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FILE NOS. 33-91174
811-9022
As filed with the Securities and Exchange Commission on January 16, 1996
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. _____ [_]
POST-EFFECTIVE AMENDMENT NO. 3 [X]
----
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 6 [X]
----
(CHECK APPROPRIATE BOX OR BOXES)
WITH RESPECT TO COMMON STOCK:
AIG ALL AGES FUNDS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
70 PINE STREET, NEW YORK, NEW YORK 10270
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(800) 862-3984
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
CT CORPORATION SYSTEM
1633 BROADWAY
NEW YORK, NEW YORK 10019
(NAME AND ADDRESS OF AGENT FOR SERVICE)
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With respect to Guarantee: With respect to Support Agreement:
AIG CAPITAL MANAGEMENT CORP. AMERICAN INTERNATIONAL GROUP, INC.
(Exact name of co-registrant as specified in charter) (Exact name of co-registrant as specified in charter)
70 PINE STREET, NEW YORK, NEW YORK 10270 70 PINE STREET, NEW YORK, NEW YORK 10270
(Address of principal executive offices) (Address of principal executive offices)
(212) 770-7000 (212) 770-7000
(Co-registrant's telephone number, including area code) (Co-registrant's telephone number, including area code)
ELIZABETH M. TUCK KATHLEEN E. SHANNON
AIG Capital Management Corp. American International Group, Inc.
70 Pine Street, New York, New York 10270 70 Pine Street, New York, New York 10270
(Name and address of agent for service) (Name and address of agent for service)
COPIES TO:
ROBERT W. HELM, ESQ. DAVID HARTMAN, ESQ.
DECHERT PRICE & RHOADS AMERICAN INTERNATIONAL GROUP, INC.
1500 K STREET, WASHINGTON, DC 20005 70 PINE STREET, NEW YORK, NEW YORK 10270
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IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX):
[_] immediately upon filing pursuant [X] on February 15, 1996 pursuant
to paragraph (b) of Rule 485. to paragraph (b) of Rule 485.
[_] 60 days after filing pursuant [_] on (date) pursuant to
to paragraph (a)(1) of Rule 485. paragraph (a)(1) of Rule 485.
[_] 75 days after filing pursuant [_] on (date) pursuant to
to paragraph (a)(2) of Rule 485. paragraph (a)(2) of Rule 485.
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
[X] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
REGISTRANT AIG ALL AGES FUNDS, INC. HAS REGISTERED UNDER THE SECURITIES ACT OF
1933 AN INDEFINITE AMOUNT OF SECURITIES PURSUANT TO RULE 24f-2(a)(1) UNDER THE
INVESTMENT COMPANY ACT OF 1940. REGISTRANT INTENDS TO FILE THE NOTICE REQUIRED
BY RULE 24f-2 WITHIN THE TIME PERIOD REQUIRED BY SUCH RULE.
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EXPLANATORY NOTE
This Registration Statement relates to (A) the registration under the
Investment Company Act of 1940 of AIG All Ages Funds, Inc. (the "Registrant"),
an open-end management investment company, and (B) the registration under the
Securities Act of 1933 of (i) an indefinite number of shares of common stock of
the Registrant; (ii) a guarantee (the "Guarantee") by AIG Capital Management
Corp. (the "Manager") to the Registrant that the net asset value of the shares
of AIG Retiree Fund -- 2003, a series of the Registrant managed by the Manager
(the "Fund"), will be sufficient, on or after November 15, 2003, that
shareholders of the Fund who have reinvested all dividends and distributions
will receive, upon redemption of their shares, at least the amount of their
original investment (including any sales charge paid); and (iii) a Support
Agreement (the "Support Agreement") entered into between American International
Group, Inc. ("AIG") and the Manager pursuant to which AIG will provide financial
support to the Manager in the event it is unable to meet its obligations under
the Guarantee. No separate consideration will be received by the Manager or AIG
for entering into the Guarantee or the Support Agreement. Shares of the Fund
will be offered only for a limited period (the "Offering Period"). The maximum
amount payable under the Guarantee and the Support Agreement will equal, without
duplication, the aggregate purchase price, including sales charges, of all
shares of the Fund sold during the Offering Period. This Registration Statement
has also been signed by First Global Equity Portfolio (the "Equity Portfolio") a
registered open-end management investment company in which the Fund will invest.
This Post-Effective Amendment No. 3 is being filed to designate a new
effective date for Post-Effective Amendment No. 2 to the Registration Statement,
which was filed on November 3, 1995. This Amendment incorporates by reference
the Prospectus, Statement of Additional Information and Part C for the AIG
Children's World Fund -- 2005 from Post-Effective Amendment No. 1 to the
Registration Statement, and the financial statements relating to that fund and
the guarantee issued in connection therewith.
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PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION
RELATING TO AIG RETIREE FUND -- 2003
CROSS REFERENCE SHEET REQUIRED BY RULE 495
UNDER THE SECURITIES ACT OF 1933
The enclosed Prospectus, Statement of Additional Information and Part C
relate only to AIG Retiree Fund -- 2003, a series of AIG All Ages Funds, Inc.
(the "Fund"), and contain information relating only to this series. Information
relating to AIG Children's World Fund -- 2005 is incorporated by reference from
Post-Effective Amendment No. 1 to the Fund's registration statement, filed on
September 21, 1995.
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Item No. in Part A of Form N-1A Location in Prospectus
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1. Cover Page Cover Page
2. Synopsis Not applicable
3. Condensed Financial
Information Not applicable
4. General Description of Investment Objectives and Management
Registrant Policies; American International
Group, Inc.
5. Management of Fund Investment
Advisory Services
5a. Managers' Discussion of
Fund Performance Not applicable
6. Capital Stock and Other Organization and Capitalization;
Securities Dividends and Distributions; Taxes;
Investment Objectives and Management
Policies -- The Manager's Guarantee
7. Purchase of Securities Being Cover Page; Purchase of Shares
Offered
8. Redemption or Repurchase Redemption or Repurchase of Shares
9. Pending Legal Proceedings Not applicable
<CAPTION>
Location in Statement of Additional
Item No. in Part B of Form N-1A Information
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10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History General Information
13. Investment Objectives and Policies Investment Objectives and Policies
14. Management of the Registrant Management and Expenses
15. Control Persons and Principal Directors and Officers
Holders of Securities
16. Investment Advisory and Other Management and Expenses; Other
Services Information
17. Brokerage Allocation Portfolio Transactions and Brokerage
18. Capital Stock and Other Securities Other Information -- Capital Stock
19. Purchase, Redemption and Pricing of Purchase and Redemption of Fund Shares;
Valuation
20. Tax Status Taxes
21. Underwriters Distribution Services
22. Calculation of Performance Data Not applicable
23. Financial Statements Not applicable
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<PAGE>
Subject to Completion, dated January 16, 1996
AIG RETIREE FUND -- 2003
a series of
AIG All Ages Funds, Inc.
505 Carr Road, Wilmington, Delaware 19809 . (800) 862-3984
----
This prospectus describes the AIG Retiree Fund -- 2003 (the "Fund").
The Fund is a diversified series of AIG All Ages Funds, Inc., an open-end
management investment company. The Fund has two investment objectives. The
first objective is to provide a guaranteed return, on or after November 15,
2003, of the full amount originally invested (including any sales charge paid)
by each shareholder who has reinvested all dividends and distributions. The
Fund pursues its first objective by investing a portion of its assets in zero
coupon securities that are the direct obligations of the United States Treasury
("Treasury Securities"), combined with further assurance from a guarantee by AIG
Capital Management Corp., the Fund's investment adviser (the "Manager"). The
Manager's obligations under its guarantee will be backed by its parent, American
International Group, Inc. ("AIG").
The Fund's second objective is to achieve total return on capital
through both capital growth (realized and unrealized) and income, by investing
the balance of its assets in a globally diversified portfolio of equity
securities. There can be no assurance that this second objective of total
return on capital will be achieved.
The Fund is intended for shareholders who are not seeking current
income, but rather are looking for an investment vehicle that offers up-side
potential while guaranteeing the return of their original investment, including
any sales charge paid.
Shares of the Fund will be offered to investors only from February 15,
1996 through November 30, 1996. During this limited period the shares will be
offered at their net
(Continued on Page 2)
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SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
This prospectus sets forth concisely the information a prospective investor
should know about the Fund and the Equity Portfolio before investing. Please
read it carefully before you invest and keep it for future reference.
Additional information about the Fund, including a Statement of Additional
Information, has been filed with the Securities and Exchange Commission. The
Statement of Additional Information is available upon request and without charge
by calling or writing the Fund at the telephone numbers or the addresses set
forth above. The Statement of Additional Information is dated the same date as
this Prospectus and is incorporated herein by reference in its entirety.
The date of this prospectus is January 16, 1996.
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AIG Retiree Fund -- 2003, Page 2
asset value plus the applicable sales charge, if any. The Fund does not expect
that its shares will be offered after November 30, 1996.
The Fund seeks to achieve the investment objective of total return on
capital by investing a portion of its investable assets in the First Global
Equity Portfolio (the "Equity Portfolio"), a diversified open-end management
investment company with the same investment objective. Both the Fund and the
Equity Portfolio are managed by the Manager and investment advice is provided by
affiliated companies. By investing in the Equity Portfolio, the Fund differs
from those mutual funds that directly acquire and manage their own portfolio of
securities. The Fund and the Equity Portfolio constitute a two-tier master-
feeder structure. The two-tier structure permits the Equity Portfolio to offer
its shares to other investors and thus is intended to reduce certain expenses
that would otherwise be payable entirely by the Fund. The Fund will directly
acquire and manage its portfolio of Treasury Securities. See "Special
Information Concerning the Two-Tier Structure."
The Fund is an open-end fund, which means that shareholders may elect
to receive dividends and distributions in cash and may redeem some or all of
their shares at any time. However, under the terms of the Manager's Guarantee,
shareholders who desire to be certain of receiving the full amount of their
original investment from the Fund on or after November 15, 2003 must reinvest
all dividends and distributions in additional shares and hold all their shares
until November 15, 2003. Further discussion of the Manager's Guarantee is
contained in the Statement of Additional Information. The Fund is intended for
long-term investors and is not appropriate for investors seeking current income
or investors who do not intend to reinvest dividends and distributions.
Shareholders are urged to consult their tax advisers concerning the effect of
federal, state, and local income taxes in their individual circumstances. See
"Taxes." In addition, the Fund may not be appropriate for investors who expect
to redeem all or a portion of their shares prior to November 15, 2003 because
there can be no assurance of the amount that will be received upon early
redemption. The net asset value of a share of the Fund can be expected to
fluctuate substantially owing to changes in prevailing interest rates that will
affect the current value of the Fund's holdings of zero coupon securities, as
well as changes in the value of the Fund's other holdings. Although the two-
tier structure permits the Equity Portfolio to offer its shares to other
investors and thus is intended to reduce certain expenses that would otherwise
be payable entirely by the Fund, the Fund itself does not expect to offer its
shares after November 30, 1996 and will not benefit from an inflow of new
capital investments. In addition, the Fund may experience redemptions and
capital losses prior to November 15, 2003 and will pay dividends and
distributions in cash to shareholders who so elect. Losses, redemptions and
dividends and distributions paid in cash will reduce the Fund's assets and its
ability to meet the total return objective. See "Investment Objectives and
Management Policies -- Proposed Operations of the Fund" and "Risk Factors --
Zero Coupon Securities."
The Fund is sold through financial intermediaries by individual
account representatives who recommend and sell mutual funds, stocks, bonds and
other securities. Account representatives provide a wide array of services to
their clients. An important service is assisting clients in their financial
planning and in choosing investment products that fit their risk and investment
profiles. There can be no assurance that an account representative's
recommendations will be suitable or that, if purchased, they will result in the
anticipated financial benefits. Their responsibility to their clients is to
offer
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AIG Retiree Fund -- 2003, Page 3
advice based on their knowledge of the products they are recommending and
understanding their clients' needs, for which they receive a fee or commission
paid by their clients. If you do not fully understand the shares that are
offered by this Prospectus, you may wish to consult your account representative.
THE FUND'S AND THE EQUITY PORTFOLIO'S EXPENSES
The following table lists the costs and expenses that an investor will
pay as a shareholder of the Fund, based upon the sales charge that may be
incurred at the time of purchase and upon the projected annual operating
expenses of the Fund and the Equity Portfolio, as a percentage of average net
assets of the Fund. THE DIRECTORS OF THE FUND BELIEVE THAT THE AGGREGATE PER
SHARE EXPENSES OF THE FUND AND THE EQUITY PORTFOLIO WILL BE LESS THAN OR
APPROXIMATELY EQUAL TO THE EXPENSES THAT THE FUND WOULD INCUR IF THE ASSETS OF
THE FUND THAT ARE INVESTED IN THE EQUITY PORTFOLIO WERE INSTEAD INVESTED
DIRECTLY BY THE FUND IN THE TYPE OF SECURITIES HELD BY THE EQUITY PORTFOLIO.
SHAREHOLDER TRANSACTION EXPENSES/1/
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Maximum sales load imposed on purchases
(as a percentage of offering price) 4.75%
Maximum sales load imposed on reinvested dividends
(as a percentage of offering price) None
Deferred sales load
(as a percentage of original purchase
price or redemption proceeds,
as applicable):
Shares acquired under Large Purchase Privilege/2/ 1.00%
All other shares None
Redemption fees
(as a percentage of amount redeemed) None
Exchange fee None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management fees (assuming 65% of the Fund's assets
are invested directly in Treasury Securities
and 35% in the Equity Portfolio):
Treasury Securities 0.20% x 65% = 0.13%
Equity Portfolio 1.20% x 35% = 0.42%
----
Estimated total management fees 0.55%/3/
12b-1 fees (DURING OFFERING PERIOD ONLY) 0.50%
Other expenses/4/ 1.00%
----
Total Fund Operating Expenses:
Before Manager's assumption of the Fund's expenses/5/ 2.05%
----
After Manager's assumption of the Fund's expenses
during the Offering Period 1.95%
====
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/1/ Investment dealers and other firms may independently charge additional fees
for shareholder transactions or for advisory services; please see their
materials for details. Reduced sales charges apply to purchases of $100,000
or more. See "Purchase of Shares."
/2/ The redemption within one year of shares purchased at net asset value under
the Large Purchase Privilege (available for purchases in amounts of $1
million or more) may be subject to a 1% contingent deferred sales charge.
See "Purchase of Shares."
/3/ The management fee will be 0.55% if 65% of the Fund's assets are invested
directly in Treasury Securities and 35% in the Equity Portfolio. However,
this allocation will fluctuate with changes in market conditions. See
"Investment Objectives and Management Policies -- Proposed Operations of
the Fund." The Manager estimates that, under normal market conditions, the
portion of the Fund's assets invested in Treasury Securities will not be
less than 50% or more than 80% during the Offering Period. Thus the total
management fee is estimated to vary between 0.40% and 0.70%. However, in
extreme market conditions, the percentage of Treasury Securities could be
less than 50% or more than 80%, with the result that the total management
fee would fall outside the indicated range.
/4/ Comprises expenses payable directly by the Fund plus the Fund's pro rata
share of expenses incurred by the Equity Portfolio.
/5/ The Manager's assumption of the Fund's expenses is subject to reimbursement
by the Fund in subsequent years under certain circumstances.
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AIG Retiree Fund -- 2003, Page 4
"Other expenses" in the above table include, among other things, fees
for transfer agent services, custodial fees, directors' and trustees' fees,
legal fees and accounting fees, printing costs, registration fees, costs of
preparing and distributing reports to shareholders and the fee for shareholder
servicing described under "Shareholder Servicing Agreement," and is based on
estimated amounts for the current fiscal year, assuming that the average assets
of the Fund during such year are $83,300,000. The Manager has agreed to assume
the Fund's expenses to the extent Total Fund Operating Expenses during the
Offering Period exceed 1.95% of average daily net assets, subject to
reimbursement by the Fund in subsequent years under certain circumstances. See
"Investment Advisory Services -- The Manager." RULE 12B-1 FEES WILL BE PAYABLE
ONLY DURING THE OFFERING PERIOD. AFTER THE OFFERING PERIOD, TOTAL FUND
OPERATING EXPENSES ARE ESTIMATED NOT TO EXCEED 1.95%.
The following example is intended to assist an investor in
understanding the various costs and expenses that an investor in the Fund will
bear directly or indirectly.
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EXAMPLE
You would pay the following expenses on a 1 Year 3 Years
$1,000 investment assuming ------ -------
(1) 5% annual return and (2) redemption at
the end of each time period: $66 $106
=== ====
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The example is intended to assist you in comparing expenses of the
Fund with those of other funds over varying investment periods. All funds are
required to present this information based on an assumed return of 5%. This
makes the comparison of various funds simpler. However, the Fund's actual
return will vary and may be greater or less than 5%. Also, if you redeem your
shares before November 15, 2003, your proceeds may be less than the amount you
originally invested. This example should not be considered a representation of
past or future expenses and actual expenses may be greater or less than those
shown.
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
IN GENERAL
The Fund has two investment objectives. The first is to provide a
guaranteed return at any time on or after November 15, 2003 (the "Maturity
Date") of the full amount originally invested (including any sales charge paid)
by each shareholder who has reinvested all dividends and distributions, which
the Fund pursues through investment of a portion of its assets in zero coupon
Treasury Securities, with additional assurance provided by the guarantee (the
"Manager's Guarantee") of the Manager, backed by its parent AIG. The second
objective is to achieve total return on capital through both capital gains
(realized and unrealized) and income, by investing the balance of its assets in
a globally diversified portfolio of equity securities. See "-- Proposed
Operations of the Fund." The investment objectives of the Fund are fundamental
and cannot be changed without the approval of the holders of a majority of the
outstanding voting securities of the Fund, as defined under the Investment
Company Act of 1940, as amended (the "1940 Act").
<PAGE>
AIG Retiree Fund -- 2003, Page 5
The Fund's investment strategy with respect to zero coupon Treasury
Securities, together with the Manager's Guarantee, ensures that shareholders who
reinvest all dividends and distributions will receive the full amount of their
original investment when they redeem their shares on or after the Maturity Date.
In addition, the Manager believes that the Equity Portfolio's investment
strategies should be sufficient to accomplish the Fund's investment objective of
total return, but there can be no assurance that this objective will be
achieved. The Fund is structured as an open-end investment company and
shareholders may redeem their shares at any time and may elect to receive
dividends and distributions in cash. However, pursuant to the terms of the
Manager's Guarantee, shareholders who wish to be certain of receiving the full
amount of their original investment must reinvest all dividends and
distributions in additional shares and hold all their shares until the Maturity
Date. There can be no assurance that shareholders who elect to receive
distributions in cash will receive the full amount of their original investment
on or after the Maturity Date. In addition, while the amount sought to be
returned on or after the Maturity Date to shareholders may equal or exceed the
amount originally invested, the present value of that amount may be
substantially less. The Manager's Guarantee is discussed in further detail in
the Statement of Additional Information.
Shareholders also should be aware that a substantial portion of the
amount returned on or after the Maturity Date represents accretion of interest
on the Fund's zero coupon Treasury Securities. The annual accretion will be
taxable to shareholders as ordinary income each year over the term of the Fund,
even for shareholders who reinvest all dividends and distributions.
Shareholders are urged to consult their tax advisers concerning the effect of
federal, state, and local income taxes in their individual circumstances. See
"Taxes."
When the zero coupon Treasury Securities in the Fund's portfolio
mature on or about the Maturity Date, the Fund will reinvest the principal
amount in short-term, highly liquid obligations of the U.S. Government. The
value of these securities is not expected to fluctuate significantly, so
shareholders who redeem their shares at any time on or after the Maturity Date
should expect to receive the amount of their initial investment (from the
liquidation of the Fund's Treasury Securities) plus the value (if any) of their
proportionate share of the Fund's interest in the Equity Portfolio. After the
Maturity Date, the Board of Directors may, in its sole discretion and without
shareholder approval, cause the Fund to redeem all of its outstanding shares at
their net asset value and distribute the proceeds to shareholders if the Board
determines that continuing the existence of the Fund is not in the best
interests of the Fund. Pursuant to the terms of the Manager's Guarantee,
shareholders who have reinvested all dividends and distributions will be certain
to receive the full amount of their original investment in the event of such
redemption.
ZERO COUPON SECURITIES
A zero coupon security is a debt obligation that entitles the holder
to a specified sum at maturity but does not provide for any periodic payments of
interest prior thereto. Such a security is therefore issued and traded at a
discount from its amount due at maturity (the "face value"). Zero coupon
securities may be created by separating the interest and principal components of
securities issued or guaranteed by the United States Government or one of its
agencies or instrumentalities or issued by private corporate
<PAGE>
AIG Retiree Fund -- 2003, Page 6
issuers. The Fund, however, will invest in zero coupon securities only if they
are direct obligations of the United States Treasury. The discount from face
value at which zero coupon securities are purchased varies depending on the time
remaining to maturity, prevailing interest rates and the liquidity of the
security. Because the discount from face value is known at the time of
investment, investors holding zero coupon Treasury Securities until maturity
know the total amount of their investment return at the time of investment.
In contrast to zero coupon securities, a portion of the total realized
return from conventional interest-paying obligations comes from the reinvestment
of periodic interest. Because the rate to be earned on these reinvestments may
be higher or lower than the rate quoted on the interest-paying obligations at
the time of the original purchase, the investor's return on reinvestments is
uncertain even if the securities are held to maturity. This uncertainty is
commonly referred to as reinvestment risk. With zero coupon securities,
however, there are no cash distributions to reinvest, so investors bear no
reinvestment risk if they hold the zero coupon securities to maturity; holders
of zero coupon securities, however, forego the possibility of reinvesting at a
higher yield than the rate paid on the originally issued security. For a
discussion of risks associated with the sale of zero coupon securities prior to
maturity, see "Risk Factors -- Zero Coupon Securities."
FIRST GLOBAL EQUITY PORTFOLIO
The Fund seeks to achieve its investment objective of total return on
capital by investing the portion of its assets not invested in zero coupon
Treasury Securities in the Equity Portfolio, which is managed by the same
Manager as the Fund. The investment objective of the Equity Portfolio is to
achieve total return on capital through both capital growth (realized and
unrealized) and income. This objective is identical to the objective of the
Fund with respect to those assets invested in the Equity Portfolio. The Equity
Portfolio seeks to achieve its objective by making global investments in
securities of issuers from around the world. This investment objective is a
fundamental policy and cannot be changed without approval of the owners of
beneficial interests in the Equity Portfolio (which include the Fund and other
investors in the Equity Portfolio). There can be no assurance that the Equity
Portfolio will achieve its investment objective of total return on capital.
Under normal conditions at least 80% of the Equity Portfolio's assets
will be invested in securities of issuers organized in one or more of the
following countries: the United States, the United Kingdom, Canada, Australia,
Japan, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Hong
Kong, Singapore and Malaysia. The Manager has selected the securities markets
of these 15 countries because they are among the largest in the world. The
Equity Portfolio may, however, invest in securities of issuers incorporated or
organized in any country. No more than 30% of the Equity Portfolio's assets may
be invested in securities of issuers incorporated or organized in any one
country, except that up to 100% of such assets may be invested in securities of
issuers organized in the United States. Securities may be included in the
Equity Portfolio without regard to minimum capitalization of their issuers. For
a discussion of the risks associated with investment in securities of foreign
issuers, see "Risk Factors -- Foreign Investment."
<PAGE>
AIG Retiree Fund -- 2003, Page 7
In allocating investments among geographic regions and individual
countries, the Manager will normally consider such factors as the relative
economic growth potential of the various economies and securities markets;
expected levels of inflation; financial, social and political conditions
influencing the investment opportunities; and the outlook for currency
relationships.
The Equity Portfolio may invest in all types of securities (subject to
the limitations discussed below and in the Statement of Additional Information),
many of which will be denominated in currencies other than the U.S. dollar. The
Equity Portfolio will normally invest its assets in equity securities, including
common stock, securities convertible into common stock, depositary receipts for
these securities, and warrants. (A brief description of these securities is
provided in the next paragraph.) The Equity Portfolio will not ordinarily
invest in nonconvertible debt securities. The Equity Portfolio, may, however,
invest up to 25% of its assets in preferred stock. Dividends may also be
considered in selecting securities when the Manager believes that such income
will favorably influence the market value of a security in light of the Equity
Portfolio's objective of total return. Equity securities in which the Equity
Portfolio will invest may be listed on a U.S. or foreign stock exchange or
traded in U.S. or foreign over-the-counter markets, although the Equity
Portfolio may also invest in securities for which there is no active trading
market (subject to the limitations discussed below and in the Statement of
Additional Information).
Common Stock is capital stock of a corporation which denotes ownership
and provides the means to control the corporation, but which is inferior to
other classes of securities with respect to payment of dividends and
distribution of assets upon dissolution of the corporation. Preferred Stock is
capital stock usually entitled by a corporation's charter to priority over
common stock in payment of dividends and in the distribution of assets upon
dissolution of the corporation. A Convertible Security is any security capable
of being converted, at the election of the holder, into another security of the
same issuer (for example, a bond that is convertible into a specified number of
shares of common stock). A Warrant is a security issued by a corporation that
gives the warrant holder the right to purchase capital stock or another security
of the corporation at a stated price.
The Equity Portfolio may invest in securities represented by
Depositary Receipts, including European Depositary Receipts ("EDRs"), American
Depositary Receipts ("ADRs") and Global Depositary Receipts ("GDRs"). ADRs are
receipts generally issued by a domestic bank or trust company that represent the
deposit of a security of a foreign issuer. EDRs are typically issued by foreign
banks or trust companies and traded in Europe. GDRs may be issued by a domestic
or foreign bank or trust company and may be traded in several markets. For
purposes of the Equity Portfolio's investment policies, an investment in
Depositary Receipts will be deemed to be an investment in the underlying
security.
The Fund may make certain negotiated investments with AIG and/or its
affiliates, subject to obtaining any necessary regulatory approvals.
As a matter of fundamental policy, the Equity Portfolio will not
engage in transactions intended to hedge foreign exchange risk. See "Risk
Factors -- Foreign Currencies." The Equity Portfolio is also subject to an
operating policy which prohibits
<PAGE>
AIG Retiree Fund -- 2003, Page 8
it from borrowing any amount more than 5% of its total assets. This effectively
limits the ability of the Equity Portfolio to "leverage" its assets by borrowing
money and investing in additional securities. Additional information about the
Equity Portfolio has been included in the Equity Portfolio's registration
statement filed with the Securities and Exchange Commission, a copy of which is
available upon request and without charge by calling or writing the Fund at the
telephone number and address set forth on the cover page of this Prospectus.
PROPOSED OPERATIONS OF THE FUND
As noted above, the Fund will invest directly in zero coupon Treasury
Securities and, through its investment in the Equity Portfolio, in a globally
diversified portfolio of equity securities in pursuing its objectives. Shares
of the Fund will be offered to investors only from February 15, 1996 through
November 30, 1996 (the "Offering Period"). During the Offering Period the
shares will be offered at their net asset value plus the applicable sales
charge, if any. The Fund does not expect that its shares will be offered after
November 30, 1996. See "Purchase of Shares." The zero coupon Treasury
securities that the Fund acquires with the proceeds of the sale of its shares
during the Offering Period will be selected so as to mature at a specific face
value on or about the Maturity Date. The Manager will continually review and
adjust where necessary the proportion of the Fund's assets that are invested in
zero coupon securities so that the value of the zero coupon securities on the
Maturity Date (i.e., the aggregate face value of the zero coupon securities held
by the Fund) will be at least sufficient to enable investors who reinvest all
dividends and hold their entire investment in the Fund until the Maturity Date
to receive on or after the Maturity Date the full amount of their original
investment, including any sales charge (the "Repayment Objective"). After the
Offering Period, the Fund anticipates adjustments in its portfolio of zero
coupon securities solely to meet requests for redemption and, if required, to
make payments of dividends and distributions. Thus, the minimum face value of
the zero coupon securities per Fund share necessary to provide for the Fund's
Repayment Objective will be continually determined and maintained.
The portion of the Fund's assets that will be allocated to the
purchase of zero coupon securities will fluctuate during the Offering Period.
This is because the market value of the zero coupon securities and the shares of
the Equity Portfolio, and therefore the offering price of the Fund's shares,
will fluctuate with changes in interest rates and other market value
fluctuations. If the offering price of the Fund's shares increases during the
Offering Period, the minimum par value of zero coupon securities per Fund share
necessary to provide for the Fund's Repayment Objective will increase. The Fund
may hold zero coupon securities in an amount in excess of the amount necessary
to provide for the Fund's Repayment Objective in the discretion of the Fund's
investment manager. During the first year of operations, under normal market
conditions, the proportion of the Fund's portfolio invested in zero coupon
securities may be expected to range from 50% to 80%; but a greater or lesser
percentage is possible.
During the Offering Period, as the percentage of zero coupon
securities in the Fund's portfolio increases, the portion of the Fund's assets
invested in the Equity Portfolio will necessarily decrease. This will result in
less potential for total return from the Equity Portfolio. In order to help
ensure shareholders at least a minimum level of initial investment in the global
equity markets, the Fund will cease offering its shares if
<PAGE>
AIG Retiree Fund -- 2003, Page 9
their continued offering would cause more than 80% of its assets to be allocated
to zero coupon securities. After the Offering Period is over, it is not
anticipated that any additional assets will be allocated to the purchase of zero
coupon securities. However, since the market values of the zero coupon
securities and the net asset value of interests in the Equity Portfolio are
often affected in different ways by changes in interest rates and other market
conditions and will often fluctuate independently, the percentage of the Fund's
net asset value represented by zero coupon securities will continue to fluctuate
after the end of the Offering Period. Zero coupon securities may be liquidated
before the Maturity Date to meet redemptions and pay cash dividends, provided
that the minimum amount of zero coupon securities necessary to provide for the
Fund's Repayment Objective is maintained.
When the zero coupon securities in the Fund's portfolio mature on or
about the Maturity Date, the Fund will reinvest the principal amount in short-
term, highly liquid Treasury Securities. The value of these securities is not
expected to fluctuate significantly, with the result that the full principal
amount of Treasury Securities held by the Fund on the Maturity Date should
continue to be available to redeeming shareholders after the Maturity Date.
After the Maturity Date, the Board of Directors of AIG All Ages Funds,
Inc. (the "Board") may, in its sole discretion and without shareholder approval,
cause the Fund to redeem all of its outstanding shares at their net asset value
and distribute the proceeds to shareholders if the Board determines that
continuing the existence of the Fund is not in the best interests of the Fund.
In such event, the Fund's Treasury Securities will be liquidated and the Fund's
interest in the Equity Portfolio shall be sold or otherwise reduced to cash, the
liabilities of the Fund will be discharged or otherwise provided for, the Fund's
outstanding shares will be mandatorily redeemed at the net asset value per share
determined on the date of redemption and, within three business days thereafter,
the Fund's net assets will be distributed to shareholders and the Fund shall be
thereafter terminated. Termination of the Fund may require disposition of the
Fund's interest in the Equity Portfolio at a time when it is otherwise
disadvantageous to do so and may involve selling such interest at a substantial
loss. The estimated expenses of liquidation and termination of the Fund are not
expected to affect materially the net asset value of the Fund, and, because of
the Manager's Guarantee, shareholders who reinvest all dividends and
distributions will be certain to receive the full amount of their original
investment in the event of such a liquidation. In the event of termination of
the Fund as noted above, the redemption of shares effected in connection with
such termination would for current federal income tax purposes constitute a sale
upon which gain or loss will be realized depending upon whether the net asset
value of the shares being redeemed is more or less than the shareholder's
adjusted cost basis.
Subject to shareholder approval, other alternatives may be pursued by
the Fund after the Maturity Date. For instance, the Board may consider the
possibility of a tax-free reorganization between the Fund and another registered
open-end management investment company or any other series of AIG All Ages
Funds, Inc. The Board has not made any determinations about the continued
operation of the Fund after the Maturity Date.
<PAGE>
AIG Retiree Fund -- 2003, Page 10
The Fund is structured as an open-end investment company and
shareholders may redeem their shares at any time and may elect to receive
dividends and distributions in cash. However, pursuant to the terms of the
Manager's Guarantee, shareholders who wish to be certain of receiving the full
amount of their original investment must reinvest all dividends and
distributions in additional shares and hold all their shares until the Maturity
Date. Shareholders who elect to receive dividends in cash are in effect
withdrawing a portion of the accreted income on the zero coupon securities that
are held to protect their original principal investment at the Maturity Date.
These shareholders will receive the same net asset value per share for any Fund
shares redeemed at the Maturity Date as shareholders who reinvest dividends, but
they will have fewer shares to redeem than shareholders similarly situated who
had reinvested all dividends. Thus there can be no assurance that such
shareholders will receive the full amount of their original investment on
or after the Maturity Date. The Manager's Guarantee is discussed in further
detail in the Statement of Additional Information.
Shareholders who redeem some or all of their shares before the
Maturity Date will not be certain to receive the full amount of their original
investment (including any sales charge paid) on or after the Maturity Date.
Under the terms of the Manager's Guarantee, the amount a shareholder is certain
to receive will be reduced in proportion to the number of shares redeemed
divided by the number of shares originally purchased during the Offering Period.
Thus, investors are encouraged to reinvest dividends and to evaluate their need
to receive some or all of their investments prior to the Maturity Date before
making an investment in the Fund.
THE MANAGER'S GUARANTEE
In order to ensure the return of the full amount of a shareholder's
original investment (including any sales charge paid) on or after the Maturity
Date, AIG All Ages Funds, Inc. and the Manager have entered into a Guarantee
Agreement with respect to the Fund, dated _______________, 1996 (the "Manager's
Guarantee"). The Manager's obligations under the Manager's Guarantee are backed
by its parent, AIG, pursuant to a Support Agreement, dated _______________,
1996. AIG is a holding company which through its subsidiaries is primarily
engaged in a broad range of insurance and insurance-related activities in the
United States and abroad. Other significant activities of AIG are financial
services and agency and service fee operations. See "American International
Group, Inc." The Manager is an indirect wholly owned subsidiary of AIG.
Pursuant to the Manager's Guarantee, the Manager has agreed that, in the
unlikely event that a shareholder who has reinvested all dividends and
distributions and who has not redeemed any shares presents his or her shares for
redemption on any date on or after the Maturity Date and the amount that would
be payable to the shareholder upon such redemption would be less than the full
amount of his or her original investment (including any sales charge paid), the
Manager will pay to the Fund an amount sufficient to ensure that the total value
of the redeeming shareholder's shares will equal the amount originally invested.
If a shareholder has reinvested all dividends and distributions but has redeemed
some of his or her shares, then the amount that shareholder is certain to
receive under the Manager's Guarantee will be reduced in proportion to the
number of shares redeemed divided by the number of shares originally purchased
during the Offering Period. Under the Support Agreement, AIG has agreed that,
if the Manager is unable to make full payment of any amount required under the
Manager's Guarantee, AIG will make a capital
<PAGE>
AIG Retiree Fund -- 2003, Page 11
contribution or a loan to the Manager to the extent of the Manager's inability
to pay. The Support Agreement provides that the full amount of such capital
contribution or loan will be paid directly to the Fund.
OTHER INVESTMENT POLICIES
Except where specifically noted below, the following investment
policies of the Fund and the Equity Portfolio are not fundamental and the Board,
or the Trustees of the Equity Portfolio, as relevant, may change such policies
without the vote of a majority of outstanding voting securities of the Fund or
the Equity Portfolio, as relevant. A more detailed description of the Fund's
and the Equity Portfolio's investment policies, including a list of those
restrictions of the Fund's and the Equity Portfolio's investment activities
which cannot be changed without such a vote, appears in the Statement of
Additional Information. Under the 1940 Act, a "vote of a majority of the
outstanding securities" of either the Fund or the Equity Portfolio means the
affirmative vote of the lesser of (1) more than 50% of the outstanding shares of
the Fund or beneficial interests in the Equity Portfolio, as relevant, or (2)
67% or more of the shares of the Fund or beneficial interests in the Equity
Portfolio present at a meeting of holders, if more than 50% of the outstanding
shares of the Fund or the beneficial interests in the Equity Portfolio are
represented at the meeting in person or by proxy.
Borrowing. The Equity Portfolio and the Fund may from time to time
borrow money from banks for extraordinary or emergency purposes, but may not
invest borrowed funds in additional securities. Such borrowing will not exceed
5% of the total assets of the Equity Portfolio or the Fund, as applicable, and
will be made at prevailing interest rates. This policy is fundamental and may
not be changed without the vote of a majority of the outstanding voting
securities of the Fund or the Equity Portfolio, as relevant.
Repurchase Agreements. The Equity Portfolio may enter into repurchase
agreements with commercial banks or broker/dealers under which the Equity
Portfolio acquires a U.S. Government security subject to resale at a mutually
agreed upon price and time. The resale price reflects an agreed upon interest
rate effective for the period the Equity Portfolio holds the instrument that is
unrelated to the interest rate on the instrument.
The Equity Portfolio's repurchase agreements will at all times be
fully collateralized by U.S. Government securities, and the Equity Portfolio
will make payment for such securities only upon physical delivery or evidence of
book entry transfer to the account of its custodian. Repurchase agreements
could involve certain risks in the event of bankruptcy or other default of the
seller, including possible delays and expenses in liquidating the underlying
security, decline in the value of the underlying security and loss of interest.
The Fund may not enter into repurchase agreements in respect of
Treasury Securities allocated to the Repayment Objective. In all other
respects, the Fund is subject to the same restrictions on repurchase agreements
as the Equity Portfolio. The Fund's and the Equity Portfolio's policies
concerning repurchase agreements are fundamental and may not be changed without
the vote of a majority of outstanding voting securities of the Fund or the
Equity Portfolio, as relevant.
<PAGE>
AIG Retiree Fund -- 2003, Page 12
Illiquid Securities. The Equity Portfolio may invest up to 15% of its
net assets in illiquid securities, including restricted securities (i.e.,
securities not readily marketable without registration under the Securities Act
of 1933 (the "1933 Act")) and other securities that are not readily marketable,
such as repurchase agreements of more than one week's duration. The Equity
Portfolio may purchase restricted securities that may be offered and sold only
to "qualified institutional buyers" under Rule 144A of the 1933 Act, and the
Equity Portfolio's Trustees may determine, when appropriate, that specific Rule
144A securities are liquid and not subject to the 15% limitation on illiquid
securities. Should the Equity Portfolio's Trustees make this determination, it
will carefully monitor the security (focusing on such factors, among others, as
trading activity and availability of information) to determine that the Rule
144A security continues to be liquid. It is not possible to predict with
assurance exactly how the market for Rule 144A securities will further evolve.
This investment practice could have the effect of increasing the level of
illiquidity in the Equity Portfolio to the extent that qualified institutional
buyers become for a time uninterested in purchasing Rule 144A securities.
The Fund may not invest in illiquid securities (except that it may
invest in beneficial interests in the Equity Portfolio).
Short Sales. The Equity Portfolio may sell securities short only
"against-the-box." A short sale "against-the-box" is a short sale in which the
Equity Portfolio owns an equal amount of the securities sold short or securities
convertible into or exchangeable without payment or further consideration for
securities of the same issue as, and equal in amounts to, the securities sold
short.
The Fund may not make short sales of securities. The Fund's and the
Equity Portfolio's policies on short sales are fundamental.
Temporary Investments. When the Manager believes that the market
conditions warrant a temporary defensive position, the Equity Portfolio may
invest up to 100% of its assets in short-term instruments such as commercial
paper, bank certificates of deposit, bankers' acceptances, or repurchase
agreements for such securities and securities of the U.S. Government and its
agencies and instrumentalities, as well as cash and cash equivalents denominated
in foreign currencies. Investments in domestic bank certificates of deposit and
bankers' acceptances will be limited to banks that have total assets in excess
of $500 million and are subject to regulatory supervision by the U.S. Government
or state governments. The Equity Portfolio's investments in commercial paper of
U.S. issuers will be limited to (a) obligations rated Prime-1 by Moody's or A-1
by Standard & Poor's or (b) unrated obligations issued by companies having an
outstanding unsecured debt issue currently rated A or better by Standard &
Poor's. A description of various commercial paper ratings and debt securities
appears in Appendix A to the Statement of Additional Information. The Equity
Portfolio's investments in foreign short-term instruments will be limited to
those that, in the opinion of the Manager, equate generally to the standards
established for U.S. short-term instruments.
RISK FACTORS
Zero Coupon Securities. Zero coupon securities of the type held by
the Fund can be sold prior to their due date in the secondary market at their
then prevailing
<PAGE>
AIG Retiree Fund -- 2003, Page 13
market value which, depending on prevailing levels of interest rates, the time
remaining to maturity and liquidity (i.e., relative levels of supply and demand
for the particular zero coupon security), may be more or less than the
securities' "accreted value", that is, their value based solely on the amount
due at maturity and accretion of interest from the date of purchase. The market
prices of zero coupon securities are generally more volatile than the market
prices of securities that pay interest periodically and, accordingly, are likely
to respond to a greater degree to changes in interest rates than do non-zero
coupon securities having similar maturities and yields. The current net asset
value of the Fund attributable to zero coupon securities and other debt
instruments generally will increase as prevailing interest rates decrease, and
they will decrease as such rates increase. For example, during the Offering
Period, an increase in prevailing interest rates of one-half of one percent
could be expected to cause the market value of the Fund's zero coupon securities
to decrease by more than four percent, and a one-half percent decrease in such
rates could be expected to cause the market value of such securities to increase
by more than four percent. Such fluctuations may be larger or smaller depending
on, among other things, the level of current rates and the time remaining to
maturity. As a result, the net asset value of shares of the Fund may
fluctuate over a greater range than shares of other mutual funds that invest in
Treasury Securities having similar maturities and yields but that make current
distributions of interest.
As an open-end investment company, the Fund is required to redeem its
shares upon the request of any shareholder at the net asset value next
determined after receipt of the request. However, because of the price
volatility of zero coupon securities prior to maturity, if it is assumed that
the value of the Fund's assets invested in the Equity Portfolio remains
constant, a shareholder who redeems shares prior to the Maturity Date may
realize an amount that is greater than or less than the purchase price of those
shares, including any sales charge paid. Even if the market value of the zero
coupon securities does not fluctuate substantially, any increase in their value
may be more than offset by declines in the value of the Equity Portfolio, so
that a shareholder redeeming shares prior to the Maturity Date could receive
less than the amount originally invested. Although the Manager's Guarantee will
terminate in respect of shares redeemed prior to the Maturity Date, and such
shares would no longer be subject to the Repayment Objective, the Manager's
Guarantee will still have effect, and the Repayment Objective will still apply,
to the portion of the amount originally invested but not redeemed, provided
dividends and distributions with respect to those shares are reinvested. Thus,
on or after the Maturity Date, the holder of those remaining shares would
receive, upon redeeming them (together with shares acquired through reinvestment
of dividends and distributions thereon), an amount that equals or exceeds the
purchase price of the shares initially purchased. The Manager's Guarantee
provides further assurance that such amount will be received upon redemption.
Nonetheless, the amount received on the Maturity Date in respect of such shares,
when combined with the amount received in respect of shares redeemed prior to
the Maturity Date, may be more or less than the aggregate purchase price of all
shares purchased in the offering.
Each year the Fund will be required to accrue an increasing amount of
income on its zero coupon securities utilizing a constant interest rate method
which takes into account the compounding of accrued interest. To maintain its
tax status as a regulated investment company and also to avoid imposition of
excise taxes, however, the Fund will be required to distribute dividends equal
to substantially all of its net investment
<PAGE>
AIG Retiree Fund -- 2003, Page 14
income, including the accrued income on its zero coupon securities for which it
receives no payments in cash prior to their maturity. Dividends of the Fund's
net investment income and distributions of its short-term capital gains will be
taxable to shareholders as ordinary income for Federal income tax purposes,
whether received in cash or reinvested in additional shares. See "Taxes."
However, a shareholder who elects to receive dividends and distributions in
cash, instead of reinvesting these amounts in additional shares of the Fund, may
realize an amount on or after the Maturity Date that is less than the entire
amount originally invested. ACCORDINGLY, THE FUND MAY NOT BE APPROPRIATE FOR
INVESTORS WHO WOULD REQUIRE CASH DISTRIBUTIONS FROM THE FUND IN ORDER TO MEET
THEIR CURRENT TAX OBLIGATIONS RESULTING FROM THEIR INVESTMENT.
Two-Tier Structure. The two-tier master-feeder structure pursuant to
which the Fund invests in the Equity Portfolio involves certain risks to
investors in the Fund that would not arise in a conventional single-tier fund.
See "Special Information Concerning the Two-Tier Structure."
Liquidity. In order to generate sufficient cash to meet distribution
requirements and other operational needs and to redeem its shares on request,
the Fund may be required to limit reinvestment of capital on the disposition of
its interest in the Equity Portfolio and may be required to liquidate some or
all of its interest in the Equity Portfolio over time. The Fund may be required
to effect these liquidations at a time when it is otherwise disadvantageous to
do so. If the Fund realizes capital losses on dispositions of interests in the
Equity Portfolio that are not offset by capital gains on the disposition of
other interests in the Equity Portfolio, the Fund may be required to liquidate a
disproportionate amount of its zero coupon securities or borrow money, in an
amount not exceeding 5% of the Fund's total assets, to satisfy the distribution
and redemption requirements described above. The liquidation of zero coupon
securities and the expenses associated with borrowing money in these
circumstances could render the Fund unable to meet its Repayment Objective.
Under the terms of the Manager's Guarantee, however, shareholders who reinvest
all dividends and other distributions will be certain of receiving the full
amount of their original investment.
Foreign Investment. Investments in securities of foreign issuers may
involve risks that are not associated with domestic investments, and the Equity
Portfolio's foreign investments may present more risk than a portfolio of
domestic securities. Foreign issuers may lack uniform accounting, auditing and
financial reporting standards, practices and requirements, and there is
generally less publicly available information about foreign issuers than there
is about U.S. issuers. Governmental regulation and supervision of foreign stock
exchanges, brokers and listed companies may be less pervasive than is customary
in the United States. Securities of some foreign issuers are less liquid, and
their prices are more volatile, than securities of comparable domestic issuers.
Foreign securities settlements may in some instances be subject to delays and
related administrative uncertainties which could result in temporary periods
when assets of the Equity Portfolio are uninvested and no return is earned
thereon and may involve a risk of loss to the Equity Portfolio. Foreign
securities markets may have substantially less volume than U.S. markets and far
fewer traded issues. Fixed brokerage commissions on foreign securities
exchanges are generally higher than in the United States and transaction costs
with respect to smaller capitalization companies may be higher than those of
larger capitalization companies. Income from foreign securities may be reduced
by tax withheld
<PAGE>
AIG Retiree Fund -- 2003, Page 15
at source or other foreign taxes. In some countries, there may also be the
possibility of expropriation or confiscatory taxation (in which case the Equity
Portfolio could lose its entire investment in a certain market), limitations on
the removal of moneys or other assets of the Equity Portfolio, political or
social instability or revolution, or diplomatic developments that could affect
investments in those countries. In addition, it may be difficult to obtain and
enforce a judgment in a court outside the U.S.
Some of the risks described in the preceding paragraph may be more
severe for investments in emerging or developing countries. By comparison with
the United States and other developed countries, emerging or developing
countries may have relatively unstable governments. Companies in emerging
markets may generally be smaller, less experienced and more recently organized
than many domestic companies. Prices of securities traded in the securities
markets of emerging or developing countries tend to be volatile. Furthermore,
foreign investors are subject to many restrictions in emerging or developing
countries. These restrictions may require, among other things, governmental
approval prior to making investments or repatriating income or capital, or may
impose limits on the amount or type of securities held by foreigners or on the
companies in which the foreigners may invest.
The economies of individual emerging countries may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross domestic
product, rates of inflation, currency depreciation, capital reinvestment,
resource self-sufficiency and balance of payment position and may be based on a
substantially less diversified industrial base. Further, the economies of
developing countries generally are heavily dependent on international trade and,
accordingly, have been, and may continue to be, adversely affected by trade
barriers, exchange controls, managed adjustments in relative currency values and
other protectionist measures imposed or negotiated by the countries with which
they trade. These economies also have been, and may continue to be, adversely
affected by economic conditions in the countries with which they trade.
Depositary Receipts. The Equity Portfolio may invest in ADRs, EDRs
and GDRs. ADRs may be publicly traded on exchanges or over-the-counter in the
United States and are quoted and settled in dollars at a price that generally
reflects the dollar equivalent of the home country share price. EDRs are
typically issued by foreign banks or trust companies and traded in Europe. GDRs
may be issued by a domestic or foreign bank or trust company and may be traded
in several markets. Depositary Receipts may be issued as sponsored or
unsponsored programs. In sponsored programs, the issuer has made arrangements
to have its securities traded in the form of a Depositary Receipt. In
unsponsored programs, the issuer may not be directly involved in the creation of
the program. Although the regulatory requirements with respect to sponsored and
unsponsored programs are generally similar, the issuers of unsponsored
Depositary Receipts are not obligated to disclose material information in the
United States and, therefore, the import of such information may not be
reflected in the market value of such securities.
Foreign Currencies. As a matter of fundamental policy, neither the
Fund nor the Equity Portfolio will engage in transactions intended to hedge
foreign exchange risk. The Equity Portfolio may, however, enter into forward
foreign currency contracts to provide for its obligations at the time of
settlement of securities transactions. Investments in foreign securities will
usually be denominated in foreign currency, and the
<PAGE>
AIG Retiree Fund -- 2003, Page 16
Equity Portfolio may temporarily hold funds in foreign currencies. The value of
the Equity Portfolio's investments denominated in foreign currencies may be
affected, favorably or unfavorably, by the relative strength of the U.S. dollar,
changes in foreign currency and U.S. dollar exchange rates and exchange control
regulations. The Equity Portfolio may incur costs in connection with conversions
between various currencies. The Equity Portfolio's net asset value will be
affected by changes in currency exchange rates. Changes in foreign currency
exchange rates may also affect the value of dividends and interest earned, gains
and losses realized on the sale of securities and net investment income and
gains, if any, to be distributed by the Equity Portfolio to owners of beneficial
interests. The rate of exchange between the U.S. dollar and other currencies is
determined by the forces of supply and demand in the foreign exchange markets
(which in turn are affected by interest rates, trade flow and numerous other
factors, including, in some countries, local government intervention).
SPECIAL INFORMATION CONCERNING THE TWO-TIER STRUCTURE
The Fund is an open-end management investment company which seeks to
achieve its investment objectives by investing a portion of its investable
assets in the Equity Portfolio, a separate registered investment company that is
taxable as a partnership for Federal tax purposes, and investing the remainder
of its assets directly in zero coupon Treasury Securities. Both the Fund and the
Equity Portfolio are managed by AIG Capital Management Corp. By investing in the
Equity Portfolio, the Fund differs from mutual funds that directly acquire and
manage their entire portfolio of securities. The Fund has adopted this two-tier
structure because the Equity Portfolio, by offering interests to other investors
in addition to the Fund, may be able to allocate certain expenses over a larger
asset base than the Fund would be able to if it were to invest all its assets
directly. For this reason the Board believes that the aggregate per share
expenses of the Fund (including its proportionate share of the expenses of the
Equity Portfolio) will be less than or approximately equal to the expenses that
the Fund would incur if the assets of the Fund that are invested in the Equity
Portfolio were instead invested directly by the Fund in the type of securities
held by the Equity Portfolio. See "Investment Objectives and Management
Policies - First Global Equity Portfolio" and "- Other Investment Policies."
The investment objectives of the Fund may be changed only with the
approval of the holders of the outstanding shares of the Fund. The investment
objective of the Equity Portfolio may be changed only with the approval of the
holders of the outstanding beneficial interests of the Equity Portfolio. Due to
the two-tier structure of the Fund, the overall investment objectives of the
Fund differ from those of the Equity Portfolio. Beneficial interests in the
Equity Portfolio are held by the Fund and may be held by other investors,
including other open-end investment companies. The Fund has agreed that, if any
matter is put to a vote of the holders of the Equity Portfolio's beneficial
interests, the Fund will vote its interest in the Equity Portfolio in accordance
with instructions received from the holders of the Fund's shares. Shareholders
of the Fund will be provided with at least 30 days' written notice of any
proposed changes to the investment objectives of the Fund or the Equity
Portfolio.
The members of the Board of Directors of AIG All Ages Funds, Inc. (the
"Company") are the same as the Trustees of the Equity Portfolio. Both the Board
and the
<PAGE>
AIG Retiree Fund -- 2003, Page 17
Trustees have adopted written procedures reasonably appropriate to deal
with potential conflicts of interest that may arise as a result. For
information about the Board and the Trustees, see the Statement of Additional
Information.
In addition to selling a beneficial interest to the Fund, the Equity
Portfolio may sell beneficial interests to other mutual funds or institutional
investors. Beneficial interests may be offered and sold only in transactions
exempt from the registration requirements of the 1933 Act. The Equity
Portfolio's Declaration of Trust prohibits it from selling beneficial interests
to individuals, S corporations (as defined in the Internal Revenue Code (S) 1361
et seq.), partnerships and grantor trusts. All investors will invest in the
Equity Portfolio on the same terms and conditions and will bear a proportionate
share of the Equity Portfolio's expenses. However, the other mutual funds that
may in the future invest in the Equity Portfolio may sell their own shares with
sales charges and expenses different from those of the Fund. Such different
pricing structures may result in differences in returns experienced by investors
in other funds that invest in the Equity Portfolio. Such differences in return
are not uncommon and are present in other mutual fund structures. As of the
date of this Prospectus, there is only one other mutual fund that invests in the
Equity Portfolio, the AIG Children's World Fund -- 2005. In the future,
information concerning the AIG Children's World Fund -- 2005 and other funds
sold by your broker that invest in the Equity Portfolio may be obtained from
your broker, or by calling the Distributor at (800) 862-3984.
The Fund is a series of AIG All Ages Funds, Inc. The Company may
withdraw the investment of the Fund from the Equity Portfolio at any time if the
Board determines that it is in the best interest of the Fund to do so and the
shareholders of the Fund approve such action. Upon any such withdrawal, the
Board would consider what action might be taken, including the investment of all
the assets of the Fund in another pooled investment entity with investment
objectives and restrictions consistent with the Fund's objectives and
restrictions or the retaining of a new investment adviser to manage the Fund's
assets in accordance with the investment policies described below.
Certain changes in the Equity Portfolio's investment objectives,
policies or restrictions, or a failure by the Fund's shareholders to approve a
change in the Equity Portfolio's investment objectives or restrictions, may
require withdrawal of the Fund's interest in the Equity Portfolio. Any such
withdrawal could result in a distribution of the Equity Portfolio's securities
to the Fund in kind (as opposed to a cash distribution). In this case, the
securities received by the Fund may or may not be readily marketable. The
distribution in kind may result in the Fund having a less diversified portfolio
of investments or adversely affect the Fund's liquidity and the Fund could incur
brokerage, tax or other charges in converting the securities to cash.
Notwithstanding the above, there are other means for meeting shareholder
redemption requests such as borrowing.
Smaller funds investing in the Equity Portfolio may be materially
affected by the actions of larger funds investing in the Equity Portfolio. For
example, if a large fund withdraws from the Equity Portfolio, the remaining
funds may subsequently experience higher pro rata operating expenses, thereby
producing lower returns. Additionally, because the Equity Portfolio would
become smaller, it may become less diversified, resulting in potentially
increased portfolio risk (however, these possibilities also exist for
traditionally structured funds which have large or institutional investors who
may redeem their shares). Also, funds with a greater pro rata ownership in the
Equity
<PAGE>
AIG Retiree Fund -- 2003, Page 18
Portfolio could have effective voting control of the operations of the
Equity Portfolio. Whenever the Fund is requested to vote on matters pertaining
to the Equity Portfolio (other than a vote by the Fund to continue the operation
of the Equity Portfolio upon the withdrawal of another investor in the Equity
Portfolio), the Company will hold a meeting of shareholders of the Fund and will
cast all of its votes proportionately as instructed by the Fund's shareholders.
The Company will vote the shares held by the Fund shareholders who do not give
voting instructions in the same proportion as the shares of Fund shareholders
who do give voting instructions. Shareholders of the Fund who do not vote will
have no effect on the outcome of such matters.
INVESTMENT ADVISORY SERVICES
THE MANAGER
The Manager is an indirect wholly owned subsidiary of American
International Group, Inc. ("AIG"). AIG is a holding company which through its
subsidiaries is primarily engaged in a broad range of insurance and insurance-
related activities in the United States and abroad. At December 31, 1994, AIG
and its subsidiaries supervised investment portfolios which in the aggregate
exceeded $60 billion, of which more than $10 billion represented third party
assets under management. At such date, members of the Manager's Investment
Committee and their teams of investment professionals supervised the
management of assets in excess of $50 billion, of which more than $7 billion
represented third party funds. See "-The Investment Process" and "- The
Subadvisors" below.
The Manager also manages the AIG Children's World Fund - 2005, another
series of the Company, and the AIG Money Market Fund, a separate money market
investment portfolio of a registered investment company. The principal business
address of the Manager is 70 Pine Street, New York, New York 10270.
The Manager serves as the Fund's and the Equity Portfolio's investment
adviser and is responsible for the management of the assets of the Fund and the
Equity Portfolio and continually reviews and supervises the Equity Portfolio's
investment program, subject to the supervision of, and policies established by,
the Board and the Trustees of the Equity Portfolio. The Manager is assisted in
the performance of these services by certain affiliated Subadvisors. See "- The
Subadvisors" below. The Manager is entitled to a fee, which is calculated daily
and paid monthly, at annual rate of 0.20% of the average daily net assets of the
Fund (other than its interest in the Equity Portfolio) and 1.20% of the average
daily net assets of the Equity Portfolio. The Fund and the Equity Portfolio
will be responsible for all expenses other than those assumed by the Manager
including those for necessary professional and brokerage services, costs of
regulatory compliance, costs associated with maintaining corporate existence,
custody, shareholder relations and insurance costs.
The Manager has agreed that, in the event that the total expenses of
the Fund during the Offering Period, including the Fund's proportional share of
the expenses of the Equity Portfolio, but excluding interest, taxes, brokerage
commissions and extraordinary expenses, should exceed 1.95% of the average daily
net assets of the Fund, the Manager will assume the Fund's expenses to the
extent of any such excess,
<PAGE>
AIG Retiree Fund -- 2003, Page 19
subject to reimbursement by the Fund as described below. The total amount of any
excess so waived or reimbursed by the Manager is referred to as the "Refunded
Amount." The Manager has no obligation to waive its fee or reimburse any
expenses of the Fund after the end of the Offering Period. The Fund and the
Manager have also agreed that, for the thirty-six months following the end of
the Offering Period, if the Fund's total expenses (calculated as described
above) are less than 1.95% per annum of average daily net assets of the Fund,
the Fund will pay to the Manager an expense reimbursement fee, computed and paid
monthly, such that after such reimbursement the aggregate expenses of the Fund
will not exceed 1.95% per annum. The total amount of such expense reimbursement
fees will not exceed the Refunded Amount plus the Manager's related financing
costs. The Board of Directors of the Fund has agreed that any related financing
costs would be calculated at an interest rate of prime rate plus 1%.
THE INVESTMENT PROCESS
The Manager has established a committee (the "Investment Committee")
that is responsible for the asset allocation of the Fund and the Equity
Portfolio and carrying out their respective investment policies. The members of
the Investment Committee are officers of the Manager, affiliated investment
advisors (see "-- The Subadvisors" below) or regional affiliates of the Manager
to whom the Manager or Subadvisors have access under service arrangements. The
members of the Investment Committee meet monthly to determine collectively the
allocation of the assets of the Fund between zero coupon securities and the
Equity Portfolio, as well as the allocation of the assets of the Equity
Portfolio on a regional basis. Members of the Investment Committee, assisted by
a team of investment professionals, are primarily responsible for the Equity
Portfolio's country and stock selection within their respective global region.
Currently the members of the Investment Committee are:
[IAN P. BUTTER. Mr. Butter has been a Director of AIG Global
Investment Corp. (Europe) Ltd. ("AIG Global Europe") in London since January
1992 and has served in a trading capacity since 1988.]
PATRICK DEMPSEY. Mr. Dempsey is Managing Director, Fixed Income, of
AIG Global Europe in London. He has been a Director of AIG Global Europe since
he joined it at its inception in 1988 as a founding Director.
BRIAN MCCARTHY. Mr. McCarthy is Vice President, International Fixed
Income of AIG Global Investment Corp. ("AIG Global"), which he joined in March
1994. Prior to joining AIG Global, he was Vice President, International Fixed
Income Research of Alliance Capital.
WIN J. NEUGER. Mr. Neuger, who acts as Chairman of the Investment
Committee, is Chief Investment Officer of AIG, which he joined in February 1995,
and Chief Investment Officer of the Manager, which he joined in August 1995.
Mr. Neuger has been a Director, Chairman of the Board and President of AIG
Global since March 1995 and has served as a Director of AIG Global Europe since
April 1995. Prior to joining these companies, Mr. Neuger was with Bankers
Trust, where he was a Senior Vice President and, since October 1991, a Managing
Director in the investment management area.
<PAGE>
AIG Retiree Fund -- 2003, Page 20
YUKIHIRO NISHIMIYA. Mr. Nishimiya has been a portfolio manager for
AIG Investment Corporation (Japan) since October 1990.
HARRY P. REKAS. Mr. Rekas is Managing Director, U.S. Equities, of AIG
Global, which he joined in April 1993. Prior to joining AIG Global, he was a
portfolio manager for Citibank in New York.
PETER SOO. Mr. Soo is Regional Director, Fund Management, of AIG
Investment Corporation (Asia), Limited, which he joined in 1989.
PETER WIGNALL. Mr. Wignall is Managing Director and Chief Executive
Officer of AIG Global Europe in London, which he joined as an Executive Director
in April 1992. Prior to April 1992 he acted as a portfolio manager for Citicorp
Investment Management in London and in Sydney, Australia.
A member of the Investment Committee will be responsible for the day-
to-day implementation of the Investment Committee's strategy. The minimum
percentage of the Fund's assets that must be allocated to zero coupon securities
in order to provide for the Repayment Objective can be mathematically determined
on any given day from the yield on the zero coupon Treasury Securities and the
amount then entitled to the benefit of the Repayment Objective. When shares are
purchased, any adjustment to the portion of the proceeds to be allocated to zero
coupon Treasury Securities required by variations in bond yield between
Investment Committee meetings will be determined under guidelines set down by
the Investment Committee. The balance of the purchase price will be invested in
the Equity Portfolio. After the Offering Period, the Fund anticipates
adjustments in its holding of Treasury Securities solely to meet requests for
redemption and, if required, to make payments of dividends and distributions.
See "Proposed Operations of the Fund."
When shares are redeemed, the Manager will ordinarily redeem the
proportional interest of those shares in the Fund's zero coupon Treasury
Securities and in the Equity Portfolio, determined on the basis of current net
asset value. For defensive reasons, however, the Manager may elect to take a
greater proportion of a redemption from the Equity Portfolio. Should a
shareholder elect to have dividends paid by the Fund in cash rather than
reinvested in additional shares of the Fund, the amount required to be paid will
be taken from the Fund's Treasury Securities and the Equity Portfolio in the
same proportion that the dividend income was generated, provided that the amount
of Treasury Securities to be sold for this purpose will be reduced (and the
interest in the Equity Portfolio to be redeemed correspondingly increased) to
the extent necessary to protect the Repayment Objective for those shareholders
who reinvest all dividends and distributions. Pursuant to the terms of the
Manager's Guarantee, shareholders who wish to be certain of receiving the full
amount of their original investment must reinvest all dividends and
distributions in additional shares and hold all their shares until the Maturity
Date.
<PAGE>
AIG Retiree Fund -- 2003, Page 21
Generally, the regional allocations within the Equity Portfolio will
be managed between the regular meetings in accordance with the policy
established at the most recent meeting; however, in exceptional circumstances,
such as subsequent market developments of a material nature, an ad hoc meeting
will be called to review policy.
THE SUBADVISORS
The Manager has entered into subadvisory agreements with AIG Global
Investment Corp. ("AIG Global"), which is a wholly owned subsidiary of AIG and
registered under the Investment Advisers Act of 1940, as amended. Pursuant to
its subadvisory agreements, AIG Global provides investment advisory services to
the Manager in respect of the management of the Fund's Treasury Securities and
in respect of the management of the assets of the Equity Portfolio and officers
of AIG Global provide representation on the Investment Committee (see "The
Investment Process"). Under the subadvisory agreements with AIG Global, the
Manager pays AIG Global a fee which is calculated daily and paid monthly at an
annual rate of 0.0825% of the average daily net assets of the Fund (other than
the Fund's interest in the Equity Portfolio) and 0.15% of the average daily net
assets of the Equity Portfolio. These fees are all paid from the management fee
paid to the Manager and they do not increase the Fund's or the Equity
Portfolio's expenses. The principal office of AIG Global is 200 Liberty Street,
New York, New York 10281.
The Manager has also entered into subadvisory agreements with AIG
Global Europe, which is a wholly owned subsidiary of AIG and registered under
the Advisers Act. AIG Global Europe is also a member of the Investment
Management Regulatory Organization Limited, a United Kingdom self-regulatory
organization. Pursuant to its subadvisory agreements, AIG Global Europe
provides investment advisory services to the Manager in respect of the
management of the Fund's Treasury Securities and in respect of the management of
the assets of the Equity Portfolio in their respective regions, and certain of
its officers provide representation on the Investment Committee. Under the
subadvisory agreements with AIG Global Europe, the Manager pays AIG Global
Europe a fee which is calculated daily and paid monthly at an annual rate of
0.0175% of the average daily net assets of the Fund (other than the Fund's
interest in the Equity Portfolio) and 0.24% of the average daily net assets of
the Equity Portfolio. AIG Global Europe's fees are all paid from the management
fees paid to the Manager and they do not increase the Fund's or the Equity
Portfolio's expenses. AIG Global Europe has advised the Manager that it intends
to terminate its registration under the Advisers Act. Concurrently with such
termination, the Manager's subadvisory agreements with AIG Global Europe will
terminate. However, it is anticipated that personnel of AIG Global Europe will
continue to provide certain services to the Manager pursuant to a service
arrangement. The principal office of AIG Global Europe is Unit 1/11 Harbour
Yard, Chelsea Harbour, London SW10 0XD, England.
AIG Global and AIG Global Europe are referred to in this prospectus as
the "Subadvisors."
PORTFOLIO TRANSACTIONS. The agreements of the Fund and the Equity
Portfolio with the Manager recognize that in the purchase and sale of portfolio
securities, the Manager and the Subadvisors will seek the most favorable price
and execution and, consistent with that policy, may give consideration to the
research, statistical and other
<PAGE>
AIG Retiree Fund -- 2003, Page 22
services furnished by brokers or dealers to the Manager or a Subadvisor. The use
of brokers who provide investment and market research and securities and
economic analysis may result in higher brokerage charges than the use of brokers
selected on the basis of the most favorable brokerage commission rates, and
research and analysis received may be useful to the Manager and the Subadvisors
in connection with their services to other clients as well as the Fund and the
Equity Portfolio. In over-the-counter markets, orders are placed with primary
market-makers unless a more favorable execution price is believed to be
obtainable.
Consistent with the rules of the National Association of Securities
Dealers, Inc., and subject to seeking the most favorable price and execution
available and such other policies as the Board and the Trustees of the Equity
Portfolio may determine, the Manager and the Subadvisors may consider sales of
shares of other mutual funds managed by the Manager as a factor in the selection
of brokers or dealers to execute portfolio transactions for the Fund or the
Equity Portfolio.
PORTFOLIO TURNOVER. A change in securities held by the Fund or the
Equity Portfolio is known as "portfolio turnover," which may result in the
payment by the Fund or the Equity Portfolio of dealer spreads or underwriting
commissions and other transaction costs on the sale of securities as well as on
the reinvestment of the proceeds in other securities. Although it is the policy
of both the Fund and the Equity Portfolio to hold securities for investment,
changes will be made from time to time when the Manager or a Subadvisor believes
such changes will strengthen the investments of the Fund or the Equity
Portfolio. After the Offering Period, the Manager does not expect any portfolio
turnover in the Fund's zero coupon Treasury Securities except for turnover
related to redemptions. The portfolio turnover of the Equity Portfolio is not
expected to exceed 100% per annum.
VALUATION. The net asset value of the shares of the Fund is
determined each day, Monday through Friday, as of the close of regular trading
on the New York Stock Exchange ("NYSE") (usually 4:00 p.m. New York City Time)
on each day that the NYSE is open. During the Offering Period, zero coupon
Treasury Securities will be valued at the average of the last reported bid and
ask prices; thereafter, in order to ensure that an adequate amount of Treasury
Securities is maintained to achieve the Repayment Objective when shares of the
Fund are redeemed, zero coupon Treasury Securities will be valued at the last
reported bid. Securities traded on a foreign exchange or over-the-counter market
are valued at the last sales price on the primary exchange or market in which
they are traded. Securities for which there are no recent sales transactions are
valued based on quotations provided by primary market makers in such securities.
Any securities for which recent market quotations are not readily available are
valued at fair value determined in accordance with procedures approved by the
Board and by the Trustees of the Equity Portfolio. Short-term holdings maturing
in 60 days or less are generally valued at amortized costs if their original
maturity was 60 days or less. Short-term holdings with more than 60 days
remaining to maturity will be valued at current market value until the 61st day
prior to maturity, and will then be valued on an amortized cost basis based on
the value as of such date unless the Board or the Trustees of the Equity
Portfolio determines that this amortized cost value does not represent fair
market value.
<PAGE>
AIG Retiree Fund -- 2003, Page 23
AMERICAN INTERNATIONAL GROUP, INC.
American International Group, Inc. ("AIG") is a Delaware corporation
which through its subsidiaries is primarily engaged in a broad range of
insurance and insurance-related activities in the United States and abroad.
AIG's primary activities include both general and life insurance operations.
Other significant activities of AIG are financial services and agency and
service fee operations. AIG's general insurance subsidiaries are multiple line
companies writing substantially all lines of property and casualty insurance;
one or more of these companies is licensed to write substantially all of these
lines in all states of the United States and in more than 100 foreign countries.
AIG's life insurance subsidiaries offer a wide range of traditional insurance
and financial and investment products; one or more of these subsidiaries is
licensed to write life insurance in all states in the United States and in over
70 foreign countries. At December 31, 1994, AIG and its consolidated
subsidiaries had total assets of $114.3 billion and capital funds of $16.4
billion; consolidated net income for the year then ended was $2.2 billion. The
Statement of Additional Information contains AIG's financial statements and
certain other information about AIG. At December 31, 1994, AIG and its
consolidated subsidiaries had approximately 32,000 employees. The principal
executive offices of AIG are located at 70 Pine Street, New York, New York 10270
and its telephone number is (212) 770-7000.
DIVIDENDS AND DISTRIBUTIONS
Dividends consisting of substantially all of the Fund's net investment
income, if any, are declared and paid annually. The Fund may also declare an
additional dividend of net investment income and net short term capital gains in
a given year to the extent necessary to avoid the imposition of federal excise
taxes on the Fund. Distributions consisting of substantially all the realized
net capital gains for the Fund are declared and paid on an annual basis, except
that an additional capital gain distribution may be made in a given year to the
extent necessary to avoid the imposition of federal excise tax on the Fund.
Declared dividends and distributions are payable to the shareholder of record on
the record date.
Dividends and capital gain distributions paid by the Fund are
automatically reinvested in additional shares of the Fund unless the shareholder
has elected to have them paid in cash. Dividends and distributions to be paid
in cash are mailed by check or are wire transferred in accordance with the
shareholder's instructions. Pursuant to the terms of the Manager's Guarantee,
shareholders who wish to be certain of receiving the full amount of their
original investment must reinvest all dividends and distributions in additional
shares and hold all their shares until the Maturity Date.
TAXES
The Fund intends to qualify as a regulated investment company under
the Internal Revenue Code of 1986, as amended (the "Code"). For each year so
qualified, the Fund will not be subject to federal income taxes on its net
investment income and realized net capital gains, if any, which it distributes
to its shareholders, provided that at least 90% of its net investment income and
net short-term capital gains are distributed to shareholders each year.
<PAGE>
AIG Retiree Fund -- 2003, Page 24
Dividends from net investment income and distributions from net short-
term capital gains are taxable as ordinary income to the shareholders, whether
received in cash or reinvested in additional shares.
The zero coupon securities will be treated as bonds that were issued
to the Fund at an original issue discount. Original issue discount is treated
as interest for federal income tax purposes and the amount of original issue
discount generally will be the difference between the bond's purchase price and
its stated redemption price at maturity. The Fund will be required to include
in gross income for each taxable year the daily portions of original issue
discount attributable to the zero coupon securities held by the Fund as such
original issue discount accrues. Dividends derived from such original issue
discount that accrues for such year will be taxable to shareholders as ordinary
income. In general, original issue discount accrues daily under a constant
interest rate method which takes into account the compounding of accrued
interest. In the case of zero coupon securities, this method will generally
result in an increasing amount of income to the Fund each year.
Distributions from net capital gains, i.e., the excess of net long-
term capital gains over any net short-term capital losses, are taxable as long-
term capital gain, whether received in cash or invested in additional shares,
regardless of how long shares have been held by the shareholders.
Any gain or loss realized upon a sale or redemption of shares of the
Fund by a shareholder who is not a dealer in securities will generally be
treated as a long-term capital gain or loss if the shares have been held for
more than one year and otherwise as a short-term capital gain or loss. However,
if shares on which a long-term capital gain distribution has been received are
subsequently sold or redeemed and such shares have been held for six months or
less, any loss realized will be treated as long-term capital loss to the extent
that it offsets the long-term capital gain distribution. In addition, no loss
will be allowed on the sale or other disposition of shares of the Fund if,
within a period beginning 30 days before the date of such sale or disposition
and ending 30 days after such date, the holder acquires (such as through
dividend reinvestment) securities that are substantially identical to the shares
of the Fund.
The Fund will generally be subject to an excise tax of 4% on the
amount of any income or capital gains, above certain permitted levels,
distributed to shareholders on a basis such that such income or gain is not
taxable to shareholders in the calendar year in which it was earned.
Furthermore, dividends declared in October, November or December payable to
shareholders of record on a specified date in such a month and paid in the
following January will be treated as having been paid by the Fund and received
by each shareholder in December. Under this rule, therefore, shareholders may be
taxed in one year on dividends or distributions actually received in January of
the following year.
Portions of the Fund's investment income may be subject to foreign
income taxes withheld at source. The Fund does not expect to qualify to "pass
through" to its shareholders credit for such foreign taxes paid. If, however,
the Fund does qualify to pass through foreign tax credits, the Fund will elect
to do so.
<PAGE>
AIG Retiree Fund -- 2003, Page 25
Investors should carefully consider the tax implications of purchasing
shares of the Fund just prior to the declaration of a dividend or capital gain
distribution, which would be subject to taxation as described above
notwithstanding that it is in effect a return of investment.
UNLESS A SHAREHOLDER INCLUDES A CERTIFIED TAXPAYER IDENTIFICATION
NUMBER (SOCIAL SECURITY NUMBER FOR INDIVIDUALS) ON THE ACCOUNT APPLICATION AND
CERTIFIES THAT THE SHAREHOLDER IS NOT SUBJECT TO BACKUP WITHHOLDING, THE FUND IS
REQUIRED TO WITHHOLD AND REMIT TO THE U.S. TREASURY A PORTION OF DISTRIBUTIONS
AND OTHER REPORTABLE PAYMENTS TO THE SHAREHOLDER. THE RATE OF BACKUP
WITHHOLDING IS 31%. SHAREHOLDERS SHOULD BE AWARE THAT, UNDER REGULATIONS
PROMULGATED BY THE INTERNAL REVENUE SERVICE, THE FUND MAY BE FINED $50 ANNUALLY
FOR EACH ACCOUNT FOR WHICH A CERTIFIED TAXPAYER IDENTIFICATION NUMBER IS NOT
PROVIDED. IN THE EVENT THAT SUCH A FINE IS IMPOSED, THE FUND MAY CHARGE A
SERVICE FEE OF UP TO $50 ANNUALLY THAT MAY BE DEBITED FROM THE SHAREHOLDER'S
ACCOUNT AND OFFSET AGAINST ANY UNDISTRIBUTED DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS. THE FUND ALSO RESERVES THE RIGHT TO CLOSE ANY ACCOUNT WHICH DOES
NOT HAVE A CERTIFIED TAXPAYER IDENTIFICATION NUMBER.
Shareholders are urged to consult their tax advisers concerning the
effect of federal, state and local income taxes in their individual
circumstances.
THE ADMINISTRATOR
PFPC International Ltd. will serve as the Fund's and the Equity
Portfolio's administrator and accounting agent. PFPC International Ltd.'s
principal business address is 80 Harcourt Street, Dublin, Ireland. Pursuant to
the administration and accounting agreement with the Fund, it will assist the
Fund and the Equity Portfolio in all aspects of their administration and
operations, including matters relating to the maintenance of financial records
and Fund and Equity Portfolio accounting.
THE TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
PFPC Inc. will serve as the Fund's transfer agent and dividend
disbursing agent. Some services may be provided by sub-transfer agents. PFPC
Inc.'s principal business address is 400 Bellevue Parkway, Wilmington, Delaware
19809.
CUSTODIAN
PNC Bank, National Association ("PNC Bank"), Airport Business Center,
International Court 2, 200 Stevens Drive, Lester, Pennsylvania 19113, will serve
as custodian of the assets of the Fund. State Street Bank and Trust Company
("State Street"), 1776 Heritage Drive, Quincy, Massachusetts 02171 serves as
custodian of the assets of the Equity Portfolio. State Street is authorized to
establish and has established separate accounts in foreign currencies and to
cause securities of the Equity Portfolio to be held in separate accounts outside
the United States in the custody of non-U.S. banks. Rules adopted under the
1940 Act permit the Fund and the Equity Portfolio to maintain their securities
and cash in the custody of certain eligible banks and securities depositories.
Pursuant to those rules, the Equity Portfolio's securities and cash, when
invested in securities of foreign countries, are held by subcustodians who
are
<PAGE>
AIG Retiree Fund -- 2003, Page 26
approved by the Board and by the Trustees of the Equity Portfolio in accordance
with the rules of the Securities and Exchange Commission. Selection of the
subcustodians is made by the Board and the Trustees following a consideration of
a number of factors, including, but not limited to, the reliability and
financial stability of an institution, the ability of the institution to capably
perform custodial services for the Equity Portfolio, the reputation of the
institution in its national market, and the political and economic stability of
the countries in which the subcustodians will be located. In addition, the 1940
Act requires that foreign subcustodians, among other things, have stockholders'
equity in excess of $200 million, have no lien on the assets of the Fund or the
Equity Portfolio, and maintain adequate and accessible records.
SHAREHOLDER SERVICING AGREEMENT
Under the Shareholder Servicing Agreement, AIG Equity Sales Corp. (the
"Distributor") provides information and administrative services for Fund
shareholders. The Distributor enters into related arrangements with various
financial services firms, such as broker-dealer firms or banks (which may be
affiliated with the Distributor), that provide services and facilities for their
customers or clients who are shareholders of the Fund. Such administrative
services and assistance may include, but are not limited to, establishing and
maintaining shareholder accounts and records, processing purchase and redemption
transactions and answering routine shareholder inquiries regarding the Fund and
its special features. The Distributor bears all its expenses for providing
services pursuant to the Shareholder Servicing Agreement, including the payment
of any service fees. For services under the Shareholder Servicing Agreement,
the Fund pays the Distributor a fee, payable monthly, at the annual rate of up
to .25 of 1% of average daily net assets of those accounts in the Fund that it
maintains and services. A broker-dealer or bank becomes eligible for the
service fee from the time of purchase based on assets in the accounts serviced
by it, and the fee continues until terminated by the Distributor or the Fund.
The fees payable to financial services firms are calculated monthly and paid
quarterly by the Distributor.
The Distributor also may provide some of the above shareholder
services and may retain any portion of the fee under the Shareholder Servicing
Agreement not paid to broker-dealers or banks to compensate itself for
shareholder servicing functions performed for the Fund's shareholders.
Currently, the shareholder servicing fee payable to the Distributor is based
only upon Fund assets in accounts for which there is a broker-dealer or bank
listed on the Fund's records and it is intended that the Distributor will pay
all the shareholder servicing fees that it receives from the Fund to broker-
dealers or banks in the form of service fees. The effective shareholder
servicing fee rate to be charged against all assets of the Fund while this
procedure is in effect would depend upon the proportion of the Fund's shares
that are in accounts for which there is a broker-dealer or bank of record.
<PAGE>
AIG Retiree Fund -- 2003, Page 27
RULE 12b-1 PLAN
Under a plan of distribution adopted by the Board pursuant to Rule
12b-1 under the 1940 Act (the "Plan"), the Fund may pay AIG Equity Sales Corp.
(the "Distributor") a distribution fee during the Offering Period at the
annualized rate of up to 0.50% of the average daily net assets of the Fund. The
Plan will terminate on the last day of the Offering Period. The Plan is
intended to reimburse the Distributor for expenses it incurs in connection with
the distribution of the shares of the Fund, to the extent such expenses exceed
any amounts the Distributor retains from the sales charges payable by
shareholders. Distribution expenses of the Distributor that are reimbursable
under the Plan include the payment of commissions to broker-dealers and interest
on any unreimbursed amounts carried forward thereunder, the cost of any
additional compensation paid by the Distributor to broker-dealers, the costs of
printing and mailing to prospective investors prospectuses and other materials
relating to the Fund, the costs of developing, printing, distributing and
publishing advertisements and other sales literature, and allocated costs
relating to the Distributor's distribution activities, including, among other
things, employee salaries, bonuses and other overhead expenses. Rules adopted
by the National Association of Securities Dealers, Inc. effectively limit the
total amount of Rule 12b-1 fees and sales charges that may be charged to a
shareholder of the Fund to 6.25% of the amount invested plus the Distributor's
associated financing costs.
PURCHASES OF SHARES
Shares of the Fund may be purchased from investment dealers during the
Offering Period at the public offering price, which is the net asset value next
determined plus a sales charge that is a percentage of the public offering price
and varies as shown below. You may also purchase shares directly from the
Fund's transfer agent, PFPC Inc., by completing the Account Application attached
to this Prospectus and mailing it to AIG Retiree Fund -- 2003, PO Box 8935,
Wilmington, Delaware 19899-9801. The minimum investment is $5,000, and the
minimum subsequent investment is $100. However, you may choose to make an
initial investment of as little as $1,000 and reach the $5,000 minimum with
several additional investments during the Offering Period. The minimum
investment for an Individual Retirement Account ("IRA") or employee benefit plan
account is $2,000, and the minimum subsequent investment is $50; for these
accounts you may choose to make an initial investment of as little as $250 and
reach the $2,000 minimum with several additional investments during the Offering
Period. To do this you must indicate on the Account Application your intent to
invest at least the $5,000 minimum (or $2,000 for IRAs and employee benefit
plans) by the end of the Offering Period. If you have not invested at least the
minimum amount by the end of the Offering Period, the Fund may redeem your
shares (which may occur at a time when the net asset value is less than when you
invested) or the Fund may impose an annual account keeping fee of $10. This fee
may be changed at any time in management's discretion.
<PAGE>
AIG Retiree Fund -- 2003, Page 28
<TABLE>
<CAPTION>
INVESTMENT SALES LOAD SCHEDULE
Sales Load as a
Percentage of Regular
---------------------------------- Dealer
Net Amount Discount
Invested as a % of
Offering ---------- Offering
Amount of Purchase Price (NAV)* Price
- ------------------ -------- ---------- ---------
<S> <C> <C> <C>
Less than $100,000 4.75% 4.99% 4.25%
$100,000 up to $249,999 4.00 4.17 3.60
$250,000 up to $499,999 3.00 3.09 2.70
$500,000 up to $999,999 2.00 2.04 1.80
$1 million and above 0.00** 0.00** ***
</TABLE>
- ---------------
* Rounded to the nearest one-hundredth of one percent.
** Redemption of shares may be subject to a contingent deferred sales charge,
as discussed below.
*** Commission may be payable by the Distributor as discussed below.
Shares of the Fund will be offered to investors only from February 15,
1996 through November 30, 1996 (the "Offering Period"). During the Offering
Period the shares will be offered at their net asset value plus the applicable
sales charge, if any, as shown in the table above. The Fund does not expect
that its shares will be offered after November 30, 1996. However, the Fund may
at its option extend or shorten the Offering Period. The offering of shares of
the Fund shall be subject to suspension or termination as provided under
"Investment Objectives and Management Policies - Proposed Operations of the
Fund." In addition, the offering of shares may be suspended from time to time
during the Offering Period in the discretion of the Manager. During any period
in which the public offering of shares is suspended or terminated, shareholders
will still be permitted to reinvest dividends and distributions in shares of the
Fund.
Certificates representing the Fund's shares will not be issued. PFPC
Inc., the Fund's transfer agent, maintains a record of each shareholder's
ownership. Shareholders receive confirmations of all transactions in Fund
shares and periodic statements reflecting share balances and dividends.
The Fund receives the entire net asset value of all shares sold. AIG
Equity Sales Corp., the Fund's principal underwriter (the "Distributor"),
retains the sales charge from which it allows discounts from the applicable
public offering price to investment dealers, which discounts are uniform for all
dealers in the United States and its territories. The normal discount allowed
to dealers is set forth in the above table. Upon notice to all dealers with
whom it has sales agreements, the Distributor may reallow up to the full
applicable sales charge, as shown in the above table, during periods and for
transactions specified in such notice and such reallowances may be based upon
attainment of minimum sales levels. During periods when 90% or more of the
sales charge is reallowed, such dealers may be deemed to be underwriters as that
term is defined in the 1933 Act.
<PAGE>
AIG Retiree Fund -- 2003, Page 29
Banks and other financial services firms may provide administrative
services related to order placement and payment to facilitate transactions in
shares of the Fund for their clients, and the Distributor may pay them a
transaction fee up to the level of the discount or other concession allowable to
dealers as described above. Banks currently are prohibited under the Glass-
Steagall Act from providing certain underwriting or distribution services. Banks
or other financial services firms may be subject to various state laws regarding
the services described above and may be required to register as dealers pursuant
to state law. If banking firms were prohibited from acting in any capacity or
providing any of the described services, management would consider what action,
if any, would be appropriate. Management does not believe that termination of a
relationship with a bank would result in any material adverse consequences to
the Fund.
In addition to the discounts or commissions described above, the
Distributor or the Manager may, from time to time, pay or allow additional
concessions or promotional incentives, in the form of cash or other
compensation, to firms that sell shares of the Fund. In some instances, such
discounts or other incentives will be offered only to certain firms that sell or
are expected to sell during specified time periods certain minimum amounts of
shares of the Fund or other funds underwritten by the Distributor. Such
concessions may be paid as a lump sum or be periodic and may be up to 0.25% of
the value of shares sold by a dealer, plus additional compensation for
continuing due diligence or other services.
Shares of the Fund may be purchased at net asset value by a
participant-directed qualified retirement plan described in Code Section 401(a)
or a participant-directed non-qualified deferred compensation plan described in
Code Section 457 provided in either case that such plan has not less than 200
eligible employees.
Shares of the Fund may also be purchased at net asset value by any
purchaser provided that the amount invested in the Fund or certain other funds
totals at least $1,000,000, including purchases pursuant to the "Letter of
Intent" and "Cumulative Discount" features described under "Special Features"
(the "Large Purchase Privilege"). The other funds for which the Large Purchase
Privilege is available will vary from time to time because they are generally
offered only for limited periods. As of the date of this Prospectus, the Large
Purchase Privilege is not available for any other funds. In the future, you may
obtain a list of the funds for which the Large Purchase Privilege is available
and request a prospectus by telephoning (800) 862-3984.
A contingent deferred sales charge of 1% may be imposed upon
redemption of shares of the Fund that are purchased under the Large Purchase
Privilege if they are redeemed within one year of purchase. The charge will not
be imposed upon redemption of reinvested dividends or share appreciation. The
charge is applied to the value of the shares redeemed less the above exclusions.
The contingent deferred sales charge will be waived in the event of redemption
of shares of a shareholder (including a registered joint owner) who has died or
who, after purchase of the shares being redeemed, becomes totally disabled (as
evidenced by a determination by the federal Social Security Administration).
Shares of the Fund purchased under the Large Purchase Privilege may be
exchanged for shares of certain other funds managed by the Manager under the
exchange privilege described under "Special Features -- Exchange Privilege"
without paying any contingent deferred sales charge at the time of exchange. If
the shares received in exchange are redeemed thereafter, a contingent deferred
sales charge may be imposed in accordance with the foregoing requirements
provided that the shares redeemed will retain their original cost and purchase
date for purposes of the contingent deferred sales charge.
<PAGE>
AIG Retiree Fund -- 2003, Page 30
The Distributor may in its discretion compensate investment dealers or
other financial services firms in connection with the sale of shares of the Fund
to employer sponsored employee benefit plans at net asset value up to the
following amounts: 1.00% of the net asset value of shares sold on amounts up to
$5 million during the Offering Period, 0.50% on the next $5 million and 0.25% on
amounts over $10 million during the Offering Period. The Distributor may in its
discretion compensate investment dealers or other financial service firms in
connection with the sale of shares of the Fund in accordance with the Large
Purchase Privilege up to the following amounts: 1.00% of the net asset value of
shares sold on amounts up to $3 million, .50% on the next $2 million and .25% on
amounts over $5 million. For purposes of determining the appropriate commission
percentage to be applied to a particular sale under the foregoing schedule, the
Distributor will consider the cumulative amount invested by the purchaser in the
Fund and other funds eligible for the Large Purchase Privilege.
Shares may be sold to officers, trustees, directors, employees
(including retirees) and sales representatives of the Fund, its investment
manager, its subadvisors, its principal underwriter or certain affiliated
companies, for themselves or members of their families, or to any trust,
pension, profit-sharing or other benefit plan for only such persons at net asset
value in any amount. Shares may be sold at net asset value in any amount to
registered representatives and employees of broker-dealers having selling group
agreements with the Distributor and officers, directors and employees of service
agents of the Fund, for themselves or their spouses or dependent children, or to
any trust or pension, profit-sharing or other benefit plan for only such
persons. Shares may be sold at net asset value in any amount to officers,
trustees, directors and employees of banks and other financial services firms
that provide administrative services related to order placement and payment to
facilitate transactions in shares of the Fund for their clients pursuant to an
agreement with the Distributor or one of its affiliates, for themselves or
members of their families, or to any trust, pension or profit-sharing or other
benefit plan for only such persons. Additionally, shares may be sold at net
asset value in any amount to officers, trustees, directors and employees of
certain other firms that provide services for the benefit of the Fund and their
affiliates, for themselves or members of their families, or to any trust,
pension, profit-sharing or other benefit plan for only such persons.
Shares of the Fund may be sold at net asset value through certain
investment advisers registered under the Investment Advisers Act of 1940 and
other financial services firms that adhere to certain standards established by
the Distributor, including a requirement that such shares be sold for the
benefit of their clients participating in a "wrap account" or similar program
under which such clients pay a fee to the investment adviser or other firm.
Such shares are sold for investment purposes and on the condition that they will
not be resold except through redemption or repurchase by the Fund. The Fund may
also issue shares at net asset value in connection with the acquisition of the
assets of or merger or consolidation with another investment company, or to
shareholders in connection with the investment or reinvestment of income and
capital gain dividends.
<PAGE>
AIG Retiree Fund -- 2003, Page 31
The sales charge scale is applicable to purchases made at one time by
any "purchaser," which includes an individual, or an individual, his or her
spouse and children under the age of 21; or a trustee or other fiduciary of a
single trust estate or single fiduciary account, or an organization exempt from
federal income tax under Section 501(c)(3) or (13) of the Code; or a pension,
profit-sharing or other employee benefit plan whether or not qualified under
Section 401 of the Code; or other organized group of persons whether
incorporated or not, provided the organization has been in existence for at
least six months and has some purpose other than the purchase of redeemable
securities of a registered investment company at a discount. In order to
qualify for a lower sales charge, all orders from an organized group will have
to be placed through a single investment dealer or other firm and identified as
originating from a qualifying purchaser.
Investment dealers and other firms provide varying arrangements for
their clients to purchase and redeem Fund shares. Some may establish higher
minimum investment requirements than set forth above. Firms may arrange with
their clients for other investment or administrative services. Such firms may
independently establish and charge additional amounts to their clients for such
services, which charges would reduce the clients' return. Firms also may hold
Fund shares in nominee or street name as agent for and on behalf of their
customers. In such instances, the Fund's transfer agent will have no
information with respect to or control over accounts of specific shareholders.
Such shareholders may obtain access to their accounts and information about
their accounts only from their firm. Certain of these firms may receive
compensation from the Fund through the Distributor for recordkeeping and other
expenses relating to these nominee accounts. See "Shareholder Servicing
Agreement." In addition, certain privileges with respect to the purchase and
redemption of shares or the reinvestment of dividends may not be available
through such firms. Some firms may participate in a program allowing them
access to their clients' accounts for servicing including, without limitation,
transfers of registration and dividend payee changes; and may perform functions
such as generation of confirmation statements and disbursement of cash
dividends. Such firms, including affiliates of the Distributor, may receive
compensation from the Fund through the Distributor for these services. This
prospectus should be read in conjunction with such firms' material regarding
their fees and services.
Orders for the purchase of shares of the Fund will be confirmed at a
price based on the net asset value next determined after receipt by the
Distributor of the order accompanied by payment. However, orders received by
dealers or other firms prior to the determination of net asset value (see
"Investment Advisory Services - Valuation") and received by the Distributor
prior to the close of its business day will be confirmed at a price based on the
net asset value effective on that day. Dealers and other financial services
firms are obligated to transmit orders promptly. Payment for purchase orders
must be made by check (a check drawn on a foreign bank will not be accepted) or
Federal Reserve Draft or by wiring Federal Funds to the Fund's Transfer Agent.
Checks should be made payable to AIG Retiree Fund - 2003. See "Purchase and
Redemption of Shares" in the Statement of Additional Information.
The Fund reserves the right to withdraw all or any part of the
offering made by this prospectus and to reject purchase orders.
Shareholders should direct their inquiries to the Distributor or to
the firm from which they received this prospectus.
<PAGE>
AIG Retiree Fund -- 2003, Page 32
REDEMPTION OR REPURCHASE OF SHARES
GENERAL
Any shareholder may require the Fund to redeem his or her shares.
However, shareholders who redeem some or all of their shares before the Maturity
Date will not be certain to receive the full amount of their original investment
(including any sales charge paid) on or after the Maturity Date. Under the
terms of the Manager's Guarantee, the amount a shareholder is certain to receive
will be reduced in proportion to the number of shares redeemed divided by the
number of shares originally purchased during the Offering Period. Thus,
investors are encouraged to reinvest dividends and to evaluate their need to
receive some or all of their investments prior to the Maturity Date before
making an investment in the Fund. As noted previously (see "Investment
Objectives and Management Policies - In General"), pursuant to the terms of the
Manager's Guarantee, shareholders who wish to be certain of receiving the full
amount of their original investment must reinvest all dividends and
distributions in additional shares and hold all their shares until the Maturity
Date.
When shares are held for the account of a shareholder by the Fund's
Transfer Agent, the shareholder may redeem them by making a written request with
signatures guaranteed to AIG Retiree Fund - 2003, PO Box 8935, Wilmington,
Delaware 19899-9801. Written redemption instructions, indicating the name of
the Fund and the number of shares to be redeemed, must be received by the
Transfer Agent in proper form and signed exactly as the shares are registered.
All signatures must be guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form generally will
be accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies and
savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Stock Exchanges Medallion Program and
the Securities Transfer Agents Medallion Program ("STAMP"). Such guarantees
must be signed by an authorized signatory thereof with "Signature Guaranteed"
appearing with the shareholder's signature. If the signature is guaranteed by a
broker or dealer, such broker or dealer must be a member of a clearing
corporation and maintain net capital of at least $100,000. Signature-guarantees
may not be provided by notaries public. Redemption requests by corporate and
fiduciary shareholders must be accompanied by appropriate documentation
establishing the authority of the person seeking to act on behalf of the
account. Investors may obtain from the Fund or the Transfer Agent forms of
resolutions and other documentation which have been prepared in advance to
assist compliance with the Fund's procedures.
The redemption price will be the net asset value next determined
following receipt by the Distributor of a properly executed request with any
required documents. Payment for shares redeemed will be made in cash as
promptly as practicable but in no event later than three business days after
receipt of a properly executed request in proper form for transfer. When the
Fund is requested to redeem shares for which it may not have yet received good
payment, it may delay transmittal of redemption proceeds until it has determined
that collected funds have been received for the purchase of such shares, which
will be up to 15 days from the purchase date. The redemption within one year of
shares purchased at net asset value under the Large Purchase Privilege may be
subject to a 1% contingent deferred sales charge (see "Purchase of
Shares").
Shareholders can request the following telephone privileges:
expedited wire transfer redemptions and exchange transactions for individual and
institutional accounts and pre-authorized telephone redemption transactions for
certain institutional accounts. Shareholders may choose these privileges on the
account application or by contacting the Distributor or the Transfer Agent for
appropriate instructions. Please note that the telephone
<PAGE>
AIG Retiree Fund -- 2003, Page 33
exchange privilege is automatic unless the shareholder refuses it on the account
application. Neither the Fund nor its agents will be liable for any loss,
expense or cost arising out of any telephone request pursuant to these
privileges, including any fraudulent or unauthorized request, and THE
SHAREHOLDER WILL BEAR THE RISK OF LOSS, so long as the Fund or its agent
reasonably believes, based upon reasonable verification procedures, that the
telephonic instructions are genuine. The verification procedures include
recording instructions, requiring certain identifying information before acting
upon instructions and sending written confirmations.
If the proceeds of the redemption are $25,000 or less and the proceeds
are payable to the shareholder of record at the address of record, normally a
telephone request or a written request by all registered account holders without
a signature guarantee is sufficient for redemptions by individual or joint
account holders, and trust, executor and guardian account holders (excluding
custodial accounts for gifts and transfers to minors), provided the trustee,
executor or guardian is named in the account registration. Other institutional
account holders may exercise this special privilege of redeeming shares by
telephone request or written request without signature guarantee subject to the
same conditions as individual account holders and subject to the limitations on
liability described above, provided that this privilege has been pre-authorized
by the institutional account holder by written instruction to the Shareholder
Service Agent with signatures guaranteed. Telephone requests may be made by
calling (800) 862-3984. Shares purchased by check may not be redeemed under
this privilege of redeeming shares by telephone request until such shares have
been owned for at least 15 days. This privilege of redemption of shares by
telephone request or by written request without a signature guarantee may not be
used if the shareholder's account has had an address change within 30 days of
the redemption request. During periods when it is difficult to contact the
Distributor by telephone, it may be difficult to use the telephone redemption
privilege, although investors can still redeem by mail. The Fund reserves the
right to terminate or modify this privilege at any time.
REPURCHASES (CONFIRMED REDEMPTIONS)
A request for repurchase may be communicated by a shareholder through
a securities dealer or other financial services firm to the Distributor, which
the Fund has authorized to act as its agent. There is no charge by the
Distributor with respect to repurchases; however, dealers or other firms may
charge customary commissions for their services. Dealers and other financial
services firms are obligated to transmit orders promptly. The repurchase price
will be the net asset value next determined after receipt of a request by the
Distributor. However, requests for repurchases received by dealers or other
firms prior to the determination of net asset value (see "Investment Advisory
Services - Valuation") and received by the Distributor prior to the close of the
Distributor's business day will be confirmed at the net asset value effective on
that day. The offer to repurchase may be suspended at any time. Requirements
as to stock powers, certificates, payments and delay of payments are the same as
for redemptions.
EXPEDITED WIRE TRANSFER REDEMPTIONS
If the account holder has given authorization for expedited wire
redemption to the account holder's brokerage or bank account, shares can be
redeemed and proceeds sent by federal wire transfer to a single previously
designated account. Requests received by the Distributor prior to the
determination of net asset value will result in shares being
redeemed that day at the net asset value effective on that day and normally the
proceeds will be sent to the designated account the following business day.
Delivery of the proceeds of a wire redemption request of $250,000 or more may be
delayed by the Fund for up to seven days if the Distributor deems it appropriate
under then current market conditions. Once
<PAGE>
AIG Retiree Fund -- 2003, Page 34
authorization is on file, the Distributor will honor requests by telephone at
(800) 862-3984 or in writing, subject to the limitations on liability described
under "General" above. The Fund is not responsible for the efficiency of the
federal wire system or the account holder's financial services firm or bank. The
Fund currently does not charge the account holder for wire transfers. The
account holder is responsible for any charges imposed by the account holder's
firm or bank. There is a $5,000 wire redemption minimum. To change the
designated account to receive wire redemption proceeds, send a written request
to the Distributor with signatures guaranteed as described above or contact the
firm through which shares of the Fund were purchased. Shares purchased by check
may not be redeemed by wire transfer until such shares have been owned for at
least 15 days. During periods when it is difficult to contact the Distributor by
telephone, it may be difficult to use the expedited redemption privilege. The
Fund reserves the right to terminate or modify this privilege at any time.
REINSTATEMENT PRIVILEGE
A shareholder who has redeemed shares of the Fund or certain other
funds may reinstate up to the full amount redeemed at net asset value at the
time of the reinstatement in shares of the Fund (but only prior to the end of
the Offering Period) or, if available, in shares of certain other funds managed
by the Manager. A shareholder of the Fund who redeems shares purchased under
the Large Purchase Privilege (see "Purchase of Shares") and incurs a contingent
deferred sales charge may reinstate up to the full amount redeemed at net asset
value at the time of the reinstatement in shares of the Fund (but only prior to
the end of the Offering Period) or, if available, in shares of certain other
funds managed by the Manager. The amount of any contingent deferred sales
charge also will be reinstated. The funds for which these privileges are
available will vary from time to time because they are generally offered only
for limited periods. As of the date of this Prospectus, the Reinstatement
Privilege is not available for any other funds. In the future, you may obtain a
list of the funds for which these privileges are available and request a
prospectus by telephoning (800) 862-3984. These reinstated shares will retain
their original cost and purchase date for purposes of the contingent deferred
sales charge. Purchases through the Reinstatement Privilege are subject to the
minimum investment requirements applicable to the shares being purchased and may
only be made for funds available for sale in the shareholder's state of
residence as listed under "Special Features - Exchange Privilege." The
Reinstatement Privilege can be used only once as to any specific shares and
reinstatement must be effected within six months of the redemption. If a loss
is realized on the redemption of Fund shares, the reinstatement may be subject
to the "wash sale" rules if made within 30 days of the redemption, resulting in
the postponement of the recognition of such loss for federal income tax
purposes. The Reinstatement Privilege may be terminated or modified at any time
and is subject to the limited Offering Period of the Fund.
SPECIAL FEATURES
LETTER OF INTENT
By signing a Letter of Intent form, available from your broker or the
Transfer Agent, you may become eligible for the reduced sales load applicable to
the total number of shares of the Fund and shares of certain other funds managed
by the Manager purchased during the Offering Period pursuant to the terms and
under the conditions set forth in the Letter of Intent. A minimum initial
purchase of $1,000 is required. The Transfer Agent will hold in escrow 5% of the
amount indicated in the Letter of Intent for payment of a higher sales load if
you do not purchase the full amount indicated in the Letter of Intent. The
escrow will be released when you fulfill the terms of the Letter of Intent
by purchasing the specified amount. If your purchases qualify for a further
sales load reduction, the sales load
<PAGE>
AIG Retiree Fund -- 2003, Page 35
will be adjusted to reflect the total purchase at the end of the Offering
Period. If total purchases are less than the amount specified, you will be
requested to remit an amount equal to the difference between the sales load
actually paid and the sales load applicable to the aggregate purchases actually
made. If such remittance is not received within 20 days, the Transfer Agent, as
attorney-in-fact pursuant to the terms of the Letter of Intent, will redeem an
appropriate number of shares held in escrow to realize the difference. Signing a
Letter of Intent does not bind you to purchase the full amount indicated at the
sales load in effect at the time of the signing, but you must complete the
intended purchase to obtain the reduced sales load. At the time you purchase
shares of any of the eligible funds, you must indicate your intention to do so
under a Letter of Intent. The other funds that may be purchased under a Letter
of Intent will vary from time to time because some funds will be offered only
for limited periods, as described in the applicable prospectus. As of the date
of this Prospectus, the Letter of Intent is not available for any other funds.
For a list of the funds for which the Letter of Intent is available in the
future, and to request a prospectus, telephone (800) 862-3984.
RIGHT OF ACCUMULATION
YOU MAY QUALIFY FOR A REDUCED SALES CHARGE. Pursuant to the Right of
Accumulation, certain investors are permitted to purchase shares of the Fund at
the sales charge applicable to the total of (a) the dollar amount then being
purchased plus (b) the current public offering price of all shares of the Fund,
shares of the other series of AIG All Ages Funds, Inc. and shares of certain
other funds managed by the Manager, then held by that investor. The following
purchases may be aggregated for the purposes of determining the amount of
purchase and the corresponding sales load: (a) individual purchases on behalf
of a single purchaser, the purchaser's spouse and their children under the age
of 21 years including shares purchased in connection with a retirement account
exclusively for the benefit of such individual(s), such as an IRA, and purchases
made by a company controlled by such individual(s); (b) individual purchases by
a trustee or other fiduciary account, including an employee benefit plan (such
as employer-sponsored pension, profit-sharing and stock bonus plans, including
plans under Section 401(k) of the Code, and medical, life and disability
insurance trusts); or (c) individual purchases by a trustee or other fiduciary
purchasing shares concurrently for two or more employee benefit plans of a
single employer or of employers affiliated with each other. Subsequent
purchases made under the conditions set forth above will be subject to the
minimum subsequent investment of $250 and will be entitled to the Right of
Accumulation.
EXCHANGE PRIVILEGE
Subject to the following limitations, shares of the Fund and certain
other funds may be exchanged for each other at their relative net asset values.
Shares purchased by check may not be exchanged until they have been owned for at
least 15 days. In addition, shares acquired by such an exchange may not be
exchanged thereafter until they have been owned for 15 days. The funds for
which this privilege is available will vary from time to time because some funds
will be offered only for limited periods, as described in the applicable
prospectus. As of the date of this Prospectus, the Exchange Privilege is not
available between the Fund and any other funds. For a list of the funds for
which the Exchange Privilege is available in the future, and to request a
prospectus, telephone (800) 862-3984. Exchanges may be made only for funds that
are available for sale in the shareholder's state of residence. The Manager's
Guarantee relates only to the Fund and will have no effect on shares that are
exchanged for shares of another fund.
<PAGE>
AIG Retiree Fund -- 2003, Page 36
The total value of shares being exchanged must at least equal the
minimum investment requirement of the fund into which they are being exchanged.
Exchanges are made based on relative dollar values of the shares involved in the
exchange. There is no service fee for an exchange; however, dealers or other
firms may charge for their services in effecting exchange transactions.
Exchanges will be effected by redemption of shares of the fund held and purchase
of shares of the other fund. For federal income tax purposes, any such exchange
constitutes a sale upon which a gain or loss may be realized, depending upon
whether the value of the shares being exchanged is more or less than the
shareholder's adjusted cost basis. Shareholders interested in exercising the
exchange privilege may obtain prospectuses of the other funds from dealers,
other firms or the Distributor. Exchanges may be accomplished by a written
request to the Distributor, or by telephone if the shareholder has given
authorization. Once the authorization is on file, the Distributor will honor
requests by telephone at (800) 862-3984 or in writing, subject to the
limitations on liability under "Redemption or Repurchase of Shares - General."
During periods when it is difficult to contact the Distributor by telephone, it
may be difficult to use the telephone exchange privilege. The exchange
privilege is not a right and may be suspended, terminated or modified at any
time. Except as otherwise permitted by applicable regulations, 60 days' prior
written notice of any termination or material change will be provided.
AUTOMATIC INVESTMENT PROGRAM
The Automatic Investment Program enables you to authorize checks to be
drawn on your checking account at regular monthly or quarterly intervals during
the Offering Period for fixed amounts of $100 or more to purchase shares of the
Fund. This Program permits you to use the dollar-cost-averaging method to
invest in the Fund. The Automatic Investment Program will terminate on the last
day of the Offering Period. See the terms and conditions on the Account
Application.
RETIREMENT PLANS
An investment in shares of the Fund may be appropriate for certain
Individual Retirement Accounts ("IRAs"), self-employed retirement plans and
corporate plans. In view of the limited Offering Period of the Fund (see
"Purchase of Shares"), the Fund may not be appropriate for periodic contribution
plans. Investors who are considering establishing, or purchasing shares of the
Fund for, any retirement plan should consult with their own tax advisers before
doing so.
The Fund sponsors IRAs which may also be used as Simplified Employee
Pension Plan ("SEP") IRA accounts. Eligible investors may establish an IRA, or
a SEP-IRA with their employer, to invest in the Fund.
PNC Bank, N.A. serves as custodian for the IRAs and SEP-IRAs sponsored
by the Fund. the current fees payable to PNC Bank, N.A. for its services as IRA
custodian are available upon request. Neither PNC Bank, N.A. nor the Fund
administers the SEP-IRAs and therefore no assurance can be given that a
particular SEP-IRA is properly administered.
PERFORMANCE
The Fund may advertise several types of performance information,
including "average annual total return" and "total return." Each of these
figures is based upon historical results and is not necessarily representative
of the future performance of the Fund.
Average annual total return and total return figures measure both the
net investment income generated by, and the effect of any realized and
unrealized appreciation or depreciation of, the underlying investments in the
Fund's portfolio for the period referenced,
<PAGE>
AIG Retiree Fund -- 2003, Page 37
assuming the reinvestment of all dividends. Thus, these figures reflect the
change in the value of an investment in the Fund during a specified period.
Average annual total return will be quoted for at least the one, five and ten
year periods ending on a recent calendar quarter (or if such periods have not
yet elapsed, at the end of a shorter period corresponding to the life of the
Fund). Average annual total return figures represent the average annual
percentage change over the period in question. Total return figures represent
the aggregate percentage or dollar value change over the period in question.
The Fund's performance may be compared to that of the Consumer Price
Index or various unmanaged indexes including the Dow Jones Industrial Average,
the Standard & Poor's 500 Stock Index, the Europe Australia Far East ("EAFE")
Index and other indexes prepared by Morgan Stanley Capital International. The
Fund's performance may also be compared to the performance of other mutual funds
or mutual fund indexes as reported by independent mutual fund reporting services
such as Lipper Analytical Services, Inc. and Micropal, Ltd. Such performance
calculations are generally based upon changes in net asset value with all
dividends reinvested.
The Fund may quote information from publications such as Morningstar,
Inc., The Wall Street Journal, Money Magazine, Forbes, Barron's, Fortune, The
New York Times, The Washington Post, The International Herald Tribune, USA
Today, Institutional Investor, Registered Representative and other consumer
journals and publications by the U.S. government and its agencies. Also,
investors may want to compare the historical returns of various investments,
performance indexes of those investments or economic indicators, including but
not limited to stocks, bonds, certificates of deposit, money market funds, and
U.S. Treasury obligations. Bank product performance may be based upon, among
other things, the BANK RATE MONITOR National Index/TM/ or various certificate of
deposit indexes. Money market fund performance may be based upon, among other
things, the IBC/Donoghue Money Fund Report/(R)/ or Money Fund Insight/(R)/,
reporting services on money market funds. Performance of U.S. Treasury
obligations may be based upon, among other things, various U.S. Treasury bill
indexes. Certain of these alternative investments may offer fixed rates of
return and guaranteed principal and may be insured.
The Fund may depict the historical performance of the securities in
which the Fund and the Equity Portfolio may invest over periods reflecting a
variety of market or economic conditions either alone or in comparison with
alternative investments, performance indexes of those investments or economic
indicators. The Fund may also describe its portfolio holdings (including those
of the Equity Portfolio) and depict its size or relative size compared to other
mutual funds, the number and make-up of its shareholder base and other
descriptive factors concerning the Fund.
The Fund's shares are sold at net asset value plus a maximum sales
charge of 4.75% of the offering price. While the maximum sales charge is
normally reflected in the Fund's performance figures, certain total return
calculations may not include such charge and those results would be reduced if
it were included. The Fund's returns and net asset value will fluctuate. Except
in limited cases described in "Purchases of Shares," shares of the Fund are
redeemable by an investor at the then current net asset value, which may be more
or less than original cost. Additional information concerning the Fund's
performance and concerning the historical performance of various types of
investments that may be used to provide for retirement needs appears in the
Statement of Additional Information. Additional information about the Fund's
performance also appears in its Annual Report to Shareholders, which will be
available without charge from the Fund.
<PAGE>
AIG Retiree Fund -- 2003, Page 38
ORGANIZATION AND CAPITALIZATION
The Fund is a series of AIG All Ages Funds, Inc., an open-end
management investment company incorporated under the laws of the State of
Maryland on April 4, 1995. The Board of Directors is authorized to issue,
create and classify shares of capital stock in separate series without further
action by shareholders. To date, shares in the AIG Retiree Fund - 2003
described herein and the AIG Children's World Fund -- 2005 are the only shares
authorized. Shares of capital stock have a par value of $.001. All shares have
non-cumulative voting rights for the election of directors. Each outstanding
share is fully paid and non-assessable, and each is freely transferable. There
are no liquidation, conversion or preemptive rights. The Company will furnish
without charge to each shareholder upon request a full statement of (1) the
designations and any preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption of the stock of each class that the Company is
authorized to issue; and (2)(a) the differences in the relative rights and
preferences between the shares of each series of preferred or special class and
(b) the authority of the Board to set the relative rights and preferences of
subsequent series. The Company does not presently intend to hold annual
shareholder meetings, but will do so if requested by the holders of at least ten
percent of its outstanding shares for the purpose of voting upon the removal of
a director or directors and to assist in communications with other shareholders
as required by the 1940 Act.
The Equity Portfolio is an open-end management investment company,
organized under the laws of Delaware on June 23, 1995 as a trust with limited
liability.
<PAGE>
AIG Retiree Fund -- 2003, Page 39
============================================================
AIG RETIREE FUND -- 2003
a series of
AIG All Ages Funds, Inc.
============================================================
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
- ------------------------------------------------------------
<S> <C>
THE FUND'S AND THE EQUITY PORTFOLIO'S EXPENSES......... 3
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES.......... 4
RISK FACTORS........................................... 12
SPECIAL INFORMATION CONCERNING THE TWO-TIER STRUCTURE.. 16
INVESTMENT ADVISORY SERVICES........................... 18
AMERICAN INTERNATIONAL GROUP, INC...................... 23
DIVIDENDS AND DISTRIBUTIONS............................ 23
TAXES.................................................. 23
THE ADMINISTRATOR...................................... 25
THE TRANSFER AGENT AND DIVIDEND DISBURSING AGENT....... 25
CUSTODIAN.............................................. 25
SHAREHOLDER SERVICING AGREEMENT........................ 26
RULE 12b-1 PLAN........................................ 27
PURCHASES OF SHARES.................................... 27
REDEMPTION OR REPURCHASE OF SHARES..................... 32
SPECIAL FEATURES....................................... 34
PERFORMANCE............................................ 36
============================================================
January 16, 1996
============================================================
</TABLE>
<PAGE>
Subject to Completion dated January 16, 1996
AIG RETIREE FUND - 2003
A Series of AIG All Ages Funds, Inc.
Statement of Additional Information
January 16, 1996
70 Pine Street
New York, NY 10270
(800) 862 - 3984
AIG Retiree Fund -- 2003 (the "Fund") is a series of AIG All Ages Funds,
Inc. (the "Company"). The Fund has two investment objectives. The first
objective is to provide a guaranteed return, on or after November 15, 2003, of
the full amount originally invested (including any sales charge paid) by each
shareholder who has reinvested all dividends and distributions. The Fund pursues
its first objective by investing a portion of its assets in U.S. Treasury zero
coupon securities, combined with further assurance from a guarantee by AIG
Capital Management Corp., the Fund's investment adviser (the "Manager"). The
Manager's obligations under its guarantee will be backed by its parent, American
International Group, Inc. ("AIG").
The Fund's second objective is to achieve total return on capital through
both capital growth (realized and unrealized) and income, by investing the
balance of its assets in a globally diversified portfolio of equity securities.
There can be no assurance the Fund's investment objective of total return on
capital will be achieved.
The Fund seeks to achieve the investment objective of total return on
capital by investing a portion of its investable assets in the First Global
Equity Portfolio (the "Equity Portfolio"), a diversified open-end management
investment company with the same investment objective. The Fund will directly
acquire and manage its portfolio of zero coupon securities. Both the Fund and
the Equity Portfolio are managed by AIG Capital Management Corp. and investment
advice is provided by affiliated companies.
This Statement of Additional Information is not a prospectus and should
be read in conjunction with the Prospectus of the Fund, dated January 16, 1996,
as amended or supplemented from time to time, a copy of which may be obtained
from the Fund upon request. This Statement of Additional Information is
incorporated by reference in its entirety into the Prospectus.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
GENERAL INFORMATION.................................... 3
INVESTMENT OBJECTIVES AND POLICIES..................... 3
THE MANAGER'S GUARANTEE................................ 9
DIRECTORS, TRUSTEES AND OFFICERS....................... 11
MANAGEMENT AND EXPENSES................................ 15
RULE 12b-1 PLAN........................................ 16
SHAREHOLDER SERVICING AGREEMENT........................ 17
PORTFOLIO TRANSACTIONS AND BROKERAGE................... 17
PURCHASE AND REDEMPTION OF FUND SHARES................. 18
DISTRIBUTION SERVICES.................................. 19
VALUATION.............................................. 20
TAXES.................................................. 21
PERFORMANCE INFORMATION................................ 22
OTHER INFORMATION...................................... 21
FINANCIAL STATEMENTS OF FIRST GLOBAL EQUITY PORTFOLIO.. 23
INFORMATION WITH RESPECT TO AIG........................ 23
</TABLE>
<PAGE>
GENERAL INFORMATION
The Fund is a newly organized, diversified series of AIG All Ages Funds,
Inc. (the "Company"), an open-end management investment company, and therefore
has no prior history.
INVESTMENT OBJECTIVES AND POLICIES
OVERVIEW
The Fund has two investment objectives. The first is to provide a
guaranteed return, at any time on or after November 15, 2003 (the "Maturity
Date"), of the full amount originally invested by each shareholder who has
reinvested all dividends and distributions. The Fund pursues its first
objective by investing a portion of its assets in U.S. Treasury zero coupon
securities, combined with further assurance from a guarantee by the Manager (the
"Manager's Guarantee"). The Manager's obligations under the Manager's Guarantee
will be backed by its parent, AIG. The Fund's second objective is to provide
total return on capital through both capital growth (realized and unrealized)
and income, through investment of the balance of its assets primarily in a
globally diversified portfolio of equity securities. The Fund seeks to achieve
its second investment objective of total return on capital by investing a
portion of its investable assets in the First Global Equity Portfolio (the
"Equity Portfolio"), an open-end diversified management investment company,
unlike other mutual funds that directly acquire and manage their own portfolio
of securities. The investment objectives of the Fund are fundamental and cannot
be changed without the approval of the holders of a majority of the outstanding
voting securities of the Fund, as defined under the Investment Company Act of
1940, as amended (the "1940 Act"). The following information regarding the
Fund's and the Equity Portfolio's investment policies supplements the
information contained in the Prospectus.
Zero Coupon Securities. There are currently two basic types of zero
coupon securities, those created by separating the interest and principal
components of a previously issued interest-paying security and those originally
issued in the form of a face amount only security paying no interest. Zero
coupon securities of the U.S. Government and certain of its agencies and
instrumentalities and of private corporate issuers are currently available,
although the Fund will purchase only those that are direct obligations of the
United States Treasury.
Zero Coupon securities of the U.S. Government that are currently
available are called STRIPS (Separate Trading of Registered Interest and
Principal of Securities) STRIPS are issued under a program introduced by the
U.S. Treasury and are direct obligations of the U.S. Government. The U.S.
Government does not issue zero coupon securities directly. The STRIPS program,
which is ongoing, is designed to facilitate the secondary market stripping of
selected Treasury notes and bonds into individual interest and principal
components. Under the program, the U.S. Treasury continues to sell its
-3-
<PAGE>
shares and bonds through its customary auction process. However, a purchaser of
those notes and bonds who has access to a book-entry account at a Federal
Reserve bank may separate the specified Treasury notes and bonds into individual
interest and principal components. The selected Treasury securities may
thereafter be maintained in the book-entry system operated by the Federal
Reserve in a manner that permits the separate trading and ownership of the
interest and principal payments. The Federal Reserve does not charge a fee for
this service; however, the book-entry transfer of interest and principal
components is subject to the same fee schedule generally applicable to the
transfer of Treasury securities.
Under the program, in order for a book-entry Treasury security to be
separated into its component parts, the face amount of the security must be an
amount which, based on the stated interest rate of the security, will produce a
semi-annual interest payment of $1,000 or a multiple of $1,000. Once a book-
entry security has been separated, each interest and principal component may be
maintained and transferred in multiples of $1,000 regardless of the face amount
initially required for separation or the resulting amount required for each
interest payment.
Investment banks may also strip Treasury securities and sell them under
proprietary names. These securities may not be as liquid as STRIPS and the Fund
has no present intention of investing in these instruments in the coming year.
STRIPS are purchased at a discount from $1,000. Absent a default by the
U.S. Government, a purchaser will receive face value for each of the STRIPS
provided the STRIPS are held to their due dates. While STRIPS can be purchased
on any business day, they all currently come due on February 15, May 15, August
15 or November 15.
Foreign Currency Transactions. The Equity Portfolio may enter into
forward foreign currency exchange contracts to fix the US dollar value of a
security it has agreed to buy or sell for the period between the date the trade
was entered into and the date the security is delivered and paid for. A forward
foreign currency exchange contract is an agreement to purchase or sell a
specific currency at a future date and at a price set at the time the contract
is entered into.
The Equity Portfolio is not required to enter into forward contracts with
regard to settlement of its foreign currency-denominated securities and will not
do so unless deemed appropriate by the Manager, AIG Global Investment Corp.
("AIG Global") or AIG Global Investment Corp. (Europe) Ltd. ("AIG Global
Europe") (AIG Global and AIG Global Europe are referred to as the
"Subadvisors"). Forward foreign currency exchange contracts do not eliminate
fluctuations in the underlying price of the securities. They simply establish a
rate of exchange at a future date. Additionally, although such contracts tend to
minimize the risk of loss due to fluctuations in the value of the currency being
traded, at the same time, they tend to limit any potential gain which might
result from an increase in the value of that currency.
-4-
<PAGE>
Investors should be aware of the costs of currency conversion. Although
foreign exchange dealers do not charge a fee for conversion, they do realize a
profit based on the difference between the prices at which they are buying and
selling various currencies. Thus, a dealer may offer to sell a foreign currency
to the Equity Portfolio at one rate, while offering a lesser rate of exchange
should the Equity Portfolio desire to resell that currency to the dealer.
Borrowing. The Fund or the Equity Portfolio may from time to time borrow
money for extraordinary or emergency purposes in an amount up to 5% of its total
assets from banks at prevailing interest rates. This policy is fundamental.
Should the Fund or the Equity Portfolio, for any reason, have borrowings that do
not meet this test, then within three business days, it must reduce such
borrowings so as to meet the foregoing test. Under these circumstances, the
Fund or the Equity Portfolio may have to liquidate its holdings at a time when
it is disadvantageous to do so. Gains made with additional funds borrowed will
generally cause the net asset value of the Fund or the Equity Portfolio, as
relevant, to rise faster than could be the case without borrowings. Conversely,
if investment results fail to cover the cost of borrowings, the net asset value
of the Fund or Equity Portfolio, as relevant, could decrease faster than if
there had been no borrowings.
Lending of Portfolio Securities. Neither the Fund nor the Equity
Portfolio may lend its holdings of securities. These are fundamental policies
of the Fund and the Equity Portfolio.
Except as noted above, the foregoing investment policies of the Fund and
the Equity Portfolio are not fundamental and the Board of Directors of AIG All
Ages Funds, Inc. or the Trustees of the Equity Portfolio, as relevant, may
change such policies without the vote of a majority of outstanding voting
securities of the Fund or the Equity Portfolio, as relevant.
Portfolio Turnover. The Equity Portfolio may generally change its
portfolio investments at any time in accordance with the Manager's or the
Subadvisors' appraisal of factors affecting any particular issuer or the market
economy in general. The Equity Portfolio anticipates that the annual rate of
portfolio turnover will not exceed 100% per annum. After the Offering Period,
the Fund does not anticipate any portfolio turnover in its holding of zero
coupon securities except that necessary to meet requests for redemption.
ADDITIONAL INVESTMENT RESTRICTIONS FOR THE FUND AND THE EQUITY PORTFOLIO
Except as expressly indicated otherwise, the following additional
restrictions are fundamental policies which cannot be changed without the
approval of the holders of a majority of the outstanding voting securities of
the Fund or the Equity Portfolio, as relevant. Under the 1940 Act, a "vote of a
majority of the outstanding voting securities" means the affirmative vote of the
lesser of (1) more than 50% of the outstanding shares, or (2) 67% or more of the
shares present at a shareholder's meeting, if more than 50% of the outstanding
shares are represented at the meeting in person or in proxy.
-5-
<PAGE>
The Fund may not:
(1) Issue senior securities (i.e., any security evidencing indebtedness
or any stock of a class having priority over any other class as to
distribution of assets or payment of dividends), provided that the
Fund may borrow money as described in clause (5) below.
(2) Make short sales of securities.
(3) Purchase securities on margin, except for such short-term credits as
are necessary for the clearance of purchases and sales of its
Treasury Securities.
(4) Write put or call options on securities.
(5) Borrow money, except from banks for extraordinary or emergency
purposes and may not invest borrowed funds in additional securities.
Such borrowing may not exceed 5% of the Fund's total assets.
(6) Engage in the underwriting of securities, except insofar as the Fund
may be deemed an underwriter under the Securities Act in disposing
of a portfolio security.
(7) Purchase, sell or hold any real estate or real estate mortgage loans.
(8) Purchase or sell any commodities or commodity contracts, including
futures contracts.
(9) Make loans or lend the Treasury Securities it holds in furtherance
of the Repayment Objective.
(10) Invest in any securities other than (i) Treasury Securities and (ii)
beneficial interests in the Equity Portfolio or of another issuer
that has investment objectives, policies and limitations
substantially similar to those of the Equity Portfolio. Should the
Directors determine that investment in the Equity Portfolio or a
similar issuer is no longer in the best interest of the Fund's
shareholders, they will hold a vote of shareholders to consider
possible alternatives.
(11) Except for investments in (i) Treasury Securities and (ii)
beneficial interests in the Equity Portfolio or of another issuer
that has investment objectives, policies and limitations
substantially similar to those of the Equity Portfolio, purchase any
security if, as a result, more than 25% of the market value of its
total assets would be invested in securities of issuers principally
engaged in the same industry (except Treasury Securities). This
investment policy is not fundamental.
-6-
<PAGE>
The Equity Portfolio may not:
(1) Issue senior securities (i.e., any security evidencing indebtedness
or any stock of a class having priority over any other class as to
distribution of assets or payment of dividends), provided that the
Equity Portfolio may borrow money as described in clause (5) below.
(2) Make short sales of securities except short sales against the box.
(3) Purchase securities on margin, except for such short-term credits as
are necessary for the clearance of purchases and sales of its
portfolio securities.
(4) Write put or call options on securities.
(5) Borrow money, except from banks for extraordinary or emergency
purposes and may not invest borrowed funds in additional securities.
Such borrowing may not exceed 5% of the Equity Portfolio's total
assets.
(6) Engage in the underwriting of securities, except insofar as the
Equity Portfolio may be deemed an underwriter under the Securities
Act in disposing of a portfolio security.
(7) Purchase, sell or hold any real estate, real estate mortgage loans
or real estate limited partnerships, provided that the Equity
Portfolio may invest in the securities of companies that are
engaged in businesses related to real estate and real estate
mortgage loans.
(8) Purchase or sell any commodities or commodity contracts, including
futures contracts, provided that the Equity Portfolio may enter into
forward foreign currency contracts to provide for its obligations at
the time of settlement of securities transactions.
(9) Make loans or lend portfolio securities except as described in the
Prospectus under "Other Investment Policies - Repurchase
Agreements."
(10) Invest more than 25% of the market value of its total assets in
securities of issuers principally engaged in the same industry
(except Treasury Securities).
(11) As to 75% of the value of its total assets, invest more than 5% of
its total assets, at market value, in the securities of any one
issuer (except Treasury Securities).
(12) Own more than 10% of the outstanding voting securities of any
issuer, or more than 10% of any class of securities of one issuer.
(13) Invest more than 5% of the value of its total assets, at market
value, in the securities of issuers which, with their predecessors,
have been in business less than three years, provided that
securities
-7-
<PAGE>
guaranteed by a company that has been in operation at least three
continuous years shall be excluded from this limitation, or in
equity securities the resale of which is restricted by law. This
policy is not fundamental.
(14) Purchase securities of open-end or closed-end investment companies,
except as permitted by the 1940 Act, and only in open market
purchases where no commission or profit to a sponsor or dealer
results other than customary brokers' commissions.
(15) Invest in warrants if, at the time of acquisition, the investment in
warrants, valued at the lower of cost or market value, would exceed
5% of the Equity Portfolio's net assets. For purposes of this
restriction, warrants acquired by the Equity Portfolio in units,
attached to securities or distributed as dividends on another
security may be deemed to have been purchased without cost. This
policy is not fundamental.
(16) Invest in companies for the purpose of exercising control or
management.
(17) Purchase or retain securities of any issuer if those officers and
trustees of the Equity Portfolio and the officers and directors of
the Manager or any Subadvisor who individually own beneficially more
than 1/2 of 1% of the outstanding securities of such issuer,
together own beneficially more than 5% of such outstanding
securities. This policy is not fundamental.
(18) Invest in oil, gas or other mineral exploration or development
programs or leases.
The prospectus states that the Equity Portfolio may invest up to 15% of
its assets in illiquid securities and that the Trustees may determine that
certain securities sold under Rule 144A of the 1933 Act are not subject to this
15% limitation. However, certain state securities laws require that all Rule
144A securities and also securities of certain unseasoned issuers be subject to
the 15% limitation. So long as these laws remain in effect, the Equity
Portfolio will include all Rule 144A securities and securities of such
unseasoned issuers when determining the percentage of illiquid securities in its
portfolio.
With respect to limitation (5) of the Fund and the Equity Portfolio, the
directors of the fund and the trustees of the Equity Portfolio have only
authorized the Fund and the Equity Portfolio to borrow money to meet
requirements for redemptions and to meet nonrecurring operating expenses.
With respect to limitation (15) above, certain state securities laws
require that no more than 2% of the net assets of the Equity Portfolio may be
invested in warrants not listed on either the New York Stock Exchange or the
American Stock Exchange. So long as these laws remain in effect, the Equity
Portfolio will be subject to this additional limitation.
-8-
<PAGE>
THE MANAGER'S GUARANTEE
In order to ensure the return of the full amount of a shareholder's
original investment (including any sales charge paid) on or after the Maturity
Date, AIG All Ages Funds, Inc. and the Manager have entered into a Guarantee
Agreement with respect to the Fund, dated _____________, 1996 (the "Manager's
Guarantee"). The Manager's Guarantee ensures that an investor who reinvests all
dividends and distributions (an "Eligible Investor") and who holds all shares
until the Maturity Date will receive upon redemption of all holdings at least as
much as was originally invested (including any sales charge). If an Eligible
Investor redeems some shares, the amount subject to the Manager's Guarantee will
be reduced in proportion to the number of shares redeemed divided by the number
of shares originally purchased during the Offering Period.
The Manager's Guarantee is triggered each time after the Maturity Date
that an Eligible Investor tenders shares to the Fund for redemption and the
value of the shares redeemed is insufficient to return the amount originally
invested. At that time, the Manager will make a payment to the Fund that is
sufficient to increase the net asset value of all shares of the Fund to a level
sufficient to ensure that the Eligible Investor's claim is satisfied. To
simplify the calculations, the Manager's Guarantee assumes that each investor
acquired shares at the highest net asset value per share during the Offering
Period and paid the maximum 4.75% front-end sales charge.
In determining whether the net asset value of the shares held by an
Eligible Investor is less than the original purchase price of the shares plus
any sales charges, the Manager's Guarantee employs a "Reinvestment Ratio." The
Reinvestment Ratio is the number of shares that would be owned by a person who
acquired one share during the Offering Period and continuously reinvested all
dividends and distributions. Due to reinvestment of dividends and
distributions, that person would own more than one share at the Maturity Date.
This number cannot be determined in advance. In order to trigger the Manager's
Guarantee, the value of these shares (i.e., the net asset value of one share
multiplied times the Reinvestment Ratio) must be less than the value of one
share of the Fund during the Offering Period, plus the sales charge of 4.75%.
Any payment by the Manager pursuant to the Manager's Guarantee will be
made to the Fund and will cause the net asset value of all outstanding shares to
increase by the same amount. Thus, a shareholder who has not reinvested all
dividends and distributions will benefit to some extent from any payment under
the Manager's Guarantee. However, a shareholder who has not reinvested will own
fewer shares on or after the Maturity Date than a shareholder who invested the
same amount during the Offering Period but has reinvested continuously. As a
result, if a payment is required under the Manager's Guarantee by an Eligible
Investor, the total value of the non-reinvesting shareholder's shares, even
after the payment, will be less than the amount originally invested. Moreover,
such shareholder will not be entitled to make a
-9-
<PAGE>
demand for payment under the Manager's Guarantee because he or she is not an
Eligible Investor.
The Manager's obligations under the Manager's Guarantee are backed by its
parent, AIG, pursuant to a Support Agreement, dated _____________, 1996. AIG is
a holding company which through its subsidiaries is primarily engaged in a broad
range of insurance and insurance-related activities in the United States and
abroad. Other significant activities of AIG are financial services and agency
and service fee operations. Under the Support Agreement, AIG has agreed that, if
the Manager is unable to make full payment of any amount required under the
Manager's Guarantee, AIG will make a capital contribution or a loan to the
Manager to the extent of the Manager's inability to pay. The Support Agreement
provides that the full amount of such capital contribution or loan will be paid
directly to the Fund.
Payment obligations under the Manager's Guarantee and the Support
Agreement will be solely the obligations of the Manager and AIG, respectively.
No other affiliate of the Fund, the Manager, AIG or any other party has
undertaken any obligation to the Fund or its shareholders with respect to the
Manager's Guarantee.
The foregoing is only a summary of the terms of the Manager's Guarantee
and the Support Agreement and is qualified in its entirety by reference to such
agreements, copies of which have been filed as exhibits to the registration
statement of which this Statement of Additional Information forms a part.
-10-
<PAGE>
DIRECTORS, TRUSTEES AND OFFICERS
Directors and officers of the Company, and Trustees and officers of the
Equity Portfolio, together with information as to their principal business
occupations during the past five years, are shown below. Each Director/Trustee
who is an "interested person" of the Fund and/or the Equity Portfolio, as
defined in the 1940 Act, is indicated by an asterisk.
<TABLE>
<CAPTION>
POSITION
POSITION WITH
WITH EQUITY PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE COMPANY PORTFOLIO DURING PAST 5 YEARS
- --------------------- -------- --------- --------------------------
<S> <C> <C> <C>
Roger T. Wickers (60) Chairman Chairman Director, Keystone
339 Forest Road of the of the Investments, Inc.; Retired
Wolfeboro, New Board Board General Counsel, Keystone
Hampshire 03894 and and Investments, Inc.
Director Trustee
Robert L. Ash/*/ (49) Director Trustee Director, AIG Capital
70 Pine Street Management Corp.; Director
New York, New York and President, AIG Asset
10270 Management Services, Inc.;
Director, AIG Asset
Management Inc.; formerly
Chairman, Kemper Sales Co.;
Senior Vice President,
Keystone; Vice President,
Alliance Capital.
Paul H. Friedman (41) Director Trustee Partner, Arter & Hadden, law
1801 K Street N.W., firm.
Suite 400k
Washington, D.C
20006-1301
Linda-Ann S. Director Trustee Executive Vice President,
Goodwin* (47) AIG Capital Management Corp.;
70 Pine Street Senior Vice President, Asset
New York, New York Management Services, Inc.;
10270 formerly Marketing Executive,
Kemper Financial; Marketing
Executive, Coca Cola, USA.
</TABLE>
- -----------------
/*/ "Interested" person, as defined in the 1940 Act by reason of affiliation
with the Manager.
-11-
<PAGE>
<TABLE>
<CAPTION>
POSITION
POSITION WITH
WITH EQUITY PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE COMPANY PORTFOLIO DURING PAST 5 YEARS
- --------------------- -------- --------- --------------------------
<S> <C> <C> <C>
Charles Vinick (48) Director Trustee Independent Consultant;
214 South Venice Blvd. Director, SMR Natural Gas
Venice, California Income Fund 1995; Director,
90291 Passage International
Incorporated; Advisory Board
Member, SMR Energy, Inc.;
formerly Vice President, The
Cousteau Society.
Gary M. Gardner (44) Secretary Secretary Chief Counsel, PNC Bank,
400 Bellevue Parkway N.A.; formerly Attorney,
Wilmington, Delaware Federated Investors, Inc.,
19809 Sun America Asset
Management Corp. and the
Boston Company.
David T. Goss (47) Vice Vice Executive Vice President, AIG
70 Pine Street President President Asset Management Services,
New York, New York Inc.; Formerly Director,
10270 Equitilink Australia; Director,
Equitilink, Ltd; Chairman,
Equitilink Pacific, Ltd;
President, Equitilink USA,
Inc.; and Director, Valufi (Pty),
Ltd.
Daniel K. Kingsbury President President President, AIG Asset
(36) Management, Inc.; President,
70 Pine Street AIG Capital Management
New York, New York Corp.; Senior Vice President,
10270 AIG Asset Management
Services, Inc.; Vice President,
AIG Equity Sales Corp.;
Executive Director, AIG Fund
Management Ltd.; formerly
Director of Strategy, AIG
Asset Management
International.
J. Fergus McKeon (34) Treasurer Treasurer General Manager, PFPC
80 Harcourt Street International; formerly Chief
Dublin, Ireland Accountant, SBC-ISL;
Director, Emerging Markets
Fixed Income Fund.
</TABLE>
-12-
<PAGE>
Pursuant to the terms of the Management Agreement with the Fund, the
Manager pays all compensation of officers and employees of the Fund as well as
the fees and expenses of all Directors of the Company who are affiliated persons
of the Manager.
The following table sets forth the aggregate compensation the Company
expects to pay to each Director and the aggregate compensation paid to each
Director for service on the Company's Board and boards of other companies in the
family of funds sponsored by the Manager or its affiliates for the fiscal year
ending on November 30, 1996.
COMPENSATION TABLE
(NOVEMBER 30, 1996)
<TABLE>
<CAPTION>
PENSION TOTAL
------- COMPENSATION
RETIREMENT FROM
BENEFITS ESTIMATED COMPANY
AGGREGATE ACCRUED --------- AND FUND
--------- AS PART ANNUAL COMPLEX
COMPENSATION OF BENEFITS PAID
FROM FUND UPON TO
NAME AND POSITION COMPANY* EXPENSES RETIREMENT DIRECTORS*
- ---------------------- ------------ ---------- ---------- -------------
<S> <C> <C> <C> <C>
Roger T. Wickers $15,000 None N/A $30,000
Director
Robert L. Ash 0 None N/A 0
Director
Paul H. Friedman $15,000 None N/A $30,000
Director
Linda-Ann S. Goodwin 0 None N/A 0
Director
Charles Vinick $15,000 None N/A $30,000
Director
</TABLE>
As of _____________, 1995, the directors and officers of the Company, as
a group, owned no shares of common stock of the Fund.
As of ______________, 1995, all of the outstanding shares of the Fund
were owned by AIG Asset Management Services, Inc., a Delaware corporation and
a subsidiary of AIG ("AIGAM Services"). The address of AIGAM Services is 70
Pine Street, New York, NY 10270. The Fund does not expect that AIGAM Services
will own a significant percentage of its shares once the Offering Period
commences.
* The amount shown is maximum compensation payable by the company and by any
unregistered investment companies that may invest in the Equity Portfolio. To
the extent that unregistered investment companies that invest in the Equity
-13-
<PAGE>
Portfolio and the individuals listed above serve as directors or trustees of
such entities, these companies will bear a portion of the aggregate
compensation payable to such individuals, allocated on the basis of relative
net assets of the individual funds, or such other basis as the directors may
deem appropriate.
-14-
<PAGE>
MANAGEMENT AND EXPENSES
As indicated in the Prospectus, under the Fund's and the Equity
Portfolio's agreements with the Manager dated _____________, 1996, subject to
the control of the Board of Directors of the Fund and the Trustees of the Equity
Portfolio, the Manager administers the business and other affairs of the Fund
and the Equity Portfolio. The Manager provides both the Fund and the Equity
Portfolio with such office space, administrative and other services and
executive and other personnel as are necessary for the operations of the Fund
and the Equity Portfolio. The Manager pays all of the compensation of Directors
of the Company and Trustees of the Equity Portfolio who are employees,
consultants and/or directors of the Manager and of the officers and employees of
the Fund and the Equity Portfolio. The Fund pays the Manager a management fee
for its services, calculated daily and payable monthly equal to 0.20% per annum
of the average daily net assets of the Fund (other than its interest in the
Equity Portfolio). Similarly, the Equity Portfolio pays the Manager a
management fee, calculated daily and payable monthly equal to 1.20% per annum of
the average daily net assets of the Equity Portfolio. As described in the
Prospectus, the Manager has agreed to waive or reimburse certain expenses
subject to reimbursement under certain circumstances by the Fund in later years.
Assuming that 65% of the Fund's assets are invested in Treasury Securities and
35% in the Equity Portfolio, the combined management fee paid by the Fund (which
includes fees paid by the Equity Portfolio for assets of the Fund held by the
Equity Portfolio) would be equal to 0.55% per annum of the average total assets
of the Fund. Assuming an allocation of 50% to 80% of the Fund's assets to
Treasury Securities the combined management fee paid by the Fund will range
between 0.40% and 0.70% per annum of the average total assets of the Fund. Fees
paid by the Manager to the Subadvisors (which do not affect the fees paid by the
Fund) are described in the Prospectus.
The Fund and the Equity Portfolio pay all of their respective expenses
other than those assumed by the Manager and the Subadvisors, including brokerage
commissions; administration, shareholder services and distribution fees; fees
and expenses of independent auditors and counsel; taxes and governmental fees,
including fees and expenses of qualifying the Fund and its shares under federal
and state securities laws; cost of stock certificates and expenses of repurchase
or redemption of shares; expenses of printing and distributing reports, notices
and proxy materials to shareholders; expenses of printing and filing reports and
other documents with governmental agencies; expenses of shareholders' meetings;
expenses of corporate data processing and related services; shareholder
recordkeeping and shareholder account services fees and disbursements of
custodians; expenses of distributing dividends and distributions; fees and
expenses of Directors of the Company or Trustees of the Equity Portfolio not
employed by (or serving as a director of) the Manager or its affiliates;
insurance premiums; and extraordinary expenses such as litigation expenses. The
Company's expenses will be allocated among the Fund and any other series in a
manner determined by the Board of Directors to be fair and equitable.
The Fund and the Equity Portfolio will be subject to certain state
expense limitations, the most stringent of which currently requires
reimbursement of total expenses (including the management fee, but excluding
interest, taxes, brokerage commissions, distribution fees and extraordinary
expenses) in any year that they exceed 2 1/2% of the first $30 million of
average net assets, 2% of the next $70 million of average net assets and 1/2%
thereafter.
-15-
<PAGE>
The Fund's and the Equity Portfolio's agreements with the Manager provide
that the Manager will not be liable to the Fund or the Equity Portfolio for any
error of judgment or mistake of law, or for any loss arising out of any
investment, or for any act or omission in performing its duties under any of
these Agreements, except for willful misfeasance, bad faith, gross negligence,
or reckless disregard of its obligations and duties under these Agreements.
The Fund's management agreement and the subadvisory agreement with each
Subadvisor were approved by the Board of Directors of the Fund at a meeting held
on December 18, 1995 and by the sole shareholder on ______________. The Equity
Portfolio's management agreement and subadvisory agreements were approved by the
Trustees of the Equity Portfolio at a meeting held on June 29, 1995 and by the
sole owner of a beneficial interest in the Equity Portfolio on June 29, 1995.
These agreements shall continue in effect for a period of more than two years
from the date they were entered into only so long as such continuance is
approved in the manner required by the 1940 Act (i.e., by a vote of the majority
of the Board of Directors or Trustees, as relevant, or of the outstanding voting
securities of the Fund or the Equity Portfolio, as relevant, and by a vote of a
majority of the Board of Directors or Trustees who are not parties to the
agreement being voted upon or interested persons (as defined in the 1940 Act) of
any such party). The Fund, the Equity Portfolio, the Manager, or the
Subadvisors, as relevant, can terminate any of these agreements to which it is a
party, without penalty, on 60 days' written notice to the relevant counterparty
and each of these agreements will terminate automatically in the event of its
assignment.
RULE 12B-1 PLAN
As indicated in the Prospectus, the Fund has adopted a Plan of
Distribution (the "Plan") in accordance with Section 12(b) of the 1940 Act and
Rule 12b-1 thereunder.
The Plan was originally approved on December 18, 1995 by the Board of
Directors of the Company, including a majority of the directors who are not
interested persons (as defined in the 1940 Act) and who have no direct or
indirect financial interest in the operation of the Fund (the "Qualified
Directors") and by the sole shareholder of the Fund on _____________, 1996. The
Plan will terminate on the last day of the Offering Period.
The Plan requires the Treasurer of the Fund to provide the Directors, and
that the Directors review at least quarterly, a written report of the amounts
expended (and purposes therefor) under the Plan. Rule 12b-1 also requires that
the selection and nomination of Directors who are not interested persons of the
Fund be made by such disinterested Directors.
-16-
<PAGE>
SHAREHOLDER SERVICING AGREEMENT
As indicated in the Prospectus, the Fund has entered into a Shareholder
Servicing Agreement with AIG Equity Sales Corp. (the "Distributor") pursuant to
which the Fund pays the Distributor a fee, payable monthly at the annual rate of
up to 0.25% of net assets in the Fund, in exchange for shareholder services.
The Shareholder Servicing Agreement was originally approved on June 29, 1995 by
the Board of Directors of the Fund, including a majority of the directors who
are not interested persons (as defined in the 1940 Act). The addition of the
Fund to the Shareholder Servicing Agreement was approved on December 18, 1995 by
the Board of Directors of the Fund and by the sole shareholder of the Fund on
__________, 1996. The Shareholder Servicing Agreement may not be amended to
increase materially the amounts payable to the Distributor without the approval
of a majority of the outstanding voting securities of the Fund and no material
amendment to the Shareholder Servicing Agreement may be made except by a
majority of both the Directors and the directors who are not interested persons
of the Fund (as defined in the 1940 Act).
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Fund's and the Equity Portfolio's agreements with the Manager and the
Subadvisors recognize that in the purchase and sale of portfolio securities, the
Manager and Subadvisors will seek the most favorable price and execution and,
consistent with that policy, may give consideration to the research, statistical
and other services furnished by brokers or dealers to the Manager or Subadvisors
for their use. Such services include supplemental investment research, analysis
and reports concerning issuers, industries and securities deemed by the Manager
and Subadvisors to be beneficial to the Fund or the Equity Portfolio. In
addition, the Manager and the Subadvisors are authorized to place orders with
brokers who provide supplemental investment and market research and statistical
and economic analysis through the use of such brokers selected solely on the
basis of seeking the most favorable price and execution, although such research
and analysis may be useful to the Manager and the Subadvisors in connection with
their services to clients other than the Fund or the Equity Portfolio.
In over-the-counter markets, the Fund and the Equity Portfolio deal with
primary market-makers unless a more favorable execution or price is believed to
be obtainable. The Fund and Equity Portfolio may buy securities from or sell
securities to dealers acting as principal, except dealers with which their
directors and/or officers are affiliated.
When two or more investment advisory clients of the Manager or the
Subadvisors desire to buy or sell the same security at the same time, the
Manager or the Subadvisors may aggregate the securities to be sold or purchased
in order to obtain the most favorable price or lower brokerage commissions and
efficient execution. The securities purchased or sold are allocated by the
Manager and the Subadvisors in
-17-
<PAGE>
a manner believed to be equitable to each client. There may be possible
advantages or disadvantages of such transactions with respect to price or the
size of positions readily obtainable or saleable.
PURCHASE AND REDEMPTION OF FUND SHARES
PURCHASE OF SHARES
REDUCTIONS AVAILABLE. Shares of the Fund sold with a sales load will be
eligible for the following reductions, which are described in more detail in the
Prospectus:
VOLUME DISCOUNTS are provided if the total amount being invested in the
Fund alone, or in combination with shares of certain other mutual funds managed
by the Manager which are sold with a sales load, reaches levels indicated in the
sales load schedule set forth in the Prospectus. A contingent deferred sales
charge of 1% may be imposed upon redemption of shares of the Fund that are
purchased pursuant to a volume discount if they are redeemed within one year of
purchase.
THE RIGHT OF ACCUMULATION allows an investor to combine the amount being
invested in the Fund and shares of certain other mutual funds managed by the
Manager and sold with the same sales load to determine reduced sales loads in
accordance with the schedule in the Prospectus. The value of the shares owned
will be taken into account in orders placed through a dealer, however, only if
the Distributor is notified by the investor or dealer of the amount owned at the
time the purchase is made and is furnished sufficient information to permit
confirmation.
A LETTER OF INTENT allows an investor to purchase shares during the
Offering Period at reduced sales loads in accordance with the schedule in the
Prospectus, based on the total amount of shares of the Fund that the letter
states the investor intends to purchase plus the total net asset value of shares
of certain other mutual funds managed by the Manager purchased with a sales load
by the investor. Reduced sales loads also may apply to purchases made within
the Offering Period starting up to 90 days before the date of execution of a
letter of intent.
CERTAIN AFFILIATED PERSONS. Shares of the Fund may be sold at net asset
value to present and retired Directors, Trustees, officers, employees (and their
family members) of the Fund and to certain other persons, as more completely
described in the Fund's Prospectus under "Purchases of Shares".
PERSONS ENTITLED TO REDUCTIONS. Reductions in sales loads apply to
purchases by a "single person" including an individual; members of a family unit
comprising husband, wife and minor children; or a trustee or other fiduciary
purchasing for a single fiduciary account. Employee benefit plans qualified
under Section 401 or 457 of the Internal Revenue Code, organizations tax exempt
under Section 501(c)(3) or (13),
-18-
<PAGE>
and non-qualified employee benefit plans that satisfy uniform criteria are
considered "single persons" for this purpose.
FURTHER TYPES OF REDUCTIONS. Shares of the Fund may be issued without a
sales load in connection with the acquisition of cash and securities owned by
other investment companies and other personal holding companies, to financial
institution trust departments, to registered investment advisers exercising
investment discretionary authority with respect to the purchase of Fund shares,
or pursuant to sponsored arrangements with organizations which make
recommendations to, or permit group solicitation of, its employees, members or
participants in connection with the purchase of shares of the Fund, to separate
accounts established and maintained by an insurance company which are exempt
from registration under Section 3(c)(11) of the 1940 Act, to registered
representatives and employees (and their spouses and minor children) of any
dealer that has a sales agreement with the Distributor and shareholders of
mutual funds with investment objectives and policies similar to the Fund who
purchase shares with redemption proceeds of such funds as described in the
Prospectus.
Shares of the Fund may be sold at net asset value to these persons since
such shares require less sales effort and lower sales related expenses as
compared with sales to the general public.
MORE ABOUT REDEMPTIONS. The procedures for redemption of shares of the
Fund under ordinary circumstances are set forth in the Prospectus. In unusual
circumstances, payment may be postponed, or the right of redemption postponed
for more than seven days, if the ordinary liquidation of securities held is
prevented by the closing of an exchange or market during periods of emergency,
or such other periods ordered by the Securities and Exchange Commission. Under
these circumstances, redemption proceeds may be made in securities, subject to
the review of some state securities commissions. If payment is made in
securities, a shareholder may incur brokerage expenses in converting these
securities to cash.
DISTRIBUTION SERVICES
The Distributor, an affiliate of the Manager, acts as general distributor
of the shares of the Fund and of other mutual funds in the family of funds
sponsored by the Manager or its affiliates. As general distributor of the
Fund's shares, the Distributor normally allows concessions to all dealers, as
indicated in the Prospectus, of up to 4.25% on purchases to which the 4.75%
sales load applies, but may allow the whole amount.
The Distributor is entitled to retain any contingent deferred sales load
imposed on certain redemptions occurring within one year of purchase of shares
purchased pursuant to a volume discount.
-19-
<PAGE>
VALUATION
Net asset value per share is determined as of the close of the New York
Stock Exchange ("NYSE") (currently 4:00 p.m. New York City time), on each
business day that the NYSE is open. Currently, the NYSE is closed on New Year's
Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
The net asset value per share is determined by dividing the market value
of the Fund's securities as of the close of trading plus any cash or other
assets (including dividends and accrued interest receivable) less all
liabilities (including accrued expenses), by the number of shares outstanding.
During the Offering Period, zero coupon Treasury Securities will be valued at
the average of the last reported bid and ask prices; thereafter, in order to
ensure that an adequate amount of Treasury Securities is maintained to achieve
the Repayment Objective when shares of the Fund are redeemed, zero coupon
Treasury Securities will be valued at the last reported bid. Equity Portfolio
securities are valued at the last sales price on the securities exchange or
securities market on which such securities are primarily traded. Securities for
which there are not recent sales transactions are valued based on quotations
provided by primary market makers in such securities. Any securities for which
recent market quotations are not readily available are valued at fair value
determined in accordance with procedures approved by the Board of Directors or
the Trustees. Short-term obligations with less than sixty days remaining to
maturity are generally valued at amortized cost. Short-term obligations with
more than sixty days remaining to maturity will be valued at current market
value until the sixtieth day prior to maturity, and will then be valued on an
amortized cost basis based on the value on such date unless the Board of
Directors or the Trustees, as relevant, determines that this amortized cost
value does not represent fair market value. Expenses and fees, including the
investment management fee are accrued daily and taken into account for the
purpose of determining the net asset value of the Fund shares.
Generally, trading in foreign securities, as well as U.S. Government
securities, money market instruments and repurchase agreements, is substantially
completed each day at various times prior to the close of the NYSE. The values
of such securities used in computing the net asset value of the Fund shares are
determined at such times. Foreign currency exchange rates are also generally
determined prior to the close of the NYSE. Occasionally, events affecting the
value of such securities and such exchange rates may occur between the times at
which they are determined and the close of the NYSE, which otherwise would not
be reflected in the computation of net asset value. If during such periods
events occur which materially affect the value of such securities, the
securities will be valued at their fair market value as determined in accordance
with procedures approved by the Board of Directors or the Trustees, as relevant.
For purposes of determining the net asset value per share of the Fund,
all assets and liabilities initially expressed in foreign currencies will be
converted into U.S. dollars at the mean between the bid and offer prices of such
currencies against US
-20-
<PAGE>
dollars quoted by a major bank that is a regular participant in the foreign
exchange market or on the basis of a pricing service that takes into account the
quotes provided by a number of such major banks.
TAXES
The Fund intends to qualify for the fiscal year ending November 30, 1996
as a "regulated investment company" under the Internal Revenue Code of 1986, as
amended (the "Code"). In order to qualify, the Fund must, among other things,
(i) derive at least 90% of its annual gross income from dividends, interest,
payments with respect to securities loans, gains from the sale or other
disposition of stocks, securities or foreign currencies, and other income
(including but not limited to gains from options, futures and forward contracts)
derived with respect to the Fund's business of investing in stocks, securities
or foreign currencies; (ii) derive less than 30% of its annual gross income from
the sale or other disposition of stocks or securities (or certain options,
futures, forward contracts and foreign currencies) held for fewer than three
months; and (iii) diversify its holdings so that, at the end of each fiscal
quarter, (x) at least 50% of the value of the Fund's assets is represented by
cash, U.S. Government securities and other securities limited, in respect of any
one issuer, to an amount not greater than 5% of the value of the Fund's assets
and 10% of the outstanding voting securities of such issuer and (y) not more
than 25% of the value of the Fund's assets is represented by securities of any
one issuer (other than U.S. Government securities).
Dividends paid by the Fund and designated as derived from the Fund's
dividend income that would be eligible for the dividends received deduction if
the Fund were not a regulated investment company will be eligible, subject to
certain restrictions, for the 70% dividends received deduction available to
shareholders of the Fund that are corporations.
Income received by the Fund from sources within various foreign countries
may be subject to foreign income tax. If more than 50% of the value of the
Fund's assets at the close of its fiscal year consists of stocks or securities
of foreign corporations, the Fund may elect to "pass through" to the Fund's
shareholders the amount of foreign income taxes paid by the Fund. In such a
case, a shareholder of the Fund would be required to include in income its share
of such foreign income taxes but would be permitted (subject to certain
limitations) to either deduct such amounts in computing U.S. taxable income or
credit such amounts in computing U.S. tax payable.
If the Fund purchases shares in a foreign corporation that is a "passive
foreign investment company," the Fund itself might be subject to United States
federal income tax, and an additional charge in the nature of interest, on a
portion of any "excess distributions" from such corporation or on gain from the
disposition of such shares, even if the excess distribution is paid by the Fund
as a dividend to its shareholders. If the Fund were able and elected to treat
the passive foreign investment company as a "qualified electing fund," the
foregoing treatment would not apply and the Fund would instead be
-21-
<PAGE>
required to include in income, and distribute to its shareholders in accordance
with the Fund's distribution requirements, the Fund's pro rata share of the
ordinary earnings and net capital gains of the qualified electing fund, whether
or not distributed to the Fund.
Gains or losses attributable to foreign currency contracts, or to
fluctuations in exchange rates that occur between the time the Fund accrues
interest or other receivables or accrues expenses or other liabilities
denominated in a foreign currency and the time the Fund actually collects such
receivables or pays such liabilities are treated as ordinary income or loss.
Similarly, gains or losses on disposition of debt securities denominated in a
foreign currency attributable to fluctuations in the value of the foreign
currency between the dates of the acquisition and disposition of the security
are also treated as ordinary gain or loss. These gains or losses increase or
decrease the amount of the Fund's net investment income available to be
distributed to its shareholders as ordinary income.
Shareholders are urged to consult their tax advisers concerning the
effect of federal, state and local income taxes in their individual
circumstances. There is a possibility that a portion of the Fund's dividends
may be exempt from state tax.
PERFORMANCE INFORMATION
The Fund is a newly organized open-end management investment company. As
a result, there is currently no performance information available.
OTHER INFORMATION
CAPITAL STOCK. The Board of Directors is authorized to classify or
reclassify and issue any unissued capital stock of the Fund into any number of
series or classes without further action by the shareholders. To date, two
series of shares has been authorized, which shares constitute interests in AIG
Children's World Fund - 2005 and AIG Retiree Fund - 2003; however, the Board of
Directors may authorize further series or classes in the future. The 1940 Act
requires that where more than one series or class exists, each series or class
must be preferred over all other series or classes in respect of assets
specifically allocated to such series or class.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted by the provisions of the 1940 Act or applicable state law, or
otherwise, to the holders of the outstanding voting securities of an investment
company such as the Fund shall not be deemed to have been effectively acted upon
unless approved by the holders of a majority of the outstanding shares of each
class or series affected by such matter. Rule 18f-2 further provides that a
class or series shall be deemed to be affected by a matter unless it is clear
that the interests of each class or
-22-
<PAGE>
series in the matter are substantially identical or that the matter does not
affect any interest of such class or series. However, the Rule exempts the
selection of independent public accountants, the approval of principal
distributing contracts and the election of directors from the separate voting
requirements of the Rule.
CUSTODIAN AND ADMINISTRATOR. PNC Bank, National Association ("PNC
Bank"), Airport Business Center, International Court 2, 200 Stevens Drive,
Lester, Pennsylvania, 19113, will serve as custodian of the Fund and of the
Equity Portfolio, and will maintain direct custody of the assets of the Fund.
PNC Bank has entered into a subcustodian agreement with State Street Bank and
Trust Company ("State Street"), 1776 Heritage Drive, North Quincy, Massachusetts
02171, in respect of the assets of the Equity Portfolio. State Street is
authorized to establish and has established separate accounts in foreign
currencies and to cause securities of the Equity Portfolio to be held in
separate accounts outside the United States in the custody of non-U.S. banks.
PFPC International Ltd., 80 Harcourt Street, Dublin, Ireland, as Administrator,
maintains, under the general supervision of the Manager, certain accounting
records and determines the net asset value for the Fund. PFPC Inc., 400
Bellevue Parkway, Wilmington, Delaware 19809 acts as the Fund's Transfer Agent
and Dividend Disbursing Agent.
ACCOUNTANTS. Coopers & Lybrand L.L.P., independent auditors, have been
selected as auditors of the Fund. Their address is 1301 Avenue of the Americas,
New York, New York 10019.
FINANCIAL STATEMENTS OF FIRST GLOBAL EQUITY PORTFOLIO
The following pages include the Equity Portfolio's Statement of Assets
and Liabilities as of September 11, 1995 and the report of Coopers & Lybrand
L.L.P. thereon.
-23-
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements and Schedules:
PART A - Financial Highlights for the AIG Retiree Fund -- 2003 are not
included because it is a new series for which financial highlights are not
required to be filed.
PART B - Statement of Assets and Liabilities of the Registrant with
respect to AIG Retiree Fund -- 2003 are not included because it is a new series
for which a Statement of Assets and Liabilities is not required to be
filed.
Statement of Assets and Liabilities of First Global Equity Portfolio as of
_______________, 1995 and report of independent auditors thereon.
(b) EXHIBITS:
(1) Articles of Incorporation./1/
(1)(a) Articles of Amendment, dated June 29, 1995./2/
(1)(b) Articles of Amendment, dated August 16, 1995./3/
(1)(c) Certificate of Correction, dated September 11, 1995./4/
(1)(d) Articles Supplementary, dated November 3, 1995./5/
(1)(e) Articles of Amendment, dated January 11, 1996./6/
(2) By-laws of Registrant./1/
(3) Not Applicable.
(4) Specimen Common Stock Certificate./2/
(5)(a) Form of Management Agreement relating to AIG Children's
World Fund -- 2005./2/
(5)(b) Form of Subadvisory Agreement with AIGAM International Limited
relating to AIG Children's World Fund -- 2005./2/
(5)(c) Form of Subadvisory Agreement with AIG Global Investors, Inc
relating to AIG Children's World Fund -- 2005./2/
(5)(d) Form of Management Agreement relating to AIG Retiree Fund --
2003./5/
(5)(e) Form of Subadvisory Agreement with AIGAM International
Limited relating to AIG Retiree Fund -- 2003./5/
(5)(f) Form of Subadvisory Agreement with AIG Global Investors Inc.
relating to AIG Retiree Fund -- 2003./5/
(6)(a) Form of Distribution Agreement relating to AIG Children's World
Fund -- 2005./2/
(6)(b) Form of Distribution Agreement relating to Secured Retiree Fund --
2002./5/
(7) Not Applicable.
(8) Form of Custody Agreement./2/
(9)(a) Form of Shareholder Servicing Agreement./2/
(9)(b) Form of Administration and Accounting Services Agreement./2/
(9)(c) Form of Transfer Agency Agreement./2/
(9)(d) Powers of Attorney (included on the signature page of the referenced
filing):
(i) Registrant (other than Ms. Linda-Ann Goodwin)/1/
(ii) First Global Equity Portfolio (other than Ms. Linda-Ann
Goodwin)/2/
(iii) AIG Capital Management Corp./3/
(iv) American International Group, Inc. (other than Mr. Houghton
Freeman)/3/
(v) Mr. Houghton Freeman (Director of American International
Group, Inc.)/4/
(vi) Ms. Linda-Ann S. Goodwin (Director of Registrant and of First
Global Equity
- ----------------------
/1/ Filed with the Initial filing of this Registration Statement on April 13,
1995.
/2/ Filed with Pre-Effective Amendment No. 1 to this Registration Statement on
July 21, 1995.
/3/ Filed with Pre-Effective Amendment No. 2 to this Registration Statement on
September 7, 1995.
/4/ Filed with Pre-Effective Amendment No. 3 to this Registration Statement on
September 13, 1995.
/5/ Filed with Post-Effective Amendment No. 2 to this Registration Statement on
November 3, 1995.
/6/ Filed herewith.
<PAGE>
Portfolio /6/
(9)(e) Form of Guarantee Agreement relating to AIG Children's World Fund
-- 2005./4/
(9)(f) Form of Support Agreement relating to AIG Children's World Fund --
2005./4/
(9)(g) Form of Guarantee Agreement relating to AIG Retiree Fund --
2003./5/
(9)(h) Form of Support Agreement relating to AIG Retiree Fund -- 2003./5/
(10)(a) Opinion and Consent of counsel with respect to shares of AIG
Children's World Fund -- 2005./4/
(10)(b) Opinions and Consents of counsel with respect to the Guarantee and
the Support Agreement relating to AIG Children's World Fund --
2005./4/
(10)(c) Opinion and Consent of counsel with respect to shares of AIG
Retiree Fund - 2003./6/
(10)(d) Opinions and Consents of counsel with respect to the Guarantee
and the Support Agreement relating to AIG Retiree Fund -- 2003.
/7/
(11) Consent of independent auditors./7/
(12) Not Applicable.
(13) Form of Agreement with respect to provision of initial capital./3/
(14) Not Applicable.
(15)(a) Rule 12b-1 Plan relating to AIG Children's Fund -- 2005./2/
(15)(b) Form of Rule 12b-1 Plan relating to AIG Retiree Fund -- 2003./5/
(16) Not Applicable.
(17) Not Applicable.
(18) Not Applicable.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of __________, 1996, there were ____ holders of shares of the AIG
Children's World Fund -- 2005 series of the Registrant and ____ holders of
shares of the AIG Retiree Fund -- 2003 series of the Registrant.
ITEM 27. INDEMNIFICATION
Section 2-418 of the General Corporation Law of the State of Maryland provides
that the Registrant may indemnify its directors, officers, employees and
agents. Article Twelfth of the Registrant's Articles of Incorporation and
Article VII of the Registrant's By-Laws provide that the Registrant shall
indemnify to the fullest extent permitted by law any person made or threatened
to be made a party to any action, suit or proceeding by reason of the fact
that such person or such person's testator or intestate is or was a director,
officer or employee of the Registrant, provided that no representative of the
Registrant shall be indemnified to the extent liability results from
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such representative's office.
____________________
/2/ Filed with Pre-Effective Amendment No. 1 to this Registration Statement on
July 21, 1995.
/4/ Filed with Pre-Effective Amendment No. 3 to this Registration Statement on
September 13, 1995.
/5/ Filed with Post-Effective Amendment No. 2 to this Registration Statement on
November 3, 1995.
/6/ Filed herewith.
/7/ To be filed by subsequent amendment.
c - ii
<PAGE>
PART C. OTHER INFORMATION (CONTINUED)
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant, pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant for expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The Registrant maintains or intends to obtain, subject to availability and the
determination of the directors as to the reasonableness of insurance premiums
from time to time, insurance insuring its officers and directors against
certain liabilities incurred in their capacities as such, and insuring the
Registrant against any payments which it is obligated to make to such persons
under the foregoing indemnification provisions.
The Restated Certificate of Incorporation of AIG (the "Certificate")
provides:
"The Company shall indemnify to the full extent permitted by law any
person made, or threatened to be made, a party to an action, suit or
proceeding (whether civil, criminal, administrative or investigative) by
reason of the fact that he, his testator or intestate is or was a
director, officer or employee of the Company or serves or served any other
enterprise at the request of the Company."
Section 6.4 of AIG's By-laws contains a similar provision.
The Certificate also provides that a director will not be personally liable to
the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent that such an exemption from liability
or limitation thereof is not permitted by the Delaware General Corporation Law
(the "GCL").
Section 145 of GCL permits indemnification against expenses, fines, judgments
and settlements incurred by any director, officer or employee of AIG in the
event of pending or threatened civil, criminal, administrative or
investigative proceedings, if such person was, or was threatened to be made, a
party by reason of the fact that he is or was a director, officer or employee
of AIG. Section 145 also provides that the indemnification provided for
therein shall not be deemed exclusive of any other rights to which those
seeking indemnification may otherwise be entitled. In addition, AIG and its
subsidiaries maintain a directors' and officers' liability insurance policy.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
AIG Capital Management Corp. (Manager)
----------------------------
AIG Capital Management Corp. is a U.S. registered investment advisor which
manages the assets of the AIG Money Market Fund, a separate money market
investment portfolio of The Advisors' Inner Circle Fund. The Advisors' Inner
Circle Fund is an open end investment company that is registered under the
Investment Company Act of 1940. Current total assets under management by the
Manager is approximately $300 million.
c - iii
<PAGE>
PART C. OTHER INFORMATION (CONTINUED)
The officers and directors of the Manager are:
<TABLE>
<CAPTION>
OFFICER/ NAME OF
DIRECTOR BUSINESS/ TIME
NAME ADDRESS CAPACITY PERIOD
- -------- --------- -------- ------
AIG CAPITAL MANAGEMENT CORP.:
- ---------------------
<S> <C> <C> <C>
Robert L. Ash AIG Capital Management Corp. Chairman/Director 3/95 to
Present
AIG Asset Management, Inc. Chairman of the 3/95 to
70 Pine Street Board/Director Present
New York, NY 10270
William N. Dooley AIG Capital Management Corp. Director 6/94 to
Present
AIG Global Investment Corp. Director/ 3/88 to
(Europe) Present
Ltd.
1/11 Harbour Yard
Chelsea Harbour
London SW10 OXD, United Kingdom
American International Group, Inc. Treasurer 7/92 to
70 Pine Street Present
New York, NY 10270
AIG Asset Management, Inc. Treasurer 8/92 to
70 Pine Street Present
New York, NY 10270
Ronald A. Latz AIG Capital Management Corp. Director 6/94 to
Present
Helen Stefanis AIG Capital Management Corp. Director 3/95 to
Present
Daniel K. Kingsbury AIG Capital Management Corp. Director/President 3/95 to
Present
</TABLE>
c - iv
<PAGE>
PART C. OTHER INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
OFFICER/ NAME OF
DIRECTOR BUSINESS/ TIME
NAME ADDRESS CAPACITY PERIOD
- -------- --------- -------- ------
<S> <C> <C> <C>
AIG Equity Sales Corp. Vice President 4/95 to
80 Pine Street Present
New York, NY 10005
AIG Asset Management, Inc. Director/President 3/95 to
70 Pine Street Present
New York, NY 10270
Win J. Neuger AIG Global Investment Corp. Director 4/95 to
(Europe) Present
Ltd.
American International Group, Inc. Senior Vice President 2/95 to
70 Pine Street Present
New York, NY 10270
AIG Global Investment Corp. Director/Chairman of 3/95 to
200 Liberty Street the Present
New York, NY 10281 Board/President
AIG Asset Management, Inc. Chief Investment Officer 8/95 to
70 Pine Street Present
New York, NY 10270
AIG Capital Management Corp. Chief Investment Officer 8/95 to
Present
Linda-Ann S. AIG Capital Management Corp. Executive Vice President 8/95 to
Goodwin Present
Edward J. Lieber AIG Capital Management Corp. Vice President 6/94 to
Present
</TABLE>
c - v
<PAGE>
<TABLE>
<CAPTION>
PART C. OTHER INFORMATION (CONTINUED)
OFFICER/ NAME OF
DIRECTOR BUSINESS/ TIME
NAME ADDRESS CAPACITY PERIOD
- -------- --------- -------- ------
<S> <C> <C> <C>
John H. Blevins AIG Capital Management Corp. Vice President 3/95 to
Present
Compliance Officer 12/94
to
Present
AIG Asset Management, Inc. Vice President 3/95 to
70 Pine Street Present
New York, NY 10270
Compliance Officer 5/94 to
Present
Neil Friedman AIG Capital Management Corp. Vice President/ 3/95 to
Comptroller Present
Lori Carrick AIG Capital Management Corp. Assistant Comptroller 3/95 to
Present
Elizabeth M. Tuck AIG Capital Management Corp. Secretary 6/94 to
Present
AIG Global Investment Corp. Secretary 3/91 to
200 Liberty Street Present
New York, NY 10281
AIG Asset Management, Inc. Secretary 6/92 to
70 Liberty Street Present
New York, NY 10270
AIG Equity Sales Corp. Secretary 4/91 to
80 Pine Street Present
New York, NY 10005
==================================================================================
</TABLE>
c - vi
<PAGE>
PART C. OTHER INFORMATION (continued)
- AIG Global Investment Corp. (Europe) Ltd.
- AIG Global Investment Corp. (Europe) Ltd. ("AIG Global Europe"), based in
London, is an investment advisor registered with the Investment Management
Regulatory Organization Limited. AIG Global Europe provides fixed income and
international equity management services primarily to AIG and its
subsidiaries, but also provides investment advisory services to third parties
including two registered investment companies as described below.
AIG Global Europe has entered into a sub-advisory agreement with an affiliate,
AIG Asset Management, Inc. (a U.S. registered investment advisor), which in
turn has entered into a sub-advisory agreement with SunAmerica Asset
Management Corp. to provide foreign equity investment expertise to the
SunAmerica Global Balanced Fund, a registered investment company.
AIG Global Europe has also been retained by Alliance Capital Management L.P.
to act as sub-advisor to the Global Bond Portfolio, a separate portfolio of
Alliance Variable Products Series Fund, Inc., a registered investment
company.
Current total assets under management by AIG Global Europe exceeds $2.9
billion of which approximately $1 billion represents third party assets.
The Officers and Directors of AIG Global Europe are:
<TABLE>
<CAPTION>
OFFICER/ NAME OF
DIRECTOR BUSINESS/ TIME
NAME ADDRESS* CAPACITY PERIOD
- -------------------- ---------------------------------- ---------------------- -------------
<S> <C> <C> <C>
AIG Global Investment Corp. (Europe) Ltd.:
Ian P. Butter AIG Global Investment Corp. Director 1/92 to
(Europe) Ltd. Present
Patrick J. Dempsey AIG Global Investment Corp. Director 3/88 to
(Europe) Ltd. Present
William N. Dooley AIG Global Investment Corp. Director 3/88 to
(Europe) Ltd. Present
AIG Capital Management Corp. Director 6/94 to
70 Pine Street Present
New York, NY 10270
American International Group, Inc. Treasurer 7/92 to
70 Pine Street Present
New York, NY 10270
</TABLE>
c - vii
<PAGE>
PART C. OTHER INFORMATION (continued)
<TABLE>
<CAPTION>
OFFICER/ NAME OF
DIRECTOR BUSINESS/ TIME
NAME ADDRESS* CAPACITY PERIOD
- -------------------- ---------------------------------- ---------------------- -------------
<S> <C> <C> <C>
AIG Asset Management, Inc. Treasurer 8/92 to
70 Pine Street Present
New York, NY 10270
Siegfried Herzog AIG Global Investment Corp. Director 3/88 to
(Europe) Ltd. Present
Lynda A. Loomes AIG Global Investment Corp. Secretary 11/94
(Europe) Ltd. to
Present
Edward E. Matthews AIG Global Investment Corp. Chairman/Director 3/88 to
(Europe) Ltd. Present
American International Group, Inc. Director 3/73 to
70 Pine Street Present
New York, NY 10270
Vice Chairman 5/89 to
Present
AIG Equity Sales Corp. Director 5/87 to
80 Pine Street Present
New York, NY 10005
AIG Global Investment Corp. Director 12/85
200 Liberty Street to
New York, NY 10281 Present
Stephen C. Penney AIG Global Investment Corp. Director 3/93 to
(Europe) Ltd. Present
Peter G. Wignall AIG Global Investment Corp. Director 4/92 to
(Europe) Ltd. Present
Ian M. Coulman AIG Global Investment Corp. Director 4/95 to
(Europe) Ltd. Present
Win J. Neuger AIG Global Investment Corp. Director 4/95 to
(Europe) Ltd. Present
</TABLE>
c - viii
<PAGE>
PART C. OTHER INFORMATION (continued)
<TABLE>
<CAPTION>
OFFICER/ NAME OF
DIRECTOR BUSINESS/ TIME
NAME ADDRESS* CAPACITY PERIOD
- -------------------- ---------------------------------- ---------------------- -------------
<S> <C> <C> <C>
American International Group, Inc. Senior Vice President 2/95 to
70 Pine Street Present
New York, NY 10270
AIG Global Investment Corp. Director/Chairman of 3/95 to
200 Liberty Street the Present
New York, NY 10281 Board/President
AIG Capital Management Corp. Chief Investment Officer 8/95 to
70 Pine Street Present
New York, NY 10270
</TABLE>
* Address of AIG Global Investment Corp. (Europe) Ltd. is 1/11 Harbour Yard,
Chelsea Harbour, London SW10 OXD, United Kingdom.
AIG Global Investment Corp.
AIG Global Investment Corp. is a U.S. registered investment advisor that
provides domestic asset management services primarily to AIG and its
subsidiaries, but also provides investment advisory services to third
parties (none of which are registered investment companies). Current total
assets under management exceed $20.9 billion of which approximately $2.9
billion represents third party assets.
c - ix
<PAGE>
PART C. OTHER INFORMATION (continued)
The Officers and Directors of AIG Global Investment Corp. are:
<TABLE>
<CAPTION>
OFFICER/ NAME OF
DIRECTOR BUSINESS/ TIME
NAME ADDRESS* CAPACITY PERIOD
- -------------------- ---------------------------------- ---------------------- -------------
<S> <C> <C> <C>
AIG Global Investment Corp.
- -----------------------
Edward E. Matthews AIG Global Investment Corp. Director 12/85
200 Liberty Street to
New York, NY 10281 Present
American International Group, Inc. Director 3/73 to
70 Pine Street Present
New York, NY 10270
Vice Chairman 5/89 to
Present
AIG Global Investment Corp. Director/Chairman 3/88 to
(Europe) Present
Ltd.
1/11 Harbour Yard
Chelsea Harbour
London SW10 OXD, United Kingdom
AIG Equity Sales Corp. Director 5/87 to
80 Pine Street Present
New York, NY 10005
Petros K. Sabatacakis AIG Global Investment Corp. Director 3/92 to
200 Liberty Street Present
New York, NY 10281
American International Group, Inc. Senior Vice President 2/92 to
70 Pine Street Present
New York, NY 10270
Robert E. Sherby AIG Global Investment Corp. Vice President/ 12/93
200 Liberty Street Chief Financial Officer to
New York, NY 10281 Present
Win J. Neuger AIG Global Investment Corp. Director/Chairman of 3/95 to
200 Liberty Street the Present
New York, NY 10281 Board/President
</TABLE>
c - x
<PAGE>
PART C OTHER INFORMATION (continued)
<TABLE>
<CAPTION>
OFFICER/ NAME OF
DIRECTOR BUSINESS/ TIME
NAME ADDRESS* CAPACITY PERIOD
- -------------------- ---------------------------------- ---------------------- -------------
<S> <C> <C> <C>
AIG Global Investment Corp.
AIG Global Investment Corp. Director 4/95 to
(Europe) Present
Ltd.
1/11 Harbour Yard
Chelsea Harbour
London SW10 OXD
American International Group, Inc. Senior Vice President 2/95 to
70 Pine Street Present
New York, NY 10270
AIG Capital Management Corp. Chief Investment Officer 8/95 to
70 Pine Street Present
New York, NY 10270
Robert B. Meyer AIG Global Investment Corp. Senior Vice President 12/94
200 Liberty Street to
New York, NY 10281 Present
Robert Morello AIG Global Investment Corp. Senior Vice President 1/93 to
200 Liberty Street Present
New York, NY 10281
Thomas Lanza AIG Global Investment Corp. Vice President 1/95 to
200 Liberty Street Present
New York, NY 10281
Brian McCarthy AIG Global Investment Corp. Vice President 3/94 to
200 Liberty Street Present
New York, NY 10281
Kerry O' Sullivan AIG Global Investment Corp. Vice President 5/94 to
200 Liberty Street Present
New York, NY 10281
David B. Pinkerton AIG Global Investment Corp. Vice President 9/89 to
200 Liberty Street Present
New York, NY 10281
Managing Director 2/95 to
Present
</TABLE>
c - xi
<PAGE>
PART C OTHER INFORMATION (continued)
<TABLE>
<CAPTION>
OFFICER/ NAME OF
DIRECTOR BUSINESS/ TIME
NAME ADDRESS* CAPACITY PERIOD
- -------------------- ---------------------------------- ---------------------- -------------
<S> <C> <C> <C>
AIG Global Investment Corp.
Harry P. Rekas AIG Global Investment Corp. Vice President 4/93 to
200 Liberty Street Present
New York, NY 10281
Delia M. Thompson AIG Global Investment Corp. Vice President 10/93
200 Liberty Street to
New York, NY 10281 Present
Director of Operations 2/95 to
Present
Richard Thompson AIG Global Investment Corp. Vice President 12/85
200 Liberty Street to
New York, NY 10281 Present
Peter Tierney AIG Global Investment Corp. Vice President 5/90 to
200 Liberty Street Present
New York, NY 10281
Robert M. Troyano AIG Global Investment Corp. Comptroller 12/93
200 Liberty Street to
New York, NY 10281 Present
Elizabeth M. Tuck AIG Global Investment Corp. Secretary 3/91 to
200 Liberty Street Present
New York, NY 10281
AIG Capital Management Corp. Secretary 6/94 to
70 Pine Street Present
New York, NY 10270
AIG Equity Sales Corp. Secretary 4/91 to
80 Pine Street Present
New York, NY 10005
AIG Asset Management, Inc. Secretary 6/92 to
70 Pine Street Present
New York, NY 10270
</TABLE>
c - xii
<PAGE>
PART C OTHER INFORMATION (continued)
<TABLE>
<CAPTION>
OFFICER/ NAME OF
DIRECTOR BUSINESS/ TIME
NAME ADDRESS* CAPACITY PERIOD
- -------------------- ---------------------------------- ---------------------- -------------
<S> <C> <C> <C>
AIG Global Investment Corp.
Steve Ruoff AIG Global Investment Corp. Portfolio Analyst 2/95 to
200 Liberty Street Present
New York, NY 10281
=================================================================================================
</TABLE>
ITEM 29. PRINCIPAL UNDERWRITERS
AIG Equity Sales Corp. also acts as a principal underwriter for:
1. AIG Life Insurance Company, as depositor on behalf of Variable Account I
and Variable Account II; and
2. American International Life Assurance Company of New York, as depositor
for Variable Account A and Variable Account B.
The Officers and Directors of the Distributor are:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
- ---------------------------- ----------------------- ---------------------
<S> <C> <C>
Michele L. Abruzzo President None
80 Pine Street and Director
New York, NY 10005
Kevin N. Clowe Vice President None
70 Pine Street and Director
New York, NY 10270
Florence A. Davis General Counsel and None
70 Pine Street Director
New York, NY 10270
Kenneth F. Judkowitz Treasurer & Comptroller None
80 Pine Street
New York, NY 10005
Edward E. Matthews Director None
70 Pine Street
New York, NY 10270
</TABLE>
c - xiii
<PAGE>
PART C OTHER INFORMATION (continued)
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
- ---------------------------- ----------------------- ---------------------
<S> <C> <C>
Jerome T. Muldowney Director None
One Chase Manhattan Plz.
New York, NY 10005
Robert J. O'Connell Director None
80 Pine Street
New York, NY 10005
Julia Perlman Director of None
80 Pine Street Marketing
New York, NY 10005
Daniel K. Kingsbury Vice President President
70 Pine Street
New York, NY 10270
Philomena Scamardella Vice President and None
80 Pine Street Senior Compliance
New York, NY 10005 Officer
Ernest E. Stempel Director None
70 Pine Street
New York, NY 10270
Elizabeth M. Tuck Secretary Assistant Secretary
70 Pine Street
New York, NY 10270
Karen F. McDonald Assistant Secretary None
70 Pine Street
New York, NY 10270
</TABLE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS - All accounts, books and other
documents required to be maintained by Section 31(a) of the 1940 Act and
the Rules (17 CFR 270.31a-1 to 31a-3) promulgated thereunder will be
maintained by the following:
AIG Capital Management Corp., 70 Pine Street, New York, New York 10270
(records relating to its function as investment adviser).
PFPC International Ltd., 80 Harcourt Street, Dublin, Ireland (records relating
to its functions as Administrator).
c - xiv
<PAGE>
PART C. OTHER INFORMATION (continued)
PNC Bank, National Association, Airport Business Center, International Court
2, 200 Stevens Drive, Lester, Pennsylvania 19113 (records relating to its
function as Custodian).
AIG Equity Sales Corp., 80 Pine Street, New York, New York 10005 (records
relating to its function as Distributor).
ITEM 31. MANAGEMENT SERVICES - None not discussed in the Prospectus or
Statement of Additional Information for the Registrant.
ITEM 32. UNDERTAKINGS
The Registrant (a) undertakes to file a post-effective amendment
under the Securities Act of 1933 with financial statements of a
reasonably current date, that may be unaudited, of the AIG Retiree
Fund - 2003 within four to six months of the effective date of this
Registration Statement and (b) if requested to do so by holders of
at least ten percent of its outstanding shares, to call a meeting of
shareholders for the purpose of voting upon the removal of a
director or directors and to assist in communications with other
shareholders as required by Section 16(c) of the Investment Company
Act of 1940.
c - xv
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this registration statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in The City of New York, the State of New York, on the 15th day of
January, 1996.
AIG ALL AGES FUNDS, INC.
By: /s/ Daniel K. Kingsbury
-----------------------
Daniel K. Kingsbury
President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons, in the capacities
indicated, on January 15, 1996.
<TABLE>
<CAPTION>
<S>
Signature Title
--------- -----
<C> <C>
* Chairman of the
- ---------------------------------------------------------- Board and Director
Roger Wickers
* Director
- ----------------------------------------------------------
Robert Ash
* Director
- ----------------------------------------------------------
Paul Friedman
* Director
- ----------------------------------------------------------
Linda-Ann S. Goodwin
* Director
- ----------------------------------------------------------
Charles Vinick
/s/ Daniel K. Kingsbury
- ---------------------------------------------------------- President (principal
Daniel K. Kingsbury executive officer)
*
- ---------------------------------------------------------- Treasurer (principal financial and
J. Fergus McKeon accounting officer)
*By: /s/ Daniel K. Kingsbury
-----------------------
Daniel K. Kingsbury
As Attorney-in-Fact
</TABLE>
c - xvi
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the First Global Equity Portfolio has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Tucker's Town, Bermuda on the 18th
day of December, 1995.
FIRST GLOBAL EQUITY PORTFOLIO
By: /s/ Daniel K. Kingsbury
-----------------------
Daniel K. Kingsbury
President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons, in the capacities
indicated, on the 18th day of December, 1995.
Signature Title
--------- -----
<TABLE>
<CAPTION>
<S>
* <C>
___________________________________________ Chairman of the Board and Trustee of First
Roger Wickers Global Equity Portfolio
*
- ------------------------------------------- Trustee of First Global Equity Portfolio
Robert Ash
*
- ------------------------------------------- Trustee of First Global Equity Portfolio
Paul Friedman
*
___________________________________________ Trustee of First Global Equity Portfolio
Linda-Ann S. Goodwin
*
- ------------------------------------------- Trustee of First Global Equity Portfolio
Charles Vinick
/s/ Daniel K. Kingsbury
___________________________________________ President (principal executive
Daniel K. Kingsbury officer) of First Global Equity Portfolio
*
- ------------------------------------------- Treasurer (principal financial and
J. Fergus McKeon accounting officer) of First Global Equity
Portfolio
</TABLE>
*By: /s/ Daniel K. Kingsbury
-----------------------
Daniel K. Kingsbury
As Attorney-in-Fact
c - xvii
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Co-registrant
AIG Capital Management Corp. has duly caused this Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in The City of New York, the State of New York on the ____ day of
January, 1996.
AIG CAPITAL MANAGEMENT CORP.
By: ______________________________________________
Daniel K. Kingsbury
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons, in
the capacities indicated, on the ____ day of January, 1996.
Signature Title
--------- -----
<TABLE>
<CAPTION>
<S>
* <C>
- ------------------------------------------- Chairman of the Board and Trustee of First
Roger Wickers Global Equity Portfolio
*
- ------------------------------------------- Trustee of First Global Equity Portfolio
Robert Ash
*
- ------------------------------------------- Trustee of First Global Equity Portfolio
Paul Friedman
*
- ------------------------------------------- Trustee of First Global Equity Portfolio
Linda-Ann S. Goodwin
*
- ------------------------------------------- Trustee of First Global Equity Portfolio
Charles Vinick
*
- ------------------------------------------- President (principal executive
Daniel K. Kingsbury officer) of First Global Equity Portfolio
*
- ------------------------------------------- Treasurer (principal financial and
J. Fergus McKeon accounting officer) of First Global Equity
Portfolio
</TABLE>
*By: __________________________
Daniel K. Kingsbury
As Attorney-in-Fact
c - xviii
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the Co-
registrant American International Group, Inc. has duly caused this Amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in The City of New York, the State of New York on the
___ day of January, 1996.
AMERICAN INTERNATIONAL GROUP,INC.
BY: ______________________
Edward E. Matthews
Vice Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Amendmenet to the Registration Statement has been signed below by the following
person, in the capacities indicated, on the ___ day of January, 1996.
Signature Title
--------- -----
<TABLE>
<CAPTION>
<S>
* <C>
- ------------------------------------------- Chairman and Director (Principal Executive
M.R. Greenberg Officer) of American International Group, Inc.
*
- ------------------------------------------- Vice Chairman and Director (Principal Financial
Edward E. Matthews Officer) of American International Group, Inc.
*
- ------------------------------------------- Executive Vice President and Comptroller
Howard I. Smith (Principal Accounting Officer) of American
International Group, Inc.
*
- ------------------------------------------- Director of American International Group, Inc.
M. Bernard Aidinoff
*
- ------------------------------------------- Director of American International Group, Inc.
Lloyd M. Bentsen
*
- ------------------------------------------- Director of American International Group, Inc.
Marshall Cohen
*
- ------------------------------------------- Director of American International Group, Inc.
Barber B. Conable Jr.
*
- ------------------------------------------- Director of American International Group, Inc.
Martin Feldstein
</TABLE>
c - xix
<PAGE>
<TABLE>
<CAPTION>
<S>
<C>
Houghton Freeman
*
- ------------------------------------------- Director of American International Group, Inc.
Leslie L. Gonda
*
- ------------------------------------------- Director of American International Group, Inc.
Carla A. Hills
*
- ------------------------------------------- Director of American International Group, Inc.
Frank Hoenemeyer
*
- ------------------------------------------- Director of American International Group, Inc.
John I Howell
*
- ------------------------------------------- Director of American International Group, Inc.
Dean P. Phypers
*
- ------------------------------------------- Director of American International Group, Inc.
John J. Roberts
*
- ------------------------------------------- Director of American International Group, Inc.
Ernest E. Stempel
*
- ------------------------------------------- Director of American International Group, Inc.
Thomas R. Tizzio
*By: ----------------------------------
Edward E. Matthews
As Attorney-in-Fact
</TABLE>
c - xx
<PAGE>
EXHIBIT INDEX
A complete list of exhibits is included in Part C, Item 24(b) of the
Registration Statement. The following exhibits are filed herewith:
Sequentially
Numbered
Exhibit Page
- ------- ------------
(1)(e) Articles of Amendment, dated January 11, 1996.
(9)(d)(vi) Power of Attorney of Ms. Linda-Ann S. Goodwin.
(10)(c) Opinion and Consent of Counsel with respect to
shares of AIG Retiree Fund -- 2003.
c - xxi
<PAGE>
EXHIBIT 1(e)
ARTICLES OF AMENDMENT
TO THE CHARTER
OF
AIG ALL AGES FUNDS, INC.
THIS IS TO CERTIFY that AIG ALL AGES FUNDS, INC., a Maryland
corporation, having its principal office in Baltimore City, Maryland (the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Articles of Incorporation of the corporation is hereby
amended by redesignating the separate series of shares previously designated the
"AIG Secured Retiree Fund -- 2002," as the "AIG Retiree Fund -- 2003."
SECOND: The Board of Directors of the Corporation on December 18, 1995
duly adopted by unanimous vote resolutions in which was set forth the foregoing
amendment to the Articles of Incorporation of the Corporation. No stock entitled
to be voted on this matter was outstanding or subscribed for at the time of
approval.
IN WITNESS WHEREOF, AIG All Ages Funds, Inc. has caused these presents
to be signed in its name and on it behalf by the President and witnessed by its
Assistant Secretary on January 11, 1996.
WITNESS AIG ALL AGES FUNDS, INC.
/s/ Elizabeth M. Tuck By: /s/ Daniel K. Kingsbury
- ---------------------- ---------------------------
Elizabeth M. Tuck Daniel K. Kingsbury
Assistant Secretary President
THE UNDERSIGNED, President of AIG All Ages Funds, Inc., who executed on
behalf of the Corporation the foregoing Articles of Amendment of which this
certificate is made part, hereby acknowledges that these Articles of Amendment
are the act of the Corporation, that to the best of his knowledge, information
and belief the matters and facts set forth herein relating to the authorization
and approval of the Articles of Amendment are true in all material respects and
that this statement is made under the penalties of perjury.
By: /s/ Daniel K. Kingsbury
---------------------------
Daniel K. Kingsbury
President
<PAGE>
EXHIBIT 9(d)(vi)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints
Daniel K. Kingsbury and David T. Goss and each of them acting singly her true
and lawful attorney-in-fact and in her name, place and stead, in any and all
capacities, to sign any or all amendments, including post-effective amendments,
and supplements to Registration Statements with respect to AIG All Ages Funds,
Inc. and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that said attorney-in-fact, or his substitute, may
lawfully do or cause to by done by virtue hereof.
/s/______________________________
Linda-Ann S. Goodwin
Director of AIG All Ages Funds, Inc.
Trustee of First Global Equity Portfolio
<PAGE>
EXHIBIT 10(c)
DECHERT PRICE & RHOADS
1500 K. Street, N.W.
Washington, D.C. 20005
January 16, 1996
AIG All Ages Funds, Inc.
70 Pine Street
New York, New York 10270
Dear Ladies and Gentlemen:
In connection with Post-Effective Amendment No. 3 to the Registration
Statement on Form N-1A (File No. 33-91174) of AIG All Ages Funds, Inc., a
Maryland corporation (the "Company"), which you expect to file under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to an
indefinite number of shares of Capital Stock of the Company, par value $.001 per
share, of the series designated as AIG Secured Retiree Fund - 2002 (to be
renamed "AIG" Retiree Fund - 2003") (the "Fund", and the shares of the Fund
being referred to herein as the "Shares"), we, as your counsel, have examined
such corporate records, certificates and other documents, and such questions of
law, as we have considered necessary or appropriate for the purposes of this
opinion.
Upon the basis of such examination, we advise you that, in our opinion, the
Shares have been duly authorized to the extent of 100,000,000 Shares and, when
the Post-Effective Amendment referred to above has become effective under the
Securities Act and the Shares have been issued (a) for at least the par value
thereof in accordance with the Registration Statement referred to above, (b) so
as not to exceed the then authorized number of Shares, and (c) in accordance
with the authorization of the Board of Directors, the Shares will be duly and
validly issued, fully paid and non-assessable.
<PAGE>
AIG All Ages Funds, Inc.
January 16, 1996
Page 2
We have relied as to certain matters on information obtained from public
officials, officers of the Company and other sources believed by us to be
responsible.
The foregoing opinion is limited to the federal laws of the United States and
the General Corporation Law of the State of Maryland, and we are expressing no
opinion as to the effect of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as an exhibit to the
Post-Effective Amendment referred to above. In giving such consent, we do not
thereby admit that we are in the category of person whose consent is required
under Section 7 of the Securities Act.
Very truly yours,
DECHERT PRICE & RHOADS
