin American Growth Fund 0.75% 0.25% 1.00%
AIM Strategic Income Fund 0.75% 0.25% 1.00%
</TABLE>
- ---------------------
* The Distribution Fee is payable apart from the sales charge, if any, as if
stated in the current prospectus for the applicable Class and the
applicable Portfolio."
All other terms and provisions of the Plan not amended herein shall remain
in full force and effect.
Dated: March 18, 1999
AIM INVESTMENT FUNDS
(on behalf of its Class A and Class C
Shares)
Attest: /s/ [ILLEGIBLE} By: /s/ [ILLEGIBLE]
------------------------- --------------------------
Assistant Secretary President
<PAGE> 1
EXHIBIT 10(c)(i)
[AIM MUTUAL FUND LOGO]
SHAREHOLDER SERVICE AGREEMENT
FOR SALE OF SHARES
OF THE AIM MUTUAL FUNDS
This Shareholder Service Agreement (the "Agreement") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940, by each of the
AIM-managed mutual funds (or designated classes of such funds) listed in
Schedule A, which may be amended from time to time by AIM Distributors, Inc.
("Distributors") to this Agreement (the "Funds"), under a Distribution Plan
(the "Plan") adopted pursuant to said Rule. This Agreement, being made between
Distributors, solely as agent for such Funds and the undersigned authorized
dealer, defines the services to be provided by the authorized dealer for which
it is to receive payments pursuant to the Plan adopted by each of the Funds.
The Plan and the Agreement have been approved by a majority of the directors of
each of the Funds, including a majority of the directors who are not interested
persons of such Funds, and who have no direct or indirect financial interest in
the operation of the Plan or related agreements (the "Dis-interested
Directors"), by votes cast in person at a meeting called for the purpose of
voting on the Plan. Such approval included a determination that in the exercise
of their reasonable business judgement and in light of their fiduciary duties,
there is a reasonable likelihood that the Plan will benefit such Fund and its
shareholders.
1. To the extent that you provide distribution-related and continuing
personal shareholder services to customers who may, from time to time,
directly or beneficially own shares of the Funds, including but not
limited to, distributing sales literature, answering routine customer
inquiries regarding the Funds, assisting customers in changing
dividend options, account designations and addresses, and in enrolling
into any of several special investment plans offered in connection
with the purchase of the Funds' shares, assisting in the establishment
and maintenance of customer accounts and records and in the processing
of purchase and redemption transactions, investing dividends and
capital gains distributions automatically in shares and providing such
other services as the Funds or the customer may reasonably request,
we, solely as agent for the Funds, shall pay you a fee periodically or
arrange for such fee to be paid to you.
2. The fee paid with respect to each Fund will be calculated at the end
of each payment period (as indicated in Schedule A) for each business
day of the Fund during such payment period at the annual rate set
forth in Schedule A as applied to the average net asset value of the
shares of such Fund purchased or acquired through exchange on or after
the Plan Calculation Date shown for such Fund on Schedule A. Fees
calculated in this manner shall be paid to you only if your firm is
the dealer of record at the close of business on the last business day
of the applicable payment period, for the account in which such shares
are held (the "Subject Shares"). In cases where Distributors has
advanced payment to you of the first year's fee for shares sold at net
asset value and subject to a contingent deferred sales charge, no
additional payments will be made to you during the first year the
Subject Shares are held.
3. The total of the fees calculated for all of the Funds listed on
Schedule A for any period with respect to which calculations are made
shall be paid to you within 45 days after the close of such period.
<PAGE> 2
4. We reserve the right to withhold payment with respect to the Subject
Shares purchased by you and redeemed or repurchased by the Fund or by
us as Agent within seven (7) business days after the date of our
confirmation of such purchase. We reserve the right at any time to
impose minimum fee payment requirements before any periodic payments
will be made to you hereunder.
5. This Agreement and Schedule A does not require any broker-dealer to
provide transfer agency and recordkeeping related services as nominee
for its customers.
6. You shall furnish us and the Funds with such information as shall
reasonably be requested either by the directors of the Funds or by us
with respect to the fees paid to you pursuant to this Agreement.
7. We shall furnish the directors of the Funds, for their review on a
quarterly basis, a written report of the amounts expended under the
Plan by us and the purposes for which such expenditures were made.
8. Neither you nor any of your employees or agents are authorized to make
any representation concerning shares of the Funds except those
contained in the then current Prospectus or Statement of Additional
Information for the Funds, and you shall have no authority to act as
agent for the Funds or for Distributors.
9. We may enter into other similar Shareholder Service Agreements with
any other person without your consent.
10. This Agreement may be amended at any time without your consent by
Distributors mailing a copy of an amendment to you at address set
forth below. Such amendment shall become effective on the date
specified in such amendment unless you elect to terminate this
Agreement within thirty (30) days of your receipt of such amendment.
11. This Agreement may be terminated with respect to any Fund at any time
without payment of any penalty by the vote of a majority of the
directors of such Fund who are Disinterested Directors or by a vote of
a majority of the Fund's outstanding shares, on sixty (60) days'
written notice. It will be terminated by any act which terminates
either the Selected Dealer Agreement between your firm and us or the
Fund's Distribution Plan, and in any event, it shall terminate
automatically in the event of its assignment as that term is defined
in the 1940 Act.
12. The provisions of the Distribution Agreement between any Fund and us,
insofar as they relate to the Plan, are incorporated herein by
reference. This Agreement shall become effective upon execution and
delivery hereof and shall continue in full force and effect as long as
the continuance of the Plan and this related Agreement are approved at
least annually by a vote of the directors, including a majority of the
Dis-interested Directors, cast in person at a meeting called for the
purpose of voting thereon. All communications to us should be sent to
the address of Distributors as shown at the bottom of this Agreement.
Any notice to you shall be duly given if mailed or telegraphed to you
at the address specified by you below.
13. You represent that you provide to your customers who own shares of the
Funds personal services as defined from time to time in applicable
regulations of the National Association
<PAGE> 3
of Securities Dealers, Inc., and that you will continue to accept
payments under this Agreement only so long as you provide such
services.
14. This Agreement shall be construed in accordance with the laws of the
State of Texas.
A I M DISTRIBUTORS, INC.
Date: By:
----------------------------- ---------------------------------
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By:
----------------------------- ---------------------------------
Signature
---------------------------------
Print Name Title
---------------------------------
Dealer's Name
---------------------------------
Address
---------------------------------
City State Zip
---------------------------------
Telephone
Please sign both copies and return one copy of each to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
<PAGE> 4
<TABLE>
<CAPTION>
SCHEDULE "A" TO
SHAREHOLDER SERVICE AGREEMENT
Fund Fee Rate* Plan Calculation Date
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
AIM Advisor Flex Fund A Shares 0.25 August 4, 1997
AIM Advisor Flex Fund B Shares 0.25 March 3, 1998
AIM Advisor Flex Fund C Shares 1.00** August 4, 1997
AIM Advisor International Value Fund A Shares 0.25 August 4, 1997
AIM Advisor International Value Fund B Shares 0.25 March 3, 1998
AIM Advisor International Value Fund C Shares 1.00** August 4, 1997
AIM Advisor Large Cap Value Fund A Shares 0.25 August 4, 1997
AIM Advisor Large Cap Value Fund B Shares 0.25 March 3, 1998
AIM Advisor Large Cap Value Fund C Shares 1.00** August 4, 1997
AIM Advisor MultiFlex Fund A Shares 0.25 August 4, 1997
AIM Advisor MultiFlex Fund B Shares 0.25 March 3, 1998
AIM Advisor MultiFlex Fund C Shares 1.00** August 4, 1997
AIM Advisor Real Estate Fund A Shares 0.25 August 4, 1997
AIM Advisor Real Estate Fund B Shares 0.25 March 3, 1998
AIM Advisor Real Estate Fund C Shares 1.00** August 4, 1997
AIM Aggressive Growth Fund A Shares 0.25 July 1, 1992
AIM Aggressive Growth Fund B Shares 0.25 March 1, 1999
AIM Aggressive Growth Fund C Shares 1.00** March 1, 1999
AIM Asian Growth Fund A Shares 0.25 November 1, 1997
AIM Asian Growth Fund B Shares 0.25 November 1, 1997
AIM Asian Growth Fund C Shares 1.00** November 1, 1997
AIM Balanced Fund A Shares 0.25 October 18, 1993
AIM Balanced Fund B Shares 0.25 October 18, 1993
AIM Balanced Fund C Shares 1.00** August 4, 1997
AIM Blue Chip Fund A Shares 0.25 June 3, 1996
AIM Blue Chip Fund B Shares 0.25 October 1, 1996
AIM Blue Chip Fund C Shares 1.00** August 4, 1997
AIM Capital Development Fund A Shares 0.25 June 17, 1996
AIM Capital Development Fund B Shares 0.25 October 1, 1996
AIM Capital Development Fund C Shares 1.00** August 4, 1997
AIM Charter Fund A Shares 0.25 November 18, 1986
AIM Charter Fund B Shares 0.25 June 15, 1995
AIM Charter Fund C Shares 1.00** August 4, 1997
AIM Constellation Fund A Shares 0.25 September 9, 1986
AIM Constellation Fund B Shares 0.25 November 3, 1997
AIM Constellation Fund C Shares 1.00** August 4, 1997
AIM European Development Fund A Shares 0.25 November 1, 1997
AIM European Development Fund B Shares 0.25 November 1, 1997
AIM European Development Fund C Shares 1.00** November 1, 1997
AIM Global Aggressive Growth Fund A Shares 0.50** September 15, 1994
AIM Global Aggressive Growth Fund B Shares 0.25 September 15, 1994
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
AIM Global Aggressive Growth Fund C Shares 1.00** August 4, 1997
AIM Global Growth Fund A Shares 0.50** September 15, 1994
AIM Global Growth Fund B Shares 0.25 September 15, 1994
AIM Global Growth Fund C Shares 1.00** August 4, 1997
AIM Global Income Fund A Shares 0.50** September 15, 1994
AIM Global Income Fund B Shares 0.25 September 15, 1994
AIM Global Income Fund C Shares 1.00** August 4, 1997
AIM Global Utilities Fund A Shares 0.25 July 1, 1992
AIM Global Utilities Fund B Shares 0.25 September 1, 1993
AIM Global Utilities Fund C Shares 1.00** August 4, 1997
AIM High Income Municipal Fund A Shares 0.25 December 22, 1997
AIM High Income Municipal Fund B Shares 0.25 December 22, 1997
AIM High Income Municipal Fund C Shares 1.00** December 22, 1997
AIM High Yield Fund A Shares 0.25 July 1, 1992
AIM High Yield Fund B Shares 0.25 September 1, 1993
AIM High Yield Fund C Shares 1.00** August 4, 1997
AIM High Yield Fund II A Shares 0.25 October 1, 1998
AIM High Yield Fund II B Shares 0.25 November 20, 1998
AIM High Yield Fund II C Shares 1.00** November 20, 1998
AIM Income Fund A Shares 0.25 July 1, 1992
AIM Income Fund B Shares 0.25 September 1, 1993
AIM Income Fund C Shares 1.00** August 4, 1997
AIM Intermediate Government Fund A Shares 0.25 July 1, 1992
AIM Intermediate Government Fund B Shares 0.25 September 1, 1993
AIM Intermediate Government Fund C Shares 1.00** August 4, 1997
AIM International Equity Fund A Shares 0.25 May 21, 1992
AIM International Equity Fund B Shares 0.25 September 15, 1994
AIM International Equity Fund C Shares 1.00** August 4, 1997
AIM Large Cap Growth Fund A Shares 0.25 March 1, 1999
AIM Large Cap Growth Fund B Shares 0.25 April 5, 1999
AIM Large Cap Growth Fund C Shares 1.00** April 5, 1999
AIM Limited Maturity Treasury Fund A Shares 0.15 December 2, 1987
AIM Money Market Fund B Shares 0.25 October 18, 1993
AIM Money Market Fund C Shares 1.00** August 4, 1997
AIM Money Market Fund Cash Reserve Shares 0.25 October 18, 1993
AIM Municipal Bond Fund A Shares 0.25 July 1, 1992
AIM Municipal Bond Fund B Shares 0.25 September 1, 1993
AIM Municipal Bond Fund C Shares 1.00** August 4, 1997
AIM Select Growth Fund A Shares 0.25 July 1, 1992
AIM Select Growth Fund B Shares 0.25 September 1,1993
AIM Select Growth Fund C Shares 1.00** August 4, 1997
AIM Small Cap Opportunities Fund A Shares 0.25 June 29, 1998
AIM Small Cap Opportunities Fund B Shares 0.25 July 13, 1998
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
AIM Small Cap Opportunities Fund C Shares 1.00** December 30, 1998
AIM Tax-Exempt Bond Fund of Connecticut A Shares 0.25 July 1, 1992
AIM Tax-Exempt Cash Fund A Shares 0.10 July 1, 1992
AIM Value Fund A Shares 0.25 July 1, 1992
AIM Value Fund B Shares 0.25 October 18, 1993
AIM Value Fund C Shares 1.00** August 4, 1997
AIM Weingarten Fund A Shares 0.25 September 9, 1986
AIM Weingarten Fund B Shares 0.25 June 15, 1995
AIM Weingarten Fund C Shares 1.00** August 4, 1997
</TABLE>
*Frequency of Payments: Quarterly, B and C share payments begin after an
initial 12 month holding period. Where the broker dealer or financial
institution waives the 1% up-front commission on Class C shares, payments
commence immediately.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the
remainder is paid as an asset-based sales charge, as those terms are defined
under the rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other
service provider for the first year with respect to sales of $1 million or
more, at no load, in cases where A I M Distributors, Inc. has advanced the
service fee to the dealer, bank or other service provider.
THE FOLLOWING FUNDS ARE ADDED AS OF THE CLOSE OF BUSINESS MAY 29, 1998:
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
AIM Basic Value Fund A Shares 0.25 May 29, 1998
AIM Basic Value Fund B Shares 0.25 May 29, 1998
AIM Basic Value Fund C Shares 1.00** May 3, 1999
AIM Developing Markets Fund A Shares 0.25 May 29, 1998
AIM Developing Markets Fund B Shares 0.25 May 29, 1998
AIM Developing Markets Fund C Shares 1.00** March 1, 1999
AIM Europe Growth Fund A Shares 0.25 May 29, 1998
AIM Europe Growth Fund B Shares 0.25 May 29, 1998
AIM Europe Growth Fund C Shares 1.00** May 3, 1999
AIM Global Consumer Products and
Services Fund A Shares 0.40** May 29, 1998
AIM Global Consumer Products and
Services Fund B Shares 0.25 May 29, 1998
AIM Global Consumer Products and
Services Fund C Shares 1.00** March 1, 1999
AIM Global Financial Services Fund A Shares 0.40** May 29, 1998
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
AIM Global Financial Services Fund B Shares 0.25 May 29, 1998
AIM Global Financial Services Fund C Shares 1.00** March 1, 1999
AIM Global Government Income Fund A Shares 0.25 May 29, 1998
AIM Global Government Income Fund B Shares 0.25 May 29, 1998
AIM Global Government Income Fund C Shares 1.00** March 1, 1999
AIM Global Growth & Income Fund A Shares 0.25 May 29, 1998
AIM Global Growth & Income Fund B Shares 0.25 May 29, 1998
AIM Global Growth & Income Fund C Shares 1.00** March 1, 1999
AIM Global Health Care Fund A Shares 0.40** May 29, 1998
AIM Global Health Care Fund B Shares 0.25 May 29, 1998
AIM Global Health Care Fund C Shares 1.00** March 1, 1999
AIM Emerging Markets Debt Fund A Shares 0.25 May 29, 1998
AIM Emerging Markets Debt Fund B Shares 0.25 May 29, 1998
AIM Emerging Markets Debt Fund C Shares 1.00** March 1, 1999
AIM Global Infrastructure Fund A Shares 0.40** May 29, 1998
AIM Global Infrastructure Fund B Shares 0.25 May 29, 1998
AIM Global Infrastructure Fund C Shares 1.00** March 1, 1999
AIM Global Resources Fund A Shares 0.40** May 29, 1998
AIM Global Resources Fund B Shares 0.25 May 29, 1998
AIM Global Resources Fund C Shares 1.00** March 1, 1999
AIM Global Telecommunications Fund A Shares 0.40** May 29, 1998
AIM Global Telecommunications Fund B Shares 0.25 May 29, 1998
AIM Global Telecommunications Fund C Shares 1.00** March 1, 1999
AIM Japan Growth Fund A Shares 0.25 May 29, 1998
AIM Japan Growth Fund B Shares 0.25 May 29, 1998
AIM Japan Growth Fund C Shares 1.00** May 3, 1999
AIM Latin American Growth Fund A Shares 0.40** May 29, 1998
AIM Latin American Growth Fund B Shares 0.25 May 29, 1998
AIM Latin American Growth Fund C Shares 1.00** March 1, 1999
AIM Mid Cap Equity Fund A Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund B Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund C Shares 1.00** May 3, 1999
AIM Global Trends Fund A Shares 0.40** May 29, 1998
AIM Global Trends Fund B Shares 0.25 May 29, 1998
AIM Global Trends Fund C Shares 1.00** May 29, 1998
AIM New Pacific Growth Fund A Shares 0.25 May 29, 1998
AIM New Pacific Growth Fund B Shares 0.25 May 29, 1998
AIM New Pacific Growth Fund C Shares 1.00** May 3, 1999
AIM Small Cap Growth Fund A Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund B Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund C Shares 1.00** May 3, 1999
AIM Strategic Income Fund A Shares 0.25 May 29, 1998
AIM Strategic Income Fund B Shares 0.25 May 29, 1998
AIM Strategic Income Fund C Shares 1.00** March 1, 1999
</TABLE>
*Frequency of Payments:
<PAGE> 8
EFFECTIVE UNTIL JUNE 30, 1998: Class A and B share payments commence
immediately and are paid quarterly. Class C share payments commence after an
initial twelve month holding period and are paid quarterly.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the
remainder is paid as an asset-based sales charge, as those terms are defined
under the rules of the National Association of Securities Dealers, Inc.
EFFECTIVE JULY 1, 1998: B share payments, like C share payments, will begin
after an initial 12 month holding period and are paid quarterly. Where the
broker dealer or financial institution waives the 1% upfront commission on
Class C shares, payments commence immediately.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the
remainder is paid as an asset-based sales charge, as those terms are defined
under the rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other
service provider for the first year with respect to sales of $1 million or
more, at no load, in cases where A I M Distributors, Inc. has advanced the
service fee to the dealer, bank or other service provider.
<PAGE> 1
EXHIBIT 10(c)(ii)
[AIM LOGO]
BANK SHAREHOLDER
SERVICE AGREEMENT
We desire to enter into an Agreement with A I M Distributors, Inc. (the
"Company") acting as agent for the "AIM Funds", for servicing of our agency
clients who are shareholders of, and the administration of such shareholder
accounts in the shares of the AIM Funds (hereinafter referred to as the
"Shares"). Subject to the Company's acceptance of this Agreement, the terms and
conditions of this Agreement shall be as follows:
1. We shall provide continuing personal shareholder and administration
services for holders of the Shares who are also our clients. Such
services to our clients may include, without limitation, some or all
of the following: answering shareholder inquires regarding the Shares
and the AIM Funds; performing subaccounting; establishing and
maintaining shareholder accounts and records; processing and bunching
customer purchase and redemption transactions; providing periodic
statements showing a shareholder's account balance and the integration
of such statements with those of other transactions and balances in
the shareholder's other accounts serviced by us; forwarding applicable
AIM Funds prospectuses, proxy statements, reports and notices to our
clients who are holders of Shares; and such other administrative
services as you reasonably may request, to the extent we are permitted
by applicable statute, rule or regulations to provide such services.
We represent that we shall accept fees hereunder only so long as we
continue to provide personal shareholder services to our clients.
2. Shares purchased by us as agents for our clients will be registered
(choose one) (in our name or in the name of our nominee) (in the names
of our clients). The client will be the beneficial owner of the Shares
purchased and held by us in accordance with the client's instructions
and the client may exercise all applicable rights of a holder of such
Shares. We agree to transmit to the AIM Funds' transfer agent in a
timely manner, all purchase orders and redemption requests of our
clients and to forward to each client any proxy statements, periodic
shareholder reports and other communications received form the Company
by us on behalf of our clients. The Company agrees to pay all
out-of-pocket expenses actually incurred by us in connection with the
transfer by us of such proxy statements and reports to our clients as
required by applicable law or regulation. We agree to transfer record
ownership of a client's Shares to the client promptly upon the request
of a client. In addition, record ownership will be promptly
transferred to the client in the event that the person or entity
ceases to be our client.
3. Within three (3) business days of placing a purchase order we agree to
send (i) a cashiers check to the Company, or (ii) a wire transfer to
the AIM Funds' transfer agent, in an amount equal to the amount of all
purchase orders placed by us on behalf of our clients and accepted by
the Company.
4. We agree to make available to the Company, upon the Company's request,
such information relating to our clients who are beneficial owners of
Shares and their transactions in such Shares as may be required by
applicable laws and regulations or as may be reasonably requested by
the
<PAGE> 2
Bank Shareholder Service Agreement Page 2
Company. The names of our customers shall remain our sole property and
shall not be used by the Company for any other purpose except as
needed for servicing and information mailings in the normal course of
business to holders of the Shares.
5. We shall provide such facilities and personnel (which may be all or
any part of the facilities currently used in our business, or all or
any personnel employed by us) as may be necessary or beneficial in
carrying out the purposes of this Agreement.
6. Except as may be provided in a separate written agreement between the
Company and us, neither we nor any of our employees or agents are
authorized to assist in distribution of any of the AIM Funds' shares
except those contained in the then current Prospectus applicable to
the Shares; and we shall have no authority to act as agent for the
Company or the AIM Funds. Neither the AIM Funds, A I M Advisors, Inc.
nor A I M Distributors, Inc. will be a party, nor will they be
represented as a party, to any agreement that we may enter into with
our clients.
7. In consideration of the services and facilities described herein, we
shall receive from the Company on behalf of the AIM Funds an annual
service fee, payable at such intervals as may be set forth in Schedule
A hereto, of a percentage of the aggregate average net asset value of
the Shares owned beneficially by our clients during each payment
period, as set forth in Schedule A hereto, which may be amended from
time to time by the Company. We understand that this Agreement and the
payment of such service fees has been authorized and approved by the
Boards of Directors/Trustees of the AIM Funds, and is subject to
limitations imposed by the National Association of Securities Dealers,
Inc. In cases where the Company has advanced payments to us of the
first year's fee for shares sold with a contingent deferred sales
charge, no payments will be made to us during the first year the
subject Shares are held.
8. The AIM Funds reserve the right, at their discretion and without
notice, to suspend the sale of any Shares or withdraw the sale of
Shares.
9. We understand that the Company reserves the right to amend this
Agreement or Schedule A hereto at any time without our consent by
mailing a copy of an amendment to us at the address set forth below.
Such amendment shall become effective on the date specified in such
amendment unless we elect to terminate this Agreement within thirty
(30) days of our receipt of such amendment.
10. This Agreement may be terminated at any time by the Company on not
less than 15 days' written notice to us at our principal place of
business. We, on 15 days' written notice addressed to the Company at
its principal place of business, may terminate this Agreement, said
termination to become effective on the date of mailing notice to
Company of such termination. The Company's failure to terminate for
any cause shall not constitute a waiver of the Company's right to
terminate at a later date for any such cause. This Agreement shall
terminate automatically in the event of its assignment, the term
"assignment" for this purpose having the meaning defined in Section
2(a)(4) of the Investment Company Act of 1940, as amended.
<PAGE> 3
Bank Shareholder Service Agreement Page 3
11. All communications to the Company shall be sent to it at Eleven
Greenway Plaza, Suite 100, Houston, Texas, 77046-1173. Any notice to
us shall be duly given if mailed or telegraphed to us at this address
shown on this Agreement.
12. This Agreement shall become effective as of the date when it is
executed and dated below by the Company. This Agreement and all rights
and obligations of the parties hereunder shall be governed by and
construed under the laws of the State of Texas.
A I M DISTRIBUTORS, INC.
Date: By: X
-------------------------- ----------------------------------
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By: X
-------------------------- ----------------------------------
Signature
----------------------------------
Print Name Title
----------------------------------
Dealer's Name
----------------------------------
Address
----------------------------------
City State Zip
Please sign both copies and return one copy of each to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
<PAGE> 4
Bank Shareholder Service Agreement Page 4
<TABLE>
<CAPTION>
SCHEDULE "A" TO
SHAREHOLDER SERVICE AGREEMENT
Fund Fee Rate* Plan Calculation Date
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
IM Advisor Flex Fund A Shares 0.25 August 4, 1997
AIM Advisor Flex Fund B Shares 0.25 March 3, 1998
AIM Advisor Flex Fund C Shares 1.00** August 4, 1997
AIM Advisor International Value Fund A Shares 0.25 August 4, 1997
AIM Advisor International Value Fund B Shares 0.25 March 3, 1998
AIM Advisor International Value Fund C Shares 1.00** August 4, 1997
AIM Advisor Large Cap Value Fund A Shares 0.25 August 4, 1997
AIM Advisor Large Cap Value Fund B Shares 0.25 March 3, 1998
AIM Advisor Large Cap Value Fund C Shares 1.00** August 4, 1997
AIM Advisor MultiFlex Fund A Shares 0.25 August 4, 1997
AIM Advisor MultiFlex Fund B Shares 0.25 March 3, 1998
AIM Advisor MultiFlex Fund C Shares 1.00** August 4, 1997
AIM Advisor Real Estate Fund A Shares 0.25 August 4, 1997
AIM Advisor Real Estate Fund B Shares 0.25 March 3, 1998
AIM Advisor Real Estate Fund C Shares 1.00** August 4, 1997
AIM Aggressive Growth Fund A Shares 0.25 July 1, 1992
AIM Aggressive Growth Fund B Shares 0.25 March 1, 1999
AIM Aggressive Growth Fund C Shares 1.00** March 1, 1999
AIM Asian Growth Fund A Shares 0.25 November 1, 1997
AIM Asian Growth Fund B Shares 0.25 November 1, 1997
AIM Asian Growth Fund C Shares 1.00** November 1, 1997
AIM Balanced Fund A Shares 0.25 October 18, 1993
AIM Balanced Fund B Shares 0.25 October 18, 1993
AIM Balanced Fund C Shares 1.00** August 4, 1997
AIM Blue Chip Fund A Shares 0.25 June 3, 1996
AIM Blue Chip Fund B Shares 0.25 October 1, 1996
AIM Blue Chip Fund C Shares 1.00** August 4, 1997
AIM Capital Development Fund A Shares 0.25 June 17, 1996
AIM Capital Development Fund B Shares 0.25 October 1, 1996
AIM Capital Development Fund C Shares 1.00** August 4, 1997
AIM Charter Fund A Shares 0.25 November 18, 1986
AIM Charter Fund B Shares 0.25 June 15, 1995
AIM Charter Fund C Shares 1.00** August 4, 1997
AIM Constellation Fund A Shares 0.25 September 9, 1986
AIM Constellation Fund B Shares 0.25 November 3, 1997
AIM Constellation Fund C Shares 1.00** August 4, 1997
</TABLE>
<PAGE> 5
Bank Shareholder Service Agreement Page 5
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
AIM European Development Fund A Shares 0.25 November 1, 1997
AIM European Development Fund B Shares 0.25 November 1, 1997
AIM European Development Fund C Shares 1.00** November 1, 1997
AIM Global Aggressive Growth Fund A Shares 0.50** September 15, 1994
AIM Global Aggressive Growth Fund B Shares 0.25 September 15, 1994
AIM Global Aggressive Growth Fund C Shares 1.00** August 4, 1997
AIM Global Growth Fund A Shares 0.50 September 15, 1994
AIM Global Growth Fund B Shares 0.25 September 15, 1994
AIM Global Growth Fund C Shares 1.00** August 4, 1997
AIM Global Income Fund A Shares 0.50 September 15, 1994
AIM Global Income Fund B Shares 0.25 September 15, 1994
AIM Global Income Fund C Shares 1.00** August 4, 1997
AIM Global Utilities Fund A Shares 0.25 July 1, 1992
AIM Global Utilities Fund B Shares 0.25 September 1, 1993
AIM Global Utilities Fund C Shares 1.00** August 4, 1997
AIM High Income Municipal Fund A Shares 0.25 December 22, 1997
AIM High Income Municipal Fund B Shares 0.25 December 22, 1997
AIM High Income Municipal Fund C Shares 1.00** December 22, 1997
AIM High Yield Fund A Shares 0.25 July 1, 1992
AIM High Yield Fund B Shares 0.25 September 1, 1993
AIM High Yield Fund C Shares 1.00** August 4, 1997
AIM High Yield Fund II A Shares 0.25 October 1, 1998
AIM High Yield Fund II B Shares 0.25 November 20, 1998
AIM High Yield Fund II C Shares 1.00** November 20, 1998
AIM Income Fund A Shares 0.25 July 1, 1992
AIM Income Fund B Shares 0.25 September 1, 1993
AIM Income Fund C Shares 1.00** August 4, 1997
AIM Intermediate Government Fund A Shares 0.25 July 1, 1992
AIM Intermediate Government Fund B Shares 0.25 September 1, 1993
AIM Intermediate Government Fund C Shares 1.00** August 4, 1997
AIM International Equity Fund A Shares 0.25 May 21, 1992
AIM International Equity Fund B Shares 0.25 September 15, 1994
AIM International Equity Fund C Shares 1.00** August 4, 1997
AIM Large Cap Growth Fund A Shares 0.25 March 1, 1999
AIM Large Cap Growth Fund B Shares 0.25 April 5, 1999
AIM Large Cap Growth Fund C Shares 1.00** April 5, 1999
AIM Limited Maturity Treasury Fund A Shares 0.15 December 2, 1987
AIM Money Market Fund B Shares 0.25 October 18, 1993
</TABLE>
<PAGE> 6
Bank Shareholder Service Agreement Page 6
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
AIM Money Market Fund C Shares 1.00** August 4, 1997
AIM Money Market Fund Cash Reserve Shares 0.25 October 18, 1993
AIM Municipal Bond Fund A Shares 0.25 July 1, 1992
AIM Municipal Bond Fund B Shares 0.25 September 1, 1993
AIM Municipal Bond Fund C Shares 1.00** August 4, 1997
AIM Select Growth Fund A Shares 0.25 July 1, 1992
AIM Select Growth Fund B Shares 0.25 September 1,1993
AIM Select Growth Fund C Shares 1.00** August 4, 1997
AIM Small Cap Opportunities Fund A Shares 0.25 June 29, 1998
AIM Small Cap Opportunities Fund B Shares 0.25 July 13, 1998
AIM Small Cap Opportunities Fund C Shares 1.00** December 30, 1998
AIM Tax-Exempt Bond Fund of Connecticut A Shares 0.25 July 1, 1992
AIM Tax-Exempt Cash Fund A Shares 0.10 July 1, 1992
AIM Value Fund A Shares 0.25 July 1, 1992
AIM Value Fund B Shares 0.25 October 18, 1993
AIM Value Fund C Shares 1.00** August 4, 1997
AIM Weingarten Fund A Shares 0.25 September 9, 1986
AIM Weingarten Fund B Shares 0.25 June 15, 1995
AIM Weingarten Fund C Shares 1.00** August 4, 1997
</TABLE>
*Frequency of Payments: Quarterly, B and C share payments begin after an
initial 12 month holding period. Where the broker dealer or financial
institution waives the 1% up-front commission on Class C shares, payments
commence immediately.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the
remainder is paid as an asset-based sales charge, as those terms are defined
under the rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other
service provider for the first year with respect to sales of $1 million or
more, at no load, in cases where A I M Distributors, Inc. has advanced the
service fee to the dealer, bank or other service provider.
THE FOLLOWING FUNDS ARE ADDED AS OF THE CLOSE OF BUSINESS MAY 29, 1998:
<PAGE> 7
Bank Shareholder Service Agreement Page 7
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
AIM Basic Value Fund A Shares 0.25 May 29, 1998
AIM Basic Value Fund B Shares 0.25 May 29, 1998
AIM Basic Value Fund C Shares 1.00** May 3, 1999
AIM Developing Markets Fund A Shares 0.25 May 29, 1998
AIM Developing Markets Fund B Shares 0.25 May 29, 1998
AIM Developing Markets Fund C Shares 1.00** March 1, 1999
AIM Europe Growth Fund A Shares 0.25 May 29, 1998
AIM Europe Growth Fund B Shares 0.25 May 29, 1998
AIM Europe Growth Fund C Shares 1.00** May 3, 1999
AIM Global Consumer Products and
Services Fund A Shares 0.40** May 29, 1998
AIM Global Consumer Products and
Services Fund B Shares 0.25 May 29, 1998
AIM Global Consumer Products and
Services Fund C Shares 1.00** March 1, 1999
AIM Global Financial Services Fund A Shares 0.40** May 29, 1998
AIM Global Financial Services Fund B Shares 0.25 May 29, 1998
AIM Global Financial Services Fund C Shares 1.00** March 1, 1999
AIM Global Government Income Fund A Shares 0.25 May 29, 1998
AIM Global Government Income Fund B Shares 0.25 May 29, 1998
AIM Global Government Income Fund C Shares 1.00** March 1, 1999
AIM Global Growth & Income Fund A Shares 0.25 May 29, 1998
AIM Global Growth & Income Fund B Shares 0.25 May 29, 1998
AIM Global Growth & Income Fund C Shares 1.00** March 1, 1999
AIM Global Health Care Fund A Shares 0.40** May 29, 1998
AIM Global Health Care Fund B Shares 0.25 May 29, 1998
AIM Global Health Care Fund C Shares 1.00** March 1, 1999
AIM Emerging Markets Debt Fund A Shares 0.25 May 29, 1998
AIM Emerging Markets Debt Fund B Shares 0.25 May 29, 1998
AIM Emerging Markets Debt Fund C Shares 1.00** March 1, 1999
AIM Global Infrastructure Fund A Shares 0.40** May 29, 1998
AIM Global Infrastructure Fund B Shares 0.25 May 29, 1998
AIM Global Infrastructure Fund C Shares 1.00** March 1, 1999
AIM Global Resources Fund A Shares 0.40** May 29, 1998
AIM Global Resources Fund B Shares 0.25 May 29, 1998
AIM Global Resources Fund C Shares 1.00** March 1, 1999
AIM Global Telecommunications Fund A Shares 0.40** May 29, 1998
AIM Global Telecommunications Fund B Shares 0.25 May 29, 1998
</TABLE>
<PAGE> 8
Bank Shareholder Service Agreement Page 8
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
AIM Global Telecommunications Fund C Shares 1.00** March 1, 1998
AIM Japan Growth Fund A Shares 0.25 May 29, 1998
AIM Japan Growth Fund B Shares 0.25 May 29, 1998
AIM Japan Growth Fund C Shares 1.00** May 3, 1999
AIM Latin American Growth Fund A Shares 0.40** May 29, 1998
AIM Latin American Growth Fund B Shares 0.25 May 29, 1998
AIM Latin American Growth Fund C Shares 1.00** March 1, 1999
AIM Mid Cap Equity Fund A Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund B Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund C Shares 1.00** May 3, 1999
AIM Global Trends Fund A Shares 0.40** May 29, 1998
AIM Global Trends Fund B Shares 0.25 May 29, 1998
AIM Global Trends Fund C Shares 1.00** May 29, 1998
AIM New Pacific Growth Fund A Shares 0.25 May 29, 1998
AIM New Pacific Growth Fund B Shares 0.25 May 29, 1998
AIM New Pacific Growth Fund C Shares 1.00** May 3, 1999
AIM Small Cap Growth Fund A Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund B Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund C Shares 1.00** May 3, 1999
AIM Strategic Income Fund A Shares 0.25 May 29, 1998
AIM Strategic Income Fund B Shares 0.25 May 29, 1998
AIM Strategic Income Fund C Shares 1.00** March 1, 1999
</TABLE>
*Frequency of Payments:
EFFECTIVE UNTIL JUNE 30, 1998: Class A and B share payments commence
immediately and are paid quarterly. Class C share payments commence after an
initial twelve month holding period and are paid quarterly.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the
remainder is paid as an asset-based sales charge, as those terms are defined
under the rules of the National Association of Securities Dealers, Inc.
EFFECTIVE JULY 1, 1998: B share payments, like C share payments, will begin
after an initial 12 month holding period and are paid quarterly. Where the
broker dealer or financial institution waives the 1% up-front commission on
Class C shares, payments commence immediately.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the
remainder is paid as an asset-based sales charge, as those terms are defined
under the rules of the National Association of Securities Dealers, Inc.
<PAGE> 9
Bank Shareholder Service Agreement Page 9
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other
service provider for the first year with respect to sales of $1 million or
more, at no load, in cases where A I M Distributors, Inc. has advanced the
service fee to the dealer, bank or other service provider.
<PAGE> 1
EXHIBIT 10(c)(iii)
[AIM LOGO]
A I M DISTRIBUTORS, INC.
SHAREHOLDER SERVICE AGREEMENT
(BANK TRUST DEPARTMENTS)
A I M Distributors, Inc.
___________, 19__
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Gentlemen:
We desire to enter into an Agreement with A I M Distributors, Inc.
("AIM Distributors") as agent on behalf of the funds listed on Schedule A
hereto (the "Funds"), for the servicing of our clients who are shareholders of,
and the administration of accounts in, the Funds. We understand that this
Shareholder Service Agreement (the "Agreement") has been adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act") by each of
the Funds, under a Distribution Plan (the "Plan") adopted pursuant to said
Rule, and is subject to applicable rules of the National Association of
Securities Dealers, Inc. ("NASD"). This Agreement defines the services to be
provided by us for which we are to receive payments pursuant to the Plan. The
Plan and the Agreement have been approved by a majority of the directors or
trustees of the applicable Fund, including a majority of directors or trustees
who are not interested persons of the applicable Fund, and who have no direct
or indirect financial interest in the operation of the Plan or related
agreements, by votes cast in person at a meeting called for the purpose of
voting on the Plan. Such approval included a determination by the directors or
trustees of the applicable Fund, in the exercise of their reasonable business
judgement and in light of their fiduciary duties, that there is a reasonable
likelihood that the Plan will benefit the Fund and the holders of its Shares.
The terms and conditions of this Agreement shall be as follows:
1. To the extent that we provide continuing personal shareholder services
and administrative support services to our customers who may from time
to time own shares of the Funds of record or beneficially, including
but not limited to, forwarding sales literature, answering routine
customer inquiries regarding the Funds, assisting customers in changing
dividend options, account designations and addresses, and in enrolling
into any of several special investment plans offered in connection with
the purchase of the Funds' shares, assisting in the establishment and
maintenance of customer accounts and records and in the processing of
purchase and redemption transactions, investing dividends and capital
gains distributions automatically in shares of the Funds and providing
such other services as AIM Distributors or the customer may reasonably
request, you shall pay us a fee periodically. We represent that we
shall accept fees hereunder only so long as we continue to provide such
personal shareholder services.
2. We agree to transmit to AIM Distributors in a timely manner, all
purchase orders and redemption requests of our clients and to forward
to each client all proxy statements, periodic shareholder reports and
other communications received from AIM Distributors by us relating
<PAGE> 2
Shareholder Service Agreement Page 2
(Bank Trust Departments)
to shares of the Funds owned by our clients. AIM Distributors, on
behalf of the Funds, agrees to pay all out-of-pocket expenses actually
incurred by us in connection with the transfer by us of such proxy
statements and reports to our clients as required under applicable laws
or regulations.
3. We agree to make available upon AIM Distributors's request, such
information relating to our clients who are beneficial owners of Fund
shares and their transactions in such shares as may be required by
applicable laws and regulations or as may be reasonably requested by
AIM Distributors.
4. We agree to transfer record ownership of a client's Fund shares to the
client promptly upon the request of a client. In addition, record
ownership will be promptly transferred to the client in the event that
the person or entity ceases to be our client.
5. Neither we nor any of our employees or agents are authorized to make
any representation to our clients concerning the Funds except those
contained in the then current prospectuses applicable to the Funds,
copies of which will be supplied to us by AIM Distributors; and we
shall have no authority to act as agent for any Fund or AIM
Distributors. Neither a Fund, nor A I M Advisors, Inc. ("AIM") will be
a party, nor will they be represented as a party, to any agreement that
we may enter into with our clients and neither a Fund nor AIM shall
participate, directly or indirectly, in any compensation that we may
receive from our clients in connection with our acting on their behalf
with respect to this Agreement.
6. In consideration of the services and facilities described herein, we
shall receive a maximum annual service fee and asset-based sales
charge, payable monthly, as set forth on Schedule A hereto. We
understand that this Agreement and the payment of such service fees and
asset-based sales charge has been authorized and approved by the Board
of Directors or Trustees of the applicable Fund, and that the payment
of fees thereunder is subject to limitations imposed by the rules of
the NASD.
7. AIM Distributors reserves the right, in its discretion and without
notice, to suspend the sale of any Fund or withdraw the sale of shares
of a Fund, or upon notice to us, to amend this Agreement. We agree that
any order to purchase shares of the Funds placed by us after notice of
any amendment to this Agreement has been sent to us shall constitute
our agreement to any such amendment.
8. All communications to AIM Distributors shall be duly given if mailed to
A I M Distributors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173. Any notice to us shall be duly given if mailed to us at the
address specified by us in this Agreement or to such other address as
we shall have designated in writing to AIM Distributors.
9. This Agreement may be terminated at any time by AIM Distributors on not
less than 60 days' written notice to us at our principal place of
business. We, on 60 days' written notice addressed to AIM Distributors
at its principal place of business, may terminate this Agreement. AIM
Distributors may also terminate this Agreement for cause on violation
by us of any of the provisions of this Agreement, said termination to
become effective on the date of mailing notice to us of such
termination. AIM Distributors's failure to terminate for any cause
shall not constitute a waiver of AIM Distributors's right to terminate
at a later date for any such cause.
<PAGE> 3
Shareholder Service Agreement Page 3
(Bank Trust Departments)
This Agreement may be terminated with respect to any Fund at any time
by the vote of a majority of the directors or trustees of such Fund who
are disinterested directors or by a vote of a majority of the Fund's
outstanding shares, on not less than 60 days' written notice to us at
our principal place of business. This Agreement will be terminated by
any act which terminates the Agreement for Purchase of Shares of The
AIM Family of Funds(R) between us and AIM Distributors or a Fund's
Distribution Plan, and in any event, it shall terminate automatically
in the event of its assignment by us, the term "assignment" for this
purpose having the meaning defined in Section 2(a)(4) of the 1940 Act.
10. We represent that our activities on behalf of our clients and pursuant
to this Agreement either (i) are not such as to require our
registration as a broker-dealer in the state(s) in which we engage in
such activities, or (ii) we are registered as a broker-dealer in the
state(s) in which we engage in such activities. We represent that we
are registered as a broker-dealer with the NASD if required under
applicable law.
11. This Agreement and the Agreement for Purchase of Shares of The AIM
Family of Funds(R) through Bank Trust Departments constitute the entire
agreement between us and AIM Distributors and supersede all prior oral
or written agreements between the parties hereto. This Agreement may be
executed in counterparts, each of which shall be deemed an original but
all of which shall constitute the same instrument.
12. This Agreement and all rights and obligations of the parties hereunder
shall be governed by and construed under the laws of the State of
Texas.
13. This Agreement shall become effective as of the date when it is
executed and dated by AIM Distributors.
<PAGE> 4
Shareholder Service Agreement Page 4
(Bank Trust Departments)
The undersigned agrees to abide by the foregoing terms and conditions.
----------------------------------
(Firm Name)
----------------------------------
(Address)
----------------------------------
City/State/Zip/County
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Dated:
-----------------------------
ACCEPTED:
A I M DISTRIBUTORS, INC.
By:
--------------------------
Name:
------------------------
Title:
-----------------------
Dated:
-----------------------
Please sign both copies and return to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
<PAGE> 5
Shareholder Service Agreement Page 5
(Bank Trust Departments)
SCHEDULE A
Funds Fees
AIM Advisor Funds, Inc.
AIM Advisor Flex Fund
AIM Advisor International Value Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund
AIM Equity Funds, Inc.
AIM Aggressive Growth Fund
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Large Cap Growth Fund
AIM Weingarten Fund (Retail Class)
AIM Funds Group
AIM Balanced Fund
AIM Global Utilities Fund
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Select Growth Fund
AIM Value Fund
AIM Growth Series
AIM Basic Value Fund
AIM Europe Growth Fund
AIM Japan Growth Fund
AIM Mid Cap Equity Fund
AIM New Pacific Growth Fund
AIM Small Cap Growth Fund
AIM International Funds, Inc.
AIM Asian Growth Fund
AIM European Development Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM International Equity Fund
<PAGE> 6
Shareholder Service Agreement Page 6
(Bank Trust Departments)
AIM Investment Funds
AIM Developing Markets Fund
AIM Emerging Markets Debt Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Government Income Fund
AIM Global Growth & Income Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications Fund
AIM Latin American Growth Fund
AIM Strategic Income Fund
AIM Investment Securities Funds
AIM Limited Maturity Treasury Fund
AIM High Yield Fund II
AIM Series Trust
AIM Global Trends Fund
AIM Special Opportunities Funds
AIM Small Cap Opportunities Fund
AIM Tax-Exempt Funds, Inc.
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
<PAGE> 7
[AIM LOGO]
A I M DISTRIBUTORS, INC.
SHAREHOLDER SERVICE AGREEMENT
(BROKERS FOR BANK TRUST DEPARTMENTS)
, 19
------------ ---
A I M Distributors, Inc.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
Gentlemen:
We desire to enter into an Agreement with A I M Distributors, Inc.
("AIM Distributors") as agent on behalf of the funds listed on Schedule A
hereto, which may be amended from time to time by AIM Distributors (the
"Funds"), for the servicing of our clients who are shareholders of, and the
administration of accounts in, the Funds. We understand that this Shareholder
Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "1940 Act") by each of the Funds,
under a Distribution Plan (the "Plan") adopted pursuant to said Rule, and is
subject to applicable rules of the National Association of Securities Dealers,
Inc. ("NASD"). This Agreement defines the services to be provided by us for
which we are to receive payments pursuant to the Plan. The Plan and the
Agreement have been approved by a majority of the directors or trustees of the
applicable Fund, including a majority of directors or trustees who are not
interested persons of the applicable Fund, and who have no direct or indirect
financial interest in the operation of the Plan or related agreements, by votes
cast in person at a meeting called for the purpose of voting on the Plan. Such
approval included a determination by the directors or trustees of the
applicable Fund, in the exercise of their reasonable business judgement and in
light of their fiduciary duties, that there is a reasonable likelihood that the
Plan will benefit the Fund and the holders of its Shares. The terms and
conditions of this Agreement shall be as follows:
1. To the extent that we provide continuing personal shareholder services
and administrative support services to our customers who may from time
to time own shares of the Funds of record or beneficially, including
but not limited to, forwarding sales literature, answering routine
customer inquiries regarding the Funds, assisting customers in
changing dividend options, account designations and addresses, and in
enrolling into any of several special investment plans offered in
connection with the purchase of the Funds' shares, assisting in the
establishment and maintenance of customer accounts and records and in
the processing of purchase and redemption transactions, investing
dividends and capital gains distributions automatically in shares of
the Funds and providing such other services as AIM Distributors or the
customer may reasonably request, you shall pay us a fee periodically.
We represent that we shall accept fees hereunder only so long as we
continue to provide such personal shareholder services.
2. We agree to transmit to AIM Distributors in a timely manner, all
purchase orders and redemption requests of our clients and to forward
to each client all proxy statements, periodic shareholder reports and
other communications received from AIM Distributors by us relating
<PAGE> 8
Shareholder Service Agreement Page 2
(Brokers for Bank Trust Departments)
to shares of the Funds owned by our clients. AIM Distributors, on
behalf of the Funds, agrees to pay all out-of-pocket expenses actually
incurred by us in connection with the transfer by us of such proxy
statements and reports to our clients as required under applicable
laws or regulations.
3. We agree to transfer to AIM Distributors in a timely manner as set
forth in the applicable prospectus, federal funds in an amount equal
to the amount of all purchase orders placed by us and accepted by AIM
Distributors. In the event that AIM Distributors fails to receive such
federal funds on such date (other than through the fault of AIM
Distributors), we shall indemnify the applicable Fund and AIM
Distributors against any expense (including overdraft charges)
incurred by the applicable Fund and/or AIM Distributors as a result of
the failure to receive such federal funds.
4. We agree to make available upon AIM Distributors's request, such
information relating to our clients who are beneficial owners of Fund
shares and their transactions in such shares as may be required by
applicable laws and regulations or as may be reasonably requested by
AIM Distributors.
5. We agree to transfer record ownership of a client's Fund shares to the
client promptly upon the request of a client. In addition, record
ownership will be promptly transferred to the client in the event that
the person or entity ceases to be our client.
6. Neither we nor any of our employees or agents are authorized to make
any representation to our clients concerning the Funds except those
contained in the then current prospectuses applicable to the Funds,
copies of which will be supplied to us by AIM Distributors; and we
shall have no authority to act as agent for any Fund or AIM
Distributors. Neither a Fund, nor A I M Advisors, Inc. ("AIM") will be
a party, nor will they be represented as a party, to any agreement
that we may enter into with our clients and neither a Fund nor AIM
shall participate, directly or indirectly, in any compensation that we
may receive from our clients in connection with our acting on their
behalf with respect to this Agreement.
7. In consideration of the services and facilities described herein, we
shall receive a maximum annual service fee and asset-based sales
charge, payable monthly, as set forth on Schedule A hereto. We
understand that this Agreement and the payment of such service fees
and asset-based sales charge has been authorized and approved by the
Board of Directors or Trustees of the applicable Fund, and that the
payment of fees thereunder is subject to limitations imposed by the
rules of the NASD.
8. AIM Distributors reserves the right, in its discretion and without
notice, to suspend the sale of any Fund or withdraw the sale of shares
of a Fund, or upon notice to us, to amend this Agreement. We agree
that any order to purchase shares of the Funds placed by us after
notice of any amendment to this Agreement has been sent to us shall
constitute our agreement to any such amendment.
9. All communications to AIM Distributors shall be duly given if mailed
to A I M Distributors, Inc., 11 Greenway Plaza, Suite 1919, Houston,
Texas 77046-1173. Any notice to us shall be duly given if mailed to us
at the address specified by us in this Agreement or to such other
address as we shall have designated in writing to AIM Distributors.
<PAGE> 9
Shareholder Service Agreement Page 3
(Brokers for Bank Trust Departments)
10. This Agreement may be terminated at any time by AIM Distributors on
not less than 60 days' written notice to us at our principal place of
business. We, on 60 days' written notice addressed to AIM Distributors
at its principal place of business, may terminate this Agreement. AIM
Distributors may also terminate this Agreement for cause on violation
by us of any of the provisions of this Agreement, said termination to
become effective on the date of mailing notice to us of such
termination. AIM Distributors's failure to terminate for any cause
shall not constitute a waiver of AIM Distributors's right to terminate
at a later date for any such cause. This Agreement may be terminated
with respect to any Fund at any time by the vote of a majority of the
directors or trustees of such Fund who are disinterested directors or
by a vote of a majority of the Fund's outstanding shares, on not less
than 60 days' written notice to us at our principal place of business.
This Agreement will be terminated by any act which terminates the
Selected Dealer Agreement between us and AIM Distributors or a Fund's
Distribution Plan, and in any event, shall terminate automatically in
the event of its assignment by us, the term "assignment" for this
purpose having the meaning defined in Section 2(a)(4) of the 1940 Act.
11. We represent that our activities on behalf of our clients and pursuant
to this Agreement either (I) are not such as to require our
registration as a broker-dealer in the state(s) in which we engage in
such activities, or (ii) we are registered as a broker-dealer in the
state(s) in which we engage in such activities. We represent that we
are registered as a broker-dealer with the NASD if required under
applicable law.
12. This Agreement and all rights and obligations of the parties hereunder
shall be governed by and construed under the laws of the State of
Texas. This Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which shall constitute the same
instrument. This Agreement shall not relieve us or AIM Distributors
from any obligations either may have under any other agreements
between us.
13. This Agreement shall become effective as of the date when it is
executed and dated by AIM Distributors.
<PAGE> 10
Shareholder Service Agreement Page 4
(Brokers for Bank Trust Departments)
The undersigned agrees to abide by the foregoing terms and conditions.
---------------------------------
(Firm Name)
---------------------------------
(Address)
---------------------------------
City/State/Zip/County
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Dated:
--------------------------
ACCEPTED:
A I M DISTRIBUTORS, INC.
By:
-------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Dated:
----------------------------------
Please sign both copies and return to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046-1173
<PAGE> 11
Shareholder Service Agreement Page 5
(Brokers for Bank Trust Departments)
SCHEDULE A
<TABLE>
<CAPTION>
Funds Fees
----- ----
<S> <C>
AIM Advisor Funds, Inc.
AIM Advisor Flex Fund
AIM Advisor International Value Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund
AIM Equity Funds, Inc.
AIM Aggressive Growth Fund
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Large Cap Growth Fund
AIM Weingarten Fund (Retail Class)
AIM Funds Group
AIM Balanced Fund
AIM Global Utilities Fund
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Select Growth Fund
AIM Value Fund
AIM Growth Series
AIM Basic Value Fund
AIM Europe Growth Fund
AIM Japan Growth Fund
AIM Mid Cap Equity Fund
AIM New Pacific Growth Fund
AIM Small Cap Growth Fund
AIM International Funds, Inc.
AIM Asian Growth Fund
AIM European Development Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM International Equity Fund
</TABLE>
<PAGE> 12
Shareholder Service Agreement Page 6
(Brokers for Bank Trust Departments)
AIM Investment Funds
AIM Developing Markets Fund
AIM Emerging Markets Debt Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Government Income Fund
AIM Global Growth & Income Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications Fund
AIM Latin American Growth Fund
AIM Strategic Income Fund
AIM Investment Securities Funds
AIM Limited Maturity Treasury Fund
AIM High Yield Fund II
AIM Series Trust
AIM Global Trends Fund
AIM Special Opportunities Funds
AIM Small Cap Opportunities Fund
AIM Tax-Exempt Funds, Inc.
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
<PAGE> 1
EXHIBIT 10(c)(vi)
AGENCY PRICING AGREEMENT
(THE AIM FAMILY OF FUNDS(R))
This Agreement is entered into as of the ____ of ______________, 19
___, between _____________ (the "Plan Provider") and A I M Distributors, Inc.
(the "Distributor").
RECITAL
Plan Provider acts as a trustee and/or servicing agent for defined
contribution plans and/or deferred compensation plans (the "Plans") and invests
and reinvests such Plans' assets as specified by an investment advisor, sponsor
or administrative committee of the Plan (a "Plan Representative") generally upon
the direction of Plan beneficiaries (the "Participants").
Plan Provider and Distributor desire to facilitate the purchase and
redemption of shares (the "Shares") of the funds listed on Exhibit A hereto
which may be amended from time to time by Distributor (the "Fund" or "Funds"),
registered investment companies distributed by Distributor, on behalf of the
Plans, through one or more accounts (not to exceed one per Plan) in each Fund
(individually an "Account" and collectively the "Accounts"), subject to the
terms and conditions of this Agreement. Distributor shall, on behalf of the
Funds, pay to Plan Provider a fee in accordance with Exhibit A hereto.
AGREEMENT
1. SERVICES
Plan Provider shall provide shareholder and administration services for
the Plans and/or their Participants, including, without limitation:
answering questions about the Funds; assisting in changing dividend
options, account designations and addresses; establishing and
maintaining shareholder accounts and records; and assisting in
processing purchase and redemption transactions (the "Services"). Plan
Provider shall comply with all applicable laws, rules and regulations,
including requirements regarding prospectus delivery and maintenance
and preservation of records. To the extent allowed by law, Plan
Provider shall provide Distributor with copies of all records that
Distributor may reasonably request. Distributor or its affiliate will
recognize each Plan as an unallocated account in each Fund, and will
not maintain separate accounts in each Fund for each Participant.
Except to the extent provided in Section 3, all Services performed by
Plan Provider shall be as an independent contractor and not as an
employee or agent of Distributor or any of the Funds. Plan Provider and
Plan Representatives, and not Distributor, shall take all necessary
action so that the transactions contemplated by this Agreement shall
not be "Prohibited Transactions" under section 406 of the Employee
Retirement Income Security Act of 1974, or section 4975 of the Internal
Revenue Code.
2. PRICING INFORMATION
Each Fund or its designee will furnish Plan Provider on each business
day that the New York Stock Exchange is open for business ("Business
Day"), with (i) net asset value information as of the close of trading
(currently 4:00 p.m. Eastern Time) on the New York Stock
<PAGE> 2
Exchange or as at such later times at which a Fund's net asset value is
calculated as specified in such Fund's prospectus ("Close of Trading"),
(ii) dividend and capital gains information as it becomes available,
and (iii) in the case of income Funds, the daily accrual or interest
rate factor (mil rate). The Funds shall use their best efforts to
provide such information to Plan Provider by 6:00 p.m. Central Time on
the same Business Day.
Distributor or its affiliate will provide Plan Provider (a) daily
confirmations of Account activity within five Business Days after each
day on which a purchase or redemption of Shares is effected for the
particular Account, (b) if requested by Plan Provider, quarterly
statements detailing activity in each Account within fifteen Business
Days after the end of each quarter, and (c) such other reports as may
be reasonably requested by Plan Provider.
3. ORDERS AND SETTLEMENT
If Plan Provider receives instructions in proper form from Participants
or Plan Representatives before the Close of Trading on a Business Day,
Plan Provider will process such instructions that same evening. On the
next Business Day, Plan Provider will transmit orders for net purchases
or redemptions of Shares to Distributor or its designee by 9:00 a.m.
Central Time and wire payment for net purchases by 2:00 p.m. Central
Time. Distributor or its affiliate will wire payment for net
redemptions on the Business Day following the day the order is executed
for the Accounts. In doing so, Plan Provider will be considered the
Funds' agent, and Shares will be purchased and redeemed as of the
Business Day on which Plan Provider receives the instructions. Plan
Provider will record time and date of receipt of instructions and will,
upon request, provide such instructions and other records relating to
the Services to Distributor's auditors. If Plan Provider receives
instructions in proper form after the Close of Trading on a Business
Day, Plan Provider will treat the instructions as if received on the
next Business Day.
4. REPRESENTATIONS WITH RESPECT TO THE DISTRIBUTOR AND THE FUNDS
Plan Provider and its agents shall limit representations concerning a
Fund or Shares to those contained in the then current prospectus of
such Fund, in current sales literature furnished by Distributor to Plan
Provider, in publicly available databases, such as those databases
created by Standard & Poor's and Morningstar, and in current sales
literature created by Plan Provider and submitted to and approved in
writing by Distributor prior to its use.
5. USE OF NAMES
Plan Provider and its affiliates will not, without the prior written
approval of Distributor, make public references to A I M Management
Group Inc. or any of its subsidiaries, or to the Funds. For purposes of
this provision, the public does not include Plan Providers'
representatives who are actively engaged in promoting the Funds. Any
brochure or other communication to the public that mentions the Funds
shall be submitted to Distributor for written approval prior to use.
Plan Provider shall provide copies of its regulatory filings that
include any reference to A I M Management Group Inc. or its
subsidiaries or the Funds to Distributor. If Plan Provider or its
affiliates should make unauthorized references or representations, Plan
Provider agrees to indemnify and hold harmless the Funds, A I M
Management Group Inc. and its subsidiaries from any claims, losses,
expenses or liability arising in any way out of or connected in any way
with such references or representations.
-2-
<PAGE> 3
6. TERMINATION
(a) This Agreement may be terminated with respect to any Fund at
any time without any penalty by the vote of a majority of the
directors of such Fund who are "disinterested directors", as
that term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act"), or by a vote of a majority of the
Fund's outstanding shares, on sixty (60) days' written notice.
It will be terminated by any act which terminates either the
Fund's Distribution Plan, or any related agreement thereunder,
and in any event, it shall terminate automatically in the
event of its assignment as that term is defined in the 1940
Act.
(b) Either party may terminate this Agreement upon ninety (90)
days' prior written notice to the other party at the address
specified below.
7. INDEMNIFICATION
(a) Plan Provider agrees to indemnify and hold harmless the
Distributor, its affiliates, the Funds, the Funds' investment
advisors, and each of their directors, officers, employees,
agents and each person, if any, who controls them within the
meaning of the Securities Act of 1933, as amended (the
"Securities Act"), (the "Distributor Indemnitees") against any
losses, claims, damages, liabilities or expenses to which a
Distributor Indemnitee may become subject insofar as those
losses, claims, damages, liabilities or expenses or actions in
respect thereof, arise out of or are based upon (i) Plan
Provider's negligence or willful misconduct in performing the
Services, (ii) any breach by Plan Provider of any material
provision of this Agreement, or (iii) any breach by Plan
Provider of a representation, warranty or covenant made in
this Agreement; and Plan Provider will reimburse the
Distributor Indemnitee for any legal or other expenses
reasonably incurred, as incurred, by them in connection with
investigating or defending such loss, claim or action. This
indemnity agreement will be in addition to any liability which
Plan Provider may otherwise have.
(b) Distributor agrees to indemnify and hold harmless Plan
Provider and its affiliates, and each of its directors,
officers, employees, agents and each person, if any, who
controls Plan Provider within the meaning of the Securities
Act (the "Plan Provider Indemnitees") against any losses,
claims, damages, liabilities or expenses to which a Plan
Provider Indemnitee may become subject insofar as such losses,
claims, damages, liabilities or expenses (or actions in
respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact
contained in the Registration Statement or Prospectus of a
Fund, or the omission or the alleged omission to state therein
a material fact required to be stated therein or necessary to
make statements therein not misleading, (ii) any breach by
Distributor of any material provision of this Agreement, (iii)
Distributor's negligence or willful misconduct in carrying out
its duties and responsibilities under this Agreement, or (iv)
any breach by Distributor of a representation, warranty or
covenant made in this Agreement; and Distributor will
reimburse the Plan Provider Indemnitees for any legal or other
expenses reasonably incurred, as incurred, by them, in
connection with investigating or defending any such loss,
claim or action. This indemnity agreement will be in addition
to any liability which Distributor may otherwise have.
-3-
<PAGE> 4
(c) If any third party threatens to commence or commences any
action for which one party (the "Indemnifying Party") may be
required to indemnify another person hereunder (the
"Indemnified Party"), the Indemnified Party shall promptly
give notice thereof to the Indemnifying Party. The
Indemnifying Party shall be entitled, at its own expense and
without limiting its obligations to indemnify the Indemnified
Party, to assume control of the defense of such action with
counsel selected by the Indemnifying Party which counsel shall
be reasonably satisfactory to the Indemnified Party. If the
Indemnifying Party assumes the control of the defense, the
Indemnified Party may participate in the defense of such claim
at its own expense. Without the prior written consent of the
Indemnified Party, which consent shall not be withheld
unreasonably, the Indemnifying Party may not settle or
compromise the liability of the Indemnified Party in such
action or consent to or permit the entry of any judgment in
respect thereof unless in connection with such settlement,
compromise or consent each Indemnified Party receives from
such claimant an unconditional release from all liability in
respect of such claim.
8. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Texas applicable to agreements fully
executed and to be performed therein.
9. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each party represents that it is free to enter into this Agreement and
that by doing so it will not breach or otherwise impair any other
agreement or understanding with any other person, corporation or other
entity. Each party represents that it has full power and authority
under applicable law, and has taken all action necessary to enter into
and perform this Agreement and the person executing this Agreement on
its behalf is duly authorized and empowered to execute and deliver this
Agreement. Additionally, each party represents that this Agreement,
when executed and delivered, shall constitute its valid, legal and
binding obligation, enforceable in accordance with its terms.
Plan Provider further represents, warrants, and covenants that:
(a) it is registered as a transfer agent pursuant to Section 17A
of the Securities Exchange Act of 1934, as amended (the "1934
Act"), or is not required to be registered as such;
(b) the arrangements provided for in this Agreement will be
disclosed to the Plan Representatives; and
(c) it is registered as a broker-dealer under the 1934 Act or any
applicable state securities laws, or, including as a result of
entering into and performing the services set forth in this
Agreement, is not required to be registered as such.
Distributor further represents, warrants and covenants, that:
(a) it is registered as a broker-dealer under the 1934 Act and any
applicable state securities laws; and
-4-
<PAGE> 5
(b) the Funds' advisors are registered as investment advisors
under the Investment Advisers Act of 1940, the Funds are
registered as investment companies under the 1940 Act and Fund
Shares are registered under the Securities Act.
10. MODIFICATION
This Agreement and Exhibit A may be amended at any time by Distributor
without Plan Provider's consent by Distributor mailing a copy of an
amendment to Plan Provider at the address set forth below. Such
amendment shall become effective thirty (30) days from the date of
mailing unless this Agreement is terminated by the Plan Provider within
such thirty (30) days.
11. ASSIGNMENT
This Agreement shall not be assigned by a party hereto, without the
prior written consent of the other parties hereto, except that a party
may assign this Agreement to an affiliate having the same ultimate
ownership as the assigning party without such consent.
12. SURVIVAL
The provisions of Sections 1, 5 and 7 shall survive termination of this
Agreement.
-5-
<PAGE> 6
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their duly
authorized officers as of the date first above written.
(PLAN PROVIDER)
By:
-----------------------------------
Print Name:
---------------------------
Title:
--------------------------------
Address:
------------------------------
A I M DISTRIBUTORS, INC.
(DISTRIBUTOR)
By:
-----------------------------------
Print Name:
---------------------------
Title:
--------------------------------
11 Greenway Plaza
Suite 100
Houston, Texas 77210
<PAGE> 7
EXHIBIT A
For the term of this Agreement, Distributor, or its affiliates, shall
pay Plan Provider the following amounts for each of the following Funds with
respect to the average daily net asset value of the Class A Shares of the Plans'
balances for the prior quarter:
<TABLE>
<CAPTION>
FUND ANNUAL FEE
- ---- ----------
<S> <C>
AIM Advisor Funds, Inc. (Class A Shares Only)
AIM Advisor Flex Fund .25%
AIM Advisor International Value Fund .25%
AIM Advisor Large Cap Value Fund .25%
AIM Advisor MultiFlex Fund .25%
AIM Advisor Real Estate Fund .25%
AIM Equity Funds, Inc. (Class A Shares Only)
AIM Aggressive Growth Fund .25%
AIM Blue Chip Fund .25%
AIM Capital Development Fund .25%
AIM Charter Fund .25%
AIM Constellation Fund .25%
AIM Large Cap Growth Fund .25%
AIM Weingarten Fund .25%
AIM Funds Group (Class A Shares Only)
AIM Balanced Fund .25%
AIM Global Utilities Fund .25%
AIM High Yield Fund .25%
AIM Income Fund
.25%
AIM Intermediate Government Fund .25%
AIM Municipal Bond Fund .25%
AIM Select Growth Fund .25%
AIM Value Fund .25%
AIM Growth Series (Class A Shares Only)
AIM Basic Value Fund .25%
AIM Europe Growth Fund .25%
AIM Japan Growth Fund .25%
AIM Mid Cap Equity Fund .25%
AIM New Pacific Growth Fund .25%
AIM Small Cap Growth Fund .25%
AIM International Funds, Inc. (Class A Shares Only)
AIM Asian Growth Fund .25%
AIM European Development Fund .25%
AIM Global Aggressive Growth Fund .25%
AIM Global Growth Fund .25%
AIM Global Income Fund .25%
AIM International Equity Fund .25%
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
AIM Investment Funds (Class A Shares Only)
<S> <C>
AIM Developing Markets Fund .25%
AIM Emerging Markets Debt Fund .25%
AIM Global Consumer Products and Services Fund .25%
AIM Global Financial Services Fund .25%
AIM Global Government Income Fund .25%
AIM Global Growth & Income Fund .25%
AIM Global Health Care Fund .25%
AIM Global Infrastructure Fund .25%
AIM Global Resources Fund .25%
AIM Global Telecommunications Fund .25%
AIM Latin American Growth Fund .25%
AIM Strategic Income Fund .25%
AIM Investment Securities Funds (Class A Shares Only)
AIM High Yield Fund II .25%
AIM Limited Maturity Treasury Fund .15%
AIM Series Trust (Class A Shares Only)
AIM Global Trends Fund .25%
AIM Special Opportunities Funds (Class A Shares Only)
AIM Small Cap Opportunities Fund .25%
</TABLE>
Distributor or its affiliates shall calculate the amount of quarterly
payment and shall deliver to Plan Provider a quarterly statement showing the
calculation of the quarterly amounts payable to Plan Provider. Distributor
reserves the right at any time to impose minimum fee payment requirements before
any quarterly payments will be made to Plan Provider. Payment to Plan Provider
shall occur within 30 days following the end of each quarter. All parties agree
that the payments referred to herein are for record keeping and administrative
services only and are not for legal, investment advisory or distribution
services.
Minimum Payments: $50 (with respect to all Funds in the aggregate.)
<PAGE> 1
EXHIBIT 11(a)
[KIRKPATRICK & LOCKHART LLP LETTERHEAD]
R. Charles Miller
(202) 778-9372
[email protected]
MAY 28,1999
AIM Eastern Europe Fund
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Ladies and Gentleman:
You have requested our opinion, as counsel to AIM Developing Markets Fund
("Acquiring Fund"), a series of AIM Investment Funds ("Trust"), a Delaware
business trust, as to certain matters regarding the issuance of Shares of the
Trust in connection with the reorganization of AIM Eastern Europe Fund
("Acquired Fund"), a Massachusetts business trust, into Acquiring Fund, as
provided for in the Agreement and Plan of Reorganization and Termination
between the Trust, acting on behalf of Acquiring Fund, and Acquired Fund
("Plan"). The Plan provides for Acquired Fund to transfer all of its assets to
Acquiring Fund in exchange solely for the issuance of Shares and Acquiring
Fund's assumption of the liabilities of Acquired Fund. (As used in this letter,
the term "Shares" means the Class A shares of beneficial interest in Acquiring
Fund to be issued in connection with the Plan.)
As such counsel, we have examined certified or other copies, believed by us
to be genuine, of the Trust's Agreement and Declaration of Trust dated May 7,
1998, as amended ("Agreement"), Amended and Restated Bylaws, and such other
documents relating to its organization and operation as we have deemed relevant
to our opinion, as set forth herein. Our opinion is limited to the laws and
facts in existence on the date hereof, and it is further limited to the laws
(other than the conflict of law rules) of the State of Delaware that in our
experience are normally applicable to the issuance of shares of beneficial
interest by business trusts and to the Securities Act of 1933, as amended
("1933 Act"), the Investment Company Act of 1940, as amended ("1940 Act") and
the rules and regulations of the Securities and Exchange Commission ("SEC")
thereunder. With respect to matters governed by the laws of the State of
Delaware (excluding the securities laws thereof), we have relied solely on the
opinion of Potter Anderson & Corroon LLP, Delaware counsel to the Trust, an
executed copy of which is appended hereto as Exhibit A.
<PAGE> 2
AIM Eastern Europe Fund
May 28, 1999
Page 2
Based on the foregoing, we are of the opinion that the issuance of the
Shares has been duly authorized by the Trust; and that, when issued and sold in
accordance with the terms contemplated by the Trust's registration statement on
Form N-14 ("Registration Statement"), including receipt by the Trust of full
payment for the Shares and compliance with the 1933 Act and the 1940 Act, the
Shares will have been legally issued, fully paid, and non-assessable.
We hereby consent to this opinion accompanying the Registration
Statement when it is filed with the SEC and to the reference to our firm in the
Registration Statement.
Very truly yours,
KIRKPATRICK & LOCKHART LLP
By: /s/ Arthur J. Brown
-------------------------------------
Arthur J. Brown
<PAGE> 1
EXHIBIT 11(b)
[POTTER ANDERSON & CORROON LLP LETTERHEAD]
May 28, 1999
AIM Investment Funds
11 Greenway Plaza
Suite 100
Houston, TX 77046
Re: Reorganization of AIM Eastern Europe Fund
into AIM Developing Markets Fund
Ladies and Gentlemen:
We have acted as special Delaware counsel for AIM Investment Funds, a
Delaware business trust (the "Trust"), in connection with the proposed issuance
of Class A shares of beneficial interest (collectively, the "Shares") in AIM
Developing Markets Fund, a series of the Trust (the "Acquiring Fund"), pursuant
to that certain Plan of Reorganization and Termination dated May __, 1999 (the
"Plan of Reorganization") by and between the Trust, on behalf of the Acquiring
Fund, and AIM Eastern Europe Fund, a Massachusetts business trust (the
"Target"). The Plan of Reorganization (a copy of which is attached hereto)
provides for the Target to transfer all of its assets to the Acquiring Fund in
exchange solely for the issuance of the Shares and the Acquiring Fund's
assumption of all of the liabilities of the Target. Initially, capitalized terms
used herein and not otherwise defined are used herein as defined in that certain
Agreement and Declaration of Trust dated as of May 7, 1998, entered into among
William J. Guilfoyle, C. Derek Anderson, Frank S. Bayley, Arthur C. Patterson,
and Ruth H. Quigley, as Trustees, and the Shareholders of the Trust, and any
amendment thereto (the "Declaration").
For purposes of giving the opinions hereinafter set forth, we have
examined only the following documents and have conducted no independent factual
investigation of our own:
1. The Certificate of Trust for the Trust, dated as of May 7, 1998, as
filed in the Office of the Secretary of State of the State of Delaware (the
"Secretary of State") on May 7, 1998;
<PAGE> 2
To Each of the Addressees Listed
on Schedule I Attached Hereto
May 28, 1999
Page 2
2. The Declaration;
3. The Amended and Restated By-laws of the Trust (the "By-laws");
4. Resolutions of the Trustees (the "Reorganization Resolutions")
approving the Plan of Reorganization;
5. The Plan of Reorganization;
6. Resolutions of the Trustees (the "18f-3 Resolutions" and, together
with the Reorganization Resolutions, the "Resolutions") adopting that certain
plan pursuant to Rule 18f-3 under the Investment Company Act of 1940, as amended
(the "18f-3 Plan");
7. A Certificate of Good Standing for the Trust, dated May 28, 1999,
obtained from the Secretary of State; and
8. The registration statement on Form N-14 filed with the Securities
and Exchange Commission on or about May 28, 1999, pursuant to the Securities Act
of 1933, as amended, covering the Shares (the "Registration Statement").
As to certain facts material to the opinions expressed herein, we have
relied upon the representations and warranties contained in the documents
examined by us.
Based upon the foregoing, and upon an examination of such questions of
law of the State of Delaware as we have considered necessary or appropriate, and
subject to the assumptions, qualifications, limitations and exceptions set forth
herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act (the
"Delaware Act").
2. The Acquiring Fund has been duly created and is validly existing as
a series under Section 3804 of the Delaware Act.
3. The Declaration constitutes the legal, valid and binding obligation
of the Trustees, enforceable against the Trustees, in accordance with its terms.
4. Subject to the other qualifications set forth herein (including,
without limitation, paragraph 5 below), the Shares have been duly authorized and
when (a) the actions referred to in the Plan of Reorganization shall have
occurred (including the due approval of the Plan of Reorganization by the
Shareholders of the Target), and (b) the Shares shall have been
<PAGE> 3
To Each of the Addresses Listed
on Schedule I Attached Hereto
May 28, 1999
Page 3
otherwise issued in accordance with the Declarations, the Resolutions, the Plan
of Reorganization, the 18f-3 Plan, and the By-laws, such Shares will be validly
issued, fully paid, and nonassessable undivided beneficial interests in the
assets of the Acquiring Fund.
5. When and if the actions referred to in paragraph 4 have
occurred, the holders of the Shares as beneficial owners of the Shares will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware, except that such holders of Shares shall be obligated
to (a) pay any transfer taxes applicable to the issuance of the Shares in a
name other than the name of the registered holder on the books of the Target,
(b) pay their own expenses, if any, incurred in connection with the
transactions contemplated by the Plan of Reorganization, and (c) provide
indemnity and/or security in connection with the issuance of replacement
certificates for lost or destroyed certificates, if any, representing such
Shares, if such holders request certificates in accordance with the By-laws and
such certificates are lost.
In addition to the assumptions and qualifications set forth above,
all of the foregoing opinions contained herein are subject to the following
assumptions, qualifications, limitations and exceptions:
a. The foregoing opinions are limited to the laws of the State
of Delaware presently in effect, excluding the securities laws thereof. We have
not considered and express no opinion on the laws of any other jurisdiction,
including, without limitation, federal laws and rules and regulations relating
thereto.
b. We have assumed that the Plan of Reorganization does not
contravene (i) any contractual restriction binding on the Trust, the Acquiring
Fund, or the Target, or (ii) any law, rule or regulation applicable to the
Trust, the Acquiring Fund, or the Target (exclusive of any Delaware law, rule
or regulation applicable to the Acquiring Fund or the Trust). In addition, we
have assumed the legal capacity of any natural persons who are parties to any
of the documents examined by us.
c. The foregoing opinion regarding the enforceability of the
Declaration is subject to (i) applicable bankruptcy, insolvency, moratorium,
fraudulent conveyance, fraudulent transfer and similar laws relating to or
affecting creditors rights generally including, without limitation, the Delaware
Uniform Fraudulent Conveyance Act, the provisions of the United States
Bankruptcy Code and the Delaware insolvency statutes, (ii) principles of equity
including, without limitation, concepts of materiality, good faith, fair
dealing, conscionability and reasonableness (regardless of whether such
enforceability is considered in a proceeding in equity or at law), (iii)
applicable law relating to fiduciary duties, and (iv) public policy limitations
with respect to exculpation, contribution and indemnity provisions.
<PAGE> 4
To Each of the Addresses Listed
on Schedule I Attached Hereto
May 28, 1999
Page 4
d. We have assumed that all signatures on documents examined by us are
genuine, that all documents submitted to us as originals are authentic and that
all documents submitted to us as copies conform with the originals.
e. We have assumed that the Declaration, the By-laws, the Plan of
Reorganization, the Resolutions and the 18f-3 Plan, collectively, constitute the
entire agreement with respect to the subject matter thereof, including (i) with
respect to the creation, dissolution and winding up of the Trust and the
Acquiring Fund, (ii) the terms applicable to the 18f-3 Plan Shares, and (iii)
the power and authority of the Trustees.
f. We have assumed that to the extent any additional rights and/or
preferences are stated in the 18f-3 Plan, such additional rights and/or
preferences (i) are enforceable in accordance with their terms, and (ii) do not
conflict with the Certificate of Trust, the Declaration, the By-laws, the Plan
of Reorganization, or any statute, rule or regulation applicable to the trust or
the Acquiring Fund.
g. We have assumed that the Plan of Reorganization will be duly adopted
by the Shareholders of the Target and that the transactions contemplated thereby
will be enforceable against the Target, the Acquiring Fund, and the Trust in
accordance with their terms.
h. We have assumed that no event set forth in Section 9.3(a) of the
Declaration has occurred with respect to the Trust or any Portfolio.
i. Notwithstanding any provision in the Declaration to the contrary, we
note that upon the occurrence of an event set forth in Section 9.3(a) thereof
with respect to the Trust or the Acquiring Fund, as the case may be, the Trust
or the Acquiring Fund, as applicable, cannot make any payments or distributions
to the Shareholders thereof until their respective creditors' claims are either
paid in full or reasonable provision for payment thereof has been made.
j. With respect to the enforceability of any provision of the
Declaration wherein the parties provide for the appointment of a liquidator, we
note that upon the application of any beneficial owner, the Delaware Court of
Chancery has the power, upon cause shown, to wind up the affairs of a Delaware
business trust or series thereof and in connection therewith to appoint a
liquidating trustee other than the one agreed to by the beneficial owners
thereof.
k. We have assumed that none of the By-laws, the Resolutions, the Plan
of Reorganization, or the 18f-3 Plan has been amended, modified, or revoked in
any manner
<PAGE> 5
To Each of the Addresses Listed
on Schedule I Attached Hereto
May 28, 1999
Page 5
from the date of its adoption, and that each of the By-laws, the Resolutions,
the Plan of Reorganization, and the 18f-3 Plan remains in full force and effect
on the date hereof.
l. We have assumed that the Trust maintains separate and
distinct records for the Acquiring Fund and that the Trust and the Trustees
hold and account for the assets belonging to the Acquiring Fund separately from
the other assets of any other portfolio and the assets of the Trust generally,
if any.
m. We note that we do not assume responsibility for the
contents of the Registration Statement.
This opinion is rendered solely for your benefit in connection with
the matters set forth herein and, without our prior written consent, may not be
furnished (except that it may be furnished to any federal, state or local
regulatory agencies or regulators having appropriate jurisdiction and entitled
to such disclosure) or quoted to, or relied upon by, any other person or entity
for any purpose. Kirkpatrick & Lockhart LLP may rely on this opinion with
respect to the matters set forth herein in connection with its opinion being
delivered on even date herewith.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In giving the
foregoing consent, we do not thereby admit that we come within the category of
Persons whose consent is required under Section 7 of the Securities Act of
1933, as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
/s/ POTTER ANDERSON & CORROON LLP
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of AIM Investment Funds:
RE: AIM Developing Markets Fund
AIM Eastern Europe Europe Fund
We hereby consent to the incorporation by reference of our reports
dated December 11, 1998 and December 18, 1998 for the AIM Developing Markets
Fund and Eastern Europe Fund, respectively, on our audits of the financial
statements and financial highlights of the above referenced funds, as of
October 31, 1998, which are incorporated by reference into this AIM Investment
Funds' Registration Statement on Form N-14 under the Securities Act of 1933, as
amended. We also consent to the references to our Firm under the caption
"Financial Highlights" and as "Experts" under the caption "Financial
Statements."
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
May 28, 1999
<PAGE> 1
EXHIBIT 17(a)
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY
TODAY!
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES.
THE TRUSTEES RECOMMEND VOTING FOR ALL OF THE PROPOSALS AND
FOR THE ELECTION OF ROBERT H. GRAHAM TO THE BOARD OF TRUSTEES.
TO VOTE, FILL IN THE BOX COMPLETELY. EXAMPLE: [X]
<TABLE>
<CAPTION>
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
1. Approval of an Agreement and Plan of Reorganization and [ ] [ ] [ ]
Termination providing for the merger of AIM Eastern Europe
Fund into AIM Developing Markets Fund, a series of
AIM Investment Funds.
FOR WITHHOLD
2. Election of Robert H. Graham to AIM Eastern Europe Fund's [ ] [ ]
Board of Trustees.
FOR AGAINST ABSTAIN
3. Ratification of the selection of PricewaterhouseCoopers LLP [ ] [ ] [ ]
as AIM Eastern Europe Fund's Independent Public Accountants.
4. IN THE DIRECTION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF.
</TABLE>
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- --------------------------------------------------------------------------------
<PAGE> 2
PROXY PROXY SOLICITED BY THE BOARD OF TRUSTEES PROXY
OF AIM EASTERN EUROPE FUND
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS OF
AIM EASTERN EUROPE FUND
August 25, 1999
The undersigned hereby appoints Samuel D. Sirko and Gary T. Crum, and each of
them separately, proxies with the power of substitution to each, and hereby
authorizes them to represent and to vote, as designated below, at the Annual
Meeting of Shareholders of AIM Eastern Europe Fund, to be held on August 25,
1999 at 3:00 p.m., central time, and at any adjournment thereof, all of the
shares of AIM Eastern Europe 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 THE APPROVAL OF ALL OF THE PROPOSALS AND FOR THE ELECTION OF
ROBERT H. GRAHAM TO THE BOARD OF TRUSTEES.
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, sign in the partnership
name.
-------------------------------------
Signature
------------------------------------
Signature (if held jointly)
--------------------------
Dated
