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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934 (AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement

[ ] Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))

[X] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

_______________________________________________________________________________

AIM EQUITY FUNDS, INC.
(For its Series Portfolios:
AIM Blue Chip Fund
AIM Capital Development Fund)

AIM INTERNATIONAL FUNDS, INC.
(For its Series Portfolios:
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM International Equity Fund)

AIM SUMMIT FUND, INC.

AIM TAX-EXEMPT FUNDS, INC.
(For its Series Portfolios:
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Exempt Cash Fund
Intermediate Portfolio)

AIM VARIABLE INSURANCE FUNDS, INC.
(For its Series Portfolios:
AIM V.I. Capital Appreciation Fund
AIM V.I. Diversified Income Fund
AIM V.I. Global Utilities Fund
AIM V.I. Government Securities Fund
AIM V.I. Growth Fund
AIM V.I. Growth and Income Fund
AIM V.I. International Equity Fund
AIM V.I. Money Market Fund
AIM V.I. Value Fund)
_______________________________________________________________________________

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

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

_______________________________________________________________________________

2) Aggregate number of securities to which transaction applies:

_______________________________________________________________________________

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

_______________________________________________________________________________

4) Proposed maximum aggregate value of transaction:

_______________________________________________________________________________

5) Total fee paid:

_______________________________________________________________________________

[ ] Fee paid previously with preliminary materials.

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

1) Amount Previously Paid:

_______________________________________________________________________________

2) Form, Schedule or Registration Statement No.:

_______________________________________________________________________________

3) Filing Party:

_______________________________________________________________________________

4) Date Filed:

_______________________________________________________________________________
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AIM EQUITY FUNDS, INC.
AIM INTERNATIONAL FUNDS, INC.
AIM SUMMIT FUND, INC.
AIM TAX-EXEMPT FUNDS, INC.
AIM VARIABLE INSURANCE FUNDS, INC.
11 Greenway Plaza, Suite 1919
Houston, TX 77046

December 20, 1996

Dear Shareholder:

As you may know, A I M Management Group Inc. ("AIM Management"), the parent
company of A I M Advisors, Inc. ("AIM"), the investment advisor to The AIM
Family of Funds--Registered Trademark--, has entered into an agreement under
which AIM Management will merge with a subsidiary of INVESCO plc. As a result
of this merger, it is necessary for the shareholders of each of the AIM Funds
to approve a new investment advisory agreement (and in some cases, a new
sub-advisory agreement).

The following important facts about the transaction are outlined below:

- The merger has no effect on the number of shares you own or the value of
those shares.

- The advisory fees and expenses charged to your Fund will not change as a
result of this merger.

- The investment objectives of the Fund will remain the same and key
employees of AIM will continue to manage your Funds as they have in the
past.

- The merger will not change the quality of the investment management and
shareholder services that you have received over the years.

Shareholders are also being asked to approve Directors, to approve certain
proposed changes in fundamental policies and to ratify the selection of
independent accountants. After careful consideration, the Board of Directors of
your Fund has unanimously approved these proposals and recommends that you read
the enclosed materials carefully and then vote FOR all proposals.

Since all of the AIM Funds are required to conduct shareholder meetings, you
will receive at least one statement and a proxy card for each Fund you own.
PLEASE VOTE EACH PROXY CARD YOU RECEIVE.

Your vote is important. Please take a moment now to sign and return your proxy
cards in the enclosed postage paid return envelope. If we do not hear from you
after a reasonable amount of time you may receive a telephone call from our
proxy solicitor, Shareholder Communications Corporation, reminding you to vote
your shares.

Thank you for your cooperation and continued support.

Sincerely,

/s/ CHARLES T. BAUER

Charles T. Bauer
Chairman
- ---------------------------

GROUP A
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- --------------------------------------------------------------------------------

YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN

ENCLOSED YOU WILL FIND ONE OR MORE PROXY CARDS RELATING TO EACH OF THE
FUNDS FOR WHICH YOU ARE ENTITLED TO VOTE. PLEASE INDICATE YOUR VOTING
INSTRUCTIONS ON EACH OF THE ENCLOSED PROXY CARDS, DATE AND SIGN THEM, AND RETURN
THEM IN THE ENVELOPE PROVIDED. IF YOU SIGN, DATE AND RETURN A PROXY CARD BUT
GIVE NO VOTING INSTRUCTIONS, YOUR SHARES WILL BE VOTED "FOR" THE NOMINEES FOR
TRUSTEE OR DIRECTOR NAMED IN THE ATTACHED PROXY STATEMENT AND "FOR" ALL OTHER
PROPOSALS INDICATED ON THE CARDS. IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF
FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN MAILING IN YOUR PROXY CARDS
PROMPTLY. UNLESS PROXY CARDS ARE SIGNED BY THE APPROPRIATE PERSONS AS INDICATED
IN THE INSTRUCTIONS BELOW, THEY WILL NOT BE VOTED.

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

INSTRUCTIONS FOR SIGNING PROXY CARDS

The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense involved in validating your vote if you fail
to sign your proxy card properly.

1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.

2. Joint Accounts: Either party may sign, but the name of the party signing
should conform exactly to the name shown in the registration on the proxy card.

3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of registration. For
example:

REGISTRATION VALID SIGNATURE
------------ ---------------

Trust Accounts
(1) ABC Trust Account.................................. Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d 12/28/78................ Jane B. Doe
Partnership Accounts
(1) The XYZ Partnership................................ Jane B. Smith, Partner
(2) Smith and Jones, Limited Partnership............... Jane B. Smith, General Partner
Custodial or Estate Accounts
(1) John B. Smith, Cust. f/b/o John B. Smith, Jr.
UGMA/UTMA......................................... John B. Smith
(2) Estate of John B. Smith............................ John B. Smith, Jr., Executor
Corporate Accounts
(1) ABC Corp. ......................................... ABC Corp.
John Doe, Treasurer
(2) ABC Corp. ......................................... John Doe, Treasurer
(3) ABC Corp. c/o John Doe, Treasurer.................. John Doe
(4) ABC Corp. Profit Sharing Plan...................... John Doe, Trustee

AIM EQUITY FUNDS, INC.
AIM Blue Chip Fund
AIM Capital Development Fund

AIM INTERNATIONAL FUNDS, INC.
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM International Equity Fund

AIM SUMMIT FUND, INC.

AIM TAX-EXEMPT FUNDS, INC.
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Exempt Cash Fund
Intermediate Portfolio

AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Capital Appreciation Fund
AIM V.I. Diversified Income Fund
AIM V.I. Global Utilities Fund
AIM V.I. Government Securities Fund
AIM V.I. Growth Fund
AIM V.I. Growth and Income Fund
AIM V.I. International Equity Fund
AIM V.I. Money Market Fund
AIM V.I. Value Fund

11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173

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

NOTICE OF JOINT ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 7, 1997

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

TO THE SHAREHOLDERS:

A joint annual meeting of shareholders of AIM Equity Funds, Inc. ("AEF"),
AIM International Funds, Inc. ("AIF"), AIM Summit Fund, Inc. ("ASF"), AIM
Tax-Exempt Funds, Inc. ("ATEF") and AIM Variable Insurance Funds, Inc. ("AVIF")
will be held on Friday, February 7, 1997 at 2:00 p.m. local time at 11 Greenway
Plaza, Suite 1919, Houston, Texas, with respect to each of the
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investment companies and their series portfolios, if any, listed above (such
portfolios and ASF are collectively referred to as the "Funds"), for the
following purposes:

(1) For each of AEF, AIF, ASF, ATEF and AVIF, to elect nine Directors, each
of whom will serve until his successor is elected and qualified.

(2) For each of the Funds, to approve a new Investment Advisory Agreement
with A I M Advisors, Inc.

(3) For ASF, to approve a new Sub-Advisory Agreement between A I M
Advisors, Inc. and TradeStreet Investment Associates, Inc.

(4) For each of the Funds (except AIM Blue Chip Fund, a series portfolio of
AEF), to eliminate the fundamental investment policy prohibiting or
restricting investments in other investment companies and/or to amend
certain related fundamental investment policies.

(5) For AIM International Equity Fund, a series portfolio of AIF, to
approve the elimination of the fundamental investment policy
prohibiting investments in companies with less than three years of
continuous operations.

(6) For each of AEF, AIF, ASF and ATEF, to ratify the selection of KPMG
Peat Marwick LLP as independent accountants for the fiscal years ending
in 1997.

(7) For AVIF, to ratify the selection of Tait, Weller & Baker as
independent accountants for the fiscal year ending in 1997.

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

Shareholders of record at the close of business on December 3, 1996 are
entitled to vote at the annual meeting and any adjournments. If you attend the
annual meeting, you may vote your shares in person. If you expect to attend the
annual meeting in person, please notify the Funds by calling 1-800-952-3502. If
you do not expect to attend the annual meeting, please fill in, date, sign and
return the proxy card in the enclosed envelope which requires no postage if
mailed in the United States.

Special Note to AVIF Shareholders: Variable annuity or variable life
insurance contractowners who are entitled to instruct the voting of AVIF shares
attributable to their contracts may do so by returning the accompanying voting
instruction form in the enclosed envelope.

It is important that you return your signed proxy card promptly so that a
quorum may be assured.

December 20, 1996

Charles T. Bauer
Chairman of the Boards of Directors

ii
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AIM EQUITY FUNDS, INC.
AIM Blue Chip Fund
AIM Capital Development Fund

AIM INTERNATIONAL FUNDS, INC.
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM International Equity Fund

AIM SUMMIT FUND, INC.

AIM TAX-EXEMPT FUNDS, INC.
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Exempt Cash Fund
Intermediate Portfolio

11 Greenway Plaza, Suite 1919, Houston, Texas 77046-1173

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

JOINT PROXY STATEMENT

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

JOINT ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 7, 1997

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

The accompanying proxy is solicited by the Board of Directors of each of
AIM Equity Funds, Inc. ("AEF"), AIM International Funds, Inc. ("AIF"), AIM
Summit Fund, Inc. ("ASF"), AIM Tax-Exempt Funds, Inc. ("ATEF") and AIM Variable
Insurance Funds, Inc. ("AVIF") (collectively referred to as the "Companies") on
behalf of the series portfolios listed above (collectively with ASF, the
"Funds"), in connection with the joint annual meeting of shareholders of the
Companies to be held at the offices of A I M Advisors, Inc. ("AIM"), 11 Greenway
Plaza, Suite 1919, Houston, Texas at 2:00 p.m. local time on Friday, February 7,
1997 (the "Annual Meeting"). A shareholder can revoke the proxy prior to its use
by appearing at the Annual Meeting and voting in person, by giving written
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notice of such revocation to the Secretary of the applicable Company, or by
returning a subsequently dated proxy. If you expect to attend the Annual Meeting
in person, please notify the Funds by calling 1-800-952-3502.

The following table summarizes each proposal to be presented at the Annual
Meeting and the Funds to be solicited pursuant to this joint proxy statement
with respect to such proposal:

PROPOSAL AFFECTED COMPANIES OR FUNDS
- -------- ---------------------------

1. Election of Directors All Companies
2. Approval of New Advisory Agreement All Funds
3. Approval of New Sub-Advisory Agreement ASF
4. Elimination of Fundamental Investment Policy All Funds except
Prohibiting or Restricting Investments in AIM Blue Chip Fund
Other Investment Companies and/or Amendment
of Certain Related Fundamental Investment
Policies
5. Elimination of Fundamental Investment Policy AIM International Equity Fund
Prohibiting Investments in Companies with
Less Than Three Years of Continuous
Operation
6. Ratification of KPMG Peat Marwick LLP as AEF, AIF ASF and ATEF
Independent Accountants
7. Ratification of Tait, Weller & Baker as AVIF
Independent Accountants

Upon the request of any shareholder, each of the Funds will furnish,
without charge, a copy of such Fund's annual report for its most recent fiscal
year together with any subsequent semi-annual report. All such requests should
be directed to AIM at 1-800-347-4246.

VOTING

At the Annual Meeting, shareholders of record at the close of business on
December 3, 1996 (the "Record Date") will be entitled to one vote per share on
the applicable proposals set forth in the table above, with proportional votes
for fractional shares. Each of the Companies had the following number of shares
outstanding on the Record Date: AEF, 1,114,141,489.255; AIF, 236,058,863.408;
ASF, 97,448,456.301; ATEF, 49,059,278.964; and AVIF, 141,886,386.562. The number
of shares outstanding on the Record Date for each series portfolio of AEF, AIF,
ASF, ATEF and AVIF is set forth in Annex A. It is expected that this joint proxy
statement (the "proxy statement") and the accompanying proxy will be first sent
to shareholders on or about December 20, 1996.

The affirmative vote of a plurality of votes cast is necessary to elect
each Company's Board of Directors (i.e., the nominees receiving the most votes
will be elected) (Proposal 1). The affirmative vote of the holders of a
"majority of the outstanding voting securities" of each Fund, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act") is required to
approve each Fund's new Investment Advisory Agreement (Proposal 2), and, for
ASF, the new Sub-Advisory Agreement (Proposal 3), and to approve the elimination
of, and changes to, each applicable Fund's fundamental

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investment policies (Proposals 4 and 5). The 1940 Act defines a "majority of the
outstanding voting securities" of a Fund to mean the lesser of (a) the vote of
holders of 67% or more of the voting shares of the Fund present in person or by
proxy at the Annual Meeting, if the holders of more than 50% of the outstanding
voting shares of the Fund are present in person or by proxy, or (b) the vote of
the holders of more than 50% of the outstanding voting shares of the Fund. The
affirmative vote of a majority of votes cast is necessary to ratify the
selection of KPMG Peat Marwick LLP and Tait, Weller & Baker as independent
accountants for the applicable Company (Proposals 6 and 7).

The Board of Directors of each of the Companies has named Charles T. Bauer,
Chairman, Robert H. Graham, President, and Carol F. Relihan, Secretary, of each
of the Companies, as proxies. Unless specific instructions are given to the
contrary in the accompanying proxy, the proxies will vote FOR the election of
each Director named in the proxy statement, FOR the approval of the new
Investment Advisory Agreement for each of the Funds, FOR the approval of the new
Sub-Advisory Agreement for ASF, FOR the proposal to eliminate each applicable
Fund's fundamental investment policy prohibiting or restricting investments in
other investment companies and/or to amend certain related fundamental
investment policies, FOR the proposal to eliminate AIM International Equity
Fund's fundamental investment policy prohibiting investments in companies with
less than three years of continuous operations, FOR the ratification of the
selection of KPMG Peat Marwick LLP as independent accountants for all Companies
other than the series portfolios of AVIF, and FOR the ratification of the
selection of Tait, Weller & Baker as independent accountants for AVIF.

Abstentions and broker non-votes (i.e., proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other person entitled to vote shares on a particular matter with
respect to which the broker or nominee does not have discretionary power) with
respect to any proposal will be counted for purposes of determining whether a
quorum is present at the Annual Meeting. Abstentions and broker non-votes do not
count as votes cast but have the same effect as casting a vote against proposals
that require the vote of a majority of the shares present at the Annual Meeting,
provided a quorum exists.

Special Note to AVIF Shareholders: Participating life insurance companies
("Insurers") are required to permit their variable annuity or life insurance
contractowners ("Contractowners") to instruct them regarding the vote of AVIF
shares attributable to their contracts. Insurers also are required to vote the
AVIF shares that they own in a consistent manner. Accordingly, each Insurer will
vote AVIF shares attributable to contracts in accordance with timely
instructions from Contractowners. Each Insurer will vote AVIF shares for which
no timely instructions have been received, and all other shares owned by the
Insurer, in proportion (whether for, against or in abstention) to the shares for
which timely instructions have been received.

The Board of Directors of each of the Companies currently knows of no other
matters to be presented at the Annual Meeting. If any other matters properly
come before the Annual Meeting, the proxies will vote in accordance with their
best judgment. The proxies may propose to adjourn the meeting to permit further
solicitation of proxies or for other purposes. Any such adjournment will require
the affirmative vote of a majority of the votes cast.

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PROPOSAL 1 --

ELECTION OF DIRECTORS

For election of Directors at the Annual Meeting, the Board of Directors of
each of the Companies has approved the nomination of Charles T. Bauer, Bruce L.
Crockett, Owen Daly II, Carl Frischling, Robert H. Graham, John F. Kroeger,
Lewis F. Pennock, Ian W. Robinson, and Louis S. Sklar, each of whom is currently
a Director of each of the Companies, each to serve as Director until his
successor is elected and qualified. All of the nominees presently serve as
Directors, Trustees or officers of the ten open-end management investment
companies advised by AIM (all such investment companies and their series
portfolios, if any, are referred to collectively as the "AIM Funds").

The proxies will vote for the election of the nominees named below unless
authority to vote for any or all of the nominees is withheld in the proxy. Each
of the nominees has indicated that he is willing to serve as a Director. If any
or all of the nominees should become unavailable for election due to events not
now known or anticipated, the persons named as proxies will vote for such other
nominee or nominees as the Directors who are not "interested persons" of the
Companies, as defined in the 1940 Act, may recommend.

The following table sets forth certain information concerning the
Directors:

(1) PRINCIPAL OCCUPATION/AFFILIATIONS DURING
NAME (AGE) DIRECTOR SINCE PAST FIVE YEARS AND (2) CURRENT DIRECTORSHIPS
- ---------- --------------- -----------------------------------------------

Charles T. Bauer(77)* AEF 05/20/88 (1) Director, Chairman and Chief Executive
AIF 10/30/91 Officer, A I M Management Group Inc.; and
ASF 02/17/82 Chairman of the Board of Directors, A I M
ATEF 05/03/93 Advisors, Inc., A I M Capital Management, Inc.,
AVIF 01/22/93 A I M Distributors, Inc., A I M Fund Services,
Inc., A I M Institutional Fund Services, Inc.
and Fund Management Company. (2)
Director/Trustee of the AIM Funds.
Bruce L. Crockett(52) AEF 10/04/93 (1) Formerly, Director, President and Chief
AIF 12/08/92 Executive Officer, COMSAT Corporation (includes
ASF 12/08/92 COMSAT World Systems, COMSAT Mobile
ATEF 05/05/93 Communications, COMSAT Video Enterprises,
AVIF 02/25/93 COMSAT RSI and COMSAT International Ventures);
President and Chief Operating Officer, COMSAT
Corporation; President, World Systems Division,
COMSAT Corporation; and Chairman, Board of
Governors of INTELSAT; (each of the COMSAT
companies listed above is an international
communication, information and
entertainment-distribution services company).
(2) Director/Trustee of the AIM Funds.

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

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

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(1) PRINCIPAL OCCUPATION/AFFILIATIONS DURING
NAME (AGE) DIRECTOR SINCE PAST FIVE YEARS AND (2) CURRENT DIRECTORSHIPS
- ---------- --------------- -----------------------------------------------

Owen Daly II(72) AEF 05/24/88 (1) Formerly, Director, CF&I Steel Corp.,
AIF 12/10/91 Monumental Life Insurance Company and
ASF 02/18/87 Monumental General Insurance Company; and
ATEF 05/05/93 Chairman of the Board of Equitable
AVIF 02/25/93 Bancorporation. (2) Director/Trustee of the AIM
Funds; and Director, Cortland Trust Inc.
(investment company).
Carl Frischling(59)** AEF 05/24/88 (1) Partner, Kramer, Levin, Naftalis & Frankel
AIF 12/10/91 (law firm). Formerly, Partner, Reid & Priest
ASF 02/17/82 (law firm); and prior thereto, Partner,
ATEF 05/05/93 Spengler Carlson Gubar Brodsky & Frischling
AVIF 05/01/93 (law firm). (2) Director/Trustee of the AIM
Funds.
Robert H. Graham(50)*** AEF 05/10/94 (1) Director, President and Chief Operating
AIF 05/10/94 Officer, A I M Management Group Inc.; Director
ASF 05/10/94 and President, A I M Advisors, Inc.; and
ATEF 05/10/94 Director and Senior Vice President, A I M
AVIF 01/22/93 Capital Management, Inc., A I M Distributors,
Inc., A I M Fund Services, Inc., A I M
Institutional Fund Services, Inc. and Fund
Management Company.
(2) Director/Trustee of the AIM Funds.
John F. Kroeger(72) AEF 05/24/88 (1) Formerly, Consultant, Wendell & Stockel
AIF 12/10/91 Associates, Inc. (consulting firm).
ASF 04/21/82 (2) Director/Trustee of the AIM Funds; and
ATEF 05/05/93 Director, Flag Investors International Fund,
AVIF 02/25/93 Inc., Flag Investors Emerging Growth Fund,
Inc., Flag Investors Telephone Income Fund,
Inc., Flag Investors Equity Partners Fund,
Inc., Total Return U.S. Treasury Fund, Inc.,
Flag Investors Intermediate Term Income Fund,
Inc., Managed Municipal Fund, Inc., Flag
Investors Value Builder Fund, Inc., Flag
Investors Maryland Intermediate Tax-Free Income
Fund, Inc., Flag Investors Real Estate
Securities Fund, Inc., Alex Brown Cash Reserve
Fund, Inc. and North American Government Bond
Fund, Inc. (investment companies).

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

** Mr. Frischling is an "interested person" of each Company, as defined in the
1940 Act, primarily because of payments received by his law firm for
services to the AIM Funds.

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

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(1) PRINCIPAL OCCUPATION/AFFILIATIONS DURING
NAME (AGE) DIRECTOR SINCE PAST FIVE YEARS AND (2) CURRENT DIRECTORSHIPS
- ---------- --------------- -----------------------------------------------

Lewis F. Pennock(54) AEF 05/24/88 (1) Attorney in private practice in Houston,
AIF 10/30/91 Texas. (2) Director/Trustee of the AIM Funds.
ASF 04/21/82
ATEF 05/05/93
AVIF 02/25/93
Ian W. Robinson(73) AEF 10/04/93 (1) Formerly, Executive Vice President and
AIF 12/08/92 Chief Financial Officer, Bell Atlantic
ASF 09/27/93 Management Services, Inc. (provider of
ATEF 05/05/93 centralized management services to telephone
AVIF 02/25/93 companies); Executive Vice President, Bell
Atlantic Corporation (parent of seven telephone
companies); and Vice President and Chief
Financial Officer, Bell Telephone Company of
Pennsylvania and Diamond State Telephone
Company. (2) Director/Trustee of the AIM Funds.
Louis S. Sklar(56) AEF 09/27/89 (1) Executive Vice President, Development and
AIF 10/30/91 Operations, Hines Interests Limited Partnership
ASF 09/27/89 (real estate development). (2) Director/Trustee
ATEF 05/05/93 of the AIM Funds.
AVIF 02/25/93

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

The Companies do not hold regular annual meetings at which Directors are
elected.

During the year ending December 31, 1996, the Companies' Boards of
Directors met eight times. Each Company has three standing committees of its
Board of Directors: the Audit Committee, the Investments Committee and the
Nominating and Compensation Committee. During the year ending December 31, 1996,
each Company's Audit Committee met four times, Investments Committee met four
times, and Nominating and Compensation Committee met two times. During such
year, all of the Companies' Directors attended at least 75% of the aggregate of
the number of meetings of the Boards of Directors and all committees.

The members of the Audit Committee of each Company are Messrs. Daly,
Kroeger (Chairman), Pennock and Robinson. The Audit Committee for each Company
is responsible for meeting with the Fund's auditors to review audit procedures
and results and to consider any matters arising from an audit to be brought to
the attention of the Directors as a whole with respect to each Company's fund
accounting or its internal accounting controls, or for considering such other
matters as the Board of Directors determines. None of the members of the Audit
Committees is an "interested person" of any Company, as defined by the 1940 Act.

The members of the Investments Committee of each Company are Messrs. Bauer,
Crockett, Daly (Chairman), Kroeger and Pennock. The Investments Committee is
responsible for reviewing portfolio compliance, brokerage allocation, portfolio
investment pricing issues, interim dividend and distribution issues, and
considering such other matters as the Board of Directors may determine. Mr.
Bauer is an "interested person" of the Companies, as defined by the 1940 Act.

The members of the Nominating and Compensation Committee of each Company
are Messrs. Crockett, Daly, Kroeger, Pennock (Chairman) and Sklar. The
Nominating and Compensa-

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tion Committee is responsible for considering and nominating individuals to
stand for election as Directors reviewing from time to time the compensation
payable to the Directors who are not "interested persons" of the Companies, as
defined by the 1940 Act, and considering such other matters as the Board of
Directors may from time to time determine. The Nominating and Compensation
Committee of each Company has sole authority to nominate persons for Directors
of such Company, but shareholders may submit names of individuals for the
Committee's consideration. None of the members of the Nominating and
Compensation Committee is an "interested person" of any Company, as defined by
the 1940 Act.

COMPENSATION OF DIRECTORS

Each Director is reimbursed for expenses incurred in attending each meeting
of the Boards of Directors or any committee thereof. Each Director who is not
also an officer of the Companies is compensated for his services according to a
fee schedule which recognizes the fact that such Director also serves as a
Director or Trustee of other AIM Funds. Each such Director receives a fee,
allocated among the AIM Funds, which consists of an annual retainer component
and a meeting fee component.

Set forth below is information regarding compensation paid or accrued
estimated for the calendar year ending December 31, 1996 for each Director of
the Companies:

RETIREMENT
AGGREGATE COMPENSATION FROM THE BENEFITS TOTAL
COMPANIES(1) ACCRUED BY COMPENSATION
------------------------------------------- ALL AIM FROM ALL AIM
DIRECTOR AEF AIF ASF ATEF AVIF FUNDS(2) FUNDS(3)
- -------- ------- ------ ------ ------ ------ ---------- ------------

Charles T. Bauer.......... -0- -0- -0- -0- -0- -0- -0-
Bruce L. Crockett......... $18,347 $5,204 $1,668 $2,807 $8,814 $ 38,621 $ 67,000
Owen Daly II.............. 18,276 5,153 1,655 2,769 8,700 82,607 67,000
Carl Frischling........... 18,347 5,204 1,668 2,807 8,814 56,683 67,000
Robert H. Graham.......... -0- -0- -0- -0- -0- -0- -0-
John F. Kroeger........... 17,777 5,011 1,604 2,685 8,437 83,654 65,000
Lewis F. Pennock.......... 18,026 5,082 1,630 2,727 8,569 33,702 66,000
Ian W. Robinson........... 18,347 5,204 1,668 2,807 8,814 64,973 67,000
Louis S. Sklar............ 18,069 5,126 1,644 2,766 8,685 47,593 65,500

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

(1) The total amount of compensation deferred by all Directors of the Companies
estimated for the year ending December 31, 1996, including interest earned
thereon, is $75,752 for AEF, $20,547 for AIF, $7,108 for ASF, $11,850 for
ATEF and $36,558 for AVIF.

(2) During the year ending December 31, 1996, the total amount of expenses
allocated to the Companies in respect of such retirement benefits is
$163,136 for AEF, $19,910 for AIF, $9,244 for ASF, $1,210 for ATEF and
$8,549 for AVIF.

(3) Each Director serves as a Director or Trustee of a total of ten AIM Funds.
Data reflect estimated total compensation earned during the calendar year
ending December 31, 1996. Does not include accrued retirement benefits or
earnings on deferred compensation.

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AIM FUNDS RETIREMENT PLAN FOR ELIGIBLE DIRECTORS/TRUSTEES

Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Retirement Plan"), each Director who is an "Eligible
Director" (as defined in the Retirement Plan) may be entitled to certain
benefits upon retirement from the Boards of Directors. Pursuant to the
Retirement Plan, the normal retirement date is the date on which the Eligible
Director has attained age 65 and has completed at least five years of continuous
service with one or more of the AIM Funds. Each Eligible Director is entitled to
receive an annual benefit from the AIM Funds commencing on the first day of the
calendar quarter coincident with or following his date of retirement equal to
75% of the retainer paid or accrued by the AIM Funds for such Eligible Director
during the twelve-month period immediately preceding the Eligible Director's
retirement (including amounts deferred under a separate agreement between the
AIM Funds and the Eligible Director) for the number of such Eligible Director's
years of service (not in excess of ten years of service) completed with respect
to any of the AIM Funds. If an Eligible Director dies after attaining the normal
retirement date but before receipt of any benefits under the Retirement Plan
commences, the Eligible Director's surviving spouse (if any) shall receive a
quarterly survivor's benefit equal to 50% of the amount payable to the deceased
Eligible Director for no more than ten years beginning the first day of the
calendar quarter following the date of the Eligible Director's death. Payments
under the Retirement Plan are not secured or funded by any AIM Fund.

Set forth below is a table that shows the estimated annual benefits payable
to an Eligible Director upon retirement assuming various final annual
compensation and years of service classifications. The estimated credited years
of service for Messrs. Crockett, Daly, Frischling, Kroeger, Pennock, Robinson
and Sklar are 9, 10, 19, 19, 15, 9 and 7, respectively, although, as noted
above, the benefits payable are based upon no more than ten years of service.

ESTIMATED BENEFITS UPON RETIREMENT

ANNUAL COMPENSATION
PAID BY ALL AIM FUNDS
NUMBER OF YEARS OF -------------------------------
SERVICE WITH THE AIM FUNDS $55,000 $60,000 $65,000
- -------------------------- ------- ------- -------

10......................................... $41,250 $45,000 $48,750
9......................................... 37,125 40,500 43,875
8......................................... 33,000 36,000 39,000
7......................................... 28,875 31,500 34,125
6......................................... 24,750 27,000 29,250
5......................................... 20,625 22,500 24,375

DEFERRED COMPENSATION AGREEMENTS

Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of this
paragraph only, the "Deferring Directors") have each executed a Deferred
Compensation Agreement (collectively, the "DC Agreements"). Pursuant to the DC
Agreements, the Deferring Directors may elect to defer receipt of up to 100% of
their compensation payable by the Companies, and such amounts are placed into a
deferral account. Currently, the Deferring Directors may select various AIM
Funds in which all or part of their deferral accounts shall be deemed to be
invested. Distributions from the Deferring Directors' deferral accounts will be
paid in cash generally in equal quarterly installments over a period

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of ten years beginning on the date the Deferring Director's retirement benefits
commence under the Retirement Plan. The Companies' Boards of Directors, in their
sole discretion, may accelerate or extend the distribution of such deferral
accounts after a Deferring Director's termination of service as a Director of a
Company. If a Deferring Director dies prior to the distribution of amounts in
his deferral account, the balance of the deferral account will be distributed to
his designated beneficiary in a single lump sum payment as soon as practicable
after such Deferring Director's death. The DC Agreements are not funded and,
with respect to the payments of amounts held in the deferral accounts, the
Deferring Directors have the status of unsecured creditors of the Companies and
of each other AIM Fund from which they are deferring compensation.

PROPOSAL 2 --

APPROVAL OF INVESTMENT ADVISORY AGREEMENT

INTRODUCTION

Shareholders are being asked to approve new Investment Advisory Agreements
(collectively, the "New Advisory Agreements") that have no material changes in
their terms and conditions, no changes in fees, and no material changes in the
way the Funds are managed, advised or operated.

AIM has served as investment advisor to each of the Funds from the dates
set forth in Annex B and currently serves pursuant to advisory agreements
(collectively, the "Current Advisory Agreements") executed on various dates, as
set forth in Annex B. On May 14, 1996, the Board of Directors of AEF, AIF, ASF,
ATEF and AVIF, including a majority of the Directors who are not interested
persons of each such Company or AIM (the "Independent Directors"), voted to
continue the Current Advisory Agreements for an additional year until June 30,
1997.

The Funds are seeking shareholder approval of the New Advisory Agreements
because of the technical requirements of the 1940 Act that apply to the merger
(the "Merger") described below under "Merger of AIM Management and INVESCO."
Because the Merger will result in a transfer of more than 25% of the outstanding
voting shares of A I M Management Group Inc. ("AIM Management"), the direct
parent of AIM, an "assignment" of the Current Advisory Agreements will occur
under the 1940 Act. The Current Advisory Agreements provide that they will
terminate automatically upon their assignment, as required by the 1940 Act. As
discussed below, the Merger will not cause any change in the operation of AIM's
business.

At a meeting held on December 10 and 11, 1996, the Board of Directors of
AEF, AIF, ASF, ATEF and AVIF, including a majority of the Independent Directors,
approved, subject to shareholder approval, the New Advisory Agreements. A copy
of a form of the New Advisory Agreements is attached hereto as Annex C. In
approving the New Advisory Agreements, the Boards of Directors took into account
the terms of the Merger. There are no material differences between the
provisions of the Current Advisory Agreements and the New Advisory Agreements. A
description of such agreements is provided below under "Terms of the Advisory
Agreements." Such description is only a summary and is qualified by reference to
the attached Annex C.

If the conditions to the Merger are not met or waived or if the merger
agreement between AIM Management and INVESCO is terminated, the Merger will not
be consummated, and the Current Advisory Agreements will remain in effect. If
the New Advisory Agreements are approved, and the

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Merger is thereafter consummated, the New Advisory Agreements will be executed
and become effective on the Closing Date, as defined below. In the event that
any of the New Advisory Agreements is not approved with respect to any Fund and
the Merger is consummated, the Board of Directors of the applicable Company will
determine what action to take, in any event subject to the approval of
shareholders of such Fund.

MERGER OF AIM MANAGEMENT AND INVESCO

On November 4, 1996, AIM Management (the parent of AIM) entered into an
agreement and plan of merger (the "Merger Agreement") with INVESCO plc
("INVESCO"). The Merger Agreement provides for the merger of AIM Management into
INVESCO Group Services, Inc., a wholly owned U.S. subsidiary of INVESCO, or into
another wholly owned U.S. subsidiary of INVESCO (in either case, "INVESCO Sub").

INVESCO is an English holding company whose shares are publicly traded on
the London Stock Exchange. American Depositary Shares evidencing such shares are
traded on the New York Stock Exchange. INVESCO and its subsidiaries are an
independent investment management group with a major presence in the
institutional investment management and retail mutual fund businesses in the
United States and Europe, and a growing presence in the Pacific. INVESCO's U.S.
subsidiaries manage individualized investment portfolios of equity, fixed income
and real estate securities for institutional clients through five business
units. Each unit utilizes a particular investment style in managing assets, and
most of these units also serve as advisor or sub-advisor to one or more of
INVESCO's U.S. mutual funds. INVESCO's European region serves both institutional
and individual investors through six major business units with facilities in the
United Kingdom, the Channel Islands, Luxembourg and France. INVESCO has also
established relationships with substantial financial organizations in Italy, the
Netherlands, Spain and Portugal. INVESCO's Pacific region manages assets of
clients based in Asia and Australia on a local, regional or global basis. It
also manages investments in the region for INVESCO clients based outside the
region. At September 30, 1996, INVESCO's assets under management were in excess
of $90 billion.

Following the Merger, INVESCO will be renamed AMVESCO plc ("AMVESCO").
AMVESCO will consist of two major complementary businesses, one comprising
principally its United States institutional and international businesses, and
the other comprising principally its United States retail mutual fund and
defined contribution plan businesses. Each of these businesses will be directed
by a separate management committee. Charles W. Brady, the Chairman of INVESCO,
will head the management committee for AMVESCO's U.S. institutional and
international businesses. Robert H. Graham, President and Chief Operating
Officer of AIM Management, will become President and Chief Executive Officer of
AIM Management's successor and will head the management committee directing
AMVESCO's United States retail businesses. Charles T. Bauer, currently Chairman
and Chief Executive Officer of AIM Management, will become Vice Chairman of
AMVESCO and Chairman of AIM Management's successor. AIM Management and INVESCO
believe that their businesses are highly complementary and that the expected
benefits resulting from the Merger include broader product range, expanded
distribution capability, increased globalization, greater capacity in defined
contribution plans, and increased financial strength and independence.

AIM has advised the AIM Funds that the Merger is not expected to have a
material effect on the operations of the AIM Funds or on their shareholders. No
material change in investment philosophy, policies or strategies is currently
envisioned. Following the Merger, AIM will continue to be a wholly

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16

owned subsidiary of the successor to AIM Management. The Merger Agreement does
not, by its terms, contemplate any changes, other than changes in the ordinary
course of business, in the management or operation of AIM relating to the AIM
Funds, the personnel managing the AIM Funds or other services provided to and
business activities of the AIM Funds. The Merger also is not expected to result
in material changes in the business, corporate structure or composition of the
senior management or personnel of AIM. Based on the foregoing, AIM does not
anticipate that the Merger will cause a reduction in the quality of services
provided to the AIM Funds, or have any adverse effect either on AIM's ability to
fulfill its respective obligations under the New Advisory Agreements, or on its
ability to operate its businesses in a manner consistent with its current
practices.

Under the Merger Agreement, each of INVESCO and INVESCO Sub has covenanted
and agreed that it will comply, and use all reasonable efforts to cause
compliance on behalf of its affiliates, with the provisions of Section 15(f) of
the 1940 Act. Section 15(f) provides, in pertinent part, that an investment
advisor and its affiliates may receive any amount of benefit in connection with
a sale of securities of, or a sale of any other interest in, such investment
advisor that results in an "assignment" of an investment advisory contract as
long as two conditions are met. First, no "unfair burden" may be imposed on the
investment company as a result of the Merger. The term "unfair burden," as
defined in the 1940 Act, includes any arrangement during the two-year period
after the transaction whereby the investment advisor (or predecessor or
successor investment advisor) or any interested person of any such advisor
receives or is entitled to receive any compensation directly or indirectly from
the investment company or its security holders (other than fees for bona fide
investment advisory or other services) or from any person in connection with the
purchase or sale of securities or other property to, from, or on behalf of the
investment company (other than fees for bona fide principal underwriting
services). No such compensation arrangements are contemplated in connection with
the Merger.

The second condition is that, for a period of three years after the
transaction occurs, at least 75% of the members of the board of directors of the
investment company advised by such advisor are not "interested persons" (as
defined in the 1940 Act) of the new or the old investment advisor. The Board of
Directors that you are being asked to elect in Proposal No. 1 meets this 75%
requirement.

BOARDS OF DIRECTORS EVALUATION

At meetings with the Boards of Directors/Trustees of the AIM Funds
beginning in September, 1996, representatives of AIM Management began discussing
with the Boards the possibility of a merger between AIM Management and INVESCO.
At a meeting in person held on September 27 and 28, 1996, the Boards of
Directors/Trustees of the AIM Funds appointed a special committee (the "Special
Committee"), consisting of the Directors/Trustees of the AIM Funds who are not
interested persons of AIM or INVESCO, to review the proposed Merger, consider
its potential impact on the AIM Funds and their shareholders, and make
recommendations to the Boards of Directors/Trustees of the AIM Funds with
respect to the approval of the New Advisory Agreements in view of the proposed
Merger. Directors/Trustees of the AIM Funds who are members of the Special
Committee are Messrs. Crockett, Daly, Frischling, Kroeger, Pennock, Robinson and
Sklar. The Special Committee met with its legal counsel ("Special Counsel"), who
assisted it in its deliberations concerning approval of the New Advisory
Agreements. At a meeting in person held on November 19, 1996, representatives of
AIM Management and INVESCO discussed with the Boards of Directors/Trustees of
the AIM Funds the specific terms of the Merger Agreement.

11
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The Special Committee met separately with Special Counsel on November 8,
1996, November 19, 1996 and December 2, 1996 to consider and review the
Directors'/Trustees' fiduciary obligations and the nature and extent of
additional information to be requested by them to evaluate the New Advisory
Agreements and the potential impact of the Merger on the AIM Funds and their
shareholders. Between November 8, 1996 and December 10, 1996, the Special
Committee and Special Counsel requested and received additional information from
AIM Management, INVESCO and their counsel, and held telephone conferences,
regarding the proposed Merger and its potential impact on the AIM Funds and
their shareholders. On December 10, 1996, the Special Committee and Special
Counsel met separately with representatives of AIM Management and INVESCO to
review various aspects of the proposed Merger, and to review additional
information regarding INVESCO and the future plans for AIM Management and AIM.

In connection with its review, the Special Committee possessed or obtained
substantial information regarding: the management, financial position and
business of INVESCO and its subsidiaries; the history of INVESCO's and its
subsidiaries' business and operations; the performance of the investment
companies and private accounts advised by INVESCO and its subsidiaries; the
impact of the Merger on the AIM Funds and their shareholders; future plans of
AMVESCO with respect to AIM and the AIM Funds; performance and financial
information about each of the AIM Funds; and information about other funds and
their fees and expenses.

The Special Committee also received information regarding the terms of the
Merger and comprehensive financial information, including: INVESCO's plans for
financing the Merger; the impact of the financing on AIM Management and AIM;
AMVESCO's plans for the compensation of executives and investment and other
staff of AIM Management and AIM; information concerning employment contracts
with senior management of AIM Management and AIM; and AMVESCO's access to
capital markets to meet the capital needs of AIM Management and its
subsidiaries.

In connection with its deliberations, the Special Committee obtained
assurances from INVESCO that: the separate identity of AIM Management and AIM
would be maintained for the foreseeable future; AMVESCO did not intend to change
executive management or staff of AIM Management or AIM (other than to appoint
Robert H. Graham Chief Executive Officer of the successor to AIM Management),
and has entered into employment agreements with key personnel; AMVESCO will
consult with the Boards of Directors/Trustees of the AIM Funds prior to making
material changes to AIM, including its financial and personnel resources that
could adversely affect the ability of AIM or its subsidiaries to render high
quality services to the AIM Funds; AMVESCO will appoint a general counsel for
AMVESCO who will have responsibility for overall compliance systems; neither
AMVESCO nor its affiliates will impose an "unfair burden" within the meaning of
Section 15(f) of the 1940 Act for a period of two years following the
consummation of the Merger; AMVESCO has not planned any major changes to the
operations and capabilities of AIM or its subsidiaries, except those intended to
enhance the capabilities of those entities to provide improved services to the
AIM Funds; and AMVESCO and its affiliates will use reasonable best efforts to
assure that for a period of three years following consummation of the Merger at
least 75% of the members of the Boards of Directors/Trustees of the AIM Funds
will not be interested persons of either AIM or INVESCO Group Services, Inc. The
Special Committee determined that it was not in a position to rank the foregoing
in order of importance.

The Special Committee also evaluated each New Advisory Agreement. The
Special Committee assured itself that the New Advisory Agreement for each of the
Funds, including the terms relating to

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the services to be provided and the fees and expenses payable by each such Fund,
is not materially different from the Current Advisory Agreement for each such
Fund.

Based on the Special Committee's review and analysis of the material
provided and the assurances received, the Special Committee unanimously
recommended to the Boards of Directors of each of the Companies that the New
Advisory Agreements be approved.

At the Boards of Directors/Trustees meetings of the AIM Funds held on
December 10 and 11, 1996, the Boards received presentations by INVESCO and AIM.
The Directors/Trustees were supplied with the information given to the Special
Committee in advance of the meeting. The Special Committee discussed with the
Boards of Directors the materials it reviewed, the issues it studied and the
reasons for its recommendation. Based upon the foregoing, the Board of Directors
of each of the Companies unanimously approved the New Advisory Agreement for the
applicable Funds and recommended approval by the shareholders.

ADDITIONAL TERMS OF THE MERGER AGREEMENT

AIM Management will merge into INVESCO Sub for consideration valued at
November 4, 1996 at approximately $1.6 billion, plus the amount of AIM
Management net income from September 1, 1996 through the date on which the
Merger is consummated (the "Closing Date"), minus dividends paid during such
period and subject to adjustments for certain balance sheet items and
transaction expenses. The consideration will include 290 million new Ordinary
Shares (including Ordinary Shares issuable in respect of vested and unvested AIM
Management options) of INVESCO valued at November 4, 1996 at approximately $1.1
billion. The balance of the consideration will be paid in cash.

The directors of AIM Management's successor will be Charles T. Bauer,
Robert H. Graham, Gary T. Crum and Michael J. Cemo, all of whom are currently
officers and directors of AIM Management. Although Charles T. Bauer will remain
Chairman of AIM Management's successor, Robert H. Graham will become President
and Chief Executive Officer of such successor. Mr. Graham currently serves as
AIM Management's President and Chief Operating Officer.

Upon consummation of the Merger, the AIM Management stockholders will own
approximately 45% of AMVESCO's total outstanding capital stock on a fully
diluted basis. INVESCO's shareholders approved the Merger at a meeting on
November 27, 1996, and on December 4, 1996, approved changing INVESCO's name
upon consummation of the Merger. AIM Management's stockholders have also
approved the Merger. The name of AIM will not change.

The closing is presently expected to occur on February 28, 1997, subject to
the satisfaction of conditions to closing that include, among other things: (a)
INVESCO having consummated one or more financings and having received net
proceeds of not less than $500 million; (b) the respective aggregate annualized
asset management fees of INVESCO and AIM Management (based on assets under
management, excluding the effects of market movements) in respect of which
consents to the Merger have been obtained being equal to or greater than 87.5%
of all such fees at October 31, 1996; (c) INVESCO and AIM Management having
received certain consents from regulators, lenders and/or other third parties;
(d) AIM Management not having received from the holder or holders of more than
2% of the outstanding AIM Management shares notices that they intend to exercise
dissenters' rights; (e) a Voting Agreement, Standstill Agreement, Transfer
Administration Agreement, Registration Rights Agreement and Indemnification
Agreement, and Transfer Restriction Agreements, and Employment Agreements with
certain AIM Management employees having been

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executed and delivered; (f) AIM Management having received an opinion from its
U.S. counsel that the Merger will be treated as a tax-free reorganization; and
(g) shareholder resolution to appoint to INVESCO's Board of Directors six AIM
Management designees and a Board resolution to appoint the seventh AIM
Management designee having been passed and not revoked.

The Merger Agreement may be terminated at any time prior to the Closing
Date (a) by written agreement of INVESCO and AIM Management, (b) by written
notice by AIM Management or INVESCO to the other after June 1, 1997 or (c) under
other circumstances set forth in the Merger Agreement. In certain circumstances
occurring on or before September 30, 1997, a termination fee will be payable by
the party in respect of which such circumstances have occurred.

In connection with the Merger, the following agreements, each to be
effective upon the closing of the Merger, have been or will be executed:

Employment Agreements. Following the Merger, the current officers of
AIM Management will be the officers of the successor to AIM Management and
the directors of the successor to AIM Management will be four of the
current directors of AIM Management. Senior management and key employees of
AIM Management have entered into employment agreements which will commence
when the Merger is consummated and will continue for initial terms ranging
from one year to four years. All of the employment agreements contain
covenants not to compete extending for at least one year after termination
of employment. Approximately thirty current employees of AIM Management are
expected to enter into such employment agreements with INVESCO.

Voting Agreement. Certain AIM Management stockholders and their
spouses, the current directors of INVESCO and proposed directors of AMVESCO
(all of whom are expected to hold in the aggregate approximately 25% of the
Ordinary Shares outstanding immediately following the consummation of the
Merger) have agreed to vote as directors and as shareholders to ensure
that: (a) the AMVESCO Board will have fifteen members, consisting of four
executive directors and three non-executive directors designated by
INVESCO's current senior management, four executive directors and three
non-executive directors designated by AIM Management's current senior
management and a Chairman; (b) the initial Chairman will be Charles W.
Brady (INVESCO's current Chairman) and the initial Vice Chairman will be
Charles T. Bauer (AIM Management's current Chairman); (c) the parties will
vote at any AMVESCO shareholder meeting on resolutions (other than those in
respect of the election of directors) supported by two-thirds of the Board
in the same proportion as votes are cast by unaffiliated shareholders. The
Voting Agreement will terminate on the earlier of the fourth anniversary of
the Closing Date and the date on which a resolution proposed by an
INVESCO-designated Board member is approved by the AMVESCO Board despite
being voted against by each AIM Management-designated Board member present
at such Board meeting.

Standstill Agreement and Transfer Restriction Agreements. Certain AIM
Management stockholders and their spouses and certain other significant
shareholders of INVESCO have agreed under certain circumstances for a
maximum of five years not to engage in a number of specified activities
that might result in a change of the ownership or control positions of
AMVESCO existing as of the Closing Date. AIM Management stockholders and
INVESCO's current chairman will be restricted in their ability to transfer
their shares of AMVESCO for a period of up to five years.

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TERMS OF THE ADVISORY AGREEMENTS

Although the Current Advisory Agreements have not terminated and the New
Advisory Agreements have not become effective, such Agreements (collectively,
the "Advisory Agreements") are described below as if they were both in effect.

Under the Advisory Agreements, AIM

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

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

(c) determines which issuers and securities shall be represented in
the Funds' investment portfolios and regularly reports thereon to the
Companies' Boards of Directors;

(d) formulates and implements continuing programs for the purchases
and sales of the securities of such issuers and regularly reports thereon
to the Companies' Boards of Directors; and

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

The Advisory Agreements provide that any investment program undertaken by
AIM, as well as any other actions taken by AIM on behalf of each Fund, shall at
all times be subject to any directives of the Board of Directors of the
applicable Company.

In performing its obligations under the Advisory Agreements, AIM is
required to comply with all applicable laws. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties under the Advisory Agreements on the part of AIM or its officers,
directors or employees, AIM shall not be liable to the Companies or the Funds or
their shareholders for any act or omission in the course of, or connected with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security.

The Advisory Agreements provide that, subject to the approval of the Board
of Directors of the applicable Company and the shareholders of the applicable
Fund, AIM may delegate certain of its duties to a sub-advisor, provided that AIM
shall continue to supervise the performance of any such sub-advisor.

The Advisory Agreements provide that all of the ordinary business expenses
incurred in the operations of each of the Funds and the offering of each of
their shares shall be paid by each such Fund. These expenses include brokerage
commissions, taxes, legal, accounting, auditing or governmental fees, custodian,
transfer agent and shareholder service agent costs.

The New Advisory Agreements also expressly provide that a Company shall be
entitled to use the name "AIM" with respect to a Fund only so long as AIM serves
as investment manager or advisor to

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such Fund. Although some of the Current Advisory Agreements presently have a
similar provision, the provision in each of the New Advisory Agreements will
read as follows:

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

Management of each Company understands that each such Company has been
using the AIM mark for each Fund only by permission of AIM and that the express
licensing provision contained in each New Advisory Agreement clarifies this
understanding.

Information with regard to the fees payable under each of the Advisory
Agreements and the aggregate advisory fees paid to AIM in each Fund's most
recently completed fiscal year is set forth in Annex F.

Each Advisory Agreement may be terminated with respect to a Fund on 60 days
written notice without penalty by (i) the applicable Fund, (ii) the action of
the shareholders of the applicable Fund, (iii) the Board of Directors of the
applicable Company, or (iv) AIM. Each Advisory Agreement will terminate
automatically in the event of any assignment, as defined by the 1940 Act. The
Advisory Agreements continue from year to year with respect to a Fund so long as
their continuance is specifically approved at least annually either (i) by the
Board of Directors of the applicable Company or (ii) by the vote of a majority
of such Fund's outstanding voting securities, as defined by the 1940 Act,
provided that in either event the continuance is also approved by the vote of a
majority of the Directors of the Company who are not interested persons of the
Company or of AIM, cast in person at a meeting called for the purpose of voting
on such approval.

The Advisory Agreements provide that, upon the request of the applicable
Company's Board of Directors, AIM may perform certain additional services on
behalf of the Funds. The Boards of Directors have approved, and the Funds have
entered into, Master Administrative Services Agreements with AIM, pursuant to
which AIM has agreed to provide or arrange for the provision of certain
accounting and other administrative services to each Fund, including the
services of a principal financial officer of each Company and related staff. As
compensation to AIM for its services under the Master Administrative Services
Agreements, the Funds reimburse AIM for expenses incurred by AIM or its
affiliates in connection with such services. In addition, A I M Fund Services,
Inc. ("AIM Services"), a wholly owned subsidiary of AIM, provides administrative
services to ASF pursuant to a contract between AIM and AIM Services.

ADDITIONAL SERVICES PROVIDED BY AIM AND ITS AFFILIATES

As noted above, AIM (and, with respect to ASF, AIM Services) provides
administrative services to each of the Funds. In addition, A I M Distributors,
Inc. ("AIM Distributors"), a wholly owned subsidiary of AIM, serves as the
principal underwriter for each of the classes of the Companies. Shares of the
Funds (other than ASF and AVIF) are generally sold with an initial sales charge
("Class A Shares"), or with respect to some of the Funds, subject to a
contingent deferred sales charge ("Class B Shares"). Such sales charges are paid
by investors. Shares of AVIF, which are offered only to separate accounts of
life insurance companies, and shares of ASF, which are offered only through
Summit Investers Plans, are sold without either an initial or a contingent
deferred sales charge.

16
22

Each of the Funds (except for ASF, AVIF and the Intermediate Portfolio of
ATEF) has also adopted a distribution plan or plans under Rule 12b-1 of the 1940
Act (each, a "Plan") with respect to each of its retail classes. Pursuant to
each Plan, each such Fund makes payments to AIM Distributors in connection with
the distribution of the Fund's shares and the provision of ongoing services to
shareholders of each class. The fees are calculated as a percentage of the
annualized average daily net assets attributable to a class of shares. AIM
Distributors pays a portion of the Rule 12b-1 fees that it receives to the
brokers, dealers, agents and other service providers with whom it has entered
into agreements and who offer shares of each such Fund for sale or provide
customers or clients certain continuing personal services. Each such Fund
categorizes the first 0.25% per year of the Rule 12b-1 fees paid to such third
parties attributable to the Class A Shares of the respective Fund as a service
fee for ongoing personal services.

AIM Distributors is authorized to advance to institutions through whom
Class B Shares are sold a sales commission under schedules established by AIM
Distributors. AIM Distributors (or its assignee or transferee) receives 0.75%
(of the total 1.00% payable under the distribution plan applicable to Class B
Shares) of each applicable Fund's annualized average daily net assets
attributable to those Class B Shares sold through the sales efforts of AIM
Distributors. The remaining 0.25% of each applicable Fund's annualized average
daily net assets attributable to Class B Shares is paid to brokers, dealers,
agents and other service providers as a service fee for ongoing personal
services.

The amounts payable by each applicable Fund under the Plans need not be
directly related to the expenses actually incurred by AlM Distributors on behalf
of each such Fund. Thus, even if AIM Distributors' actual expenses exceed the
fee payable to AIM Distributors thereunder at any given time, the applicable
Funds will not be obligated to pay more than that fee, and if AIM Distributors'
expenses are less than the fee it receives, AIM Distributors will retain the
full amount of the fee.

AIM Services serves as transfer agent to each of the retail classes of AEF,
AIF and ATEF. State Street Bank and Trust Company ("State Street"), an entity
which is not affiliated with AIM, serves as transfer agent for ASF and AVIF.

Information with regard to the amount of fees paid by each Fund to AIM and
its affiliates for services provided other than under the Current Advisory
Agreements in each Fund's most recently completed fiscal year is set forth in
Annex D.

The agreements pursuant to which AIM provides administrative services to
the Funds and pursuant to which AIM Distributors serves as the Funds' principal
underwriter will terminate as a result of the Merger. The Board of Directors of
each of the Companies has approved new agreements, which are substantially
identical to the existing administrative services and distribution agreements,
to take effect upon consummation of the Merger. Under the 1940 Act, such
agreements do not require the approval of shareholders before they become
effective. The agreements pursuant to which AIM Services and State Street
provide transfer agency services will not terminate as a result of the Merger.

INFORMATION CONCERNING AIM

AIM serves as the investment advisor to each of the Funds. AIM was
organized in 1976 and, together with its affiliates, advises 38 investment
company portfolios constituting the AIM Funds and

17
23

sub-advises one investment company portfolio. As of December 3, 1996, the total
assets of the AIM Funds were approximately $62.6 billion. AIM is a wholly owned
subsidiary of AIM Management. Certain of the Directors and officers of AIM are
also Directors and executive officers of the Companies, and their names,
principal occupations and affiliations are shown in the table under Proposal 1
and under "Executive Officers" in Annex E. Information regarding the AIM Funds,
including their total net assets and the fees received by AIM from such AIM
Funds for its services, is set forth in Annex F. The address of AIM, all of the
directors of AIM, AIM Distributors, AIM Services and AIM Management, is 11
Greenway Plaza, Suite 1919, Houston, Texas 77046-1173.

RECOMMENDATION OF DIRECTORS

The Board of Directors of each Company recommends that you vote FOR the
approval of the New Advisory Agreements.

PROPOSAL 3 --

APPROVAL OF SUB-ADVISORY AGREEMENT

Shareholders of ASF are being asked to approve a new Sub-Advisory Agreement
(the "New Sub-Advisory Agreement") between AIM and its sub-advisor, TradeStreet
Investment Associates, Inc. ("TradeStreet"). The New Sub-Advisory Agreement
contains no material changes in its terms, conditions, or fees, nor does it
contain any material changes in the way ASF is managed, advised or operated.

TradeStreet has served as sub-advisor to ASF since April 1, 1996, pursuant
to a sub-advisory agreement dated October 18, 1993, as supplemented as of
December 9, 1993 and restated as of April 1, 1996 (the "Current Sub-Advisory
Agreement") originally with NationsBank of Texas, N.A. ("NationsBank of Texas").
TradeStreet is a wholly owned subsidiary of NationsBank, N.A. TradeStreet
assumed the rights and duties of NationsBank of Texas under an agreement dated
as of April 1, 1996. On May 14, 1996, the Board of Directors of ASF, including a
majority of the directors who are not interested persons of ASF or AIM, voted to
continue the Current Sub-Advisory Agreement for an additional year until June
30, 1997.

ASF is seeking shareholder approval of the New Sub-Advisory Agreement
because of the technical requirements of the 1940 Act that apply to the Merger
described above in Proposal 2. The Merger will result in a transfer of more than
25% of the outstanding voting shares of AIM Management, AIM's direct parent,
causing an "assignment" of the Current Advisory Agreement under the 1940 Act.
The Current Advisory Agreement provides that it will terminate automatically
upon its assignment, as required by the 1940 Act. The termination of the Current
Advisory Agreement effectively terminates the Current Sub-Advisory Agreement.
Shareholders are therefore being asked to approve the New Sub-Advisory
Agreement. The Merger will not have any effect on TradeStreet.

At a meeting held on December 10, 1996, the Board of Directors of ASF,
including a majority of the Independent Directors, approved, subject to
shareholder approval, the New Sub-Advisory Agreement. A copy of the form of the
New Sub-Advisory Agreement is attached hereto as Annex G. In approving the New
Sub-Advisory Agreement, the Board of Directors of ASF took into account the
Merger described above under "Merger of AIM Management and INVESCO." There are
no material differences between the provisions of the Current Sub-Advisory
Agreement and the New Sub-Advisory

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24

Agreement. A description of such agreements is provided below under "Terms of
the Sub-Advisory Agreement." Such description is only a summary and is qualified
by reference to the attached Annex G.

If the conditions to the Merger are not met or waived or if the Merger
Agreement is terminated, the Merger will not be consummated, and the Current
Sub-Advisory Agreement will remain in effect. If the New Sub-Advisory Agreement
is approved, and the Merger is thereafter consummated, the New Sub-Advisory
Agreement will be executed and become effective on the Closing Date. In the
event that the New Sub-Advisory Agreement is not approved and the Merger is
consummated, the Board of Directors of ASF will determine what action to take,
in any event subject to the approval of shareholders of ASF.

TERMS OF THE SUB-ADVISORY AGREEMENT

Although the Current Sub-Advisory Agreement has not terminated and the New
Sub-Advisory Agreement is not yet in effect, the agreements (collectively, the
"Sub-Advisory Agreement") are described below as if they were both in effect.

Under the Sub-Advisory Agreement, TradeStreet provides investment research
and advisory services to ASF under the supervision of AIM and subject to the
approval and direction of the Board of Directors of ASF. While AIM determines
the core stocks and the emerging growth stocks to be purchased or sold by ASF,
TradeStreet, under AIM's supervision, determines the value-oriented stocks to be
purchased or sold by the Fund. As compensation for TradeStreet's services under
the Sub-Advisory Agreements, AIM pays to TradeStreet an annual fee equal to
0.50% of the first $10 million of the Fund's average daily net assets, 0.35% of
the next $140 million of the Fund's average daily net assets, 0.225% of the next
$550 million of the Fund's average daily net assets and 0.15% of the Fund's
average daily net assets in excess of $700 million. For ASF's most recent fiscal
year, TradeStreet and its predecessor, NationsBank of Texas, received aggregate
fees in the amount of $2,442,907.

The Sub-Advisory Agreement may be terminated without penalty on 60 days'
written notice by (i) ASF, (ii) the action of the shareholders of ASF, (iii) the
Board of Directors of ASF, (iv) AIM or (v) TradeStreet. The notice provision may
be waived by either party. The Sub-Advisory Agreement will terminate
automatically in the event of any assignment, as defined by the 1940 Act. The
Sub-Advisory Agreement continues from year to year so long as its continuance is
specifically approved at least annually either (i) by the Board of Directors of
ASF or (ii) by the vote of a majority of ASF's outstanding voting securities, as
defined by the 1940 Act, provided that in either event the continuance is also
approved by the vote of a majority of the Directors of ASF who are not
interested persons of ASF, AIM, or TradeStreet, cast in person at a meeting
called for the purpose of voting on such approval.

INFORMATION CONCERNING TRADESTREET

TradeStreet was formed on January 1, 1996, and is a wholly-owned,
registered investment advisory subsidiary of NationsBank, N.A. TradeStreet
employs over 80 investment professionals who, as of November 18, 1996, managed
approximately $37 billion. TradeStreet services over 140 institutional clients
and, as of November 18, 1996, acted as sub-advisor to 46 mutual funds.
Information with regard to the directors and executive officers of TradeStreet
is set forth in Annex H.

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25

RECOMMENDATION OF DIRECTORS

The Board of Directors of ASF recommends that you vote FOR the approval of
the New Sub-Advisory Agreement.

PROPOSAL 4 --

ELIMINATION OF THE FUNDAMENTAL INVESTMENT POLICY
PROHIBITING OR RESTRICTING INVESTMENTS IN OTHER INVESTMENT
COMPANIES AND/OR AMENDMENT OF CERTAIN RELATED FUNDAMENTAL
INVESTMENT POLICIES

The Boards of Directors of AEF (with respect to AIM Capital Development
Fund), AIF, ASF, ATEF and AVIF propose the elimination and/or the modification
of certain fundamental investment policies that prohibit or restrict the Funds
from investing in other investment companies. The specific changes proposed are
described below. This proposal does not apply to AIM Blue Chip Fund, a series
portfolio of AEF.

Set forth below is each Fund's current fundamental investment policy
prohibiting or restricting investments in other investment companies.

POLICY ON INVESTMENTS IN
COMPANY/FUND OTHER INVESTMENT COMPANIES
- ------------------------------------- -----------------------------------------------------

AEF
AIM Blue Chip Fund................... No Policy.
AIM Capital Development Fund......... No Policy.
AIF
All AIF Funds........................ No Policy.
ASF.................................. Fund may not acquire for value the securities of any
other investment companies, other than in connection
with a merger, consolidation, reorganization or
acquisition of assets, except that the Fund may
invest up to 5% of its assets in securities of other
investment companies. The Fund will not purchase more
than 3% of the outstanding voting stock of any
investment company.
ATEF
AIM Tax-Exempt Cash Fund............. Fund may not invest in shares of any other investment
company, other than in connection with a merger,
consolidation, reorganization or acquisition of
assets, except that it may invest in shares of other
investment companies representing compensation
otherwise payable to directors of the Company
pursuant to any deferred compensation plan.

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26

POLICY ON INVESTMENTS IN
COMPANY/FUND OTHER INVESTMENT COMPANIES
- ------------------------------------- -----------------------------------------------------

Intermediate Portfolio............... Fund may not invest in shares of any other investment
company, other than in connection with a merger,
consolidation, reorganization or acquisition of
assets, except that for temporary purposes it may
invest up to 10% of its assets in securities of other
investment companies whose dividends are tax-exempt;
provided that it will not invest more than 5% of its
assets in securities of any investment company or
purchase more than 3% of the outstanding voting stock
of any investment company.
AIM Tax-Exempt Bond Fund of
Connecticut........................ Fund may not invest in shares of any other investment
company, other than in connection with a merger,
consolidation, reorganization or acquisition of
assets, except that it may invest in shares of other
investment companies representing compensation
otherwise payable to directors of the Company
pursuant to any deferred compensation plan.
AVIF
All AVIF Funds....................... Funds will not invest in securities of any other
investment company except as part of a merger,
consolidation or acquisition of assets and except for
the investment in such securities of funds
representing compensation otherwise payable to
Directors of the Company pursuant to any deferred
compensation plan existing at any time between the
Company and one or more of its Directors.
Additionally, the [AIM V.I. International Equity
Fund] may purchase such securities of investment
companies, provided that such purchase does not cause
the Fund (i) to have more than 5% of the Fund's total
assets, taken at market value, invested in any one
such company, (ii) to have an aggregate investment in
such companies of more than 10% of its total assets,
taken at market value, or (iii) to own more than 3%
of the total outstanding voting stock of any such
company.

Section 12 of the 1940 Act generally prohibits each Fund from (i) owning
more than 3% of the total outstanding voting stock of any other investment
company; (ii) investing more than 5% of its total assets in the securities of
any one other investment company; and (iii) investing more than 10% of its total
assets (in the aggregate) in the securities of other investment companies.

The Boards of Directors may, in the near future, authorize AIM and the
Companies to seek exemptive relief from the Securities and Exchange Commission
("SEC") to permit the Funds to purchase securities of other investment companies
in excess of the limitations imposed by Section 12

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of the 1940 Act (exemptive orders granted with respect to such Funds are
referred to herein collectively as the "Exemptive Orders"). There is no
assurance that such Exemptive Orders will be granted. The investment companies
in which the Funds may invest pursuant to the Exemptive Orders are referred to
herein collectively as the "Exemptive Order Funds." In order to take full
advantage of any exemptive relief that may be granted by the SEC and to invest
in shares of the Exemptive Order Funds in excess of the percentage limitations
imposed by Section 12, each such Fund is seeking shareholder approval to
eliminate the prohibition or restriction against investing in other investment
companies.

The Companies and AIM may seek Exemptive Orders because they believe each
Fund can effectively invest in certain other types of securities through pooled
investment vehicles such as the Exemptive Order Funds. By pooling their
investments in such securities, the Funds may have the ability to invest in a
wider range of issuers, industries and markets, thereby seeking to decrease
volatility and risk while at the same time providing greater liquidity than a
Fund would have available to it investing in such securities by itself. Pooling
investments may also allow the Funds to increase the efficiency of portfolio
management by permitting each Fund's portfolio manager to concentrate on those
investments that constitute the bulk of the Fund's assets and not spend a
disproportionate amount of time on specialized areas. The Companies may seek
Exemptive Orders to permit, among other things, investments by the Funds for
cash management purposes in money market funds advised by AIM, implementation of
a master/feeder fund structure or investments in a separate small capitalization
or initial public offering fund.

If the proposed elimination of the Funds' prohibitions or restrictions
against investments in other investment companies is approved, each such Fund
may invest in securities of an Exemptive Order Fund only to the extent
consistent with the respective Fund's investment objectives and policies as set
forth from time to time in each Company's registration statement.

In connection with obtaining Exemptive Orders, AIM may agree to waive fees
applicable to the Funds to the extent that the assets of the Funds are invested
in Exemptive Order Funds, and collect fees from the Exemptive Order Funds. Other
expenses incurred by the Exemptive Order Funds (such as audit and custodial
fees) will be borne by them, and thus indirectly by the Funds. AIM believes that
these indirect expenses will be offset by the benefits to the Funds of pooling
their investments.

CERTAIN RELATED FUNDAMENTAL INVESTMENT POLICIES

Some of the Funds currently have other fundamental investment restrictions
that may prohibit each such Fund from taking full advantage of the Exemptive
Orders. These fundamental restrictions may include one or more of the following:

1. Diversification. AIM Capital Development Fund, a Fund of AEF, and each
Fund of AIF and AVIF (except the AIM V.I. Global Utilities Fund) are
prohibited from investing more than 5% of their assets in securities of
a single issuer (other than U.S. Government Securities) or holding more
than 10% of the outstanding voting securities of an issuer, except that
such Funds may invest up to 25% (or for AIM Global Income Fund, up to
50%) of all assets without regard to such restrictions. As an
operational matter, AIM V.I. Money Market Fund will invest no more than
5% of the value of its total assets in securities, other than U.S.
Government Securities, of any one issuer except that it may exceed this
limit to the extent permitted by Rule 2a-7 under the 1940 Act. ASF is
prohibited from investing more than 5% of its assets in

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28

the securities of a single issuer (other than U.S. Government
Securities) or holding more than 10% of the outstanding voting
securities of an issuer. Neither AIM Tax-Exempt Cash Fund, nor the
Intermediate Portfolio of ATEF will, with respect to 75% of its total
assets, purchase the securities of any issuer if such purchase would
cause more than 5% of the value of its total assets to be invested in
the securities of such issuer (except securities issued, guaranteed or
sponsored by the U.S. Government or its agencies and instrumentalities
and, with respect to AIM Tax-Exempt Cash Fund, except as permitted by
Rule 2a-7).

2. Control. ASF and each Fund of AVIF are prohibited from making
investments for the purpose of exercising control or participation in
management. The 1940 Act deems a person to have presumptive control over
another person if it beneficially owns more than 25% of the other
person's voting securities.

From time to time, such Funds may desire to (i) invest more than 25% of
their total assets in one or more Exemptive Order Funds or (ii) own more than
25% of the voting securities of one or more Exemptive Order Funds.

The foregoing restrictions may be worded differently from Fund to Fund, but
the substance of the restrictions is as set forth above. Additional information
regarding a Fund's fundamental investment restrictions may be obtained without
cost by telephoning AIM at 1-800-347-4246 and requesting a copy of the Fund's
Statement of Additional Information.

In order to take full advantage of the Exemptive Orders, each Fund subject
to one or more of the foregoing investment restrictions seeks shareholder
approval to amend such restrictions by adding the following exception to each
restriction:

. . . , except that the [name of the applicable Fund] may purchase
securities of other investment companies to the extent permitted by
applicable law or exemptive order.

The elimination of the fundamental investment policy prohibiting or
restricting investments in other investment companies and/or the amendments to
the related fundamental investment policies would become effective March 1,
1997, if approved by shareholders at the Annual Meeting. These changes are not
related to the Merger described in Proposal 2. Shareholders are being asked to
consider such amendments at this time because the Companies do not regularly
hold annual shareholder meetings. AIM believes that submitting this proposal
together with Proposal 2 may reduce the expenses incurred by each Fund in
connection with soliciting approval of this proposal because the Companies will
not be required to hold a separate meeting.

RECOMMENDATION OF DIRECTORS

The Board of Directors of each Company recommends that you vote FOR the
proposal to eliminate the fundamental investment policy prohibiting or
restricting investments in other investment companies and/or to amend certain
related fundamental investment policies.

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29

PROPOSAL 5 --

ELIMINATION OF FUNDAMENTAL INVESTMENT POLICY
PROHIBITING INVESTMENTS IN COMPANIES WITH LESS THAN
THREE YEARS OF CONTINUOUS OPERATIONS

The Board of Directors of AIF proposes to eliminate the fundamental
investment policy that AIM International Equity Fund, a series portfolio of AIF,
may not:

invest in securities of an issuer (including predecessors and unconditional
guarantors) which has a record of less than three years of continuous
operations.

Companies which, together with their predecessors, have been in business
for less than three years are often referred to as "unseasoned issuers." The
Fund wishes to purchase securities of unseasoned issuers because such securities
may provide opportunities for long-term capital growth. Greater risks are
associated with investments in securities of unseasoned issuers than in the
securities of more established companies because unseasoned issuers have only a
brief operating history and may have more limited markets and financial
resources. As a result, securities of unseasoned issuers tend to be more
volatile than securities of more established companies. The Board of Directors
of AIF and AIM nonetheless believe that the potential benefits to shareholders
of permitting the Fund to invest in unseasoned issuers outweighs the marginal
increase in risk that the Fund would incur in making such investments. In
addition, elimination of this policy will permit the Fund to invest in Exemptive
Order Funds, as described in Proposal 4, if such Exemptive Order Funds have been
operating for less than three years.

The elimination of the fundamental investment policy prohibiting
investments in companies with less than three years of continuous operations
would become effective March 1, 1997, if approved by shareholders at the Annual
Meeting. This change is not related to the Merger described in Proposal 2.
Shareholders are being asked to consider such amendments at this time because
AIF does not regularly hold annual shareholder meetings. AIM believes that
submitting this proposal together with Proposal 2 may reduce the expenses
incurred by the Fund in connection with soliciting approval of this proposal
because AIF will not be required to hold a separate meeting.

RECOMMENDATION OF DIRECTORS

The Board of Directors of AIF recommends that you vote FOR the elimination
of AIM International Equity Fund's fundamental investment policy prohibiting
investments in companies with less than three years of continuous operations.

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30

PROPOSAL 6 --

RATIFICATION OF SELECTION OF
KPMG PEAT MARWICK LLP AS INDEPENDENT ACCOUNTANTS

The Board of Directors of each of AEF, AIF, ASF and ATEF, including a
majority of the Independent Directors, has selected KPMG Peat Marwick LLP as
independent accountants for the fiscal year of the Funds ending in 1997 to
examine and verify the accounts and securities of the series portfolios of AEF,
AIF, ASF and ATEF, and to report thereon to the Boards and the shareholders.
This selection will be submitted for ratification at the Annual Meeting. A
representative of KPMG Peat Marwick LLP is expected to be present at the Annual
Meeting.

RECOMMENDATION OF DIRECTORS

The Board of Directors of each of AEF, AIF, ASF and ATEF recommends that
you vote FOR the ratification of the selection of KPMG Peat Marwick LLP as each
such Company's independent accountants.

PROPOSAL 7 --

RATIFICATION OF SELECTION OF
TAIT, WELLER & BAKER, AS INDEPENDENT ACCOUNTANTS

The Board of Directors of AVIF, including a majority of the Independent
Directors, has selected Tait, Weller & Baker as independent accountants for the
fiscal year of the Funds ending in 1997 to examine and verify the accounts and
securities of the series portfolios of AVIF, and to report thereon to the Board
and the shareholders. This selection will be submitted for ratification at the
Annual Meeting. A representative of Tait, Weller & Baker is expected to be
present at the Annual Meeting.

RECOMMENDATION OF DIRECTORS

The Board of Directors of AVIF recommends that you vote FOR the
ratification of the selection of Tait, Weller & Baker as AVIF's independent
accountants.

GENERAL INFORMATION

EXECUTIVE OFFICERS OF EACH OF THE COMPANIES

Information regarding the executive officers of each of the Companies is
set forth in Annex E.

SECURITY OWNERSHIP OF MANAGEMENT AND 5% HOLDERS

Information regarding ownership of each class of the Funds' shares by
Directors and the Chief Executive Officer and by 5% holders of each class of
such Fund is set forth in Annex I.

PROXY SOLICITATION

The Companies have engaged the services of Shareholder Communications
Corporation ("SCC") to assist them in the solicitation of proxies for the Annual
Meeting. It is estimated that the aggregate cost of SCC's services with respect
to all of the AIM Funds will be approximately $3,500,000. The cost

25
31

of soliciting proxies will be borne primarily by AIM Management and certain
incremental costs will be borne by the AIM Funds. The Companies expect to
solicit proxies principally by mail, but the Companies or SCC may also solicit
proxies by telephone, facsimile or personal interview. AIM Management may also
reimburse firms and others for their expenses in forwarding solicitation
materials to the beneficial owners of shares of the Funds.

SHAREHOLDER PROPOSALS

As a general matter, each Company does not hold regular annual meetings of
shareholders. Any shareholder who wishes to submit proposals for consideration
at a shareholders' meeting of such shareholder's Fund should send such proposal
to the applicable Company at the address set forth on the first page of this
proxy statement. To be considered for presentation at a shareholders' meeting,
proposals must be received a reasonable time before a solicitation is made and
must comply with applicable law.

OTHER BUSINESS

The management knows of no business to be presented to the Annual Meeting
other than the matters set forth in this proxy statement.

By order of the Boards of Directors,

Charles T. Bauer
Chairman of the Board of Directors

December 20, 1996

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32

ANNEX A

NUMBER OF SHARES OUTSTANDING ON DECEMBER 3, 1996
FOR EACH SERIES PORTFOLIO OF AEF, AIF, ASF, ATEF AND AVIF

AIM EQUITY FUNDS, INC.

NUMBER OF SHARES
OUTSTANDING ON
NAME OF FUND DECEMBER 3, 1996
- ------------ -----------------

AIM Aggressive Growth Fund.............................................. 60,713,760.440
AIM Blue Chip Fund...................................................... 6,132,165.159
AIM Capital Development Fund............................................ 28,846,040.199
AIM Charter Fund........................................................ 289,860,679.395
AIM Constellation Fund.................................................. 462,867,166.774
AIM Weingarten Fund..................................................... 265,721,677.288
-----------------
TOTAL--AIM EQUITY FUNDS, INC............................................ 1,114,141,489.255
=================

AIM INTERNATIONAL FUNDS, INC.

NUMBER OF SHARES
OUTSTANDING ON
NAME OF FUND DECEMBER 3, 1996
- ------------ -----------------

AIM Global Aggressive Growth Fund....................................... 115,711,714.806
AIM Global Growth Fund.................................................. 17,612,400.392
AIM Global Income Fund.................................................. 3,775,095.797
AIM International Equity Fund........................................... 98,959,652.413
----------------
TOTAL--AIM INTERNATIONAL FUNDS, INC..................................... 236,058,863.408
================

AIM SUMMIT FUND, INC.

NUMBER OF SHARES
OUTSTANDING ON
NAME OF FUND DECEMBER 3, 1996
- ------------ -----------------

AIM Summit Fund, Inc.................................................... 97,448,456.301
===============

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AIM TAX-EXEMPT FUNDS, INC.

NUMBER OF SHARES
OUTSTANDING ON
NAME OF FUND DECEMBER 3, 1996
- ------------ ----------------

AIM Tax-Exempt Bond Fund of Connecticut................................... 3,620,195.568
AIM Tax-Exempt Cash Fund.................................................. 37,680,037.032
Intermediate Portfolio.................................................... 7,759,046.364
--------------
TOTAL--AIM TAX-EXEMPT FUNDS, INC.......................................... 49,059,278.964
==============

AIM VARIABLE INSURANCE FUNDS, INC.

NUMBER OF SHARES
OUTSTANDING ON
NAME OF FUND DECEMBER 3, 1996
- ------------ ----------------

AIM V.I. Capital Appreciation Fund......................................... 18,703,289.606
AIM V.I. Diversified Income Fund........................................... 5,573,923.997
AIM V.I. Global Utilities Fund............................................. 991,647.918
AIM V.I. Government Securities Fund........................................ 2,332,250.556
AIM V.I. Growth Fund....................................................... 10,288,776.336
AIM V.I. Growth and Income Fund............................................ 12,546,988.489
AIM V.I. International Equity Fund......................................... 9,833,643.390
AIM V.I. Money Market Fund................................................. 62,113,848.850
AIM V.I. Value Fund........................................................ 19,502,017.420
---------------
TOTAL--AIM VARIABLE INSURANCE FUNDS, INC................................... 141,886,386.562
===============

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34

ANNEX B

DATES OF ADVISORY AGREEMENTS

DATE LAST DATE SINCE AIM
SUBMITTED TO HAS SERVED AS
A VOTE OF INVESTMENT
NAME OF COMPANY AND FUND DATE OF CURRENT ADVISORY AGREEMENT SHAREHOLDERS ADVISOR
- ------------------------ -------------------------------------- -------------- ----------------

AIM EQUITY FUNDS, INC.
AIM Blue Chip Fund Master Investment Advisory Agreement March 11, March 12, 1996
dated October 18, 1993, as amended by 1996**
Amendment No. 1, dated November 14,
1994, as amended by Amendment No. 2,
dated March 12, 1996
AIM Capital Development Fund Master Investment Advisory Agreement March 11, March 12, 1996
dated October 18, 1993, as amended by 1996**
Amendment No. 1, dated November 14,
1994, as amended by Amendment No. 2,
dated March 12, 1996

AIM INTERNATIONAL FUNDS, INC.
AIM International Equity Fund Master Investment Advisory Agreement September 27, November 8, 1991
dated October 18, 1993 1993*
AIM Global Aggressive Growth Fund Master Investment Advisory Agreement July 1, 1994** July 1, 1994
dated July 1, 1994
AIM Global Growth Fund Master Investment Advisory Agreement July 1, 1994** July 1, 1994
dated July 1, 1994
AIM Global Income Fund Master Investment Advisory Agreement July 1, 1994** July 1, 1994
dated July 1, 1994
AIM SUMMIT FUND, INC. Investment Advisory Agreement dated September 27, October 5, 1988
October 18, 1993 1993*
AIM TAX-EXEMPT FUNDS, INC.
AIM Tax-Exempt Bond Fund of
Connecticut Master Investment Advisory Agreement August 6, June 30, 1992
dated October 18, 1993 1993**
AIM Tax-Exempt Cash Fund Master Investment Advisory Agreement August 6, June 30 1992
dated October 18, 1993 1993**
Intermediate Portfolio Master Investment Advisory Agreement August 6, May 11, 1987
dated October 18, 1993 1993**

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

* The Current Advisory Agreement was last submitted to a vote of shareholders
in 1993 as a result of a reorganization of several AIM Funds and/or the
recapitalization of A I M Management Group Inc.

** The Current Advisory Agreement was submitted to a vote of the initial
shareholder of the Fund prior to commencement of operations.

29
35

AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Capital Appreciation Fund Master Investment Advisory Agreement September 27, March 31, 1993
dated October 18, 1993, as amended by 1993*
Amendment to Appendix A, dated April
28, 1994
AIM V.I. Diversified Income Fund Master Investment Advisory Agreement September 27, March 31, 1993
dated October 18, 1993, as amended by 1993*
Amendment to Appendix A, dated April
28, 1994
AIM V.I. Global Utilities Fund Master Investment Advisory Agreement May 1, 1994** April 28, 1994
dated October 18, 1993, as amended by
Amendment to Appendix A, dated April
28, 1994
AIM V.I. Government Securities Fund Master Investment Advisory Agreement September 27, March 31, 1993
dated October 18, 1993, as amended by 1993*
Amendment to Appendix A, dated April
28, 1994
AIM V.I. Growth Fund Master Investment Advisory Agreement September 27, March 31, 1993
dated October 18, 1993, as amended by 1993*
Amendment to Appendix A, dated April
28, 1994
AIM V.I. Growth and Income Fund Master Investment Advisory Agreement May 1, 1994** April 28, 1994
dated October 18, 1993, as amended by
Amendment to Appendix A, dated April
28, 1994
AIM V.I. International Equity Fund Master Investment Advisory Agreement September 27, March 31, 1993
dated October 18, 1993, as amended by 1993*
Amendment to Appendix A, dated April
28, 1994
AIM V.I. Money Market Fund Master Investment Advisory Agreement September 27, March 31, 1993
dated October 18, 1993, as amended by 1993*
Amendment to Appendix A, dated April
28, 1994
AIM V.I. Value Fund Master Investment Advisory Agreement September 27, March 31, 1993
dated October 18, 1993, as amended by 1993*
Amendment to Appendix A, dated April
28, 1994

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

* The Current Advisory Agreement was last submitted to a vote of shareholders
in 1993 as a result of a reorganization of several AIM Funds and/or the
recapitalization of A I M Management Group Inc.

** The Current Advisory Agreement was submitted to a vote of the initial
shareholder of the Fund prior to commencement of operations.

30
36

ANNEX C

[NAME OF COMPANY]

MASTER INVESTMENT ADVISORY AGREEMENT

THIS AGREEMENT is made this day of , 1997, by and between [Name
of Company], a Maryland Corporation (the "Company"), with respect to its series
of shares shown on the Appendix A attached hereto, as the same may be amended
from time to time, and A I M Advisors, Inc., a Delaware corporation (the
"Advisor").

RECITALS

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

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

[This section does not apply to AIM Summit Fund. WHEREAS, the Company's
charter authorizes the Board of Directors of the Company to classify or
reclassify authorized but unissued shares of the Company, and as of the date of
this Agreement, the Company's Board of Directors has authorized the issuance of
[ ] series of shares representing interests in [ ] investment
portfolios (such portfolios and any other portfolios hereafter added to the
Company being referred to individually as a "Fund," collectively as the
"Funds"); and]

[This section applies only to AIM Summit Fund. WHEREAS, the Company's
charter does not currently provide for the issuance of separate series of shares
of the Company representing separate investment portfolios, but such charter may
in the future be amended to provide for such series of shares and portfolios
(the current portfolio of the Company and any other portfolios hereafter added
to the Company being referred to individually herein as a "Fund," collectively
as the "Funds"); and]

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

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

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

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37

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

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

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

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

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

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

3. Delegation of Responsibilities. Subject to the approval of the Board of
Directors and the shareholders of the Funds, the Advisor may delegate to a
sub-advisor certain of its duties enumerated in Section 2 hereof, provided that
the Advisor shall continue to supervise the performance of any such sub-advisor.

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

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

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

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

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

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

6. Broker-Dealer Relationships. The Advisor is responsible for decisions to
buy and sell securities for the Funds, broker-dealer selection, and negotiation
of brokerage commission rates. The Advisor's primary consideration in effecting
a security transaction will be to obtain execution at the most favorable price.
In selecting a broker-dealer to execute each particular transaction, the Advisor

32
38

will take the following into consideration: the best net price available; the
reliability, integrity and financial condition of the broker-dealer; the size of
and the difficulty in executing the order; and the value of the expected
contribution of the broker-dealer to the investment performance of the Funds on
a continuing basis. Accordingly, the price to the Funds in any transaction may
be less favorable than that available from another broker-dealer if the
difference is reasonably justified by other aspects of the portfolio execution
services offered. Subject to such policies as the Board of Directors may from
time to time determine, the Advisor shall not be deemed to have acted unlawfully
or to have breached any duty created by this Agreement or otherwise solely by
reason of its having caused the Funds to pay a broker or dealer that provides
brokerage and research services to the Advisor an amount of commission for
effecting a portfolio investment transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction, if the Advisor determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Advisor's overall responsibilities with respect to
a particular Fund, other Funds of the Company, and to other clients of the
Advisor as to which the Advisor exercises investment discretion. The Advisor is
further authorized to allocate the orders placed by it on behalf of the Funds to
such brokers and dealers who also provide research or statistical material, or
other services to the Funds, to the Advisor, or to any sub-advisor. Such
allocation shall be in such amounts and proportions as the Advisor shall
determine and the Advisor will report on said allocations regularly to the Board
of Directors of the Company indicating the brokers to whom such allocations have
been made and the basis therefor. In making decisions regarding broker-dealer
relationships, the Advisor may take into consideration the recommendations of
any sub-advisor appointed to provide investment research or advisory services in
connection with the Funds, and may take into consideration any research services
provided to such sub-advisor by broker-dealers.

7. Compensation. The Company shall pay the Advisor as compensation for
services rendered to a Fund hereunder an annual fee, payable monthly, based upon
the average daily net assets of such Fund as the same is set forth in Appendix A
attached hereto. Such compensation shall be paid solely from the assets of such
Fund. The average daily net asset value of the Funds shall be determined in the
manner set forth in the corporate charter and registration statement of the
Company, as amended from time to time.

8. Additional Services. Upon the request of the Company's Board of
Directors, the Advisor may perform certain accounting, shareholder servicing or
other administrative services on behalf of the Funds which are not required by
this Agreement. Such services will be performed on behalf of the Funds and the
Advisor may receive from the Funds such reimbursement for costs or reasonable
compensation for such services as may be agreed upon between the Advisor and the
Company's Board of Directors based on a finding by the Board of Directors that
the provision of such services by the Advisor is in the best interests of the
Company and its shareholders. Payment or assumption by the Advisor of any Fund
expense that the Advisor is not otherwise required to pay or assume under this
Agreement shall not relieve the Advisor of any of its obligations to the Funds
nor obligate the Advisor to pay or assume any similar Fund expense on any
subsequent occasions. Such services may include, but are not limited to:

(a) the services of a principal financial officer of the Company
(including applicable office space, facilities and equipment) whose normal
duties consist of maintaining the financial accounts and books and records
of the Company and the Funds, including the review and

33
39

calculation of daily net asset value and the preparation of tax returns;
and the services (including applicable office space, facilities and
equipment) of any of the personnel operating under the direction of such
principal financial officer;

(b) the services of staff to respond to shareholder inquiries
concerning the status of their accounts; providing assistance to
shareholders in exchanges among the mutual funds managed or advised by the
Advisor; changing account designations or changing addresses; assisting in
the purchase or redemption of shares; supervising the operations of the
custodian, transfer agent(s) or dividend disbursing agent(s) for the Funds;
or otherwise providing services to shareholders of the Funds; and

(c) such other administrative services as may be furnished from time
to time by the Advisor to the Company or the Funds at the request of the
Company's Board of Directors.

9. Expenses of the Funds. All of the ordinary business expenses incurred in
the operations of the Funds and the offering of their shares shall be borne by
the Funds unless specifically provided otherwise in this Agreement. These
expenses borne by the Funds include but are not limited to brokerage
commissions, taxes, legal, accounting, auditing, or governmental fees, the cost
of preparing share certificates, custodian, transfer and shareholder service
agent costs, expenses of issue, sale, redemption and repurchase of shares,
expenses of registering and qualifying shares for sale, expenses relating to
directors and shareholder meetings, the cost of preparing and distributing
reports and notices to shareholders, the fees and other expenses incurred by the
Company on behalf of the Funds in connection with membership in investment
company organizations and the cost of printing copies of prospectuses and
statements of additional information distributed to the Funds' shareholders.

10. Expense Limitation. [This section not applicable to AIM Variable
Insurance Funds, Inc. If, for any fiscal year of the Company, the total of all
ordinary business expenses of the Funds, including all investment advisory fees,
but excluding brokerage commissions and fees, taxes, interest and extraordinary
expenses, such as litigation costs, would exceed the applicable expense
limitations imposed by state securities regulations in any state in which the
Funds' shares are qualified for sale, as such limitations may be raised or
lowered from time to time, the aggregate of all such investment advisory fees
shall be reduced by the amount of such excess. The amount of any such reduction
to be borne by the Advisor shall be deducted from the monthly investment
advisory fee otherwise payable to the Advisor during such fiscal year. If
required pursuant to such state securities regulations, the Advisor will, not
later than the last day of the first month of the next succeeding fiscal year,
reimburse the Funds for any such annual operating expenses (after reduction of
all investment advisory fees in excess of such limitation). For the purposes of
this paragraph, the term "fiscal year" shall exclude the portion of the current
fiscal year which shall have elapsed prior to the date hereof and shall include
the portion of the then current fiscal year which shall have elapsed at the date
of termination of this Agreement. The application of expense limitations shall
be applied to each Fund of the Company separately unless the laws or regulations
of any state shall require that the expense limitations be imposed with respect
to the Company as a whole.]

11. Non-Exclusivity. The services of the Advisor to the Company and the
Funds are not to be deemed to be exclusive, and the Advisor shall be free to
render investment advisory and administrative or other services to others
(including other investment companies) and to engage in other activities. It is
understood and agreed that officers or directors of the Advisor may serve as
officers or directors of the Company, and that officers or directors of the
Company may serve as officers or directors of the

34
40

Advisor to the extent permitted by law; and that the officers and directors of
the Advisor are not prohibited from engaging in any other business activity or
from rendering services to any other person, or from serving as partners,
officers, directors or trustees of any other firm or trust, including other
investment advisory companies.

12. Term and Approval. This Agreement shall become effective with respect
to a Fund if approved by the shareholders of such Fund, and if so approved, this
Agreement shall thereafter continue in force and effect until February 28, 1999,
and may be continued from year to year thereafter, provided that the
continuation of the Agreement is specifically approved at least annually;

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

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

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

14. Liability of Advisor and Indemnification. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Advisor or any of its officers, directors or
employees, the Advisor shall not be subject to liability to the Company or to
the Funds or to any shareholder of the Funds for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security. [The
following provision is applicable only to AIF, ASF and AVIF. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Advisor or any officer,
director or employee of the Advisor, the Company hereby agrees to indemnify and
hold the Advisor harmless from and against all claims, actions, suits, and
proceedings at law or in equity, whether brought or asserted by a private party
or a governmental agency, instrumentality or entity of any kind, relating to the
sale, purchase, pledge of, advertisement of, or solicitation of sales or
purchases of any security (whether of a Fund or otherwise) by the Company, its
officers, directors, employees or agents in alleged violation of applicable
federal, state or foreign laws, rules or regulations.]

15. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered, telecopied or mailed postage paid, to the party
entitled to receipt thereof at such address as such party may designate for the
receipt of such notice. Until further notice to the other party, it is agreed
that the address of the Company shall be and that of the Advisor shall be Eleven
Greenway Plaza, Suite 1919, Houston, Texas 77046.

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41

16. Questions of Interpretation. Any question of interpretation of any term
or provision of this Agreement having a counterpart in or otherwise derived from
a term or provision of the 1940 Act or the Advisers Act shall be resolved by
reference to such term or provision of the 1940 Act or the Advisers Act and to
interpretations thereof, if any, by the United States Courts or in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the Securities and Exchange Commission issued pursuant to said Acts. In
addition, where the effect of a requirement of the 1940 Act or the Advisers Act
reflected in any provision of the Agreement is revised by rule, regulation or
order of the Securities and Exchange Commission, such provision shall be deemed
to incorporate the effect of such rule, regulation or order. [The following
provision is applicable only to AIF. Subject to the foregoing, this Agreement
shall be governed by and construed in accordance with the laws (without
reference to conflicts of law provisions) of the State of Texas.]

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

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

[NAME OF COMPANY]
(a Maryland corporation)
Attest:

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

(SEAL)
A I M ADVISORS, INC.

Attest: By:
- -------------------------------------------- -----------------------------------------
Assistant Secretary President
(SEAL)

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42

APPENDIX A
TO
MASTER INVESTMENT ADVISORY AGREEMENT
OF
[NAME OF COMPANY]

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

[FUND]

ANNUAL
NET ASSETS RATE
---------- ------

[Fees will be those set forth in Annex F]

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43

ANNEX D

FEES PAID TO AFFILIATES
IN MOST RECENT FISCAL YEAR

AIM
(ADMINISTRATIVE AIM
COMPANY AND FUND AGREEMENT) DISTRIBUTORS* AIM SERVICES
- ---------------- --------------- ------------- ------------

AIM EQUITY FUNDS, INC.
AIM Blue Chip Fund**....... $ 20,545 $ 172,399 $ 20,982
AIM Capital Development
Fund***................. 19,841 986,668 75,666
AIM INTERNATIONAL FUNDS, INC.
AIM International Equity
Fund.................... 94,250 2,265,347 1,170,699
AIM Global Aggressive
Growth Fund............. 86,330 4,361,647 1,474,675
AIM Global Growth Fund..... 78,704 565,334 216,084
AIM Global Income Fund..... 74,433 88,913 40,282
AIM SUMMIT FUND, INC......... 63,439 0 0
AIM TAX-EXEMPT FUNDS, INC.
AIM Tax-Exempt Cash Fund... 34,220 2,659 40,165
AIM Tax-Exempt Bond Fund of
CT...................... 45,950 34,649 19,600
Intermediate Portfolio..... 44,054 18,234 42,242
AIM VARIABLE INSURANCE FUNDS,
INC.****
AIM V.I. Capital
Appreciation Fund....... 33,560 0 0
AIM V.I. Diversified Income
Fund.................... 36,406 0 0
AIM V.I. Government
Securities Fund......... 30,769 0 0
AIM V.I. Global Utilities
Fund.................... 33,582 0 0
AIM V.I. Growth Fund....... 32,425 0 0
AIM V.I. Growth & Income
Fund.................... 31,484 0 0
AIM V.I. International
Equity Fund............. 21,068 0 0
AIM V.I. Money Market
Fund.................... 22,997 0 0
AIM V.I. Value Fund........ 35,540 0 0

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

* Net amount received from sales commissions and Rule 12b-1 fees, not
including amounts reallocated to brokers, dealers, agents and other
service providers.

** For the period June 3, 1996 (date AIM commenced advising Fund) through
October 31, 1996

*** For the period June 17, 1996 (date operations commenced) through October
31, 1996

**** For the eleven months ended December 31, 1995

38
44

ANNEX E

EXECUTIVE OFFICERS

EXECUTIVE OFFICERS OF AEF

Officers of AEF serve at the pleasure of the Board. Set forth below is
certain information regarding the executive officers of AEF.

BUSINESS EXPERIENCE
NAME AGE POSITION WITH AEF DURING PAST FIVE YEARS
- ---- --- ------------------------------- ------------------------------------------

Charles T. Bauer 77 Chairman See Director table under Proposal 1.
Robert H. Graham 50 President See Director table under Proposal 1.
John J. Arthur* 52 Senior Vice President and Senior Vice President and Treasurer, AIM;
Treasurer and Vice President and Treasurer, A I M
Management Group Inc. ("AIM Management"),
A I M Capital Management, Inc. ("AIM
Capital"), A I M Distributors, Inc. ("AIM
Distributors"), A I M Fund Services, Inc.
("AIM Services"), A I M Institutional Fund
Services, Inc.("AIM Institutional"), and
Fund Management Company ("Fund
Management").
Gary T. Crum 49 Senior Vice President Director and President, AIM Capital; and
Director and Senior Vice President, AIM
Management, and AIM; and Director, AIM
Distributors.
Scott G. Lucas 37 Senior Vice President Director and Senior Vice President, AIM
Capital; and Vice President, AIM
Management and AIM.
Jonathan C. Schoolar 35 Senior Vice President Director and Senior Vice President, AIM
Capital; and Vice President, AIM.
Carol F. Relihan* 42 Senior Vice President and Senior Vice President, General Counsel and
Secretary Secretary, AIM; Vice President, General
Counsel and Secretary, AIM Management;
Vice President and General Counsel, Fund
Management; and Vice President, AIM
Capital, AIM Distributors, AIM Services,
and AIM Institutional.
Dana R. Sutton 37 Vice President and Assistant Vice President and Fund Controller, AIM;
Treasurer and Assistant Vice President and Assistant
Treasurer, Fund Management.

Melville B. Cox 53 Vice President Vice President and Chief Compliance
Officer, AIM, AIM Capital, AIM
Distributors, AIM Services, AIM
Institutional and Fund Management.
Formerly, Vice President, Charles Schwab &
Co., Inc.; Assistant Secretary, Charles
Schwab Family of Funds and Schwab
Investments; Chief Compliance Officer,
Charles Schwab Investment Management,
Inc.; and Vice President, Integrated
Resources Life Insurance Co. and Capital
Life Insurance Co.

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

* Mr. Arthur and Ms. Relihan are married to each other.

39
45

EXECUTIVE OFFICERS OF AIF

Officers of AIF serve at the pleasure of the Board. Set forth below is
certain information regarding the executive officers of AIF.

BUSINESS EXPERIENCE
NAME AGE POSITION WITH AIF DURING PAST FIVE YEARS
- ---- --- ------------------------------- ------------------------------------------

Charles T. Bauer 77 Chairman See Director table under Proposal 1.
Robert H. Graham 50 President See Director table under Proposal 1.
John J. Arthur* 52 Senior Vice President and Senior Vice President and Treasurer, AIM;
Treasurer and Vice President and Treasurer, AIM
Management, AIM Capital, AIM Distributors,
AIM Services, AIM Institutional, and Fund
Management.
Gary T. Crum 49 Senior Vice President Director and President, AIM Capital;
Director and Senior Vice President, AIM
Management, and AIM; and Director, AIM
Distributors.
Scott G. Lucas 37 Senior Vice President Director and Senior Vice President, AIM
Capital; and Vice President, AIM and AIM
Management.
Carol F. Relihan* 42 Senior Vice President and Senior Vice President, General Counsel and
Secretary Secretary, AIM; Vice President, General
Counsel and Secretary, AIM Management;
Vice President and General Counsel, Fund
Management; and Vice President, AIM
Capital, AIM Distributors, AIM Services,
and AIM Institutional.
Dana R. Sutton 37 Vice President and Assistant Vice President and Fund Controller, AIM;
Treasurer and Assistant Vice President and Assistant
Treasurer, Fund Management.
Jonathan C. Schoolar 35 Vice President Director and Senior Vice President, AIM
Capital; and Vice President, AIM.
Melville B. Cox 53 Vice President Vice President and Chief Compliance
Officer, AIM, AIM Capital, AIM
Distributors, AIM Services, AIM
Institutional and Fund Management.
Formerly, Vice President, Charles Schwab &
Co., Inc.; Assistant Secretary, Charles
Schwab Family of Funds and Schwab
Investments; Chief Compliance Officer,
Charles Schwab Investment Management,
Inc.; and Vice President, Integrated
Resources Life Insurance Co. and Capital
Life Insurance Co.
Robert G. Alley 48 Vice President Senior Vice President, AIM Capital; and
Vice President, AIM. Formerly, Senior
Fixed Income Money Manager, Waddell and
Reed, Inc.

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

* Mr. Arthur and Ms. Relihan are married to each other.

40
46

EXECUTIVE OFFICERS OF ASF

Officers of ASF serve at the pleasure of the Board. Set forth below is
certain information regarding the executive officers of ASF.

BUSINESS EXPERIENCE
NAME AGE POSITION WITH ASF DURING PAST FIVE YEARS
- ---- --- ----------------------------- ---------------------------------------

Charles T. Bauer 77 Chairman See Director table under Proposal 1.
Robert H. Graham 50 President See Director table under Proposal 1.
John J. Arthur* 52 Senior Vice President and Senior Vice President and Treasurer,
Treasurer AIM; and Vice President and Treasurer,
AIM Management, AIM Capital, AIM
Distributors, AIM Services, AIM
Institutional, and Fund Management.
Gary T. Crum 49 Senior Vice President Director and President, AIM Capital;
Director and Senior Vice President, AIM
Management and AIM; and Director, AIM
Distributors.
Carol F. Relihan* 42 Senior Vice President and Senior Vice President, General Counsel
Secretary and Secretary, AIM; Vice President,
General Counsel and Secretary, AIM
Management; Vice President and General
Counsel, Fund Management; and Vice
President, AIM Capital, AIM
Distributors, AIM Services, and AIM
Institutional.
Scott G. Lucas 37 Senior Vice President Director and Senior Vice President, AIM
Capital; and Vice President, AIM
Management and AIM.
Dana R. Sutton 37 Vice President and Assistant Vice President and Fund Controller,
Treasurer AIM; and Assistant Vice President and
Assistant Treasurer, Fund Management.
Jonathan C. Schoolar 35 Vice President Director and Senior Vice President, AIM
Capital; and Vice President, AIM.
Melville B. Cox 53 Vice President Vice President and Chief Compliance
Officer, AIM, AIM Capital, AIM
Distributors, AIM Services, AIM
Institutional and Fund Management.
Formerly, Vice President, Charles
Schwab & Co., Inc.; Assistant
Secretary, Charles Schwab Family of
Funds and Schwab Investments; Chief
Compliance Officer, Charles Schwab
Investment Management, Inc.; and Vice
President, Integrated Resources Life
Insurance Co. and Capital Life
Insurance Co.

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

* Mr. Arthur and Ms. Relihan are married to each other.

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47

EXECUTIVE OFFICERS OF ATEF

Officers of ATEF serve at the pleasure of the Board. Set forth below is
certain information regarding the executive officers of ATEF.

BUSINESS EXPERIENCE
NAME AGE POSITION WITH ATEF DURING PAST FIVE YEARS
- ---- --- ----------------------------- ---------------------------------------

Charles T. Bauer 77 Chairman See Director table under Proposal 1.
Robert H. Graham 50 President See Director table under Proposal 1.
John J. Arthur* 52 Senior Vice President and Senior Vice President and Treasurer,
Treasurer AIM; and Vice President and Treasurer,
AIM Management, AIM Capital, AIM
Distributors, AIM Services, AIM
Institutional, and Fund Management.
Gary T. Crum 49 Senior Vice President Director and President, AIM Capital;
Director and Senior Vice President, AIM
Management and AIM; and Director, AIM
Distributors.
Carol F. Relihan* 42 Senior Vice President and Senior Vice President, General Counsel
Secretary and Secretary, AIM; Vice President,
General Counsel and Secretary, AIM
Management; Vice President and General
Counsel, Fund Management; and Vice
President, AIM Capital, AIM
Distributors, AIM Services, and AIM
Institutional.
Dana R. Sutton 37 Vice President and Assistant Vice President and Fund Controller,
Treasurer AIM; and Assistant Vice President and
Assistant Treasurer, Fund Management.
Melville B. Cox 53 Vice President Vice President and Chief Compliance
Officer, AIM, AIM Capital, AIM
Distributors, AIM Services, AIM
Institutional and Fund Management.
Formerly, Vice President, Charles
Schwab & Co., Inc.; Assistant
Secretary, Charles Schwab Family of
Funds and Schwab Investments; Chief
Compliance Officer, Charles Schwab
Investment Management, Inc.; and Vice
President, Integrated Resources Life
Insurance Co. and Capital Life
Insurance Co.
Stuart W. Coco 41 Vice President Senior Vice President, AIM Capital; and
Vice President, AIM.
Karen Dunn Kelley 36 Vice President Senior Vice President, AIM Capital; and
Vice President, AIM.

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

* Mr. Arthur and Ms. Relihan are married to each other.

42
48

EXECUTIVE OFFICERS OF AVIF

Officers of AVIF serve at the pleasure of the Board. Set forth below is
certain information regarding the executive officers of AVIF.

BUSINESS EXPERIENCE
NAME AGE POSITION WITH AVIF DURING PAST FIVE YEARS
- ---- --- ----------------------------- ---------------------------------------

Charles T. Bauer 77 Chairman See Director table under Proposal 1.
Robert H. Graham 50 President See Director table under Proposal 1.
John J. Arthur* 52 Senior Vice President and Senior Vice President and Treasurer,
Treasurer AIM; and Vice President and Treasurer,
AIM Management, AIM Capital, AIM
Distributors, AIM Services, AIM
Institutional, and Fund Management.
Gary T. Crum 49 Senior Vice President Director and President, AIM Capital;
Director and Senior Vice President, AIM
Management and AIM; and Director, AIM
Distributors
Scott G. Lucas 36 Senior Vice President Director and Senior Vice President, AIM
Capital; and Vice President, AIM
Management and AIM.
Carol F. Relihan* 42 Senior Vice President and Senior Vice President, General Counsel
Secretary and Secretary, AIM; Vice President,
General Counsel and Secretary, AIM
Management; Vice President and General
Counsel, Fund Management; and Vice
President, AIM Capital, AIM
Distributors, AIM Services, and AIM
Institutional.
Dana R. Sutton 37 Vice President and Assistant Vice President and Fund Controller,
Treasurer AIM; and Assistant Vice President and
Assistant Treasurer, Fund Management.
Melville B. Cox 53 Vice President Vice President and Chief Compliance
Officer, AIM, AIM Capital, AIM
Distributors, AIM Services, and AIM
Institutional and Fund Management.
Formerly, Vice President, Charles
Schwab & Co., Inc.; Assistant
Secretary, Charles Schwab Family of
Funds and Schwab Investments; Chief
Compliance Officer, Charles Schwab
Investment Management, Inc.; and Vice
President, Integrated Resources Life
Insurance Co. and Capital Life
Insurance Co.
Jonathan C. Schoolar 35 Vice President Director and Senior Vice President, AIM
Capital; and Vice President, AIM.
Robert G. Alley 48 Vice President Senior Vice President, AIM Capital; and
Vice President, AIM. Formerly, Senior
Fixed Income Money Manager, Waddell and
Reed, Inc.

Stuart W. Coco 41 Vice President Senior Vice President, AIM Capital; and
Vice President, AIM.
Karen Dunn Kelley 36 Vice President Senior Vice President, AIM Capital; and
Vice President, AIM.

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

* Mr. Arthur and Ms. Relihan are married to each other.

43
49

ANNEX F

ADVISORY AGREEMENT FEE SCHEDULE

AGGREGATE WAIVERS
TOTAL NET FEES FOR THE
NET ASSETS PAID TO AIM MOST
FOR THE MOST FOR THE MOST RECENTLY
ANNUAL RATE RECENTLY RECENTLY COMPLETED
(BASED ON AVERAGE COMPLETED COMPLETED FISCAL
NAME OF COMPANY AND FUND DAILY NET ASSETS) FISCAL YEAR FISCAL YEAR* YEAR
- ------------------------ --------------------------- --------------- ------------ ----------

AIM EQUITY FUNDS, INC.
AIM Aggressive Growth Fund 0.80% of the first $150
million.
0.625% of the excess over
$150 million. $ 2,750,563,943 $16,492,564 0
AIM Blue Chip Fund 0.75% of the first $350
million.
0.625% of the excess over
$350 million. $ 128,548,354 $ 256,773 ** $ 26,433
AIM Capital Development Fund 0.75% of the first $350
million.
0.625% of the excess over
$350 million. $ 273,687,609 $ 280,248 *** $ 144,946
AIM Charter Fund 1.00% of the first $30
million.
0.75% over $30 million up
to $150 million.
0.625% of the excess over
$150 million. $ 3,192,471,415 $16,529,891 $ 156,975
AIM Constellation Fund 1.00% of the first $30
million.
0.75% over $30 million up
to $150 million.
0.625% of the excess over
$150 million. $11,548,540,962 $57,614,412 $1,869,383
AIM Weingarten Fund 1.00% of the first $30
million.
0.75% over $30 million up
to $350 million.
0.625% of the excess over
$350 million. $ 5,305,435,087 $29,960,379 $1,458,804

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

* AIM reimbursed expenses with respect to the following Funds: AIM Municipal
Bond Fund, $13,200; AIM Global Growth Fund, $11,719; AIM Global Income Fund,
$18,300; AIM V.I. Global Utilities Fund, $13,800; Liquid Assets Portfolio,
$116,930; Prime Portfolio, $61,100; Treasury Portfolio, $113,500; Treasury
TaxAdvantage Portfolio, $25,600; and Cash Reserve Portfolio, $20,000.

** For the period 06/03/96 through 10/31/96.

*** For the period 06/17/96 through 10/31/96.

44
50

ADVISORY AGREEMENT FEE SCHEDULE

AIM FUNDS GROUP
AIM Balanced Fund 0.75% of the first $150
million.
0.50% of the excess over
$150 million. $ 164,874,356 $ 666,619 $ 24,176
AIM Global Utilities Fund 0.60% of the first $200
million.
0.50% over $200 million up
to $500 million.
0.40% over $500 million up
to $1 billion.
0.30% of the excess over $1
billion. $ 241,317,685 $ 1,256,220 0
AIM Growth Fund 0.80% of the first $150
million.
0.625% of excess over $150
million. $ 306,250,064 $ 1,715,406 0
AIM High Yield Fund 0.625% of the first $200
million.
0.55% over $200 million to
$500 million.
0.50% over $500 million to
$1 billion.
0.45% of the excess over $1
billion. $ 1,444,032,572 $ 5,717,303 0
AIM Income Fund 0.50% of the first $200
million.
0.40% over $200 million to
$500 million.
0.35% over $500 million to
$1 billion.
0.30% of the excess over $1
billion. $ 295,583,696 $ 1,176,249 0
AIM Intermediate Government Fund 0.50% of the first $200
million.
0.40% over $200 million to
$500 million.
0.35% over $500 million to
$1 billion.
0.30% of the excess over $1
billion. $ 237,617,705 $ 996,681 0

45
51

ADVISORY AGREEMENT FEE SCHEDULE

AIM Money Market Fund 0.55% of the first $1
billion.
0.50% of the excess over $1
billion. $ 584,793,680 $ 2,589,822 0
AIM Municipal Bond Fund 0.50% of the first $200
million.
0.40% over $200 million to
$500 million.
0.35% over $500 million to
$1 billion.
0.30% of the excess over $1
billion. $ 306,280,329 $ 1,356,225 0
AIM Value Fund 0.80% of the first $150
million.
0.625% of excess over $150
million. $ 6,269,483,246 $24,829,687 $ 502,799
AIM INTERNATIONAL FUNDS, INC.
AIM Global Aggressive Growth Fund 0.90% of the first $1
billion.
0.85% of the excess over $1
billion. $ 1,726,533,976 $ 8,751,918 0
AIM Global Growth Fund 0.85% of the first $1
billion.
0.80% of the excess over $1
billion. $ 236,819,172 $ 1,162,771 0
AIM Global Income Fund 0.70% of the first $1
billion.
0.65% of the excess over $1
billion. $ 38,713,770 0 $ 182,596
AIM International Equity Fund 0.95% of the first $1
billion.
0.90% of the excess over $1
billion. $ 1,476,749,468 $10,085,495 $ 299,147
AIM INVESTMENT SECURITIES FUNDS
Limited Maturity Treasury Portfolio 0.20% of the first $500
million.
0.175% of the excess over
$500 million. $ 502,515,805 $ 933,207 0
AIM SUMMIT FUND, INC. 1.00% of the first $10
million.
0.75% over $10 million to
$150 million.
0.625% over $150 million. $ 1,261,008,244 $ 7,360,028 **** 0

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

**** Of the $7,360,028 paid to AIM, $2,442,907 was paid by AIM to TradeStreet
pursuant to a sub-advisory agreement.

46
52

ADVISORY AGREEMENT FEE SCHEDULE

AIM TAX-EXEMPT FUNDS, INC.
AIM Tax-Exempt Cash Fund 0.35%. $ 30,014,343 $ 101,649 0
AIM Tax-Exempt Bond Fund of Connecticut 0.50%. $ 39,355,441 $ 0 $ 198,182
Intermediate Portfolio 0.30% of the first $500
million.
0.25% over $500 million to
$1 billion.
0.20% of the excess over $1
billion. $ 83,066,447 $ 232,893 0
AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Capital Appreciation Fund 0.65% of the first $250
million.
0.60% of the excess over
$250 million. $ 212,152,423 $ 882,870 0
AIM V.I. Diversified Income Fund 0.60% of the first $250
million.
0.55% of the excess over
$250 million. $ 44,630,145 $ 193,008 0
AIM V.I. Global Utilities Fund 0.65% of the first $250
million.
0.60% of the excess over
$250 million. $ 8,393,967 0 $ 32,703
AIM V.I. Government Securities Fund 0.50% of the first $250
million.
0.45% of the excess over
$250 million. $ 19,545,391 $ 71,080 0
AIM V.I. Growth Fund 0.65% of the first $250
million.
0.60% of the excess over
$250 million. $ 102,600,112 $ 434,620 0
AIM V.I. Growth and Income Fund 0.65% of the first $250
million.
0.60% of the excess over
$250 million. $ 38,567,212 $ 46,017 $ 67,802
AIM V.I. International Equity Fund 0.75% of the first $250
million.
0.70% of the excess over
$250 million. $ 82,256,855 $ 457,559 0

47
53

ADVISORY AGREEMENT FEE SCHEDULE

AIM V.I. Money Market Fund 0.40% of the first $250
million.
0.35% of the excess over
$250 million. $ 65,505,754 $ 168,901 0
AIM V.I. Value Fund 0.65% of the first $250
million.
0.60% of the excess over
$250 million. $ 257,211,787 $ 1,078,007 0
SHORT-TERM INVESTMENTS CO.
Liquid Assets Portfolio 0.15%. $ 2,086,944,322 $ 125,264 $2,562,094
Prime Portfolio 0.20% of the first $100
million.
0.15% over $100 million up
to $200 million.
0.10% over $200 million up
to $300 million.
0.06% over $300 million up
to $1.5 billion.
0.05% over $1.5 billion. $ 6,151,948,355 $ 3,007,431 0
SHORT-TERM INVESTMENTS TRUST
Treasury Portfolio 0.15% of the first $300
million.
0.06% over $300 million up
to $1.5 billion.
0.05% of the excess over
$1.5 billion. $ 3,703,891,140 $ 2,227,788 0
Treasury TaxAdvantage Portfolio 0.20% of the first $250
million.
0.15% over $250 million up
to $500 million.
0.10% of the excess over
$500 million. $ 457,196,150 $ 675,795 $ 116,126
TAX-FREE INVESTMENTS CO.
Cash Reserve Portfolio 0.25% of the first $500
million.
0.20% of the excess over
$500 million. $ 1,044,178,428 $ 1,819,232 $ 690,397

48
54

ANNEX G

AIM SUMMIT FUND, INC.
SUB-ADVISORY AGREEMENT

THIS AGREEMENT originally made the day of , 1997, by and
between A I M Advisors, Inc., a Delaware corporation (the "Advisor"), and
TradeStreet Investment Associates, Inc., a Maryland corporation (the
"Sub-Advisor").

RECITALS

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

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

WHEREAS, the Sub-Advisor is registered under the Advisers Act, as an
investment advisor and engages in the business of acting as an investment
advisor;

WHEREAS, the Advisor has entered into an investment advisory agreement of
even date herewith with the Fund (the "Investment Advisory Agreement"), pursuant
to which the Advisor shall act as investment advisor with respect to the Fund;
and

WHEREAS, pursuant to Section 3 (Delegation of Responsibilities) of the
Investment Advisory Agreement, the Advisor wishes to retain the Sub-Advisor for
purposes of rendering advisory services to the Advisor in connection with the
Fund upon the terms and conditions hereinafter set forth;

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

1. Appointment of Sub-Advisor. The Advisor hereby appoints the
Sub-Advisor to render investment research and advisory services to the
Advisor with respect to the Fund, under the supervision of the Advisor and
subject to the approval and direction of the Fund's Board of Directors, and
the Sub-Advisor hereby accepts such appointment, all subject to the terms
and conditions contained herein.

2. Investment Analysis. The duties of the Sub-Advisor shall be limited
to the following:

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

(b) to the extent requested by the Advisor, determining which
issuers and securities shall be represented in the Fund's investment
portfolio, formulating programs for the

49
55

purchases and sales of such securities and regularly reporting thereon
to the Advisor and, at the request of the Advisor, to the Fund's Board
of Directors.

3. Control by Board of Directors. Any investment program undertaken by
the Sub-Advisor pursuant to this Agreement, as well as any other activities
undertaken by the Sub-Advisor with respect to the Fund, shall at all times
be subject to any directives of the Board of Directors of the Fund.

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

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

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

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

(e) any other applicable provisions of state and federal law.

5. Compensation. The Advisor shall pay the Sub-Advisor, as
compensation for services rendered hereunder, an annual fee, payable
monthly, based upon the following average daily net assets of the Fund:

NET ASSETS
-----------------------------------------------------------

First $10 million.......................................... 0.50%
Over $10 million to and including $150 million............. 0.35%
Over $150 million.......................................... 0.225%
Over $700 million.......................................... 0.15%

The average daily net asset value of the Fund shall be determined in the
manner set forth in the corporate charter and registration statement of the
Fund, as amended from time to time.

6. Expenses of the Fund. All of the ordinary business expenses
incurred in the operations of the Fund and the offering of its shares shall
be borne by the Fund unless specifically provided otherwise in this
Agreement. These expenses borne by the Fund include but are not limited to
brokerage commissions, taxes, legal, auditing, or governmental fees, the
cost of preparing share certificates, custodian, transfer and shareholder
service agent costs, expenses of issue, sale, redemption and repurchase of
shares, expenses of registering and qualifying shares for sale, expenses
relating to directors and shareholder meetings, the cost of preparing and
distributing reports and notices to shareholders, the fees and other
expenses incurred by the Fund in connection with membership in investment
company organizations and the cost of printing copies of prospectuses and
statements of additional information distributed to the Fund's
shareholders.

50
56

7. Expense Limitation. If, for any fiscal year of the Fund, the amount
of the fee which the Advisor would otherwise receive from the Fund pursuant
to the Investment Advisory Agreement is reduced pursuant to expense
limitation provisions of the Investment Advisory Agreement, the fee which
the Sub-Advisor would otherwise receive from the Advisor pursuant to
Section 5 of this Agreement shall also be reduced proportionately. For
example, if the Advisor's fee from the Fund is reduced by 1/3, the
Sub-Advisor's fee from the Advisor will also be reduced by 1/3. Such
reduction shall be deducted from the monthly fee otherwise payable to the
Sub-Advisor by the Advisor, and, if such amount should exceed such monthly
fee, the Sub-Advisor agrees to repay the Advisor such amount of its fee
previously received with respect to such fiscal year as may be required to
make up the deficiency no later than the last day of the following month.
In no event will the Sub-Advisor be required to reimburse the Advisor for
any amount in excess of the fee it receives pursuant to this Agreement
during the fiscal year of the Fund in which reimbursement is required.

8. Non-Exclusivity. The services of the Sub-Advisor to the Advisor
with respect to the Fund are not to be deemed to be exclusive, and the
Sub-Advisor shall be free to render investment advisory and administrative
or other services to others (including other investment companies) and to
engage in other activities. It is understood and agreed that officers or
directors of the Sub-Advisor may serve as officers or directors of the
Advisor or of the Fund, and that officers or directors of the Fund or of
the Advisor may serve as officers or directors of the Sub-Advisor to the
extent permitted by law; and that the officers and directors of the
Sub-Advisor are not prohibited from engaging in any other business activity
or from rendering services to any other person, or from serving as
partners, officers, directors or trustees of any other firm or trust,
including other investment advisory companies.

9. Term and Approval. This Agreement shall become effective if
approved by the shareholders of the Fund, and if so approved, this
Agreement shall thereafter continue in force and effect until February 28,
1999, and may be continued from year to year thereafter, provided that the
continuation of the Agreement is specifically approved at least annually:

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

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

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

11. Liability of Sub-Advisor. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Sub-Advisor or any of

51
57

its officers, directors or employees, the Sub-Advisor shall not be subject
to liability to the Advisor for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.

12. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to such address as may be
designated for the receipt of such notice, with a copy to the Fund. Until
further notice, it is agreed that the address of the Fund and that of the
Advisor shall be Eleven Greenway Plaza, Suite 1919, Houston, Texas 77046
and that of the Sub-Advisor shall be 101 South Tryon Street, Suite 1000,
Charlotte, NC 28255.

13. Questions of Interpretation; Applicable Law. Any question of
interpretation of any term or provision of this Agreement having a
counterpart in or otherwise derived from a term or provision of the 1940
Act or the Advisers Act shall be resolved by reference to such term or
provision of the 1940 Act or the Advisers Act and to interpretations
thereof, if any, by the United States Courts or in the absence of any
controlling decision of any such court, by rules, regulations or orders of
the Securities and Exchange Commission issued pursuant to said Acts. In
addition, where the effect of a requirement of the 1940 Act or the Advisers
Act reflected in any provision of the Agreement is revised by rule,
regulation or order of the Securities and Exchange Commission, such
provision shall be deemed to incorporate the effect of such rule,
regulation or order.

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

A I M ADVISORS, INC.
Attest:
By:
- -------------------------------------- --------------------------------
Assistant Secretary President
(SEAL)
TRADESTREET INVESTMENT
ASSOCIATES, INC.
Attest:
By:
- -------------------------------------- --------------------------------
Assistant Secretary President

(SEAL)

52
58

ANNEX H

TRADESTREET
DIRECTORS AND EXECUTIVE OFFICERS

DIRECTOR/
OFFICER POSITION WITH BUSINESS EXPERIENCE
NAME AGE SINCE TRADESTREET DURING PAST FIVE YEARS
- ---- --- ------------ ---------------- -----------------------------

James Bainbridge Sommers 57 Director Director President, NationsBank Trust;
since 09/95 Officer, NationsBank, N.A.;
Director, NationsBanc
Discount Brokerage, Inc.
John Warner Munce 42 Director Director Executive Vice President,
since 09/95 NationsBank N.A.; Director,
NationsBanc Discount
Brokerage, Inc.
Stuart Alvin Sachs 64 Director Director President, Sovran Capital
since 09/95 Management Corp.; President,
C&S/Sovran Capital Management
Corp.
Andrew Michael Silton 42 Director and Director and Senior Vice President,
Officer President NationsBank, N.A.; President,
since 09/95 Cooperative Ventures; Senior
Vice President, Shields Asset
Management; Registered
Representative, Furman Selz.
Richard Scott Gershen 42 Officer Chief Operating Senior Vice President,
since 10/95 Officer NationsBank, N.A.; Senior
Vice President, Alliance
Capital Management L.P.;
Chief Financial Officer,
Shields Asset Management,
Inc.
Emerson Keith Wirtz, Jr. 36 Officer Chief Investment Senior Vice President,
since 12/96 Officer BankAmerica Corp.; First Vice
President, Security Pacific
Corp.
Holly Day Deem 41 Officer Officer Senior Vice President,
since 09/95 NationsBank, N.A.; Senior
Vice President, NationsBank
of Texas, N.A.; Senior Vice
President, First Florida
Bank, N.A.

53
59

ANNEX I

SECURITY OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth certain information regarding the ownership
of the shares of Common Stock the Companies listed below by the Directors and
Chief Executive Officer of such Companies. To the extent that a Company is not
listed next to a Director's name, such Director held no shares of any class of
such Company as of December 3, 1996.

SHARES OWNED
BENEFICIALLY AS
OF DECEMBER 3, PERCENT
NAME OF DIRECTOR/CHIEF EXECUTIVE OFFICER COMPANY FUND (CLASS) 1996 OF CLASS
- ------------------------------------------ ------- --------------------------------------------- ---------------- --------

Charles T. Bauer.......................... AEF AIM Aggressive Growth Fund (Class A) 4,544.953 *
AIM Capital Development Fund (Class A) 10,921.776 *
AIM Charter Fund (Class A) 48,369.432 *
AIM Constellation Fund (Class A) 29,927.659 *
AIM Weingarten Fund (Class A) 14,911.721 *
AIF AIM Global Aggressive Growth Fund (Class A) 6,455.468 *
AIM Global Growth Fund (Class A) 18,724.445 *
AIM International Equity Fund (Class A) 42,369.005 *
ASF 4,183.574 *
ATEF AIM Tax-Exempt Cash Fund 789,611.520 2.0955%
International Portfolio 172,896.132 2.2283%
(AIM Tax-Free Intermediate Shares)
Bruce L. Crockett......................... AEF AIM Aggressive Growth Fund (Class A) 251.624 *
AIM Charter Fund (Class A) 131.885 *
AIM Constellation Fund (Class A) 58.293 *
AIM Weingarten Fund (Class A) 73.643 *
AIF AIM International Equity Fund (Class A) 419.680 *
Owen Daly II.............................. AEF AIM Aggressive Growth Fund (Class A) 366.902 *
AIM Charter Fund (Class A) 27,750.297 *
AIM Constellation Fund (Class A) 15,783.283 *
AIM Weingarten Fund (Class A) 20,313.067 *
AIF AIM International Equity Fund (Class A) 3,838.293 *
Carl Frischling........................... AEF AIM Aggressive Growth Fund (Class A) 265.225 *
AIM Charter Fund (Class A) 3,336.570 *
AIM Constellation Fund (Class A) 3,455.961 *
AIM Weingarten Fund (Class A) 3,272.528 *
Robert H. Graham.......................... AEF AIM Aggressive Growth Fund (Class A) 2,859.955 *
AIM Blue Chip Fund (Class A) 3,067.485
AIM Capital Development Fund (Class A) 7,411.067 *
AIM Charter Fund (Class A) 15,775.609 *
AIM Constellation Fund (Class A) 7,406.817 *
AIM Weingarten Fund (Class A) 10,584.043 *
AIF AIM Global Aggressive Growth Fund (Class A) 5,855.097 *
AIM International Equity Fund (Class A) 12,415.435 *
ASF 20,850.004 *
ATEF AIM Tax-Exempt Cash Fund 10,568.370 *
Intermediate Portfolio 76,069.951 *
(AIM Tax-Free Intermediate Shares)
John F. Kroeger........................... AEF AIM Charter Fund (Class A) 6,486.779 *
AIM Weingarten Fund (Class A) 2,058.234 *

- ---------------
* Less than 1% of the outstanding shares of the Class.

54
60

Lewis F. Pennock.......................... AEF AIM Charter Fund (Class A) 1,071.175 *
Ian W. Robinson........................... AIF AIM International Equity Fund (Class A) 2,312.713 *
Louis S. Sklar............................ AEF AIM Aggressive Growth Fund (Class A) 522.624 *
AIM Charter Fund (Class A) 4,870.955 *
AIM Constellation Fund (Class A) 2,153.944 *
AIM Weingarten Fund (Class A) 1,630.405 *
AIF AIM International Equity Fund (Class A) 3,261.420 *
All Directors and Chief Executive Officer AEF AIM Aggressive Growth Fund (Class A) 8,811.283 *
AIM Blue Chip Fund (Class A) 3,067.485 *
AIM Capital Development Fund (Class A) 18,332.843 *
AIM Charter Fund (Class A) 107,792.702 *
AIM Constellation Fund (Class A) 58,785.957 *
AIM Weingarten Fund (Class A) 52,843.641 *
AIF AIM Global Aggressive Growth Fund (Class A) 12,310.565 *
AIM Global Growth Fund (Class A) 18,724.445 *
AIM International Equity Fund (Class A) 64,616.546 *
ASF 25,033.578 *
ATEF AIM Tax-Exempt Cash Fund 800,179.890 2.1236%
Intermediate Portfolio
(AIM Tax-Free Intermediate Shares) 248,966.083 3.2087%

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

* Less than 1% of the outstanding shares of the Class.

SECURITY OWNERSHIP OF CERTAIN RECORD OWNERS

AEF

To the best knowledge of AEF, the names and addresses of the record holders
of 5% or more of the outstanding shares of AEF as of the Record Date, and the
amount of the outstanding shares owned of record by such holders are set forth
below. AEF has no knowledge of shares held beneficially.

SHARES OF RECORD
NAME AND ADDRESS OWNED AS OF PERCENT
FUND (CLASS) OF RECORD OWNERS DECEMBER 3, 1996 OF CLASS
- ------------ ----------------------------------------------- ---------------- --------

AIM AGGRESSIVE GROWTH FUND
CLASS A..................................... Merrill Lynch Pierce Fenner & Smith 13,102,312.079 21.58%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246
AIM BLUE CHIP FUND
CLASS A..................................... Robert W. Baird Inc. 1,719,177.080 31.40%
Attn: Mutual Fd Operations
777 E. Wisconsin Ave.
Milwaukee, WI 53202
CLASS B..................................... Merrill Lynch Pierce Fenner & Smith 69,514.000 10.59%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246

55
61

SHARES OF RECORD
NAME AND ADDRESS OWNED AS OF PERCENT
FUND (CLASS) OF RECORD OWNERS DECEMBER 3, 1996 OF CLASS
- ------------ ----------------------------------------------- ---------------- --------

AIM CAPITAL DEVELOPMENT FUND
CLASS A..................................... Merrill Lynch Pierce Fenner & Smith 4,455,139.471 17.98%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246
Robert W. Baird Inc. 2,590,087.830 10.45%
Attn: Mutual Fd Operations
777 E. Wisconsin Ave.
Milwaukee, WI 53202
CLASS B..................................... Merrill Lynch Pierce Fenner & Smith 838,416.000 20.61%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246
AIM CHARTER FUND
CLASS A..................................... Merrill Lynch Pierce Fenner & Smith 30,259,884.858 12.68%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246
Great-West Life and Annuity Insurance Co 18,214,762.787 7.63%
401(k) Unit Valuations
Attn: Rod Switzer 2T2
8515 E. Orchard
Englewood, CO 80111
CLASS B..................................... Merrill Lynch Pierce Fenner & Smith 5,179,090.000 10.66%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246
INSTITUTIONAL CLASS......................... Commonwealth of Massachusetts 2,388,416.162 90.45%
Deferred Compensation Plan
One Ashburton Place
12th Floor
Boston, MA 02108
AIM CONSTELLATION FUND
CLASS A..................................... Merrill Lynch Pierce Fenner & Smith 76,352,799.963 16.92%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd floor
Jacksonville, FL 32246
INSTITUTIONAL CLASS......................... City of New York Deferred Compensation 5,669,522.144 49.10%
Attn: Joan Barrow
40 Rector Street 3rd floor
New York, NY 10006
Nationwide Ohio Variable Account 1,562,558.914 13.53%
P.O. Box 182029
C/O IPO Portfolio Accounting
Columbus, OH 43218
Commonwealth of Massachusetts 1,472,819.304 12.75%
Deferred Compensation Plan
Attn: Laureen Casper
One Ashburton Place 12th floor
Boston, MA 02108

56
62

SHARES OF RECORD
NAME AND ADDRESS OWNED AS OF PERCENT
FUND (CLASS) OF RECORD OWNERS DECEMBER 3, 1996 OF CLASS
- ------------ ----------------------------------------------- ---------------- --------

AIM WEINGARTEN FUND
CLASS A..................................... Merrill Lynch Pierce Fenner & Smith 47,543,872.319 19.13%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246
CLASS B..................................... Merrill Lynch Pierce Fenner & Smith 1,779,870.503 12.55%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246
INSTITUTIONAL CLASS......................... Commonwealth of Massachusetts 1,965,036.607 66.12%
Deferred Compensation Plan
Attn: Laureen Casper
One Ashburton Place 12th floor
Boston, MA 02108
Union Planters National Bank 542,412.225 18.25%
P.O. Box 387
Attn: Susan Trotter
Memphis, TN 38147
City of Milwaukee Deferred Compensation 170,555.407 5.74%
Firstar Trust Co.
P.O. Box 2054
Milwaukee, WI 53201

AIF

To the best knowledge of AIF, the names and addresses of the record holders
of 5% or more of the outstanding shares of AIF as of the Record Date, and the
amount of the outstanding shares owned of record by such holders are set forth
below. AIF has no knowledge of shares held beneficially.

SHARES OF RECORD
NAME AND ADDRESS OWNED AS OF PERCENT
FUND (CLASS) OF RECORD OWNERS DECEMBER 3, 1996 OF CLASS
- ------------ ----------------------------------------------- ---------------- --------

AIM GLOBAL AGGRESSIVE GROWTH FUND
CLASS A..................................... Merrill Lynch Pierce Fenner & Smith 11,081,247.909 18.22%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246
CLASS B..................................... Merrill Lynch Pierce Fenner & Smith 15,140,542.422 27.59%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246
AIM GLOBAL GROWTH FUND
CLASS A..................................... Merrill Lynch Pierce Fenner & Smith 1,187,184.000 14.05%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246

57
63

SHARES OF RECORD
NAME AND ADDRESS OWNED AS OF PERCENT
FUND (CLASS) OF RECORD OWNERS DECEMBER 3, 1996 OF CLASS
- ------------ ----------------------------------------------- ---------------- --------

CLASS B..................................... Merrill Lynch Pierce Fenner & Smith 2,270,014.000 24.77%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246
AIM GLOBAL INCOME FUND
CLASS B..................................... Merrill Lynch Pierce Fenner & Smith 199,628.000 12.18%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246
AIM INTERNATIONAL EQUITY FUND
CLASS A..................................... Merrill Lynch Pierce Fenner & Smith 20,600,410.942 28.13%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246
CLASS B..................................... Merrill Lynch Pierce Fenner & Smith 9,312,312.861 36.18%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246

ASF

To the best knowledge of ASF, there were no record holders of 5% or more of
the outstanding shares of ASF as of the Record Date. ASF has no knowledge of
shares held beneficially.

ATEF

To the best knowledge of ATEF, the names and addresses of the record
holders of 5% or more of the outstanding shares of ATEF as of the Record Date,
and the amount of the outstanding shares owned of record by such holders are set
forth below. ATEF has no knowledge of shares held beneficially.

SHARES OWNED OF
NAME AND ADDRESS RECORD AS OF PERCENT
FUND (CLASS) OF RECORD OWNERS DECEMBER 3, 1996 OF CLASS
- ------------ ----------------------------------------------- ---------------- --------

AIM TAX-EXEMPT CASH FUND
P. Andrews McLane 3,957,540.640 10.50%
77 Dean Rd
Weston, MA 02193-0000
William L. Lanier 1,923,934.490 5.11%
Mary Jane Lanier Jt Ten
15 Lloyd Harbor Road
Lloyd Habor, NY 11743-7204
INTERMEDIATE PORTFOLIO
Merrill Lynch Pierce Fenner & Smith 764,591.000 9.85%
FBO the sole benefit of customers
Attn: Fund Administration
4800 Deer Lake Dr. East 3rd Floor
Jacksonville, FL 32246

58
64
AVIF

To the best knowledge of AVIF, the names and addresses of the record
holders of 5% or more of the outstanding shares of AVIF as of the Record Date,
and the amount of outstanding shares owned of record by such holders are set
forth below. AVIF has no knowledge of shares held beneficially.

SHARES OWNED OF
NAME AND ADDRESS RECORD AS OF PERCENT
FUND (CLASS) OF RECORD OWNERS DECEMBER 3, 1996 OF CLASS
- ------------ ----------------------------------------------- ---------------- --------

AIM V.I. CAPIAL APPRECIATION FUND
CIGNA Individual Insurance 16,065,616.171 85.90%
AIM VI Separate Acct - Kurt Bauer
S204
Hartford, CT 06152
Glenbrook Life & Annuity Co. 2,376,565.028 12.71%
Attn: Financial Control Dept. N4A
P.O. Box 94040
Palatine, IL 60094-4040
AIM V.I. DIVERSIFIED INCOME FUND
CIGNA Individual Insurance 4,750,334.524 85.22%
AIM VI Separate Acct - Kurt Bauer
S204
Hartford, CT 06152
Glenbrook Life & Annuity Co. 694,337.952 12.46%
Attn: Financial Control Dept. N4A
P.O. Box 94040
Palatine, IL 60094-4040
AIM V.I. GLOBAL UTILITIES FUND
CIGNA Individual Insurance 825,920.886 83.29%
AIM VI Separate Acct - Kurt Bauer
S204
Hartford, CT 06152
Glenbrook Life & Annuity Co. 111,175.795 11.21%
Attn: Financial Control Dept. N4A
P.O. Box 94040
Palatine, IL 60094-4040
Connecticut General Life Ins. Co. 54,540.668 5.50%
Seed Account / Attn: Kurt Bauer
S-203
Hartford, CT
AIM V.I. GOVERNMENT SECURITIES FUND
CIGNA Individual Insurance 1,988,725.463 85.27%
AIM VI Separate Acct - Kurt Bauer
S204
Hartford, CT 06152
Glenbrook Life & Annuity Co. 230,251.357 9.87%
Attn: Financial Control Dept. N4A
P.O. Box 94040
Palatine, IL 60094-4040
AIM V.I. GROWTH FUND
CIGNA Individual Insurance 9,024,101.063 87.71%
AIM VI Separate Acct - Kurt Bauer
S204
Hartford, CT 06152
Glenbrook Life & Annuity Co. 1,250,748.188 12.16%
Attn: Financial Control Dept. N4A
P.O. Box 94040
Palatine, IL 60094-4040

59
65

SHARES OWNED OF
NAME AND ADDRESS RECORD AS OF PERCENT
FUND (CLASS) OF RECORD OWNERS DECEMBER 3, 1996 OF CLASS
- ------------ ----------------------------------------------- ---------------- --------

AIM V.I. GROWTH AND INCOME FUND
CIGNA Individual Insurance 5,835,715.043 46.51%
AIM VI Separate Acct - Kurt Bauer
S204
Hartford, CT 06152
IDS Life Insurance Company 4,751,890.637 37.87%
Attn: Craig Lindo
Re Growth & Income
IDS Tower 10
Minneapolis MN 55440
Glenbrook Life & Annuity Co. 1,694,649.396 13.51%
Attn: Financial Control Dept. N4A
P.O. Box 94040
Palatine, IL 60094-4040
AIM V.I. INTERNATIONAL EQUITY FUND
CIGNA Individual Insurance 8,538,137.843 86.83%
AIM VI Separate Acct - Kurt Bauer
S204
Hartford, CT 06152
Glenbrook Life & Annuity Co. 1,294,398.394 13.16%
Attn: Financial Control Dept. N4A
P.O. Box 94040
Palatine, IL 60094-4040
AIM V.I. MONEY MARKET FUND
CIGNA Individual Insurance 54,285,574.030 87.65%
AIM VI Separate Acct - Kurt Bauer
S204
Hartford, CT 06152
Glenbrook Life & Annuity Co. 7,587,876.890 12.25%
Attn: Financial Control Dept. N4A
P.O. Box 94040
Palatine, IL 60094-4040
AIM V.I. VALUE FUND
CIGNA Individual Insurance 17,466,226.479 89.56%
AIM VI Separate Acct - Kurt Bauer
S204
Hartford, CT 06152
Glenbrook Life & Annuity Co. 1,919,086.933 9.84%
Attn: Financial Control Dept. N4A
P.O. Box 94040
Palatine, IL 60094-4040

60
66

APPENDIX 1

PROXY PROXY
AIM BLUE CHIP FUND
A SERIES OF AIM EQUITY FUNDS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS -- FEBRUARY 7, 1997

The undersigned hereby appoints Charles T. Bauer, Robert H. Graham and Carol F.
Relihan, and each of them separately, proxies with the power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Annual Meeting of Shareholders of the Fund indicated above, on
February 7, 1997 at 2 p.m. Central time, and at any adjournment thereof,
all of the shares of the Fund which the undersigned would be entitled to vote
if personally present. IF THIS PROXY IS SIGNED AND RETURNED WITH NO CHOICES
INDICATED, THE SHARES WILL BE VOTED FOR THE ELECTION OF THE NOMINEES NAMED ON
THIS PROXY AND FOR APPROVAL OF THE OTHER PROPOSALS. (For AVIF Shareholders:
This proxy will serve as the voting instruction form by which the undersigned
owner of a variable annuity or variable life insurance contract (each, a
"Contract") instructs the voting of the Fund shares attributable to his or her
Contract. See the proxy statement for more details.)

NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS
ON THIS PROXY CARD. All joint owners should
sign. When signing as executor, administrator,
attorney, trustee or guardian or as custodian
for a minor, please give full title as such.
If a corporation, please sign in full
corporate name and indicate the signer's
office. If a partner, sign in the partnership
name.

___________________________________________
Signature

___________________________________________
Signature (if held jointly)

___________________________________________
Date

GROUP A

THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS. THE DIRECTORS RECOMMEND VOTING "FOR" ALL APPLICABLE PROPOSALS.

1. ELECTION OF DIRECTORS -- To Withhold Authority to vote for any individual nominee,
strike a line through the name below.

Nominees: Charles T. Bauer Bruce L. Crockett Owen Daly II Carl Frischling Robert H. Graham
John F. Kroeger Lewis F. Pennock Ian W. Robinson Louis S. Sklar

FOR AGAINST ABSTAIN
2. Proposal to approve a new Master Investment Advisory Agreement for the Fund. / / / / / /

3. Proposal to approve a new Master Sub-Advisory Agreement for the Fund
(Applies only to ASF) / / / / / /

4. Proposal to eliminate a fundamental investment policy prohibiting or restricting
investments in other investment companies and/or to amend certain related fundamental
investment policies. (Applies to all Funds except AIM Blue Chip Fund) / / / / / /

5. Proposal to eliminate fundamental investment policy prohibiting investments in companies
with less than three years of continuous operations. (Applies only to
AIM International Equity Fund) / / / / / /

6. Proposal to ratify the selection of KPMG Peat Marwick LLP as independent
accountants for the Fund. (Applies to all Funds except AVIF) / / / / / /

7. Proposal to ratify the selection of Tait, Weller & Baker as independent
accountants for the Fund. (Applies only to AVIF) / / / / / /

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

GROUP A
68
PROXY PROXY
AIM CAPITAL DEVELOPMENT FUND
A SERIES OF AIM EQUITY FUNDS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS -- FEBRUARY 7, 1997
The undersigned hereby appoints Charles T. Bauer, Robert H. Graham and Carol F.
Relihan, and each of them separately, proxies with the power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Annual Meeting of Shareholders of the Fund indicated above, on
February 7, 1997 at 2 p.m. Central time, and at any adjournment thereof,
all of the shares of the Fund which the undersigned would be entitled to vote
if personally present. IF THIS PROXY IS SIGNED AND RETURNED WITH NO CHOICES
INDICATED, THE SHARES WILL BE VOTED FOR THE ELECTION OF THE NOMINEES NAMED ON
THIS PROXY AND FOR APPROVAL OF THE OTHER PROPOSALS. (For AVIF Shareholders:
This proxy will serve as the voting instruction form by which the undersigned
owner of a variable annuity or variable life insurance contract (each, a
"Contract") instructs the voting of the Fund shares attributable to his or her
Contract. See the proxy statement for more details.)

___________________________________________
Signature

___________________________________________
Signature (if held jointly)

___________________________________________
Date
GROUP A