DEFA14A 1 h30298cdefa14a.txt A I M INVESTMENTS - PROXY UPDATE 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY On November 24, 2005, AIM filed prospectus stickers announcing 6 proposed fund mergers. The information below lists the funds proposed for merger, general and fund specific questions and answers. The information contained in this document can be found in the definitive proxy statements dated January 9, 2006.
Selling Fund (Target) Buying Fund (Acquiring) --------------------- ----------------------- AIM Aggressive Growth Fund* AIM Constellation Fund AIM Weingarten Fund AIM Constellation Fund AIM Blue Chip Fund AIM Large Cap Growth Fund AIM Mid Cap Growth Fund AIM Dynamics Fund AIM Small Company Growth Fund AIM Small Cap Growth Fund AIM Premier Equity Fund AIM Charter Fund
* Contingent upon the completion of the AIM Aggressive Growth reorganization, AIM Aggressive Growth Fund 529 Portfolio will reorganize into AIM Constellation Fund 529 Portfolio effective March 13, 2006. REASONS FOR THE PROPOSED MERGERS For the following reasons, AIM believes the proposed mergers are in the best interest of shareholders. - The larger combined asset base of each surviving fund after the reorganizations may help the fund to achieve operating efficiencies. - In most of the proposed mergers, the respective portfolio managers of the acquiring funds serve on the management teams of the funds to be acquired and are already familiar with the investment products and processes in each of the proposed mergers. - More specific details on the benefits of individual mergers can be found in the fund specific section of this Q&A or in the proxy statement for that merger. FACTORS THE TRUSTEES CONSIDERED WHEN EVALUATING THE MERGERS AIM initially proposed that the Trustees consider the mergers at an in-person meeting held on October 27, 2005, at which preliminary discussions of the mergers took place. The Trustees of each target fund determined that the mergers are advisable and in the best interests of each target fund and will not dilute the interests of each target fund's shareholders. The Trustees approved the mergers at a telephonic meeting on November 14, 2005. In evaluating each of the mergers, the Trustees considered a number of factors regarding the target and acquiring funds, including: - Investment objective and principal investment strategies - Comparative expenses of each fund and pro forma expenses of buying fund after giving effect to each merger - Comparative performance - Comparative sizes of each fund - The consequences of the mergers for Federal income tax purposes, including the treatment of any unrealized capital gains and capital loss carryforwards, if any, available to offset future capital gains of each target and acquiring fund - Any fees and expenses that will be borne directly or indirectly by each target or acquiring fund - The projected financial impact to AIM and its affiliates 1 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY KEY DATES - November 14, 2005: Board approves proposed mergers - December 2, 2005: Record date for shareholder proxy inclusion - January 9, 2006: Date of definitive proxy statement filed with SEC - January 5-11, 2006: Print proxies - January 12-16, 2006: Mail proxies - TBD: Close target funds to new investors (actual closing date depends on when sufficient shareholder votes have been received approving merger) - February 28, 2006: Shareholder meeting - March 10 & 24, 2006: Valuation Dates of the Mergers (last NAV): - March 13 & 27, 2006: Mergers close (3/13- Weingarten, Aggressive Growth and Blue Chip, 3/27- Premier Equity, Small Company Growth and Mid Cap Growth) NUMBER OF ACCOUNTS AFFECTED
FUND ACCOUNTS AS OF 7/31/05 ---- ---------------------- AIM Aggressive Growth Fund 237,692 AIM Weingarten Fund 343,754 AIM Blue Chip Fund 375,805 AIM Mid Cap Growth Fund 34,244 AIM Small Company Growth Fund 93,013 AIM Premier Equity Fund 889,384
METHODS OF COMMUNICATION - Press Release announcing Trustee approval of soliciting shareholders for merger initiatives - Fast Faxes to Home Offices and Back Offices announcing: - Proxy mailing - If shareholders approve fund merger / date funds will close to new investors / merger date - Final distributions and merger factors - Public Q&A on how to vote included in proxy and available on AIMInvestments.com - E-Alert to advisors announcing: - Trustee approval of soliciting shareholders for merger initiatives - Proxy mailing - If shareholders approve fund merger / date funds will close to new investors / merger date - Final distributions and merger factors - Advisor Proxy Update - Literature updates - Prospectus / SAI Stickers - Transaction Confirms - E-Alert to advisors announcing completion of mergers - Final distributions and merger factors available on AIMInvestments.com For a complete communication plan including communication activity, task coordinator, target dates and statuses, please see the communication plan on the Product Development website. 2 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY MERGER TRANSACTION EXAMPLE The investor will receive the closing share price for the surviving fund on the valuation date (March 10 or 24, 2006) of the merger. The balance of the account in the reorganizing fund will be calculated at NAV on March 10 or 24, and the total amount will be invested in the surviving fund at the appropriate conversion rate to determine the number of shares in the surviving fund the shareholder will receive. This is not a taxable event for the shareholder. EXAMPLE: If, at the close of business on March 10, 2006 [ ] AIM Aggressive Growth Fund's NAV = $11.23 [ ] AIM Constellation Fund's NAV = $25.42 [ ] 11.23 / 25.42 = 0.4417781 (merger ratio) 1,000 shares of AIM Aggressive Growth Fund will equate to 441.778 shares of AIM Constellation Fund at 8:00 a.m. EST on March 13, 2006. ACCOUNT VALUES Although the NAV's may be different, shareholders will receive a number of shares in the surviving fund with a value equal to the value of their account in the target fund on the effective date of the merger. TAX IMPLICATIONS The mergers have been structured as tax-free transactions. Each target fund will receive an opinion of Ballard Spahr Andrews & Ingersoll, LLP to the effect that the merger will constitute a tax-free merger for federal income tax purposes. However, please note that there may be capital gains or dividends distributed to shareholders of the target fund just prior to the merger that may present tax consequences to the shareholders. In certain cases, the surviving fund may be limited in utilizing capital loss carryforwards that were recognized as of the merger date by one or both funds. OTHER INITIATIVES INCLUDED IN THE PROXIES There are no other initiatives that AIM is requesting approval for. PROSPECTUS DELIVERY The prospectus of the surviving fund is attached to the proxy statement that will be mailed to the target funds' shareholders on or about January 12, 2006. CONFIRMATION STATEMENTS Pending shareholder approval, confirmation statements for the mergers will be mailed to those shareholders in the funds to be merged away 2-3 days following the merger effective dates. Shareholders will also receive a first quarter 2006 statement around the first week in April. Advisors will also receive copies of confirmation statements; however, AIM has discontinued production of periodic dealer statements. 3 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY SHAREHOLDERS NOT WISHING TO INVEST IN THE SURVIVING FUND Shareholders may exercise their privilege to exchange into another AIM Fund. Should a shareholder not wish to exchange into another AIM Fund, he or she may redeem at any time. However, any applicable CDSC will be charged on redemptions. POST-MERGER SHAREHOLDER COMMUNICATIONS Shareholders will receive a confirmation immediately following the close of the merger accompanied by a letter from AIM President, Robert H. Graham. ACCOUNT FEATURES (E.G. AUTOMATIC INVESTMENTS AND SYSTEMATIC WITHDRAWALS)? All features will carry over to the account in the surviving fund. ADVISORY FEES AIM's uniform fee schedules are designed so that as a fund's assets increase the advisory fees decrease, as a percentage of average daily net assets. As a result of the merger, the combined assets may achieve a more advantageous uniform fee schedule breakpoint, thus resulting in lower advisory fees, as a percentage of average daily net assets. The shareholder will be subject to the advisory fee of the acquiring fund, then in effect. Please see the individual merger proxy for specific information on the pro forma fees and expenses. 4 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY Detailed information on the mergers, including board considerations, performance and expenses, can be found in the definitive proxy statements dated January 9, 2006. AIM AGGRESSIVE GROWTH FUND THE MERGER OF AIM AGGRESSIVE GROWTH FUND INTO AIM CONSTELLATION FUND IS CONTINGENT ON SHAREHOLDER APPROVAL OF AIM WEINGARTEN FUND INTO AIM CONSTELLATION FUND. THE MERGER OF AIM WEINGARTEN FUND INTO AIM CONSTELLATION FUND IS NOT CONTINGENT ON SHAREHOLDER APPROVAL OF AIM AGGRESSIVE GROWTH FUND INTO AIM CONSTELLATION FUND. REASONS FOR SELECTING AIM CONSTELLATION FUND AS THE ACQUIRING FUND AIM proposed the AIM Aggressive Growth Fund Reorganization, together with the AIM Weingarten Fund Reorganization, as part of an effort to consolidate the AIM Funds' growth fund offerings. In considering the AIM Aggressive Growth Fund Reorganization, the Board noted that the funds have similar investment objectives and are managed using similar investment strategies. In addition, AIM Constellation Fund's long-term performance track record is better than AIM Aggressive Growth Fund's and the expenses of the combined fund are expected to be lower than those of AIM Aggressive Growth Fund. The Board noted that since September 16, 2005, both AIM Aggressive Growth Fund and AIM Constellation Fund have been managed by the same lead portfolio manager and portfolio management team using similar investment strategies. Although AIM Constellation Fund and AIM Aggressive Growth Fund only had approximately 20% portfolio overlap as of July 31, 2005, the amount of portfolio overlap between the funds is expected to increase because the same portfolio management team now manages both funds using similar investment strategies. The Board noted that AIM Aggressive Growth Fund is currently positioned as a small- to mid-cap growth fund, whereas AIM Constellation Fund has a multi-cap discipline focusing on mid-and large-cap stocks. Thus, AIM Aggressive Growth Fund shareholders may lose most of their current small-cap exposure in AIM Constellation Fund's investment process. The Board also noted that consummation of the AIM Aggressive Growth Fund Reorganization is conditioned on consummation of the AIM Weingarten Fund Reorganization. If the AIM Weingarten Fund Reorganization is not consummated, the asset retention requirements for small cap stocks necessary to maintain the tax-free nature of the AIM Aggressive Growth Fund Reorganization could unduly limit the portfolio manager's flexibility in managing the combined fund because a disproportionately large percentage of the assets of the combined fund could be required to be held in small cap stocks. In 2005 AIM reorganized and consolidated the management teams of the AIM Funds managed in the growth style. The Reorganizations are intended to further combine similar funds within that style space which are now managed by the same portfolio management teams. OBJECTIVES AND INVESTMENT STRATEGIES AIM Aggressive Growth Fund, AIM Weingarten fund and AIM Constellation Fund have similar investment objectives. AIM Weingarten Fund and AIM Constellation Fund seek growth of capital, while AIM Aggressive Growth Fund seeks long-term growth of capital. AIM Aggressive Growth Fund, AIM Weingarten Fund and AIM Constellation Fund also invest in similar types of securities. All three funds invest primarily in common stocks of companies with above-average long-term growth in earnings and excellent prospects for future growth. However, AIM Aggressive Growth Fund invests in small and medium-sized growth companies and AIM Weingarten Fund invests in seasoned, better capitalized companies, while AIM Constellation Fund may invest without regard to capitalization. AIM Constellation Fund also has the ability to use leverage, although its portfolio management team does not currently do so. The chart below provides a summary for comparison purposes of the investment objectives and principal investment strategies of AIM Aggressive Growth Fund, AIM Weingarten Fund and AIM Constellation Fund. 5 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY
AIM AGGRESSIVE GROWTH FUND AIM WEINGARTEN FUND AIM CONSTELLATION FUND (SELLING FUND) (SELLING FUND) (BUYING FUND) ------------------------------------- ------------------------------------- ----------------------------------- INVESTMENT OBJECTIVES - Long-term growth of capital - Growth of capital - Growth of capital INVESTMENT STRATEGIES - Invests primarily in common - Invests in common stocks of - Invests principally in stocks of small and medium-sized seasoned and better capitalized common stocks, without regard growth companies. companies. to market capitalization. - Portfolio managers focus on - Portfolio managers focus on - Invests in common stocks companies that are likely to companies that have experienced of companies the portfolio benefit from new or innovative above-average growth in earnings managers believe are likely to products, services or processes and have excellent prospects for benefit from new or innovative as well as those that have future growth. products, services or experienced above-average, processes as well as those long-term growth in earnings and that have experienced above have excellent prospects for average, long-term growth in future growth. earnings and have excellent prospects for future growth. - May also invest up to 25% of - May also invest up to 20% of - May also invest up to 20% its total assets in foreign its total assets in foreign of its total assets in foreign securities. securities. securities.
PORTFOLIO MANAGEMENT
AIM Aggressive Growth Fund AIM Constellation Fund -------------------------- ---------------------- Lanny H. Sachnowitz (LEAD) Lanny H. Sachnowitz (LEAD) Kirk L. Anderson Kirk L. Anderson James G. Birdsall James G. Birdsall Asst by Large/Multi-Cap Growth Team Robert J. Lloyd Asst by Large/Multi-Cap Growth Team
AIM Aggressive Growth Fund and AIM Constellation Fund have been managed by the same team since 9/16/05. HISTORICAL PERFORMANCE Although AIM Aggressive Growth Fund has recently provided better returns, AIM Constellation Fund has provided better long-term returns to its shareholders. Average Annual Total Returns as of 7/31/05* 6 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY
1-YEAR 5-YEAR 10-YEAR SINCE INCEPTION INCEPTION DATE ------ ------ ------- --------------- --------------- AIM AGGRESSIVE GROWTH A SHARES 19.17% -5.28% 5.67% 11.89% 5/1/84 AIM CONSTELLATION A SHARES 14.02% -7.60% 5.03% 14.38% 4/30/76
* Performance at NAV PERFORMANCE SURVIVOR The Board determined that it was appropriate for AIM Constellation Fund to be the surviving fund in the AIM Aggressive Growth Fund Reorganization primarily because although AIM Aggressive Growth Fund and AIM Constellation Fund currently have overlapping management teams, the portfolio composition of the combined fund is expected to be more like that of AIM Constellation Fund over time, and the investment style that AIM Constellation Fund's management team currently utilizes to manage AIM Constellation Fund will apply to the combined fund after the AIM Aggressive Growth Fund Reorganization. Consequently, the Board determined that AIM Constellation Fund's performance track record more accurately reflects the results of the investment process that the combined fund will utilize after the AIM Aggressive Growth Fund Reorganization. FUND ASSETS As of July 31, 2005, AIM Constellation Fund had net assets of approximately $5.8 billion, compared to net assets for AIM Aggressive Growth Fund of approximately $1.8 billion. EXPENSES ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS) FOR A SHARES The following table shows annual operating expenses for both reorganizing funds, as well as estimates of expenses for the combined fund, giving effect to the reorganizations of AIM Weingarten Fund and AIM Aggressive Growth into AIM Constellation Fund.
AIM AGGRESSIVE AIM WEINGARTEN FUND AIM CONSTELLATION COMBINED PRO FORMA GROWTH FUND A SHARES A SHARES (%) FUND A SHARES A SHARES (%) (%) (10/31/04 ) (10/31/04 AS RESTATED) (%) (10/31/04 AS RESTATED) (10/31/04) -------------------- ---------------------- -------------------------- ------------------ MANAGEMENT FEES 0.64 0.64 0.63 0.63 RULE 12B-1 FEES 0.25 0.25 0.25 0.25 OTHER EXPENSES 0.41 0.46 0.36 0.36 TOTAL EXPENSES 1.30 1.35 1.24 1.24 FEE WAIVERS -- -- 0.03 0.05 TOTAL NET EXPENSES 1.30 1.35 1.21 1.19
- Effective upon the closing of the Reorganization, the Board approved a permanent reduction of the advisory fees of the AIM Constellation Fund to 0.80% of the first $150 million, plus 0.625% of the Fund's average daily net assets in excess of $150 million. - Effective July 1, 2005, the Board of Trustees has approved a permanent reduction of the Rule 12b-1 fees applicable to Class A shares of AIM Weingarten Fund and AIM Constellation Fund to 0.25%. Distribution and/or Service (12b-1) Fees reflect this agreement. 7 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY - Effective January 1, 2005 through December 31, 2009, the advisor for AIM Weingarten Fund has contractually agreed to waive a portion of its advisory fees to the extent necessary so that the advisory fees payable by the Fund (based on the Fund's average daily net assets) do not exceed the annual uniform fee schedule rate of 0.695% of the first $250 million, plus 0.67% of the next $250 million, plus 0.645% of the next $500 million, plus 0.62% of the next $1.5 billion, plus 0.595% of the next $2.5 billion, plus 0.57% of the next $2.5 billion, plus 0.545% of the next $2.5 billion, plus 0.52% of the Fund's daily net assets in excess of $10 billion. The Fee Waiver reflects this agreement. - Effective January 1, 2005 through December 31, 2009, the advisor for AIM Constellation Fund has contractually agreed to waive a portion of its advisory fees to the extent necessary so that the advisory fees payable by the Fund (based on the Fund's average daily net assets) do not exceed the annual uniform fee schedule rate of 0.75% of the first $150 million, plus 0.615% of the next $4.85 billion, plus 0.57% of the next $2.5 billion, plus 0.545% of the next $2.5 billion, plus 0.52% of the Fund's daily net assets in excess of $10 billion. The Fee Waiver reflects this agreement. - Effective upon the closing of the Reorganization, the advisor for AIM Constellation Fund has contractually agreed to waive a portion of its advisory fees for the period January 1, 2005 through December 31, 2009, to the extent necessary so that the advisory fees payable by the Fund (based on the Fund's average daily net assets) do not exceed the annual uniform fee schedule rate of 0.695% of the first $250 million, plus 0.615% of the next $4 billion, plus 0.595% of the next $750 million, plus 0.57% of the next $2.5 billion, plus 0.545% of the next $2.5 billion, plus 0.52% of the Fund's daily net assets in excess of $10 billion. The Fee Waiver reflects this agreement. - At the request of the Board of Trustees, AMVESCAP (as defined herein) has agreed to reimburse AIM Aggressive Growth Fund, AIM Weingarten Fund and AIM Constellation Fund for expenses related to market timing matters. - AIM Aggressive Growth Fund and AIM Weingarten Fund may incur additional expenses related to the Reorganizations. MERGER COSTS AIM Aggressive Growth Fund's expenses incurred in connection with the AIM Aggressive Growth Fund Reorganization are expected to be approximately $957,000. The Board noted AIM's proposal that AIM Aggressive Growth Fund bear 25% and AIM bear 75% of AIM Aggressive Growth Fund's costs in connection with the AIM Aggressive Growth Fund Reorganization and concluded it was appropriate for AIM Aggressive Growth Fund to bear such portion of the expenses in light of the decrease in expenses that are expected to result from the AIM Aggressive Growth Fund Reorganization. AIM Constellation Fund's expenses to be incurred in connection with the AIM Aggressive Growth Fund Reorganization are expected to be approximately $30,000. AIM Constellation Fund will bear its costs and expenses incurred in connection with the AIM Aggressive Growth Fund Reorganization. SHARE CLASSES
CLASSES OF SHARES OF AIM CLASSES OF SHARES OF AGGRESSIVE GROWTH FUND AIM CONSTELLATION FUND ------------------------ ---------------------- Class A Class A Class B Class B Class C Class C Class R Class R Institutional Class Institutional Class
8 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY AIM WEINGARTEN FUND THE MERGER OF AIM AGGRESSIVE GROWTH FUND INTO AIM CONSTELLATION FUND IS CONTINGENT ON SHAREHOLDER APPROVAL OF AIM WEINGARTEN FUND INTO AIM CONSTELLATION FUND. THE MERGER OF AIM WEINGARTEN FUND INTO AIM CONSTELLATION FUND IS NOT CONTINGENT ON SHAREHOLDER APPROVAL OF AIM AGGRESSIVE GROWTH FUND INTO AIM CONSTELLATION FUND. REASONS FOR SELECTING AIM CONSTELLATION FUND AS THE ACQUIRING FUND AIM proposed the AIM Weingarten Fund Reorganization as part of an effort to consolidate the AIM Funds' growth fund offerings. In considering the AIM Weingarten Fund Reorganization, the Board noted that AIM Constellation Fund and AIM Weingarten Fund have the same investment objectives, are managed using similar investment strategies and invest in similar securities. In addition, AIM Constellation Fund's long-term performance track record is better than AIM Weingarten Fund's and the expenses of the combined fund are expected to be lower than those of AIM Weingarten Fund. The Board noted that since September 16, 2005, AIM Weingarten Fund and AIM Constellation Fund have been managed using the same discipline by the same lead portfolio manager and portfolio management team. The Board noted that because AIM Weingarten Fund and AIM Constellation Fund have the same investment objectives and similar investment strategies, there is significant portfolio overlap between these two funds. As of July 31, 2005, approximately 64% of AIM Weingarten Fund's total net assets were invested in securities AIM Constellation Fund also owns. In addition, the Board noted that AIM Weingarten Fund is currently positioned as a large-cap growth fund, whereas AIM Constellation Fund has a multi-cap discipline focusing on mid- and large-cap stocks. Thus, as a result of the AIM Weingarten Fund Reorganization, AIM Weingarten Fund shareholders may lose some exposure to large-cap stocks in AIM Constellation Fund's investment process. In 2005 AIM reorganized and consolidated the management teams of the AIM Funds managed in the growth style. The Reorganizations are intended to further combine similar funds within that style space which are now managed by the same portfolio management teams. OBJECTIVES AND INVESTMENT STRATEGIES AIM Aggressive Growth Fund, AIM Weingarten fund and AIM Constellation Fund have similar investment objectives. AIM Weingarten Fund and AIM Constellation Fund seek growth of capital, while AIM Aggressive Growth Fund seeks long-term growth of capital. AIM Aggressive Growth Fund, AIM Weingarten Fund and AIM Constellation Fund also invest in similar types of securities. All three funds invest primarily in common stocks of companies with above-average long-term growth in earnings and excellent prospects for future growth. However, AIM Aggressive Growth Fund invests in small and medium-sized growth companies and AIM Weingarten Fund invests in seasoned, better capitalized companies, while AIM Constellation Fund may invest without regard to capitalization. AIM Constellation Fund also has the ability to use leverage, although its portfolio management team does not currently do so. The chart below provides a summary for comparison purposes of the investment objectives and principal investment strategies of AIM Aggressive Growth Fund, AIM Weingarten Fund and AIM Constellation Fund.
AIM AGGRESSIVE GROWTH FUND AIM WEINGARTEN FUND AIM CONSTELLATION FUND (SELLING FUND) (SELLING FUND) (BUYING FUND) ------------------------------------- ------------------------------------- ------------------------------------- INVESTMENT OBJECTIVES - Long-term growth of capital - Growth of capital - Growth of capital INVESTMENT STRATEGIES
9 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY - Invests primarily in common - Invests in common stocks of - Invests principally in common stocks of small and medium-sized seasoned and better capitalized stocks, without regard to market growth companies. companies. capitalization. - Portfolio managers focus on - Portfolio managers focus on - Invests in common stocks of companies that are likely to companies that have experienced companies the portfolio managers benefit from new or innovative above-average growth in earnings believe are likely to benefit products, services or processes and have excellent prospects for from new or innovative products, as well as those that have future growth. services or processes as well as experienced above-average, those that have experienced long-term growth in earnings and above average, long-term growth have excellent prospects for in earnings and have excellent future growth. prospects for future growth. - May also invest up to 25% of its - May also invest up to 20% of its - May also invest up to 20% of its total assets in foreign total assets in foreign total assets in foreign securities. securities. securities.
PORTFOLIO MANAGEMENT
AIM Weingarten Fund AIM Constellation Fund ------------------- ---------------------- Lanny H. Sachnowitz (LEAD) Lanny H. Sachnowitz (LEAD) James G. Birdsall Kirk L. Anderson Asst by Large/Multi-Cap Growth Team James G. Birdsall Robert J. Lloyd Asst by Large/Multi-Cap Growth Team
AIM Weingarten Fund and AIM Constellation Fund have been managed by the same team since 9/16/05. HISTORICAL PERFORMANCE Although AIM Weingarten Fund has recently provided better returns, AIM Constellation Fund has provided better long-term returns to its shareholders than AIM Weingarten Fund. Average Annual Total Returns as of 7/31/05*
SINCE INCEPTION 1-YEAR 5-YEAR 10-YEAR INCEPTION DATE ------ ------ ------- --------- --------- AIM WEINGARTEN A SHARES 15.47 -12.56 3.70 11.68 6/17/69 AIM CONSTELLATION A SHARES 14.02 -7.60 5.03 14.38 4/30/76
* Performance at NAV PERFORMANCE SURVIVOR The Board determined that it was appropriate for AIM Constellation Fund to be the surviving fund in the AIM Weingarten Fund Reorganization. The portfolio composition, investment objectives and strategies, policies and restrictions of the 10 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY combined fund will be those of AIM Constellation Fund. The expense structure of AIM Constellation Fund is more similar to the expense structure of the combined fund, and AIM Constellation Fund has significantly more assets than AIM Weingarten Fund. Although the portfolio management team of the combined fund is more like the team that has managed AIM Weingarten Fund since January 2002, the anticipated utilization of AIM Constellation Fund's multi-cap strategy and investment universe is a greater indicator that the combined fund will more closely resemble AIM Constellation Fund than AIM Weingarten Fund in the future. Although the management team of the combined fund will be more similar to the team responsible for AIM Weingarten Fund, the Board determined that it was appropriate for AIM Constellation Fund to be the surviving fund in the AIM Weingarten Fund Reorganization. The Board determined AIM Constellation Fund should be the surviving fund primarily because the portfolio composition of the combined fund is expected to be more like that of AIM Constellation Fund and the investment style AIM Constellation Fund's management team currently utilizes to manage AIM Constellation Fund will apply to the combined fund after the AIM Weingarten Fund Reorganization. Consequently, the Board determined that AIM Constellation Fund's performance track record more accurately reflects the results of the investment process that the combined fund will utilize after the AIM Weingarten Fund Reorganization. FUND ASSETS As of July 31, 2005, AIM Constellation Fund had net assets of approximately $5.8 billion, compared to net assets for AIM Weingarten Fund of approximately $2.5 billion. EXPENSES ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS) FOR A SHARES The following table shows annual operating expenses for both reorganizing funds, as well as estimates of expenses for the combined fund, giving effect to the reorganization of only AIM Weingarten Fund into AIM Constellation Fund.
AIM WEINGARTEN FUND AIM CONSTELLATION A SHARES (%) FUND A SHARES COMBINED PRO FORMA (10/31/04 AS (%) (10/31/04 A SHARES (%) RESTATED) AS RESTATED) (10/31/04) ------------------- ----------------- ------------------ MANAGEMENT FEES 0.64 0.63 0.63 RULE 12B-1 FEES 0.25 0.25 0.25 OTHER EXPENSES 0.46 0.36 0.36 TOTAL EXPENSES 1.35 1.24 1.24 FEE WAIVERS -- 0.03 0.04 TOTAL NET EXPENSES 1.35 1.21 1.20
- Effective July 1, 2005, the Board of Trustees has approved a permanent reduction of the Rule 12b-1 fees applicable to Class A shares to 0.25%. Distribution and/or Service (12b-1) Fees reflect this agreement. - Effective January 1, 2005 through December 31, 2009, the advisor for AIM Weingarten Fund has contractually agreed to waive a portion of its advisory fees to the extent necessary so that the advisory fees payable by the Fund (based on the Fund's average daily net assets) do not exceed the annual rate of 0.695% of the first $250 million, plus 0.67% of the next $250 million, plus 0.645% of the next $500 million, plus 0.62% of the next $1.5 billion, plus 0.595% of the next $2.5 billion, plus 0.57% of the next $2.5 billion, plus 0.545% of the next $2.5 billion, plus 0.52% of the Fund's daily net assets in excess of $10 billion. The Fee Waiver reflects this agreement. - Effective January 1, 2005 through December 31, 2009, the advisor for AIM Constellation Fund has contractually agreed to waive a portion of its advisory fees to the extent necessary so that the advisory fees payable by the Fund (based on the Fund's average daily net assets) do not exceed the annual rate of 0.75% of the first $150 million, plus 11 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY 0.615% of the next $4.85 billion, plus 0.57% of the next $2.5 billion, plus 0.545% of the next $2.5 billion, plus 0.52% of the Fund's daily net assets in excess of $10 billion. The Fee Waiver reflects this agreement. - Effective upon the closing of the Reorganization, the advisor for AIM Constellation Fund has contractually agreed to waive a portion of its advisory fees for the period January 1, 2005 through December 31, 2009, to the extent necessary so that the advisory fees payable by the Fund (based on the Fund's average daily net assets) do not exceed the annual rate of 0.695% of the first $250 million, plus 0.615% of the next $4 billion, plus 0.595% of the next $750 million, plus 0.57% of the next $2.5 billion, plus 0.545% of the next $2.5 billion, plus 0.52% of the Fund's daily net assets in excess of $10 billion. The Fee Waiver reflects this agreement. - At the request of the Board of Trustees, AMVESCAP (as defined herein) has agreed to reimburse AIM Weingarten Fund and AIM Constellation Fund for expenses related to market timing matters. - AIM Weingarten Fund will incur additional expenses in connection with the Weingarten Fund Reorganization. The following table shows annual operating expenses for all three reorganizing funds, as well as estimates of expenses for the combined fund, giving effect to the reorganizations of AIM Weingarten Fund and AIM Aggressive Growth into AIM Constellation Fund.
AIM AGGRESSIVE AIM WEINGARTEN AIM CONSTELLATION COMBINED PRO GROWTH FUND A FUND A SHARES (%) FUND A SHARES FORMA A SHARES (%) (10/31/04 AS (%) (10/31/04 SHARES (%) (10/31/04) RESTATED) AS RESTATED) (10/31/04) -------------- ----------------- ----------------- ------------ MANAGEMENT FEES 0.64 0.64 0.63 0.63 RULE 12B-1 FEES 0.25 0.25 0.25 0.25 OTHER EXPENSES 0.41 0.46 0.36 0.36 TOTAL EXPENSES 1.30 1.35 1.24 1.24 FEE WAIVERS -- -- 0.03 0.05 TOTAL NET EXPENSES 1.30 1.35 1.21 1.19
- Effective upon the closing of the Reorganization, the Board approved a permanent reduction of the advisory fees of the AIM Constellation Fund to 0.80% of the first $150 million, plus 0.625% of the Fund's average daily net assets in excess of $150 million. - Effective July 1, 2005, the Board of Trustees has approved a permanent reduction of the Rule 12b-1 fees applicable to Class A shares of AIM Weingarten Fund and AIM Constellation Fund to 0.25%. Distribution and/or Service (12b-1) Fees reflect this agreement. - Effective January 1, 2005 through December 31, 2009, the advisor for AIM Weingarten Fund has contractually agreed to waive a portion of its advisory fees to the extent necessary so that the advisory fees payable by the Fund (based on the Fund's average daily net assets) do not exceed the annual uniform fee schedule rate of 0.695% of the first $250 million, plus 0.67% of the next $250 million, plus 0.645% of the next $500 million, plus 0.62% of the next $1.5 billion, plus 0.595% of the next $2.5 billion, plus 0.57% of the next $2.5 billion, plus 0.545% of the next $2.5 billion, plus 0.52% of the Fund's daily net assets in excess of $10 billion. The Fee Waiver reflects this agreement. - Effective January 1, 2005 through December 31, 2009, the advisor for AIM Constellation Fund has contractually agreed to waive a portion of its advisory fees to the extent necessary so that the advisory fees payable by the Fund (based on the Fund's average daily net assets) do not exceed the annual uniform fee schedule rate of 0.75% of the first $150 million, plus 0.615% of the next $4.85 billion, plus 0.57% of the next $2.5 billion, plus 0.545% of the 12 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY next $2.5 billion, plus 0.52% of the Fund's daily net assets in excess of $10 billion. The Fee Waiver reflects this agreement. - Effective upon the closing of the Reorganization, the advisor for AIM Constellation Fund has contractually agreed to waive a portion of its advisory fees for the period January 1, 2005 through December 31, 2009, to the extent necessary so that the advisory fees payable by the Fund (based on the Fund's average daily net assets) do not exceed the annual uniform fee schedule rate of 0.695% of the first $250 million, plus 0.615% of the next $4 billion, plus 0.595% of the next $750 million, plus 0.57% of the next $2.5 billion, plus 0.545% of the next $2.5 billion, plus 0.52% of the Fund's daily net assets in excess of $10 billion. The Fee Waiver reflects this agreement. - At the request of the Board of Trustees, AMVESCAP (as defined herein) has agreed to reimburse AIM Aggressive Growth Fund, AIM Weingarten Fund and AIM Constellation Fund for expenses related to market timing matters. - AIM Aggressive Growth Fund and AIM Weingarten Fund may incur additional expenses related to the Reorganizations. MERGER COSTS AIM Weingarten Fund's expenses incurred in connection with the AIM Weingarten Fund Reorganization are expected to be approximately $1,500,000. The Board noted AIM's proposal that AIM Weingarten Fund bear 50% and AIM bear 50% of AIM Weingarten Fund's costs in connection with the AIM Weingarten Fund Reorganization and concluded it was appropriate for AIM Weingarten Fund to bear such portion of the expenses in light of the decrease in expenses that are expected to result from the AIM Weingarten Fund Reorganization. AIM Constellation Fund's expenses to be incurred in connection with the AIM Weingarten Fund Reorganization are expected to be approximately $30,000. AIM Constellation Fund will bear its costs and expenses incurred in connection with the AIM Weingarten Fund Reorganization. SHARE CLASSES
CLASSES OF SHARES OF CLASSES OF SHARES OF AIM AIM WEINGARTEN FUND CONSTELLATION FUND -------------------- ------------------------ Class A Class A Class B Class B Class C Class C Class R Class R Institutional Class Institutional Class
13 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY AIM BLUE CHIP FUND REASONS FOR SELECTING AIM LARGE CAP GROWTH FUND AS THE ACQUIRING FUND AIM proposed the AIM Blue Chip Fund Reorganization as part of an effort to consolidate the AIM Funds' large cap growth fund offerings. In considering the Reorganization, the Board noted that the funds have identical investment objectives and invest in similar types of securities. In addition, AIM Large Cap Growth Fund's performance track record is generally better than AIM Blue Chip Fund's and the expenses of the combined fund are expected to be lower than those of AIM Blue Chip Fund. The Board noted that the funds both attract investors looking for a large cap growth investment program, and despite having different portfolio managers, there is moderate portfolio overlap between the two funds. As of July 31, 2005, approximately 49% of AIM Blue Chip Fund's total net assets were invested in securities AIM Large Cap Growth Fund also owns. The Board noted that AIM Blue Chip Fund's shareholders may lose some mega-cap and core style exposure, while gaining some large cap exposure, which could lead to more volatility. OBJECTIVES AND INVESTMENT STRATEGIES AIM Blue Chip Fund and AIM Large Cap Growth Fund have identical investment objectives and invest in similar types of securities. Both funds seek long-term growth of capital. AIM Blue Chip Fund invests primarily in blue chip companies, which are large or medium sized companies that have market leading positions and certain financial characteristics described in AIM Blue Chip Fund's Prospectus. AIM Large Cap Growth Fund invests primarily in large-capitalization companies that AIM believes have the potential for above average growth in revenues and earnings. The chart below provides a summary for comparison purposes of the investment objectives and principal investment strategies of AIM Blue Chip Fund and AIM Large Cap Growth Fund.
AIM BLUE CHIP FUND AIM LARGE CAP GROWTH FUND (SELLING FUND) (BUYING FUND) ------------------------------------- ---------------------------------------- INVESTMENT OBJECTIVES - Long-term growth of capital - Long-term growth of capital INVESTMENT STRATEGIES - Invests at least 80% of its net - Invests at least 80% of its net assets, in securities of blue assets in securities of chip companies. large-capitalization companies. - In complying with the 80% - In complying with the 80% investment requirement, the fund investment requirement, the fund may invest primarily in may invest primarily in marketable marketable equity securities, equity securities, including including convertible convertible securities, but its securities, but its investments investments may include other may include other securities, securities, such as synthetic such as synthetic instruments. instruments. - May invest in United States - No corresponding strategy. government securities and high-quality debt securities when the portfolio managers believe securities other than marketable equity securities offer the opportunity for long-term growth of capital and current income.
14 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY - No corresponding strategy. - Portfolio Managers may focus on securities of companies with market capitalizations that are within the top 50% of stocks in the Russell 1000 Index at the time of purchase. - Portfolio managers purchase securities of a limited number of large-cap companies that they believe have the potential for above-average growth in revenues and earnings. - May invest up to 25% of its - May invest up to 25% of its total total assets in foreign assets in foreign securities. securities.
PORTFOLIO MANAGEMENT
AIM Blue Chip Fund AIM Large Cap Growth Fund ------------------ ------------------------- Kirk L. Anderson (LEAD) Geoffrey V. Keeling (CO) Asst by Large/Multi-Cap Growth Team Robert L. Shoss (CO) Asst by Large/Multi-Cap Growth Team
HISTORICAL PERFORMANCE AIM Large Cap Growth Fund has provided better short-term returns to its shareholders than AIM Blue Chip Fund. Average Annual Total Returns as of 7/31/05*
1-YEAR 5-YEAR 10-YEAR SINCE INCEPTION INCEPTION DATE ------ ------ ------- --------------- -------------- AIM BLUE CHIP A SHARES 9.46% -7.94% 7.02% 8.73% 2/14/87 AIM LARGE CAP GROWTH A SHARES 12.21% -10.67% N/A 0.28% 3/1/99
* Performance at NAV PERFORMANCE SURVIVOR The Board determined that it was appropriate for AIM Large Cap Growth Fund to be the surviving fund in the Reorganization primarily because the same investment team that has managed AIM Large Cap Growth Fund since its inception in 1999 will also manage the combined fund. Moreover, the investment strategies and stock selection techniques of AIM Large Cap Growth Fund will be the investment strategies and stock selection techniques of the combined fund. Consequently, the Board determined that AIM Large Cap Growth Fund's performance track record more accurately reflects the results of the investment process that the combined fund will utilize after the Reorganization. The Board considered the relative sizes of the two funds and concluded that AIM Large Cap Growth Fund should be the surviving fund in the Reorganization, even though AIM Blue Chip Fund has a larger asset base. FUND ASSETS As of July 31, 2005, AIM Large Cap Growth Fund had net assets of approximately $818 million, compared to net assets for AIM Blue Chip Fund of approximately $2.2 billion. 15 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY EXPENSES ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS) FOR A SHARES The following table shows annual operating expenses for both reorganizing funds, as well as estimates of expenses for the combined fund.
AIM LARGE CAP AIM BLUE CHIP GROWTH FUND COMBINED PRO FUND A SHARES A SHARES FORMA A (%) (10/31/04 (%) (10/31/04 SHARES (%) AS RESTATED) AS RESTATED) (10/31/04) ------------- ------------- ------------ MANAGEMENT FEES 0.64 0.75 0.64 RULE 12B-1 FEES 0.25 0.25 0.25 OTHER EXPENSES 0.46 0.45 0.44 TOTAL EXPENSES 1.35 1.45 1.33 FEE WAIVER 0.01 0.12 0.01 TOTAL NET EXPENSES 1.34 1.33 1.32
- Effective July 1, 2005, the Board of Trustees has approved a permanent reduction of the Rule 12b-1 fees applicable to Class A shares to 0.25%. Distribution and/or Service (12b-1) Fees reflect this agreement. - Effective January 1, 2005 through December 31, 2009, the advisor for AIM Blue Chip Fund and AIM Large Cap Growth Fund has contractually agreed to waive a portion of its advisory fees to the extent necessary so that the advisory fees payable by the Funds' (based on the Funds' average daily net assets) do not exceed the annual rate of 0.695% of the first $250 million, plus 0.67% of the next $250 million, plus 0.645% of the next $500 million, plus 0.62% of the next $1.5 billion, plus 0.595% of the next $2.5 billion, plus 0.57% of the next $2.5 billion, plus 0.545% of the next $2.5 billion, plus 0.52% of the Fund's daily net assets in excess of $10 billion. - The investment advisor for AIM Large Cap Growth Fund has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit Total Annual Fund Operating Expenses (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Investor Class and Institutional Class shares to 1.32%, 2.07% 2.07%, 1.57%, 1.32% and 1.07% of average daily net assets, respectively. In determining the advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the Total Annual Fund Operating Expenses to exceed the numbers reflected above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items; (v) expenses related to a merger or reorganization, as approved by the fund's Board of Trustees; (vi) expenses that the fund has incurred but did not actually pay because of an expense offset arrangement. Currently, in addition to the expense reimbursement arrangement with AMVESCAP (as defined herein) described more fully below, the only expense offset arrangements from which the fund benefits are in the form of credits that the fund receives from banks where the fund or its transfer agent has deposit accounts in which it holds uninvested cash. Those credits are used to pay certain expenses incurred by the fund. This expense limitation agreement is in effect through October 31, 2006. - At the request of the Board of Trustees, AMVESCAP (as defined herein) has agreed to reimburse AIM Blue Chip and AIM Large Cap Growth Fund for expenses related to market timing matters. - AIM Blue Chip Fund will incur additional expenses in connection with the Reorganization. 16 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY MERGER COSTS AIM Blue Chip Fund's expenses incurred in connection with the Reorganization are expected to be approximately $1,400,000. The Board noted AIM's proposal that AIM Blue Chip Fund bear 25% and AIM bear 75% of AIM Blue Chip Fund's costs in connection with the Reorganization and concluded it was appropriate for AIM Blue Chip Fund to bear such portion of the expenses in light of the decrease in expenses that are expected to result from the Reorganization. AIM Large Cap Growth Fund's expenses to be incurred in connection with the Reorganization are expected to be approximately $30,000. AIM Large Cap Growth Fund will bear its costs and expenses incurred in connection with the Reorganization. SHARE CLASSES
CLASSES OF SHARES OF CLASSES OF SHARES OF AIM BLUE CHIP FUND LARGE CAP GROWTH FUND -------------------- --------------------- Class A Class A Class B Class B Class C Class C Class R Class R Investor Class Investor Class Institutional Class Institutional Class
17 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY AIM MID CAP GROWTH FUND REASONS FOR SELECTING AIM DYNAMICS FUND AS THE ACQUIRING FUND AIM proposed the AIM Mid Cap Growth Fund Reorganization as part of an effort to consolidate the AIM Funds' mid cap growth product offerings. In considering the Reorganization, the Board noted that the funds have identical investment objectives, are managed using similar investment strategies and invest in similar securities. In addition, AIM Dynamics Fund's performance track record relative to its Lipper peer group is generally better than AIM Mid Cap Growth Fund's and the expenses of the combined fund are expected to be lower than those of AIM Mid Cap Growth Fund. The Board noted that AIM Mid Cap Growth Fund and AIM Dynamics Fund are managed by the same lead portfolio manager supported by the same portfolio management team. The funds have identical investment strategies, resulting in significant portfolio overlap between the two funds. As of July 31, 2005, approximately 85% of AIM Mid Cap Growth Fund's total net assets were invested in securities AIM Dynamics Fund also owns. OBJECTIVES AND INVESTMENT STRATEGIES AIM Mid Cap Growth Fund and AIM Dynamics Fund have identical investment objectives. Both funds seek long-term growth of capital. In addition, AIM Mid Cap Growth Fund and AIM Dynamics Fund have similar investment strategies. AIM Mid Cap Growth Fund invests primarily in securities of mid-capitalization companies that are likely to benefit from new or innovative products, services or processes, as well as those that have experienced long-term growth, while AIM Large Cap Growth Fund focuses on mid-cap companies with high growth potential. The chart below provides a summary for comparison purposes of the investment objectives and principal investment strategies of AIM Mid Cap Growth Fund and AIM Dynamics Fund.
AIM MID CAP GROWTH FUND AIM DYNAMICS FUND (SELLING FUND) (BUYING FUND) ------------------------------------- ---------------------------------------- INVESTMENT OBJECTIVES - Long-term growth of capital - Long-term growth of capital INVESTMENT STRATEGIES
18 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY - Invests at least 80% of its net - Normally invests at least 65% of assets, in securities of its net assets in common stocks of mid-capitalization companies. mid-size companies. - The advisor actively manages the fund, focusing on mid-cap companies with high growth potential that also are favorably priced relative to the growth expectations for that company. - The advisor bases its selection of stocks for the fund on an analysis of individual companies. The investment process involves: - identifying medium sized companies with sustainable revenue and earnings growth that have attractive stock price valuations relative to their projected growth rates; - applying fundamental research including financial statement analysis and management visits to identify stocks of companies with large potential markets, cash generating business models, improving balance sheets and solid management teams; and - using a variety of valuation techniques to determine target buy and sell prices and a stock's valuation upside and downside potential. - The resulting fund portfolio contains (1) "core holdings," which are industry leaders serving growing, non-cyclical markets whose performance tends to remain constant regardless of economic conditions; and (2) "earnings-acceleration" holdings that are driven by near term catalysts such as new products, improved processes, and/or specific economic conditions, which may lead to rapid sales and earnings growth. - In complying with the 80% investment requirement, the fund may invest primarily in marketable equity securities, including convertible securities, but its investments may include other securities, such as synthetic instruments.
19 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY - Under normal conditions, the top - No corresponding strategy 10 holdings may comprise up to 40% of the fund's total assets. - No corresponding strategy - The fund sometimes invests in the securities of small companies. - May invest up to 25% of its - May invest up to 25% of its assets total assets in foreign in non-U.S. issuers. securities.
PORTFOLIO MANAGEMENT
AIM Mid Cap Growth Fund AIM Dynamics Fund ----------------------- ----------------- Karl F. Farmer (CO) Paul J. Rasplicka (LEAD) Paul J. Rasplicka (CO) Karl F. Farmer Asst by Mid Cap Growth & GARP Team Asst by Mid Cap Growth & GARP Team
HISTORICAL PERFORMANCE AIM Mid Cap Growth Fund and AIM Dynamics Fund have comparable performance records. Average Annual Total Returns as of 7/31/05*
1-YEAR 5-YEAR 10-YEAR SINCE INCEPTION INCEPTION DATE ------ ------ ------- --------------- -------------- AIM MID CAP GROWTH A SHARES 24.88% -6.38% N/A 1.33% 11/1/99 AIM DYNAMICS A SHARES 24.81% -8.57% 8.60% 9.14% 9/15/67
* Performance at NAV PERFORMANCE SURVIVOR The Board determined that it was appropriate for AIM Dynamics Fund to be the surviving fund in the Reorganization primarily because both funds have similar investment programs and overlapping management teams. AIM Dynamics Fund has a lower management fee structure and a significantly larger asset base. FUND ASSETS As of July 31, 2005, AIM Dynamics Fund had net assets of approximately $2 billion, compared to net assets for AIM Mid Cap Growth Fund of approximately $190 million. 20 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY EXPENSES ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS) FOR A SHARES The following table shows annual operating expenses for both reorganizing funds, as well as estimates of expenses for the combined fund.
AIM MID CAP GROWTH AIM DYNAMICS FUND A SHARES (%) FUND A SHARES COMBINED PRO (10/31/04 AS (%) (7/31/05 FORMA A SHARES %) RESTATED) AS RESTATED) (7/31/05) ------------------ ------------- ----------------- MANAGEMENT FEES .080 0.51 0.51 RULE 12B-1 FEES 0.25 0.25 0.25 OTHER EXPENSES 0.61 0.35 0.37 TOTAL EXPENSES 1.66 1.11 1.13 FEE WAIVER 0.05 -- -- TOTAL NET EXPENSES 1.61 1.11 1.13
- Effective July 1, 2005, the Board of Trustees has approved a permanent reduction of the Rule 12b-1 fees applicable to Class A shares to 0.25%. Distribution and/or Service (12b-1) Fees reflect this agreement. - Effective October 1, 2005, the Board of Trustees approved an amendment to the transfer agency agreement of AIM Dynamics Fund. Other Expenses of AIM Dynamics Fund have been restated to reflect the changes in fees under the new agreement. Other Expenses for Class R shares of AIM Dynamics Fund are based on estimated average net assets for the current fiscal year. - The advisor of AIM Dynamics Fund has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit Total Annual Fund Operating Expenses (excluding certain items discussed below) to 1.90%, 2.65%, 2.65%, 2.15%, 1.90% and 1.65% on Class A, Class B, Class C, Class R, Investor Class and Institutional Class shares, respectively. In determining the advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account and could cause the Total Annual Operating Expenses to exceed the numbers reflected above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items; (v) expenses related to a merger or reorganization, as approved by the fund's Board of Trustees; and (vi) expenses that the fund has incurred but did not actually pay because of an expense offset arrangement. Currently, in addition to the expense reimbursement arrangement with AMVESCAP (as defined herein) described more fully below, the only expense offset arrangements from which the fund benefits are in the form of credits that the fund receives from banks where the fund or its transfer agent has deposit accounts in which it holds uninvested cash. Those credits are used to pay certain expenses incurred by the fund. This expense limitation agreement is in effect through July 31, 2006. - Effective January 1, 2005 through December 31, 2009, the advisor for AIM Mid Cap Growth Fund has contractually agreed to waive a portion of its advisory fees to the extent necessary so that the advisory fees payable by the Fund (based on the Fund's average daily net assets) do not exceed the annual rate of 0.745% for the first $250 million, plus 0.73% of the next $250 million, plus 0.715% of the next $500 million, plus 0.70% of the next $1.5 billion, plus 0.685% of the next $2.5 billion, plus 0.67% of the next $2.5 billion, plus 0.655% of the next $2.5 billion, plus 0.64% of the Fund's average daily net assets in excess of $10 billion. The Fee Waiver reflects this agreement. - At the request of the Board of Trustees, AMVESCAP (as defined herein) has agreed to reimburse AIM Mid Cap Growth Fund and AIM Dynamics Fund for expenses related to market timing matters. 21 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY - AIM Mid Cap Growth Fund will incur additional expenses in connection with the Reorganization. MERGER COSTS AIM Mid Cap Growth fund's expenses incurred in connection with the Reorganization are expected to be approximately $185,000. The Board noted AIM's proposal that AIM Mid Cap Growth Fund will bear its share of the costs in connection with the Reorganization and concluded it was appropriate for AIM Mid Cap Growth Fund to bear such expenses in light of the decrease in expenses that are expected to result from the Reorganization. AIM Dynamics Fund's expenses to be incurred in connection with the Reorganization are expected to be approximately $30,000. AIM Dynamics Fund will bear its costs and expenses incurred in connection with the Reorganization. SHARE CLASSES
CLASSES OF SHARES OF CLASSES OF SHARES OF AIM MID CAP GROWTH FUND AIM DYNAMICS FUND ----------------------- -------------------- Class A Class A Class B Class B Class C Class C Class R Class R Institutional Class Institutional Class
22 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY AIM SMALL COMPANY GROWTH FUND REASONS FOR SELECTING AIM SMALL CAP GROWTH FUND AS THE ACQUIRING FUND AIM proposed the AIM Small Company Growth Fund Reorganization as part of an effort to consolidate the AIM Funds' small cap growth product offerings. In considering the Reorganization, the Board noted that the funds have identical investment objectives and utilize similar investment strategies. Both Funds are managed by the same lead portfolio manager with support from the same portfolio management team. In addition, the expenses of the combined fund are expected to be lower than those of AIM Small Company Growth Fund. As of July 31, 2005, the funds had relatively low portfolio overlap of approximately 11%. Due to the sometimes limited availability of common stocks of smaller companies that meet the investment process of AIM Small Cap Growth Fund's portfolio managers, AIM Small Cap Growth Fund has been engaged in a limited offering of its shares since March 18, 2002. The Board noted that AIM represented that the Reorganization should not negatively impact AIM Small Cap Growth Fund's ability to invest in suitable securities within the small cap growth space because of the funds' low portfolio overlap. Thus, the Board determined that the Reorganization is not inconsistent with the limited offering of AIM Small Cap Growth Fund's shares. OBJECTIVES AND INVESTMENT STRATEGIES AIM Small Company Growth Fund and AIM Small Cap Growth Fund have identical investment objectives and invest in similar types of securities. Both funds seek long-term growth of capital and normally invest at least 80% of their net assets in small-capitalization companies. The chart below provides a summary for comparison purposes of the investment objectives and principal investment strategies of AIM Small Company Fund and AIM Small Cap Growth Fund.
AIM SMALL COMPANY GROWTH FUND AIM SMALL CAP GROWTH FUND (SELLING FUND) (BUYING FUND) ------------------------------------- ---------------------------------------- INVESTMENT OBJECTIVES - Long-term growth of capital - Long-term growth of capital INVESTMENT STRATEGIES - Invests at least 80% of its net - Invests at least 80% of its net assets in securities of assets in securities of small-capitalization companies. small-capitalization companies.
23 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY - The advisor actively manages the - In complying with the 80% fund in the growth style investment requirement, the fund focusing on small cap growth may invest primarily in marketable companies with high growth equity securities, including potential as demonstrated by convertible securities, but its quantitative and qualitative investments may include other analysis. securities, such as synthetic instruments. - The adviser selects stocks for the fund based on an analysis of individual companies, focusing on company fundamentals and growth prospects. The advisor uses a three-step process that includes quantitative, fundamental and evaluation analysis. The proprietary quantitative models and screening tools reduce an investment universe of thousands of companies down to a more manageable list of investment candidates. The fundamental research includes careful financial statement analysis and meetings with company management teams to define a company's key drivers of success and to access its durability. The goal is to ascertain the level, quality and duration of a Company's growth prospects, and to gain confidence in the management team. The valuation analysis assesses the degree to which expected future growth is discounted in the stock price. The adviser also carefully scrutinizes the risks/reward of each holding to ensure a continued fit in the fund. The stock that successfully passes this selection process is a viable candidate for the fund's portfolio. - No corresponding strategy - The fund may also invest up to 20% of its assets in equity securities of issuers that have market capitalizations, at the time of purchase, in other market capitalization ranges, and in investment-grade non-convertible debt securities, U.S. government securities and high-quality money market instruments. - May invest up to 25% of its - May invest up to 25% of its total total assets in securities of assets in foreign securities. non-U.S. issuers.
PORTFOLIO MANAGEMENT
AIM Small Company Growth Fund AIM Small Cap Growth Fund ----------------------------- ------------------------- Juliet S. Ellis (LEAD) Juliet S. Ellis (LEAD) Juan R. Hartsfield Juan R. Hartsfield Asst by Small Cap Core/Growth Team Asst by Small Cap Core/Growth Team
AIM Small Company Growth Fund and AIM Small Cap Growth Fund have been managed by the same team since 9/16/05. 24 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY HISTORICAL PERFORMANCE Although AIM Small Company Growth Fund has recently provided better returns, AIM Small Cap Growth Fund has provided better long-term returns to its shareholders than AIM Small Company Growth Fund. Average Annual Total Returns as of 7/31/05*
1-YEAR 5-YEAR 10-YEAR SINCE INCEPTION INCEPTION DATE ------ ------ ------- --------------- -------------- AIM SMALL COMPANY GROWTH A SHARES 26.12% N/A N/A 4.97% 3/28/02 AIM SMALL CAP GROWTH A SHARES 22.01% -2.97% N/A 12.45% 10/18/95
* Performance at NAV PERFORMANCE SURVIVOR The Board determined that it was appropriate for AIM Small Cap Growth Fund to be the surviving fund in the Reorganization primarily because the management team that will manage the combined fund has managed AIM Small Cap Growth Fund longer than AIM Small Company Growth Fund. Consequently, the Board determined that AIM Small Cap Growth Fund's performance track record more accurately reflects the results of the investment process that the combined fund will utilize after the Reorganization. FUND ASSETS As of July 31, 2005, AIM Small Cap Growth Fund had net assets of approximately $1.7 billion, compared to net assets for AIM Small Company Growth Fund of approximately $450 million. EXPENSES ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS) FOR A SHARES The following table shows annual operating expenses for both reorganizing funds, as well as estimates of expenses for the combined fund.
AIM SMALL COMPANY AIM SMALL CAP GROWTH GROWTH FUND A SHARES FUND A SHARES (%) COMBINED PRO (%) (7/31/05 AS (12/31/04 AS FORMA A SHARES RESTATED) RESTATED) (%) (12/31/04) -------------------- -------------------- -------------- MANAGEMENT FEES .072 0.69 0.68 RULE 12B-1 FEES 0.25 0.25 0.25 OTHER EXPENSES 0.42 0.34 0.35 TOTAL EXPENSES 1.39 1.28 1.29 FEE WAIVER -- -- -- TOTAL NET EXPENSES 1.39 1.28 1.28
- Effective July 1, 2005, the Board of Trustees has approved a permanent reduction of the Rule 12b-1 fees applicable to Class A shares to 0.25%. Distribution and/or Service (12b-1) Fees reflect this agreement. - Effective October 1, 2005, the Board of Trustees approved an amendment to the transfer agency agreement. Other Expenses have been restated to reflect the changes in fees under the new agreement. Other Expenses for Class R 25 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY shares and Institutional Class shares for AIM Small Company Growth Fund are based on estimated average net assets for the current fiscal year. - The advisor for AIM Small Company Growth Fund has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit Total Annual Fund Operating Expenses (excluding certain items discussed below) for the fund's Class A, Class B, Class C, Class R, Investor Class and Institutional Class shares to 1.90%, 2.65%, 2.65%, 2.15%, 1.90% and 1.65% of average daily net assets, respectively. In determining the advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the Total Annual Fund Operating Expenses to exceed the limits stated above: (i) interest; (ii) taxes; (iii) dividend expenses on short sales, (iv) extraordinary items; (v) expenses related to a merger or reorganization, as approved by the fund's Board of Trustees; and (vi) expenses that the fund has incurred but did not actually pay because of an expense offset arrangement. Currently, in addition to the expense reimbursement arrangement with AMVESCAP (as defined herein) described more fully below, the expense offset arrangements from which the fund benefits are in the form of credits that the fund receives from banks where the fund or its transfer agent has deposit accounts in which it holds uninvested cash. Those credits are used to pay certain expenses incurred by the fund. This expense limitation agreement is in effect through July 31, 2006. Upon closing of the Reorganization, the investment advisor has contractually agreed to continue these limitations. - The advisor for AIM Small Company Growth Fund has voluntarily agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit Total Annual Fund Operating Expenses (excluding certain items discussed above) to 1.50%, 2.25%, 2.25%, 1.75%, 1.50% and 1.25% on Class A, Class B, Class C, Class R, Investor Class and Institutional Class shares, respectively. These expense limitation agreements may be modified or discontinued at any time upon consultation with the Board of Trustees without further notice to investors. Upon closing of the reorganization, the investment advisor voluntarily agreed to continue these limitations. - At the request of the Board of Trustees, AMVESCAP (as defined herein) has agreed to reimburse AIM Small Company Growth Fund and AIM Small Cap Growth Fund for expenses related to market timing matters. - AIM Small Company Growth Fund will incur additional expenses in connection with the Reorganization. MERGER COSTS AIM Small Company Growth Fund's expenses incurred in connection with the Reorganization are expected to be approximately $450,000. The Board noted AIM's proposal that AIM Small Company Growth Fund bear 25% and AIM bear 75% of AIM Small Company Growth Fund's costs in connection with the Reorganization and concluded it was appropriate for AIM Small Company Growth Fund to bear such portion of the expenses in light of the decrease in expenses that are expected to result from the Reorganization. AIM Small Cap Growth Fund's expenses to be incurred in connection with the Reorganization are expected to be approximately $30,000. AIM Small Cap Growth Fund will bear its costs and expenses incurred in connection with the Reorganization. SHARE CLASSES
CLASSES OF SHARES OF AIM CLASSES OF SHARES OF AIM SMALL COMPANY GROWTH FUND SMALL CAP GROWTH FUND ------------------------- ------------------------ Class A Class A Class B Class B Class C Class C Class R Class R Investor Class Investor Class* Institutional Class Institutional Class
* On 11/11/05, AIM filed to add Investor Class shares for AIM Small Cap Growth Fund. 26 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY AIM PREMIER EQUITY FUND PLEASE NOTE THAT SOME AIM PREMIER EQUITY FUND SHAREHOLDERS WILL RECEIVE AN ADDITIONAL MAILING CONTAINING A PROXY CORRECTION REGARDING THE PERFORMANCE BAR CHART FOR AIM CHARTER FUND. REASONS FOR SELECTING AIM CHARTER FUND AS THE ACQUIRING FUND AIM proposed the AIM Premier Equity Fund Reorganization as part of an effort to consolidate the AIM Funds' large cap core fund offerings. In considering the Reorganization, the Board noted that the funds have similar investment objectives, are managed using similar investment strategies and invest in similar securities. In addition, AIM Charter Fund's performance track record relative to its Lipper peer group is generally better than AIM Premier Equity Fund's and the expenses of the combined fund are expected to be lower than those of AIM Premier Equity Fund. The Board noted that approximately 50% of AIM Premier Equity Fund and all of AIM Charter Fund have been managed using the same discipline by the same lead portfolio manager and portfolio management team. The Board noted that the funds have similar investment objectives and similar investment strategies, resulting in significant portfolio overlap between the two funds. As of July 31, 2005, approximately 59% of AIM Premier Equity Fund's total net assets were invested in securities AIM Charter Fund also owns. The Board noted that AIM Charter Fund is a large-cap core fund, while AIM Premier Equity Fund also includes value and growth disciplines. Thus, shareholders of AIM Premier Equity Fund may lose exposure to those value and growth disciplines in AIM Charter Fund's investment process. OBJECTIVES AND INVESTMENT STRATEGIES AIM Premier Equity Fund and AIM Charter Fund have similar investment objectives. AIM Premier Equity Fund seeks long-term growth of capital with a secondary objective of income, while AIM Charter Fund seeks growth of capital. AIM Premier Equity Fund and AIM Charter Fund also invest in similar types of securities. However, while AIM Premier Equity Fund seeks income as a secondary objective when selecting stocks for investment, AIM Charter Fund seeks to invest primarily in undervalued equity securities. The chart below provides a summary for comparison purposes of the investment objectives and principal investment strategies of AIM Premier Equity Fund and AIM Charter Fund.
AIM PREMIER EQUITY FUND AIM CHARTER FUND (SELLING FUND) (BUYING FUND) ------------------------------------- ---------------------------------------- INVESTMENT OBJECTIVES - Long-term growth of capital - Growth of capital - Income INVESTMENT STRATEGIES - Invests at least 80% of its net - Invests at least 65% of its total assets, plus the amount of any assets in securities, of borrowings for investment established companies that have purposes, in equity securities, long-term above-average growth in including convertible earnings, and growth companies that securities. the portfolio managers believe have the potential for above-average growth in earnings. - In complying with the 80% - No corresponding strategy. investment requirement, the fund's investments may include synthetic instruments.
27 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY - Diversified among the core, - The portfolio manager seeks to growth and value equity identify those companies that are, investment disciplines to in his view, undervalued relative construct a single, core to current or projected earnings or investment portfolio. the current market value of assets owned by the company. - A greater percentage of the fund's assets will be invested using the core investment discipline than using either the growth or value investment disciplines. - The core discipline portfolio managers focus on equity securities of out-of-favor cyclical growth companies, established growth companies that are undervalued compared to historical relative valuation parameters, companies where there is early but tangible evidence of improving prospects that are not yet reflected in the price of the company's equity securities, and companies whose equity securities are selling at prices that do not reflect the current market value of their assets and where there is reason to expect realization of this potential in the form of increased equity values (the "core categories"). - The growth discipline portfolio managers focus on equity securities of companies with the potential to consistently generate above-average growth in sales and earnings, established large-cap companies with strong business franchises, and companies experiencing significant positive change leading to accelerating revenue or earnings growth - usually above market expectations. - The value discipline portfolio managers focus on equity securities of companies that are selling at a substantial discount to calculated intrinsic value. - May invest in preferred stocks - No corresponding strategy. and debt instruments that have prospects for growth of capital. - May also invest up to 25% of its - May also invest up to 20% of its total assets in foreign total assets in foreign securities. securities.
PORTFOLIO MANAGEMENT
AIM Premier Equity Fund AIM Charter Fund -------------------------------- ------------------------------- Ronald S. Sloan (LEAD) Ronald S. Sloan Lanny H. Sachnowitz Asst by Mid/Large Cap Core Team Bret W. Stanley Asst by Mid/Large Cap Core Team, Large/Multi-Cap Growth Team, and Basic Value Team
28 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY HISTORICAL PERFORMANCE Although AIM Premier Equity Fund has recently provided better returns, AIM Charter Fund has provided better long-term returns to its shareholders than AIM Premier Equity Fund. Average Annual Total Returns as of 7/31/05*
1-YEAR 5-YEAR 10-YEAR SINCE INCEPTION INCEPTION DATE ------ ------ ------- --------------- -------------- AIM PREMIER EQUITY A SHARES 12.23% -6.41% 5.66% 12.28% 5/1/84 AIM CHARTER A SHARES 10.39% -5.64% 7.42% 11.82% 11/26/68
* Performance at NAV PERFORMANCE SURVIVOR The Board determined that it was appropriate for AIM Charter Fund to be the surviving fund in the Reorganization primarily because the investment team responsible for both funds has managed AIM Charter Fund longer than AIM Premier Equity Fund and the portfolio composition of the combined fund is expected to be most like that of AIM Charter Fund over time. Consequently, the Board determined that AIM Charter Fund's investment process more accurately reflects the investment process that the combined fund will utilize after the Reorganization. FUND ASSETS As of July 31, 2005, AIM Charter Fund had net assets of approximately $2.6 billion, compared to net assets for AIM Premier Equity Fund of approximately $5.7 billion. EXPENSES ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS) FOR A SHARES The following table shows annual operating expenses for both reorganizing funds, as well as estimates of expenses for the combined fund.
AIM PREMIER EQUITY AIM CHARTER FUND FUND A SHARES (%) A SHARES (%) COMBINED PRO FORMA (12/31/04 AS (10/31/04 AS A SHARES (%) RESTATED) RESTATED) (10/31/04) ------------------ ---------------- ------------------ MANAGEMENT FEES 0.63 0.63 0.63 RULE 12B-1 FEES 0.25 0.25 0.25 OTHER EXPENSES 0.40 0.34 0.34 TOTAL EXPENSES 1.28 1.22 1.22 FEE WAIVER 0.05 0.01 0.05 TOTAL NET EXPENSES 1.23 1.21 1.17
- Effective upon the closing of the Reorganization, the Board approved a permanent reduction of the advisory fee of the AIM Charter Fund to 0.80% of the first $150 million, plus 0.625% of the Fund's average daily net assets in excess of $150 million. 29 2006 FUND REORGANIZATIONS (MERGERS) THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY - The Board of Trustees has approved a permanent reduction of the Rule 12b-1 fees applicable to AIM Charter Fund Class A shares to 0.25% effective July 1, 2005. Distribution and/or Service (12b-1) Fees reflect this agreement. - Other Expenses of AIM Premier Equity Fund Institutional Class shares are based on estimated amounts for the current fiscal year. - Effective January 1, 2005 through December 31, 2009, the advisor for AIM Premier Equity Fund and AIM Charter Fund has contractually agreed to waive a portion of its advisory fees to the extent necessary so that the advisory fees payable by the Fund (based on the Fund's average daily net assets) do not exceed the annual uniform fee schedule rate of 0.75% of the first $150 million, plus 0.615% of the next $4.85 billion, plus 0.57% of the next $2.5 billion, plus 0.545% of the next $2.5 billion, plus 0.52% of the Fund's average daily net assets in excess of $10 billion. The Fee Waiver reflects this agreement. - Effective July 1, 2005 through June 30, 2006, the AIM Premier Equity Fund's advisor has contractually agreed to waive an additional 0.02% of its Management Fees. - At the request of the Board of Trustees AMVESCAP (as defined herein) has agreed to reimburse AIM Premier Equity and AIM Charter Fund for expenses related to market timing matters. - AIM Premier Equity Fund will incur additional expenses in connection with the Reorganization. MERGER COSTS AIM Premier Equity Fund's expenses incurred in connection with the Reorganization are expected to be approximately $3,000,000. The Board noted AIM's proposal that AIM Premier Equity Fund bear 14% and AIM bear 86% of AIM Premier Equity Fund's costs in connection with the Reorganization and concluded it was appropriate for AIM Premier Equity Fund to bear such portion of expenses in light of the decrease in expenses that are expected to result from the Reorganization. AIM Charter Fund's expenses to be incurred in connection with the Reorganization are expected to be approximately $30,000. AIM Charter Fund will bear its costs and expenses incurred in connection with the Reorganization. SHARE CLASSES
CLASSES OF SHARES OF AIM CLASSES OF SHARES OF PREMIER EQUITY FUND AIM CHARTER FUND ------------------------ -------------------- Class A Class A Class B Class B Class C Class C Class R Class R Institutional Class Institutional Class
30 AIM FAST FAX Jan. 13, 2006 AIM INVESTMENTS(R) MAILS PROXIES FOR SIX PROPOSED FUND REORGANIZATIONS AIM Investments announced in November 2005 that the Board of Trustees of each of the applicable funds listed below had approved the reorganization of six AIM funds. AIM began mailing proxy statements to shareholders (of record as of Dec. 2, 2005) on Jan. 12, 2006. Please note that some AIM Premier Equity Fund shareholders will receive an additional mailing containing a proxy correction. A shareholder meeting is scheduled for Feb. 28, 2006, at which shareholders of the target funds will vote on their respective reorganizations. If approved by shareholders, the reorganizations of AIM Aggressive Growth Fund, AIM Blue Chip Fund and AIM Weingarten Fund are expected to be completed by March 13, 2006. If approved by shareholders, the reorganizations of AIM Mid Cap Growth Fund, AIM Premier Equity Fund and AIM Small Company Growth Fund are expected to be completed by March 27, 2006. The funds approved for reorganizations are:
ACQUIRING FUND EXISTING FUND ACQUIRING FUND FUND MANAGEMENT TEAM ------------- -------------- -------------------- AIM Aggressive Growth Fund* AIM Constellation Fund Lanny H. Sachnowitz (Lead) Kirk L. Anderson James G. Birdsall Robert J. Lloyd Asst by Large/Multi-Cap Growth Team AIM Weingarten Fund AIM Constellation Fund Lanny H. Sachnowitz (Lead) Kirk L. Anderson James G. Birdsall Robert J. Lloyd Asst by Large/Multi-Cap Growth Team AIM Blue Chip Fund AIM Large Cap Growth Fund Geoffrey V. Keeling (Co) Robert L. Shoss (Co) Asst by Large Cap Growth Team AIM Mid Cap Growth Fund AIM Dynamics Fund Karl F. Farmer (Co) Paul J. Rasplicka (Co) Asst by Mid Cap Growth & GARP Team AIM Small Company Growth Fund AIM Small Cap Growth Fund Juliet S. Ellis (Lead) Juan R. Hartsfield Asst by Small Cap Core/Growth Team AIM Premier Equity Fund AIM Charter Fund Ronald S. Sloan Asst by Mid/Large Cap Core Team
CONTINUED, PAGE 2 FOR INSTITUTIONAL INVESTOR USE ONLY AIM FAST FAX (CONTINUED) COMMUNICATION PLAN AIM Investments will provide communications at various times leading up to the completion of the reorganizations. The table below lists the details of planned communications.
What will I get? When will I get it? How will I get it? ---------------- ------------------- ------------------ Fast Fax announcing availability Jan. 12, 2006 - Fax of proxy materials - Available on AIMinvestments.com Advisor Proxy Update Jan. 17, 2006 - Direct mailing Press release announcing outcome On or about Feb. 28, 2006 - Available on AIMinvestments.com of shareholder meeting Fast Fax announcing outcome of On or about Feb. 28, 2006 - Fax shareholder meeting - Available on AIMinvestments.com Fast Fax announcing completion March 13, 2006 and March 27, 2006 - Fax of reorganizations including final distribution information - Available on AIMinvestments.com and reorganization ratios Confirmation statements On or about the week of March 13, - Direct mailing 2006 and the week of March 27, 2006
For more information on fund reorganizations, please contact the sales desk for your division:
INDEPENDENT NATIONAL RETIREMENT AND FINANCIAL ADVISOR INSTITUTIONAL FINANCIAL DEALER ACCOUNTS EDUCATION DIVISION (IFAD) SALES DIVISION (FDD) DIVISION -------------- ----------------- ------------- ---------------- ------------ 800-370-1519 800-337-4246 800-410-4246 800-998-4246 800-349-0104
FOR INSTITUTIONAL INVESTOR USE ONLY THIS MATERIAL IS FOR INSTITUTIONAL INVESTOR USE ONLY AND MAY NOT BE QUOTED, REPRODUCED OR SHOWN TO THE PUBLIC, NOR USED IN WRITTEN FORM AS SALES LITERATURE FOR PUBLIC USE. CONSIDER THE INVESTMENT OBJECTIVES, RISKS, AND CHARGES AND EXPENSES CAREFULLY. FOR THIS AND OTHER INFORMATION ABOUT AIM FUNDS, OBTAIN A PROSPECTUS FROM AIMINVESTMENTS.COM. INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. AIM Investments is a registered service mark of A I M Management Group Inc. A I M Distributors, Inc. is the distributor for the retail mutual funds represented by AIM Investments. NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE (AIM INVESTMENTS--Registered Trademark-- LOGO APPEARS HERE) Your goals. Our solutions--Registered Trademark--.
AIMinvestments.com 01/06 A I M Distributors, Inc MANAGEMENT INFORMATION SERVICES PROPOSED SCRIPT FOR TELEPHONE VOTING OPENING: WHEN CONNECTED TO THE TOLL-FREE NUMBER, SHAREHOLDER WILL HEAR: "Welcome. "Please enter the control number labeled as such or located in the box indicated by an arrow on the upper portion of your proxy card." WHEN SHAREHOLDER ENTERS THE CONTROL NUMBER, HE/SHE WILL HEAR: "Please refer to your proxy card as you vote. To vote as the Board recommends, press 1 now. To vote otherwise, press 0 now." OPTION 1: VOTING AS MANAGEMENT RECOMMENDS IF SHAREHOLDER ELECTS TO VOTE AS MANAGEMENT RECOMMENDS, HE/SHE WILL HEAR: "You have voted as the Board recommended. If this is correct, press 1. If incorrect, press 0." IF SHAREHOLDER PRESSES 1, HE/SHE WILL HEAR: "If you have received more than one proxy card, you must vote each card separately. If you would like to vote another proxy, press 1 now. To end this call, press 0 now." IF SHAREHOLDER PRESSES 0 TO END THE CALL, "Thank you for voting." IF SHAREHOLDER ELECTS TO REVOTE OR VOTE ANOTHER PROXY, HE/SHE IS RETURNED TO THE "PLEASE ENTER THE CONTROL NUMBER" SPEECH (ABOVE). IF SHAREHOLDER ELECTS TO END THE CALL, HE/SHE WILL HEAR: CALL IS TERMINATED. MANAGEMENT INFORMATION SERVICES 1/13/2006 OPTION 0: VOTING OTHERWISE (NOT AS BOARD RECOMMENDS) IF SHAREHOLDER ELECTS TO VOTE EACH PROPOSAL SEPARATELY, HE/SHE WILL HEAR: "Proposal 1: To vote FOR, press 1. Against, press 9. Abstain, press 0." IF SHAREHOLDER PRESSES 1 FOR PROPOSAL 1, HE/SHE WILL HEAR: "Your votes have been cast as follows. Proposal 1 "For". If this is correct, press 1. If incorrect, press 0." IF SHAREHOLDER PRESSES 1, HE/SHE WILL HEAR: "If you have received more than one proxy card, you must vote each card separately. If you would like to vote another proxy, press 1 now. To end this call, press 0 now." IF SHAREHOLDER PRESSES 0, HE/SHE WILL HEAR: "Please refer to your proxy card as you vote. To vote as the Board recommends, press 1 now. To vote otherwise, press 0 now." IF SHAREHOLDER PRESSES 9 FOR PROPOSAL 1, HE/SHE WILL HEAR: "Your votes have been cast as follows. Proposal 1 "Against". If this is correct, press 1. If incorrect, press 0." IF SHAREHOLDER PRESSES 1, HE/SHE WILL HEAR: "If you have received more than one proxy card, you must vote each card separately. If you would like to vote another proxy, press 1 now. To end this call, press 0 now." IF SHAREHOLDER PRESSES 0, HE/SHE WILL HEAR: "Please refer to your proxy card as you vote. To vote as the Board recommends, press 1 now. To vote otherwise, press 0 now." IF SHAREHOLDER PRESSES 0 FOR PROPOSAL 1, HE/SHE WILL HEAR: "Your votes have been cast as follows. Proposal 1 "Abstain". If this is correct, press 1. If incorrect, press 0." IF SHAREHOLDER PRESSES 1, HE/SHE WILL HEAR: "If you have received more than one proxy card, you must vote each card separately. If you would like to vote another proxy, press 1 now. To end this call, press 0 now." IF SHAREHOLDER PRESSES 0, HE/SHE WILL HEAR: "Please refer to your proxy card as you vote. To vote as the Board recommends, press 1 now. To vote otherwise, press 0 now." MANAGEMENT INFORMATION SERVICES 1/13/2006 IF THE SHAREHOLDER PRESSES 1, HE/SHE WILL HEAR: "If you have received more than one proxy card, you must vote each card separately. If you would like to vote another proxy, press 1 now. To end this call, press 0 now." IF SHAREHOLDER ELECTS TO END THE CALL, HE/SHE WILL HEAR. "Thank you for voting." IF SHAREHOLDER ELECTS TO REVOTE THE CANCELLED VOTE OR VOTE ANOTHER PROXY, HE/SHE IS RETURNED TO THE "PLEASE ENTER THE CONTROL NUMBER" SPEECH (ABOVE). CALL IS TERMINATED. MANAGEMENT INFORMATION SERVICES 1/13/2006 PROXY VOTING INFORMATION A proxy statement was mailed to AIM shareholders of record as of the close of business on December 2, 2005, for the funds listed below. The purpose of the proxy statement is to request approval of an Agreement and Plan of Reorganization or Plan of Reorganization, as applicable. Each proxy statement contains disclosure information about the proposal for which votes are being solicited. You can also access your fund's proxy statement, common questions regarding your fund's proposal, prospectus, and annual report by clicking on the fund name listed below. - AIM Aggressive Growth Fund - AIM Premier Equity Fund - AIM Blue Chip Fund - AIM Small Company Growth Fund - AIM Mid Cap Growth Fund - AIM Weingarten Fund HOW TO VOTE You may cast your vote by any of the following methods. HOWEVER YOU CHOOSE TO VOTE, IT IS IMPORTANT THAT YOU VOTE NOW TO SAVE THE EXPENSE OF ADDITIONAL SOLICITATIONS. (BY INTERNET) You may vote your shares at www.proxyweb.com unless your shares are held through a broker, in which case you may vote your shares at www.proxyvote.com. Enter the control number listed on the proxy card you received in the mail and follow the instructions on the web site. (BY TELEPHONE) Call toll-free 1-888-221-0697. Enter the control number listed on the proxy card and follow the recorded instructions. (BY MAIL) Complete and sign the proxy card and return it in the postage-paid envelope provided in the shareholder mailing. IN PERSON The shareholder meeting will be held on February 28, 2006. Please notify AIM Investments at 1-800-952-3502 if you plan to vote your shares at the meeting. IF YOU HAVE ANY QUESTIONS... If you have questions on the proxy or the voting process, please contact your financial consultant or call AIM toll-free at 1-800-952-3502 any business day between 7:30 a.m. and 7:00 p.m. CT. If we have not received your proxy card after a reasonable amount of time, a representative from our proxy solicitation firm, Management Information Services, may contact you to remind you to exercise your right to vote. AIM PROXY INFORMATION BY FUND AIM AGGRESSIVE GROWTH FUND 1. Please read the proxy statement in full. (PDF) 2. Access some typical questions that shareholders may have regarding the proxy statement. (PDF) 3. You may vote your shares at www.proxyweb.com unless your shares are held through a broker, in which case you may vote your shares at www.proxyvote.com. ADDITIONAL FUND MATERIALS: o Prospectus (PDF) o Annual Report (PDF) Return to top AIM BLUE CHIP FUND 1. Please read the proxy statement in full. (PDF) 2. Access some typical questions that shareholders may have regarding the proxy statement. (PDF) 3. You may vote your shares at www.proxyweb.com unless your shares are held through a broker, in which case you may vote your shares at www.proxyvote.com. ADDITIONAL FUND MATERIALS: o Prospectus (PDF) o Annual Report (PDF) Return to top AIM MID CAP GROWTH FUND 1. Please read the proxy statement in full. (PDF) 2. Access some typical questions that shareholders may have regarding the proxy statement. (PDF) 3. You may vote your shares at www.proxyweb.com unless your shares are held through a broker, in which case you may vote your shares at www.proxyvote.com. ADDITIONAL FUND MATERIALS: o Prospectus (PDF) o Annual Report (PDF) Return to top AIM PREMIER EQUITY FUND 1. Please read the proxy statement in full. (PDF) 2. Access some typical questions that shareholders may have regarding the proxy statement. (PDF) 3. You may vote your shares at www.proxyweb.com unless your shares are held through a broker, in which case you may vote your shares at www.proxyvote.com. ADDITIONAL FUND MATERIALS: o Prospectus (PDF) o Annual Report (PDF) o Semiannual Report (PDF) Return to top AIM SMALL COMPANY GROWTH FUND 1. Please read the proxy statement in full. (PDF) 2. Access some typical questions that shareholders may have regarding the proxy statement. (PDF) 3. You may vote your shares at www.proxyweb.com unless your shares are held through a broker, in which case you may vote your shares at www.proxyvote.com. ADDITIONAL FUND MATERIALS: o Prospectus (PDF) o Annual Report (PDF) Return to top AIM WEINGARTEN FUND 1. Please read the proxy statement in full. (PDF) 2. Access some typical questions that shareholders may have regarding the proxy statement. (PDF) 3. You may vote your shares at www.proxyweb.com unless your shares are held through a broker, in which case you may vote your shares at www.proxyvote.com. ADDITIONAL FUND MATERIALS: o Prospectus (PDF) o Annual Report (PDF) Return to top IF YOU HAVE ANY QUESTIONS... If you have questions on the proxy or the voting process, please contact your financial consultant or call AIM toll-free at 1.800.952.3502 any business day between 7:30 a.m. and 7:00 p.m. CT. If we have not received your proxy card after a reasonable amount of time, a representative from our proxy solicitation firm, Management Information Services, may contact you to remind you to exercise your right to vote. Return to top Prospectuses | Help | Site Map | Terms of Use | Privacy AIM INVESTMENT SERVICES, INC. 01/2006 (c) 2005 A I M Management Group Inc. All Rights Reserved. QUESTIONS & ANSWERS FOR AIM AGGRESSIVE GROWTH FUND We encourage you to read the proxy statement in full; however, the following represent some typical questions that shareholders may have regarding the proxy statement/prospectus. HOW DO I VOTE? Voting may take place in the following ways: - You may vote your shares at www.proxyweb.com unless your shares are held through a broker, in which case you may vote your shares at www.proxyvote.com. You will need the control number from your proxy card to vote on the Internet. Because Internet voting is the most economical way to vote your proxy, we encourage all shareholders to use this method. - You may call in your vote to a 24-hour automated system at 1-888-221-0697. You will need the control number from your proxy card to vote by telephone. For questions or to vote through a customer service representative you may call 1-888-684-2426; you will be asked to verify your identity such as your current address and ZIP code. - You may indicate your vote on the proxy card and return it in the postage-paid envelope provided in the shareholder mailing. - If you do attend the meeting, you may vote your shares in person. Please notify AIM Investments at 1-800-952-3502 if you plan to attend the meeting. HOW DOES THE BOARD RECOMMEND THAT I VOTE? The Board, including the independent trustees, unanimously recommends that you vote FOR the proposal on the proxy card. WHY SHOULD I VOTE? Every vote is important. If shareholders fail to vote their proxies, the fund may not receive enough votes to go forward with the February 28, 2006, shareholder meeting. If this happens, additional solicitations may have to be made to obtain a quorum, or proxies may have to be resent to shareholders. HAS AIM CONTRACTED FOR THE SERVICES OF A PROXY SOLICITOR? Yes, AIM has hired Management Information Services as its proxy solicitor. If we do not receive your vote after a reasonable amount of time, you may receive a telephone call from them reminding you to vote your shares. WILL MY VOTE BE CONFIDENTIAL USING THE ONLINE PROXY VOTING SYSTEM? The Web proxy voting system offered by proxyweb.com maintains a high level of security to ensure the confidentiality of your vote. Security features include: - SECURE SOCKETS LAYER (SSL) - A security measure that encrypts all information that travels between proxyweb.com's Web server and the shareholder's computer. - CONTROL NUMBER - Each shareholder is required to enter his or her control number. Proxyweb.com verifies the number and presents the holder with the proxy card. - FIREWALL - To protect the confidentiality of your account records, proxyweb.com uses only control numbers and card codes to register votes. Voted positions are then periodically uploaded to our master database of shareholders listed as of the record date. All account-specific data remains behind our firewall. HOW DO I SIGN THE PROXY CARD? The following general rules for signing proxy cards may be of assistance to you and could help avoid the time and expense involved in validating your vote if you fail to sign your proxy card properly. Individual Accounts: Shareholders should sign exactly as their name appears in the account registration shown on the proxy card. Joint Accounts: All joint owners should sign exactly as their names appear in the account registration shown on the proxy card. All Other Accounts: The capacity of the individual signing the proxy card (for example, "trustee") should be indicated unless it is reflected in the form of registration. If a corporation, limited liability company, or partnership, please sign full entity name and indicate the signer's position with the entity. WHAT IS THE DEADLINE FOR VOTING? All votes must be received before or at the Shareholder Meeting, which will be held on February 28, 2006 at 3:00 p.m. Central Time. WHAT IS THE PROPOSAL BEING PRESENTED AT THE MEETING AND WHAT AM I BEING ASKED TO VOTE ON? - You are being asked to vote on the approval of a Plan of Reorganization (the "Plan") under which all of the assets and liabilities of AIM Aggressive Growth Fund (the "Fund"), a portfolio of AIM Equity Funds ("Trust") will be transferred to AIM Constellation Fund ("Buying Fund"), also a portfolio of Trust, and Trust will issue shares of each class of Buying Fund to shareholders of the corresponding class of shares of the Fund. WHERE CAN I FIND MORE INFORMATION CONCERNING THE PROPOSAL? Further details about the proposal can be found in the proxy statement. QUESTIONS & ANSWERS FOR AIM BLUE CHIP FUND We encourage you to read the proxy statement in full; however, the following represent some typical questions that shareholders may have regarding the proxy statement/prospectus. HOW DO I VOTE? Voting may take place in the following ways: - You may vote your shares at www.proxyweb.com unless your shares are held through a broker, in which case you may vote your shares at www.proxyvote.com. You will need the control number from your proxy card to vote on the Internet. Because Internet voting is the most economical way to vote your proxy, we encourage all shareholders to use this method. - You may call in your vote to a 24-hour automated system at 1-888-221-0697. You will need the control number from your proxy card to vote by telephone. For questions or to vote through a customer service representative you may call 1-888-684-2426; you will be asked questions to verify your identity such as your current address and ZIP code. - You may indicate your vote on the proxy card and return it in the postage-paid envelope provided in the shareholder mailing. - If you do attend the meeting, you may vote your shares in person. Please notify AIM Investments at 1-800-952-3502 if you plan to attend the meeting. HOW DOES THE BOARD RECOMMEND THAT I VOTE? The Board, including the independent trustees, unanimously recommends that you vote FOR the proposal on the proxy card. WHY SHOULD I VOTE? Every vote is important. If shareholders fail to vote their proxies, the fund may not receive enough votes to go forward with the February 28, 2006, shareholder meeting. If this happens, additional solicitations may have to be made to obtain a quorum, or proxies may have to be resent to shareholders. HAS AIM CONTRACTED FOR THE SERVICES OF A PROXY SOLICITOR? Yes, AIM has hired Management Information Services as its proxy solicitor. If we do not receive your vote after a reasonable amount of time, you may receive a telephone call from them reminding you to vote your shares. WILL MY VOTE BE CONFIDENTIAL USING THE ONLINE PROXY VOTING SYSTEM? The Web proxy voting system offered by proxyweb.com maintains a high level of security to ensure the confidentiality of your vote. Security features include: - SECURE SOCKETS LAYER (SSL) - A security measure that encrypts all information that travels between proxyweb.com's Web server and the shareholder's computer. - CONTROL NUMBER - Each shareholder is required to enter his or her control number. Proxyweb.com verifies the number and presents the holder with the proxy card. - FIREWALL - To protect the confidentiality of your account records, proxyweb.com uses only control numbers and card codes to register votes. Voted positions are then periodically uploaded to our master database of shareholders listed as of the record date. All account-specific data remains behind our firewall. HOW DO I SIGN THE PROXY CARD? The following general rules for signing proxy cards may be of assistance to you and could help avoid the time and expense involved in validating your vote if you fail to sign your proxy card properly. Individual Accounts: Shareholders should sign exactly as their name appears in the account registration shown on the proxy card. Joint Accounts: All joint owners should sign exactly as their names appear in the account registration shown on the proxy card. All Other Accounts: The capacity of the individual signing the proxy card (for example, "trustee") should be indicated unless it is reflected in the form of registration. If a corporation, limited liability company, or partnership, please sign full entity name and indicate the signer's position with the entity. WHAT IS THE DEADLINE FOR VOTING? All votes must be received before or at the Shareholder Meeting, which will be held on February 28, 2006 at 3:00 p.m. Central Time. WHAT IS THE PROPOSAL BEING PRESENTED AT THE MEETING AND WHAT AM I BEING ASKED TO VOTE ON? - You are being asked to vote on the approval of a Plan of Reorganization (the "Plan") under which all of the assets and liabilities of AIM Blue Chip Fund (the "Fund"), a portfolio of AIM Equity Funds ("Trust"), will be transferred to AIM Large Cap Growth Fund ("Buying Fund"), also a portfolio of Trust, and Trust will issue shares of each class of Buying Fund to shareholders of the corresponding class of shares of the Fund. WHERE CAN I FIND MORE INFORMATION CONCERNING THE PROPOSAL? Further details about the proposal can be found in the proxy statement. QUESTIONS & ANSWERS FOR AIM MID CAP GROWTH FUND We encourage you to read the proxy statement in full; however, the following represent some typical questions that shareholders may have regarding the proxy statement/prospectus. HOW DO I VOTE? Voting may take place in the following ways: - You may vote your shares at www.proxyweb.com unless your shares are held through a broker, in which case you may vote your shares at www.proxyvote.com. You will need the control number from your proxy card to vote on the Internet. Because Internet voting is the most economical way to vote your proxy, we encourage all shareholders to use this method. - You may call in your vote to a 24-hour automated system at 1-888-221-0697. You will need the control number from your proxy card to vote by telephone. For questions or to vote through a customer service representative you may call 1-888-684-2426; you will be asked questions to verify your identity such as your current address and ZIP code. - You may indicate your vote on the proxy card and return it in the postage-paid envelope provided in the shareholder mailing. - If you do attend the meeting, you may vote your shares in person. Please notify AIM Investments at 1-800-952-3502 if you plan to attend the meeting. HOW DOES THE BOARD RECOMMEND THAT I VOTE? The Board, including the independent trustees, unanimously recommends that you vote FOR the proposal on the proxy card. WHY SHOULD I VOTE? Every vote is important. If shareholders fail to vote their proxies, the fund may not receive enough votes to go forward with the February 28, 2006, shareholder meeting. If this happens, additional solicitations may have to be made to obtain a quorum, or proxies may have to be resent to shareholders. HAS AIM CONTRACTED FOR THE SERVICES OF A PROXY SOLICITOR? Yes, AIM has hired Management Information Services as its proxy solicitor. If we do not receive your vote after a reasonable amount of time, you may receive a telephone call from them reminding you to vote your shares. WILL MY VOTE BE CONFIDENTIAL USING THE ONLINE PROXY VOTING SYSTEM? The Web proxy voting system offered by proxyweb.com maintains a high level of security to ensure the confidentiality of your vote. Security features include: - SECURE SOCKETS LAYER (SSL) - A security measure that encrypts all information that travels between proxyweb.com's Web server and the shareholder's computer. - CONTROL NUMBER - Each shareholder is required to enter his or her control number. Proxyweb.com verifies the number and presents the holder with the proxy card. - FIREWALL - To protect the confidentiality of your account records, proxyweb.com uses only control numbers and card codes to register votes. Voted positions are then periodically uploaded to our master database of shareholders listed as of the record date. All account-specific data remains behind our firewall. HOW DO I SIGN THE PROXY CARD? The following general rules for signing proxy cards may be of assistance to you and could help avoid the time and expense involved in validating your vote if you fail to sign your proxy card properly. Individual Accounts: Shareholders should sign exactly as their name appears in the account registration shown on the proxy card. Joint Accounts: All joint owners should sign exactly as their names appear in the account registration shown on the proxy card. All Other Accounts: The capacity of the individual signing the proxy card (for example, "trustee") should be indicated unless it is reflected in the form of registration. If a corporation, limited liability company, or partnership, please sign full entity name and indicate the signer's position with the entity. WHAT IS THE DEADLINE FOR VOTING? All votes must be received before or at the Shareholder Meeting, which will be held on February 28, 2006 at 3:00 p.m. Central Time. WHAT IS THE PROPOSAL BEING PRESENTED AT THE MEETING AND WHAT AM I BEING ASKED TO VOTE ON? - You are being asked to vote on the approval of an Agreement and Plan of Reorganization (the "Agreement") under which all of the assets and liabilities of AIM Mid Cap Growth Fund (the "Fund"), a portfolio of AIM Equity Funds ("Trust") will be transferred to AIM Dynamics Fund ("Buying Fund"), a portfolio of AIM Stock Funds ("Buyer"), and Buyer will issue shares of each class of Buying Fund to shareholders of the corresponding class of shares of the Fund. WHERE CAN I FIND MORE INFORMATION CONCERNING THE PROPOSAL? Further details about the proposal can be found in the proxy statement. QUESTIONS & ANSWERS FOR AIM PREMIER EQUITY FUND We encourage you to read the proxy statement in full; however, the following represent some typical questions that shareholders may have regarding the proxy statement/prospectus. HOW DO I VOTE? Voting may take place in the following ways: - You may vote your shares at www.proxyweb.com unless your shares are held through a broker, in which case you may vote your shares at www.proxyvote.com. You will need the control number from your proxy card to vote on the Internet. Because Internet voting is the most economical way to vote your proxy, we encourage all shareholders to use this method. - You may call in your vote to a 24-hour automated system at 1-888-221-0697. You will need the control number from your proxy card to vote by telephone. For questions or to vote through a customer service representative you may call 1-888-684-2426; you will be asked questions to verify your identity such as your current address and ZIP code. - You may indicate your vote on the proxy card and return it in the postage-paid envelope provided in the shareholder mailing. - If you do attend the meeting, you may vote your shares in person. Please notify AIM Investments at 1-800-952-3502 if you plan to attend the meeting. HOW DOES THE BOARD RECOMMEND THAT I VOTE? The Board, including the independent trustees, unanimously recommends that you vote FOR the proposal on the proxy card. WHY SHOULD I VOTE? Every vote is important. If shareholders fail to vote their proxies, the fund may not receive enough votes to go forward with the February 28, 2006, shareholder meeting. If this happens, additional solicitations may have to be made to obtain a quorum, or proxies may have to be resent to shareholders. HAS AIM CONTRACTED FOR THE SERVICES OF A PROXY SOLICITOR? Yes, AIM has hired Management Information Services as its proxy solicitor. If we do not receive your vote after a reasonable amount of time, you may receive a telephone call from them reminding you to vote your shares. WILL MY VOTE BE CONFIDENTIAL USING THE ONLINE PROXY VOTING SYSTEM? The Web proxy voting system offered by proxyweb.com maintains a high level of security to ensure the confidentiality of your vote. Security features include: - SECURE SOCKETS LAYER (SSL) - A security measure that encrypts all information that travels between proxyweb.com's Web server and the shareholder's computer. - CONTROL NUMBER - Each shareholder is required to enter his or her control number. Proxyweb.com verifies the number and presents the holder with the proxy card. - FIREWALL - To protect the confidentiality of your account records, proxyweb.com uses only control numbers and card codes to register votes. Voted positions are then periodically uploaded to our master database of shareholders listed as of the record date. All account-specific data remains behind our firewall. HOW DO I SIGN THE PROXY CARD? The following general rules for signing proxy cards may be of assistance to you and could help avoid the time and expense involved in validating your vote if you fail to sign your proxy card properly. Individual Accounts: Shareholders should sign exactly as their name appears in the account registration shown on the proxy card. Joint Accounts: All joint owners should sign exactly as their names appear in the account registration shown on the proxy card. All Other Accounts: The capacity of the individual signing the proxy card (for example, "trustee") should be indicated unless it is reflected in the form of registration. If a corporation, limited liability company, or partnership, please sign full entity name and indicate the signer's position with the entity. WHAT IS THE DEADLINE FOR VOTING? All votes must be received before or at the Shareholder Meeting, which will be held on February 28, 2006 at 3:00 p.m. Central Time. WHAT IS THE PROPOSAL BEING PRESENTED AT THE MEETING AND WHAT AM I BEING ASKED TO VOTE ON? - You are being asked to vote on the approval of an Agreement and Plan of Reorganization (the "Agreement") under which all of the assets and liabilities of AIM Premier Equity Fund (the "Fund"), a portfolio of AIM Funds Group ("Trust"), will be transferred to AIM Charter Fund ("Buying Fund"), a portfolio of AIM Equity Funds ("Buyer"), and Buyer will issue shares of each class of Buying Fund to shareholders of the corresponding class of shares of the Fund. WHERE CAN I FIND MORE INFORMATION CONCERNING THE PROPOSED AGREEMENT? Further details about the proposal can be found in the proxy statement. QUESTIONS & ANSWERS FOR AIM SMALL COMPANY GROWTH FUND We encourage you to read the proxy statement in full; however, the following represent some typical questions that shareholders may have regarding the proxy statement/prospectus. HOW DO I VOTE? Voting may take place in the following ways: - You may vote your shares at www.proxyweb.com unless your shares are held through a broker, in which case you may vote your shares at www.proxyvote.com. You will need the control number from your proxy card to vote on the Internet. Because Internet voting is the most economical way to vote your proxy, we encourage all shareholders to use this method. - You may call in your vote to a 24-hour automated system at 1-888-221-0697. You will need the control number from your proxy card to vote by telephone. For questions or to vote through a customer service representative you may call 1-888-684-2426; you will be asked questions to verify your identity such as your current address and ZIP code. - You may indicate your vote on the proxy card and return it in the postage-paid envelope provided in the shareholder mailing. - If you do attend the meeting, you may vote your shares in person. Please notify AIM Investments at 1-800-952-3502 if you plan to attend the meeting. HOW DOES THE BOARD RECOMMEND THAT I VOTE? The Board, including the independent trustees, unanimously recommends that you vote FOR the proposal on the proxy card. WHY SHOULD I VOTE? Every vote is important. If shareholders fail to vote their proxies, the fund may not receive enough votes to go forward with the February 28, 2006, shareholder meeting. If this happens, additional solicitations may have to be made to obtain a quorum, or proxies may have to be resent to shareholders. HAS AIM CONTRACTED FOR THE SERVICES OF A PROXY SOLICITOR? Yes, AIM has hired Management Information Services as its proxy solicitor. If we do not receive your vote after a reasonable amount of time, you may receive a telephone call from them reminding you to vote your shares. WILL MY VOTE BE CONFIDENTIAL USING THE ONLINE PROXY VOTING SYSTEM? The Web proxy voting system offered by proxyweb.com maintains a high level of security to ensure the confidentiality of your vote. Security features include: - SECURE SOCKETS LAYER (SSL) - A security measure that encrypts all information that travels between proxyweb.com's Web server and the shareholder's computer. - CONTROL NUMBER - Each shareholder is required to enter his or her control number. Proxyweb.com verifies the number and presents the holder with the proxy card. - FIREWALL - To protect the confidentiality of your account records, proxyweb.com uses only control numbers and card codes to register votes. Voted positions are then periodically uploaded to our master database of shareholders listed as of the record date. All account-specific data remains behind our firewall. HOW DO I SIGN THE PROXY CARD? The following general rules for signing proxy cards may be of assistance to you and could help avoid the time and expense involved in validating your vote if you fail to sign your proxy card properly. Individual Accounts: Shareholders should sign exactly as their name appears in the account registration shown on the proxy card. Joint Accounts: All joint owners should sign exactly as their names appear in the account registration shown on the proxy card. All Other Accounts: The capacity of the individual signing the proxy card (for example, "trustee") should be indicated unless it is reflected in the form of registration. If a corporation, limited liability company, or partnership, please sign full entity name and indicate the signer's position with the entity. WHAT IS THE DEADLINE FOR VOTING? All votes must be received before or at the Shareholder Meeting, which will be held on February 28, 2006 at 3:00 p.m. Central Time. WHAT IS THE PROPOSAL BEING PRESENTED AT THE MEETING AND WHAT AM I BEING ASKED TO VOTE ON? - You are being asked to vote on the approval of an Agreement and Plan of Reorganization (the "Agreement") under which all of the assets and liabilities of AIM Small Company Growth Fund (the "Fund"), a portfolio of AIM Stock Funds ("Trust"), will be transferred to AIM Small Cap Growth Fund ("Buying Fund"), a portfolio of AIM Growth Series ("Buyer"), and Buyer will issue shares of each class of Buying Fund to shareholders of the corresponding class of shares of the Fund. WHERE CAN I FIND MORE INFORMATION CONCERNING THE PROPOSED AGREEMENT? Further details about the proposal can be found in the proxy statement. QUESTIONS & ANSWERS FOR AIM WEINGARTEN FUND We encourage you to read the proxy statement in full; however, the following represent some typical questions that shareholders may have regarding the proxy statement/prospectus. HOW DO I VOTE? Voting may take place in the following ways: - You may vote your shares at www.proxyweb.com unless your shares are held through a broker, in which case you may vote your shares at www.proxyvote.com. You will need the control number from your proxy card to vote on the Internet. Because Internet voting is the most economical way to vote your proxy, we encourage all shareholders to use this method. - You may call in your vote to a 24-hour automated system at 1-888-221-0697. You will need the control number from your proxy card to vote by telephone. For questions or to vote through a customer service representative you may call 1-888-684-2426; you will be asked questions to verify your identity such as your current address and ZIP code. - You may indicate your vote on the proxy card and return it in the postage-paid envelope provided in the shareholder mailing. - If you do attend the meeting, you may vote your shares in person. Please notify AIM Investments at 1-800-952-3502 if you plan to attend the meeting. HOW DOES THE BOARD RECOMMEND THAT I VOTE? The Board, including the independent trustees, unanimously recommends that you vote FOR the proposal on the proxy card. WHY SHOULD I VOTE? Every vote is important. If shareholders fail to vote their proxies, the fund may not receive enough votes to go forward with the February 28, 2006, shareholder meeting. If this happens, additional solicitations may have to be made to obtain a quorum, or proxies may have to be resent to shareholders. HAS AIM CONTRACTED FOR THE SERVICES OF A PROXY SOLICITOR? Yes, AIM has hired Management Information Services as its proxy solicitor. If we do not receive your vote after a reasonable amount of time, you may receive a telephone call from them reminding you to vote your shares. WILL MY VOTE BE CONFIDENTIAL USING THE ONLINE PROXY VOTING SYSTEM? The Web proxy voting system offered by proxyweb.com maintains a high level of security to ensure the confidentiality of your vote. Security features include: - SECURE SOCKETS LAYER (SSL) - A security measure that encrypts all information that travels between proxyweb.com's Web server and the shareholder's computer. - CONTROL NUMBER - Each shareholder is required to enter his or her control number. Proxyweb.com verifies the number and presents the holder with the proxy card. - FIREWALL - To protect the confidentiality of your account records, proxyweb.com uses only control numbers and card codes to register votes. Voted positions are then periodically uploaded to our master database of shareholders listed as of the record date. All account-specific data remains behind our firewall. HOW DO I SIGN THE PROXY CARD? The following general rules for signing proxy cards may be of assistance to you and could help avoid the time and expense involved in validating your vote if you fail to sign your proxy card properly. Individual Accounts: Shareholders should sign exactly as their name appears in the account registration shown on the proxy card. Joint Accounts: All joint owners should sign exactly as their names appear in the account registration shown on the proxy card. All Other Accounts: The capacity of the individual signing the proxy card (for example, "trustee") should be indicated unless it is reflected in the form of registration. If a corporation, limited liability company, or partnership, please sign full entity name and indicate the signer's position with the entity. WHAT IS THE DEADLINE FOR VOTING? All votes must be received before or at the Shareholder Meeting, which will be held on February 28, 2006 at 3:00 p.m. Central Time. WHAT IS THE PROPOSAL BEING PRESENTED AT THE MEETING AND WHAT AM I BEING ASKED TO VOTE ON? - You are being asked to vote on the approval of a Plan of Reorganization (the "Plan") under which all of the assets and liabilities of AIM Weingarten Fund (the "Fund"), a portfolio of AIM Equity Funds ("Trust"), will be transferred to AIM Constellation Fund ("Buying Fund"), also a portfolio of Trust, and Trust will issue shares of each class of Buying Fund to shareholders of the corresponding class of shares of the Fund. WHERE CAN I FIND MORE INFORMATION CONCERNING THE PROPOSED PLAM? Further details about the proposals can be found in the proxy statement. HYPERLINK ALERT You are leaving the AIM Investments Web Site. As a convenience to our users, the AIM Investments web site contains links to other web sites that are created and maintained by other organizations. AIM INVESTMENTS DOES NOT CONTROL, CANNOT GUARANTEE, AND IS NOT RESPONSIBLE FOR THE ACCURACY, TIMELINESS, OR EVEN THE CONTINUED AVAILABILITY OR EXISTENCE OF THE INFORMATION CONTAINED ON THE WEB SITE YOU ARE ABOUT TO ENTER. Access is provided for the convenience of online shareholder voting for the AIM Investments only and should not be construed as an offer, solicitation, recommendation, endorsement or approval by AIM Investments of any other products or services described in such other web sites. [OK GRAPHIC] -------------------------------------------------------------------------------- Prospectuses | Help | Site Map | Terms of Use | Privacy -------------------------------------------------------------------------------- A I M MANAGEMENT GROUP INC. (c) 2005 A I M Management Group Inc. All Rights Reserved. The following information appears in the AIM Aggressive Growth Fund Annual Report to Shareholders dated October 31, 2005. "You have recently received or should shortly receive a proxy requesting your vote on a proposed merger of AIM Aggressive Fund into AIM Constellation Fund. We encourage you to read the proxy materials carefully and to vote promptly. The ways in which you may cast your proxy ballot are detailed in the proxy materials." The following information appears in the AIM Blue Chip Fund Annual Report to Shareholders dated October 31, 2005. "You have recently received or should shortly receive a proxy requesting your vote on a proposed merger of AIM Blue Chip Fund into AIM Large Cap Growth Fund. We encourage you to read the proxy materials carefully and to vote promptly. The ways in which you may cast your proxy ballot are detailed in the proxy materials." The following information appears in the AIM Mid Cap Growth Fund Annual Report to Shareholders dated October 31, 2005. "You have recently received or should shortly receive a proxy requesting your vote on a proposed merger of AIM Mid Cap Growth Fund into AIM Dynamics Fund. We encourage you to read the proxy materials carefully and to vote promptly. The ways in which you may cast your proxy ballot are detailed in the proxy materials." The following information appears in the AIM Weingarten Fund Annual Report to Shareholders dated October 31, 2005. "You have recently received or should shortly receive a proxy requesting your vote on a proposed merger of AIM Weingarten Fund into AIM Constellation Fund. We encourage you to read the proxy materials carefully and to vote promptly. The ways in which you may cast your proxy ballot are detailed in the proxy materials."