AIM VARIABLE INSURANCE FUNDS INC, DEFS14A, 2000-03-07

AIM VARIABLE INSURANCE FUNDS INC
DEFS14A, 2000-03-07

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<PAGE> 1
SCHEDULE 14A

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __ )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

AIM VARIABLE INSURANCE FUNDS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1) Title of each class of securities to which transaction applies:

-----------------------------------------------------------------------

2) Aggregate number of securities to which transaction applies:

-----------------------------------------------------------------------

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

-----------------------------------------------------------------------

4) Proposed maximum aggregate value of transaction:

-----------------------------------------------------------------------

5) Total fee paid:

-----------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

---------------------------------------------------

2) Form, Schedule or Registration Statement No.:

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3) Filing Party:

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4) Date Filed:

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<PAGE> 2

AIM VARIABLE INSURANCE FUNDS, INC.

AIM V.I. AGGRESSIVE GROWTH FUND
AIM V.I. BALANCED FUND
AIM V.I. BLUE CHIP FUND
AIM V.I. CAPITAL APPRECIATION FUND
AIM V.I. CAPITAL DEVELOPMENT FUND
AIM V.I. DENT DEMOGRAPHIC TRENDS FUND
AIM V.I. DIVERSIFIED INCOME FUND
AIM V.I. GLOBAL GROWTH AND INCOME FUND
AIM V.I. GLOBAL UTILITIES FUND
AIM V.I. GOVERNMENT SECURITIES FUND
AIM V.I. GROWTH AND INCOME FUND
AIM V.I. GROWTH FUND
AIM V.I. HIGH YIELD FUND
AIM V.I. INTERNATIONAL EQUITY FUND
AIM V.I. MONEY MARKET FUND
AIM V.I. TELECOMMUNICATIONS FUND
AIM V.I. VALUE FUND

11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 10, 2000

AIM Variable Insurance Funds, Inc. (the company) is holding a special
meeting of shareholders on Monday, April 10, 2000 at 3:00 p.m., Central time.
The place of the meeting is the company's offices at 11 Greenway Plaza, Suite
100, Houston, Texas 77046-1173.

The company, a Maryland corporation, consists of the following series
portfolios: AIM V.I. Aggressive Growth Fund, AIM V.I. Balanced Fund, AIM V.I.
Blue Chip Fund, AIM V.I. Capital Appreciation Fund, AIM V.I. Capital Development
Fund, AIM V.I. Dent Demographic Trends Fund, AIM V.I. Diversified Income Fund,
AIM V.I. Global Growth and Income Fund, AIM V.I. Global Utilities Fund, AIM V.I.
Government Securities Fund, AIM V.I. Growth and Income Fund, AIM V.I. Growth
Fund, AIM V.I. High Yield Fund, AIM V.I. International Equity Fund, AIM V.I.
Money Market Fund, AIM V.I. Telecommunications Fund and AIM V.I. Value Fund.
This proxy statement relates to all of these series portfolios (together, the
funds).

The purposes of the meeting are as follows:

(1) To elect ten directors, each of whom will serve until his or her successor
is elected and qualified.
<PAGE> 3

(2) To approve an Agreement and Plan of Reorganization which provides for the
reorganization of the company as a Delaware business trust.

(3) To approve a new Master Investment Advisory Agreement with A I M Advisors,
Inc.

(4) To approve changing the fundamental investment restrictions of all funds.

(5) To approve changing the investment objectives of AIM V.I. Aggressive Growth
Fund, AIM V.I. Balanced Fund, AIM V.I. Blue Chip Fund, AIM V.I. Capital
Development Fund, AIM V.I. Diversified Income Fund, AIM V.I. Global Growth
and Income Fund, AIM V.I. Growth and Income Fund, AIM V.I. Money Market Fund
and AIM V.I. Telecommunications Fund so that they are non-fundamental.

(6) To approve changing the investment objectives of AIM V.I. Capital
Appreciation Fund, AIM V.I. Global Utilities Fund, AIM V.I. Government
Securities Fund, AIM V.I. Growth Fund, AIM V.I. International Equity Fund
and AIM V.I. Value Fund and making them non-fundamental.

(7) To ratify the selection of Tait, Weller & Baker as independent accountants
for each of the funds for the fiscal year ending in 2000.

(8) To transact such other business as may properly come before the meeting.

You may vote at the meeting if you are the record owner of shares of a fund
as of the close of business on January 20, 2000. You may give voting
instructions if you are a contract owner who had values allocated to any of the
funds as of the close of business on January 20, 2000. Please fill in, date,
sign and return the proxy card or the voting instruction card you have received
in the enclosed envelope which requires no postage if mailed in the United
States.

It is important that contract owners return signed voting instructions
promptly so that a quorum may be assured. Contract owners who do not send in
voting instructions may receive a telephone call from our proxy solicitor,
Shareholder Communications Corporation, reminding them to submit voting
instructions.

Thank you for your cooperation and continued support.

By order of the Board,

/s/ CAROL F. RELIHAN
Carol F. Relihan
Secretary
March 7, 2000

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AIM VARIABLE INSURANCE FUNDS, INC.

11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
------------------------------------------------------
PROXY STATEMENT
DATED MARCH 7, 2000
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SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 10, 2000

WHO IS ASKING FOR MY VOTE?

The Board of Directors (the Board) of AIM Variable Insurance Funds, Inc.
(the company) is sending you this proxy statement and the enclosed proxy or
voting instruction card (or cards) on behalf of the seventeen separate series
portfolios of the company listed above (together, the funds). The Board is
soliciting your votes for the 2000 special meeting of shareholders of the
company (the meeting).

WHEN AND WHERE WILL THE MEETING BE HELD?

The meeting will be held at the company's offices, 11 Greenway Plaza, Suite
100, Houston, Texas 77046-1173, at 3:00 p.m., Central time, on Monday, April 10,
2000.

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<PAGE> 5

WHAT PROPOSALS APPLY TO MY FUND?

The following table summarizes each proposal to be presented at the meeting
and the funds whose shareholders the Board is soliciting with respect to each
proposal:

<TABLE>
<CAPTION>
PROPOSAL AFFECTED FUNDS
-------- --------------
<C> <S> <C>
1. Electing directors All funds
2. Approving an Agreement and Plan of All funds
Reorganization, under which the company
will reorganize as a Delaware business
trust
3. Approving a new advisory agreement with All funds
A I M Advisors, Inc.
4. Changing the funds' fundamental All funds
investment restrictions
5. Changing the investment objectives of AIM V.I. Aggressive Growth Fund
the funds so that they are (Aggressive Growth), AIM V.I. Balanced
non-fundamental Fund (Balanced), AIM V.I. Blue Chip Fund
(Blue Chip), AIM V.I. Capital
Development Fund (Capital Development),
AIM V.I. Diversified Income Fund
(Diversified Income), Global Growth and
Income, AIM V.I. Growth and Income Fund
(Growth and Income), AIM V.I. Money
Market Fund (Money Market) and AIM V.I.
Telecommunications Fund
(Telecommunications)
6. Changing the investment objectives of AIM V.I. Capital Appreciation Fund
certain funds and making the investment (Capital Appreciation), AIM V.I. Global
objectives non-fundamental Utilities Fund (Global Utilities), AIM
V.I. Government Securities Fund
(Government Securities), AIM V.I. Growth
Fund (Growth), AIM V.I. International
Equity Fund (International Equity) and
AIM V.I. Value Fund (Value)
7. Ratifying the Board's selection of All funds
independent accountants
8. Considering other matters All funds
</TABLE>

WHO IS ELIGIBLE TO VOTE?

The shares of the funds are currently sold only to variable life insurance
separate accounts and variable annuity separate accounts (together, variable
accounts) as a funding vehicle for contracts offered by the variable accounts of
certain life insurance companies. In each case, the life insurance company is
the legal owner of all shares of the funds held by the variable accounts.

In accordance with current law, life insurance company shareholders of the
funds, in effect, pass along their voting rights to owners of variable contracts
issued by the insurance companies. Essentially, each life insurance company
seeks instructions as to how its contract owners wish the company to vote the
funds' shares (i) technically owned by the company but (ii) beneficially owned

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<PAGE> 6

by the contract owners. The life insurance companies communicate directly with
contract owners about the procedures that the companies follow in seeking
instructions and voting shares under the particular variable accounts. The funds
understand that the life insurance companies will vote shares in each variable
account for which no instructions are received in the same proportion to shares
in such variable account for which instructions are received from contract
owners.

The Board is sending this proxy statement, the attached notice of meeting
and the enclosed proxy or voting instruction card on or about March 7, 2000 to
(i) all shareholders who owned shares of common stock of a fund at the close of
business on January 20, 2000 (the record date) and (ii) all contract owners who
had values allocated to any of the funds as of the close of business on January
20, 2000. The number of shares outstanding on the record date for each fund is
in Appendix A. Each share of common stock of a fund that a contract owner
beneficially own entitles the owner to one vote on each proposal set forth in
the table above that applies to that fund (a fractional share has a fractional
vote).

WHAT ARE THE DIFFERENT WAYS CONTRACT OWNERS CAN VOTE?

Voting by Instruction Card

The Board urges contract owners to complete, sign and date the enclosed
voting instruction card and to return it promptly in the envelope provided.

Each variable account that owns shares of any of the funds will vote all of
its shares in accordance with instructions it has timely received from contract
owners who have amounts allocated to such fund(s) on the record date.

The Board has named Robert H. Graham, Gary T. Crum and Lewis F. Pennock as
proxies. If a contract owner properly fills in his or her voting instruction
card and sends it to his or her life insurance company in time to vote, the life
insurance company will authorize the proxies to vote the shares the contract
owner beneficially owns as directed. If a contract owner signs and returns the
voting instruction card but does not make specific choices, the contract owner's
shares attributable to his or her contract will be voted with respect to
Proposals 1 through 8 as recommended by the Board.

If any other matter is presented, the proxies will vote in accordance with
his or her best judgment. At the time this proxy statement was printed, the
Board knew of no matters that needed to be acted on at the meeting other than
those discussed in this proxy statement.

A contract owner who has given voting instructions may revoke them only
through and in accordance with the procedures of the applicable life insurance
company prior to the date of the meeting.

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<PAGE> 7

Voting By Telephone

Contract owners may also vote by telephone if they are contacted by
Shareholder Communications Corporation, the funds' proxy solicitor.

HOW DOES THE BOARD RECOMMEND THAT I VOTE?

The Board recommends that shareholders vote FOR each of the proposals
described in this proxy statement.

WHAT IS THE QUORUM REQUIREMENT?

A quorum of shareholders is necessary to hold a valid meeting. The presence
in person or by proxy of shareholders entitled to cast thirty percent (30%) of
all votes entitled to be cast at the meeting shall constitute a quorum at all
meetings of the shareholders, except with respect to any matter which by law or
the charter of the company requires the separate approval of one or more classes
or series of the capital stock of the company, in which case the holders of
one-third of the shares of each such class or series (or of such classes or
series voting together as a single class) entitled to vote on the matter shall
constitute a quorum.

Abstentions with respect to any proposal will count as present for
establishing a quorum.

WHAT IS THE VOTE NECESSARY TO APPROVE EACH PROPOSAL?

The affirmative vote of a plurality of votes cast is necessary to elect the
directors, meaning that the nominees receiving the most votes will be elected
(Proposal 1). In an uncontested election of directors, the plurality requirement
is not a factor.

The affirmative vote of a majority of the outstanding shares of the company
entitled to vote at the meeting is required to approve the Agreement and Plan of
Reorganization to reorganize the company as a Delaware business trust (Proposal
2). Abstentions will not count as votes cast and will have the effect of votes
against this proposal.

The affirmative vote of a majority of the outstanding voting securities of
each applicable fund, as defined in the Investment Company Act of 1940, as
amended (the 1940 Act), is required to:

- Approve the funds' new advisory agreement (Proposal 3);

- Change the fundamental investment restrictions for the funds (Proposal
4);

- Make nonfundamental the investment objective of each of Aggressive
Growth, Balanced, Blue Chip, Capital Development, Diversified Income,
Global Growth and Income, Growth and Income, Money Market and
Telecommunications (Proposal 5); and

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<PAGE> 8

- Change the investment objective of each of Capital Appreciation, Global
Utilities, Government Securities, Growth, International Equity and Value
(Proposal 6) and make the investment objective non-fundamental.

The 1940 Act defines a majority of the outstanding voting securities of a
fund (a 1940 Act majority) as the lesser of (a) the vote of holders of 67% or
more of the voting securities of the fund present in person or by proxy, if the
holders of more than 50% of the outstanding voting securities of the fund are
present in person or by proxy, or (b) the vote of the holders of more than 50%
of the outstanding voting securities of the fund. Abstentions will not count as
votes cast and will have the effect of votes against Proposals 3 through 6.

The affirmative vote of a majority of votes cast is necessary to ratify the
selection of Tait, Weller & Baker as your fund's independent accountants
(Proposal 7). Abstentions will not count as votes cast and will have no effect
on the outcome of the vote.

CAN THE MEETING BE ADJOURNED?

The proxies may propose to adjourn the meeting to permit further
solicitation of proxies or for other purposes. Any such adjournment will require
the affirmative vote of a majority of the votes cast.

PROPOSAL 1: ELECTION OF DIRECTORS

WHICH FUNDS' SHAREHOLDERS WILL VOTE ON THE ELECTION OF DIRECTORS?

Proposal 1 applies to all shareholders of all funds.

WHO ARE THE NOMINEES FOR DIRECTOR?

For election of directors at the meeting, the Board has approved the
nomination of Charles T. Bauer, Bruce L. Crockett, Owen Daly II, Edward K. Dunn,
Jr., Jack M. Fields, Carl Frischling, Robert H. Graham, Prema Mathai-Davis,
Lewis F. Pennock and Louis S. Sklar, each to serve as director until his or her
successor is elected and qualified.

The proxies will vote for the election of these nominees unless your
insurance company has been authorized by you pursuant to your voting instruction
card to withhold authority to vote for any or all of them. Each of the nominees
has indicated that he or she is willing to serve as a director. If any or all of
the nominees should become unavailable for election due to events not now known
or anticipated, the persons named as proxies will vote for such other nominee or
nominees as the directors who are not interested persons of the company, as
defined in the 1940 Act (the independent directors), may recommend.

All of the nominees presently are directors of the company. The nominees
serve as directors, trustees or officers of the following open-end management

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investment companies advised or managed by A I M Advisors, Inc. (AIM): AIM
Advisor Funds, Inc., AIM Equity Funds, Inc., AIM Funds Group, AIM International
Funds, Inc., AIM Investment Securities Funds, AIM Special Opportunities Funds,
AIM Summit Fund, Inc., AIM Tax-Exempt Funds, Inc., AIM Variable Insurance Funds,
Inc., Short-Term Investments Co., Short-Term Investments Trust and Tax-Free
Investments Co. (these investment companies and their series portfolios, if any,
are referred to collectively as the AIM funds). Robert H. Graham also serves as
a director, or trustee, and officer of other open-end and closed-end management
investment companies managed or advised by AIM. No director or nominee is a
party adverse to the company or any of its affiliates in any material pending
legal proceedings, nor does any director or nominee have an interest materially
adverse to the company.

The following table sets forth information concerning the nominees:

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING PAST
NAME, ADDRESS AND AGE DIRECTOR SINCE 5 YEARS
- --------------------- ------------------ --------------------------------------
<S> <C> <C>
*Charles T. Bauer (81) January 22, 1993 Director and Chairman, A I M
11 Greenway Plaza Management Group Inc.; A I M Advisors,
Suite 100 Inc., A I M Capital Management, Inc.;
Houston, TX 77046-1173 A I M Distributors, Inc.; A I M Fund
Services, Inc. and Fund Management
Company; and Executive Vice Chairman
and Director, AMVESCAP PLC.
Bruce L. Crockett (55) February 25, 1993 Director, ACE Limited (insurance
906 Frome Lane company). Formerly, Director,
McLean, VA 22102 President and Chief Executive Officer,
COMSAT Corporation; and Chairman,
Board of Governors of INTELSAT
(international communications
company).
Owen Daly II (75) February 25, 1993 Formerly, Director, Cortland Trust
Six Blythewood Road Inc. (investment company), CF & I
Baltimore, MD 21210 Steel Corp., Monumental Life Insurance
Company and Monumental General
Insurance Company; and Chairman of the
Board of Equitable Bancorporation.
Edward K. Dunn, Jr. (64) March 10, 1998 Chairman of the Board of Directors,
2 Hopkins Plaza, 8th Mercantile Mortgage Corporation.
Floor, Suite 805 Formerly, Vice Chairman of the Board
Baltimore, MD 21201 of Directors and President and Chief
Operating Officer, Mercantile-Safe
Deposit & Trust Co.; and President,
Mercantile Bankshares.
</TABLE>

* Mr. Bauer is an interested person of AIM and the company, as defined in the
1940 Act, primarily because of his positions with AIM and its affiliated
companies, as set forth above, and through his ownership of stock of
AMVESCAP PLC, which, through A I M Management Group Inc., owns
all of the outstanding stock of AIM.
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<PAGE> 10

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING PAST
NAME, ADDRESS AND AGE DIRECTOR SINCE 5 YEARS
- --------------------- ------------------ --------------------------------------
<S> <C> <C>
Jack M. Fields (48) March 11, 1997 Chief Executive Officer, Texana
Jetero Plaza, Suite E Global, Inc. (foreign trading company)
8810 Will Clayton Parkway and Twenty First Century Group, Inc.
Humble, TX 77338 (a governmental affairs company); and
Director, Telscape International and
Administaff. Formerly, Member of the
U.S. House of Representatives.
**Carl Frischling (63) May 1, 1993 Partner, Kramer Levin Naftalis &
919 Third Avenue Frankel LLP (law firm). Formerly
New York, NY 10022 Partner, Reid & Priest (law firm).
***Robert H. Graham (53) January 22, 1993 Director, President and Chief
11 Greenway Plaza Executive Officer, A I M Management
Suite 100 Group Inc.; Director and President,
Houston, TX 77046-1173 A I M Advisors, Inc.; Director and
Senior Vice President, A I M Capital
Management, Inc., A I M Distributors,
Inc., A I M Fund Services, Inc. and
Fund Management Company; and Director
and Chief Executive Officer, Managed
Products, AMVESCAP PLC.
Prema Mathai-Davis (49) September 10, 1998 Chief Executive Officer, YWCA of the
350 Fifth Avenue, Suite U.S.A.
301
New York, NY 10118
Lewis F. Pennock (57) February 25, 1993 Partner, Pennock & Cooper (law firm).
6363 Woodway, Suite 825
Houston, TX 77057
Louis S. Sklar (60) February 25, 1993 Executive Vice President, Development
The Williams Tower and Operations, Hines Interests
50th Floor Limited Partnership (real estate
2800 Post Oak Boulevard development).
Houston, TX 77056
</TABLE>

** Mr. Frischling is an interested person of the company, as defined in the
1940 Act, primarily because of payments received by his law firm from the
company for services to the independent directors of the company.

*** Mr. Graham is an interested person of AIM and the company, as defined in the
1940 Act, primarily because of his positions with AIM and its affiliated
companies, as set forth above, and through his ownership of stock of
AMVESCAP PLC, which, through A I M Management Group Inc., owns all of the
outstanding stock of AIM.

WHAT ARE THE RESPONSIBILITIES OF THE BOARD?

The Board is responsible for the general oversight of the funds' business
and for assuring that the funds are managed in the best interests of each fund's
shareholders. The Board periodically reviews the funds' investment performance
as well as the quality of other services provided to the funds and their
shareholders by each of the fund's service providers, including AIM and its
affiliates. At least annually, the Board reviews the fees paid by the company
for these services and the overall level of the funds' operating expenses.

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WHY ARE DIRECTORS BEING ELECTED AT THE PRESENT TIME?

Under the 1940 Act, the Board may fill vacancies on the Board or appoint
new directors only if, immediately thereafter, at least two-thirds of the
directors will have been elected by shareholders. Currently, seven of the
company's ten directors have been elected by shareholders. As directors retire,
resign or otherwise cease their service as directors in the future, the company
may be unable to fill the vacancies created by such action because three of the
company's ten directors have not been elected by shareholders. To provide the
Board with the flexibility to fill vacancies created when directors cease their
service as directors, and in light of the fact that only seven of the company's
directors have been elected by shareholders, the Board believes it is
appropriate for shareholders to elect directors at the present time.

HOW LONG CAN DIRECTORS SERVE ON THE BOARD?

Directors generally hold office until their successors are elected and
qualified. Pursuant to a policy adopted by the Board, each duly elected or
appointed independent director may continue to serve as a director until
December 31 of the year in which the director turns 72. Independent directors
who were age 65 or older and serving on the board of one or more of the AIM
funds when the policy was initially adopted in 1992 may continue to serve until
December 31 of the year in which the director turns 75. A director of the
company may resign or be removed for cause by a vote of the holders of a
majority of the outstanding shares of the company at any time. A majority of the
Board may extend from time to time the retirement date of a director. The Board
has agreed to extend the retirement date of Mr. Daly, who otherwise would have
retired December 31, 2000, to December 31, 2001. In making this decision, the
Board took into account Mr. Daly's experience and active participation as a
director.

WHAT ARE SOME OF THE WAYS IN WHICH THE BOARD REPRESENTS MY INTERESTS?

The Board seeks to represent shareholder interests by:

- reviewing each fund's investment performance with the fund's managers;

- reviewing the quality of the various other services provided to the funds
and their shareholders by each of the funds' service providers, including
AIM and its affiliates;

- discussing with senior management of AIM steps being taken to address any
performance deficiencies;

- reviewing the fees paid to AIM and its affiliates to ensure that such
fees remain reasonable and competitive with those of other mutual funds,
while at the same time providing sufficient resources to continue to
provide high-quality services in the future;

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<PAGE> 12

- monitoring potential conflicts between the funds and AIM and its
affiliates to ensure that the funds continue to be managed in the best
interests of their shareholders; and

- monitoring potential conflicts among funds to ensure that shareholders
continue to realize the benefits of participation in a large and diverse
family of funds.

WHAT ARE THE COMMITTEES OF THE BOARD?

The standing Committees of the Board are the Audit Committee, the
Capitalization Committee, the Investments Committee and the Nominating and
Compensation Committee.

The members of the Audit Committee are Messrs. Crockett, Daly, Dunn
(Chairman), Fields, Frischling, Pennock and Sklar and Dr. Mathai-Davis. The
Audit Committee is responsible for:

- considering management's recommendations of independent accountants for
each fund and evaluating such accountants' performance, costs and
financial stability;

- with AIM, reviewing and coordinating audit plans prepared by the funds'
independent accountants and management's internal audit staff; and

- reviewing financial statements contained in periodic reports to
shareholders with the funds' independent accountants and management.

The members of the Capitalization Committee are Messrs. Bauer, Graham
(Chairman) and Pennock. The Capitalization Committee is responsible for:

- increasing or decreasing the aggregate number of shares of any class of
the company's common stock by classifying and reclassifying the company's
authorized but unissued shares of common stock, up to the company's
authorized capital;

- fixing the terms of such classified or reclassified shares of common
stock; and

- issuing such classified or reclassified shares of common stock upon the
terms set forth in the applicable fund's prospectus, up to the company's
authorized capital.

The members of the Investments Committee are Messrs. Bauer, Crockett, Daly,
Dunn, Fields, Frischling, Pennock and Sklar (Chairman) and Dr. Mathai-Davis. The
Investments Committee is responsible for:

- overseeing AIM's investment-related compliance systems and procedures to
ensure their continued adequacy; and

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<PAGE> 13

- considering and acting, on an interim basis between meetings of the full
Board, on investment-related matters requiring Board consideration,
including dividends and distributions, brokerage policies and pricing
matters.

The members of the Nominating and Compensation Committee are Messrs.
Crockett (Chairman), Daly, Dunn, Fields, Pennock and Sklar and Dr. Mathai-Davis.
The Nominating and Compensation Committee is responsible for:

- considering and nominating individuals to stand for election as
independent directors as long as the company maintains a distribution
plan pursuant to Rule 12b-1 under the 1940 Act;

- reviewing from time to time the compensation payable to the independent
directors; and

- making recommendations to the Board regarding matters related to
compensation, including deferred compensation plans and retirement plans
for the independent directors.

The Nominating and Compensation Committee will consider nominees
recommended by a shareholder to serve as directors, provided (i) that such
person is a shareholder of record at the time he or she submits such names and
is entitled to vote at the meeting of shareholders at which directors will be
elected, and (ii) that the Nominating and Compensation Committee or the Board,
as applicable, shall make the final determination of persons to be nominated.

HOW OFTEN DOES THE BOARD MEET?

The Board typically conducts regular meetings nine times a year to review
the operations of the funds and of the other AIM funds. Typically, five of these
nine meetings are held in person, each over a two-day period. One or more
Committees of the Board generally meets in conjunction with each in-person
meeting of the Board. In addition, the Board or any Committee may hold special
meetings by telephone or in person to discuss specific matters that may require
action prior to the next regular meeting.

During the fiscal year ended December 31, 1999, the Board held 9 meetings,
the Audit Committee held 5 meetings, the Investments Committee held 4 meetings
and the Nominating and Compensation Committee held 5 meetings. The
Capitalization Committee did not meet. All of the current directors and
Committee members then serving attended at least 75% of the meetings of the
Board and applicable Committees, if any, held during the fiscal year ended
December 31, 1999.

WHAT ARE THE DIRECTORS PAID FOR THEIR SERVICES?

Each director is reimbursed for expenses incurred in connection with each
meeting of the Board or any Committee attended. Each director who is not also

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<PAGE> 14

an officer of the company is compensated for his or her services according to a
fee schedule which recognizes the fact that such director also serves as a
director or trustee of all of the other AIM funds. Each such director receives a
fee, allocated among the AIM funds for which he or she serves as a director or
trustee, which consists of an annual retainer component and a meeting fee
component.

Set forth below is information regarding compensation paid or accrued for
each director:

<TABLE>
<CAPTION>
TOTAL
RETIREMENT BENEFITS COMPENSATION
AGGREGATE COMPENSATION ACCRUED BY ALL FROM ALL
DIRECTOR FROM THE COMPANY(1) AIM FUNDS(2) AIM FUNDS(3)
- -------- ---------------------- ------------------- ------------
<S> <C> <C> <C>
Charles T. Bauer..... $ 0 $ 0 $ 0
Bruce L. Crockett.... 14,751 37,485 103,500
Owen Daly II......... 14,751 122,898 103,500
Edward K. Dunn
Jr. ............... 14,751 0 103,500
Jack M. Fields....... 14,473 15,826 101,500
Carl Frischling(4)... 14,751 97,791 103,500
Robert H. Graham..... 0 0 0
Prema Mathai-Davis... 14,443 0 101,500
Lewis F. Pennock..... 14,751 45,766 103,500
Ian W. Robinson(5)... 3,464 94,442 25,000
Louis S. Sklar....... 14,443 90,232 101,500
</TABLE>

(1) The total amount of compensation deferred by all directors of the company
during the fiscal year ended December 31, 1999, including earnings thereon,
was $111,120.

(2) During the fiscal year ended December 31, 1999, the total amount of expenses
allocated to the company in respect of such retirement benefits was $28,223.
Data reflects compensation for the calendar year ended December 31, 1999.

(3) Each director serves as director or trustee of a total of at least 12
registered investment companies advised by AIM. Data reflects compensation
for the calendar year ended December 31, 1999.

(4) During the fiscal year ended December 31, 1999, the company paid $54,485 in
legal fees to Mr. Frischling's law firm, Kramer Levin Naftalis & Frankel
LLP, for services rendered to the independent directors of the company.

(5) Mr. Robinson was a director until March 12, 1999, when he retired.

A I M Management Group Inc. (AIM Management) has requested proposals from
real estate development firms in the greater Houston area in connection with
exploring possible options upon the expiration of the lease of AIM Management's
current office space on December 31, 2003. Mr. Sklar is employed by Hines
Interests Limited Partnership (Hines). Two of Hines' affiliates,

11
<PAGE> 15

Hines Corporate Properties, LLC and Sugarland Properties Incorporated
(collectively, Hines Affiliates), have each submitted office space proposals to
AIM Management for evaluation. Mr. Sklar would have an indirect financial
interest, and may have a direct equity interest, in these proposals. Since the
Hines Affiliates' proposals are among many being evaluated by AIM Management, it
is not currently possible to determine the extent of any such interest, or to
determine whether AIM Management will proceed with negotiations with Hines
Affiliates on any specific proposal.

AIM Funds Retirement Plan for Eligible Directors/Trustees

Under the terms of the AIM Funds Retirement Plan for Eligible Directors/
Trustees, each director (who is not an employee of any of the AIM funds, AIM
Management (or any of their affiliates) may be entitled to certain benefits upon
retirement from the Board. Pursuant to such retirement plan, a director becomes
eligible to retire and to receive full benefits under the plan when he or she
attains age 65 and has completed at least five years of continuous service with
one or more of the regulated investment companies managed, administered or
distributed by AIM or its affiliates (the applicable AIM funds). Each eligible
director is entitled to receive an annual benefit from the applicable AIM funds
commencing on the first day of the calendar quarter coincident with or following
his or her date of retirement equal to a maximum of 75% of the annual retainer
paid or accrued by the applicable AIM funds for such director during the twelve-
month period immediately preceding the director's retirement (including amounts
deferred under a separate agreement between the applicable AIM funds and the
director) and based on the number of such director's years of service (not in
excess of 10 years of service) completed with respect to any of the applicable
AIM funds. Such benefit is payable to each eligible director in quarterly
installments. If an eligible director dies after attaining the normal retirement
date but before receipt of all benefits under the plan, the director's surviving
spouse (if any) shall receive a quarterly survivor's benefit equal to 50% of the
amount payable to the deceased director for no more than ten years beginning the
first day of the calendar quarter following the date of the director's death.
Payments under the plan are not secured or funded by any applicable AIM fund.

12
<PAGE> 16

Set forth below is a table that shows the estimated annual benefits payable
to an eligible director upon retirement assuming the retainer amount reflected
below and various years of service. The estimated credited years of service for
Messrs. Crockett, Daly, Dunn, Fields, Frischling, Pennock, Robinson and Sklar
and Dr. Mathai-Davis are 13, 13, 2, 3, 23, 18, 11, 10 and 1 years, respectively.

ESTIMATED ANNUAL BENEFITS UPON RETIREMENT

<TABLE>
<CAPTION>
ANNUAL
RETIREMENT
COMPENSATION
PAID BY ALL
NUMBER OF YEARS OF SERVICE APPLICABLE
WITH THE APPLICABLE AIM FUNDS AIM FUNDS
----------------------------- ------------
<S> <C>
10............................. $67,500
9............................. $60,750
8............................. $54,000
7............................. $47,250
6............................. $40,500
5............................. $33,750
</TABLE>

Deferred Compensation Agreements

Messrs. Daly, Dunn, Fields, Frischling and Sklar and Dr. Mathai-Davis (the
deferring directors) have each executed a deferred compensation agreement.
Pursuant to the agreements, the deferring directors may elect to defer receipt
of up to 100% of their compensation payable by the company, and such amounts are
placed into a deferral account. Currently, the deferring directors may select
various AIM funds in which all or part of their deferral accounts shall be
deemed to be invested. Distributions from the deferring directors' accounts will
be paid in cash, in generally equal quarterly installments over a period of five
(5) or ten (10) years (depending on the agreement) beginning on the date the
deferring director's retirement benefits commence under the plan. The Board, in
its sole discretion, may accelerate or extend the distribution of such deferral
accounts after the deferring director's termination of service as a director of
the company. If a deferring director dies prior to the distribution of amounts
in his or her deferral account, the balance of the deferral account will be
distributed to his or her designated beneficiary in a single lump sum payment as
soon as practicable after such deferring director's death. The agreements are
not funded and, with respect to the payments of amounts held in the deferral
accounts, the deferring directors have the status of unsecured creditors of the
company and of each other AIM fund from which they are deferring compensation.

WHAT ARE OFFICERS PAID FOR THEIR SERVICES?

The company does not pay its officers for the services they provide to the
company. Instead the officers, who are also officers or employees of AIM or its
affiliates, are compensated by AIM Management or its affiliates.

13
<PAGE> 17

WHAT IS THE BOARD'S RECOMMENDATION ON PROPOSAL 1?

YOUR BOARD, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.

PROPOSAL 2: APPROVAL OF AN AGREEMENT AND PLAN OF REORGANIZATION TO REORGANIZE
THE COMPANY AS A DELAWARE BUSINESS TRUST

WHICH FUNDS' SHAREHOLDERS WILL VOTE ON THIS PROPOSAL?

Proposal 2 applies to all shareholders of all funds.

WHAT AM I BEING ASKED TO APPROVE?

The company currently is organized as a Maryland corporation. The Board has
approved an Agreement and Plan of Reorganization (the plan), which provides for
a series of transactions to convert each fund of the company (a current fund) to
a corresponding series (a new fund) of a newly created open-end management
investment company organized as a business trust (the trust) under the Delaware
Business Trust Act. Under the plan, each current fund will transfer all its
assets to a corresponding new fund in exchange solely for voting shares of
beneficial interest in the new fund and the new fund's assumption of all the
current fund's liabilities (collectively, the reorganization). A form of the
plan relating to the proposed reorganization is in Appendix B. If Proposal 2 is
not approved by the shareholders, the company will continue to operate as a
Maryland corporation.

The reorganization is being proposed primarily to provide the company with
greater flexibility in conducting its business operations. The operations of
each new fund following the reorganization will be substantially similar to
those of its predecessor current fund, except that each new fund's advisory
agreement will conform to the changes proposed in Proposal 3, to the extent
Proposal 3 is approved; AIM will be solely responsible for providing investment
advisory services to new Global Growth and Income and therefore, new Global
Growth and Income will not have a sub-advisory agreement; the fundamental
investment restrictions for all of the new funds will conform to the changes
proposed in Proposal 4, to the extent that Proposal 4 is approved; the
investment objectives for Aggressive Growth, Balanced, Blue Chip, Capital
Development, Diversified Income, Global Growth and Income, Growth and Income,
Money Market and Telecommunications will be made non-fundamental as proposed in
Proposal 5, if Proposal 5 is approved; and the investment objectives of Capital
Appreciation, Global Utilities, Government Securities, Growth, International
Equity and Value will be changed and made non-fundamental as proposed in
Proposal 6, if

14
<PAGE> 18

Proposal 6 is approved. Finally, as described below, the trust's Agreement and
Declaration of Trust differs from the company's Charter in certain respects that
are expected to improve the company's and each fund's operations.

WHAT ARE THE REASONS FOR THE PROPOSED REORGANIZATION?

The reorganization is being proposed because, as noted above, AIM and the
Board believe that the Delaware business trust organizational form offers a
number of advantages over the Maryland corporate organizational form. As a
result of these advantages, the Delaware business trust organizational form has
been increasingly used by mutual funds, including many AIM funds.

The Delaware business trust organizational form offers greater flexibility
than the Maryland corporate form. A Maryland corporation is governed by the
detailed requirements imposed by Maryland corporate law and by the terms of its
Charter. A Delaware business trust is subject to fewer statutory requirements.
The trust will be governed primarily by the terms of an Agreement and
Declaration of Trust (trust instrument). In particular, the trust will have
greater flexibility to conduct business without the necessity of engaging in
expensive proxy solicitations to shareholders. For example, under Maryland
corporation law, amendments to the company's Charter would typically require
shareholder approval. Under Delaware law, unless the trust instrument of a
Delaware business trust provides otherwise, amendments to it may be made without
first obtaining shareholder approval. In addition, unlike Maryland corporation
law, which restricts the delegation of a board of directors' functions, Delaware
law permits the board of trustees of a Delaware business trust to delegate
certain of its responsibilities. For example, the board of trustees of a
Delaware business trust may delegate the responsibility of declaring dividends
to duly empowered committees of the board or to appropriate officers. Finally,
Delaware law permits the trustees to adapt a Delaware business trust to future
contingencies. For example, the trustees may, without a shareholder vote, change
a Delaware business trust's domicile or organizational form. In contrast, under
Maryland corporation law, a company's board of directors would be required to
obtain shareholder approval prior to changing domicile or organizational form.

The reorganization will also have certain other effects on the company, its
shareholders and management, which are described below under the heading "How
Will the Trust Compare to the Company?"

WHAT WILL THE PROPOSED REORGANIZATION INVOLVE?

To accomplish the reorganization, the trust has been formed as a Delaware
business trust pursuant to its trust instrument, and each new fund has been
established as a series of the trust. On the closing date, each current fund
will transfer all of its assets to a corresponding new fund in exchange solely
for a number of full and fractional shares of the new fund equal to the number
of full and fractional shares of common stock of the corresponding current fund
then

15
<PAGE> 19

outstanding and the new fund's assumption of the current fund's liabilities.
Immediately thereafter, each current fund will distribute those new fund shares
to its shareholders in complete liquidation and will, as soon as practicable
thereafter, be terminated. Upon completion of the reorganization, each
shareholder of each current fund will be the owner of full and fractional shares
of the corresponding new fund equal in number and aggregate net asset value to
the shares he or she held in the current fund.

The obligations of the company and the trust under the plan are subject to
various conditions stated therein. To provide against unforeseen events, the
plan may be terminated or amended at any time prior to the closing of the
reorganization by action of the Board, notwithstanding the approval of the plan
by the shareholders of the company. However, no amendments may be made that
would materially adversely affect the interests of shareholders of any current
fund. The company and the trust may at any time waive compliance with any
condition contained in the plan, provided that the waiver does not materially
adversely affect the interests of shareholders of any current fund.

The plan authorizes the company to acquire one share of each new fund and,
as the sole shareholder of the trust prior to the reorganization, to do each of
the following:

- Approve with respect to each new fund a new investment advisory agreement
that will be substantially identical to that described in Proposal 3.
Information on the new advisory agreement, including a description of the
differences between it and the current advisory agreement, is set forth
below under Proposal 3. A form of the new advisory agreement is in
Appendix C. If Proposal 3 is not approved by a current fund's
shareholders, the trust will approve with respect to such fund an
investment advisory agreement that is substantially identical to such
fund's existing investment advisory agreement.

- Assuming that Proposal 3 is approved by shareholders, approve with
respect to each new fund a new administrative services agreement with AIM
that will be substantially identical to the company's existing
administrative services agreement with AIM, except for the changes
described in Proposal 3. If Proposal 3 is not approved by a current
fund's shareholders, the trust will approve for such fund an
administrative services agreement that is substantially identical to such
fund's existing administrative services agreement.

- Approve with respect to AIM V.I. Dent Demographic Trends Fund (Dent
Demographic Trends) a new sub-advisory agreement that will be
substantially identical to the fund's existing sub-advisory agreement.

- Approve with respect to each new fund a new distribution agreement with
A I M Distributors, Inc. The proposed distribution agreements will

16
<PAGE> 20

provide for substantially the same distribution services as currently
provided by A I M Distributors, Inc.

- Approve with respect to each new fund a custodian agreement and a
transfer agency and servicing agreement with State Street Bank and Trust
Company, which currently provides such services to the corresponding
current fund.

- Elect the directors of the company as the trustees of the trust to serve
without limit in time, except as they may resign or be removed by action
of the trust's trustees or shareholders, and except as they retire in
accordance with the trust's retirement policy for trustees. The trust's
retirement policy for trustees is substantially identical to the
company's retirement policy for directors.

- Ratify the selection of Tait, Weller & Baker, the accountants for each
current fund, as the independent public accountants for each new fund.

- Approve such other agreements and plans as are necessary for each new
fund's operation as a series of an open-end management investment
company.

The trust's transfer agent will establish for each shareholder an account
containing the appropriate number of shares of each new fund. Such accounts will
be identical in all respects to the accounts currently maintained by the
company's transfer agent for each shareholder of the current funds. Shares held
in the current fund accounts will automatically be designated as shares of the
new funds. The trust will not normally issue share certificates.

WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION?

The company and the trust will receive an opinion of Ballard Spahr Andrews
& Ingersoll, LLP to the effect that the reorganization will constitute a
tax-free reorganization under section 368(a)(1)(F) of the Internal Revenue Code
of 1986, as amended. Accordingly, the current funds, the new funds and the
shareholders of the new funds will recognize no gain or loss for federal income
tax purposes as a result of the reorganization. Shareholders of the current
funds should consult their tax advisors regarding the effect, if any, of the
reorganization in light of their individual circumstances and as to state and
local consequences, if any, of the reorganization.

WILL I HAVE APPRAISAL RIGHTS?

Appraisal rights are not available to shareholders. However, shareholders
retain the right to redeem their shares of the current funds or the new funds,
as the case may be, at any time before or after the reorganization.

17
<PAGE> 21

HOW WILL THE TRUST COMPARE TO THE COMPANY?

Structure of the Trust

The trust has been established under the laws of the State of Delaware by
the filing of a certificate of trust in the office of the Secretary of State of
Delaware. The trust has established series corresponding to and having identical
designations as the series portfolios of the company. Each new fund will have
the same investment objectives, policies, and restrictions as its predecessor
current fund, except that the new funds' fundamental restrictions, investment
objectives, and fundamental policies will conform to the changes proposed in
Proposals 4, 5 and 6 (assuming approval of each of these Proposals by the
shareholders). If any of Proposals 4, 5 or 6 is not approved by shareholders,
the new funds affected by the non-approval will continue to be subject to the
corresponding current funds' existing fundamental restrictions, investment
objectives, and fundamental policies, as applicable. The trust's fiscal year is
the same as that of the company. The trust will not have any operations prior to
the reorganization. Initially, the company will be the sole shareholder of the
trust.

As a Delaware business trust, the trust's operations are governed by its
trust instrument and Bylaws and applicable Delaware law rather than by the
company's Charter and Amended and Restated Bylaws and applicable Maryland law.
Certain differences between the two domiciles and organizational forms are
summarized below. The operations of the trust will continue to be subject to the
provisions of the 1940 Act and the rules and regulations thereunder.

Trustees and Officers of the Trust

Subject to the provisions of the trust instrument, the business of the
trust will be managed by its trustees, who serve indefinite terms and who have
all powers necessary or convenient to carry out their responsibilities. The
responsibilities, powers, and fiduciary duties of the trustees are substantially
the same as those of the directors of the company.

The trustees of the trust would be those persons elected at this meeting to
serve as directors of the company. Information concerning the nominees for
election as directors of the company, all of whom presently serve in such
positions, is set above under Proposal 1. The current officers of the company,
as well as certain AIM personnel, have been elected to serve as officers of the
trust and the current officers of the company will perform the same functions on
behalf of the trust following the reorganization that they now perform on behalf
of the company.

Shares of the Trust

The beneficial interests in the new funds will be represented by
transferable shares, par value $0.001 per share. Shareholders do not have the
right to demand or require the trust to issue share certificates although the
trust, in its sole

18
<PAGE> 22

discretion, may issue them. The trustees have the power under the trust
instrument to establish new series and classes of shares; the company's
directors currently have a similar right. The trust instrument permits the
trustees to issue an unlimited number of shares of each series and class (if
any). The company is authorized to issue only the number of shares specified in
the Charter and may issue additional shares only with Board approval and after
payment of a fee to the State of Maryland on any additional shares authorized.

Except as discussed in this proxy statement, shares of each of the new
funds will have rights, privileges, and terms substantially similar to those of
the corresponding current funds.

Shareholder Meeting Requirements

Maryland law provides that a special meeting of shareholders shall be
called upon the written request of shareholders holding 25% of the company's
shares. The company's Amended and Restated Bylaws allow a special meeting of
shareholders to be called upon the written request of shareholders holding 10%
of the company's shares. The trust's Bylaws provide that a special meeting of
shareholders for the purpose of voting on the removal of any trustee may be
called by the holders of 10% or more of the outstanding shares of the trust.

The trust, like the company, will operate as an open-end management
investment company registered with the Securities and Exchange Commission (SEC)
under the 1940 Act. As permitted by SEC rules, the trust will adopt as its own
the registration statement of the company. Shareholders of the new funds
therefore will have the power to vote at special meetings with respect to, among
other things, changes in any fundamental investment objectives and the
fundamental restrictions and policies of the new funds; approval of certain
changes to investment advisory contracts and plans of distribution; and
additional matters relating to the trust required by the 1940 Act.

Shareholder Voting Rights

Under Maryland law, shareholders of the company have the right to vote on
the following matters: the substantive amendment or complete restatement of the
company's Charter; generally, a consolidation, merger, or share exchange
involving the company or a transfer of the company's assets not in the ordinary
course of business; and the voluntary or, in some cases, involuntary dissolution
of the company.

Shareholders of the trust will have only those voting rights that are
explicitly set forth in the trust instrument. Under the trust instrument,
shareholders of the trust have the right to vote on the following matters: the
election or removal of trustees, provided that a meeting of shareholders has
been called for that purpose; the termination of the trust or any fund or class,
provided that a meeting of shareholders has been called for that purpose and
unless there are fewer than 100

19
<PAGE> 23

holders of record of the trust or such terminating fund or class; the sale of
all or substantially all of the assets of the trust or any fund or class, unless
the primary purpose of such sale is to change the trust's domicile or
organizational form; under certain circumstances, the merger or consolidation of
the trust or any fund or class with and into another company or with and into
another fund or class of the trust; and the amendment of the section of the
trust instrument that governs shareholders' voting rights.

Removal of Directors and Trustees

The company's Charter permits removal of a director prior to the expiration
of his or her term of office for cause, and not otherwise, by the affirmative
vote of a majority of all votes entitled to be cast for the election of
directors. Under the trust's trust instrument, a trustee may be removed by a
written instrument, signed by at least two-thirds of the number of trustees
prior to such removal, or by the affirmative vote of holders of two-thirds of
the trust's outstanding shares at a special meeting called for that purpose.

Shareholders' Rights of Inspection

Maryland law provides generally that persons who have been shareholders of
record for six months or more and who own of record at least 5% of a current
fund's outstanding shares may inspect that current fund's books of account and
stock ledger. Under the trust's trust instrument and Bylaws, new fund
shareholders who have held shares of record for at least six months and who hold
at least 5% of the outstanding shares of any new fund are permitted, upon
written request, to inspect a list of the shareholders of that fund.

Shareholder Liability

Maryland law provides that a shareholder is not obligated to the company
with respect to the stock held therein, except to the extent that (1) the
subscription price or other agreed consideration for the stock has not been paid
(subject to limited exceptions); (2) the shareholder knowingly accepted an
illegal distribution; or (3) the shareholder is subject to any liability imposed
by law upon the dissolution, voluntary or involuntary, of the company.

Under Delaware law, shareholders of a Delaware business trust shall be
entitled to the same limitations of liability extended to shareholders of
private for-profit corporations; however, there is a remote possibility that
shareholders could, under certain circumstances, be held liable for the
obligations of the trust to the extent the courts of another state which does
not recognize such limited liability were to apply the laws of such state to a
controversy involving such obligations. However, the trust instrument disclaims
shareholder liability for acts or obligations of the trust and requires that
notice of such disclaimer be given in each agreement, obligation or instrument
entered into or executed by the trust or the trustees to all parties, and each
party thereto must expressly waive all rights

20
<PAGE> 24

of action directly against shareholders of the trust. The trust instrument
provides for indemnification out of the property of a new fund for all losses
and expenses of any shareholder of such new fund held liable on account of being
or having been a shareholder. Thus, the risk of a shareholder incurring
financial loss due to shareholder liability is limited to circumstances in which
a new fund would be unable to meet its obligations and the complaining party was
held not to be bound by the liability disclaimer.

Liability of Directors and Trustees

Under its Charter, the company limits the liability of and indemnifies its
present and past directors and officers to the maximum extent permitted by
Maryland law and the 1940 Act. Directors may be personally liable to the company
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of their duties or by reason of reckless disregard of their duties
as directors. In the event of any litigation or other proceeding against a
director or officer of the company, Maryland law permits the company to
indemnify the director or officer for certain expenses and to advance money for
such expenses unless (a) it is established that the act or omission of the
director or officer was material to the matter giving rise to the proceeding and
the act or omission was committed in bad faith or was the result of active and
deliberate dishonesty; (b) the director or officer actually received an improper
personal benefit in money, property or services; or (c) in the case of any
criminal proceeding, the director or officer had reasonable cause to believe the
act or omission was unlawful.

The trust instrument provides indemnification for current and former
trustees, officers, employees and agents of the trust to the fullest extent
permitted by Delaware law, the trust's Bylaws and other applicable law. Trustees
of the trust may be personally liable to the trust and its shareholders by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of their duties or by reason of reckless disregard of their duties as trustees.

Amendment of Charter and Trust Instrument

Under the company's Charter and Maryland law, the Charter may be amended
upon (a) adoption by the Board of a resolution setting forth the proposed
amendment and declaring that such amendment is advisable and (b) approval of
such resolution by the holders of a majority of the company's outstanding
shares. The trust instrument may be amended by a majority of the trustees
without any shareholder vote, except that the shareholders will have the right
to vote on any amendment that affects their voting rights, that reduces the
indemnification provided to shareholders or former shareholders, that is
required to have shareholder approval by law or by the trust's registration
statement, or that is submitted to the shareholders by the trustees.
---------------------

21
<PAGE> 25

The foregoing is only a summary of certain differences between and among
the company's Charter and Amended and Restated Bylaws and Maryland law and the
trust instrument and the trust's Bylaws and Delaware law. It is not a complete
list of the differences. Shareholders should refer to the provisions of these
documents and state law directly for a more thorough comparison. Copies of the
Charter and Amended and Restated Bylaws of the company, and of the trust
instrument and the trust's Bylaws are available to shareholders without charge
upon written request to the company or the trust.

WHEN WILL PROPOSAL 2 BE IMPLEMENTED?

Assuming your approval of Proposal 2, the company currently contemplates
that the reorganization will close on May 1, 2000. However, the reorganization
may close on another date if circumstances warrant.

WHAT IS THE BOARD'S RECOMMENDATION ON PROPOSAL 2?

YOUR BOARD, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.

PROPOSAL 3: APPROVAL OF A NEW
INVESTMENT ADVISORY AGREEMENT

WHICH FUNDS' SHAREHOLDERS WILL VOTE ON THIS PROPOSAL?

Proposal 3 applies to all shareholders of all funds.

WHAT AM I BEING ASKED TO APPROVE?

The Board recommends that you approve a new advisory agreement between AIM
and the company for your fund. The Board is asking you to vote on this new
agreement because the company may amend its advisory agreement only with
shareholder approval. A form of the company's proposed Master Investment
Advisory Agreement is in Appendix C. The proposed advisory agreement amends the
current advisory agreement primarily by:

- omitting references to the provision of administrative services to the
funds;

- clarifying existing non-exclusivity provisions;

- clarifying existing delegation provisions;

- adding provisions regarding affiliated brokerage;

- adding certain provisions relating to certain functions to be performed
by AIM in connection with the funds' securities lending program; and

22
<PAGE> 26

- clarifying existing liability provisions.

At a meeting held on February 3, 2000, the Board voted to recommend that
you approve a proposal to adopt the new advisory agreement.

WHO IS THE FUNDS' INVESTMENT ADVISOR?

AIM became the investment advisor for each of the funds on the dates
indicated in Appendix D. The current Master Investment Advisory Agreement, as
amended, was executed, and the funds' shareholders last voted on such agreement,
on the dates indicated in Appendix D. The Board, including a majority of the
independent directors, last approved the current advisory agreement on May 11,
1999 for all funds other than Blue Chip and Dent Demographic Trends. The current
advisory agreement for Blue Chip and Dent Demographic Trends was approved by the
Board, including a majority of the independent directors, on June 9, 1999 and
September 24, 1999, respectively.

AIM is a wholly owned subsidiary of AIM Management, a holding company that
has been engaged in the financial services business since 1976. The address of
AIM and AIM Management is 11 Greenway Plaza, Suite 100, Houston, Texas 77046.
AIM was organized in 1976, and, together with its subsidiaries, advises or
manages approximately 120 investment portfolios encompassing a broad range of
investment objectives. AIM Management is an indirect wholly owned subsidiary of
AMVESCAP PLC, 11 Devonshire Square, London EC2M 4YR, United Kingdom. AMVESCAP
PLC and its subsidiaries are an independent investment management group engaged
in institutional investment management and retail mutual fund businesses in the
United States, Europe and the Pacific region. A list of the principal executive
officer and the directors of AIM is in Appendix E.

DO ANY OF THE COMPANY'S DIRECTORS OR EXECUTIVE OFFICERS HOLD POSITIONS WITH AIM?

Charles T. Bauer, Robert H. Graham, Gary T. Crum, Carol F. Relihan,
Melville B. Cox, Dana R. Sutton , Robert G. Alley, Stuart W. Coco and Karen Dunn
Kelley, all of whom are directors and/or executive officers of the company, also
are directors and/or officers of AIM. Each of them also beneficially owns shares
of AMVESCAP PLC and/or options to purchase shares of AMVESCAP PLC. Additional
information concerning these affiliations is in Appendix M.

WHAT ARE THE TERMS OF THE CURRENT ADVISORY AGREEMENT?

Under the terms of the current advisory agreement, AIM supervises all
aspects of the funds' operations and provides investment advisory services to
the funds. AIM obtains and evaluates economic, statistical and financial
information to formulate and implement investment programs for the funds. AIM
will not be

23
<PAGE> 27

liable to the funds or their shareholders except in the case of AIM's willful
misfeasance, bad faith, gross negligence or reckless disregard of duty.

The current advisory agreement provides that the funds will pay or cause to
be paid all of their expenses not assumed by AIM, including without limitation:

- brokerage commissions;

- taxes;

- legal, accounting, auditing or governmental fees;

- the cost of preparing share certificates;

- custodian, transfer and shareholder service agent costs;

- expenses of issue, sale, redemption, and repurchase of shares;

- expenses of registering and qualifying shares for sale;

- expenses relating to director and shareholder meetings;

- the cost of preparing and distributing reports and notices to
shareholders;

- the fees and other expenses incurred by the funds in connection with
membership in investment company organizations;

- the cost of printing copies of prospectuses and statements of additional
information distributed to the funds' shareholders; and

- all other charges and costs of the funds' operations unless otherwise
explicitly provided.

The current advisory agreement will continue in effect from year to year
for each fund only if such continuance is specifically approved at least
annually by (i) the Board or the vote of a majority of the outstanding voting
securities of that fund (as defined in the 1940 Act), and (ii) the affirmative
vote of a majority of independent directors by votes cast in person at a meeting
called for such purpose. The current advisory agreement provides that the Board,
a majority of the outstanding voting securities of a fund or AIM may terminate
the agreement for a fund on 60 days' written notice without penalty. The
agreement terminates automatically in the event of its assignment.

AIM may from time to time waive or reduce its fee. AIM may rescind
voluntary fee waivers or reductions at any time without further notice to
investors. If, during any fiscal year, AIM has waived or reduced fees, AIM will
retain its ability to be reimbursed for such fee waiver or reduction prior to
the end of such fiscal year. If AIM has agreed to contractual fee waivers or
reductions, AIM may not alter those arrangements to a fund's detriment during
the period stated in the agreement between AIM and the company.

The annual rates at which AIM receives fees from each fund under the
current advisory agreement, as well as the dollar amounts of advisory fees net
of

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<PAGE> 28

any expense limitations or fee waivers paid to AIM by each fund and the dollar
amount of advisory fees (if any) waived by AIM for each fund for the fiscal
period or year ended December 31, 1999, are in Appendix F.

CAN AIM DELEGATE ANY OF ITS DUTIES UNDER THE ADVISORY AGREEMENT?

The current advisory agreement provides that AIM may delegate to a sub-
advisor or sub-advisors certain of its obligations under the current advisory
agreement. In accordance with this provision, AIM had entered into a sub-
advisory agreement dated December 29, 1999 with H.S. Dent Advisors, Inc.
("Dent") with respect to Dent Demographic Trends, pursuant to which the sub-
advisor agreed to provide AIM with investment research and advisory services and
analysis and recommendations on appropriate industry and sector allocations and
weightings for the fund's investment portfolio based on demographic trends. All
investment decisions and portfolio transactions remain the responsibility of
AIM.

The sub-advisory agreement for Dent Demographic Trends was approved by the
initial sole shareholder of the fund on December 29, 1999 and was last approved
by the Board of the company on September 24, 1999. Under the sub-advisory
agreement, Dent is entitled to receive from AIM, a sub-advisory fee calculated
at the following annual rates based upon the average daily net assets of Dent
Demographic Trends: 0.13% of the first $1 billion of average daily net assets;
0.10% of the average daily net assets over $1 billion, to and including $2
billion; and 0.07% of average daily net assets over $2 billion. During the
fiscal year ended December 31, 1999, Dent received $0 in fees for its services
to Dent Demographic Trends.

In addition, AIM had entered into a sub-advisory agreement dated December
14, 1998 with INVESCO Asset Management Limited ("INVESCO") with respect to
Global Growth and Income. The duties of INVESCO under the current sub-advisory
agreement include:

- Obtaining and evaluating pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the
fund, and whether concerning the individual issuers whose securities are
included in the fund or the activities in which such issuers engage, or
with respect to securities which INVESCO considers desirable for
inclusion in the fund's investment portfolio;

- Determining which issuers and securities shall be represented in the
fund's investment portfolio and regularly reporting thereon to AIM and,
at the request of AIM, to the Board; and

- Formulating and implementing continuing programs for the purchases and
sales of the securities of such issuers and regularly reporting thereon
to AIM and, at the request of AIM, to the Board.

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<PAGE> 29

The sub-advisory agreement for Global Growth and Income was approved by the
initial sole shareholder of the fund on December 14, 1998 and was last approved
by the Board of the company on September 26, 1998. During the fiscal year ended
December 31, 1999, INVESCO received $32,070 in fees for its services to Global
Growth and Income.

Since the date of the INVESCO agreement, AIM has developed or acquired
additional resources for and experience in conducting international economic and
market research and securities analyses. Accordingly, AIM believes that the
services of INVESCO are no longer necessary to manage the funds and recommended
that the Board terminate the sub-advisory arrangement that had been in effect
for Global Growth and Income. At a meeting in person held on March 7, 2000, the
Board, including a majority of the independent directors, approved the
termination of the sub-advisory agreement, effective May 1, 2000. In approving
such termination, the Board considered the nature and quality of services
rendered and to be rendered by AIM and AIM's qualifications regarding its
provision of the services previously provided by the sub-advisor.

WHAT ADDITIONAL SERVICES ARE PROVIDED BY AIM AND ITS AFFILIATES?

AIM and its affiliates also provide additional services to the company and
the funds. AIM provides or arranges for others to provide administrative
services to the funds. A I M Distributors, Inc., a wholly owned subsidiary of
AIM, serves as the principal underwriter for the funds. Information concerning
fees paid to AIM and A I M Distributors, Inc. for these services is in Appendix
G.

WHAT ADVISORY FEES DOES AIM CHARGE FOR SIMILAR FUNDS IT MANAGES?

The advisory fee schedules for other funds advised by AIM with similar
investment objectives as the funds are in Appendix H.

WHAT ARE THE TERMS OF THE PROPOSED ADVISORY AGREEMENT?

The primary changes to the proposed advisory agreement that the Board
approved are:

- To omit references to the provision of administrative services to the
funds by AIM, because such services are covered by a separate
administrative services agreement between AIM and the company;

- To clarify non-exclusivity provisions that are set forth in the current
advisory agreement;

- To clarify delegation provisions that are set forth in the current
advisory agreement;

- To add provisions regarding affiliated brokerage;

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<PAGE> 30

- To add certain provisions relating to certain functions to be performed
by AIM in connection with the funds' securities lending program; and

- To clarify that one fund is not liable for another fund's obligations,
and that AIM's liability to one fund does not automatically extend to
another fund.

Each of these changes is discussed more fully below. Except for these
changes, the terms of the current advisory agreement and the proposed advisory
agreement are substantially similar, except for the effective dates and the
renewal dates.

Administrative Services

The company and AIM are parties to a Master Administrative Services
Agreement dated May 1, 1998, as amended on December 14, 1998, September 24, 1999
and December 29, 1999. The current advisory agreement states that AIM may
provide certain administrative services to the funds at the Board's request. The
Board has traditionally asked AIM to provide such services to the funds. AIM
then provides such services pursuant to the Master Administrative Services
Agreement.

The Board proposes to separate the advisory services and the administrative
services that AIM provides to the company, so that the provision of
administrative services is dealt with solely in a Master Administrative Services
Agreement. As a result, the proposed advisory agreement omits all references to
the Master Administrative Services Agreement. Since this omission will not
change the administrative services that AIM provides to the company or the
compensation AIM receives for providing administrative services, the Board
believes that this change is a matter of form rather than a substantive change
in the relationship between AIM and the company.

Non-Exclusivity Provisions

The current advisory agreement provides that neither AIM nor the directors
or officers of the company owe an exclusive duty to the company. The current
advisory agreement expressly permits AIM to render investment advisory,
administrative and other services to other entities (including investment
companies). The current advisory agreement also expressly permits the directors
and officers of the company to serve as partners, officers, directors or
trustees of other entities (including other investment advisory companies). The
Board believes that the non-exclusivity provision in the current advisory
agreement should be divided into two separate provisions: one dealing with AIM
and the other dealing with officers and directors of the company.

The non-exclusivity provisions of the proposed advisory agreement are
substantially similar to the provision in the current advisory agreement.
However, the proposed advisory agreement explicitly states that the company
recognizes

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<PAGE> 31

that AIM's obligations to other clients may adversely affect the company's
ability to participate in certain investment opportunities. The proposed
advisory agreement also explicitly states that AIM, in its sole discretion,
shall be entitled to determine the allocation of investment opportunities among
the AIM funds and other clients in accordance with a policy that AIM believes to
be equitable.

Delegation

The proposed advisory agreement expands the extent to which AIM can
delegate its rights, duties and obligations by expressly providing that AIM may
delegate any or all of its rights, duties or obligations under the agreement to
one or more sub-advisors rather than solely certain specified advisory services.
It also provides that AIM may replace sub-advisors from time to time in
accordance with applicable federal securities laws and rules and regulations in
effect or interpreted from time to time by the SEC or with exemptive orders or
other similar relief. If, in accordance with the laws, rules, interpretations
and exemptions, AIM is not required to seek shareholder approval of the
appointment of a sub-advisor, it may do so solely upon approval of the Board.
Under the current agreement, any appointment of a sub-advisor would require
shareholder approval.

Affiliated Brokerage

Although AIM does not currently execute trades through brokers or dealers
that are affiliated with AIM, the proposed advisory agreement includes a new
provision that would permit such trades, subject to compliance with applicable
federal securities laws, rules, interpretations and exemptions.

Securities Lending

If a fund engages in securities lending, AIM will provide the investment
advisory services and related administrative services. The proposed advisory
agreement includes a new provision that specifies the administrative services to
be rendered by AIM if a fund engages in securities lending activities, as well
as the compensation AIM may receive for such administrative services. Services
to be provided include: (a) overseeing participation in the securities lending
program to ensure compliance with all applicable regulatory and investment
guidelines; (b) assisting the securities lending agent or principal (the agent)
in determining which specific securities are available for loan; (c) monitoring
the agent to ensure that securities loans are effected in accordance with AIM's
instructions and with procedures adopted by the Board; (d) preparing appropriate
periodic reports for, and seeking appropriate approvals from, the Board with
respect to securities lending activities; (e) responding to agent inquiries; and
(f) performing such other duties as may be necessary.

AIM's compensation for advisory services rendered in connection with
securities lending is included in the current advisory fee schedule. As
compensation for the related administrative services AIM will provide, a lending
fund shall pay AIM a fee equal to 25% of the net monthly interest or fee income
retained or

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<PAGE> 32

paid to the fund from such activities. AIM currently intends to waive such fees
and has agreed to seek Board approval prior to its receipt of all or a portion
of such fees.

Liability

The proposed advisory agreement clarifies that no fund shall be liable for
the obligations of another fund, and the liability of AIM to one fund shall not
automatically render AIM liable to any other fund.

WHAT FACTORS DID THE DIRECTORS CONSIDER IN APPROVING THE ADVISORY AGREEMENT?

At the request of AIM, the Board discussed the approval of the proposed
advisory agreement at a meeting held in person on February 3, 2000. The
independent directors also discussed approval of the proposed advisory agreement
with independent counsel at that meeting. In evaluating the proposed advisory
agreement, the Board requested and received information from AIM to assist in
its deliberations. The board considered the following factors in determining the
reasonableness and fairness of the proposed changes to the current advisory
agreement with respect to each fund.

- The qualifications of AIM to provide investment advisory services. The
Board reviewed the credentials and experience of the officers and
employees of AIM who provide investment advisory services to the funds,
and noted that the persons providing services to the funds would not
change if the new advisory agreement is approved by shareholders.

- The range of investment advisory services provided by AIM. The Board
reviewed the services to be provided by AIM under the new advisory
agreement, and noted that no changes in the level or type of services
provided by AIM would occur if the new advisory agreement is approved by
shareholders, other than the provision by AIM of certain additional
services if a fund engages in securities lending.

- The qualifications of AIM to provide a range of management and
administrative services. The Board reviewed the general nature of the
non-investment advisory services performed by AIM and its affiliates,
such as administrative, transfer agency and distribution services, and
the fees received by AIM and its affiliates for performing such services.
In addition to reviewing such services, the Board also considered the
organizational structure employed by AIM and its affiliates to provide
those services. The Board reviewed the proposed elimination from the new
advisory agreement of references to the provision by AIM of
administrative services. The Board also reviewed the proposed form of
administrative services agreement, noted that the services to be provided
under the existing and proposed administrative services agreements are
the same, and concluded that the administrative services to be provided
by AIM

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<PAGE> 33

would not change if all references to administrative services were
deleted from the new advisory agrement.

- The performance record of the funds. The Board determined that AIM has
provided high quality services with respect to each fund, after
considering performance information that it received during the past year
from AIM regarding the funds. The Board also determined that each fund's
performance would not have been affected if the proposed advisory
agreement had been in effect during the past fiscal year, since no
changes to advisory fees are being proposed, other than to permit AIM's
receipt of fees in connection with securities lending. Such fees would be
paid only to the extent that a fund generates additional income by
engaging in securities lending, and therefore are not paid if the fund
does not generate additional income. The Board noted that the funds do
not currently engage in securities lending, but that such arrangements
provide the opportunity for both the fund and AIM to obtain additional
income. The Board also noted that AIM was currently waiving its right to
receive any fees for the services it may provide in connection with
securities lending activities.

- The profitability of AIM The Board reviewed information concerning the
profitability of AIM's (and its affiliates') investment advisory and
other activities and its financial condition. The Board noted that no
changes to the advisory fees were being proposed, other than to permit
AIM's receipt of fees in connection with securities lending, and further
noted that AIM was currently waiving its right to receive any such fees.
The Board also noted that, in accordance with an exemptive order issued
by the SEC, each fund may elect to invest in money market funds advised
by AIM the cash collateral it receives as security for the borrower's
obligation to return the loaned securities. If the funds invest the cash
collateral in AIM-advised money market funds, AIM will receive additional
compensation from these money market funds. The Board considered the
liquidity, yield, lower transaction costs and diversification that may be
provided by an investment in AIM-advised money market funds. Since the
cash collateral relates to assets of the fund that have already been
invested, and the investment of the cash collateral is intended to
benefit the funds by providing them with additional income, the Board
concluded that it was in the best interests of the funds to invest the
cash collateral in AIM-advised money market funds. In making such
determination, the Board took into account the fact that such an
investment would have a positive effect on the profitability of AIM.

- The terms of the proposed agreement. The Board reviewed the terms of the
proposed agreement, including changes being made to clarify non-
exclusivity, delegation and liability provisions, to separate
administrative services from advisory services, to have AIM assist the
fund if they

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<PAGE> 34

engage in securities lending and to permit AIM to engage in brokerage
transactions with affiliates. The Board determined that these changes
reflect the current environment in which the funds operate, and that AIM
should have the flexibility to take advantage of that environment.

After considering the foregoing factors, the Board concluded that it is in
the best interests of the funds and their shareholders to approve the new
advisory agreement.

The Board reached its conclusion after careful discussion and analysis. The
Board believes that it has carefully and thoroughly examined the pertinent
issues and alternatives. In recommending that you approve the proposed advisory
agreement, the independent directors have considered what they believe to be in
your best interests. In so doing, they were advised by independent counsel,
retained by the independent directors and paid for by the company, as to the
nature of the matters to be considered and the standards to be used in reaching
their decision.

In accordance with an exemptive order issued by the SEC, each lending fund
may elect to invest in money market funds advised by AIM the cash collateral it
receives as security for a borrower's obligation to return the loaned
securities. If the funds invest the cash collateral in AIM-advised money market
funds, AIM will receive additional compensation from these money market funds.

WHEN WILL PROPOSAL 3 BE IMPLEMENTED?

If approved, the new advisory agreement will become effective on May 1,
2000 and will expire, unless renewed, on or before June 30, 2001. If
shareholders do not approve the proposed advisory agreement with respect to a
fund, the current advisory agreement will continue in effect for such fund.

WHAT IS THE BOARD'S RECOMMENDATION ON PROPOSAL 3?

YOUR BOARD, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.

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<PAGE> 35

PROPOSALS 4(a) THROUGH 4(h): CHANGES TO FUNDAMENTAL INVESTMENT RESTRICTIONS OF
EACH FUND

WHAT AM I BEING ASKED TO APPROVE?

The Board recommends that you approve changing your fund's investment
restrictions. The Board is asking you to vote on these changes because the
investment restrictions described below are fundamental and shareholders must
approve any change.

Pursuant to the 1940 Act, each fund has adopted fundamental restrictions
covering certain types of investment practices, which may be changed only with
shareholder approval. Restrictions that a fund has not specifically designated
as being fundamental are considered to be "non-fundamental" and may be changed
by the Board without shareholder approval. In addition to investment
restrictions, the funds operate pursuant to investment objectives and policies.
These objectives and policies govern the investment activities of the funds and
further limit their ability to invest in certain types of securities or engage
in certain types of transactions.

The Board is proposing that you approve changes to your fund's fundamental
investment restrictions. The changes will conform these restrictions to a set of
uniform model restrictions under which most AIM funds will operate. The Board
approved the changes to your fund's fundamental investment restrictions at a
meeting held on February 3, 2000. The current fundamental investment
restrictions for each fund are in Appendix I.

WHAT ARE THE REASONS FOR THE PROPOSED CHANGES TO THE FUNDAMENTAL RESTRICTIONS?

Several of the funds' current fundamental restrictions that the funds have
adopted reflect regulatory, business or industry conditions, practices or
requirements that are no longer applicable. Other fundamental restrictions
reflect federal regulatory requirements that remain in effect but are not
required to be stated as fundamental, or in some cases even as non-fundamental,
restrictions. Also, as new AIM funds have been created or acquired during recent
years, substantially similar fundamental restrictions often have been phrased in
slightly different ways, sometimes resulting in minor but unintended differences
in effect or potentially giving rise to unintended differences in
interpretation.

Accordingly, the Board has approved changes to substantially all of the
funds' fundamental restrictions in order to simplify, modernize and make more
uniform those restrictions that are required to be fundamental. The funds'
fundamental investment restriction permitting a fund to invest all of its assets
in a single open-end investment company under certain circumstances will not
change.

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<PAGE> 36

The Board expects that you will benefit from these changes in a number of
ways. The proposed uniform restrictions will provide the funds with as much
investment flexibility as is possible under the 1940 Act. The Board believes
that eliminating the disparities among the AIM funds' fundamental restrictions
will enhance management's ability to manage efficiently and effectively the
funds' assets in changing regulatory and investment environments. In addition,
by reducing to a minimum those restrictions that can be changed only by
shareholder vote, each fund will be able to avoid the costs and delays
associated with a shareholder meeting if the Board decides to make future
changes to a fund's investment policies.

WHAT ARE THE PROPOSED CHANGES TO THE FUNDAMENTAL RESTRICTIONS?

Each proposed change to the funds' fundamental restrictions is discussed
below. The proposed fundamental restrictions will provide the funds with the
ability to operate under new interpretations of the 1940 Act or pursuant to
exemptive relief from the SEC without receiving prior shareholder approval of
operating under such interpretations or exemptions. Even though the funds will
have this flexibility, if the proposed restrictions are approved, several non-
fundamental investment restrictions which function as internal operating
guidelines will become effective. AIM must follow the non-fundamental investment
restrictions in managing the funds. Of course, if circumstances change, the
Board may change or eliminate any non-fundamental investment restriction in the
future without shareholder approval.

With respect to each fund and each fundamental or non-fundamental
restriction, if a percentage restriction is adhered to at the time of an
investment or transaction, a later increase or decrease in percentage resulting
from a change in the values of the fund's portfolio securities or the amount of
its total assets will not be considered a violation of the restriction.

PROPOSAL 4(a): CHANGE TO FUNDAMENTAL RESTRICTION
ON ISSUER DIVERSIFICATION

WHICH FUNDS' SHAREHOLDERS WILL VOTE ON THIS PROPOSAL?

Proposal 4(a) applies to shareholders of all funds other than Global
Utilities.

WHAT IS THE PROPOSED CHANGE?

Upon the approval of Proposal 4(a), the existing fundamental restriction on
issuer diversification for each fund other than Global Utilities will read as
follows:

"The fund is a "diversified company" as defined in the 1940 Act. The
fund will not purchase the securities of any issuer if, as a result,
the fund would fail to be a diversified company within the meaning of
the

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<PAGE> 37

1940 Act, and the rules and regulations promulgated thereunder, as
such statute, rules and regulations are amended from time to time or
are interpreted from time to time by the SEC staff (collectively, the
1940 Act laws and interpretations) or except to the extent that the
fund may be permitted to do so by exemptive order or similar relief
(collectively, with the 1940 Act laws and interpretations, the 1940
Act laws, interpretations and exemptions). In complying with this
restriction, however, the fund may purchase securities of other
investment companies to the extent permitted by the 1940 Act laws,
interpretations and exemptions."

Discussion:

The funds to which this change would apply are "diversified" funds under
the 1940 Act. (Global Utilities is a non-diversified fund.) The proposed change
would permit the funds to take advantage of 1940 Act laws, interpretations and
exemptions in effect from time to time relating to issuer diversification.
However, the Board does not expect this change to have any material impact on
the funds' current operations.

If you approve the proposed change, the following non-fundamental
investment restriction will become effective for each fund (other than Global
Utilities):

"In complying with the fundamental restriction regarding issuer
diversification, the fund will not, with respect to 75% of its total
assets (and for Money Market, with respect to 100% of its total
assets), purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities), if, as a result, (i) more than 5% of the fund's
total assets would be invested in the securities of that issuer,
except as permitted by Rule 2a-7 under the 1940 Act, or (ii) the fund
would hold more than 10% of the outstanding voting securities of that
issuer. The fund may (i) purchase securities of other investment
companies as permitted by Section 12(d)(1) of the 1940 Act and (ii)
invest its assets in securities of other money market funds and lend
money to other investment companies or their series portfolios that
have AIM or an affiliate of AIM as an investment advisor (an AIM
fund), subject to the terms and conditions of any exemptive orders
issued by the SEC."

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<PAGE> 38

PROPOSAL 4(b): CHANGE TO FUNDAMENTAL RESTRICTION ON BORROWING MONEY AND ISSUING
SENIOR SECURITIES

WHICH FUNDS' SHAREHOLDERS WILL VOTE ON THIS PROPOSAL?

Proposal 4(b) applies to shareholders of all funds.

WHAT IS THE PROPOSED CHANGE?

Upon the approval of Proposal 4(b), the existing fundamental restriction on
issuing senior securities and borrowing money for each of the funds would read
as follows:

"The fund may not borrow money or issue senior securities, except as
permitted by the 1940 Act laws, interpretations and exemptions."

Discussion:

The 1940 Act establishes limits on the ability of the funds to borrow money
or issue "senior securities," a term that is defined, generally, to refer to
obligations that have a priority over the company's shares with respect to the
distribution of its assets or the payment of dividends.

The proposed restriction is substantially similar to the funds' current
investment restriction, but it would make the funds' restriction on borrowing
money and issuing senior securities no more limiting than required by the 1940
Act laws, interpretations or exemptions, rather than just the 1940 Act laws. The
Board believes that changing the funds' fundamental restriction in this manner
will provide flexibility for future contingencies. However, the Board does not
expect this change to have any material impact on the funds' current operations.

If you approve the proposed change, the following non-fundamental
investment restriction will become effective for each fund:

"In complying with the fundamental restriction regarding borrowing
money and issuing senior securities, the fund may borrow money in an
amount not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). The fund may
borrow from banks, broker-dealers or an AIM fund. The fund may not
borrow for leveraging, but may borrow for temporary or emergency
purposes, in anticipation of or in response to adverse market
conditions, or for cash management purposes. The fund may not purchase
additional securities when any borrowings from banks exceed 5% of the
fund's total assets."

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PROPOSAL 4(c): CHANGE TO FUNDAMENTAL RESTRICTION
ON UNDERWRITING SECURITIES

WHICH FUNDS' SHAREHOLDERS WILL VOTE ON THIS PROPOSAL?

Proposal 4(c) applies to shareholders of all funds.

WHAT IS THE PROPOSED CHANGE?

Upon the approval of Proposal 4(c), the existing fundamental restriction on
underwriting securities for each of the funds would read as follows:

"The fund may not underwrite the securities of other issuers. This
restriction does not prevent the fund from engaging in transactions
involving the acquisition, disposition or resale of its portfolio
securities, regardless of whether the fund may be considered to be an
underwriter under the Securities Act of 1933."

Discussion:

The proposed change to this fundamental restriction expands the types of
transactions in which a fund may engage even if it may be considered to be an
underwriter. Otherwise, the proposed restriction is substantially similar to the
funds' current investment restriction.

PROPOSAL 4(d): CHANGE TO FUNDAMENTAL RESTRICTION
ON INDUSTRY CONCENTRATION

WHICH FUNDS' SHAREHOLDERS WILL VOTE ON THIS PROPOSAL?

Proposal 4(d) applies to shareholders of all funds.

WHAT IS THE PROPOSED CHANGE?

All Funds Other than Global Utilities

Upon the approval of Proposal 4(d) by shareholders of each fund other than
Global Utilities, the existing fundamental restriction on industry concentration
for each of these funds would read as follows:

"The fund will not make investments that will result in the
concentration (as that term may be defined or interpreted by the 1940
Act laws, interpretations and exemptions) of its investments in the
securities of issuers primarily engaged in the same industry. This
restriction does not limit the fund's investments in (i) obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, (ii) tax-exempt obligations issued by governments
or political subdivisions of governments, or (iii) for Money Market,
bank instruments. In complying with

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<PAGE> 40

this restriction, the fund will not consider a bank-issued guaranty or
financial guaranty insurance as a separate security."

The proposed changes in this restriction for all funds other than Global
Utilities would make the fundamental restriction on industry concentration for
those funds no more limiting than required by the 1940 Act laws, interpretations
or exemptions. The proposed change would clarify that for industry concentration
purposes, the funds will not consider a bank-issued guaranty or financial
guaranty insurance as a separate security.

If you approve the proposed change, the following non-fundamental
restriction will become effective for each fund other than Global Utilities:

"In complying with the fundamental restriction regarding industry
concentration, the fund may invest up to 25% of its total assets in
the securities of issuers whose principal business activities are in
the same industry."

Global Utilities

Upon the approval by shareholders of Global Utilities of Proposal 4(d), the
existing fundamental restriction on industry concentration for Global Utilities
would be changed as follows:

"The fund will concentrate (as such term may be defined or interpreted
by the 1940 Act laws, interpretations and exemptions) its investments
in the securities of domestic and foreign public utility companies."

The proposed change to this fundamental restriction for Global Utilities
will make explicit the group of industries in which Global Utilities will
concentrate its investments.

If you approve the proposed change, the following non-fundamental
restriction will become effective for Global Utilities:

"For purposes of Global Utilities' fundamental restriction regarding
industry concentration, public utility companies shall consist of
companies that produce or supply electricity, natural gas, water,
sanitary services, and telephone, telegraph, cable, satellite or other
communication or information transmission services, as well as
developing utility technology companies and holding companies which
derive at least 40% of their revenues from utility-related
activities."

PROPOSAL 4(e): CHANGE TO FUNDAMENTAL RESTRICTION
ON PURCHASING OR SELLING REAL ESTATE

WHICH FUNDS' SHAREHOLDERS WILL VOTE ON THIS PROPOSAL?

Proposal 4(e) applies to shareholders of all funds.

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WHAT IS THE PROPOSED CHANGE?

Upon the approval of Proposal 4(e), the existing fundamental restriction on
real estate investments for each of the funds would read as follows:

"The fund may not purchase real estate or sell real estate unless
acquired as a result of ownership of securities or other instruments.
This restriction does not prevent the fund from investing in issuers
that invest, deal, or otherwise engage in transactions in real estate
or interests therein, or investing in securities that are secured by
real estate or interests therein."

Discussion:

Although the proposed restriction is similar to the existing fundamental
restriction, the proposed changes to this fundamental restriction would clarify
the types of real estate-related securities that are permissible investments for
each fund. The Board does not expect this change to have any material impact on
the funds' current operations.

PROPOSAL 4(f): CHANGE TO FUNDAMENTAL RESTRICTION
ON PURCHASING OR SELLING COMMODITIES

WHICH FUNDS' SHAREHOLDERS WILL VOTE ON THIS PROPOSAL?

Proposal 4(f) applies to shareholders of all funds.

WHAT IS THE PROPOSED CHANGE?

Upon the approval of Proposal 4(f), the existing fundamental restriction on
investing in commodities for each of the funds would read as follows:

"The fund may not purchase physical commodities or sell physical
commodities unless acquired as a result of ownership of securities or
other instruments. This restriction does not prevent the fund from
engaging in transactions involving futures contracts and options
thereon or investing in securities that are secured by physical
commodities."

Discussion:

The proposed changes to this fundamental restriction are intended to limit
the prohibition on purchasing commodities to physical commodities to ensure that
the funds will have the maximum flexibility to enter into hedging and other
transactions utilizing financial contracts and derivative products when doing so
is permitted by the funds' other investment policies. Furthermore, the proposed
restriction would allow the funds to respond to the rapid and continuing

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<PAGE> 42

development of derivative products. The proposed restriction also broadens the
types of futures and options contracts that are not prohibited by the investment
restriction.

Money Market does not intend to invest in puts, calls or combinations
thereof.

The Board does not expect this change to have any material impact on the
funds' current operations.

PROPOSAL 4(g): CHANGE TO FUNDAMENTAL RESTRICTION
ON MAKING LOANS

WHICH FUNDS' SHAREHOLDERS WILL VOTE ON THIS PROPOSAL?

Proposal 4(g) applies to shareholders of all funds.

WHAT IS THE PROPOSED CHANGE?

Upon the approval of Proposal 4(g), the existing fundamental restriction on
making loans for each of the funds would read as follows:

"The fund may not make personal loans or loans of its assets to
persons who control or are under common control with the fund, except
to the extent permitted by 1940 Act laws, interpretations and
exemptions. This restriction does not prevent the fund from, among
other things, purchasing debt obligations, entering into repurchase
agreements, loaning its assets to broker-dealers or institutional
investors, or investing in loans, including assignments and
participation interests."

Discussion:

The proposed fundamental restriction more completely describes various
types of debt instruments available in the financial markets that the funds may
purchase that do not constitute the making of a loan, and broadens the potential
circumstances under which the funds could make loans.

If you approve the proposed change, the following non-fundamental
restriction will become effective for each fund:

"In complying with the fundamental restriction with regard to making
loans, the fund may lend up to 33 1/3% of its total assets and may
lend money to another AIM fund, on such terms and conditions as the
SEC may require in an exemptive order."

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<PAGE> 43

PROPOSAL 4(h): ELIMINATION OF FUNDAMENTAL
RESTRICTION ON INVESTING FOR THE PURPOSE OF CONTROL

WHICH FUNDS' SHAREHOLDERS WILL VOTE ON THIS PROPOSAL?

Proposal 4(h) applies to shareholders of each fund.

WHAT IS THE PROPOSED CHANGE?

Upon the approval of Proposal 4(h), the existing fundamental restriction on
investing for the purpose of control for each of the funds would be eliminated.

Discussion:

The Board proposes to eliminate this fundamental restriction, which
prohibits each of the funds from investing in companies for the purpose of
exercising control or management. Elimination of this restriction would clarify
each fund's ability to exercise freely its rights as a shareholder of the
companies in which it invests. No fund, however, currently intends to become
involved in directing or administering the day-to-day operations of any company.

AIM believes that it should be able to communicate freely each fund's views
as a shareholder on important matters of policy to a company's management, its
board of directors and its shareholders, when AIM or the Board believes that
such action or policy may affect significantly the value of its investment. The
activities that each fund might engage in, either individually or with others,
include seeking changes in a company's direction, seeking the sale of a company
or a portion of its assets, or participating in a takeover effort or in
opposition to a takeover effort. AIM believes that each fund currently may
engage in such activities without necessarily violating this fundamental
restriction. Nevertheless, the existence of the investment restriction might
give rise to a claim that such activities did in fact constitute investing for
control or management.

WHEN WILL PROPOSALS 4(a) THROUGH 4(h) BE IMPLEMENTED?

If you approve each of the above proposals, the new fundamental
restrictions will replace the current corresponding fundamental investment
restrictions for all funds. Accordingly, they and the current fundamental
investment restriction pertaining to investing in a single open-end management
investment company will become the only fundamental investment restrictions
under which these funds will operate. If approved, the above restrictions may
not be changed with respect to your fund without the approval of the holders of
a majority of your fund's outstanding voting securities. The Board anticipates
that these proposals, if approved, will be implemented on May 1, 2000.

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<PAGE> 44

WHAT IS THE BOARD'S RECOMMENDATION ON PROPOSALS 4(a) THROUGH 4(h)?

YOUR BOARD, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" PROPOSALS 4(a) THROUGH 4(h).

PROPOSAL 5: CHANGE TO INVESTMENT OBJECTIVES OF
AGGRESSIVE GROWTH, BALANCED, BLUE CHIP, CAPITAL
DEVELOPMENT, DIVERSIFIED INCOME, GLOBAL GROWTH AND
INCOME, GROWTH AND INCOME, MONEY MARKET AND
TELECOMMUNICATIONS SO THAT THEY ARE
NON-FUNDAMENTAL

WHICH FUNDS' SHAREHOLDERS WILL VOTE ON THIS PROPOSAL?

Proposal 5 applies only to shareholders of Aggressive Growth, Balanced,
Blue Chip, Capital Development, Diversified Income, Global Growth and Income,
Growth and Income, Money Market and Telecommunications.

WHAT AM I BEING ASKED TO APPROVE?

The Board recommends that you approve making your fund's investment
objective non-fundamental, rather than fundamental. The Board is asking you to
vote on this change because the investment objective of your fund presently is
fundamental and shareholders must approve any change.

The investment objective of your fund is in Appendix J. By making an
objective non-fundamental, the Board may amend it as it deems appropriate,
without seeking a shareholder vote. The Board does not anticipate changing the
investment objective of your fund at the present time.

The Board expects that you will benefit from this proposed change because
it will have the ability to respond more quickly to new developments and
changing trends in the marketplace without incurring the time and the costs of a
shareholder vote. This should make your fund more competitive among its peers.

For example, although the investment objective of Telecommunications will
not currently change, the Board has approved changing the name of
Telecommunications to the AIM V.I. Telecommunications and Technology Fund. The
Board has also approved a change in the investment policy of Telecommunications
to provide that the fund will invest under normal conditions at least 65% of its
assets in securities issued by companies in the telecommunications and
technology industries. All of the foregoing changes will become effective on May
1, 2000. If as a result of these changes the Board determines in the future to
change the fund's investment objective, it may do so without shareholder
approval.

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<PAGE> 45

WHEN WILL PROPOSAL 5 BE IMPLEMENTED?

The Board anticipates that Proposal 5, if approved, will be implemented on
May 1, 2000.

WHAT IS THE BOARD'S RECOMMENDATION ON PROPOSAL 5?

YOUR BOARD, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.

PROPOSAL 6: CHANGING THE INVESTMENT OBJECTIVES OF CAPITAL APPRECIATION, GLOBAL
UTILITIES, GOVERNMENT
SECURITIES, GROWTH, INTERNATIONAL EQUITY AND VALUE AND MAKING THE INVESTMENT
OBJECTIVES
NON-FUNDAMENTAL

WHICH FUNDS' SHAREHOLDERS WILL VOTE ON THIS PROPOSAL?

Proposal 6 applies only to shareholders of Capital Appreciation, Global
Utilities, Government Securities, Growth, International Equity and Value.

WHAT AM I BEING ASKED TO APPROVE?

The Board recommends that you approve changing your fund's investment
objective as follows: (1) for each of these six funds, by making the investment
objective non-fundamental; (2) for each of the funds, by eliminating from the
investment objective the types of securities the fund proposes to purchase in
seeking to achieve its objective; and (3) for Global Utilities, by changing the
investment objective so that the fund would achieve a high total return rather
than primarily a high level of current income. The Board is asking you to vote
on this change because the investment objective of your fund presently is
fundamental and shareholders must approve any change.

The current investment objective of your fund is in Appendix J. By making
an objective non-fundamental, the Board may change it as it deems appropriate,
without seeking a shareholder vote. The Board does not anticipate making
additional changes to the investment objective of your fund at the present time.

The Board believes that the basic investment objective of the fund should
be separate from the types of securities the fund may purchase to achieve its
objective. This change will permit the Board to change the types of securities
the fund may purchase without also changing the fund's investment objective.

If shareholders approve this proposal, with the exception of Capital
Appreciation and Global Utilities, neither the investment objective nor the
proposed

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<PAGE> 46

separate investment policy regarding the types of securities your fund may
purchase will change as a result of the proposal.

Capital Appreciation

For Capital Appreciation, the investment objective of the fund will not
change, but the investment policy will change. Currently, the fund emphasizes
investment in medium and small sized growth companies in seeking to achieve its
objective of growth of capital. If this proposal is approved, the fund will seek
to meet its objective by investing principally in common stocks of companies the
portfolio managers believe are likely to benefit from new or innovative
products, services or processes as well as those that have experienced
above-average, long-term growth in earnings and have excellent prospects for
future growth. The Board is recommending this change to permit the fund to
invest in securities regardless of the size of the issuer.

If shareholders of Capital Appreciation approve this proposal, the
investment objective of Capital Appreciation will read as follows:

"The fund's investment objective is growth of capital."

Global Utilities

For Global Utilities, the investment objective of the fund will change, but
the investment policy will not change. Currently, the fund seeks to achieve a
high level of current income and secondarily, growth of capital. If this
proposal is approved by shareholders, its investment objective will change so
that the fund will seek to achieve a high total return. The Board is
recommending this change so that the investment objective conforms to the
investment characteristics of public utility company securities currently
available in the market place. These securities have the potential for capital
appreciation, but may not be income-producing.

If shareholders of Global Utilities approve this proposal, the investment
objective of Global Utilities will read as follows:

"The fund's investment objective is to achieve a high total return."

Global Utilities will seek to achieve its objective by investing, normally,
at least 65% of its total assets in securities of domestic and foreign public
utility companies. Public utility companies include companies that produce or
supply electricity, natural gas, water, sanitary services, and telephone,
telegraph, cable, satellite or other communication or information transmission
services, as well as developing utility technology companies and holding
companies which derive at least 40% of their revenues from utility-related
activities. The fund will seek to position itself to take advantage of
deregulation in the utility industry, and advances in communications and natural
gas technology.

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<PAGE> 47

Government Securities

If shareholders of Government Securities approve this proposal, the
investment objective of Government Securities will read as follows:

"The fund's investment objective is to achieve a high level of current
income consistent with reasonable concern for safety of principal."

Government Securities will also retain the investment policy of investing
in debt securities issued, guaranteed or otherwise backed by the U.S.
Government.

Growth

If shareholders of Growth approve this proposal, the investment objective
of Growth will read as follows:

"The fund's investment objective is to achieve growth of capital."

Growth will also retain the investment policy of investing in seasoned and
better-capitalized companies considered to have strong earnings momentum.

International Equity

If shareholders of International Equity approve this proposal, the
investment objective of International Equity will read as follows:

"The fund's investment objective is to achieve long-term growth of
capital."

International Equity will retain the policy of investing in a diversified
portfolio of international equity securities whose issuers are considered to
have strong earnings momentum.

Value

If shareholders of Value approve this proposal, the investment objective of
Value will read as follows:

"The fund's investment objective is to achieve long-term growth of
capital. Income is a secondary objective."

Value will retain the policy of investing primarily in equity securities
judged by AIM to be undervalued relative to its appraisal of the current or
projected earnings of the companies issuing the securities, or relative to
current market values of assets owned by the companies issuing the securities or
relative to the equity market generally.

The Board expects that you will benefit from these proposed changes because
it will be able to change your fund's investment objective and related
investment policies without incurring the time and the costs of a shareholder
vote. In addition, for Capital Appreciation and Utilities, the changes permit
these

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<PAGE> 48

funds to purchase a broader range of securities available in the marketplace.
The Board believes that this additional flexibility to respond to new
developments and changing trends in the marketplace may make your fund more
competitive among its peers.

WHEN WILL PROPOSAL 6 BE IMPLEMENTED?

The Board anticipates that Proposal 6, if approved, will be implemented on
May 1, 2000.

WHAT IS THE BOARD'S RECOMMENDATION ON PROPOSAL 6?

YOUR BOARD, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.

PROPOSAL 7: RATIFICATION OF SELECTION OF TAIT, WELLER & BAKER AS INDEPENDENT
ACCOUNTANTS

WHICH FUNDS' SHAREHOLDERS WILL VOTE ON THIS PROPOSAL?

Proposal 7 applies to shareholders of all funds.

WHAT AM I BEING ASKED TO APPROVE?

The Board has selected Tait, Weller & Baker as independent accountants for
each fund for its fiscal year ending December 31, 2000. As each fund's
independent accountants, Tait, Weller & Baker will examine and verify the
accounts and securities of that fund and report on them to the Board and to that
fund's shareholders. The Board's selection will be submitted for your
ratification at the meeting.

WHY HAS THE BOARD SELECTED TAIT, WELLER & BAKER AS THE INDEPENDENT ACCOUNTANTS?

Tait, Weller & Baker was selected primarily on the basis of its expertise
as auditors of investment companies, its independence from AIM and its
affiliates, the quality of its audit services, and the competitiveness of the
fees charged for these services. Tait, Weller & Baker has served as independent
accountants for the funds since their inception.

WILL A REPRESENTATIVE FROM TAIT, WELLER & BAKER BE AVAILABLE FOR QUESTIONS?

The Board does not expect that a representative of Tait, Weller & Baker
will be present at the meeting.

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<PAGE> 49

WHAT IS THE BOARD'S RECOMMENDATION ON PROPOSAL 7?

YOUR BOARD, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.

GENERAL INFORMATION

WHO ARE THE EXECUTIVE OFFICERS OF THE COMPANY?

Information about the executive officers of the company is in Appendix K.

WHAT IS THE SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN HOLDERS?

Information about the ownership of each fund's shares by the directors and
the executive officers of the company and by 5% holders of each fund is in
Appendix L.

WHO ARE THE INVESTMENT ADVISORS, ADMINISTRATOR AND PRINCIPAL UNDERWRITERS OF THE
FUNDS?

A I M Advisors, Inc., whose principal address is 11 Greenway Plaza, Suite
100, Houston, Texas 77046-1173, serves as the investment advisor and
administrator for the funds.

A I M Distributors, Inc., whose principal address is 11 Greenway Plaza,
Suite 100, Houston, Texas 77046-1173, serves as the principal underwriter for
each of the funds.

H.S. Dent Advisors, Inc., whose principal address is 6515 Gwin Road,
Oakland, California 94611, serves as investment sub-advisor to Dent Demographic
Trends.

INVESCO Asset Management Limited, whose principal address is 11 Devonshire
Square, London, England EC2 M4YR, serves as investment sub-advisor to Global
Growth and Income. Its sub-advisory agreement with AIM with respect to Global
Growth and Income will terminate as of May 1, 2000. See "CAN AIM DELEGATE ANY OF
ITS DUTIES UNDER THE ADVISORY AGREEMENT?" under Proposal 3.

HAS THE COMPANY HIRED A PROXY SOLICITOR?

The company has engaged the services of Shareholder Communications
Corporation (SCC) to assist it in soliciting proxies for the meeting. The
company estimates that the aggregate cost of SCC's services will be
approximately $5,000. The company will bear the cost of soliciting proxies. The
company expects to solicit proxies principally by mail, but SCC may also solicit
proxies by telephone,

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<PAGE> 50

facsimile, or personal interview. The company may also reimburse firms and
others for their expenses in forwarding solicitation materials to the beneficial
owners of shares of the funds.

HOW CAN I SUBMIT A PROPOSAL?

As a general matter, the funds do not hold regular meetings of
shareholders. If a contract holder wishes to submit a proposal for consideration
at a meeting of shareholders of a fund, he or she should send such proposal to
his or her insurance company. To be considered for presentation at a
shareholders' meeting, the insurance company must receive proposals and transmit
them to the company a reasonable time before proxy materials are prepared
relating to that meeting. Your proposal also must comply with applicable law.

HOW CAN I OBTAIN MORE INFORMATION ABOUT THE FUNDS?

UPON YOUR REQUEST, EACH FUND WILL FURNISH YOU A FREE COPY OF ITS MOST
RECENT ANNUAL REPORT. YOU SHOULD DIRECT YOUR REQUEST TO A I M FUND SERVICES,
INC. AT P.O. BOX 4739, HOUSTON, TX 77210-4739 OR BY CALLING 1-800-347-4246.

OTHER MATTERS

The Board does not know of any matters to be presented at the meeting other
than those set forth in this proxy statement. If any other business should come
before the meeting, the persons named in the accompanying proxy will vote
thereon in accordance with their best judgment.

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<PAGE> 51

APPENDIX A

SHARES OF AIM VARIABLE INSURANCE FUNDS, INC.

<TABLE>
<CAPTION>
NUMBER OF SHARES
OUTSTANDING ON
NAME OF FUND JANUARY 20, 2000
- ------------ ----------------
<S> <C>
AIM V.I. Aggressive Growth Fund........................... 1,294,831.162
AIM V.I. Balanced Fund.................................... 3,921,022.433
AIM V.I. Blue Chip Fund................................... 122,021.857
AIM V.I. Capital Appreciation Fund........................ 32,450,602.438
AIM V.I. Capital Development Fund......................... 1,040,485.783
AIM V.I. Dent Demographic Trends Fund..................... 202,142.099
AIM V.I. Diversified Income Fund.......................... 9,818,403.479
AIM V.I. Global Growth and Income Fund.................... 2,247,876.191
AIM V.I. Global Utilities Fund............................ 1,761,678.127
AIM V.I. Government Securities Fund....................... 6,535,188.689
AIM V.I. Growth and Income Fund........................... 78,592,180.438
AIM V.I. Growth Fund...................................... 22,682,220.598
AIM V.I. High Yield Fund.................................. 2,849,031.297
AIM V.I. International Equity Fund........................ 15,592,094.063
AIM V.I. Money Market Fund................................ 92,105,197.260
AIM V.I. Telecommunications Fund.......................... 3,131,699.444
AIM V.I. Value Fund....................................... 72,971,088.258
</TABLE>

A-1
<PAGE> 52

APPENDIX B

AIM VARIABLE INSURANCE FUNDS, INC.

AGREEMENT AND PLAN OF REORGANIZATION

AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of
December 7, 1999, is entered into by and between AIM Variable Insurance Funds,
Inc., a Maryland corporation (the "Company"), acting on its own behalf and on
behalf of each of its series portfolios, all of which are identified on Schedule
A to this Agreement, and AIM Variable Insurance Funds, a Delaware business trust
(the "Trust"), acting on its own behalf and on behalf of each of its series
portfolios, all of which are identified on Schedule A to this Agreement.

BACKGROUND

The Company is organized as a series management investment company and is
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940. The Company currently publicly offers shares of common
stock representing interests in seventeen separate series portfolios. Each of
these series portfolios is listed on Schedule A and is referred to in this
Agreement as a "Current Fund."

The Board of Directors of the Company has designated a single class of
common stock that represent interests in each Current Fund.

The Company desires to change its form and place of organization by
reorganizing as the Trust. In anticipation of such reorganization (the
"Reorganization"), the Board of Trustees of the Trust has established seventeen
series portfolios corresponding to the Current Funds (each a "New Fund"), and
has designated a single class of shares of beneficial interest in each New Fund.
Schedule A lists the New Funds.

The Reorganization will occur through the transfer of all of the assets of
each Current Fund to the corresponding New Fund. In consideration of its receipt
of these assets, each New Fund will assume all of the liabilities of the
corresponding Current Fund, and will issue to the Current Fund shares of
beneficial interest in the New Fund ("New Fund Shares"). New Fund Shares
received by the Current Fund will have an aggregate net asset value equal to the
aggregate net asset value of the shares of the Current Fund immediately prior to
the Reorganization (the "Current Fund Shares"). The Current Fund will then
distribute the New Fund Shares it has received to its shareholders.

The Reorganization is subject to, and shall be effected in accordance with,
the terms of this Agreement. This Agreement is intended to be and is adopted by
the Company, on its own behalf and on behalf of the Current Funds, and by the
Trust, on its own behalf and on behalf of the New Funds, as a Plan of

B-1
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Reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code").

NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:

1. DEFINITIONS.

Any capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the preamble or background to this Agreement. In addition,
the following terms shall have the following meanings:

1.1 "Assets" shall mean all assets including, without limitation, all
cash, cash equivalents, securities, receivables (including interest and
dividends receivable), claims and rights of action, rights to register shares
under applicable securities laws, books and records, deferred and prepaid
expenses shown as assets on a Current Fund's books, and other property owned by
a Current Fund at the Effective Time.

1.2 "Closing" shall mean the consummation of the transfer of assets,
assumption of liabilities and issuance of shares described in Sections 2.1 and
2.2 of this Agreement, together with the related acts necessary to consummate
the Reorganization, to occur on the date set forth in Section 3.1.

1.3 "Code" shall mean the Internal Revenue Code of 1986, as amended.

1.4 "Current Fund" shall mean each of the Company's seventeen series
portfolios.

1.5 "Current Fund Shares" shall mean the shares of the Current Funds
outstanding immediately prior to the Reorganization.

1.6 "Effective Time" shall have the meaning set forth in Section 3.1.

1.7 "Liabilities" shall mean all liabilities of a Current Fund including,
without limitation, all debts, obligations, and duties of whatever kind or
nature, whether absolute, accrued, contingent, or otherwise, whether or not
determinable at the Effective Time, and whether or not specifically referred to
herein.

1.8 "New Fund" shall mean each of the series portfolios of the Trust, one
of which shall correspond to one of the Current Funds as shown on Schedule A.

1.9 "New Fund Shares" shall mean those shares of beneficial interest in a
New Fund, issued to a Current Fund in consideration of the New Fund's receipt of
the Current Fund's Assets.

1.10 "Registration Statement" shall have the meaning set forth in Section
5.4

1.11 "RIC" shall mean a regulated investment company under Subchapter M of
the Code.

B-2
<PAGE> 54

1.12 "SEC" shall mean the Securities and Exchange Commission.

1.13 "Shareholder(s)" shall mean a Current Fund's shareholder(s) of
record, determined as of the Effective Time.

1.14 "Shareholders' Meeting" shall have the meaning set forth in Section
5.1.

1.15 "Transfer Agent" shall have the meaning set forth in Section 2.2

1.16 "1940 Act" shall mean the Investment Company Act of 1940, as amended.

2. PLAN OF REORGANIZATION.

2.1 The Company agrees, on behalf of each Current Fund, to assign, sell
convey, transfer and deliver all of the Assets of each Current Fund to its
corresponding New Fund. The Trust, on behalf of the each New Fund agrees in
exchange therefor:

(a) to issue and deliver to the Current Fund the number of full and
fractional (rounded to the third decimal place) New Fund Shares equal to
the number of full and fractional Current Fund Shares; and

(b) to assume all of the Current Fund's Liabilities.

Such transactions shall take place at the Closing.

2.2 At the Effective Time (or as soon thereafter as is reasonably
practicable), (a) the New Fund Shares issued pursuant to Section 5.2 shall be
redeemed by each New Fund for $1.00 and (b) each Current Fund shall distribute
the New Fund Shares received by it pursuant to Section 2.1 to the Current Fund's
Shareholders in exchange for such Shareholders' Current Fund Shares. Such
distribution shall be accomplished through opening accounts, by the transfer
agent for the Trust (the "Transfer Agent"), on each New Fund's share transfer
books in the Shareholders' names and transferring New Fund Shares to such
accounts. Each Shareholder's account shall be credited with the respective pro
rata number of full and fractional (rounded to the third decimal place) New Fund
Shares due that Shareholder. All outstanding Current Fund Shares, including
those represented by certificates, shall simultaneously be canceled on each
Current Fund's share transfer books. The Trust shall not issue certificates
representing the New Fund Shares in connection with the Reorganization. However,
certificates representing Current Fund Shares shall represent New Fund Shares
after the Reorganization.

2.3 As soon as reasonably practicable after distribution of the New Fund
Shares pursuant to Section 2.2, the Company shall dissolve its existence as
corporation under Maryland law.

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2.4 Any transfer taxes payable on issuance of New Fund Shares in a name
other than that of the registered holder of the Current Fund Shares exchanged
therefor shall be paid by the person to whom such New Fund Shares are to be
issued, as a condition of such transfer.

2.5 Any reporting responsibility of the Company or each Current Fund to a
public authority is, and shall remain its responsibility up to and including the
date on which it is terminated.

3. CLOSING.

3.1 The Closing shall occur at the principal office of the Company on
April 17, 2000, or on such other date and at such other place upon which the
parties may agree. All acts taking place at the Closing shall be deemed to take
place simultaneously as of the Company's and the Trust's close of business on
the date of the Closing or at such other time as the parties may agree (the
"Effective Time").

3.2 The Company or its fund accounting agent shall deliver to the Trust at
the Closing, a certificate of an authorized officer verifying that the
information (including adjusted basis and holding period, by lot) concerning the
Assets, including all portfolio securities, transferred by the Current Funds to
the New Funds, as reflected on the New Funds' books immediately following the
Closing does or will conform to such information on the Current Funds' books
immediately before the Closing. The Company shall cause the custodian for each
Current Fund to deliver at the Closing a certificate of an authorized officer of
the custodian stating that (a) the Assets held by the custodian will be
transferred to each corresponding New Fund at the Effective Time and (b) all
necessary taxes in conjunction with the delivery of the Assets, including all
applicable federal and state stock transfer stamps, if any, have been paid or
provision for payment has been made.

3.3 The Company shall deliver to the Trust at the Closing a list of the
names and addresses of each Shareholder of each Current Fund and the number of
outstanding Current Fund Shares owned by each Shareholder, all as of the
Effective Time, certified by the Company's Secretary or Assistant Secretary. The
Trust shall cause the Transfer Agent to deliver at the Closing a certificate as
to the opening on each New Fund's share transfer books of accounts in the
Shareholders' names. The Trust shall issue and deliver a confirmation to the
Company evidencing the New Fund Shares to be credited to each corresponding
Current Fund at the Effective Time or provide evidence satisfactory to the
Company that such shares have been credited to each Current Fund's account on
such books. At the Closing, each party shall deliver to the other such bills of
sale, checks, assignments, stock certificates, receipts, or other documents as
the other party or its counsel may reasonably request.

B-4
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3.4 The Company and the Trust shall deliver to the other at the Closing a
certificate executed in its name by its President or a Vice President in form
and substance satisfactory to the recipient and dated the Effective Time, to the
effect that the representations and warranties it made in this Agreement are
true and correct at the Effective Time except as they may be affected by the
transactions contemplated by this Agreement.

4. REPRESENTATIONS AND WARRANTIES.

4.1 The Company represents and warrants on its own behalf and on behalf of
each Current Fund as follows:

(a) The Company is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Maryland, and its Charter
is on file with the Maryland Department of Assessments and Taxation;

(b) The Company is duly registered as an open-end series management
investment company under the 1940 Act, and such registration is in full
force and effect;

(d) At the Closing, each Current Fund will have good and marketable
title to its Assets and full right, power, and authority to sell, assign,
transfer, and deliver its Assets free of any liens or other encumbrances;
and upon delivery and payment for the Assets, the corresponding New Fund
will acquire good and marketable title to the Assets;

(e) The New Fund Shares are not being acquired for the purpose of
making any distribution thereof, other than in accordance with the terms
hereof;

(f) Each Current Fund is a "fund" as defined in Section 851(g)(2) of
the Code; each Current Fund qualified for treatment as a RIC for each past
taxable year since it commenced operations and will continue to meet all
the requirements for such qualification for its current taxable year (and
the Assets will be invested at all times through the Effective Time in a
manner that ensures compliance with the foregoing); each Current Fund has
no earnings and profits accumulated in any taxable year in which the
provisions of Subchapter M did not apply to it; and each Current Fund has
made all distributions for each such past taxable year that are necessary
to avoid the imposition of federal excise tax or has paid or provided for
the payment of any excise tax imposed for any such year;

(g) There is no plan or intention of the Shareholders who individually
own 5% or more of any Current Fund Shares and, to the best of the Company's
knowledge, there is no plan or intention of the remaining Shareholders to
redeem or otherwise dispose of any New Fund Shares to be

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<PAGE> 57

received by them in the Reorganization. The Company does not anticipate
dispositions of those shares at the time of or soon after the
Reorganization to exceed the usual rate and frequency of redemptions of
shares of the Current Fund as a series of an open-end investment company.
Consequently, the Company is not aware of any plan that would cause the
percentage of Shareholder interests, if any, that will be disposed of as a
result of or at the time of the Reorganization will be one percent (1%) or
more of the shares of the Current Fund outstanding as of the Effective
Time;

(h) The Liabilities were incurred by the Current Funds in the ordinary
course of their business and are associated with the Assets;

(i) The Company is not under the jurisdiction of a court in a
proceeding under Title 11 of the United States Code or similar case within
the meaning of Section 368(a)(3)(A) of the Code;

(j) As of the Effective Time, no Current Fund will have outstanding
any warrants, options, convertible securities, or any other type of rights
pursuant to which any person could acquire Current Fund Shares except for
the right of investors to acquire its shares at net asset value in the
normal course of its business as an open-end diversified management
investment company operating under the 1940 Act;

(k) At the Effective Time, the performance of this Agreement shall
have been duly authorized by all necessary action by the Company's
shareholders; and

(l) Throughout the five-year period ending on the date of the Closing,
each Current Fund will have conducted its historic business within the
meaning of Section 1.368-1(d) of the Income Tax Regulations under the Code
in a substantially unchanged manner;

(m) The fair market value of the Assets of each Current Fund
transferred to the corresponding New Fund will equal or exceed the sum of
the Liabilities assumed by the New Fund plus the amount of Liabilities, if
any, to which the transferred Assets are subject.

4.2 The Trust represents and warrants on its own behalf, and on behalf of
each New Fund as follows:

(a) The Trust is a business trust duly organized, validly existing,
and in good standing under the laws of the State of Delaware, and its
Certificate of Trust has been duly filed in the office of the Secretary of
State of Delaware;

(b) At the Effective Time, the Trust will succeed to the Company's
registration statement filed under the 1940 Act with the SEC and thus will
become duly registered as an open-end management investment company under
the 1940 Act;

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<PAGE> 58

(d) No New Fund has commenced operations nor will it commence
operations until after the Closing;

(e) Prior to the Effective Time, there will be no issued and
outstanding shares in any New Fund or any other securities issued by the
Trust on behalf of any New Fund, except as provided in Section 5.2;

(f) No consideration other than New Fund Shares (and the New Fund's
assumption of the Liabilities) will be issued in exchange for the Assets in
the Reorganization;

(g) The New Fund Shares to be issued and delivered to the
corresponding Current Fund hereunder will, at the Effective Time, have been
duly authorized and, when issued and delivered as provided herein, will be
duly and validly issued and outstanding shares of the New Fund, fully paid
and non-assessable;

(h) Each New Fund will be a "fund" as defined in Section 851(g)(2) of
the Code and will meet all the requirements to qualify for treatment as a
RIC for its taxable year in which the Reorganization occurs;

(i) The Trust, on behalf of the New Funds, has no plan or intention to
issue additional New Fund Shares following the Reorganization except for
shares issued in the ordinary course of its business as a series of an
open-end investment company; nor does the Trust, on behalf of the New
Funds, have any plan or intention to redeem or otherwise reacquire any New
Fund Shares issued pursuant to the Reorganization, other than in the
ordinary course of its business or to the extent necessary to comply with
its legal obligation under Section 22(e) of the 1940 Act;

(j) Each New Fund will actively continue the corresponding Current
Fund's business in substantially the same manner that the Current Fund
conducted that business immediately before the Reorganization; and no New
Fund has any plan or intention to sell or otherwise dispose of any of the
Assets, except for dispositions made in the ordinary course of its business
or dispositions necessary to maintain its qualification as a RIC, although
in the ordinary course of its business the New Fund will continuously
review its investment portfolio (as each Current Fund did before the
Reorganization) to determine whether to retain or dispose of particular
stocks or securities, including those included in the Assets;

(k) There is no plan or intention for any of the New Funds to be
dissolved or merged into another corporation or business trust or "fund"
thereof (within the meaning of section 851(g)(2) of the Code) following the
Reorganization; and

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<PAGE> 59

4.3 Each of the Company and the Trust, on its own behalf and on behalf of
each Current Fund or each New Fund, as appropriate, represents and warrants as
follows:

(a) The fair market value of the New Fund Shares of each New Fund
received by each Shareholder will be equal to the fair market value of the
Current Fund Shares of the corresponding Current Fund surrendered in
exchange therefor;

(b) Immediately following consummation of the Reorganization, the
Shareholders will own all the New Fund Shares of each New Fund and will own
such shares solely by reason of their ownership of the Current Fund Shares
of the corresponding Current Fund immediately before the Reorganization;

(d) There is no intercompany indebtedness between a Current Fund and a
New Fund that was issued or acquired, or will be settled, at a discount;
and

(e) Immediately following consummation of the Reorganization, each New
Fund will hold the same assets, except for assets distributed to
shareholders in the course of its business as a RIC and assets used to pay
expenses incurred in connection with the Reorganization, and be subject to
the same liabilities that the corresponding Current Fund held or was
subject to immediately prior to the Reorganization. Assets used to pay (i)
expenses, (ii) all redemptions (other than redemptions at the usual rate
and frequency of the Current Fund as a series of an open-end investment
company), and (iii) distributions (other than regular, normal
distributions), made by a Current Fund after the date of this Agreement
will, in the aggregate, constitute less than one percent (1%) of its net
assets.

5. COVENANTS

5.1 As soon as practicable after the date of this Agreement, the Company
shall call a meeting of its Shareholders (the "Shareholders Meeting") to
consider and act on this Agreement. The Board of Directors of the Company shall
recommend that Shareholders approve this Agreement and the transactions
contemplated by this Agreement. Approval by Shareholders of this Agreement will
authorize the Company, and the Company hereby agrees, to vote on the matters
referred to in Sections 5.2 and 5.3.

5.2 The Trust's trustees shall authorize the issuance of, and each New
Fund shall issue, prior to the Closing, one New Fund Share of each New Fund to
the Company in consideration of the payment of $1.00 per share for the purpose
of enabling the Company to elect the Company's directors as the Trust's trustees

B-8
<PAGE> 60

(to serve without limit in time, except as they may resign or be removed by
action of the Trust's trustees or shareholders), to ratify the selection of the
Trust's independent accountants, and to vote on the matters referred to in
Section 5.3;

5.3 Immediately prior to the Closing, the Trust (on its own behalf of and
with respect to each New Fund, as appropriate) shall enter into a Master
Investment Advisory Agreement, a Master Sub-Advisory Agreement, a Master
Administrative Services Agreement, Master Distribution Agreements, a Custodian
Agreement and a Transfer Agency and Servicing Agreement; and shall enter into or
adopt, as appropriate, such other agreements and plans as are necessary for each
New Fund's operation as a series of an open-end investment company. Each such
agreement and plan shall have been approved by the Trust's trustees and, to the
extent required by law, by such of those trustees who are not "interested
persons" of the Trust (as defined in the 1940 Act) and by the Company as the
sole shareholder of each New Fund.

5.4 The Company or the Trust, as appropriate, shall file with the SEC one
or more post-effective amendments to the Company's Registration Statement on
Form N-1A under the Securities Act of 1933, as amended, and the 1940 Act, as
amended (the "Registration Statement"), (i) which contain such amendments to
such Registration Statement as are determined by the Company to be necessary and
appropriate to effect the Reorganization and (ii) pursuant to which the Trust
adopts such Registration Statement, as so amended, as its own, and shall use its
best efforts to have such post-effective amendment or amendments to the
Registration Statement become effective as of the Closing.

6. CONDITIONS PRECEDENT.

The obligations of the Company, on its own behalf and on behalf of each
Current Fund, and the Trust, on its own behalf and on behalf of each New Fund,
will be subject to (a) performance by the other party of all its obligations to
be performed hereunder at or before the Effective Time, (b) all representations
and warranties of the other party contained herein being true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated hereby, as of the Effective Time, with the same
force and effect as if made on and as of the Effective Time, and (c) the further
conditions that, at or before the Effective Time:

6.1 The Shareholders of the Company shall have approved this Agreement and
the transactions contemplated by this Agreement in accordance with applicable
law.

6.2 All necessary filings shall have been made with the SEC and state
securities authorities, and no order or directive shall have been received that
any other or further action is required to permit the parties to carry out the
transactions contemplated hereby. All consents, orders, and permits of federal,

B-9
<PAGE> 61

state, and local regulatory authorities (including the SEC and state securities
authorities) deemed necessary by either the Company or the Trust to permit
consummation, in all material respects, of the transactions contemplated hereby
shall have been obtained, except where failure to obtain such consults, orders,
and permits would not involve a risk of a material adverse effect on the assets
or properties of either a Current Fund or a New Fund, provided that either the
Company or the Trust may for itself waive any of such conditions.

6.3 Each of the Company and the Trust shall have received an opinion from
Ballard Spahr Andrews & Ingersoll, LLP as to the federal income tax consequences
mentioned below. In rendering such opinion, such counsel may rely as to factual
matters, exclusively and without independent verification, on the
representations made in this Agreement (or in separate letters of representation
that the Company and the Trust shall use their best efforts to deliver to such
counsel) and the certificates delivered pursuant to Section 3.4. Such opinion
shall be substantially to the effect that, based on the facts and assumptions
stated therein and conditioned on consummation of the Reorganization in
accordance with this Agreement, for federal income tax purposes:

(a) The Reorganization will constitute a Reorganization within the
meaning of section 368(a) of the Code, and each Current Fund and each New
Fund will be "a party to a Reorganization" within the meaning of section
368(b) of the Code;

(b) No gain or loss will be recognized to a Current Fund on the
transfer of the Assets to the corresponding New Fund in exchange solely for
New Fund Shares and the New Fund's assumption of the Liabilities or on the
subsequent distribution of New Fund Shares to the Shareholders, in
constructive exchange for their Current Fund Shares, in liquidation of the
Current Fund;

(c) No gain or loss will be recognized to a New Fund on its receipt of
the Assets in exchange for New Fund Shares and its assumption of the
Liabilities;

(d) Each New Fund's basis for the Assets will be the same as the basis
thereof in the corresponding Current Fund's hands immediately before the
Reorganization, and the New Fund's holding period for the Assets will
include the Current Fund's holding period therefor;

(e) A Shareholder will recognize no gain or loss on the constructive
exchange of Current Fund Shares solely for New Fund Shares pursuant to the
Reorganization; and

(f) A Shareholder's basis for the New Fund Shares of each New Fund to
be received in the Reorganization will be the same as the basis for the
Current Fund Shares of the corresponding Current Fund to be constructively
surrendered in exchange for such New Fund Shares, and a Share-

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<PAGE> 62

holder's holding period for such New Fund Shares will include its holding
period for the Current Fund Shares constructively surrendered, provided
that the New Fund Shares are held as capital assets by the Shareholder at
the Effective Time.

6.4 No stop-order suspending the effectiveness of the Registration
Statement shall have been issued, and no proceeding for that purpose shall have
been initiated or threatened by the SEC (and not withdrawn or terminated).

At any time prior to the Closing, any of the foregoing conditions (except
those set forth in Section 6.1) may be waived by the directors/trustees of
either the Company or the Trust if, in their judgment, such waiver will not have
a material adverse effect on the interests of the Current Fund's shareholders.

7. EXPENSES.

Except as otherwise provided in Section 4.3(c), all expenses incurred in
connection with the transactions contemplated by this Agreement (regardless of
whether they are consummated) will be borne by the parties as they mutually
agree.

8. ENTIRE AGREEMENT.

Neither party has made any representation, warranty, or covenant not set
forth herein, and this Agreement constitutes the entire agreement between the
parties.

9. AMENDMENT.

This Agreement may be amended, modified, or supplemented at any time,
notwithstanding its approval by the Company's Shareholders, in such manner as
may be mutually agreed upon in writing by the parties; provided that following
such approval no such amendment shall have a material adverse effect on the
Shareholders' interests.

10. TERMINATION.

This Agreement may be terminated at any time at or prior to the Effective
Time, whether before or after approval by the Company's Shareholders:

10.1 By either the Company or the Trust (a) in the event of the other
party's material breach of any representation, warranty, or covenant contained
herein to be performed at or prior to the Effective Time, (b) if a condition to
its obligations has not been met and it reasonably appears that such condition
will not or cannot be met, or (c) if the Closing has not occurred on or before
July 31, 2000; or

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10.2 By the parties' mutual agreement.

Except as otherwise provided in Section 7, in the event of termination
under Sections 10.1(c) or 10.2, there shall be no liability for damages on the
part of either the Company or the Trust or any Current Fund or corresponding New
Fund, to the other.

11. MISCELLANEOUS.

11.1 This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware; provided that, in the case of any
conflict between such laws and the federal securities laws, the latter shall
govern.

11.2 Nothing expressed or implied herein is intended or shall be construed
to confer upon or give any person, firm, trust, or corporation other than the
parties and their respective successors and assigns any rights or remedies under
or by reason of this Agreement.

11.3 The execution and delivery of this Agreement have been authorized by
the Trust's trustees, and this Agreement has been executed and delivered by
authorized officers of the Trust acting as such; neither such authorization by
such trustees nor such execution and delivery by such officers shall be deemed
to have been made by any of them individually or to impose any liability on any
of them or any shareholder of the Trust personally, but shall bind only the
assets and property of the New Funds, as provided in the Trust's Agreement and
Declaration of Trust.

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<PAGE> 64

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 VARIABLE INSURANCE FUNDS,
INC.,
on behalf of each of its series
listed in Schedule A to this
Agreement

/s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
- --------------------------------- ---------------------------------
Title: President
---------------------------

Attest: AIM VARIABLE INSURANCE FUNDS,
on behalf of each of its series
listed in Schedule A to this
Agreement

/s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
- --------------------------------- ---------------------------------
Title: President
---------------------------
</TABLE>

B-13
<PAGE> 65

SCHEDULE A

<TABLE>
<CAPTION>
SERIES OF AIM VARIABLE CORRESPONDING SERIES OF AIM
INSURANCE FUNDS, INC. VARIABLE INSURANCE FUNDS
(EACH A "CURRENT FUND") (EACH A "NEW FUND")
- -------------------------------------- --------------------------------------
<S> <C>
AIM V.I. Aggressive Growth Fund AIM V.I. Aggressive Growth Fund
AIM V.I. Balanced Fund AIM V.I. Balanced Fund
AIM V.I. Blue Chip Fund AIM V.I. Blue Chip Fund
AIM V.I. Capital Appreciation Fund AIM V.I. Capital Appreciation Fund
AIM V.I. Capital Development Fund AIM V.I. Capital Development Fund
AIM V.I. Dent Demographic Trends Fund AIM V.I. Dent Demographic Trends Fund
AIM V.I. Diversified Income Fund AIM V.I. Diversified Income Fund
AIM V.I. Global Growth and Income Fund AIM V.I. Global Growth and Income Fund
AIM V.I. Global Utilities Fund AIM V.I. Global Utilities Fund
AIM V.I. Government Securities Fund AIM V.I. Government Securities Fund
AIM V.I. Growth and Income Fund AIM V.I. Growth and Income Fund
AIM V.I. Growth Fund AIM V.I. Growth Fund
AIM V.I. High Yield Fund AIM V.I. High Yield Fund
AIM V.I. International Equity Fund AIM V.I. International Equity Fund
AIM V.I. Money Market Fund AIM V.I. Money Market Fund
AIM V.I. Telecommunications Fund AIM V.I. Telecommunications Fund
AIM V.I. Value Fund AIM V.I. Value Fund
</TABLE>

B-14
<PAGE> 66

APPENDIX C

AIM VARIABLE INSURANCE FUNDS, INC.
FORM OF MASTER INVESTMENT ADVISORY AGREEMENT

THIS AGREEMENT is made this day of , , by and
between AIM Variable Insurance Funds, Inc., a Maryland corporation (the
"Company") with respect to its series of shares shown on the Schedule A attached
hereto, as the same may be amended from time to time, and A I M Advisors, Inc.,
a Delaware corporation (the "Advisor").

RECITALS

WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "l940 Act"), as an open-end, diversified management
investment company;

WHEREAS, the Advisor is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment advisor and engages in
the business of acting as an investment advisor;

WHEREAS, the Company's Charter (the "Charter") authorizes the Board of
Directors of the Company (the "Board of Directors") to create separate series of
shares of common stock of the Company, and as of the date of this Agreement, the
Board of Directors has created seventeen separate series portfolios (such
portfolios and any other portfolios hereafter added to the Company being
referred to collectively herein as the "Funds"); and

WHEREAS, the Company and the Advisor desire to enter into an agreement to
provide for investment advisory services to the Funds upon the terms and
conditions hereinafter set forth;

NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:

1. Advisory Services. The Advisor shall act as investment advisor for the
Funds and shall, in such capacity, supervise all aspects of the Funds'
operations, including the investment and reinvestment of cash, securities or
other properties comprising the Funds' assets, subject at all times to the
policies and control of the Board of Directors. The Advisor shall give the
Company and the Funds the benefit of its best judgment, efforts and facilities
in rendering its services as investment advisor.

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2. Investment Analysis and Implementation. In carrying out its obligations
under Section 1 hereof, the Advisor shall:

(a) supervise all aspects of the operations of the Funds;

(b) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the Funds,
and whether concerning the individual issuers whose securities are included
in the assets of the Funds or the activities in which such issuers engage,
or with respect to securities which the Advisor considers desirable for
inclusion in the Funds' assets;

(c) determine which issuers and securities shall be represented in the
Funds' investment portfolios and regularly report thereon to the Board of
Directors;

(d) formulate and implement continuing programs for the purchases and
sales of the securities of such issuers and regularly report thereon to the
Board of Directors; and

(e) take, on behalf of the Company and the Funds, all actions which
appear to the Company and the Funds necessary to carry into effect such
purchase and sale programs and supervisory functions as aforesaid,
including but not limited to the placing of orders for the purchase and
sale of securities for the Funds.

3. Securities Lending Duties and Fees. The Advisor agrees to provide the
following services in connection with the securities lending activities of each
Fund: (a) oversee participation in the securities lending program to ensure
compliance with all applicable regulatory and investment guidelines; (b) assist
the securities lending agent or principal (the "Agent") in determining which
specific securities are available for loan; (c) monitor the Agent to ensure that
securities loans are effected in accordance with the Advisor's instructions and
with procedures adopted by the Board of Directors; (d) prepare appropriate
periodic reports for, and seek appropriate approvals from, the Board of
Directors with respect to securities lending activities; (e) respond to Agent
inquiries; and (f) perform such other duties as necessary.

As compensation for such services provided by the Advisor in connection
with securities lending activities of each Fund, a lending Fund shall pay the
Advisor a fee equal to 25% of the net monthly interest or fee income retained or
paid to the Fund from such activities.

4. Delegation of Responsibilities. The Advisor is authorized to delegate
any or all of its rights, duties and obligations under this Agreement to one or
more sub-advisors, and may enter into agreements with sub-advisors, and may
replace any such sub-advisors from time to time in its discretion, in accordance

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with the 1940 Act, the Advisers Act, and rules and regulations thereunder, as
such statutes, rules and regulations are amended from time to time or are
interpreted from time to time by the staff of the Securities and Exchange
Commission ("SEC"), and if applicable, exemptive orders or similar relief
granted by the SEC and upon receipt of approval of such sub-advisors by the
Board of Directors and by shareholders (unless any such approval is not required
by such statutes, rules, regulations, interpretations, orders or similar
relief).

5. Independent Contractors. The Advisor and any sub-advisors shall for all
purposes herein be deemed to be independent contractors and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Company in any way or otherwise be deemed to be an agent of the
Company.

6. Control by Board of Directors. Any investment program undertaken by the
Advisor pursuant to this Agreement, as well as any other activities undertaken
by the Advisor on behalf of the Funds, shall at all times be subject to any
directives of the Board of Directors.

7. Compliance with Applicable Requirements. In carrying out its obligations
under this Agreement, the Advisor shall at all times conform to:

(a) all applicable provisions of the 1940 Act and the Advisers Act and
any rules and regulations adopted thereunder;

(b) the provisions of the registration statement of the Company, as
the same may be amended from time to time under the Securities Act of 1933
and the 1940 Act;

(d) the provisions of the by-laws of the Company, as the same may be
amended from time to time; and

(e) any other applicable provisions of state, federal or foreign law.

8. Broker-Dealer Relationships. The Advisor is responsible for decisions to
buy and sell securities for the Funds, broker-dealer selection, and negotiation
of brokerage commission rates.

(a) The Advisor's primary consideration in effecting a security
transaction will be to obtain the best execution.

(b) In selecting a broker-dealer to execute each particular
transaction, the Advisor will take the following into consideration: the
best net price available; the reliability, integrity and financial
condition of the broker-dealer; the size of and the difficulty in executing
the order; and the value of the expected contribution of the broker-dealer
to the investment performance of the Funds on a continuing basis.
Accordingly, the price to the Funds

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<PAGE> 69

in any transaction may be less favorable than that available from another
broker-dealer if the difference is reasonably justified by other aspects of
the fund execution services offered.

(c) Subject to such policies as the Board of Directors may from time
to time determine, the Advisor shall not be deemed to have acted unlawfully
or to have breached any duty created by this Agreement or otherwise solely
by reason of its having caused the Funds to pay a broker or dealer that
provides brokerage and research services to the Advisor an amount of
commission for effecting a fund investment transaction in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction, if the Advisor determines in good faith that
such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed
in terms of either that particular transaction or the Advisor's overall
responsibilities with respect to a particular Fund, other Funds of the
Company, and to other clients of the Advisor as to which the Advisor
exercises investment discretion. The Advisor is further authorized to
allocate the orders placed by it on behalf of the Funds to such brokers and
dealers who also provide research or statistical material, or other
services to the Funds, to the Advisor, or to any sub-advisor. Such
allocation shall be in such amounts and proportions as the Advisor shall
determine and the Advisor will report on said allocations regularly to the
Board of Directors indicating the brokers to whom such allocations have
been made and the basis therefor.

(d) With respect to one or more Funds, to the extent the Advisor does
not delegate trading responsibility to one or more sub-advisors, in making
decisions regarding broker-dealer relationships, the Advisor may take into
consideration the recommendations of any sub-advisor appointed to provide
investment research or advisory services in connection with the Funds, and
may take into consideration any research services provided to such sub-
advisor by broker-dealers.

(e) Subject to the other provisions of this Section 8, the 1940 Act,
the Securities Exchange Act of 1934, and rules and regulations thereunder,
as such statutes, rules and regulations are amended from time to time or
are interpreted from time to time by the staff of the SEC, any exemptive
orders issued by the SEC, and any other applicable provisions of law, the
Advisor may select brokers or dealers with which it or the Funds are
affiliated.

9. Compensation. The compensation that each Fund shall pay the Advisor is
set forth in Schedule B attached hereto.

10. Expenses of the Funds. All of the ordinary business expenses incurred
in the operations of the Funds and the offering of their shares shall be borne
by the Funds unless specifically provided otherwise in this Agreement. These
expenses borne by the Funds include but are not limited to brokerage commis-

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<PAGE> 70

sions, taxes, legal, accounting, auditing, or governmental fees, the cost of
preparing share certificates, custodian, transfer and shareholder service agent
costs, expenses of issue, sale, redemption and repurchase of shares, expenses of
registering and qualifying shares for sale, expenses relating to directors and
shareholder meetings, the cost of preparing and distributing reports and notices
to shareholders, the fees and other expenses incurred by the Company on behalf
of the Funds in connection with membership in investment company organizations
and the cost of printing copies of prospectuses and statements of additional
information distributed to the Funds' shareholders.

11. Services to Other Companies or Accounts. The Company understands that
the Advisor now acts, will continue to act and may act in the future as
investment manager or advisor to fiduciary and other managed accounts, and as
investment manager or advisor to other investment companies, including any
offshore entities, or accounts, and the Company has no objection to the Advisor
so acting, provided that whenever the Company and one or more other investment
companies or accounts managed or advised by the Advisor have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a formula believed to be equitable to each company and account.
The Company recognizes that in some cases this procedure may adversely affect
the size of the positions obtainable and the prices realized for the Funds.

12. Non-Exclusivity. The Company understands that the persons employed by
the Advisor to assist in the performance of the Advisor's duties under this
Agreement will not devote their full time to such service and nothing contained
in this Agreement shall be deemed to limit or restrict the right of the Advisor
or any affiliate of the Advisor to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature. The Company
further understands and agrees that officers or directors of the Advisor may
serve as officers or directors of the Company, and that officers or directors of
the Company may serve as officers or directors of the Advisor to the extent
permitted by law; and that the officers and directors of the Advisor are not
prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors
or trustees of any other firm or trust, including other investment advisory
companies.

13. Effective Date, Term and Approval. This Agreement shall become
effective with respect to a Fund, if approved by the shareholders of such Fund,
on the Effective Date for such Fund, as set forth in Schedule A attached hereto.
If so approved, this Agreement shall thereafter continue in force and effect
until June 30, 2001, and may be continued from year to year thereafter, provided
that the continuation of the Agreement is specifically approved at least
annually:

(a) (i) by the Board of Directors or (ii) by the vote of "a majority
of the outstanding voting securities" of such Fund (as defined in Section
2(a)(42) of the 1940 Act); and

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<PAGE> 71

(b) by the affirmative vote of a majority of the trustees who are not
parties to this Agreement or "interested persons" (as defined in the 1940
Act) of a party to this Agreement (other than as Company directors), by
votes cast in person at a meeting specifically called for such purpose.

14. Termination. This Agreement may be terminated as to the Company or as
to any one or more of the Funds at any time, without the payment of any penalty,
by vote of the Board of Directors or by vote of a majority of the outstanding
voting securities of the applicable Fund, or by the Advisor, on sixty (60) days'
written notice to the other party. The notice provided for herein may be waived
by the party entitled to receipt thereof. This Agreement shall automatically
terminate in the event of its assignment, the term "assignment" for purposes of
this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act.

15. Amendment. No amendment of this Agreement shall be effective unless it
is in writing and signed by the party against which enforcement of the amendment
is sought.

16. Liability of Advisor and Fund. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Advisor or any of its officers, directors or
employees, the Advisor shall not be subject to liability to the Company or to
the Funds or to any shareholder of the Funds for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security. Any
liability of the Advisor to one Fund shall not automatically impart liability on
the part of the Advisor to any other Fund. No Fund shall be liable for the
obligations of any other Fund.

17. Liability of Shareholders. Notice is hereby given that, as provided by
applicable law, the obligations of or arising out of this Agreement are not
binding upon any of the shareholders of the 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 shareholders of private corporations for
profit.

18. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered, telecopied or mailed postage paid, to the other party
entitled to receipt thereof at such address as such party may designate for the
receipt of such notice. Until further notice to the other party, it is agreed
that the address of the Company and that of the Advisor shall be 11 Greenway
Plaza, Suite 100, Houston, Texas 77046-1173.

19. Questions of Interpretation. Any question of interpretation of any term
or provision of this Agreement having a counterpart in or otherwise derived from
a term or provision of the 1940 Act or the Advisers Act shall be resolved by
reference to such term or provision of the 1940 Act or the Advisers Act and to
interpretations thereof, if any, by the United States Courts or in the absence
of

C-6
<PAGE> 72

any controlling decision of any such court, by rules, regulations or orders of
the SEC issued pursuant to said Acts. In addition, where the effect of a
requirement of the 1940 Act or the Advisers Act reflected in any provision of
the Agreement is revised by rule, regulation or order of the SEC, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
Subject to the foregoing, this Agreement shall be governed by and construed in
accordance with the laws (without reference to conflicts of law provisions) of
the State of Texas.

20. License Agreement. The Company shall have the non-exclusive right to
use the name "AIM" to designate any current or future series of shares only so
long as A I M Advisors, Inc. serves as investment manager or advisor to the
Company with respect to such series of shares.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
written above.

AIM VARIABLE INSURANCE FUNDS, INC.
(a Maryland corporation)
Attest:
By:
- --------------------------------------- -------------------------------
Assistant Secretary President

(SEAL)

Attest: A I M ADVISORS, INC.

By:
- --------------------------------------- -------------------------------
Assistant Secretary President

(SEAL)
</TABLE>

C-7
<PAGE> 73

SCHEDULE A

FUNDS AND EFFECTIVE DATES

<TABLE>
<CAPTION>
EFFECTIVE DATE OF
NAME OF FUND ADVISORY AGREEMENT
- ------------ ------------------
<S> <C>
AIM V.I. Aggressive Growth Fund May 1, 2000
AIM V.I. Balanced Fund May 1, 2000
AIM V.I. Blue Chip Fund May 1, 2000
AIM V.I. Capital Appreciation Fund May 1, 2000
AIM V.I. Capital Development Fund May 1, 2000
AIM V.I. Dent Demographic Trends Fund May 1, 2000
AIM V.I. Diversified Income Fund May 1, 2000
AIM V.I. Global Growth and Income Fund May 1, 2000
AIM V.I. Global Utilities Fund May 1, 2000
AIM V.I. Government Securities Fund May 1, 2000
AIM V.I. Growth and Income Fund May 1, 2000
AIM V.I. Growth Fund May 1, 2000
AIM V.I. High Yield Fund May 1, 2000
AIM V.I. International Equity Fund May 1, 2000
AIM V.I. Money Market Fund May 1, 2000
AIM V.I. Telecommunications Fund May 1, 2000
AIM V.I. Value Fund May 1, 2000
</TABLE>

C-8
<PAGE> 74

SCHEDULE B

COMPENSATION TO THE ADVISOR

The Company shall pay the Advisor, out of the assets of a Fund, as full
compensation for all services rendered, an advisory fee for such Fund set forth
below. Such fee shall be calculated by applying the following annual rates to
the average daily net assets of such Fund for the calendar year computed in the
manner used for the determination of the net asset value of shares of such Fund.

AIM V.I. CAPITAL APPRECIATION FUND
AIM V.I. GLOBAL UTILITIES FUND
AIM V.I. GROWTH FUND
AIM V.I. GROWTH AND INCOME FUND
AIM V.I. VALUE FUND

<TABLE>
<CAPTION>
ANNUAL
NET ASSETS RATE
- ---------- ------
<S> <C>
First $250 million........................... 0.65%
Over $250 million............................ 0.60%
</TABLE>

AIM V.I. AGGRESSIVE GROWTH FUND

<TABLE>
<CAPTION>
ANNUAL
NET ASSETS RATE
- ---------- ------
<S> <C>
First $150 million.......................... 0.80%
Over $150 million........................... 0.625%
</TABLE>

AIM V.I. BALANCED FUND

<TABLE>
<CAPTION>
ANNUAL
NET ASSETS RATE
- ---------- ------
<S> <C>
First $150 million........................... 0.75%
Over $150 million............................ 0.50%
</TABLE>

AIM V.I. BLUE CHIP FUND
AIM V.I. CAPITAL DEVELOPMENT FUND

<TABLE>
<CAPTION>
ANNUAL
NET ASSETS RATE
- ---------- ------
<S> <C>
First $350 million.......................... 0.75%
Over $350 million........................... 0.625%
</TABLE>

C-9
<PAGE> 75

AIM V.I. DENT DEMOGRAPHIC TRENDS FUND

<TABLE>
<CAPTION>
ANNUAL
NET ASSETS RATE
- ---------- ------
<S> <C>
First $2 billion............................. 0.85%
Over $2 billion.............................. 0.80%
</TABLE>

AIM V.I. DIVERSIFIED INCOME FUND

<TABLE>
<CAPTION>
ANNUAL
NET ASSETS RATE
- ---------- ------
<S> <C>
First $250 million........................... 0.60%
Over $250 million............................ 0.55%
</TABLE>

AIM V.I. GLOBAL GROWTH AND INCOME FUND
AIM V.I. TELECOMMUNICATIONS FUND

<TABLE>
<CAPTION>
ANNUAL
NET ASSETS RATE
- ---------- ------
<S> <C>
Average Daily Net Assets..................... 1.00%
</TABLE>

AIM V.I. GOVERNMENT SECURITIES FUND

<TABLE>
<CAPTION>
ANNUAL
NET ASSETS RATE
- ---------- ------
<S> <C>
First $250 million........................... 0.50%
Over $250 million............................ 0.45%
</TABLE>

AIM V.I. HIGH YIELD FUND

<TABLE>
<CAPTION>
ANNUAL
NET ASSETS RATE
- ---------- ------
<S> <C>
First $200 million.......................... 0.625%
Next $300 million........................... 0.55%
Next $500 million........................... 0.50%
Amount over $1 billion...................... 0.45%
</TABLE>

AIM V.I. INTERNATIONAL EQUITY FUND

<TABLE>
<CAPTION>
ANNUAL
NET ASSETS RATE
- ---------- ------
<S> <C>
First $250 million........................... 0.75%
Over $250 million............................ 0.70%
</TABLE>

C-10
<PAGE> 76

AIM V.I. MONEY MARKET FUND

<TABLE>
<CAPTION>
ANNUAL
NET ASSETS RATE
- ---------- ------
<S> <C>
First $250 million........................... 0.40%
Over $250 million............................ 0.35%
</TABLE>

C-11
<PAGE> 77

APPENDIX D

DATES OF ADVISORY AGREEMENTS

<TABLE>
<CAPTION>
DATE LAST
DATE OF CURRENT SUBMITTED TO A DATE AIM BECAME
NAME OF FUND ADVISORY AGREEMENT VOTE OF SHAREHOLDERS INVESTMENT ADVISOR
- ------------ --------------------- -------------------- --------------------
<S> <C> <C> <C>
AIM V.I. Aggressive Dated February 28, April 15, 1998** April 15, 1998
Growth Fund 1997 as amended April
4, 1998, December 14,
1998, September 24,
1999 and December 29,
1999
AIM V.I. Balanced Dated February 28, April 15, 1998** April 15, 1998
Fund 1997 as amended April
15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
AIM V.I. Blue Chip Dated February 28, September 14, 1999** September 24, 1999
Fund 1997 as amended April
15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
AIM V.I. Capital Dated February 28, February 7, 1997* March 31, 1993
Appreciation Fund 1997 as amended April
15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
AIM V.I. Capital Dated February 28, April 15, 1998** April 15, 1998
Development Fund 1997 as amended April
15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
</TABLE>

* The current advisory agreement was last submitted to a vote of public
shareholders of the fund in connection with a merger between A I M
Management Group Inc. and a subsidiary of INVESCO PLC.

** The current advisory agreement was submitted to a vote of the initial
shareholder of the fund prior to commencement of operations.
D-1
<PAGE> 78

<TABLE>
<CAPTION>
DATE LAST
DATE OF CURRENT SUBMITTED TO A DATE AIM BECAME
NAME OF FUND ADVISORY AGREEMENT VOTE OF SHAREHOLDERS INVESTMENT ADVISOR
- ------------ --------------------- -------------------- --------------------
<S> <C> <C> <C>
AIM V.I. Dent Dated February 28, December 29, 1999** December 29, 1999
Demographic Trends 1997 as amended April
Fund 15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
AIM V.I. Diversified Dated February 28, February 7, 1997* March 31, 1993
Income Fund 1997 as amended April
15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
AIM V.I. Global Dated February 28, December 14, 1998** December 14, 1998
Growth and Income 1997 as amended April
Fund 15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
AIM V.I. Global Dated February 28, February 7, 1997* March 31, 1993
Utilities Fund 1997 as amended April
15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
AIM V.I. Government Dated February 28, February 7, 1997* March 31, 1993
Securities Fund 1997 as amended April
15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
AIM V.I. Growth Fund Dated February 28, February 7, 1999* March 31, 1993
1997 as amended April
15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
</TABLE>

* The current advisory agreement was last submitted to a vote of public
shareholders of the fund in connection with a merger between A I M
Management Group Inc. and a subsidiary of INVESCO PLC.

** The current advisory agreement was submitted to a vote of the initial
shareholder of the fund prior to commencement of operations.
D-2
<PAGE> 79

<TABLE>
<CAPTION>
DATE LAST
DATE OF CURRENT SUBMITTED TO A DATE AIM BECAME
NAME OF FUND ADVISORY AGREEMENT VOTE OF SHAREHOLDERS INVESTMENT ADVISOR
- ------------ --------------------- -------------------- --------------------
<S> <C> <C> <C>
AIM V.I. Growth and Dated February 28, February 7, 1997* March 31, 1993
Income Fund 1997 as amended April
15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
AIM V.I. High Yield Dated February 28, April 15, 1998** April 15, 1998
Fund 1997 as amended April
15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
AIM V.I. Dated February 28, February 7, 1997* March 31, 1993
International 1997 as amended April
Equity Fund 15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
AIM V.I. Money Market Dated February 28, February 7, 1997* March 31, 1993
Fund 1997 as amended April
15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
AIM V.I. Dated February 28, December 14, 1998** December 14, 1998
Telecommunications 1997 as amended April
Fund 15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
AIM V.I. Value Fund Dated February 28, February 7, 1997* March 31, 1993
1997 as amended April
15, 1998, December
14, 1998, September
24, 1999 and December
29, 1999
</TABLE>

* The current advisory agreement was last submitted to a vote of public
shareholders of the fund in connection with a merger between A I M Management
Group Inc. and a subsidiary of INVESCO PLC.

** The current advisory agreement was submitted to a vote of the initial
shareholder of the fund prior to commencement of operations.

D-3
<PAGE> 80

APPENDIX E

PRINCIPAL EXECUTIVE OFFICER AND DIRECTORS OF
A I M ADVISORS, INC.

The following table provides information with respect to the principal
executive officer and the directors of A I M Advisors, Inc., all of whose
business address is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.

<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH AIM PRINCIPAL OCCUPATION
- ---------------- ----------------- --------------------
<S> <C> <C>
Charles T. Bauer Director and Chairman See director table under Proposal 1
Gary T. Crum Director and Senior See Appendix M
Vice President
Robert H. Graham Director and President See director table under Proposal 1
Dawn M. Hawley Director, Senior Vice Senior Vice President, Chief
President and Treasurer Financial Officer and Treasurer,
A I M Management Group Inc.; and
Vice President and Treasurer, A I M
Capital Management, Inc., A I M
Distributors, Inc., A I M Fund
Services, Inc. and Fund Management
Company
Carol F. Relihan Director, Senior Vice See Appendix M
President, General
Counsel and Secretary
</TABLE>

E-1
<PAGE> 81

APPENDIX F

ADVISORY AGREEMENT FEE SCHEDULE

<TABLE>
<CAPTION>
TOTAL NET ASSETS AGGREGATE NET
FOR THE MOST FEES PAID TO FEE WAIVERS FOR
RECENTLY AIM FOR THE THE MOST
ANNUAL RATE COMPLETED MOST RECENTLY RECENTLY
(BASED ON AVERAGE FISCAL COMPLETED FISCAL COMPLETED FISCAL
NAME OF FUND DAILY NET ASSETS) PERIOD OR YEAR PERIOD OR YEAR PERIOD OR YEAR
- ------------ ----------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
AIM V.I. Aggressive 0.80% of first $ 17,325,844 $ 0 $ 66,764
Growth Fund $150 million;
0.625% of the
excess over $150
million
AIM V.I. Balanced Fund 0.75% of first 48,307,070 183,468 26,814
$150 million;
0.50% of the
excess over $150
million
AIM V.I. Blue Chip 0.75% of first 999,604 0 41
Fund $350 million;
0.625% of the
excess over $350
million
AIM V.I. Capital 0.65% of first 1,131,217,460 4,830,846 0
Appreciation Fund $250 million;
0.60% of the
excess over $250
million
AIM V.I. Capital 0.75% of first 11,034,931 0 35,726
Development Fund $350 million;
0.625% of the
excess over $350
million
AIM V.I. Dent 0.85% of first $2 999,599 0 47
Demographic Trends billion; 0.80% of
Fund the excess over
$2 billion
AIM V.I. Diversified 0.60% of first 99,508,578 556,413 0
Income Fund $250 million;
0.55% of the
excess over $250
million
AIM V.I. Global Growth 1.00% 30,756,126 68,674 11,500
and Income Fund
AIM V.I. Global 0.65% of first 39,772,266 202,137 0
Utilities Fund $250 million;
0.60% of the
excess over $250
million
</TABLE>

F-1
<PAGE> 82

<TABLE>
<CAPTION>
TOTAL NET ASSETS AGGREGATE NET
FOR THE MOST FEES PAID TO FEE WAIVERS FOR
RECENTLY AIM FOR THE THE MOST
ANNUAL RATE COMPLETED MOST RECENTLY RECENTLY
(BASED ON AVERAGE FISCAL COMPLETED FISCAL COMPLETED FISCAL
NAME OF FUND DAILY NET ASSETS) PERIOD OR YEAR PERIOD OR YEAR PERIOD OR YEAR
- ------------ ----------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
AIM V.I. Government 0.50% of first $ 70,761,222 $ 315,598 $ 0
Securities Fund $250 million;
0.45% of the
excess over $250
million
AIM V.I. Growth and 0.65% of first 2,443,263,980 10,438,977 0
Income Fund $250 million;
0.60% of the
excess over $250
million
AIM V.I. Growth Fund 0.65% of first 704,095,680 3,026,404 0
$250 million;
0.60% of the
excess over $250
million
AIM V.I. High Yield 0.625% of first 25,268,186 58,392 45,183
Fund $200 million;
0.55% of next
$300 million;
0.50% of next
$500 million; and
0.45% of excess
over $1 billion
AIM V.I. International 0.75% of first 454,059,551 2,066,153 0
Equity Fund $250 million;
0.70% of excess
over $250 million
AIM V.I. Money Market 0.40% of first 95,152,169 317,031 0
Fund $250 million;
0.35% of excess
over 250 million
AIM V.I. 1.00% 108,427,764 756,068 0
Telecommunications
Fund
AIM V.I. Value Fund 0.65% of first 2,383,366,571 10,380,472 0
$250 million;
0.60% of the
excess over $250
million
</TABLE>

F-2
<PAGE> 83

APPENDIX G

FEES PAID TO AIM AND AFFILIATES
IN MOST RECENT FISCAL YEAR

The following chart sets forth the fees paid during the fiscal period or
year ended December 31, 1999 by the company to A I M Advisors, Inc. ("AIM") for
administrative services and to A I M Distributors, Inc., a wholly owned
subsidiary of AIM. The administrative and distribution services currently
provided by AIM and A I M Distributors, Inc. will continue to be provided if the
proposed investment advisory agreement with AIM is approved.

<TABLE>
<CAPTION>
AIM
(ADMINISTRATIVE A I M
SERVICES) DISTRIBUTORS, INC.
--------------- ------------------
<S> <C> <C>
AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Aggressive Growth Fund.................. $ 43,901 $ 0
AIM V.I. Balanced Fund........................... 43,975 0
AIM V.I. Blue Chip Fund.......................... 274 0
AIM V.I. Capital Appreciation Fund............... 498,993 0
AIM V.I. Capital Development Fund................ 43,891 0
AIM V.I. Dent Demographic Trends Fund............ 274 0
AIM V.I. Diversified Income Fund................. 50,901 0
AIM V.I. Global Growth and Income Fund........... 25,232 0
AIM V.I. Global Utilities Fund................... 51,234 0
AIM V.I. Government Securities Fund.............. 98,225 0
AIM V.I. Growth and Income Fund.................. 102,711 0
AIM V.I. Growth Fund............................. 73,728 0
AIM V.I. High Yield Fund......................... 43,433 0
AIM V.I. International Equity Fund............... 64,730 0
AIM V.I. Money Market Fund....................... 44,311 0
AIM V.I. Telecommunications Fund................. 34,698 0
AIM V.I. Value Fund.............................. 107,813 0
</TABLE>

G-1
<PAGE> 84

APPENDIX H

ADVISORY FEE SCHEDULES FOR OTHER AIM FUNDS

The following table provides information with respect to the annual
advisory fee rates paid to AIM by certain funds that have a similar investment
objective as Aggressive Growth, Capital Appreciation, Capital Development, Dent
Demographic Trends, Growth, International Equity and Telecommunications, all of
which have similar investment objectives.

<TABLE>
<CAPTION>
FEE WAIVERS, EXPENSE
LIMITATIONS AND/OR
ANNUAL RATE TOTAL NET ASSETS FOR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE THE MOST RECENTLY FOR THE MOST RECENTLY
NAME OF FUND DAILY NET ASSETS) COMPLETED FISCAL YEAR COMPLETED FISCAL YEAR
- ------------ ----------------- --------------------- ----------------------
<S> <C> <C> <C>
AIM Aggressive Growth
Fund................ 0.80% of the first $150 million; $ 2,840,171,882 N/A
0.625% of the excess over $150
million
AIM Capital
Development Fund.... 0.75% of the first $350 million; $ 1,084,854,198 N/A
0.625% of the excess over $350
million
AIM Constellation
Fund................ 1.00% of the first $30 million; $15,288,481,794 Waive 0.025% of advisory fee on
0.75% over $30 million up to $150 average net assets in excess of $2
million; 0.625% of the excess over billion
$150 million
AIM Dent Demographic
Trends Fund......... 0.85% of the first $2 billion; $ 392,908,501 Waive 0.05% of advisory fee on
0.80% of the excess over $2 average net assets
billion
AIM Large Cap Growth
Fund................ 0.75% of the first $1 billion; $ 13,869,426 Waive advisory fee and/or
0.70% over $1 billion up to $2 reimburse expenses on Class A,
billion; 0.625% of the excess over Class B and Class C to extent
$2 billion necessary to limit expenses
(excluding interest, taxes,
dividends on short sales and
extraordinary expenses) of Class A
shares to 0.85%
AIM Mid Cap Growth
Fund................ 0.80% of the first $1 billion; N/A* N/A
0.75% of the excess over $1
billion
AIM Weingarten
Fund................ 1.00% of the first $30 million; $ 9,600,690,471 Waive 0.025% of advisory fee on
0.75% over $30 million up to $350 average net assets in excess of $2
million; 0.625% of the excess over billion to and including $3
$350 million billion; 0.05% on average net
assets in excess of $3 billion to
and including $4 billion and
0.075% on average net assets in
excess of $4 billion
</TABLE>

- ---------------
* AIM Mid Cap Growth Fund commenced operations on November 1, 1999.
H-1
<PAGE> 85

<TABLE>
<CAPTION>
FEE WAIVERS, EXPENSE
LIMITATIONS AND/OR
ANNUAL RATE TOTAL NET ASSETS FOR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE THE MOST RECENTLY FOR THE MOST RECENTLY
NAME OF FUND DAILY NET ASSETS) COMPLETED FISCAL YEAR COMPLETED FISCAL YEAR
- ------------ ----------------- --------------------- ----------------------
<S> <C> <C> <C>
AIM Asian Growth
Fund................ 0.95% of the first $500 million; $ 42,497,099 Expense limitation --
0.90% of the excess over $500 Class A, 1.92%;
million Class B, 2.80%;
Class C, 2.80%
AIM European
Development Fund.... 0.95% of the first $500 million; $ 178,160,567 N/A
0.90% of the excess over $500
million
AIM Global Aggressive
Growth Fund......... 0.90% of the first $1 billion; $ 1,795,495,057 N/A
0.85% of the excess over $1
billion
AIM Global Growth
Fund................ 0.85% of the first $1 billion; $ 845,251,073 N/A
0.80% of the excess over $1
billion
AIM International
Equity Fund......... 0.95% of the first $1 billion; $ 3,063,733,110 Waive 0.05% of advisory fee on
0.90% of the excess over $1 average net assets in excess of
billion $500 million
AIM Select Growth
Fund................ 0.80% of the first $150 million; $ 1,079,458,334 N/A
0.625% of the excess over $150
million
AIM Summit Fund,
Inc. ............... 1.00% of the first $10 million; $ 2,624,615,009 Expense limitation --
0.75% of the next $140 million; Class II, 1.50%
0.625% in excess of $150 million
AIM Large Cap
Opportunities
Fund................ Base fee of 1.50%; maximum annual N/A** N/A
performance adjustment of +/-1.00%
AIM Mid Cap
Opportunities
Fund................ Base fee of 1.00%; maximum annual $ 4,789,875 Expense limitation -- Limit total
adjustment of +/-1.00% operating expenses excluding
management fee, Rule 12b-1
distribution plan fee, interest
expense, taxes, dividend expenses
attributable to securities sold
short and extraordinary expenses:
Class A, 0.50%;
Class B, 0.52%;
Class C, 0.52%
</TABLE>

- --------

**AIM Large Cap Opportunities Fund commenced operations on December 30, 1999.

H-2
<PAGE> 86

<TABLE>
<CAPTION>
FEE WAIVERS, EXPENSE
LIMITATIONS AND/OR
ANNUAL RATE TOTAL NET ASSETS FOR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE THE MOST RECENTLY FOR THE MOST RECENTLY
NAME OF FUND DAILY NET ASSETS) COMPLETED FISCAL YEAR COMPLETED FISCAL YEAR
- ------------ ----------------- --------------------- ----------------------
<S> <C> <C> <C>
AIM Small Cap
Opportunities
Fund................ Base fee of 1.00%; maximum annual $ 365,491,330 N/A
adjustment of +/-0.75%
AIM Basic Value
Fund................ First $500 million 0.725%; Next $ 136,276,615 Expense limitation -- Limit Net
$500 million 0.70%; Next $500 Expenses:
million 0.675%; excess over Class A, 1.75%;
0.65%*** Class B, 2.40%;
Class C, 2.40%
AIM Euroland Growth
Fund................ First $500 million 0.975%; Next $ 541,308,192 Expense limitation -- Limit Net
$500 million 0.95%; Next $500 Expenses:
million 0.925%; excess over 0.90% Class A, 2.00%;
Class B, 2.65%;
Class C, 2.65%
AIM Japan Growth
Fund................ First $500 million 0.975%; Next $ 304,533,247 Expense limitation -- Limit Net
$500 million 0.95%; Next $500 Expenses:
million 0.925%; excess over 0.90% Class A, 2.00%;
Class B, 2.65%;
Class C, 2.65%
AIM Mid Cap Equity
Fund................ First $500 million 0.725%; Next $ 333,668,281 Expense limitation -- Limit Net
$500 million 0.70%; Next $500 Expenses:
million 0.675%; excess over 0.65% Class A, 1.75%;
Class B, 2.40%;
Class C, 2.40%
AIM New Pacific
Growth Fund......... First $500 million 0.975%; Next $ 139,121,407 Expense limitation -- Limit Net
$500 million 0.95%; Next $500 Expenses:
million 0.925%; excess over 0.90% Class A, 2.00%;
Class B, 2.65%;
Class C, 2.65%
</TABLE>

- ---------------

*** Reflects management and administration fees for both master and feeder
funds.

H-3
<PAGE> 87

<TABLE>
<CAPTION>
FEE WAIVERS, EXPENSE
LIMITATIONS AND/OR
ANNUAL RATE TOTAL NET ASSETS FOR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE THE MOST RECENTLY FOR THE MOST RECENTLY
NAME OF FUND DAILY NET ASSETS) COMPLETED FISCAL YEAR COMPLETED FISCAL YEAR
- ------------ ----------------- --------------------- ----------------------
<S> <C> <C> <C>
AIM Small Cap Growth
Fund................ First $500 million 0.725%; Next $ 716,060,823 Expense limitation -- Limit Net
$500 million 0.70%; Next $500 Expenses:
million 0.675%; excess over Class A, 1.75%;
0.65%*** Class B, 2.40%;
Class C, 2.40%
AIM Global Consumer
Products and
Services Fund....... First $500 million 0.975%; Next $ 184,973,907 Expense limitation -- Limit Net
$500 million 0.95%; Next $500 Expenses:
million 0.925%; excess over Class A, 2.00%;
0.90%*** Class B, 2.50%;
Class C, 2.50%
AIM Global Financial
Services Fund....... First $500 million 0.975%; Next $ 81,913,285 Expense limitation -- Limit Net
$500 million 0.95%; Next $500 Expenses:
million 0.925%; excess over Class A, 2.00%;
0.90%*** Class B, 2.50%;
Class C, 2.50%
AIM Global Healthcare
Fund................ First $500 million 0.975%; Next $ 462,669,291 Expense limitation -- Limit Net
$500 million 0.95%; Next $500 Expenses:
million 0.925%; excess over 0.90% Class A, 2.00%;
Class B, 2.50%;
Class C, 2.50%
AIM Global
Infrastructure
Fund................ First $500 million 0.975%; Next $ 45,124,457 Expense limitation -- Limit Net
$500 million 0.95%; Next $500 Expenses:
million 0.925%; excess over Class A, 2.00%;
0.90%*** Class B, 2.50%;
Class C, 2.50%
AIM Global Resources
Fund................ First $500 million 0.975%; Next $ 35,998,488 Expense limitation -- Limit Net
$500 million 0.95%; Next $500 Expenses:
million 0.925%; excess over Class A, 2.00%;
0.90%*** Class B, 2.50%;
Class C, 2.50%
</TABLE>

- ---------------
*** Reflects management and administration fees for both master and feeder
funds.

H-4
<PAGE> 88

The following table provides information with respect to the annual
advisory fee rates paid to AIM by certain funds that have a similar investment
objective as Balanced.

H-5
<PAGE> 89

The following table provides information with respect to the annual
advisory fee rates paid to AIM by certain funds that have a similar investment
objective as Blue Chip, Growth and Income and Value, all of which have similar
investment objectives.

The following table provides information with respect to the annual
advisory fee rates paid to AIM by certain funds that have a similar investment
objective as Diversified Income and AIM V.I. High Yield Fund, all of which have
similar investment objectives.

H-6
<PAGE> 90

The following table provides information with respect to the annual
advisory fee rates paid to AIM by certain funds that have a similar investment
objective as Global Growth and Income.

The following table provides information with respect to the annual
advisory fee rates paid to AIM by certain funds that have a similar investment
objective as Global Utilities.

The following table provides information with respect to the annual
advisory fee rates paid to AIM by certain funds that have a similar investment
objective as Government Securities.

H-7
<PAGE> 91

The following table provides information with respect to the annual
advisory fee rates paid to AIM by certain funds that have a similar investment
objective as Money Market.

<TABLE>
<CAPTION>
FEE WAIVERS, EXPENSE
LIMITATIONS AND/OR
ANNUAL RATE TOTAL NET ASSETS FOR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE THE MOST RECENTLY FOR THE MOST RECENTLY
NAME OF FUND DAILY NET ASSETS) COMPLETED FISCAL YEAR COMPLETED FISCAL YEAR
- ------------ ----------------- --------------------- ----------------------
<S> <C> <C> <C>
AIM Money Market
Fund................ 0.55% of the first $1 billion; $1,451,025,249 N/A
0.50% of the excess over $1
billion
Liquid Assets
Portfolio........... 0.15% of the average daily net $6,194,495,351 Waive 0.095% of advisory fee on
assets of the Portfolio average net assets
Prime Portfolio...... 0.20% of the first $100 million; $8,724,224,691 N/A
0.15% over $100 million up to $200
million; 0.10% over $200 million
up to $300 million; 0.06% over
$300 million up to $1.5 billion;
0.05% over $1.5 billion
Government & Agency
Portfolio........... 0.10% $ 279,185,112 Limit Net Expenses, excluding Rule
12b-1 distribution plan fee,
interest expense, taxes and
extraordinary expenses to, 0.06%
Treasury Portfolio... 0.15% of first $300 million; 0.06% $5,203,747,106 N/A
over $300 million up to $1.5
billion; 0.05% of the excess over
$1.5 billion
Treasury TaxAdvantage
Portfolio........... 0.20% of the first $250 million; $ 133,893,290 Limit Net Expenses, excluding Rule
0.15% over $250 million up to $500 12b-1 distribution plan fee,
million; 0.10% of the excess over interest expense, taxes and
$500 million extraordinary expenses, to 0.11%
</TABLE>

- ---------------
*** Reflects management and administration fees for both master and feeder
funds.

H-8
<PAGE> 92

APPENDIX I

CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS

The following restrictions apply to all of the Funds and are fundamental.
Unless permitted by law, they will not be changed for any Fund without approval
of that Fund's voting securities.

None of the Funds will:

(1) invest for the purpose of exercising control over or management
over a company except that each Fund may purchase securities of other
investment companies to the extent permitted by applicable law or exemptive
order;

(2) act as an underwriter, except to the extent that, in connection
with the disposition of portfolio securities, the Fund may be deemed to be
an underwriter for purposes of the 1933 Act;

(3) purchase or sell real estate or any interest therein, except that
each Fund may, as appropriate and consistent with its investment policies
and other investment restrictions, invest in securities of corporate or
governmental entities secured by real estate or marketable interests
therein or securities of issuers that engage in real estate operations or
interests therein, and may hold and sell real estate acquired as a result
of ownership in such securities;

(4) purchase or sell commodity contracts, except that each Fund may,
as appropriate and consistent with its investment policies and other
investment restrictions, enter into futures contracts on securities,
securities indices and currency, options on such futures contracts, forward
foreign currency exchange contracts, forward commitments and repurchase
agreements;

(5) make loans, except for collateralized loans of portfolio
securities in an amount not exceeding 33 1/3% of the applicable Fund's
total assets. This restriction does not prevent a Fund from purchasing
government obligations, short-term commercial paper, or publicly traded
debt, including bonds, notes, debentures, certificates of deposit, bankers
acceptances and equipment trust certificates, nor does this restriction
apply to loans made under insurance policies, or through entry into
repurchase agreements, to the extent they may be viewed as loans;

(6) purchase the securities of issuers conducting their principal
business activity in the same industry if, immediately after such purchase,
the value of its investments in such industry would exceed 25% of its total
assets at market value at the time of each investment, except that the
Money Market Fund may invest up to 100% of its assets in obligations issued
by banks. This limitation does not apply to the Global Utilities Fund or to
investments in obligations of the U.S. Government or any of its agencies or

I-1
<PAGE> 93

instrumentalities but will apply to foreign government obligations unless
the Securities and Exchange Commission permits their exclusion;

(7) issue senior securities, except to the extent permitted by the
1940 Act, including permitted borrowings;

(8) purchase securities of an issuer (other than investments in
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities or except that each Fund may purchase securities of other
investment companies to the extent permitted by applicable law or exemptive
order), if as a result with respect to 75% of the value of the Fund's total
assets, taken at market value, (i) more than 5% of the Fund's total assets
taken at market value would be invested in the securities of such issuer,
except that up to 25% of the Fund's total assets may be invested in
securities issued or guaranteed by any foreign government or its agencies
or instrumentalities, or (ii) such purchase would at the time result in
more than 10% of the outstanding voting securities of such issuer being
held by the Fund. As a matter of operating policy, the Money Market Fund
will invest no more than 5% of the value of that Fund's total assets in
securities, other than U.S. Government securities of any one issuer, except
that the Money Market Fund may invest up to 25% of its total assets in
First Tier Securities (as defined in Rule 2a-7 under the 1940 Act) of a
single issuer for a period of up to three business days after the purchase
of such security. This restriction does not apply to the Global Utilities
Fund; and

(9) Each Fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the same
fundamental investment objectives, policies and limitations as that Fund.

I-2
<PAGE> 94

APPENDIX J

CURRENT INVESTMENT OBJECTIVES

The investment objective of AIM V.I. Aggressive Growth Fund is to achieve
long-term growth of capital.

The investment objective of AIM V.I. Balanced Fund is to achieve as high a
total return as possible, consistent with preservation of capital.

The investment objective of AIM V.I. Blue Chip Fund is long-term growth of
capital, with a secondary objective of current income.

The investment objective of AIM V.I. Capital Appreciation Fund is growth of
capital through investment in common stocks, with emphasis on medium- and
small-sized growth companies.

The investment objective of AIM V.I. Capital Development Fund is long-term
growth of capital.

The investment objective of AIM V.I. Dent Demographic Trends Fund is
long-term growth of capital.

The investment objective of AIM V.I. Diversified Income Fund is to achieve
a high level of current income.

The investment objectives of AIM V.I. Global Growth and Income Fund are
long-term growth of capital together with current income.

The investment objectives of AIM V.I. Global Utilities Fund are to achieve
a high level of current income and secondarily, growth of capital, by investing
primarily in the common and preferred stocks of public utility companies (either
domestic or foreign).

The investment objective of AIM V.I. Government Securities Fund is to
achieve a high level of current income consistent with reasonable concern for
safety of principal by investing in debt securities issued, guaranteed or
otherwise backed by the United States Government.

The investment objective of AIM V.I. Growth Fund is to seek growth of
capital primarily by investing in seasoned and better capitalized companies
considered to have strong earnings momentum.

The investment objective of AIM V.I. Growth and Income Fund is growth of
capital with a secondary objective of current income.

The investment objective of AIM V.I. High Yield Fund is to achieve a high
level of current income.

The investment objective of AIM V.I. International Equity Fund is to
provide long-term growth of capital by investing in a diversified portfolio of

J-1
<PAGE> 95

international equity securities whose issuers are considered to have strong
earnings momentum.

The investment objective of AIM V.I. Money Market Fund is to provide as
high a level of current income as is consistent with the preservation of capital
and liquidity.

The investment objective of AIM V.I. Telecommunications Fund is long-term
growth of capital.

The investment objective of AIM V.I. Value Fund is to achieve long-term
growth of capital by investing primarily in equity securities judged by the
fund's investment advisor to be undervalued relative to the investment advisor's
appraisal of the current or projected earnings of the companies issuing the
securities, or relative to current market values of assets owned by the
companies issuing the securities or relative to the equity market generally.
Income is a secondary objective.

J-2
<PAGE> 96

APPENDIX K

EXECUTIVE OFFICERS OF AIM VARIABLE
INSURANCE FUNDS, INC.

The following table provides information with respect to the executive
officers of the company. Each executive officer is elected by the Board and
serves until his or her successor is chosen and qualified or until his or her
resignation or removal by the Board. The business address of all officers of the
company is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.

<TABLE>
<CAPTION>
NAME, AGE AND POSITION PRINCIPAL OCCUPATION(S)
WITH THE COMPANY OFFICER SINCE DURING PAST 5 YEARS
- ---------------------- ------------- -----------------------
<S> <C> <C>
Charles T. Bauer (81), February 25, 1993 See director table under
Chairman Proposal 1
Robert H. Graham (53), February 25, 1993 See director table under
President Proposal 1
Gary T. Crum (52), February 25, 1993 Director and President,
Senior Vice President A I M Capital Management,
Inc.; Director and
Executive Vice President,
A I M Management Group
Inc.; Director and Senior
Vice President, A I M
Advisors, Inc.; and
Director, A I M
Distributors, Inc. and
AMVESCAP PLC.
Carol F. Relihan (45), August 4, 1994 Director, Senior Vice
Senior Vice President President, General Counsel
Secretary and Secretary, A I M
Advisors, Inc.; 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.
Melville B. Cox (56), February 25, 1993 Vice President and Chief
Vice President Compliance Officer, A I M
Advisors, Inc., A I M
Capital Management, Inc.,
A I M Distributors, Inc.,
A I M Fund Services, Inc.
and Fund Management Company
</TABLE>

K-1
<PAGE> 97

<TABLE>
<CAPTION>
NAME, AGE AND POSITION PRINCIPAL OCCUPATION(S)
WITH THE COMPANY OFFICER SINCE DURING PAST 5 YEARS
- ---------------------- ------------- -----------------------
<S> <C> <C>
Dana R. Sutton (41), February 25, 1993 Vice President and Fund
Vice President Controller, A I M Advisors,
Treasurer Inc.; and Assistant Vice
President and Assistant
Treasurer, Fund Management
Company.
Edgar M. Larsen (59), March 12, 1999 Vice President, A I M
Vice President Capital Management, Inc.
Robert G. Alley (51), February 25, 1993 Senior Vice President,
Vice President A I M Capital Management,
Inc.; and Vice President,
A I M Advisors, Inc.
Stuart W. Coco (44), February 25, 1993 Senior Vice President,
Vice President A I M Capital Management
Inc.; and Vice President,
A I M Advisors, Inc.
Karen Dunn Kelley (39), February 25, 1993 Senior Vice President,
Vice President A I M Capital Management,
Inc.; and Vice President,
A I M Advisors, Inc.
</TABLE>

K-2
<PAGE> 98

APPENDIX L

SECURITY OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT

SECURITY OWNERSHIP OF MANAGEMENT

As of January 20, 2000, none of the directors nor the chief executive
officer of the company owned shares of any fund of the company. The directors
and executive officers, as a group, held less than 1% of the shares of any fund
as of January 20, 2000.

L-1
<PAGE> 99

SECURITY OWNERSHIP OF CERTAIN RECORD OWNERS

To the best knowledge of the company, the names and addresses of the
holders of 5% or more of the outstanding shares of each of the funds as of
January 20, 2000, and the amount of the outstanding shares owned of record or
beneficially by such holders, are set forth below.

<TABLE>
<CAPTION>
PERCENT PERCENT OF
NAME AND ADDRESS OWNED SHARES FUND
OF RECORD/BENEFICIAL SHARES OWNED OF FUND OWNED OWNED
FUND OWNER OF RECORD OF RECORD BENEFICIALLY* BENEFICIALLY*
---- ---------------------------- -------------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C>
AIM V.I. Aggressive
Growth Fund....... Glenbrook Life & Annuity Co 1,280,250.070 98.874%** 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062-7154
AIM V.I. Balanced
Fund.............. Glenbrook Life & Annuity Co 3,021,180.228 77.051%** 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062-7154

The Union Central Life 875,488.345 22.328% 0 0
Insurance Co
PO Box 40888
Cincinnati, Ohio 45240
AIM V.I. Blue Chip
Fund.............. A I M Advisors, Inc 100,001.000 81.953%** 0 0
11 Greenway Plaza Ste 100
Houston, TX 77046

Glenbrook Life & Annuity Co 22,020.857 18.047% 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062-7154
AIM V.I. Capital
Appreciation
Fund.............. Allstate Life Insurance Co 11,254,999.213 34.684%** 0 0
Financial Control
3100 Sanders Road Suite J4A
Northbrook, IL 60062

Glenbrook Life & Annuity Co 6,260,801.554 19.293% 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062-7154

Merrill Lynch Life Insurance 5,063,889.033 15.605% 0 0
Co
4804 Deer Lake Dr. E.
Bldg 3 - 4th Flr
Jacksonville, FL 32246

Aetna Life Insurance & 3,629,577.659 11.185% 0 0
Annuity Co
151 Farmington Ave
Hartford, CT 06156
</TABLE>

L-2
<PAGE> 100

<TABLE>
<CAPTION>
PERCENT PERCENT OF
NAME AND ADDRESS OWNED SHARES FUND
OF RECORD/BENEFICIAL SHARES OWNED OF FUND OWNED OWNED
FUND OWNER OF RECORD OF RECORD BENEFICIALLY* BENEFICIALLY*
---- ---------------------------- -------------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C>
AIM V.I. Capital
Development
Fund.............. Glenbrook Life & Annuity Co 555,736.639 53.411%** 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062-7154

American Express Financial 480,725.031 46.201%** 0 0
Advisors
c/o IDS Life Insurance
Company ICD
IDS Tower 10 T11/340
Minneapolis, MN 55440
AIM V.I. Dent
Demographic Trends
Fund.............. Glenbrook Life & Annuity Co 100,921.686 49.926%** 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062-7154

A I M Advisors, Inc 100,001.000 49.471%** 0 0
11 Greenway Plaza Ste 100
Houston, TX 77046
AIM V.I.
Diversified
Income Fund....... Allstate Life Insurance Co 4,659,627.962 47.458%** 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062

Glenbrook Life & Annuity Co 2,938,540.885 29.929%** 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062-7154

General American Life Ins Co 1,412,545.307 14.387% 0 0
SA28
700 Market Street
St. Louis, MO 63101
AIM V.I. Global
Growth and Income
Fund.............. General American Life Ins Co 2,244,997.360 99.872%** 0 0
SA29
700 Market Street
St. Louis, MO 63101
AIM V.I. Global
Utilities Fund.... Allstate Life Insurance Co 879,064.592 49.899%** 0 0
3100 Sanders Rd Suite J4A
Northbrook, IL 60062

Glenbrook Life & Annuity Co 766,715.776 43.522%** 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062-7154
</TABLE>

L-3
<PAGE> 101

<TABLE>
<CAPTION>
PERCENT PERCENT OF
NAME AND ADDRESS OWNED SHARES FUND
OF RECORD/BENEFICIAL SHARES OWNED OF FUND OWNED OWNED
FUND OWNER OF RECORD OF RECORD BENEFICIALLY* BENEFICIALLY*
---- ---------------------------- -------------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C>
AIM V.I. Government
Securities Fund... Allstate Life Insurance Co 1,988,152.095 30.423%** 0 0
3100 Sanders Rd Suite J4A
Northbrook, IL 60062

Glenbrook Life & Annuity Co 1,782,095.713 27.269%** 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062-7154

First Citicorp Life 1,273,974.654 19.494% 0 0
Insurance Co
PO Box 7031
Dover, DE 19903

Security Life of Denver 716,658.337 10.966% 0 0
1290 Broadway
Denver, CO 80203-5699

General American Life Ins Co 327,428.703 5.010% 0 0
SA28
700 Market Street
St. Louis, MO 63101
AIM V.I. Growth
Fund.............. Allstate Life Insurance Co 8,974,690.150 39.567%** 0 0
3100 Sanders Rd Suite J4A
Northbrook, IL 60062

Glenbrook Life & Annuity Co 5,691,581.348 25.093%** 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062-7154

Aetna Life Insurance & 2,434,567.571 10.733% 0 0
Annuity Company
151 Farmington Ave
Hartford, CT 06156

Lincoln Life Flexible 1,354,867.512 5.975% 0 0
Premium
1300 S Clinton St
Fort Wayne, IN 46802
AIM V.I. Growth and
Income Fund....... American Express Financial 48,334,315.101 61.500%** 0 0
Advis
c/o IDS Life Insurance
Company
IDS Tower 10
Minneapolis, MN 55440

Glenbrook Life & Annuity Co 7,463,497.367 9.496% 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062-7154

Prudential Insurance Co. of 6,401,783.243 8.146% 0 0
America
213 Washington Street
Newark, NJ 07102-2992

Allstate Life Insurance Co 6,199,844.483 7.888% 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062
</TABLE>

L-4
<PAGE> 102

<TABLE>
<CAPTION>
PERCENT PERCENT OF
NAME AND ADDRESS OWNED SHARES FUND
OF RECORD/BENEFICIAL SHARES OWNED OF FUND OWNED OWNED
FUND OWNER OF RECORD OF RECORD BENEFICIALLY* BENEFICIALLY*
---- ---------------------------- -------------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C>
AIM V.I. High Yield
Fund.............. Glenbrook Life & Annuity Co 1,632,939.295 57.316%** 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062-7154

Hartford Life Insurance Co 999,608.825 35.086%** 0 0
PO Box 2999
Hartford, CT 06104-2999

A I M Advisors, Inc 214,551.999 7.530% 0 0
11 Greenway Plaza Ste 100
Houston, TX 77046
AIM V.I.
International
Equity Fund....... Allstate Life Insurance Co 6,610,846.525 42.399%** 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062

Glenbrook Life & Annuity Co 3,144,818.863 20.169% 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062-7154

General American Life Ins Co 1,904,882.207 12.217% 0 0
SA29
700 Market Street
St. Louis, MO 63101

First Citicorp Life 962,538.138 6.173% 0 0
Insurance Co
PO Box 7031
Dover, DE 19903
AIM V.I. Money
Market Fund....... Allstate Life Insurance Co 44,808,116.120 48.649%** 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062

Glenbrook Life & Annuity Co 25,876,003.830 28.094%** 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062-7154

General American Life Ins Co 19,559,010.200 21.235% 0 0
SA28
700 Market Street
St. Louis, MO 63101
</TABLE>

L-5
<PAGE> 103

<TABLE>
<CAPTION>
PERCENT PERCENT OF
NAME AND ADDRESS OWNED SHARES FUND
OF RECORD/BENEFICIAL SHARES OWNED OF FUND OWNED OWNED
FUND OWNER OF RECORD OF RECORD BENEFICIALLY* BENEFICIALLY*
---- ---------------------------- -------------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C>
AIM V.I.
Telecommunications
Fund.............. General American Life Ins Co 3,056,639.568 97.603%** 0 0
SA29
700 Market Street
St. Louis, MO 63101
AIM V.I. Value
Fund.............. Merrill Lynch Life Insurance 18,386,788.844 25.198%** 0 0
Co.
4804 Deer Lake Drive E.
Jacksonville, FL 32246

Allstate Life Insurance Co 16,210,509.873 22.215% 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062

Prudential Insurance Co. of 11,078,568.720 15.182% 0 0
America
213 Washington Street
7th Floor
Newark, NJ 07102-2992

Glenbrook Life & Annuity Co. 8,925,666.762 12.232% 0 0
3100 Sanders Road Suite J4A
Northbrook, IL 60062-7154
</TABLE>

- ---------------

* The company has no knowledge of shares held beneficially.
*** A shareholder who holds 25% or more of the outstanding shares of a fund may
be presumed to be in "control" of such fund as defined in the 1940 Act.

L-6
<PAGE> 104

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. AGGRESSIVE GROWTH FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

The undersigned hereby appoints Robert H. Graham, Gary T. Crum and Lewis F.
Pennock, 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 Special Meeting of Shareholders on April 10, 2000, at 3:00 p.m., Central
time, and at any adjournment thereof, all of the shares of the fund which the
undersigned would be entitled to vote if personally present. IF THIS PROXY IS
SIGNED AND RETURNED WITH NO CHOICES INDICATED, THE SHARES WILL BE VOTED "FOR"
EACH DIRECTOR AND "FOR" THE APPROVAL OF EACH OTHER PROPOSAL.

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)

--------------------------------------------
Date 10511-01

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

<TABLE>
<S> <C> <C> <C>
1. To elect ten individuals to the Board of Directors of AIM Variable Insurance Funds, Inc. WITHHOLD
each of whom will serve until his or her successor is elected and qualified: FOR AUTHORITY FOR ALL
ALL FOR ALL NOMINEES EXCEPT
01 Charles T. Bauer 04 Edward K. Dunn, Jr. 07 Robert H. Graham 10 Louis S. Sklar
02 Bruce L. Crockett 05 Jack M. Fields 08 Prema Mathai-Davis
03 Owen Daly II 06 Carl Frischling 09 Lewis F. Pennock [ ] [ ] [ ]

IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR NOMINEE, MARK THE "FOR ALL EXCEPT"
BOX AND WRITE THE NOMINEE NUMBER(S) ON THE LINE PROVIDED. YOUR SHARES WILL BE VOTED "FOR"
THE REMAINING NOMINEE(S).________________________________________________________________
FOR AGAINST ABSTAIN
2. To approve an Agreement and Plan of Reorganization which provides for the reorganization of [ ] [ ] [ ]
AIM Variable Insurance Funds, Inc. as a Delaware business trust.

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

a) Change to Fundamental Restriction on Issuer Diversification. [ ] [ ] [ ]
b) Change to Fundamental Restriction on Borrowing Money and Issuing Senior Securities. [ ] [ ] [ ]
c) Change to Fundamental Restriction on Underwriting Securities. [ ] [ ] [ ]
d) Change to Fundamental Restriction on Industry Concentration. [ ] [ ] [ ]
e) Change to Fundamental Restriction on Purchasing or Selling Real Estate. [ ] [ ] [ ]
f) Change to Fundamental Restriction on Purchasing or Selling Commodities. [ ] [ ] [ ]
g) Change to Fundamental Restriction on Making Loans. [ ] [ ] [ ]
h) Elimination of Fundamental Restriction on Investing for the Purpose of Control. [ ] [ ] [ ]

5. To approve changing the investment objective of the fund so that it is non-fundamental. [ ] [ ] [ ]

6. To approve changing the investment objective of the fund and making it non-fundamental. NOT APPLICABLE

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 105

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. BALANCED FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-02

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

5. To approve changing the investment objective of the fund so that it is non-fundamental. [ ] [ ] [ ]

6. To approve changing the investment objective of the fund and making it non-fundamental. NOT APPLICABLE

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 106

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. BLUE CHIP FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-03

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

5. To approve changing the investment objective of the fund so that it is non-fundamental. [ ] [ ] [ ]

6. To approve changing the investment objective of the fund and making it non-fundamental. NOT APPLICABLE

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 107

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. CAPITAL APPRECIATION FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-04

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

5. To approve changing the investment objective of the fund so that it is non-fundamental. NOT APPLICABLE

6. To approve changing the investment objective of the fund and making it non-fundamental. [ ] [ ] [ ]

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 108

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. CAPITAL DEVELOPMENT FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-05

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

5. To approve changing the investment objective of the fund so that it is non-fundamental. [ ] [ ] [ ]

6. To approve changing the investment objective of the fund and making it non-fundamental. NOT APPLICABLE

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 109

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. DENT DEMOGRAPHIC TRENDS FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-06

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

5. To approve changing the investment objective of the fund so that it is non-fundamental. NOT APPLICABLE

6. To approve changing the investment objective of the fund and making it non-fundamental. NOT APPLICABLE

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 110

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. DIVERSIFIED INCOME FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-07

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

5. To approve changing the investment objective of the fund so that it is non-fundamental. [ ] [ ] [ ]

6. To approve changing the investment objective of the fund and making it non-fundamental. NOT APPLICABLE

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 111

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. GROWTH AND INCOME FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-11

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

5. To approve changing the investment objective of the fund so that it is non-fundamental. [ ] [ ] [ ]

6. To approve changing the investment objective of the fund and making it non-fundamental. NOT APPLICABLE

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 112

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. GLOBAL GROWTH AND INCOME FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-08

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

5. To approve changing the investment objective of the fund so that it is non-fundamental. [ ] [ ] [ ]

6. To approve changing the investment objective of the fund and making it non-fundamental. NOT APPLICABLE

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 113

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. GLOBAL UTILITIES FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-09

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

a) Change to Fundamental Restriction on Issuer Diversification. NOT APPLICABLE
b) Change to Fundamental Restriction on Borrowing Money and Issuing Senior Securities. [ ] [ ] [ ]
c) Change to Fundamental Restriction on Underwriting Securities. [ ] [ ] [ ]
d) Change to Fundamental Restriction on Industry Concentration. [ ] [ ] [ ]
e) Change to Fundamental Restriction on Purchasing or Selling Real Estate. [ ] [ ] [ ]
f) Change to Fundamental Restriction on Purchasing or Selling Commodities. [ ] [ ] [ ]
g) Change to Fundamental Restriction on Making Loans. [ ] [ ] [ ]
h) Elimination of Fundamental Restriction on Investing for the Purpose of Control. [ ] [ ] [ ]

5. To approve changing the investment objective of the fund so that it is non-fundamental. NOT APPLICABLE

6. To approve changing the investment objective of the fund and making it non-fundamental. [ ] [ ] [ ]

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 114

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. GOVERNMENT SECURITIES FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-10

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

5. To approve changing the investment objective of the fund so that it is non-fundamental. NOT APPLICABLE

6. To approve changing the investment objective of the fund and making it non-fundamental. [ ] [ ] [ ]

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 115

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. GROWTH FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-12

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

5. To approve changing the investment objective of the fund so that it is non-fundamental. NOT APPLICABLE

6. To approve changing the investment objective of the fund and making it non-fundamental. [ ] [ ] [ ]

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 116

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. HIGH YIELD FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-13

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

5. To approve changing the investment objective of the fund so that it is non-fundamental. NOT APPLICABLE

6. To approve changing the investment objective of the fund and making it non-fundamental. NOT APPLICABLE

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 117

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. INTERNATIONAL EQUITY FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-14

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

5. To approve changing the investment objective of the fund so that it is non-fundamental. NOT APPLICABLE

6. To approve changing the investment objective of the fund and making it non-fundamental. [ ] [ ] [ ]

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 118

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. MONEY MARKET FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-15

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

5. To approve changing the investment objective of the fund so that it is non-fundamental. [ ] [ ] [ ]

6. To approve changing the investment objective of the fund and making it non-fundamental. NOT APPLICABLE

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 119

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. TELECOMMUNICATIONS FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-16

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

5. To approve changing the investment objective of the fund so that it is non-fundamental. [ ] [ ] [ ]

6. To approve changing the investment objective of the fund and making it non-fundamental. NOT APPLICABLE

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>

<PAGE> 120

EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY!

PROXY PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PROXY

AIM V.I. VALUE FUND

(A PORTFOLIO OF AIM VARIABLE INSURANCE FUNDS, INC.)

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 10, 2000

--------------------------------------------
Signature

--------------------------------------------
Signature (If held jointly)

--------------------------------------------
Date 10511-17

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" EACH PROPOSAL. TO VOTE, FILL IN THE BOX COMPLETELY.
EXAMPLE: [X]

3. To approve a new Master Investment Advisory Agreement with A I M Advisors, Inc. [ ] [ ] [ ]

4. To approve changing each fund's fundamental investment restrictions.

5. To approve changing the investment objective of the fund so that it is non-fundamental. NOT APPLICABLE

6. To approve changing the investment objective of the fund and making it non-fundamental. [ ] [ ] [ ]

7. To ratify the selection of Tait, Weller & Baker as independent accountants of the fund for [ ] [ ] [ ]
the fiscal year ending in 2000.

8. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>